Swimmingpool Co Pty Ltd employs Martin as the manager of their Tasmanian sales division. Martin is to quote to potential customers the cost of installing the various pools that the company offers, to draw up any new contracts on behalf of the company and further to ensure that a deposit is paid by potential customers, monies which are then deposited in the company's bank account. Martin is on a fixed salary but his contract of employment allows for the payment of a bonus if he exceeds his annual target of signing new customers.

The company is very impressed with Martin in the first month of his employment; he has signed at least 20 new customers and work has begun on at least half of the new projects signed.

After the lapse of another month the company receives a number of complaints from customers who claim that the construction of their swimming pool is substantially different to what they had contracted for. A number of customers were given wrong advice on the suitability of the placement of their new swimming pool, which means some newly constructed pools are sinking into the ground, the repair of which will cost the company considerably. It appears also that some of the deposits have not been paid into the company's bank. Martin appears to have kept part of the money collected. The company also discovers that Martin is in the process of setting up his own business which will compete with Swimmingpool Co.

In considering the facts above make some legal observations on the following:

1. Is Swimmingpool Co liable for Martin's actions? On what basis in law would this be the case?

2. Can the company claim they are not liable for Martin because he has not followed instructions? Explain.

3. Is Martin liable to his employer for any of his actions? On what basis in law would he be liable?

4. Has Martin breached any law if he is planning to set up his business? Explain.