Submission: Assignment must be submitted electronically via Turnitin, in one (1) single MS Word or
PDF document. No hard copy required. Professional presentation and logical/legal reasoning, with
correct application of legislation and cases are part of the assessment. Assignments must be properly
identified with student's name, ID and tutorial time.
Total word limit: 2,000 words (overall), with 10% tolerance, you may distribute the total of 2,000
words as necessary in answering the two questions. Word limit excludes the assignment questions,
footnotes and reference lists.
Assignment format and referencing: Assignment must be answered in an essay format, using
academic formal language. Avoid colloquial language and spelling, grammatical and typographical
errors. Repeated errors of this kind will be penalised. All consulted/cited materials must be referenced.
You may choose either Harvard or Australian Guide to Legal Citation (AGLC) styles. For tips
regarding referencing please refer to: http://www.latrobe.edu.au/learning/referencing.html. For tips on
acknowledgement, referencing and plagiarism please refer
Late submission policy: Late submissions will be penalised in accordance with the Late
Submissions Policy (https://www.latrobe.edu.au/policy/documents/late-submission-of-assessmenttasks-policy.pdf). See Subject Learning Guide for more details.
Special Consideration and Extensions: Extensions to the deadline will be granted only on
exceptional and unforeseen circumstances in accordance with the Special Considerations Policy
(https://www.latrobe.edu.au/policy/documents/special-consideration-policy.pdf) and procedures
(http://www.latrobe.edu.au/policy/documents/special-consideration-procedures.pdf). See Subject
Learning Guide for more details.
Academic Integrity: All assignments are electronically and manually checked for plagiarism,
collusion and contract cheating (where a student submits an assignment which is not of their own
authorship, e.g.: purchase of assignments through specialised websites). Suspected cases of
academic misconduct will be reported to the Academic Integrity Adviser for the appropriate measures.
Please refer to the Academic Integrity policy (http://www.latrobe.edu.au/students/learning/academicintegrity) for more details.
Assessment criteria: Assignments will be assessed against the SILOs for the assessment. In
particular, assignments will be assessed based on objective demonstration of the following: Engagement of critical thinking and
the case study. interpretation skills to correctly identify the issues to be Application of critical thinking,
interpretation and analytical skills to develop a meaningful
the issue(s) previously identified on each question, with detailed and
analytical application of tax concepts, tax principles, legislation and
case law. Mere
repetition of question
facts, citation or transcription of theory, concepts, legislation
law without proper application will not attract any marks. Elaboration of a meaningful solution to
each question; the solution must be logically
derived from the factors
analysed in the body of the essay. Please refer to Grades Table available at the SLG for details of the expected elements/achievement
level of each grade band.
Graduate capabilities assessed in this assignment: Writing – Writing skills are assessed based on the quality of the arguments presented, marks
are attributed where student presents a well organised essay written in academic English,
with logically sequenced and coherent paragraphs and proper application of legislation and
case law. A good essay must be clear, objective, and easily understandable, and must provide
a conclusion that is logically derived from the arguments presented. Essays whose
paragraphs are not logically organised, with tautological arguments and poor syntax will
receive less marks depending on the quality of the work presented. Cultural Literacy – Cultural literacy is assessed based on the demonstrated capacity to
correctly interpret question facts with reference to Business/Accounting concepts and general
knowledge expected from final year master students. Critical Thinking / Creative Problem-Solving / Inquiry / Research – Critical
thinking/Creative Problem Solving skills are assessed based on the student’s demonstrated
capacity to make reasonable, justifiable and original assumptions leading to a correct and
coherent conclusion grounded on legal provisions and case law precedents. Inquiry /
Research skills are assessed by correct identification and application legislation, rulings and
case precedents in order to provide legal grounds for their solution. Assignment Cases/Questions
AUSGeo vs U-Trains
AUSGeo Engineering Ltd (AUSGeo) is an Australian geological engineering company which provides
consultancy and infrastructure services to several companies in the mining, transport and
In July 2014 AUSGeo was engaged by Underground Trains Melbourne (U-Trains) to perform
infrastructure assessments and coordinate the excavation works for the construction of part of the
tunnel that would link Melbourne to Sydney. The contract between AUSGeo and U-Trains had an
initial term of 8 years and an agreed value of $18,000,000 for the infrastructure assessment and
$86,000,000 for the excavation and construction services. The infrastructure assessment was
completed by January 2015, and in that same month AUSGeo invested $16,000,000 in a tunnel
boring machine (TBM) which was 100% dedicated to the project.
In September 2016, an auditing procedure evidenced that U-Trains was under severe financial
difficulties and as a consequence U-Trains’ Board of Directors decided to restructure the business. As
part of the restructuring process, in October 2016 U-Trains temporarily suspended all existing
contracts until further notice, which caused the immediate interruption of the payments to AUSGeo.
As AUSGeo’s TBM had already been underground, AUSGeo incurred $8,000,000 in order to
resurface it so it could be used in other projects. Unfortunately, during the resurfacing operation part
of the tunnel collapsed and damaged the TBM, causing AUSGeo to spend a further $5,000,000
having it repaired.
In March 2017 U-Trains decided to quit the construction of the Melbourne-Sydney tunnel and
negotiated the cancellation of the contract with AUSGeo. While the contract was in force, AUSGeo
had received from U-Trains a total amount of $30,000,000, being $18,000,000 for the infrastructure
assessment services (which were already completed) and $12,000,000 as an initial payment for the
construction of the tunnel.
According to the contract’s termination clause, U-Trains had to pay AUSGeo an upfront cancellation
fee of 10% of the contract’s original value (i.e. $10,400,000) plus 10% of the residual value over a
period of 5 years. U-Trains honoured the upfront termination payment and agreed to pay the future
instalments accordingly, so the contract was terminated on 30 March 2017.
In May 2017 AUSGeo took U-Trains to Court seeking compensation for the damages caused to the
TBM. On 20 August 2017 the Court ordered U-Trains to pay $25,000,000 in damages to AUSGeo.
Part A (10 marks) – Required:
For the year ending 30 June 2017, advise AUSGeo on the assessability of the payments received
from U-Trains, supporting your arguments with legislative references and application of case law.
(calculations not required) Part B
Black Gold Resort
In 1984 AUSGeo purchased a 20-hectare block of land in northern Queensland for $100,000. The
land included a deactivated gold mine which had been used by AUSGeo for geoscience research
projects during approximately 10 years. The land was also located in a heritage protected site with
good potential for tourism.
As AUSGeo had not conducted any research projects on the land since 1995, its Board of Directors
made a decision to sell it. However, instead of selling the vacant mine which would require extensive
environmental remediation, AUSGeo decided to take advantage of its expertise in geoscience to
create a theme resort where visitors could enjoy exciting experiences involving geological
experiments, mine-site tours and field trips. In order to fund this enterprise, AUSGeo obtained a $30
million loan from the Bank of Queensland, which was to be repaid in 5 years at commercial interest
The development, which was named “Black Gold Resort”, was constructed between 2014 and 2015 at
a total cost of $32 million, and on 10 April 2017 it was sold to Parklands Leisure Group (which owns
and runs a number of entertainment facilities in QLD, including theme parks and resorts) for a total of
$45 million. At the time of sale, the land was valued at $800,000 and the improvements (being the
resort hotel and related infrastructure such as access roads, geothermal pools, solar energy plant and
water reservoir) were valued at $44,200,000 (building only, excluding depreciating assets).
Part B (10 marks) – Required:
For the year ending 30 June 2017, advise AUSGeo on the tax consequences of the above
transactions, supporting your arguments with legislative references and applying relevant case law.
(calculations not required)