IRAC method essay Example

IRAC Method Essay

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29^th April, 2012.

Question 1: Legal Advice to Toan on the Auction’s success

Step 1: Identification of the legal issues

Owing to the fact that Toan had previously bought land, the bone of contention of the case will revolve around whether Toan is a separate entity from the company that he formed and therefore no breach of the government’s policies and laws that seeks to restrict developers from purchasing multiple lands. Therefore, the legal issues in the situation is simply the legality in the formation of the company as a separate legal entity with legal personality where it can sue and be sued, enter into contracts, acquire and dispose property in its own name¹. On the other side, there are some legal issues that address liability under breach of the government policy.

Step 2: Legal Rules in Addressing the Legal Issues

The legal rules in addressing the legal issues are mainly under the company law that addresses formation a company as a separate legal entity attaining a legal personality. The rules will be defined in the incorporation section. Consequently, the issue of the government authority seller refusing to go through with the sell on the claim that Toan and the company are one and the same person therefore breaching the policy restricting multiple land purchases by developers. Another legal rule depends on whether the case reaches the court which will order lifting of the veil of incorporation under the common law in the case where the company is of an agency character and or is a sham or cloak where the incorporation is being used for illegal or improper purpose². The other legal rule is on the liability under the policy.

Step 3: Application of the Rules to the Facts in Addressing the Legal Issues

The company incorporation under the incorporation section in the company law, the Toan’s proprietary company is a private company limited by shares and has adhered to every aspect of the provisions of the corporation legislation in regard to number of members and directors among other issues. However, the company was formed in the aim of Toan being eligible to bid in an action against the policy restricting multiple land purchase by developers. On the other hand, the company is of an agency character since it is directed towards serving shareholders interest of multiple land purchase³.

Step 4: Conclusion of the legal issues

The proprietary company is a separate legal entity with a legal personality since it is registered with full conception of the provisions in the corporation legislation. However, if the case is handled to the courts, the court under the common law will order lifting of the veil of incorporation in order to identify the company with other persons in this case being the members and directors. The lifting of the veil will be under the company exhibiting an agency character and/or is a sham as it is used for an illegal purpose to breach the policy of multiple land purchase. Consequently, the auction is bound to fail since the company was formed as an agency and is a sham since the purpose was illegal⁴. In any case, Toan will be held liable for the breach of the government’s policy in case the purchase goes through.

Question 2

Step 1: Identification of the legal issues

The corporation as a separate legal entity from its directors and hence can be prosecuted for the criminal actions of its employees.

The corporation having a legal capacity that is the corporation has the capacity to do things which can amount to legal consequences for instance sue and be sued.

The dogma that the corporation is an artificial person

The doctrine that the corporation holds a separate existence from the personalities involved in its making; the corporate veil⁵.

The canon of tortuous or contractual rights and obligations of the company are separate from the ones of its members or shareholders.

Whether the precept necessary for criminal law i.e. criminal responsibility can be established, that is a mens rea and an actus reus.

The doctrine that the company is an agent of its controller⁶

Step 2: Legal Rules in Addressing the Legal Issues

A legal rule in addressing the legal issue in the case revolves around the court establishing a mens rea and an actus reus in the company and thus holds the director or the agent for whom the company is operating for responsible for gross negligence. The ratio decidendi is that the company has no mind of its own and also has no means of acting on its own behalf and will therefore rely on its agents or people employed in the corporation for conduct the misconducts (gross negligence which resulted to the deaths of residents)⁷.

Step 3: Application of the Rules to the Facts in Addressing the Legal Issues

The doctrine that the corporation holds separate existence from the personalities who formed the corporation will not apply. The principle reason behind this judgement is that the corporation was formed by Toan in an attempt to bid for multiple lands and therefore, if taken to the court and the court lifts the corporation veil in the process of identifying the key personalities behind the illegal motive, the corporation consequently ceases to be treated as a separate legal entity from its directors and shareholders. The other principles can be used in establishing liability for gross negligence.

Step 4: Conclusion of the legal issues

Following the legal issues identified in regard to the issue, the ratifying solution that forms the conclusion is that both the corporation and the individuals (the principal, Mr. Toan) working for the corporation and are part of the negligent actions of the corporation leading to loss of lives are both accountable and liable for their mistakes. Therefore, an overarching policy whereby the corporation and the individuals are to be held accountable for criminal responsibility is thus called for and which can be found in the words of Judge Lord Denning in H.L. Bolton (Engineering) Co Ltd v T.J.Graham & Sons Ltd “may in many ways be likened to a human body. They have a brain and a nerve centre which controls what they do. They also have hands which hold the tools and act in accordance with directions from the centre”. Hence the controllers of the organization, the agent are responsible for the negligent actions of the corporation.