1.  Write an essay answering of the following two questions:

a. Should the practice of hedging share options conferred as a part of a director's or other officer's remuneration package be regulated and, if so, how? In your response discuss what the problem with the practice is, the current state of regulation of director's and other officer's remuneration, and the methods and effectiveness of regulation of hedging share options. Discuss also whether the practice is one which should be regulated.

b. Would the case law on piercing the corporate veil have helped the victims of asbestos related diseases recover from James Hardie Ltd (NW? In your response indicate what cases would provide useful precedents. Also consider what legislative intervention might resolve such situations.

2. Data Pty Ltd ('Data') is a newly founded IT company that specialises in networking technology. The company recently patented a special form of data communication. This technology works by grouping packets of information together, isolating similar data in each packet and then sending them as a group down the data stream. This new technology is extremely successful. It can increase internet speeds by up to 300%.

As a result, Data becomes a highly profitable company. It markets its patent rights in all major global markets, earning lucrative royalties.

The board of directors of Data decides at its meeting in May to buy-back some of the shares held by Apex Pty Ltd ('Apex') in Data. The major shareholders of Data are Apex and Bravo Pty Ltd ('Bravo'). Apex holds 48% of the issued shares in Data, while Bravo has a 30% stake.

The other shares are held by a number of minority shareholders. CC Pty Ltd ('CC') and Dan hold 10% and 12% of the issued shares in Data respectively.

A proposal is put to the shareholders to buy back 8,000 shares held by Apex for 525,000. Apex votes in favour of the proposal. CC and Dan believe that Data should use it profits for expansion or re-investment into new projects. They, therefore, vote against the proposal. Bravo is absent and does not vote on the resolution.

Advise Dan.

3. Marcus was a director of a small proprietary company. The company had given Marcus several low interest loans to buy a house and land for private purposes. In late 2004, the company began experiencing financial difficulties but continued to trade. At a meeting in December 2004, Marcus and a newly-appointed director, Barton, resolved to release Marcus from all his debts to the company. Subsequently, a deed of release was properly executed by the company. Barton had been appointed in haste, was unfamiliar with the company's affairs and was prepared to follow Marcus' advice as to his duties.

In March 2005 the company went into liquidation and a liquidator was appointed. The liquidator discovered that two years before, Marcus had given a personal guarantee to the ANZ Bank for a loan of $50,000 to the company. In both January and February 2005, a sum of $25,000 had been paid to the ANZ Bank in satisfaction of the loan. The liquidator also discovered that the company had probably been insolvent for at least six months.

In view of these facts discuss the actions that could be brought by the liquidator.

Part B:

1. Slide Pty Ltd ('Slide') is a newly registered company which provides skiing equipment for hire at Mount Buller. The directors of Slide are Alison, Bob and Chris. Alison is responsible for the day-to-day running of the company. She has never been appointed as a managing director.

Last year, Slide entered into a 5 year contract with RipOff Pty Ltd ('RipOff) to purchase $10,000 worth of brand-name skiing equipment per year. Alison owns 36% of the shares in RipOff.

Slide is dissatisfied with the equipment provided by RipOff Pty Ltd. Slide finds out the equipment is fake, overpriced and it breaks down on the snow causing the dangerous accidents to skiers. As a result of this, Slide wishes to discontinue the contract.

Slide says that the contract they executed with RipOff was done without affixing Slide's common seal. Alison did not tell Bob and Chris about the contract with RipOff. She signed the contract and forged Bob's signature. Dale, the CEO of RipOff, has seen Bob's signature on many occasions and noticed that on this occasion, it was slightly different.

Is the contract between RipOff and Slide enforceable?