Sue, Grabbit & Runne is a firm of solicitors. There are three partners, Anne, Mary and Jane. There is a partnership agreement that states that each partner might enter into contracts worth up to $ 50 000, but that any contract in excess of that amount requires the prior agreement of all partners. Anne and Mary are away at the law conference when Jane sees an advert in local Law Society Journal for the set of law reports being sold by the local barrister, Tom, who is retiring. The set will cost in excess of $ 100 000 if all the back issues were bought from the publisher, so Jane thinks that asking price of $ 60 000 is very good, and she agrees to buy them for firm. She also decides that since she and Mary both did film studies as part of their undergraduate degrees, the firm will make money if it branched out into film-making, and so she buys a movie camera for $ 20 000 from Edgar. When Anne and Mary return from conference they are furious to find out what Jane has done and refuse to authorise payment for law reports and the camera from the firm’s bank account. Advise Tom and Edgar as to their legal position, citing appropriate law.
Mark worked as a route manager for United Trucks Pty Ltd in Queensland from 2002-08. A term of his contract was that if he must leave the company, he can’t engage in the trucking industry in Queensland for five years. In 2010 he registered the company called Sunshine Trucks Pty Ltd. Mark owns 95% of the shares. Other 5% are owned by his brother, Greg, whom he elected as sole director and CEO. All contracts for haulage of goods are signed by Greg in the name of Sunshine Trucks Pty Ltd. The company operates in north Queensland.
Greg also signed the contract on behalf of the company, taking out the loan of $ 2 million from Grasping Bank in 2010 as start-up capital. The company did well during 2010, 2011 and the first half of 2012, but in July 2012 was not able to repay the loan instalment of $ 100 000 owing to Grasping Bank Ltd.
Mark comes to you for suggestion after receiving two letters: One from United Trucks Pty Ltd requiring him to cease operations of Sunshine Trucks Ltd in Queensland, the other from Grasping Bank Ltd threatening to sue him for $ 100 000. Advise him, citing all appropriate legal authority.