PART A - You must answer Question 1 and either question 2 or 3. A strict word limit of 900 words applies to question 1, and 600 words for questions 2 and 3.

Question 1 - compulsory

Li and Qiang operate a business together as buyer’s representatives for purchasing properties. Their work involved acting for others as a representative of buyers at auctions to purchase residential real estate. When Qiang was in Australia on a business trip, Li was engaged by Walter (who lives in Hong Kong) to purchase for him a property in Hong Kong for not more than $1,500,000 (HK). Li’s cousin had a residential property that met all of Walter’s requirements. The property was on the market for $1,400,000. Li said to his cousin “I have been engaged by this rich man to buy him a property like yours, and is prepared to pay $1,500,000. Why don’t we sell your property to him for $1,500,000 and split the $100,000 difference?” The cousin agreed. The sale is completed and the cousins shared the $100,000 difference.

While looking through some old newspapers about a month later, Walter sees the property he has just bought advertised for $1,400,000, and finds out the truth.

a) Can Walter take legal action against Li and/or Qiang? In your answer consider both the legal relationship between Walter on one hand and Li and Qiang on the other. Also consider the type of legal relationship that exists between Li and Qiang in their business operation.

b) Identify the how you would minimise risk at each “risk event” you can identify in this question.

(10 marks + 5 marks = 15 marks – maximum 900 words)

Question 2

You have been engaged by the Hong Kong based Dragon Bank as a financial risk management consultant. Your instructions are to prepare a brief report for the board on what you consider to be the top 5 financial risk management issues facing the bank. In your answer make appropriate reference to relevant Banking Ordinances that address liquidity requirements for Hong Kong banks.

(10 marks – maximum 600 words)

Question 3

Chenxia was employed by the “Pink Rooster” fast food chicken shop as a shop assistant working the night shift. Her duties required attending to customer orders for fast food chicken, hot chips and other related products, cooking the food items that are sold and cleaning the shop. One evening when Chenxia was working her co-worker rang in sick. Chenxia tried to contact her boss to request another staff member be rostered on but could not contact him. Chenxia was left alone in the shop to handle everything and this left her feeling anxious. As she expected the shop got busy and she had to do everything including putting a large batch of chips in hot oil to cook. As she was running around trying to keep customers happy she slipped and her arm went into the vat of boiling chip fat causing serious burns.

You are engaged by the Pink Rooster board of directors to advise them on their duties under the Occupational Health and Safety Ordinance Cap 509 and whether they may have breached that ordinance. They also want to find out how to better manage the work system at their shops to avoid OHS risks and how to better comply with this ordinance. Advise them.
(10 marks – maximum 600 words)

PART B - You must answer Question 4 and either question 5 or 6. A strict word limit of 900 words applies to question 4, and 600 words for questions 5 and 6.

Question 4 - compulsory

Energy Resources of Brunei (‘ENROB’) was listed on the Hong Kong Stock Exchange (‘HKEX’) to carry on business as an oil exploration company in the South China Sea. ENROB has expanded its activities in recent years to include a number of very risky investments in the energy sector which have created some spectacular profits as well as substantial losses. However ENROB had set up a number of creative partnership arrangements which enabled it to exclude these losses from its financial statements. As a result ENROB has appeared to be one of the most profitable companies in Hong Kong, and its share price has soared. Early in 2006, the HKEX received some complaints about ENROB’s accounting practices, and an investigation commenced. As part of the investigation HKEX requested a report from the ENROB auditors, who were the highly respected chartered accounting firm, Arthur Ng and Son. This firm provided a detailed report in June 2006, which gave justification for the non disclosures and strongly argued that the accounts provided a true and fair view of the company’s position. The report was qualified by a disclaimer that it was prepared solely for the information and use of the HKEX. As a result, HKEX was convinced everything was fine and decided to take no further action.

In August 2006, the Hong Kong Central Bank (‘Central Bank’) was looking for high performing stocks in the energy sector and it purchased $HK50,000,000 worth of stock in ENROB. Not long after, in September 2006, some disgruntled former employees who were recently sacked by ENROB made statements to the press about a dispute over substantial termination benefits. These statements were to the effcet that ENROB was in ‘meltdown’ due to poor financial management. A new investigation was commenced by HKEX and this time, a more thorough investigation process found serious breaches of accounting standards, which may well amount to fraud. It also found a range of corporate governance breaches including lack of independence of the auditors and related party dealings which had not been disclosed. Upon receiving this report, the HKEX immediately halted trading in ENROB shares. It appears that Central Bank’s shares in ENROB are now effectively worthless.

Required:

Advise Central Bank whether it can bring an action to seek damages for misrepresentation or other common law remedies against either the HKEX, or the firm of auditors Arthur Ng and Son.

[15 marks – 900 word limit]

Question 5

Arthur Ng and Son holds a professional indemnity insurance policy with a leading Australian based insurance company, the Chubb Insurance Company of Australia Limited (‘Chubb’). A copy of the terms of this policy is provided with this exam. Following the events described in question 1, you can assume now that the Central Bank has issued proceedings against Arthur Ng and Son and that firm has now duly submitted a claim for indemnity under this policy to Chubb.

Chubb investigations have revealed that the audit committee of ENROB was chaired by Lenny Boy, who was formerly an audit partner with Arthur Ng & Son. Lenny had made the task of the auditors almost impossible by rarely returning phone calls and being very uncooperative in providing documents and explaining transactions. He also used his familiarity with the audit firm to assure them that ENROB practices were completely legitimate. If the auditors pressed him for more detail he would resist, pointing out that most of the accounting practices in question had been set up on the advice of partners in the business consulting divisions of Arthur Ng & Son.

Required:

Advise Chubb whether it has any valid grounds for refusing to indemnify the auditors in respect of the claim by the Central Bank.

NOTE – you can assume that the Insurance Contracts Act 1984 (Cwth of Australia) does not apply to this policy.

[10 marks – 600 word limit]

Question 6

Big Hungry Profitmaker Ltd (‘BHP’) is a public corporation with a diverse range of interests in existing and proposed business ventures across the Asia Pacific region, including the following:
· An open cut gold and copper mine in the Phillipines which has been criticised for heavy metal contamination of local waterways and destruction of large tracts of rainforest;
· Palm oil plantations in Borneo which have been established through illegal burning of rainforest which has displaced endangered populations of orang-utan and the traditional hunting and gathering lifestyle of indigenous peoples.
· A proposal to construct a pulp mill in northern Tasmania, which is opposed because it is not planned to adopt best practice ‘chlorine free’ bleaching processes
· A proposal to build a new coal fired power station in southern China using the cheapest and ‘dirtiest’ technology.

Assume that you are the Chief Executive officer of BHP. Last night a group of environmental protesters surrounded your home and chanted loudly about your company’s environmental impacts. You also happened to watch Al Gore’s movie ‘An Inconvenient Truth’ and realise that it s time that industry was more proactive in dealing with environmental matters.

Required

Prepare a report for your Board of Directors of BHP on how to transform the company into a more sustainable corporation, using the above list of activities as a general indication of the types of risks and opportunities faced by the company.

[10 marks – 600 word limit]

Question 1
According to the fact, it is possible for Walter to take legal action against Li and Qiang. In addition, after paying for Walter’s loss, Qiang has the right to take another legal action against Li for asking for his loss from Li’s misconduct. Since the fact of this case is located in Hong Kong, relative laws of China will be applied in it.

Question 4
The issue of this case is whether either the HKEX, or the firm of auditors Arthur Ng and Son owed a duty to take reasonable care to Central Bank [Esanda Finance Corporation Ltd v Peat Marwick Hungerfords (1997) 71 ALJR 448]. The following will prove that Central Bank can bring an action to seek damages for negligent misrepresentation against the firm of auditors Arthur Ng and Son.

Firstly, the firm of auditors Arthur Ng and Son owed a duty of care to Central Bank [JEB Fasteners Ltd v Mark Bloom & Co (1981) 3 All ER 289]. Due to the HKEX would rely upon their audit report to make decisions whether take any further action to ENROB, the firm of auditors Arthur Ng and Son's responsibility is to scrutinize the ENROB's accounts to disclose a true and fair reflection of its financial position. Also this audit report is a public document, and so it would be relied upon by Central Bank when they invested. Therefore, though Central Bank is the third party, there is a special relationship between the firm of auditors Arthur Ng and Son and Central Bank. Moreover, the firm of auditors Arthur Ng and Son should be reasonable foreseeable that their audit report would be evidence of the HKEX's decisions and investors would rely on, so they should take the reasonable care to investors. In addition, whether there is a reasonable reliance between the auditors and Central Bank is important. Because the firm of auditors were the highly respected accounting firm, it is reasonable the HKEX and investors also highly relied upon the audit report. The audit report was prepared for the HKEX to scrutinize the ENROB's accounts to avoiding any loss of investors [Esanda Finance Corporation Ltd v Peat Marwick Hungerfords (1997) 71 ALJR 448]. Furthermore, although the audit report was qualified by a disclaimer that it was prepared solely for the information and use of the HKEX, the disclaimer could not be effective because there is a special relationship existed between the firm of auditors and Central Bank, the firm of auditors owed a duty of care to Central Bank to take reasonable care in providing this audit report [Hedley Byrne Co Ltd v Heller and Partners Ltd (1964) AC 465].

Secondly, the firm of Arthur Ng and Son breached the standard of care because the firm of Arthur Ng and Son has failed to exercise the required standard of care. Under this situation, the firm of Arthur Ng and Son were required to exercise reasonable care avoiding any risk to the investors of firm in exercise of their judgment and in expressing the information or advice which they choose to conveying. And the firm of Arthur Ng and Son was highly respected chartered accounting firm, thus they should be very professional and prudential in exercise their duty to disclose the fact of financial position or accounting practices. However, the detailed report provided in June 2006, but few months later ENROB is founded serious breaches of accounting standards, which may well amount to fraud. It also found a range of corporate governance breaches including lack of independence of the auditors and related party dealings which had not been disclosed. Such problems could not be formed in the few months. And also such serious breaches should have arisen when Arthur and Son audited the accounting practices of ENROB, the financial position of firm would not like what they described. It is clearly that Arthur Ng and Son would not exercise their professional and prudential care. It is true that the firm of auditors should be able to expect investors would rely on their reports when they invest listed companies, but they did not take equal care avoiding related risks for Central Bank or other investors. As a result the firm of auditors Arthur Ng and Son failed to exercise required standard of care to Central Bank.

Thirdly, Central Bank's damages are not remoteness. Due to there is a special relationship between the two parties, the damages of Central Bank should be reasonably foreseen by auditors. The firm of Arthur Ng and Son should take reasonable care avoiding Central Bank's damages, yet they did not equally carry out their duty and so made clear an untrue and unfair audit report to the HKEX and investors. If the audit report was able to truly disclose their serious breaches of accounting standards and lack of independence of the auditors, the HKEX would have taken a further action or Central Bank would have chosen another company to invest. Furthermore, the audit report also provided sufficient confidence on the position of ENROB to the HKEX and Central Bank, because the HKEX decided to take no further action under the audit report, Central Bank believed ENROB provided a true and fair view of the company's position. It is the main reason to create Central Bank investing ENROB and lead Central Bank's loss.
It can see Central Bank can take legal action against the firm of auditors Arthur Ng and Son for negligence. Central Bank can claim the amount of damages was the amount of loss suffered by investing the ENROM $HK50, 000,000 [Kenny &Good Pty Ltd v MGICA (1992) Ltd (1999) 73 ALJR 901].

论文题目：待定（可能是有关中国企业在风险管理中出现的问题）
课程专业：BUSINESS LAW （商法）
字数：3000-5000
截稿时间：1个月内
学校背景：澳大利亚一流大学（排名前5）
补充要求：由于是Research Project, 论文题目还未决定。请给我一些题目的建议。
学校的写做指导 guide：The Research Project will require investigation of a practical or theoretical legal issue that is relevant to contemporary business operations or management.
The aim of this unit is for students to:
• identify the major sources of legal risk faced by business
managers;
• identify and apply the various legal principles that may impose
liability upon business owners and managers, across a range of areas that
may include:
o the law of business entities;
o contract and tort;
o workplace law;
o banking and lending law;
o directors duties; and
o environmental law and corporate social responsibility
• recommend and explain appropriate strategies to minimise the legal risks identified above