Business Law Discussion

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ILAC method

Mark worked as route manager for United Trucks Pty Ltd in Queensland from 2003-13. 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 2014 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 2014 as start-up capital.

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The company did well during 2014, 2015 and the first half of 2016, but in July 2016 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 as to his position, 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, and so you should therefore not address that issue.

 
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