legal issues affecting management of a corporation
Identify as many legal issues as you can from the following fact situation. For each issue, refer to anyapplicable case law or statutes that might assist in resolving the problem. Where you are able to cometo a conclusion on one ground, but see that the question also raises other issues, please complete youranswer by discussing the other issues.Congratulations on your appointment as manager of operations for Trans-Global Corporation inVancouver. The date is January 5, 2020. As you settle into your new office, your secretary tells you thatthere are a few files on the desk that you might want to look through sooner rather than later.You discover that Trans-Global has some issues with special metal tubing that it had shipped by oceanship from the United Kingdom. Trans-Global had ordered 16 tubes at $175,000 per tube. When theyarrived on February 27, 2019, they were contained in four huge containers – 4 tubes to a container.Each tube weighed 5,000 kg. When they arrived, the tubes had significant rust and showed signs ofcontact with salty water. Trans-Global’s engineer has concluded that the coils are now good only forscrap. You review the bill of lading that is on file. You see that the bill of lading:1. Is a clean bill of lading2. Indicates 4 packages with 4 coils per package3. Does not include a declaration of value4. States that all disputes should be resolved by the UK courts in the United Kingdom.As no notice has yet ben given, you think about giving notice to the carrier and filing suit in BritishColumbia.In order to get evidence for a lawsuit, your predecessor had the tubes shipped to the company’slaboratories in Mississauga, Ontario. Trans-Global has a few trucks going to Ontario every week. Whilein Ontario a charge was laid because set of dual wheels flew off the truck outside Thunder Bay, Ontarioand the company was charged under section 84.1 of the Ontario Highway Traffic Act. The files includequite a bit of information relative to training, testing and maintenance of truck wheels. The thoughtcrosses your mind that a due diligence defence should be raised.Apparently, the driver concluded that this trip was too much for him. On the way back to BritishColumbia, he dropped into the Manitoba’s Ministry of Labour with some very interesting allegationsabout Trans-Global’s labour relations. Manitoba’s labour inspectors have sent a letter saying that theyintend to attend Trans-Global’s premises in Vancouver to do a full audit and that charges may result.Meanwhile, another particularly thick file deals with damaged machinery that was flown into Vancouverfrom France on March 31, 2018. Two machines were flown under one air way bill. One machine thathad been purchased for $44,000 was a write off; it weighed 7,000 kg. The other machine had beenpurchased for $34,000, weighed 5,000 kg and was undamaged. Unfortunately, the second machine hadlimited functions when not employed in tandem with the first machine. The air waybill indicates thatany legal action with respect to the carriage need to be brought in Paris. On further review of the file, you find a memo from you predecessor to the company’s president inwhich it is concluded that the nature of the damage to the machinery meant that it could only havebeen caused by intentional action and not by accident. The memo further details how Trans-Global haslost two valuable contracts because it did not have the required machinery. The president’s reply is thatthe company will insist on full recovery from the carrier for what it paid for the machinery, in addition toits lost profits from the two contracts that it could not perform.Your task is to prepare a memorandum of law which outlines all of the issues, making reference to anystatutory provisions that apply as well as relevant caselaw. In your memo, do not try and argue yourcase, rather objectively outline all of the provisions that help as well as hurt your chances of success.
