Legal Issues

    The New York case, whether from an individual or philosophical perspective, must be considered a significant victory for American constitutional interpretation and the integrity of the judicial system.  It has been noted, for example, that the policy underlying the taking clause has consistently referred to the benefits of a public use the problem, however, has been defining what constitutes the type of public use that will justify a taking pursuant to the American constitution.

This was the essential issue in the instant case.  Columbia University was unable to secure the private property through negotiations so it resorted to lobbying the State of New York to exercise its power of eminent domain in order to attempt to take through condemnation what could not be secured through open market negotiations.  The court wisely rejected the elitist argument that Columbia University would put the land to better use than simple citizens.  Several ethical issues are raised.  First, the State of New York stood to make a profit on the condemnation process.  This creates a conflict of interest.  Second, validating such a broad interpretation would open the door for other influential organizations to offer low amounts of money in negotiations because they could always use their political influence to threaten or pursue condemnation proceedings.  This is not meant to suggest that there are not circumstances in which eminent domain is appropriate and truly beneficial to the public more generally.  Indeed, for large infrastructure projects delivering water, oil, electricity, and other widely distributable public goods, eminent domain is a valuable tool for governance and public administration.  Very localized exercises, as in the instant case, risk the substitution of coercive government powers and unethical negotiation practices.  The taking clause ought to be narrowly defined with a public use concept that stresses privacy as a preeminent right while simultaneously demanding a general rather than specific or localized type of public use. 

United States Department of Health and Human Services Regulation
Pursuant to Congressional authorization, the Secretary of the United States Department of Health and Human Services is authorized to adopt uniform national standards for the secure electronic exchange of health information.  262, 110 Stat. at 2021-26 (Citizens for Health v. Leavitt, 2005, p.8). This particular authorization, allowing the Secretary to issue rules and regulations regarding the use and disclosure of health information, is part of a larger legislative framework known as the Health Insurance Portability and Accountability Act (HIPAA).  This federal legislative framework was designed and subsequently voted into law by Congress in 1996 in an effort to create a balance between two competing objectives of HIPAAimproving the efficiency and effectiveness of the national health care system and preserving individual privacy in personal health information (Citizens for Health v. Leavitt, 2005, p.7).  How this balance is achieved, between efficiency and privacy, has been a main source of contention and litigation.

Health consumers and individual plaintiffs alleged that this regulatory rule violated federal statutory law, American constitutional law, and that in the alternative the Secretary has exceeded the scope of his authority.  They argued, in short, that the use and the disclosure of private health information through an electronic clearinghouse without the consent of patients is illegal despite the ostensible benefits for administrative and business purposes.  The Court of Appeals probably decided the case fairly because the regulatory rule does have important business and administrative purposes and because the rule is permissive rather than mandatory.  The court stated that this regulation does not impose an affirmative obligation on the State to ensure that those interests do not come to harm through other means (Citizens for Health v. Leavitt, 2005, p.20).  This is the pivotal distinction because the language in the privacy rule is permissive rather than compulsory.  This means, in the Courts view, that the privacy rule cannot be characterized as unconstitutional if it does not create an unconstitutional deprivation or infringement on its own.  The permissive nature of the rule allows for patient consent to be sought and secured any abuse will be the result of actions beyond the scope of the rule itself.  In short, businesses will benefit and individuals and health care providers will still have legal recourse if the use and disclosure of the health information is abused.  This is a fairly reasonable balancing act and harms none of the parties while achieving the regulations underlying policy objectives.

Company law reforms have been experienced greatly over the years and towards the end of the 20th century various activities governing trade practices, company conduct and ethics have been changed to fit the different needs of various corporate entities in Australia. The corporate act 2001 controls the corporate activities in Australia

Case study Christopher Skase and quintex
Quintex was an Australian investment company offering media consultancy and development services in the whole of Australia. It was in situated in Melbourne, Victoria and had several branches across the continent. Quintex was initially formed as a retail and broadcasting company and performed well in its early days of business. In 1989, the company scrambled down due to bankruptcy. One of the company directors Mr. Tedd Harris highlighted the circumstances of the collapse to the public as personal interference of the chief executive in the running of the business. He stated that Mr. Skase was channeling company revenues to his other private companies including the seven network TV station and a number of hotel resorts and clubs across Australia and Asia. These transfers were unauthorized and involved huge amounts of money. In the early 1980s, quintex was estimated to be over 1.5 Australian billion dollars and by the time of collapse, the company was in debt of over 700, 000 million Australian dollars. Skase was one of the most successful businessmen in history of Australia whose life in business ended in jeopardy.

Formation of quintex
In Australia, There are two main forms of companies proprietary (private) companies and public companies. Before Skase, quintex operated as a public registered company in Tasmania. In 1975, Skase bought quintex and slowly transformed it to one of the biggest corporations in Australia
The company was limited by share capital and guarantee and had no limitations to its liability level. This meant that the company was registered as a company with share capital and the activities and interests of the company were not to be individually controlled although this was not the case to be later on. In order to register a company in Australia, the owners must submit an application form to the ASCI. Quintex was an already existing company (before Skase) having fulfilled all the requirements of opening a company in Australia. The requirements for setting up a company in Australia include

The company type (public in the case of quintex)
The companies desired name. For a name pass to be granted, the name given should not coincide with that of another existing company carrying the same activities as the ones you are aspiring to conduct (Bainbridge, 2008, p.77).
Names, addresses and contact details of both the parties who are registering as members to the company.
The esteemed directors should disclose their family names, addresses and background details.
The esteemed company secretary should present a written consent declaring their willing fullness to be associated with the company.
The form should outline the desired physical location and address of the company. It should also indicate business hours for public companies.
for limited companies(public companies) the form should indicate clearly the
The amount and lass of shares each shareholder is willing to contribute (pay) and hold on registration. This consent should be forwarded in written form (mulligan, 2008, p.43).
The jurisdictional state at which the company wishes to operate in should also be indicated in the form. Quintex was deemed to operate in Victoria but its services were to be rendered nationally.
For companies like quintex which are public and are limited by shares, the corporate act (2001) indicates that
If shares will be issued for noncash consideration--the prescribed particulars about the issue of the shares, unless the shares will be issued under a written contract and a copy of the contract is lodged with the application (section3).

After quintex accepted to sale itself to Skase, they agreed not to change the name but only review the service charter. After verifying the details, the ASCI took the liberty to give the company an ACN (Australian Company Number) and a certificate of registration that stated the name of the company, registration dates, the company number, its jurisdiction state of operation (Victoria) as provide in the corporate act 2001 chapter 1274 section 7A.

Company powers, duties and obligations (quintex)
        1.     The Constitution                       
After registration, a public company becomes a legal entity on its own. Quintex operated independed for fifteen years adhering to all the requirements of the constitution. Skase did not honor the provisions of the company constitution and controlled the activities of the company as if it were proprietorship. The board members were not happy with the conducts of Skase and in October 1989 they all refused to consent to an order that 13.5 million AU dollars be transferred to a privately owned company. Most of the directors threatened to resign and this led contributed to the collapse of quintex. The company was legislated by its legal capacity and powers provided by the ASCI and were bound to follow certain rules and regulation imposed by the government (Ferber, 2008, p23). The company in its constitution discussed the companys abilities and its code of conduct. However, the constitution did not include contracts entered into before incorporation of the company. The parties involved in the contract were free from liability and were not subject to indemnity. The constitution of the company outlined the management, the stake holders of the company and the rules which can be altered or changed. Skase did not enquire for change of rules but rather enacted his own rules to fit his personal interests. In changing a companies name, the ASCI has the mandate to direct the terms involved and it must provide a certificate of incorporation including the details of the new face of the company. In acquiring quintex, Skase did retain the company name but changed management overtime and increased its operations.

The 2001 corporate act indicates that the ASCI have the mandate to control the activities of third party involvement in the activities of companies. The ASCI registers agents and has the right to conduct inspection on the conduct of agents. If the conduct is not satisfactory the ASCI has the power to retrieve the certificate of operation. That is what happened in the dawn of the 1990s world wide economic recession for quintex.

The duties of directors, other officers and employees
 The ASCI and the labor association of Australia control the activities of employees and other parties working on the interest of the company. The controller of companies reacted to the voice of the company directors in revoking the operation certificate for quintex. The ASCI states that the employees of a company are the primary stakeholders of the company. They are obligated to work only for the interest of the company and to the satisfaction of the utmost good faith principle. Director Tedd Harris reacted under this rule in informing the ASCI on the activities which were revolving behind the scenes at quintex. Employees are not supposed to be involved in activities which contradict the interests of the company and should not work in two companies with similar interests. Although Skase was the owner of quintex, he was an employee of quintex since he was in their salary list and was mandated to conduct his other personal businesses without the interference of the smooth running of quintex. Skase funded his luxurious life using company funds for example, in 1988 he held a Christmas party amounting AU450,000 dollars at the expense of the company. Employees of quintex were bound to use their skills to the fullest for the benefit of the company and had a civil obligation to fulfill their positions in the company. In quintex, all the stakeholders of the company were at liberty to disclose and vote freely on issues regarding to material or individual interests.

Directors are the leading figures of a corporate venture. The law provides that the individual must reside and must be an Australian citizen. Any person who is past the age of 18 years can be a director. Quintex had on board a total of eight directors and two of them were citizens of Australia. This was according to the provisions of quintex. However, Skase hired and controlled the board to fit his personal interests. He wanted people he could control and delegate. He even hired individuals dismissed from managerial positions who were not liable to be appointed as a director. Almost half of the board consisted half of his personal friends.

Appointments of directors must be presented to the ASCI within 28 days after the appointment. Directors delegate the companys activities and analyze investment proposals. In quintex, Skase determined what was to be done and the directors were just but his spokes persons. They are personally liable as trustees to bad debts and other demeaning financial obligations experienced by the company. The directors are vested with the power to delegate who is to be employed and who is not. In 1989, the board was tired of Skase and threatened to vote him out. The directors appoint the managing director of the company and they have the right to access the financial systems of the company at any time they feel like. Skase was in total control of the internal audit arm and this compromised the value of audit reports. Directors salaries are determined by a resolution by the companys management. After the directors of quintex refused to grant Skase his wish (transfer of funds), he demanded an increase in salary without a resolution. Their remuneration is not secret and members have has the power to review and question the directors salaries. However, this applies for public companies but for proprietary companies the directors delegate and determine their own salary undependably. Skase was acting against this provision by delegating his own salary. Directors can resign at will but a written document must be submitted stating the reasons of resignation. In 1989,  of the company directors resigned from board leading to the resignation of the other members. In public companies, directors can not vote out a fellow director but members can remove a director from the bar.    

Appointment of company secretaries follows the same criteria as that of company directors except for heshe is appointed by the directors themselves. In quintex, Skase appointed the company secretary and in 1984 the ASCI addressed wrote to the company requesting them to provide for details of their company secretary. A person must submit a letter of consent so that heshe can be accepted as a company secretary. The ASCI must be notified within 28 days after the appointment. Skase conducted his business at his own pace and did not meet the requirements of the ASCI.

Related parties must seek an approval from the members of the company and are adhered to the consequences incase of breach of agreement. In quintex, related parties were his trading allies and personal investors of the company. In the early 1980s, Skases ego in business appealed many investors and this saw a number of local and foreign investors injecting huge amounts of money to the business. The Section 167 indicates that an individual is termed as a member of a company if
He counts among the founders of the company and his name appears on the registrars office
If he accepted to be incorporated after the registration of the company and his name appears on the registrars books or after the conversion from being limited by guarantee to shares (Duncan, 2005, p.65).

In joining quintex, Skase adhered to the above requirements but along the way Skase adopted any body willing to invest in his business ideas as a member. Skase was brave enough to adhere in only those matters of little relevance to him and those which did not contradict his financial gain from the company. He wanted to run a public company as a private company and did all he could to centralize all the powers of the company to himself.

  Meetings
In public companies, a director can call a directors meeting. He should clearly give out his motives of calling the meeting. An early notice must be given to each director individually unless the matter to be discussed is of urgency. In a public company the quorum of directors to convene a meeting is two. Majority rules in passing resolutions in a directors meeting (Kapoor 2007, p.41). In quintex, majority was Skase himself. Skase did not require the consent of the other directors to pass a resolution.
A members meeting can be called by directors, court or by a fellow member. Just like a directors meeting an early notice must be issued to each member. For a member to be eligible to give a company a resolution notice heshe must have over 5 support in votes that may be counted in a general meeting or over 100 member quorum of esteemed voters on the meeting. The notice must be presented formally (writing) and the movers must sign it.

The companys internal auditor must be present at the meeting and should give a comprehensive report on the financial positions of the company. Skase appointed and fired his auditors at will. If an auditor did not perform his duties to the personal satisfaction of Skase, heshe risked losing hisher job at quintex any time.

A company is required to hold an annual general meeting (AGM) eighteen months after its incorporation (public companies). Skase delegated when meetings were to be called. He matched the interests of quintex to the ones of his other private companies. Companies are entitled to call for an AGM meeting two times annually and immediately after the fifth month after the end of the companys financial year. The main aim of calling an AGM meeting is to
Inform all the stakeholders of the achievements and activities of the past year. The auditors report was detailed not to inform the members of the missing money until it was not possible to hide any more.

Form a committee for the coming financial year. Skase appointed the committee himself
To inform all the stake holders of deemed reforms on the constitution of the company. Skase did consider the pleas of other stake holders in reforming the constitution of quintex.
A clear sample of the agenda must be indicated on the meeting notice. The following outlines a proposed agenda on an AGM meeting notice as provided by the 2001 corporate act but in quintex, Skase would analyze the contents to be presented in the agenda and had them edited to his satisfactory.
Apologies and reasons for absenteeism
Readings of meetings from the previous meeting
A detailed report from the chairman. Skase usually had his assistant conduct most of his readings for most of the times he was out attending personal matters.
A detailed report from the secretary of the company
A detailed report on the financial position of the company. This should indicate the esteemed dividends per share for listed companies.
Election of a committee for the following financial year

Comprehensive minutes should be noted to form an agenda for the following year. Resolutions are passed upon harmonization of the achievements. In quintex, resolutions passed by the members were bound to be edited to fit the requirements of Skase.

Issue of shares
Section 124 of the corporate act gives companies the power to issue shares. Quintex did not distribute returns to the stake holders of the company. In stead, he channeled all the money to his personal accounts. Quintex was deemed to issue bonus shares to its members annually but Skase had his plans too.

Bonus shares- The term bonus refers to the amount in excess paid o stake holders of a company in terms of dividends. The corporate act demands that after the financial analysis on the performance of the company is carried out, the company should direct and allocate dividends to the stake holders depending on the amount of shares held. Bonus shares are issued with the aim of enlarging the amount of share ownership by members but not to increase the company value. Bonus shares are issued according to the constitution of the company. Skase only issued bonus to only stakeholders who threatened to take legal action against quintex.

Winding up of quintex 
In Australia a company can be wound upon notification of the ASCI. The parties responsible to the company musty make sure that the company is wound up in a certain procedure that doesnt leave debtors and creditors in dilemma as provided by the constitution of the company and the subsection number 601NF(2) of the corporate act 2001. The circumstances for winding up of quintex were by a court order. The court might decide to wind up the company because of its ultra vires acts to the purposes at which it was formed to perform. The court placed the company under the care of receiver managers to evaluate and deal with the creditors and debtors of the company.

Most receiver managers in Australia declined to receive quintex in their care demanding the arrest of Skase first. Skase had fled to exile in Majorca, Spain after realizing that his debtors were in hot pursuit for him. Skase fled with all the revenue projections of the company though he claimed cases of bankruptcy. He was quoted as extending his life of luxury to Spain and he even tried to resurrect his empire there.

The media claimed the Australian government of failing to arrest Skase and judge him for his fraudulent conducts in using management funds for his personal matters. Skase fled Australia leaving behind bank and individual debts o over AU 700,000 dollars. Christopher Skase died in exile on 2001 as one of the most controversial businessman Australia has ever experienced in its history. A film depicting his life was released projecting that the only way to get Skase was only by kidnapping him.

After-action review (AAR) is a process undertaken most by leaders of an organization or in Army in order to know why something happened, when and how it happened.AAR is also critical assessment for the team leader since it provides a base through which they can train their employees on how to improve their performance. The first part of the paper will keenly discuss the advantages of AAR and other implications of the process. In the second part the paper will highlight the purpose of recorders in incident management and storage of information during emergencies.

Question One.
The first advantage of AAR is that it does not evaluate a failure or a success. This means that the process is only intended to guide the way the leaders or the employees of an organization will undertake similar assignments in future. Thus it does not demotivate employees. The second advantage of the assessment is that it is through its proper performance that team leaders find out exactly why something happened. This implies that incase of a deviation from the expected results, leaders will come up with proper strategies to face off such challenges in the future. Thirdly, it gives the employees avenue through which they are able to learn how things are undertaken and avoided in their assignments. By so doing it does not only give them personal development but also it improves their skills and experience. Fourthly AAR involves participation of all members of the team making it possible to review more projects undertaken by the group. As a result it improves the performance of the team as well as enhancing the spirit of togetherness among the team members.

The review is a continuous process this means that it does not need to be conducted at the end of a project. For the leaders to have a closer monitoring of the activities of their groups it is imperative for AAR to be conducted at different stages of the project.AAR is conducted by leaders since their aim is to have excellent results from their employees. An effective leader is supposed to give immediate feedback of the review to the employees so as to guide them in their future tasks. In order to prepare for AAR it is prudent to have a number of documents. The first document is the project plan that was drafted before the project was initiated. The second important document is the one showing all the objectives of the tasks undertaken by the team      members. The third document is the one with the final results of the organization. With the three documents it is easy for the leaders to compare the initial plans and the actual results and come up with deviations.

After action review can be demonstrated when Paul Smith, a military personnel based in Orlando came up with new technologies that will be adopted by the military personnel in their future trining.According to the report that the Paul Smith gave Francis Harvey, the US secretary of Army in 2005 his review of the military training needed more sophisticated technology so as to make it more effective. Based on this the Army research department started to develop the new technologies under the leadership of Paul Smith (Larry, 2005).

Question Two
During incident management the role of the recorder is to store information that is retrieved from the public or from the victims. This information is vital since it is the one used by the Homeland security departments in their investigation and analysis. It is important for every branch, division and sector to have a recorder so as to enhance timely and effective communication system. In this way it will also improve the security systems based on the fact that one of the roles of the government is to provide security for its citizens by arresting criminals. The incident commander is the one responsible for controlling the information retrieved during an emergency. However depending with different forms of incidents public information officer can undertake the role of controlling the information.

    Appellants respectfully request the court to declare the City of Long Branchs exercise of eminent domain powers unconstitutional with respect to their privately held real property on several grounds.  It is acknowledged, with respect to the applicable standard under the fifth amendment of the United States Constitution, that the takings clause has been interpreted as not requiring a literal public use in order for the taking to satisfy constitutional scrutiny on the other hand, appellants do contend that the facts of the instant case do not satisfy the Supreme Courts public purpose test as set forth in Kelo v. City of New London.  In that case, similar in some ways but clearly distinguishable from the instant case, the Supreme Court outlined the applicable federal constitutional standards for analyzing and resolving eminent domain cases.     

    The Supreme Court began its analysis by clearly noting that eminent domain cases are to be viewed on the merits of their own particular facts and that overarching bright-line rules are not to be applied specifically, the Court stated that Viewed as a whole, our jurisprudence has recognized that the needs of society have varied between different parts of the Nation, just as they have evolved over time in response to changed circumstances. (Kelo v. City of New London. 2005, n.p.)  The clear directive, therefore, is that Kelo is to function as a guide and that the resolution of the case must derive from the facts associated specifically with the City of Long Branchs redevelopment plan.  Second, the Supreme Court provided that a municipality could exercise its eminent domain powers on behalf of economic development even if private developers benefited in the process.  The majority opinion argued in this respect that Quite simply, the governments pursuit of a public purpose will often benefit individual private parties. (Kelo v. City of New London. 2005, n.p.)  This does not mean, however, that municipalities can therefore exercise their eminent domain powers simply by alleging that these exercises are in furtherance of a poorly envisioned economic development plan.  Quite the contrary, the Supreme Court demanded a minimum level of factual specificity in order to demonstrate that the envisioned redevelopment plan was both honest and reasonable. The deference in short, is not without all constitutional limits.   In Kelo, this standard was met because the City of New London was pursuing its redevelopment plan in a way that would increase employment opportunities and tax revenues that could be used for public services. 

    In the instant case, the facts are distinguishable from those in Kelo.  In Kelo, the redevelopment plan envisioned the creation of jobs whereas in the instant case the redevelopment plan envisions no such direct form of job creation quite the contrary, the City of Long Branchs redevelopment plan explicitly states as its goals that it desires to recruit possible employees to the area by creating suitable housing.  This is, to be sure, putting the horse before the cart and clearly distinguishes the instant case from Kelo.  No jobs are being created while at the same time the City of Long Branch is planning on increasing its local population the diversified labor pool envisioned is disingenuous because there are no jobs being created in the first place to entice these mythical new employees.  The clear implication is that this redevelopment plan has been designed to benefit private developers of the waterfront and that references to jobs are a red herring.  Additionally, as a matter of sound public policy, the majority of legal scholars have called for restraint in the application of the Kelo precedent.  It is well-established, for instance, that  the reaction was more like an explosion of outrage. This rage was, perhaps, motivated by the public perception that the Supreme Court had stated that all takings were thereafter justifiable if economic development was simply cited as a reason.  As a matter of public policy, and consistent with its prior decisions, this court can assuage such public fears and outrage by ruling that facts matter and that vague allusions to possible economic development do not satisfy the public use standard of the United States Constitution.

  Other leading scholars, echoing the same public policy concerns, have noted that  The Supreme Court did nothing more than restate that baseline for local officials seeking to invoke eminent domain condemnation proceedings HYPERLINK httpwww.questia.comPM.qstaod5034944198(Barkacs  Barkacs, 2007, p. 38)  The facts of the instant case do not meet this baseline, the public uses are far too attenuated to meet constitutional scrutiny, and appellants respectfully request as a matter of constitutional interpretation and public policy that the court find the City of Long Branchs exercise of eminent domain a violation of the fifth amendement.

    Reverend Dr. Martin Luther King Jr was a strong hold of Christian belief but he criticized the way blacks were treated by the white people. He was confined in Birmingham city and came across some sediment from the clergymen who were calling his activities as untimely and unwise. The clergymen were not happy about laws concerning human personality. The Reverend responded the clergymen that human personality is a gift from God and any law that praises human personality is just (Pyatt, 1986). On the other hand, he criticized any law that degraded the personality of a human being and referred it as unjust.

     Human personality in this context means the individual characteristic that is possessed by an individual. The set of individual characteristic which is organized and dynamic influences his or her behaviors or motives in various situations. Human personality is determined by genetics, environment and the surrounding human experiences. Research shows that human personality is basically influenced by genetics and environment. This is true because the behavior or motives of any particular individual depends on the surrounding environment. Moods, individual opinions and attitudes are some aspects that embrace human personality. Reverend Martin Luther King Jr was very much concerned about what was going on through out the whole States and he moved to Birmingham city where injustice was very much rampant. He sought for justice to be done to many people who were suffering especially the blacks. He saw the whites abuse the blacks and regarded the laws as unjust (Pyatt, 1986).

     The people in Birmingham city staged demonstrations in the streets to demand fro justice but the whites were doing nothing about it. Martin Luther King Jr was very much upset by this humiliating behavior of racism and criticized the church very much about its deeds. Every human being has right to justice and any body that is seen to violate this right must be taken as a criminal. The protection of human personality is the duty of the administration and the clergymen must be on the front line to fight for justice of human race. Human personality therefore is a very important aspect of human life and must be taken care of through proper administration of justice.

    The practices of human beings against each other are some traits that lead to degradation or uplifting of human personality. It is obvious that activities such as slavery, forced labor and violation of human rights lead to uplifting or degradation of human personality. Racism which was very common among the blacks led to slavery which is one of the major critics of Martin Luther King Jr and it is a way of degrading human personality. Freedom on the other hand is one way through which human personality can be uplifted. An unjust law is one that gives the majority power to compel the minority group. A just law is one that gives majority group power to compel the minority follow their will. Just law is a way of uplifting human personality and it is necessary for individuals to learn on how to respect their fellow human beings and apply the rule of justice anytime (Pyatt, 1986). It is known that justice delayed is justice denied so every human being must consider this principle as a way of promoting human personality. Justice is very much related to human personality and the promotion of justice is one step towards promotion of democracy.

Law and morality are two concepts that are ideally mutually exclusive yet morality affects law adversely as well as positively. Despite the fact that presumptions such as what is legal can be comprehended as befitting the norms that are spelt out in a given societies morality, such presuppositions turn out to be wrong and as such, come about as simplistic. However, morality remains the basis of harmonious existence between enterprise and the community as well as between businesses themselves. This is because businesses though being separate legal entities that stand on their own, are dependent on human force for their prosperity. It therefore follows that divorcing human factors which are ideally social factors from business practice would yield disastrous results. As such, morality in business practice is absolutely critical in defining success in an enterprise.  For instance, it would be significantly immoral to stand by while a man is in danger yet one is in a position to salvage the situation though legally, they are not obligated to do so. Similarly, in business enterprise there is a moral question in regards to legal business practices such as failing to fulfill a promise which ideally is not legally binding. Problems in contract law arise as a result of various reasons. These are mistakes, misrepresentations, undue influence and illegal contracts. A misrepresentation, as Cheshire, Furmston and Fifoot (2007) observe is a sham declaration of facts which is made by one party to a contract. This declaration is primarily made prior to or after the contract whereupon the purpose that the individual to whom the statement is made acts upon the said representation and as such heshe does so act. Plaintiffs in misrepresentations must have endured damage from the misrepresentation. Misrepresentation can also be as a result of conduct which may be written or oral. We will now assess two cases with regard to contract law.

Case One
Pennzoil and Getty Oil, in early 1984 entered into a contractual agreement in a merger. But prior to signing formal documents, Texaco brought a better offer on the table for Getty Oil whereupon Gordon Getty who owned a majority of the companys shares rescinded the Pennzoil deal and agreed to accept Texaco as a partner. Naturally, Pennzoil did not agree with the resulting scenario as it felt offended and unfairly treated. Consequently, it filed a lawsuit against Texaco in which it alleged that the latter had illegally interfered in its negotiations with Getty Oil. Ultimately, Pennzoil won the case. In late nineteen eighty five the company was granted 11.1 billion dollars, which in the case of America was the largest judgment ever. The court of appeal reduced the amount by two billion dollars but because of penalties and interests the amount shot back to 10.3 billion dollars.  

Texacos C E O James Kinnear had commented that the company would file for bankruptcy in the event that Pennzoil was granted permission by the court to secure the judgment through filing of liens against the companys assets. The C.E.O had promised to face his opponents up to the Supreme Court level if the circumstances demanded so through arguing partly that Pennzoil did not adhere to SEC set regulations in the companys negotiations with Getty. In April nineteen eighty seven, on the brink of Pennzoil filing of liens, Texaco offered to compensate Pennzoil two billion dollars in settlement of the whole case. Pennzoils Chairman, Hugh Liedtke, pointed out that advisors of the company had notified him that an ideal settlement should be within the range of three to five billion dollars. Consequently, Pennzoil chairman, Liedtke, turned down Texacos offer of two billion and within a number of days, and only a single day to filing of liens on Texacos assets, the company (Texaco) filed for protection from its creditors as outlined in Chapter eleven of the United States bankruptcy law. Later, in 1987 Pennzoil submitted a plan for financial reorganization on behalf of Texaco. Under the plan Texaco would have paid a sum of 4.1 billion dollars to Pennzoil. In the end, prior to Christmas 1987, as observed in The Washington Post (1987) the two companies agreed on a settlement of three billion dollars which was part of Texacos reorganization financially.

Case Two
On May 21st in 2004, UFJ Group and its business counterpart Sumitomo came into agreement for business co-operation which was in fact the buying of UFJ Trust by Sumitomo Trust. The primary contract that was agreed by both companies contained various provisions. The contract stated that both parties were to be based on results of legal matters as well as review of business in addition to accounting. The parties contract was also based on each companys investigation and subsequent confirmation by the relevant bodies whereupon through good faith negotiations each party was to execute a basic contract which was to provide details of their corporation and henceforth enter into a contract with a target date set at the end of July 2004. The agreement also provided that each of the parties in the agreement, primarily the two companies, was barred from disclosing either indirectly or directly, any information of either company moreover, negotiations with third parties were also barred with regard to transactions that were thought to affect the aim of the basic agreement, which though did not spell out in its form a specific statute that enabled the two companies to execute the final contract. Moreover, the contract did not also spell out measures that were to be taken against a partner that was in breach of the contract. Later UFJ presented written notification to Sumitomo instructing Sumitomo to terminate the Agreement whereupon it ended the negotiations and restrained from executing the final contract. UFJ later proposed a business partnership to MTFG. Sumitomo sued UFJ Group for damages and asked to be compensated monetarily with a sum within the range of 100 to 233 billion yen. The court rejected this offer as observed in The Nihon Keizai Shimbun (2003).     

To arrive at conclusions for both cases of Pennzoil and Texaco as well as UFJ Group and Sumitomo, the question that guides my arrival at what ought to have been the courts decision is guided by the question of whether the corporation is a moral organization. In the law, the corporation is an individual and as such, distinct in its personality from the person who bears its ownership. Additionally, the corporation is also distinct from the individuals that carry out activities on its behalf. These are its directors as well as officers and other employees. This implies that companies are separate business entities which stand as persons and as such they are obligated to adhere to moral principles that govern societies. The violations in the contracts that regard the four companies involve not only the law but laws that have stemmed out of ethics. As such, the basis of arriving at conclusions to their cases should have invoked ethical theories as opposed to legal laws. If the organization was perceived as an individual the conventions it had violated pertains to the morality that governed those individuals and as such it called for invoking ethical principles to guide the final decisions. As such, the following principles and their derived decisions should have been followed.

Ethical relativism is a theory that can be used against the courts case. In this doctrine individuals judge their actions by what they feel is right or wrong for them. It propagates that all the disagreeing parties with regard to a moral question are ideally correct because in essence morality is relative. What this principle renders in the case of Pennzoil and Texaco as well as UFJ Group and Sumitomo Trust is the fact that ideally all the organizations were both right in their intentions. As such, Texacos agreement with Getty Oils was motivated by the companies need to maximize its profit as well as ensure returns on its stakeholders investments. These objectives would only be yielded in the event that the company came into agreement with Getty Oil and as such increase productivity through the opportunity acquired from partnership with Getty Oil. The court should not have ruled against Texaco as these are good motives. Moreover, according to ethical relativism, businesses as separate legal entities that enjoy rights as citizens can not be wrong. It therefore follows that the courts decision to find Texaco in violation of the Law was flawed as it was derived from wrong standards of decision making that were irrespective of ethical relativism.

If we are to argue in the perspective of Pennzoil, we also find Pennzoil to be right in its own sense but it is also worth observing that since ethical relativism finds everybody to be right, Pennzoil should not have found Texaco in violation of anything. This is because it lacks ground on which to stem the validity of its concern as according to ethical relativism everybody is right. The courts ruling that Pennzoil was to be compensated by Texaco was thus wrong. In the case of Sumitomo Trust and UFJ Group, the derived decision should also have borne resemblance to what was analyzed above. As such Sumitomo was not posited to define UFJs withdrawal from their prior engagement as wrong. It was bound by ethical relativism to find UFJs withdrawal as right. The deficiency of this principle of ethical relativism is its characteristic of deriving anarchy as everybody perceives hisher inclination to be right and as such there fails to have a clear premise structure that can be used to arrive at a meaning. This makes ethical relativism to some extent deficient in arriving at an efficient decision. As such it calls for analyses of whether utilitarianism can be used. 

The second principle of ethics that I invoke in analyzing the two cases is utilitarianism. This concept assesses good as well as evil in terms of the consequences of actions taken.  As such, the underlying rule behind this principle is the concept of decision and consequence. Whether the decision is right or wrong is judged by the consequences the said decision yields. As such those actions that derive the greatest pleasure for the greatest number of persons are conceived as morally right. If we were to define the people in the context of Texaco and Pennzoil as well as UFJ Group and Sumitomo Trust we have to define these people as the stakeholders of these companies. These stakeholders include both external as well as internal stakeholders. They range from employees, investors, customers, business partners as well as the surrounding communities that benefit both directly and indirectly from the companies.

There are two aspects to utilitarianism with regard to these cases. First is the fact that, if the decision by Texaco to come into contract with Getty Oil was meant to be of benefit to a majority of people as compared to Getty Oils contract with Pennzoil, it would follow that Texaco would not have been wrong. But in the instance where the benefit derived from the contract between Pennzoil and Getty Oil was immense when compared to that of Getty Oil with Texaco, Pennzoil had grounds to seek compensation because ideally, Texaco was wrong. The second issue regards the courts decision. The courts decision should have been based on the number of stakeholders each company had. As such, if Texaco was a bigger company that upon a decision not in its favor being made would have impacted negatively on a majority of people as compared to Pennzoil, it would have followed that such a decision would have been wrong. Much is the case for UFJ Group and Sumitomo. If the benefits of Sumitomos contract with UFJ Trust superseded the contract benefits between UFJ and MTFG, bearing the people that were posited to benefit from these contracts, it would follow that UFJ was in violation and as such it was obligated to compensate Sumitomo.

These benefits in the said companies also regard the concept of cost-benefit analysis. In this concept, businesses pursue strategies that lower business operational cost but consequently derive colossal produce. Through such a strategy the businesses are able to produce the greatest pleasure to its stakeholders as a result of increased return on investment. The increased return on investment ideally implies that there is more money that can be used by the greatest number of people who constitute the companies stakeholders for their greatest pleasure. If Texacos motives were driven by cost benefit analysis, it would follow that its business venture was moral and as such the courts decision to find it liable for contractual relationship with Getty Oil to derive this cost-benefit analysis would be flawed. Much is the same case for Pennzoil as well as UFJ Group and Sumitomo Trust. This concept of utilitarianism lacks in given senses. Firstly, the court could not have used it because defining pleasure, a concept that is totally subjective, implies that amassing an overall definition of what is pleasurable to a compact majority with regard to the beneficiaries of this pleasure is absolutely impossible. This means that the principle can not define what was pleasurable to be one thing, monetary benefits, and amass it on all respective potential beneficiaries of the said companies. This leads to Deontological theories.

The theory of deontology purports that underlying principles can be wrong or right irrespective of calculations that posit given actions as pleasurable or painful. As Such, they address the deficiency wrought in utilitarianism through holding the postulation that actions ought to be judged by their intended motives and the means they use to arrive at these motives. This Kantian theory is the basis of my deriving conclusions to the two cases. Kants two proposals aid my final conclusions. Firstly, Kant proposes that individuals and companies should act only by adhering to a given maxim which at that time has the potential to agree with conventionally embraced norms. Secondly, companies have the obligation to respect the autonomy as well as rationality of others whereupon they should strive to desist from treating other companies as expedient.

Primarily my conclusion to the above cases is that Texaco by virtue of being a separate legal entity that qualified as a person had the obligation to embrace moral conventions that were conceptualized and practiced universally. One such norm was fairness in dealings. Because Pennzoil was already in contractual agreement with Getty Oil, Texaco was obligated to restrain dealings with Getty Oil by virtue of the fact that, in fair dealings, one is not supposed to invoke hisher immense financial resources to put another party out of contention. This is a universally agreed moral principle and as such the case against Texaco. Secondly, I propose the Kantian principle as described above. As such, Texaco can not realistically state for a fact that its treatment of Pennzoil, by going behind Pennzoils back to seek business partnership with Getty Oil is an action that it had no problem with if Pennzoil or any other given company pursued the same course of action against it. As such, the punishment through compensation that the company was subjected to is valid with regard to the use of deontology as the standard of assessment.  Using deontology as the standard of assessment of the case that involves UFJ Group with Sumitomo Trust, deontology posits UFJ as the wrong doer. This is because it is a universally agreed norm that people in this case companies, are obligated to keep their word. This implies that UFJ had to abide by the contract it had with Sumitomo and thus, it was supposed to be fined heavily for going against this standard.

Tax avoidance is the use of legal based methods in order to lower the amount of the income tax that is owed. It is the legal use of the tax regimentations to take a personal advantage by reducing the amount of tax payable according to the law. It is also called tax mitigation. Most taxpayers use a variety of methods to reduce the amount of tax they are supposed to pay. Some of them use some loopholes in the law or take advantage of some misinterpretations in the law to avoid paying the right amount of tax. This paper will look at the ITAA laws in Australia and make a discussion concerning loopholes in the anti avoidance statutes


Preview

The income tax assessment act 1936 is an act that was passed by the Australian national assembly and it is the main statute where the calculation of income tax takes place. The act has been rewritten and is now incorporated in the income tax assessment act of 1997 and the 1997 act is still being improved upon to encompass emerging issues in the world of taxation. Tax avoidance is the use of legal based methods in order to lower the amount of the income tax that is owed. It is the legal use of the tax regimentations to take a personal advantage by reducing the amount of tax payable according to the law. It is also called tax mitigation (Loman, 2001). Most taxpayers use a variety of methods to reduce the amount of tax they are supposed to pay. Some of them use some loopholes in the law or take advantage of some misinterpretations in the law to avoid paying the right amount of tax.

One of the most common statutes in the ITAA is the anti avoidance statute or law that has been misused by the wealthy at the expense of the employees due to lack of clarity and very many loopholes. The anti avoidance laws that are found allover the Income Tax assessment Act (ITAA) are meant to prevent the tax payers from subverting the regulations that are underpinned by this law. The proposition in the law assumes that there is a vivid policy that is discernible in the ITAA but there no truth in this (Melvin, 2009). If you look at the rules that govern the alienation of income, there is an allowance for the wealthy to vest assets that produce income which include business premises and real estate, in entities such as companies and trusts such that the associates that are lowly taxed pay tax themselves rather that the tax being imposed on the wealthy people who run these entities. There are specific anti avoidance provisions that are within the ITAA that reflect on the political decisions that are ad hoc instead of making rigorous application of sound tax policy (Melvin, 2009). With little planning, income from the property can attract special attention. This means that there must be a new approach to define income before attacking the alienation and the anti avoidance laws (James, 2002. The new approach of defining income would not require anti avoidance provisions because the judicial system can affect the vivid policy intention of the law making process (Melvile, 2009). Unless these kinds of changes take place, the anti avoidance regulations may just be exposing the policy shortcoming of the income legislation which are supposed to ensure that there effective policy settings within the income tax act which it should protect. This means that there is a trick being played by some tax payers who are actual winners in a way that cannot be clearly visible. The tax games are being played especially by strategically placed individuals and companies. The taxpayers who avoid taxes using legal loopholes appear as if that are winning and they believe so, but the reality that they may be winning but the amount of loss they create for everyone is magnanimous and the consequences are cyclic and they come to affect the same tax avoiders indirectly (Nugget,2009).

The tax games
This trick being played by the wealth tax payers by taking advantage of the slack legislations allows them to circumvent the top rate of 39 percent personal rate by making an interposition of a partnership company or trust which makes their employees pay tax and even at a higher rate. This is what affects the employment income of the employee because of the cushion given to the employers by the loopholes in the tax policy. This means that this situation can only be countered by an attribution rule that should apply for the income tax only. The attribution rule will address the need to protect the PAYE foundations because of the way the wealthy have affected their income especially after the increase of the top personal tax rate that shot up to 39 percent and the simple avoidance mechanism should be targeted at the employees in bid to relieve them from the burden posed to them by the cunning employers who have taken advantage of the slack legislation to cushion themselves financially (Wallin, 1998). The general anti avoidance rules can be used to counter such avoidance activities by the wily employers. Though they may be time consuming and expensive to implement, the rules can be relied on to counter the imminent increase in the cases of income alienation by the employees to circumvent tedious court cases that are arising every day due to the complications.

 The attribution rule will apply in the cases an employee has an employment relationship that is structured and in the interposition of different entities and to the employer. This means that if income suffers from diversion, alienation to a person who is associated, there will be lower marginal rates of tax and the effect of the attribution rule will be to attribute the specific person and not the employer (Salanie, 2000). This means that the net income will not be affected by any deductible expenses that would have been deductible under the previous rule thus making the employers to escape that bit of taxation that they are supposed to be responsible for but they end up passing the burden to the employees. In this case, the game played by the employers will be cut short if the rule goes deeper to search explanations that will be able to legally define substantial assets. This is because the current rule does not recognize substantial business assets as depreciate assets that cannot be used privately. In this case, the amount attributed under the current rule is lesser that the net income of the services of the associates and this allows the reduction of the amount of tax that the employer will pay, without the rule taking into consideration that the amount that the employer is exempted under the existing circumstances are passed on to the employees indirectly meaning that they are overburdened by something that the employer should have been responsible for.

Approach in defining income
Income can be regarded as a personal service income if it is factored in as a reward for the personal skills of the efforts of an individual and this will apply, skills notwithstanding. It will also apply regardless of whether the income was received directly by that individual or received by a firm, trust or a partnership which are broadly referred to as personal services entities. This means that the laws should not affect someone who has some workplace arrangements with the clients because that taxation will be personal and not tied to the personal services entities (Kahn, 2009). This means that the employers should not therefore link the personal services entities with their personal alienation income provisions at the expense of their employees (James, 2002). This because, according to this approach of income definition, people who qualify for personal services business must obtain a determination from the ATO confirming that in fact they are  in personal business services. This means that the general anti avoidance provisions of part four will know be clear in application to schemes that will reduce the income tax by the action of splitting (Melvin, 2009).

This approach to the definition of income will clarify the deductions that will be made against any one who is affected by the personal services limits of income. This will now create a rift between the private and the business taxation limits meaning that the taxation for business will not be categorized as private meaning that the cushion the employers have been getting due to this invisible overlap will cease to be there and the un called for burden that the employees have been shouldering on behalf of their wily employers will now be transferred to the employers because under this approach, it is very clear what an income is and which category should business income and personal based income is taxed in. the business premises test is one of the four business services trials that can determine whether a personal business falls within an income year meaning that if the personal business is not being conducted within an income year, then it is highly possible that the change in tax law will not change the taxation dynamics for the business (James,2002). To save the employees from the exploitation of the employers through  double taxation, this test allows the personal business entity to meet the test in reference to the personal services income that have been set by the anti avoidance laws.

Discussion

It is very clear that there is something wrong with the current state of the law that enables a variety of taxpayers to exploit the loopholes in the law to cut the amount of tax that they are supposed to pay. This is why it would be correct to call these loopholes as avenues for tax games that the taxpayers play as they seek to defraud the tax master. There is no way in which the law can catch up with them in its currents states because they will end up weaving their way in and out making it hard for rulings to be made against them. This means that it is the wealthy who can manage to twist the personal tax provisions and the business services provisions that will benefit from the game because the business provision will be covered under the private tax because of the loophole that exists in the income alienation laws (James, 2002). This helps them to put their assets like the business premises, houses for rent, vehicles for business and other business related assets under the trust entities that make a mockery of the tax policies (Harper, 2009). What is important in the reform of the law is the mending of this loophole by ensuring that the provisions under the anti avoidance laws stay clear of political decisions that are arbitrary and focus on the application of the tax policy. This will ensure that there is no avenue left for the wealthy to exploit the political cracks in the legislations to cut the amount of the tax that they submit to the state (Silverman, 2000).  This will also ensure equality because the ordinary citizen, most of whom are the employees to these wealthy class are often disadvantaged because, first, there is they do not have such a wide avenue to take advantage of the taxation law loopholes to make a cut on the amount of tax that they pay to the state and secondly, when the wealthy ones play this game, and avoid paying the correct amount of tax, the discrepancy in what they pay and what they are supposed to pay is usually reflected in the deflated incomes of the employees meaning that the amendment of the taxation laws will largely benefit the employees who have for years been exploited by their wealthy employers who have been hiding under some rules that have certain defects. This is why the attribution rule will come in handy to address the situation of avoidance.

The attribution rule will also add in another advantage in that it will clear the overlap between tax avoidance and tax evasion meaning that some of the actions that have been falling under tax avoidance will now be considered under tax evasion and this will easily scare away the potential offender because there are harsh penalties for tax evasion, but avoidance can be easily challenged by dancing with legal explanations (Fillebrown, 2004). This means that planning can help to make sure that income from the property can attract special attention in the realms of taxation and also remove avenues for avoidance So, there should be a new approach to the analysis of income before amending the alienation and the anti avoidance laws. This new approach would call for a better way of   defining income and would not require anti avoidance provisions because the judicial system can give effect to the vivid policy intention of the law making process. Unless these kinds of changes take place, the anti avoidance regulations may just be exposing the policy shortcoming of the income legislation which are supposed to ensure that there effective policy settings within the income tax act which it should protect (Cosa, 2008) that the tax games being played especially by strategically placed individuals and companies will be a thing of the past. The taxpayers who avoid taxes using legal loopholes appear as if that are winning and they believe so, but the reality that they may be winning but the amount of loss they create for everyone is magnanimous and the consequences are cyclic and they come to affect the same tax avoiders indirectly. The situation can be rectified by the installation of transitional arrangements that will relate to the alienation of the personal services income after consultation with various stakeholders. This will actually help the taxpayers who have been affected by the new income legislation that is aimed at curbing tax avoidance (Staples, 2000). This will call for the concessions where the penalties of the general interests charge are being applied. The kind of tax payers that should be targeted by this arrangement should include contractors and consultants especially those who operate under companies and trusts because they have the widest avenue for avoidance because most of the scope of their operation is not often reached by the law. Others that need to be targeted are entrepreneurs who operate multiple companies because in the process of operating these companies, avenues arise where tax avoidance can easily take place. This calls for a mechanism to establish the constituent structures of various consortiums that operate franchises and chains to ensure that the calculation of tax for each chain and franchise is independent otherwise the overall combination might also create avenues for the avoidance of taxes especially where personal and business interests meet.

 These arrangements will have a major impact on employers and taxpayers who use the various business entities under their personal business but will exempt those entities that provide public service or community service because their avoidance of tax is usually covered by the jurisdictions that they operate in meaning that theirs is actually a tax exemption and not avoidance per se (Aaron, 2003). Anti avoidance laws especially the current ones in the ITAA are just full of legal cracks that encourage tax payers to dodge the tax master and worse still, no legal follow up can be made easily because the tax offenders will use legal justifications in the ambiguous laws to escape the penalties that ought to be imposed to people who are found guilty of avoiding to pay taxes to the state in accordance with the laws stipulated in the anti avoidance statutes of the ITAA (Melvin, 2009).