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Veronica inherited an antiques shop from her father. She acts as a sole trader - the business is not a corporation.
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Veronica inherited an antiques shop from her father. She acts as a

sole trader - the business is not a corporation. Veronica has little experience with antiques, but has taken care to hire sales-people who have been in the industry for several years. She relies on them both to buy for the shop and to sell to collectors.


One day a lawyer for a deceased estate comes into the shop, offering an 18th century clock for sale. Sylvester, one of Veronica's salespeople, tells the lawyer that the shop isn't interested in buying it, but phones him a few days later and offers to buy it for the sum of $ 10 000, which the lawyer accepts and Sylvester goes to the lawyer's house to collect the clock. Sylvester then sells the clock to a friend of his, who he (Sylvester) has long known is a collector of such clocks, for $ 15 000.


Another of Veronica's salespeople, Bob, deals with major collectors. He also acts as Veronica's finance manager, and has access to the business' bank account. He has worked for Veronica for five years, during which time he has frequently negotiated with Angela, who collects pictures by contemporary Australian artists. Bob frequently comes to work late. Despite several warnings his performance does not improve. One Friday afternoon, Veronica says to Bob "You are fired with immediate effect - clear out your desk and leave". Veronica then rushes off to a meeting across town without making sure that Bob actually leaves the premises.


Bob sends an email to Angela, saying that the shop has just been sold a painting by a prominent Australian artist, which he offers to her for $ 50 000. Angela agrees, and makes an electronic transfer of $ 50 000 in payment, saying that she will collect the painting on Monday. Bob withdraws the $ 50 000 from the shop's bank account and disappears overseas with it. When Angela comes to collect the painting on Monday, Veronica refuses to give it to her, saying that Bob had no authority to sell it as he had been fired. Angela has sued Veronica for delivery of the painting.


Give Veronica legal advice in relation to the above situations.


Question 2 (10 marks)


Mark worked as route manager for United Trucks Pty Ltd in Queensland from 2003-17. A term of his contract was that if he should leave the company, he could not engage in the trucking industry in Queensland for five years.


In 2018 he registered a company called Sunshine Trucks Pty Ltd. Mark owns 99% of the shares in the company. The other 1% is owned by his brother, Greg, whom he elected as sole director and CEO. Sunshine Trucks operates from Townsville and carries goods all over Queensland. Greg also signs a contract on behalf of the company, taking out a loan of $ 2 million from Grasping Bank in 2018 as start-up capital. The company did well during 2018, 2019 and the first half of 2020, but in July 2020 was not able to repay a loan instalment of $ 100 000 owing to Grasping Bank Ltd.


Mark comes to you for advice after receiving two letters: One from United Trucks Pty Ltd requiring Sunshine Trucks Ltd to cease operating in Queensland, the other from Grasping Bank Ltd threatening to sue him for $ 100 000. Advise him, citing all relevant legal authority.


Please note that you should assume that the restraint of trade clause in the contract that Mark had with United Trucks is valid under the law of contract. You should therefore not discuss that issue.

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