how to defined the special majority which is one of the exception in the proper plaintiff? question 2

UNIVERSITI TUNKU ABDUL RAHMAN FACULTY OF BUSINESS AND FINANCE ACADEMIC YEAR: 2015/2016 MAY 2016 TRIMESTER UBML2013 COMPANY LAW BACHELOR OF COMMERCE (HONS) ACCOUNTING GROUP ASSIGNMENT ANSWER ASSIGNMENT QUESTIONS Submission Date : Thursday, 28th July 2016 before 5.00pm Contribution 15% of total unit marks : INSTRUCTIONS TO STUDENTS 1. Your assignment should be between 2500 to 4000 words excluding references. 2. Your assignment should be typed using 12 point Times New Roman font and 1.5 line spacing. The number of words should be shown at the end of your assignment. 3. Each of the questions carries 15 marks (i.e. Question 1 15 marks & Question 2 15 marks) and the total mark will be average to 15%. GROUP ASSIGNMENTS Question 1 Pandir, after 10 successful years of running a home decor business, incorporate it into Dream Decor Sdn Bhd in 2010. The nominal capital was RM300,000 which was divided into 300,000 RM1 shares of which one was held by his wife Mandir and the rest owned by him. Pandir and Mandir are the only shareholders and directors. Although the business run by Pandir was worth RM1,000,000 it was sold to the company for RM5,000,000. The company in exchange for the business issued Pandir with a debenture for RM4,700,000 secured by fixed charge on the company's assets. The sales consideration was effected by the allotment to Pandir and his wife of 300,000 fully paid up shares of RM1 each. In January last year a fire damaged the premises of the business. Pandir was unable to attend to many of his clients and had suffered a loss of a month's business resulted in a loss of RM100,000. Pandir had effected insurance cover in respect of loss of business and the damage to the premises. Unfortunate, on incorporation he had failed to assign the insurance policy to the company. In late 2015 Pandir was advised by his accountant that due to the implementation of GST and economic downturn the company suffers a huge decline in sales volume, something had to be done to prevent the company going into insolvency. In November 2015 Pandir borrowed, in the name of the company, RM2,000,000 from Banana Bank Bhd, in order to expand the business of the company. Adding to their misery the business failed to pick up and some of the Company's corporate clients commenced legal actions against Dream Dcor Sdn Bhd for the poor quality products and services furnished. The claim for damages will be in the region of RM1,500,000. The company was wound up recently on a petition of one of the creditors and on the grounds of the company being unable to pay its debts and a liquidator has been appointed. Advise on the following problems: a) Whether Dream Dcor Sdn Bhd have the right to issue debenture secured by fixed charges in favour of its member Pandir. b) Whether Pandir is entitled to make a claim on the insurance policy. c) Whether Pandir can be made personally liable for the debt to Banana Bank Bhd. d) Whether Pandir may recover his loan to the company. [15 marks] Question 2 The following is a passage from the joint judgment of Cumming Bruce, Templeman and Brightman L.JJ. in Prudential Assurance Co Ltd v. Newman Industries Ltd (No. 2) [1982] 1 All ER 354: It is an elementary principle that A cannot, as a general rule bring an action against B to recover damages or secure other relief against B on behalf of C for an injury done by B to C. C is the proper plaintiff because C is the party injured, and therefore, the person in whom the cause of action is vested. This is sometimes referred to as the rule in Foss v. Harbottle (1843) 2 Hare 461.' Discuss the operation of the proper plaintiff rule as established in Foss v. Harbottle. [15 marks] UNIVERSITI TUNKU ABDUL RAHMAN FACULTY OF BUSINESS AND FINANCE ACADEMIC YEAR 2015/2016 MAY 2016 TRIMESTER UBML2013 COMPANY LAW BACHELOR OF COMMERCE (HONS) ACCOUNTING GROUP ASSIGNMENT (MARKING SCHEME) Element Marks Allocatio n 1 Identification of main issues/problems 1 marks 2 Analysis of the issues 4 marks 3 Comments of effective solutions/strategies (The solution may be in the case already or propose by the student) 4 marks Links to course reading and additional research 3 marks 4 5. Quality of written assignment 3 marks TOTAL MARKS ALLOCATED 15 marks Marks Given Comments