Assignment

This assignment counts for 30% of the total grade for the course. You can choose to complete the assignment individually or in a group of two.

Due date

Tuesday 25 March 2025 at 12 noon.

Word count:

The maximum word count for the Assignment is 3000 words inclusive of any footnotes. A penalty of 1% of the total marks available will be imposed for every 1% (or part thereof) by which an Assignment exceeds the specified word limit. The bibliography is excluded from the specified word count.

Late penalty:

Meeting assignment deadlines is an important part of a law degree. If you cannot meet the Assignment due date and time for a good reason, you may apply online for an extension: Assessment Extension Request – Power Apps. Assignments handed in after the due date and time (or the extension deadline) will be subject to a penalty. The penalty will be 10% of the highest achievable mark for work handed in within 24 hours after the deadline, and an additional 10% for each subsequent 24 hours. Assignments handed in more than 72 hours after the assignment deadline will not be marked and will receive a mark of 0%.

Coversheet for Undergraduate Work.

The Coversheet for Undergraduate Work is available as a word document in the Assessment folder on the LAWS 305 AKO LEARN page. The instructions on the Coversheet apply to this Assignment. Please download the Coversheet document and begin your Assignment on the second page. The document is already formatted for your use. When you have completed your Assignment and the Coversheet front page, save your document as a PDF file. Please then self-allocate yourself to a group. You must do this even if you are submitting individually. If you are submitting as a group of two, you must self-allocate to the same group. Upload the PDF file to AKO LEARN and submit it to Turnitin by the due date and time.

Marking Criteria

The Assignment will be marked in accordance with the criteria specified in the Meaning of Grades chart in the Faculty of Law Undergraduate Handbook. Each of the following factors will be assessed:

• Your coverage of relevant issues and law.
• Your demonstrated understanding of relevant issues and law.
• The accuracy and precision with which you present material.
• The depth and quality of your analysis and conclusions.
• The clarity and quality of your written style.
• The suitability of your written style for your audience.
• The effectiveness of your organisation and structuring of material.
• The depth and quality of the research you have carried out.
• The extent to which your assignment complies with the referencing and citation rules in the New Zealand Law Style Guide (3rd ed).
• The degree to which you comply with the Assignment instructions.

Bibliography

Include a bibliography. Your bibliography should list all of the sources you have consulted in the preparation of your Assignment. Set out your bibliography following the rules in Appendix 7 of the New Zealand Law Style Guide (3rd ed). The bibliography is not included in the word count.

Citation of sources

Except as specified below, follow the citation conventions set out in the New Zealand Law Style Guide (3rd ed). The use of Gen-AI tools, such as ChatGPT, is not recommended because of reliability issues. If you choose to use Gen-AI, you must cite and acknowledge all quotations, ideas and materials derived from its use as follows: Output from ChatGPT (artificial intelligence text generator by OpenAI) to “User’s Student Number” in response to the prompt “prompt text” (Date Month Year). If you choose to use Gen-AI, you must use it responsibility. You must not put data into a Gen-AI tool without the permission of the person who owns the IP. Data for this purpose includes learning materials such as lecture handouts, slides and this assignment. Please note that AI detection will be used on your assignment. It is good practice to use Word when writing your assignment and to keep draft copies on your OneDrive. See also Generative AI at UC | University of Canterbury

Relevant material

Please note that not all relevant material will be covered in lectures (or at all) before the Assignment due date. You will need to carry out your own and/or additional research over and above material covered in handouts and lectures to complete the Assignment.

Additional instructions for groups

You may choose to work collaboratively by completing the assignment in a group of two. You can access a list of students enrolled in LAWS 305 by clicking on the “Participants” link on AKO LEARN. If you would like to work in a group, but do not know anyone in the class, please email Lynne Taylor (Lynne.Taylor@canterbury.ac.nz) by 5 pm on Friday 23 February with permission for your name and email address to be circulated to other class members who are looking to form a group. Lynne will also invite those wanting to join a group to meet at the end of lectures in the first and second weeks of term.

The Coversheet for Undergraduate Work, available in the Assessment folder on AKO LEARN, has been modified to allow for the submission of a group Assignment. All group members’ ID numbers must be entered on the Coversheet. The inclusion of your ID number constitutes your agreement that you are a party to the Coversheet declaration. Please note the additional undertaking on the Coversheet that the assessment reflects an equal contribution of group members. The mark and grade for a group Assignment will be awarded to each group member.

General instructions

Assume you have a part-time job as a law clerk at the well-known Christchurch law practice of Ngāta & Denning Ltd. The director who supervises your work, Freida Denning, is aware that you are completing LAWS 305 Company Law and is keen to test your company law knowledge. Freida has set you two tasks. You must complete both tasks.

Task One

Assume you recently sat in on an interview conducted by Frieda Denning, with a client, Teva Cowan. Teva currently carries on business on his own account as a builder. A transcript of that interview follows.

Transcript of an interview between Teva Cowan and Frieda Denning on 17 February 2025.

FD:	Kia ora Teva, it's good to see you. How are you?
TC:	I can't complain.
FD: 	And the family?
TC:  	They're all good too. Lani's just started year 8 and Ben is in year 6. 
FD:  	Lani and Ben are at Te Parito Kowhai Russley School?
TC:	Yes, both with great teachers this year.
FD: 	And Jeni?
TC:	Jeni's good and still keeping busy. There never seems to be a let up in the number of physio patients. And you, Freida?
FD:  	I'm doing very well. 
TC: 	I like your new offices. Much better parking!
FD: 	I have to confess I am enjoying the new office. Anyway, what brings you to see me today?
TC: 	I want to do a bit of forward thinking and planning. As you know I've been operating on my own for some years now. It's all been very simple, just me and sometimes a few casual employees if I take on a big job. 
FD:	And things are changing?
TC: 	Yes, you'll recall we talked several years ago about incorporating the business.
FD: 	You decided at that stage that it would be more work than it was worth. 
TC:	That's right. My Dad's a retired account manager and he does the books for me. I think he's discovered his true calling. He keeps a very tight rein on debtors. I don't do much sub-contracting work for the big outfits. I've seen too many other small builders lose it all when the big contractor has failed and can't pay them. I figure if I make a mistake, I'll be liable for it personally anyway because I did the work, but Dad makes sure I've got all the right insurance. And Dad and I didn't feel like coming to grips with the tax situation.
FD:	We did set up a family trust to protect your assets.
TC: 	That's right. We put the house and some other assets in the trust. So things as they stand are fine. But I'm planning on changing my work situation.
FD:	You're looking to expand?
TC: 	Got it in one. I've got this builder friend in Oamaru, Jax Healy. We worked together years ago when we had both just qualified, but they shifted to Oamaru when their father became ill and then stayed down there. Jax is looking to move back to Christchurch mid-2025 and we'd really like to go into business together. I like and trust Jax. With the two of us, we could take on bigger jobs. 
FD:	It sounds like you need some advice on how to structure this new and expanded business.
TC: 	Exactly. I know we talked about setting up a company in the past when it was just me. What I want to know is whether that would be best for me and Jax. If we expand and take on bigger jobs, we will be taking on more risk. And it will no longer be just me being responsible for my own work.
FD: 	Are you aware of the other ways in which a business can be structured?

TC:	Some. Jeni carries on her physio business as a partnership with two others and she has never had any issues with that. It all seems quite straightforward and runs very much like my business. It's the same with the family trust. That runs like clockwork now as well. 
FD: 	I can recall being involved in the set-up of Jeni's partnership.
TC: 	That's right. It did involve quite a bit of work writing up agreements.
FD:	Yes, but my advice is that it is better to document how you intend the partnership to operate at the beginning in a formal partnership deed. In fact, that's true whatever form of business structure you decide upon in the end. Everyone then knows where they stand and what their obligations are.
TC:	I can see that's important. The costs of setting up a company, a partnership or a trust aren't all that different?
FD:	That's correct, although there are registration fees for limited partnerships and companies. To confirm, the intention is that you and Jax will be operating the new business?
TC: 	Well, now that you mention it, I've been doing some thinking about that. Dad has been working with me for quite a while now. He's helped me out with working capital as and when I've needed it, and he says he's quite happy to continue doing that. We always document the money he puts in. Dad is relatively well off. It would be good to involve him in some formal way to recognise his contribution, although he says he doesn't want to be involved in the actual running of the business. He says he wants to leave that to the experts, to Jax and me. Also, I wouldn't want to put him at any financial risk. He's not in a position now to replace his assets if he loses them. 
FD:	Would it be you and Jax making the business decisions? Do you envisage you would both have an equal say in the management of the business?
TC:	Yes, that would be best. We're pretty similar in our views. I'd rather we both had to agree to an idea before we went ahead. Mind you, at least at the beginning I'll be contributing more equipment and there's also the money contributions Dad has made. I'd like to record and account for that. 
FD:	What about returns from the new business? How do you plan on sharing those?
TC:	I'll have to give some thought to that. To the extent that Jax and I are sharing the work and doing the same job, I guess we should receive the same amount. But I can see that it could get a bit complicated if you look at returns on capital contributions as well.
FD:	And Jeni?
TC:	What's mine is hers anyway, isn't it? I'm only joking. We're rock solid.
FD:	That's good to hear. It's going back a few years now, but didn't you start up in business after you and Jeni got together? 
TC:	Yes, in fact we used our joint savings to set me up. It was the same when she started up in business.
FD:	That means that your business assets are relationship property so that if you and Jeni ever did split then those assets would be subject to the property sharing regime in the Property (Relationships) Act. Do you see Jeni having a role in the new business?
TC:	If she part-owns it now, given that those assets will be used in the new business, it would be right to recognise that. Like Dad, though, Jeni doesn't want a role in the day to day running of the new business. I don't interfere in the running of her business, and she has always kept out of mine as well. 
FD:	What about Jax's position? Is there anyone that they might like to involve in the new business?
TC:	I'll have to get back to you on that.
FD:	Do you have any timeframe in mind for the operation of the new business?
TC:	I hadn't really thought about that. I'm 44 and Jax is the same so it's possible we could go on until it's time to retire. Another 20 years!
FD:	Do you know if Jax has the same view?

TC:	No, I don't. I'd better check. I suppose we need to think about what will happen if either one of us wants out for any reason.
FD:	You're quite right. And what will happen if one of you dies or is injured and can no longer work.
TC:	Not nice to contemplate. But I can see I need to do some more talking with Jax to work out the details. What I would appreciate now is some information on the best option for structuring the new business. 
FD:	We can do that for you. I'll have that information to you within the next day or so. We can then start the set-up process once all the details have been finalised.

Required

With reference to relevant case law and legislation, (a) identify possible business structures for Teva Cowan’s proposed new business and (b) advise which of those identified structures is most appropriate for Teva Cowan’s presently identified needs.

You must submit the requested information in the form of a legal memorandum addressed to Frieda Denning. You need not address any relationship property or tax issues arising out of the given fact situation.

Ensure that your memorandum meets the following requirements:

1. It includes a heading as set out below:
   Ki | To: [the reader (Freida Denning)]
   Nā | From: [your student ID number(s)]
   Rā | Date: [date, month and year (25 March 2025)]
   Kaupapa | Subject: [Describe the content in sufficient detail so that your reader can tell at a glance what the memo is about. Sometimes one client may have several open files at any one time, so the subject line must allow your reader to identify which of the client’s files it relates to. Your subject heading must be no longer than 7 words.]
2. The body of your content following your heading begins with an introduction that summarises your tasks and forecasts the structure of the material you are presenting. You should structure the body of your memorandum in a way that best organises and presents your content in a logical order. There is no “right answer”. You must end with a conclusion that summarises your key points in answer to the tasks you have been set.
3. Use the system of headings specified in Appendix 7 of the New Zealand Law Style Guide (3rd ed).
4. Take care to ensure that your written style and content meet the needs of your audience, Freida Denning. Freida is a general legal practitioner with 20 years of experience and has a good general understanding of business structures. She has a particular dislike of written work containing spelling, punctuation, and grammatical errors.

You may find the following resources helpful when starting your research:
Before you set up a company | Companies Register
Starting a business — business.govt.nz
M Barber (ed) Commercial Law in New Zealand (online ed) ch 26.
S Watson & L Taylor (eds) Corporate Law in New Zealand (Thomson Reuters, 2018) ch 2.
P Watts, N Campbell & Chris Hare Company Law in New Zealand (2nd ed, LexisNexis, 2016) ch 1.
P Webb Laws of New Zealand Partnership and Joint Ventures (online ed).
N Wells Laws of New Zealand Limited Partnerships (online ed)

Task Two

Frieda Denning has asked you to assist with preparing an in-house training seminar for Ngāta & Denning Ltd’s commercial and corporate team. Ngāta & Denning Ltd is joining an Australian association of law practices and the company’s commercial and corporate law team is likely to be advising an increased number of clients with trans-Tasman company interests and issues.

The seminar will focus on the pooling order provisions in the Companies Act 1993 and the Corporations Act 2001 (Cth).

Ngāta & Denning Ltd subscribes to the electronic version of Ford’s Principles of Corporations Law (which is also available via the UC Library catalogue) and you should use this as your primary Australian reference text.

Required

1. With reference to relevant caselaw and legislation, prepare a written draft of the content of the research seminar. This content will be distributed to the audience as a reference tool so it must be written in a formal way.
2. Your document must introduce and forecast the content of the seminar for the audience.
3. Your document must also address the following:
   1. The rationale for the making of court-ordered pooling orders under ss 271-272 of the Companies Act 1993 and s 579E of the Corporations Act 2001 (Cth).
   2. A summary of Morgan v McMillan Investment Holdings Pty Ltd [2024] HCA 33 as a case study illustrating the application of the Australian rules.
   3. An application of the New Zealand rules to the fact situation in Morgan v McMillan Investment Holdings Pty Ltd [2024] HCA 33 to determine whether the same or a different outcome would occur. If you need further information to complete this task, please specify what this is and how it would inform your answer to this point.
   4. A comment on the merit(s) of amending the Companies Act 1993 to include rules equivalent to those in Subdivision A of Division 8 of Part 5.6 of the Corporations Act 2001 (Cth).
4. Although your document must begin with the introduction and forecast specified in 2(a), it need not be structured following the sequence in 3(a)-(d). You may adopt an alternative structure and/or sequence so long as this results in an effective organisation and structuring of material for your audience. You may include diagrams, flowcharts or similar.
5. Take care to ensure that your style, language and content meet the needs of your audience, a team of corporate and commercial lawyers. For examples of work of this kind, refer to recent New Zealand Law Society CPD (Continuing Professional Development) seminar materials. You can access these via an author alphabetical search in the UC Library catalogue for “New Zealand Law Society”. Alternatively, refer to practitioner focused texts, such as Morison’s Company Law (online looseleaf ed, LexisNexis).
6. Use the system of headings specified in Appendix 7 of the New Zealand Law Style Guide (3rd ed) and number each of your paragraphs.