THE UNIVERSITY OF THE WEST INDIES FACULTY OF LAW LL.M. (CORPORATE AND COMMERCIAL LAW) LAW6400 COMPANY LAW THEORY LAW IN MODERN COMMERCE.
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1 THE UNIVERSITY OF THE WEST INDIES FACULTY OF LAW LL.M. (CORPORATE AND COMMERCIAL LAW) LAW6400 COMPANY LAW THEORY LAW IN MODERN COMMERCE January 2008 Completed papers must be returned to a Campus Faculty of Law Office by 4:00p.m. on Friday, February 22 "d, Answer one question. It should be no less than 4000 words and should not exceed 6000 words. QUESTION 1 Telecom International Limited is a limited liability company incorporated in the United Kingdom. In Trinidad and Tobago its wholly owned subsidiary, Trinidad and Tobago Telecom Ltd ("Trintel"), a locally incorporated company, carries on the business of providing telecommunication services in Trinidad and Tobago. The Trintel group of companies comprises 3 other companies, Telesery Ltd, Teleconnect and Atlas Providers Limited ("Atlas"). Trintel owns 90% of the share capital of Atlas. The main business of Atlas is to provide accounting and management services to members of the Trintel group. William and Harry are directors of Telecom International Limited, of Trintel and of Atlas. Indeed William and Harry are the sole directors of Atlas.
2 In December 2000 Trintel employed Roger as the general manager of Trintel. He received a substantial salary, a company car, an overseas travel allowance and health and fitness benefits available to employees of the group. Roger's salary, allowances and benefits were paid by Atlas from funds held by Atlas. Sales of mobile phones decreased substantially in 2001, and in February 2002 the chairman of the Trintel group terminated the services of Roger because of the group's disastrous results. In June 2002 Roger sued Atlas for wrongful dismissal. In 2005 the Trintel group on the advice of accountants from Telecom International Limited undertook a reorganization of the group, as a result of which Atlas ceased to do business and its assets were transferred to the two other members of the group. When the trial of the wrongful dismissal action came on in January 2006 Atlas was not represented. The presiding judge heard the matter ex parte (in the absence of Atlas) and awarded damages of $500,000 against Atlas. In May 2006 Roger brought a fresh action against all the companies in the Trintel group, including Atlas, claiming that his dismissal was oppressive and unfairly prejudicial contrary to section 242 of the Companies Act.
3 Roger contended in the second action that the conduct of the group was oppressive or unfairly prejudicial to him. In reply William on behalf of the respondents gave evidence that on account of the introduction of competition in a very small market and the advice of the company's accountants it was in the best interests of Atlas and the group that Atlas should cease its operations. William has also averred that Atlas is in any event unable to pay the sum awarded at the ex parte hearing or any other sum since it no longer had any assets. Advise Roger on the company law issues arising on these facts. QUESTION 2 "The theoretical arguments in favour of corporate criminal liability seem strong, but developments at common law have been slow... A small number of statutes impose direct or vicarious liability on companies, but there is no such general approach... [A] new approach based on a new concept of `management failure'... is limited to a small number of homicide cases... It also serves to raise the wider question of whether there is much point in punishing corporations." Discuss
4 QUESTION 3 Answer either question (a) or (b). (a) "I am of the view that the discretion given to the Court under section 239(d) [of the Companies Act of Trinidad and Tobago] is not limited only to elevating a creditor to a proper person status": per Ventour J in Five Star Medical. Discuss in the context of the entitlement of creditors to the statutory oppression remedy. (b) While recent case law emanating from the Commonwealth Caribbean importantly provides an opportunity to evaluate many of the underlying assumptions of company law, the decisions of Trinidad Cement Ltd and Five Star Medicalsuggest that the discretion bestowed on Caribbean courts by the Companies Act is wider than perhaps the legislators intended. In this regard, perhaps the approach adopted in Lopez v. Telecommunications Services of Trinidad&Tobago is to be welcomed. Critically analyse this statement.
5 QUESTION 4 "While academics have postulated several theories in an attempt to explain the raison d'etre of the corporate persona, no one of these theories in itself has adequately so explained". Critically analyse this statement. QUESTION 5 "The decision of Salomon v. Salomon represents jurisprudential ineptitude as the House of Lords rejected the clear intention of the legislature in favour of the so-called literal interpretation. In so doing, small private companies of little public utility are able to claim the benefits of [limited liability]". Discuss
6 MANDATORY REQUIREMENTS: (1)The completed paper MUST be submitted to the responsible Administrative Assistant (or her delegate) at the office of the Faculty of Law at your campus on or before Friday. February 22, 2008, no later than 4:00 p.m. (2) Your paper should answer the question, should be not less than [4000] words and should not exceed [6000] words in length, exclusive of footnotes and appendices. (3) The completed paper shall be treated as an examination script and shall bear your student identification number only. Your name must not be written on the script. (4)In accordance with the decision of the Faculty Board the completed paper shall constitute the full and final mark in the course. (5) The Rules and Regulations of the University of the West Indies, which apply to Examinations, apply mutatis mutandis to these instructions. Format of Answer Line spacing - 1 Y Paper should be paginated Sources, references and citations should be included by way of footnotes or endnotes and should comply with usual citation rules (bibliography optional) Preferred type fonts - Times New Roman or Arial Preferred font size - 12pt Font colour - black Presentation Papers must be secured with staples only. NO SPIRAL BINDING OR REPORT COVERS.
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