Project #11906 - Company Law

ASSIGNMENT 1 

Read the case excerpt. Identify the issues and discuss the relevant statutory and common 

law positions. This activity is worth 8%. A model answer is provided for your guidance 

below and is to be used for all similar assignments. 

 

The appellant, Mr Billie Stern ("Mr Stern"), was the managing director of Your Money 

Management Ltd ("YMM") and Westcoast Property Management Ltd ("Westcoast"). 

YMM operated as the management company of a group of property companies called the 

Your Money Group ("the Group") from December 2003 to January 2010. YMM went 

into creditors’ voluntary liquidation on 17th February 2010 with a deficiency with regard 

to creditors then estimated to be TTD50.77m, but later increased to TTD100.186m. 

Westcoast then took over the management of the Group in February 2003. On 26th 

October 2004 Westcoast was compulsorily wound up. Its estimated deficiency with 

regard to creditors was TTD10.224m. 

 

On 24th October 2006, the Official Receiver commenced proceedings against Mr Stern 

under the Companies Act 1995 in relation to his conduct as a director of both YMM and 

Westcoast. The matters by reference to which it was alleged that Mr Stern was unfit to be 

concerned in the management of a company, so far as still relevant, fell into two main 

groups. The first ("the Drawings Charges") concerned the alleged unauthorised drawings 

by Mr Stern from both YMM and Westcoast. The second ("the Trading Charges") related 

to alleged trading at the risk of creditors by both companies. 

The conduct of which the Official Receiver complained, referred to as charges, fell into 

the categories we have already mentioned. The Trading Charges, as summarised by the 

judge in paragraph 18, were: 

(1) [Mr Stern] traded in respect of YMM at the risk of creditors and/or knowingly 

continued the company's business when there was no reasonable prospect of all 

creditors being paid. 

(2) [Mr Stern] financed YMM's business with TTD50.2 million retained from 

revenues collected on behalf of the State. 

(3) [Mr Stern] drew undue remuneration and benefits having regard to the 

prospective turnover or profitability of YMM and the interests of creditors. 

(4) [Mr Stern] knowingly operated the business of Westcoast when there was no 

real prospect of all creditors being paid. 

(5) [He] had no reasonable grounds for expecting that the business of Westcoast 

would succeed, it having been carried on without any significant change in its 

financing or method of operation following the business which had previously 

been carried on unsuccessfully by YMM. 

(6) The operation of Westcoast unfairly and improperly exploited the privilege of 

limited liability. Page | 2 

(7) [Mr Stern] financed Westcoast's business with sums retained from revenues 

collected on behalf of the State; having regard to the point on withholding tax that 

I have mentioned this point is still relied on but in respect of a smaller amount. 

(8) [Mr Stern] drew excessive remuneration from Westcoast." 

With regard to the Drawings Charges it was agreed that charge against Mr Stern, with 

regard to both YMM and Westcoast, was that he 

"drew substantial sums from each company in turn in addition to [his] 

remuneration which drawings constituted either simply misapplication of 

corporate funds or unlawful loans to directors." 

Mr Stern wishes to appeal all these charges and comes to you for advice. Please advise 

Mr Stern, based on your knowledge of the law of Trinidad and Tobago, as to the 

possible outcomes. 

This coursework essay will account for 8% of your overall mark. You should refer to 

the APA or Chicago style guide for information on bibliographic/referencing styles. 

The guideline developed to assist you in completing this assignment is indicated below. 

See also the model answer. 

________________________________________________________________________ 

This assignment shall be marked out of 100 marks and pro-rated out of 8% as follows: 

Identify the legal issue(s) raised (10 marks) 

Identify the relevant statutory and common law positions that apply to the issue, 

citing the exact legislative provision or case (40 marks) 

Based on the identified law, recommend a solution to the problem (50 marks

Subject Law
Due By (Pacific Time) 09/13/2013 12:00 am
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