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