Company and Association Law - Linfox, Downer and Thiess - Assignment Example

Name Course Tutor Date Company and Association Law Part A 1. A. The joint venture participants consisted of three partners namely, Linfox’, ‘Downer’ and ‘Thiess’. B. The joint venture is known as Roche Thiess Linfox Joint Venture. Consequently, the joint venture is registered within that name because of GST, under an Australian Business Number. In the documents that have been provided for the evidence, the joint venture was always referred to as RTL. The three applicant companies, namely, Linfox’, ‘Downer’ and ‘Thiess’ are the owners of Roche Thiess Linfox Joint Venture joint venture (Iowa General Assembly 5). 1 C. The joint venture was formed to provide mining, civil construction as well as earthmoving plant hire services. 2. The issue before the court was that in the year 2002, Yallourn Energy Pty Ltd, which supposedly is the holder of mining rights for a coal mine within Yallourn, got into an arrangement with Roche Thiess Linfox Joint Venture to develop the mine. Under the ‘alliance Agreement’, the company agreed to offer Roche Thiess Linfox Joint Venture possession of the mine. Meanwhile, Roche Thiess Linfox Joint Venture agreed to undertake contract mining. On 31st 0ctober 2006, Richard Gausci who was among the workers working on the mines died because of injuries he got while he was trampled by a belt clamp on a conveyor at the Yallourn mine. Mr. Richard was a worker of a maintenance subcontractor engaged by Roche Thiess Linfox Joint Venture (Iowa General Assembly 12-15). 2 As a result, charges were laid against the applicants ss 21, 23 and 26 of the Occupational Health and Safety Act 2004 (Vic) (the ‘Act’). There were nine counts where every account claimed in substance that Roche Thiess Linfox Joint Venture failed in ensuring there was considerably practicable, and that the mining site was safe and devoid of health risks. During the beginning of the trial, the applicants sought to have the charges against them dismissed, in contention that they were indefensible. However, the trial jury rejected the application. The applicants sought review, under s 296 of the Criminal Procedure Act 2009 (Vic), of the trial jury’s dismissal to confirm under s 295(3) of that Act. Accordingly, appeal was granted and hence charges against the applicants were dismissed (Iowa General Assembly 10-12).3 As it appeared, both the type of the charges as well as the evidence which was relied on revealed an elementary fallacy on the part of the prosecution as to what was needed to provide evidence on the commission of an offence under the Act by entity members of the joint venture. It is both outstanding, and deplorable, that this was not respected before. The defect, which could so simply have been alleviated had it been identified in good time, was then inoperable. There was a debate during the hearing as to if it was suitable for the defendants to have what was equal to a no case submission before any proof was called. In my opinion, this was not proper course in this case, provided that the legal matters raised went to the very basis of the case brought against the defendants. As a result, the utilization of the interlocutory appeal process was both suitable and necessary within the somehow unusual situation of this case. In the event, this timely action saved numerous weeks of trial time and evaded high levels of inconvenience to the witnesses (Sherriff 26). 4 3. Crown claimed that Roche Thiess Linfox Joint Venture being the employer did not so far as was convincingly practicable offer and maintain its employees a working environment that was safe and did not have any health risks (Maxwell 12). 5 The fundamental premise of the Crown’s case, hence is that the joint venture (Roche Thiess Linfox Joint Venture) was the employer, which possessed a responsibility under s 21(1) to its employees, including the Silcar employees to make sure that so far as was reasonably practicable that they were in a position to work safely and without any risks within the mine workplace. Nevertheless, no allegation was made that any of the corporate members of the joint venture was itself an employer which had the obligation of ensuring safety to its employees or Silcar’s employees within that workplace. Therefore, Crown’s case was that Roche Thiess Linfox Joint Venture was the employer on whom the safety obligation was imposed by s 21(1). 4. No, the court never agreed with the premise. The joint venture had no lawful personality separate from the corporations which had united (through contract) in the venture. Therefore, Roche Thiess Linfox Joint Venture could not get into a contract of employment. Only its corporate members could. The court rejected the defense challenge on that it had the inference been considerably open on the proof that any of the applicants was an employer and hence was in control of the pertinent activity within the mine work place. The availability of other inferences steady with the applicants’ lacking liability under the Act would did not justify holding back the case from the judges. Nevertheless, no evidence of employment or control was availed. As the counsel for the applicants appropriately presented, the issue of whom in the real sense employed the employees at Roche Thiess Linfox Joint Venture and who in reality controlled the applicable activity within the mine workplace, was considered to be an issue of conjecture as well as speculation. Therefore, it was concluded that there was nothing within the evidence relied on which enabled a deduction to be convincingly drawn that any of the defendant companies was an employer or relevantly in control and hence the case was dismissed (Sherriff 16-18). 6 Part C Introduction The limited liability partnership (LPP) is a type of inclusive partnership formed under state general law partnership laws, whereby partners are statutorily allayed of all or part of their individual liability for partnership liabilities, debts as well as responsibilities. The partnerships are formed through filling a registration statement in the way the state statute specifies. Because the status of such partnerships has a likelihood of affecting the partners’ shares of partnership and also partner’s rights of indemnification and contribution, the partners are required to review their partnership agreement and distribute the business risks among the partners fittingly (Sullivan 22-25). 7 In regard to the creation and operation of limited liability partnerships, there is a filing requirement. The various state limited liability partnership statutes necessitate that the partnership should file a document to qualify as an LPP. The document is variously known as a of limited liability partnership. Filling fees is also required and in most cases it is dependant on the number of partners. Name is also a requirement where the partners should use a name with words “limited liability partnership" or the abbreviations "LLP". Moreover, the partners are supposed to have an insurance whereby the insurance covers the liabilities and hence the partners do not bear personal liability (Sullivan 26-28). 8 Vicarious Liability In vicarious liability, there is first generation LLP Statutes. The primary limited liability partnership statutes sheltered partners from mismanagement claims which come from either laxity or malfeasance of the partners. This statutes offered protection against professional malpractice but left LLP partners jointly or mutually and severally, legally responsible for other partnership liabilities, debts in addition to responsibilities. Moreover, under this statutes, partners go on having a contribution responsibility in case a partners has an indemnification right not in favor of the partnership. Whereas the first generation LLP Statutes grant liability protection against malpractice claims pled as torts, it is not certain if they offer wider protection to cover malpractice-type claims pled under speculations other than tort, for instance breaching the contract or breaching of fiduciary obligation. To the level that liability is emphasized on contractual basis for conduct can also be claimed to have been inappropriate on negligence theory, for example, by asserting a breach of an implied guarantee within a contract, it is practical to argue that all liability resulting from such behavior is protected by the status of the partnership. Given that the fundamental policy in the partnership legislation is to protect partners in relation to some kinds of conduct, conduct whose protection is afforded within one part (tort claims), is supposed to be afforded corresponding protection within another area. This means contract claims basing on implied warranties. This decision is founded on the usage of the word “negligence” within LLP legislation and on the basis that protection within an implied contractual state has been endowed by usage of the term "wrongful acts" in nearly all LLP legislation (Fibbe 12-14).9 There is also Second Generation" LLP Statutes. In this case, ensuing partnership statutes try to resolve the matters of if malpractice type claims are established in tort or within contract and if partners are legally responsible on a negligent indemnification claim of a partner. The statutes in general states that the partners do not bear individual liability for any partnership responsibilities or liabilities resulting from the mal-practice of a co-partner or other individual not under the management and control of the partner. Nevertheless, numerous uncertain matters linger under the second generation statutes. One, since general partners customarily have joint and several liability for partnership responsibilities, the Uniform Partnership Act does not have any provisions regarding distributions formed when the partnership is in receivership or which make the partnership insolvent. It is not certain within this partnership context if partner distributions formed after partnership liability occurs will be subject to a re-contribution responsibility. Additionally, in case the courts enforce a re-contribution obligation, the limits of that requirement are tentative (Fibbe 25).10 Secondly, the outcome of such partnership statute on other partnership liability sharing arrangements under the Uniform Partnership Act and by agreement is supposed to be taken into consideration. Conventionally, the risk of loss arising from malpractice liabilities should be shared by the partners within general partnerships. In several partnerships, it is not compulsory for a negligent partner to indemnify or reimburse the partnership for partnership losses ensuing because of the partner’s negligence. Furthermore, partners normally are at liberty to be indemnified through the partnership for individual liabilities incurred because of the negligence of the partner within the scope of the partnership business. Still, indemnified partners have a right of contribution in opposition to the other partner. However, the indemnification-contribution issue has been handled that the outcome is changed and the negligent partner is left to bear the individual cost of the malpractice caused without any contribution right. But the partner with the right to indemnification can recover only when the partnership has adequate assets (Fibbe 20-22). 11 In case partners within a liability partnership prefer retaining a full or contractually limited contribution right, the partnership agreement is supposed to offer that right. Enclosure of a contribution right within the partnership agreement brings other matters. First, there is an issue regarding if it is possible to form a contribution responsibility that is enforceable by the partner who is negligent excluding not the creditors. In case the partner insolvent, the trustee may possibly implement the contribution obligation. If not, there is no certain solution but the most preferred conclusion is that creditors cannot implement the contribution obligation except if they posses third-party beneficiary rank. Second, there is the matter as to if the contribution obligation of the partners is supposed to be limited to protect non-negligent partners from considerable and potentially insolvent judgments whereas making negligent partners whole with respect to less important judgments. Third, acknowledging that official contribution agreements will raise a creditor’s disagreement settlement control, there is an issue of if it is preferable to depend on less official guarantees that partners will provide for each other, and if there are non-contractual ways of establishing a climate where partners can depend on such guarantees. Lastly, in case partners utilize official or unofficial contribution agreement, there is an issue regarding the conditions under which contribution ought to be available. An ordinary approach is that partners are supposed to make contributions towards ordinary negligence judgments although not toward judgment which engage co-partner’s unpleasant negligence, willful misdemeanors, fraud, harassment, actions engaging moral turpitude, assets embezzlement, and violation of fiduciary obligation in addition to other extreme actions. Lastly, lacking contribution rights or limited contribution rights is supposed to cause professional firms to reconsider the scope of their malpractice insurance (Fibbe 34-35).12 Third, in case there are inadequate partnership assets to pay all partnership obligations, there is a question if non-negligent partners may make the partnership to utilize its assets in paying liabilities where the non-negligent party is jointly and severally legally responsible, for instance, lease payments. In case partnership assets are utilized in paying such liabilities, a negligent partner is more prone to being obliged to utilize his or her separate assets in paying the liability. Such conduct is prone to raising substantial issues regarding the non-negligent partners’ violation of their fiduciary obligations of loyalty, good faith as well as fair dealing. Still in Vicarious Liability, there is third generation LLP statutes which limits liability for all claims and are not restricted to professionals (Gale Research Company 8-12).13 There is also the effect of vicarious liability protection on the culture of a company. The last matter is about how LLP status affects the culture of the company as well as professional representation. The first question is if the status is fair to each and every partner in practice areas which pose the utmost risk of great malpractice judgments, and which are characteristically the most rewarding for the partnership, for instance these partners probably will bear the liability risk alone, rather than distribute the risk with partners in less risky practice areas within which malpractice judgments are improbable or are in the limits of the partnership insurance as well as asset base. A connected issue is if and to what degree, partners who bear inconsistent loss risk are supposed to be compensated for that risk. The third issue regards the meaning of direct supervision and control as well as the effect of supervisory obligation on non-negligent partners, including if service on committees, for instance management, judgment, recruiting, training, associate committees, establishes a risk of liability; if business generators, who have evident supervisory obligations on several issues but who cannot take part within the underlying work, have inordinate risk; and if partners will be willing to supervise in addition to training associates (Sullivan 15-20).14 The forth issue is if LLP partners will be less willing to help their co-partners regarding issues not within their absolute control. The fifth issue is if LLP partners will take a less active role within policing the performance of their co-partners, because non-performance knowledge establishes liability risk. All these issues pose the last question of if changes within personal liability will affect the sense of ordinary interest in addition to cooperation that is advantageous part of company culture and if LLP partners will become secluded and autonomous economic units. The partners should re-examine all these questions in the light of goals of the professional partnership: client representation as well as service (Gale Research Company 25-26).15 Direct Partner Liability Limited liability partnership statutes offer that the partners will be personally responsible for their own negligence or malfeasance. Moreover, most Limited liability partnership statutes provide that Limited liability partnership partners are completely responsible for the negligence, wrongful acts as well as misconduct of any individual under the Limited liability partnership partner’s “direct supervision and control” even if the statutory terminology is different in this manner. The diverse state Limited liability partnership statutes do not define what direct supervision and control implies and this issue is interpreted through judiciary. For supervisory liability to be enforced on a Limited liability partnership’s partner both “supervision and control” ought to exist and the consented supervision and control are supposed to be direct. It is likely that Limited liability partnership statutes consider instant, close supervision and control through a Limited liability partnership partner, instead of informal level of supervision or control is considered. The direct supervision as well as control standard are supposed to necessitate an intimate association within supervision and control in connection with concrete work with respect to an issue, instead of plain obligation for an issue or customer. Therefore, for instance, a Limited liability partnership partner within a company who is working daily in supervising and directing the activities of a worker would to have some exposure to liability. In contrast, the departmental chair to the managing partners who have set up general policy for their companies but who are not personally involved within a customer representation would emerge not to have exposure to liability. In the same way, two Limited liability partnership partners working on an issue in parallel of each other, none of them is perceived as supervising or controlling the other, ought to be in a position to argue that because they acted autonomously of each other, they are not expected to be exposed to liability for the conduct of the other partner. Nevertheless, the lack of authority on this matter establishes risk, which has the likelihood of affecting the actions of the other Limited liability partnership partners (Sullivan 42-45).16 Works Cited Fibbe G.K. EC Law Aspects of Hybrid Entities. Volume 15 of Doctoral series. Sydney: IBFD, 2009. Gale Research Company. Encyclopedia of associations, Volume 3; Volume 36. Florida: Gale Research Co., 2006. Iowa General Assembly. Legislative documents submitted to the General Assembly of the State of Iowa, Volume 2. New York: New York Public, 2010. Maxwell C. Occupational Health and Safety Act Review. New York: Macmillan, 2009. Sullivan Callison. Limited Liability Companies: A State-by-State Guide to Law and Practice. New Jersey: Sage. Sherriff B. The applicants relied on a statement to that effect in B Sheriff, OHS in Practice – A Guide to Legislation in Victoria (2010). Vol. 11–23. Read More