Answers
Fundamentals Level – Skills Module, Paper F4 (HKG) Corporate and Business Law (Hong Kong) 1
December 2008 Answers
This question invites the candidates to demonstrate their knowledge in the common law rules adopted by the court in giving meaning to the words of an Ordinance as well as the effect of the Bill of Rights Ordinance (Cap 383) on the application of such rules. (a) It should be noted at the outset that while it is the Legislative Council that is responsible for the enactment of Ordinance, the power of statutory interpretation is in the hands of the court. The Literal Rule Under this rule, the intention of the legislature has to be ascertained according to the ordinary and natural meaning of the words used in the Ordinance. Provided that the meanings of the words are clear and unambiguous, the meaning must be adopted even though it may appear to be absurd. A judge may look up the definition of words in a dictionary. Re an Infant (1962) HK is a case about the interpretation of the word ‘reside’ in the Adoption Ordinance. In that case, the court was asked to decide if a boy was residing in Hong Kong when he was in a boarding school in the UK. Holding that the word ‘reside’ referred to a place where a person habitually lived and slept, the court decided that the boy was not residing in Hong Kong. The Golden Rule The golden rule requires that where the interpretation of an Ordinance allows for more than one meaning, the court should adopt the meaning which avoids the most absurd or repugnant result. In Re Sigworth (1935) UK, it was held that the words ‘next of kin’ in the Administration of Estates Act 1925 did not include a son, who was the next of kin of an intestate (his mother) whom he murdered. The Mischief Rule This rule is sometimes referred to as the rule in Heydon’s case. The aim of this rule serves to resolve the ambiguities which render the literal rule incapable of being applied in the interpretation of an Ordinance. Under this rule, consideration should be given to the following: – – – – The The The The common law position prior to the enactment of the Ordinance in question; mischief or defect which the Ordinance was trying to deal with; remedy provided for by the Legislative Council; and true reason of the remedy.
Having considered the foregoing factors, the court will then construct an Ordinance in such a way as to suppress the mischief and enhance the remedy. In Gardiner v Sevenoaks RDC (1950) UK, the word ‘premises’ in an Act was held to include a cave when the purpose of the Act was to ensure the safe storage of film on a premises. (b) Article 39 of the Basic Law of the HKSAR (‘BL’) provides, among others, that the provisions of the International Covenant on Civil and Political Rights (‘ICCPR’) as applied to the Hong Kong Special Administrative Region (‘HKSAR’) shall remain in force and be implemented through the laws of the HKSAR. The Article further provides that the rights and freedoms of Hong Kong residents shall not be restricted unless as prescribed by law and that such restriction shall not contravene with the Article. The intention for the enactment of the Bill of Rights Ordinance (Cap 383) (‘BRO’) is to incorporate provisions of the ICCPR as applied to the HKSAR into the laws of the HKSAR. The provision of the BRO set out the individual rights of the citizens of the HKSAR, which are almost identical to those being stated in the ICCPR. Given that the BL is the highest form of law in the HKSAR in that where other laws are in conflict with the BL, the BL is to prevail, the BRO may be said to have been entrenched by Article 39 of the BL in that it has the same legal status as the provisions of the BL. It follows that during the process of statutory interpretation, the courts of the HKSAR must now consider the purpose of the BRO and seek guidance from the ICCPR in determining the meaning of the legislation before them. Hence, any previously accepted interpretations of statutes, which were made without considering the BRO, may now be invalid.
2
The question invites the candidates to show their knowledge in the nemo dat rule and some of the exceptions to the rule. (a) The Latin words nemo dat quod non habat or nemo dat in short mean that one cannot sell things one does not have. The rule, as stated in s.23(1) of the Sales of Goods Ordinance (Cap 26) (‘SOGO’), provides that where goods are sold by a person who is not their owner and who does not sell the goods under the authority of the owner, the buyer acquires no better title to the goods than the seller had.
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Hence, under a contract for sale of goods, even though possession of the goods sold under the contract is transferred to the buyer, the buyer is not the owner of the goods, i.e., he does not have the title or ownership to the goods if the seller is not the owner or authorised by the owner to sell. The buyer in such case has the physical possession of the goods only. While s.23(1) of SOGO applies only to sale by a non-owner, the maxim nemo dat itself has a wider application. Under the maxim, a sale by the owner of goods cannot sell the goods free from encumbrances or charges on the goods in favour of a third party. (b) The SOGO provides for exceptions to the rule. The buyer acquires title to the goods being sold to the buyer by a non-owner once the buyer proves that the buyer’s case is within the boundary of any one of the exceptions. (i) Estoppel A buyer of goods from a non-owner or from a seller selling the goods without authority from the owner may acquire title to the goods if the owner by his conduct is precluded from denying the seller’s authority to sell: s.23(1) SOGO. The aim of the section is to protect the interest of a buyer who is misled by the conduct of the owner coming into the belief that the seller has the authority from the owner to sell. The word ‘conduct’ in the section covers words from the owner. However, the mere act of transferring physical possession of the goods by the owner does not amount to conduct within the ambit of the section. The conduct of the owner has to be a representation to the buyer that the seller has the authority from the owner to sell: Fanlin Investments Ltd v Hang Seng Finance Ltd (1994) HK. Hence an owner by his conduct holding out that the seller is his agent or has his authority to sell or that the seller is the owner of the goods is estopped from denying so; and title of the goods is transferred to the buyer under the contract of sale. (ii) Market Overt Section 24 of SOGO provides for another exception to the nemo dat rule. Under s.24, where goods are openly sold in a shop or market in Hong Kong in the ordinary course of its business, a buyer who buys the goods in good faith and without knowledge that the seller is not the true owner acquires ownership of the goods. In R v Tai shing Jewellery Co (1983) HK, it was held that where a sale of a coin by a person who had stolen the coin to a shopkeeper, s.24 did not assist the shopkeeper for the section was only available to the sale by a shopkeeper, not to a shopkeeper. In Au Muk-shun v Choi Chuen-yau (1988) HK, the Court of Appeal held the following: To be benefited under s.24, the buyer is rested with the burden to show the existence of the following conditions: – – – – The The The The goods must be openly sold; sale must take place in a shop or market; sale must be in the ordinary course of business of that shop or market; and purchaser must act in good faith and without any notice of any defect of title.
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This question invites candidates to demonstrate their knowledge in the various remedies available to innocent parties being suffered a breach of contract. The followings are the principle remedies available to the innocent parties for breach of contract. Damages Damages are remedies at law, i.e., in common law. Hence, once the innocent parties show that they suffer damages as a result of the breach of contract, they are entitled to damages as a matter of right. The purpose of damages is not to punish the party in breach, so the amount of damages awarded can never be greater than the actual loss suffered. Every failure to perform a primary obligation is a breach of contract. The secondary obligation on the part of the party in default is to pay monetary compensation to the other party for the loss sustained by him in consequence of the breach: Photo Productions Ltd v Securicor Transport Ltd (1980) UK. Such monetary compensation for breach of contract represents the damages being suffered by the innocent party. The estimation of what damages are to be paid by a party in breach of contract can be divided into two parts: remoteness and measure. Remoteness of damage involves deciding how far down a chain of events a defendant is liable Hadley v Baxendale (1854) & Victoria Laundry Ltd v Newham Industries Ltd (1949). The principle governing the measurement of damages in contract law is to put the innocent parties in the same position that they would have been in had the contract been properly performed. Quantum meruit Quantum meruit means that a party should be awarded ‘as much as he had earned’. If the parties enter into a contract without determining the reward that is to be provided for performance, then in the event of any dispute, the court will award a reasonable sum. Payment may also be claimed on the basis of quantum meruit when a party has carried out work in respect of a voidable contract: Craven-Ellis v Canons Ltd (1936) UK.
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Specific performance An order for specific performance is an equitable remedy and requires the party in breach to complete their part of the contract. As an equitable remedy, whether an order of specific performance will be granted is on the discretion of the court. Specific performance will only be granted in cases where the common law remedy of damages is inadequate. It is most commonly granted in cases involving the sale of land, where the subject matter of the contract is unique. However, specific performance will not be granted where the court cannot supervise its enforcement. For this reason it will not be available in respect of contracts of employment or personal service: Ryan v Mutual Tontine Westminster Chambers Association (1893) UK. Being an equitable remedy, an order of specific performance will not be granted when it is inequitable to do so, e.g., where the plaintiff has not acted properly on their part. Injunction This is also an equitable remedy and, hence, discretionary by nature. An order of injunction directs a person not to break their contract. It can have the effect of indirectly enforcing contracts for personal service: Warner Bros v Nelson (1937) UK. Rescission This equitable remedy entitles the innocent party to a voidable contract to treat it as if it had never been made and consequently to recover all money or assets that had previously been exchanged under the contract.
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The question invites the candidates to demonstrate their knowledge in the ways through which an employment contract may be terminated. (a) An employee is said to have been unreasonably dismissed when, at the time the dismissal takes place, the employee has been employed under a continuous contract for a period of not less than 24 months for reason other than those stated in s.32K of the Employment Ordinance Cap (‘EO’) because the employer intends to extinguish or reduce any right, benefit or protection conferred or to be conferred upon the employee by the EO (‘the Dismissal Intention’): s.32A(1)(a) EO. The employer is deemed or presumed to dismiss the employee with the Dismissal Intention unless the employer can show that the dismissal is by reasons of the conduct of the employee, the capability or qualifications of the employee for performing his work, redundancy or other genuine operational requirements of the business, or other substantial reasons. It is also a valid ground for dismissal if the parties would be in contravention of the law should the employee continue in the employment of the employer: s.32K EO. (b) Where the dismissal of an employee by an employer amounts to the commission of an offence by the employer when the dismissal takes place in the circumstance being disallowed by the law, the dismissal is said to be an unlawful dismissal. An employer commits an offence if the employer dismisses the employee: – – – – – When the employee has been confirmed pregnant and has served a notice of pregnancy with the employer. The employee is on paid sick leave. The employee gives evidence or information in any proceedings or inquiry in connection with the enforcement of labour legislation or industrial accidents or breach of regulations relating to work safety. For trade union membership and activities of the employee. After the employee is injured at work but before the parties come to an agreement for the employee’s compensation or the issue of a certificate of assessment regarding the employee’s injury.
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The question invites the candidates to show their knowledge in concepts relating to the capital of a company. (a) A share, as defined in Borland’s Trustee v Steel Bros Co Ltd (1901) UK, is ‘… the interest of a shareholder in the company measured by a sum of money, for the purpose of a liability in the first place, and of interest in the second, but also consisting of a series of mutual covenants entered into by all the shareholders inter se’. As such, a share is a personal estate and transferable in the manner provided for by the articles of the company: s.65 Companies Ordinance (Cap 32) (‘CO’). (b) A debenture is the document of a company which evidences an indebtedness or a loan of the company. A debenture could be debenture stock, bonds and other securities of the company whether they constitute a charge on the assets of the company: s.2 CO. A limited company incorporated under the CO must state in the capital clause of its memorandum of association the total nominal values of the shares that the company may issue: s.5(4)(a) CO. The total nominal values is called the authorised capital of the company. The authorised capital of a company is a fixed figure in that if the company issued shares the total nominal values of which is in excess of the company’s authorised capital, the issue is void and those being allotted with the shares may recover the money they have paid for the allotment from the company: Bank of Hindustan, China and Japan Ltd v Ailson (1871) UK.
(c)
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(d)
Where the value of a company’s share in the stock market is higher than the nominal value of the share, which is normally fixed, the difference between the two is referred to as the premium. Strictly speaking, premium is not regarded as the capital of a company. Hence, the rules applicable to premium are different from those of the capital of a company.
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The question invites the candidates to show their knowledge in insider dealing. (a) Under s.270 of the Securities and Futures Ordinance (Cap 571) (‘SFO’), insider dealing in relation to a listed corporation (‘the insider dealing’) takes place under the following circumstances. Firstly, the insider dealing takes place when a person connected with the corporation (‘the connected person’) either deals, or discloses relevant information knowing, or having reasonable cause to believe, that the recipient of the information would deal. Secondly, a person commits the insider dealing when the person contemplating (or has contemplated) a take-over, either deals or counsels or procures another to deal, or discloses information knowing, or having reasonable cause to believe, that the recipient of the information would so deal. Thirdly, the insider dealing takes place when a person receiving relevant information from the connected person or the person contemplating (or has contemplated) a take-over either deals or counsels or procures another person to deal. (b) Relevant information, in relation to a corporation, means specific information about the corporation, a shareholder or officer of the corporation, or the listed securities of the corporation or their derivatives, which is not generally known to the persons who are accustomed or would be likely to deal in the listed securities of the corporation but which would if it were generally known to them be likely to affect the price of the listed securities materially.
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The question invites the candidates to show their knowledge in concepts relating to the voluntary winding up of a company. (a) The winding up, or liquidation, of a company refers to the process through which the life of the company is brought to an end. During the process of winding up, the company continues to exist and all acts are still done under the name of the company. The life of the company will come to an end only after the whole process of winding up is completed and the company is formally dissolved either with or without a court’s order. Voluntary winding up refers to the winding up of a company by the company voluntarily. Section 228(1) of the Companies Ordinance (Cap 32)(‘CO’) provides for the following circumstances under which a company may be wound up voluntarily: – When the period, if any, fixed for the duration of the company by the articles expires, or the event, if any, occurs on the occurrence of which the memorandum or articles provide that the company is to be dissolved, and the company in a general meeting has passed a resolution requiring the company to be wound up voluntarily; If the company resolves by special resolution that the company be wound up voluntarily; If the company resolves by special resolution to the effect that it cannot by reason of its liabilities continue its business, and that it is advisable to wind up; If the directors of the company, or in the case of a company having more than two directors, the majority of the directors, make and deliver to the Registrar a winding up statement under s.228A(1) CO. In such a case, a special procedure for voluntary winding up under s.228A CO applies.
(b)
– – –
(c)
During the winding up process, the assets of the company will be realised by the liquidator, and the proceeds obtained will be used for the settlement of the outstanding debts of the company. The balance, if any, will then be distributed amongst the shareholders or dealt with in such a manner as provided for by the memorandum of association of the company. Voluntary winding up is deemed to commence once the resolution for winding up the company is passed: s.230 CO, or in the case where s.228(1)(d) CO applies, a statement is delivered to the Registrar: s.228A(3) CO and a notice is given in the Gazette during the following 14 days: s.229 and s.228A(4) CO. A winding up is one of the members’ voluntary winding up if a certificate of solvency has been issued prior to the commencement of the winding up process: s.233(4) CO. The company in a general meeting may then appoint a liquidator by passing an ordinary resolution to conduct the winding up process: s.235(1) CO. The liquidator so appointed may be removed by a special resolution of the company in a general meeting: s.235A(1) CO. After the liquidator completes the task, the liquidator must call a meeting, which is the final meeting of the company, and present a report explaining how the winding up process has been conducted and the property of the company has been applied: s.239(1) CO. Within one week of the meeting, the liquidator must send a copy of the report to the Registrar and make a return regarding details of the meeting: s.239(3) CO. The company is formally dissolved after three months from the day the Registrar registers the report and the return with the Companies Registry: s.239(4) CO.
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The question invites the candidates to demonstrate their knowledge in the types of business vehicles being available to those who want to carry on business in the Hong Kong Special Administrative Region (HKSAR). For people who want to conduct business in the HKSAR, they may consider to carry on their business in the form of partnership and company incorporated under the Companies Ordinance Cap 32. Partnership A partnership is defined as the relationship which subsists between persons carrying on business in common with a view to profit under s.3(1) of Partnership Ordinance (Cap. 38) (‘PO’). All the partners are collectively referred to as a firm and the name of the partnership is called the firm-name: s.6(1) PO. The essential feature of a partnership is the existence of a partnership agreement among all the partners. The agreement may be an oral agreement, an agreement in writing or an agreement being inferred from the conduct of the related parties. Hence, partnerships can be formed very quickly and cheaply. Ada, Beatrix and Collins want to start running the business as soon as possible, that all of them want to take part in the day-today management of the business, and that they do not want to incur too much money in the formation of the business. As far as these constraints are concerned, partnership could be their choice. However, in relation to outsiders to partnerships, partners are liable jointly, i.e., together, and severally, i.e., separately, for all the liabilities of the partnership: ss.12–14 PO. As opposed to companies incorporated under the Companies Ordinance (Cap 32) (‘CO’), partnerships do not have separate legal entities. It follows that the liabilities of their partners are unlimited in that the liabilities are the same as those of the partnerships. Since the three want to keep their loss in the business to a certain amount, hence, partnership is probably not the business organisation they should adopt in carrying out their business. Limited Partnership Under s.3(2) of the Limited Partnership Ordinance (Cap 37)(‘LPO’), a limited partnership is a partnership which shall not consist in any case of more than 20 persons. Such a partnership must have one or more persons called general partners and one or more persons called limited partners. A general partner is one who shall be liable for all debts and obligations of the firm. A limited partner is one, who shall at the time of entering into the limited partnership, contribute to the firm a sum, as capital or property, valued at a stated amount, and who shall not be liable for the debts or obligations of the firm beyond the amount so contributed: s.3(2) LPO. During the continuance of the partnership, a limited partner is not allowed, either directly or indirectly, to draw out or receive back any part of his contribution, and if he does so, he shall be liable for the debts and obligations of the firm up to the amount so drawn out or received back: s.3(3) LPO. Subject to LPO, a limited partnership is the same as an ordinary partnership in law: s.6 LPO. From what has been mentioned, unless any one of Ada, Beatrix and Collins are willing to shoulder the liabilities of the limited partnership by being a general partner, a limited partnership again is not suitable to them. Limited company incorporated under the Companies Ordinance (Cap 32) Under the law, a limited company has a separate legal entity. This means, among others, that, while the company’s liability is unlimited, the liabilities of the company’s members or shareholders are limited to the value of the company’s shares being held by them. Hence, by appointing themselves as the directors of a limited company so that all of them can take part in the daily management of the company, conducting their business by a limited company has the advantage of keeping the losses of Ada, Beatrix and Collins under their control. However, before a limited company can start running a business, the company must have already been duly incorporated under the Companies Ordinance (Cap 32) (‘CO’) by complying with all the procedural requirements of the CO. The subscribers or the founder members of the company, i.e., Ada, Beatrix and Collins in this case, are required to complete an application form and sign it. They are also required to deliver to the Registrar copies of signed Memorandum and Articles of Association of the company: s.14(3) CO. Hence, the incorporation process is time consuming and more expensive than the formation of a partnership. Nevertheless, ready made companies or shell companies are available for purchase by people who want to carry on their business in the HKSAR. To purchase a shell company for conducting business could be costly even though to do so can save the time of Ada, Beatrix and Collins. Besides, Ada, Beatrix and Collins may have to take the risk that the company to be purchased has undisclosed liabilities. To sum up, if Ada, Beatrix and Collins are willing to pay, a limited company is probably the best choice for them. However, if they do not want to pay, then they or at least one of them has to risk their wealth if they still want to carry on business together by carrying on their business in the form of limited partnership.
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The question invites the candidates to show their knowledge in the requirements for the formation of a contract. It should be noted at the outset that for the formation of a contract, there must be an offer, acceptance of the offer, considerations from the parties concerned, and the intentions of the parties to create legal relations. (a) In contract law, an offer may be terminated by acceptance, rejection and revocation. An offer may also be terminated when it is lapsed.
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For a contract to be formed, the acceptance of an offer by the offeree must correspond with the terms of the offer. An offeree who accepts the offer on terms different from the offer, in effect, rejects the offer and makes a counter-offer. In such a case, the original offer is terminated and not available for acceptance afterwards: Hyde v Wrench (1840) UK. It should be noted that a mere enquiry by the offeree for further information about the offer is not a rejection of the offer, and hence, the offer is still available for acceptance before it is properly revoked. In Stevenson v McLean (1880) UK, having received an offer from the defendant, the plaintiff asked the defendant for information about the manner of payment and delivery. It was held by the court that what the plaintiff did was just to seek further information from the defendant regarding the performance of the contract. Hence, there was no rejection by the plaintiff of the offer from the defendant. The word ‘demand’ being used in the problem scenario suggests that it was a requirement by Crystal that the company had to pay her a monthly salary of HK$30,000. It would be very difficult for Crystal to argue that the demand being made by her was in fact an enquiry for further information from the company regarding the salary. As such, the demand from Crystal was a counter-offer from her. The counter-offer was not accepted by the company when the company refused Crystal’s demand on the same occasion. It follows that when the company refused Crystal’s demand, Crystal’s offer was terminated. Hence no offer from the company was available for Crystal to accept. As such, Crystal may well be advised that there is no contract between the company and her. (b) This part of the question is about the need of consideration from the contracting parties for the formation of a contract. To determine whether the company may withdraw the offer before the end of this week, at issue is whether there was a contract between the company and Daisy under which the company was contractually bound not to withdraw Daisy’s offer within the week. When the company gave Daisy the offer and promised to wait for the reply from Daisy until the end of this week, the company in fact made two offers. The first offer was the job offer and the second one was the offer from the company to Daisy that the company would keep the job offer open until the end of this week (‘the Second Offer’). For a contract to be validly formed, the parties to the contract must furnish considerations by the time the contract is concluded. For the purpose of forming a contract, the considerations from the parties must be valuable considerations. ‘A valuable consideration, in the sense of the law, may consist in some right, interest, profit, or benefit accruing to the one party, or some forbearance, detriment, loss, or responsibility given, suffered or undertaken by the other.’ Per Lush J Currie v Misa (UK) The fact that Daisy agreed to consider the job offer and reply to the company within the week amounted only to an acceptance of the Second Offer. On the basis of the facts given by the problem scenario, it seems quite clear that no consideration has been given by Daisy for the formation of a contract under which the company is contractually bound to wait for Daisy’s reply until the end of this week. As such, the company may well be advised that the company may withdraw the offer any time if the company wishes to do so.
10 The question invites the candidates to show their knowledge in the common law duty of care owed by directors to a company. As such a director owes to the company a duty of care, which is also known as the common law duty of care and skill. In relation to the duty of care and skill, it is the law that in the performance of their duties, the directors of a company are expected to demonstrate that degree of care and skill which ‘may reasonably be expected from a person of his knowledge and experience’. Re City Equitable Fire Insurance (1925) UK per Romer. J. The standard, as laid down by Romer. J in the City Equitable case, calls for the consideration of both objective and subjective aspects. In determining the reasonableness in the acts of a director in managing the business of a company, while the court expects a director to demonstrate that degree of skill, which would have been shown by a reasonable director, the court will also take into consideration the knowledge and experience being possessed by that particular director in question. At issue is whether Hugo was in breach of the duty of care and skill when he signed the contract without reading it. In determining the issue, the fact that Hugo himself was a lawyer in practice before he joined the company is relevant. The standard of care and skill that the court expects from Hugo may probably be the degree of prudence that is normally exercised by a lawyer when the lawyer signs legal documents. It follows that the court may probably demand that, for Hugo to discharge the duty of skill and care properly, Hugo should have read the document before he signed it. However, the argument of Hugo is unlikely to be accepted by the court. Given that Property Limited is a company engaging in property investment business, it is not unusual for Hugo to approve transactions of the company relating to sale and purchase of properties by signing on different kinds of legal documents. It follows that Hugo ought to have been aware of the consequence, i.e., loss is likely to be suffered by the company, if mistake should be made in the content of the contracts. As such, the court will probably find that Hugo, as a director, was in breach of the common law duty of care and skill he owes to the company when he signed the document without having read it. The advice to Hugo is that he will probably be liable for the loss suffered by the company.
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Fundamentals Level – Skills Module, Paper F4 (HKG) Corporate and Business Law (Hong Kong) 1
December 2008 Marking Scheme
This question invites the candidates to demonstrate their knowledge in the common law rules adopted by the court in giving meaning to the words of an Ordinance as well as the effect of the Bill of Rights Ordinance (Cap 383) on the application of such rules. (a) and (b) 4–5 2–3 0–1 Answers provide a clear understanding and thorough treatment of the subject areas being examined. Less thorough treatment of the question. Towards the bottom of this range are those answers which have only very brief explanation of the subject areas being examined. Very weak answers with inadequate information or answers show little understanding of the topic being examined.
2
The question invites the candidates to show their knowledge in the nemo dat rule and some of the exceptions to the rule. (a) and (b) 2–3 At the top of this range are those providing a clear understanding and thorough treatment of the subject area being examined. Towards the bottom of this range will be those showing some knowledge but with little detail. Extremely poor answers that show either no or very little knowledge of the area. At the top of this range are those providing a clear understanding and thorough treatment of the subject area being examined. Towards the bottom of this range will be those showing some knowledge but with little detail. Extremely poor answers that show either no or very little knowledge of the area.
0–1 (c) 3–4
0–2
3
This question invites candidates to demonstrate their knowledge in the various remedies available to innocent parties being suffered a breach of contract. 8–10 5–7 2–4 0–1 Answers provide a thorough treatment of the question. Answers show an understanding of the question area but with little explanation. Answers show some knowledge. Extremely poor answers that show either no or very little knowledge of the area.
4
The question invites the candidates to demonstrate their knowledge in the ways through which an employment contract may be terminated. (b) and (c) 4–5 2–3 0–1 Answers provide a clear understanding and thorough treatment of the subject areas being examined. Less thorough treatment of the question. Towards the bottom of this range are those answers which have only very brief explanation of the subject areas being examined. Very weak answers with inadequate information or answers show little understanding of the topic being examined.
5
The question invites the candidates to show their knowledge in concepts relating to the capital of a company. (a) and (c) 2–3 At the top of this range are those providing a clear understanding and thorough treatment of the subject area being examined. Towards the bottom of this range will be those showing some knowledge but with little detail. Extremely poor answers that show either no or very little knowledge of the area. At the top of this range are those providing a clear understanding and thorough treatment of the subject area being examined. Towards the bottom of this range will be those showing some knowledge but with little detail.
0–1 (b) and (d) 0–2
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6
The question invites the candidates to show their knowledge in insider dealing. (a) 6–7 4–5 0–3 Answers provide a clear understanding and thorough treatment of the subject areas being examined. Less thorough treatment of the question. Towards the bottom of this range are those answers which have only very brief explanation of the remedies. Very weak answers with inadequate information or answers show little understanding of the topic being examined. At the top of this range are those providing a clear understanding and thorough treatment of the subject area being examined. Towards the bottom of this range will be those showing some knowledge but with little detail. Extremely poor answers that show either no or very little knowledge of the area.
(b)
2–3
0–1
7
The question invites the candidates to show their knowledge in concepts relating to the voluntary winding up of a company. (a) and (b) 2–3 At the top of this range are those providing a clear understanding and thorough treatment of the subject area being examined. Towards the bottom of this range will be those showing some knowledge but with little detail. Extremely poor answers that show either no or very little knowledge of the area. At the top of this range are those providing a clear understanding and thorough treatment of the subject area being examined. Towards the bottom of this range will be those showing some knowledge but with little detail. Extremely poor answers that show either no or very little knowledge of the area.
0–1 (c) 3–4
0–2
8
The question invites the candidates to demonstrate their knowledge in the types of business vehicles being available to those want to carry on business in the HKSAR. 8–10 5–7 2–4 0–1 Answers provide a thorough treatment of the question. Answers show an understanding of the question area but with little explanation. Answers show some knowledge. Extremely poor answers that show either no or very little knowledge of the area.
9
The question invites the candidates to show their knowledge in the requirements for the formation of a contract. (a) 5–6 3–4 0–2 Answers provide a clear understanding and thorough treatment of the subject areas being examined. Less thorough treatment of the question. Towards the bottom of this range are those answers which have only very brief explanation of the remedies. Very weak answers with inadequate information or answers show little understanding of the topic being examined. At the top of this range are those providing a clear understanding and thorough treatment of the subject area being examined. Towards the bottom of this range will be those showing some knowledge but with little detail. Extremely poor answers that show either no or very little knowledge of the area.
(b)
3–4
0–2
10 The question invites the candidates to show their knowledge in the common law duty of care owed by directors to a company. 8–10 5–7 2–4 0–1 Answers provide a thorough treatment of the question. Answers show an understanding of the question area but with little explanation. Answers show some knowledge. Extremely poor answers that show either no or very little knowledge of the area.
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