You should not summarise the facts at the beginning of your answer. Go straight to identification of the main legal issues raised by the facts in your Introduction. b) Use the IRAC framework for structuring your discussion of the individual issues and sub-issues rather than the entire paper will make your paper easier to read. c) Use of headings/subheadings can also make your paper easier to follow. d) You need to give legal authority for each legal principle you state in your answer. Wherever possible, you should rely on primary, rather than secondary, sources of law (i.e. cases and legislation rather than texts and journals). e) Your assignment must have footnotes and a bibliography listing the cases, books and or journal articles you used in preparing the answer.  

Please note the following when completing a legal problem assignment:

1. In a legal problem solving assignment, you marker is looking for your ability to solve a legal problem by identifying the correct legal issues and relevant law, and applying the relevant law to the facts in issue.
2. You should not summarise the facts at the beginning of your answer. Go straight to identification of the main legal issues raised by the facts in your Introduction.
3. Use the IRAC framework for structuring your discussion of the individual issues and sub-issues rather than the entire paper will make your paper easier to read.
4. Use of headings/subheadings can also make your paper easier to follow.
5. You need to give legal authority for each legal principle you state in your answer. Wherever possible, you should rely on primary, rather than secondary, sources of law (i.e. cases and legislation rather than texts and journals).
6. Your assignment must have footnotes and a bibliography listing the cases, books and or journal articles you used in preparing the answer.

 The Legal Problem

 Peter Lim and Jane Cheng are the only directors and shareholders of Fantastic Graphics Ltd (Fantastic), a private company incorporated in Hong Kong in 2015. Peter holds 1000 shares in Fantastic and Jane holds 500 shares in the company. A year ago, the company began to suffer cash flow problems and needed additional capital. Jane persuaded Andrew Wong to invest $100,000 in Fantastic. Peter and Jane held a directors’ meeting and decided to issue Andrew 100 shares in the company. A general meeting of shareholders also appointed Andrew as a director of the company. At the shareholders’ meeting, Andrew said that he would not be attending board meetings and wanted to be treated as a ‘silent partner’.

The company’s financial position improved as a result of Andrew’s $100,000 investment. Despite its increased profits, Peter and Jane caused Fantastic to pass a shareholders’ resolution that it would not distribute a dividend for the current year. Instead, they gave themselves pay rises and arranged for the company to hire two new Mercedes-Benz cars for their personal use.

Andrew began to attend directors meetings and made a number of suggestions to improve the profitability of the business. He also questioned Peter and Jane about their pay rises. Peter and Jane resented these questions and took the following actions: 

They formed another company, Peter and Jane Graphics Pty Ltd, in which Andrew was not involved, and diverted a valuable government design contract that they had been negotiating on behalf of Fantastic to their new company.

They also called a shareholders’ meeting at which they will propose that Andrew be removed from his position as a director.