Question 2 [10 marks]

Mark worked as route manager for United Trucks Pty Ltd in Queensland from 2003-10. 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 2011 he registered a company called Sunshine Trucks Pty Ltd. Mark owns 99% of the shares. 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. All contracts for haulage of goods are signed by Greg in the name of Sunshine Trucks Pty Ltd. Greg also signed a contract on behalf of the company, taking out a loan of $ 2 million from Grasping Bank in 2011 as start-up capital. The company did well during 2011, 2012 and the first half of 2013, but in July 2013 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 him to cease the operations of Sunshine Trucks Ltd in Queensland, the other from Grasping Bank Ltd threatening to sue him for $ 100 000. Advise him, citing all relevant legal authority.

Rationale
This assessment item will allow you to demonstrate:

Your knowledge of the law of partnership, the law on the effect of incorporation and the legal relationships within these types of business organisation and with outsiders ;
Your ability to apply legal rules to hypothetical practical situations at a basic level;
Your ability to conduct research using provided materials as well as other resources;
Your ability to structure your answer and use a clear writing style by identifying issues, stating the law, applying the law and reaching a conclusion;
Your ability to apply academic standards of presentation and referencing
Your ability to complete an assessment task which is relevant to professional practice and the giving of advice in the workplace