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Andrew owns and runs 'My Precious' a business in Woollahra creating and selling bespoke jewellery. 'My Precious' has several loyal and wealthy customers who, over

Andrew owns and runs 'My Precious' a business in Woollahra creating and selling bespoke jewellery. 'My Precious' has several loyal and wealthy customers who, over the years have ordered jewellery to be made for them. Andrew leases a shopfront and workshop from BusPro Pty Ltd in Woollahra on a month-to-month basis for $12,000 per calendar month. When Andrew first set up his business, he employed Sonil, the 15-year-old son of a friend of his, as an apprentice jewellery maker and salesperson. Eighteen years on, Sonil still works for Andrew, but over the years Sonil has taken on greater responsibilities in both design of jewellery and management of the business. Consequently, Andrew often leaves Sonil in charge when Andrew is away. Last year, while Andrew was attending a 3-day conference, Aisha visited 'My Precious'. Aisha was a regular client and had inherited several items of jewellery from her late mother's estate. She wanted to know whether 'My Precious' would be able to remodel the pieces of jewellery to give to her daughter as a wedding present. Sonil has grown weary of working for Andrew, and has for some time planned to establish his own business. He saw this as an opportunity to impress a wealthy client, and so proposed that he, Sonil, design and remodel all the items for a total price of $20,000. Aisha, thinking this was an excellent price, agreed. The Covid-19 pandemic saw a significant drop in the demand for bespoke jewellery. Andrew became concerned he would struggle to pay the monthly rent on the shop. While he was attending the 3-day conference, he reconnected with an old art school buddy, Mia. By pure coincidence, Mia owns a commercial property in Double Bay. Over a bottle or two of champagne Andrew unburdened his financial concerns to her. She said to him, 'Andrew, I know it's a common problem these days. I know you, and I want to help. I think my premises in Double Bay would be perfect for your business. Would you be able to afford $10,000 a month? I'd have to check when the current tenants are moving out, and you would have to agree to an initial 12-month lease'. Andrew said: 'That would be fantastic! I'll move in as soon as I can'! The following day Andrew gave written notice to BusPro Pty Ltd that he will vacate the Woollahra property in a month. Andrew is a brilliant jeweller, however, is an awkward and shy individual. He recently met and married a much younger woman, Brenda. Brenda has an 18-year-old son Kye, from a previous marriage. Brenda is an overbearing spouse and together Brenda and Kye constantly bully and belittle Andrew. Andrew is very intimidated and sometimes even frightened of his wife and her son, but despite everything he loves her and is terrified if he challenges their behaviour, she will leave him. Brenda has constantly complained to Andrew that Kye has no 'security', and insisted Andrew make some financial provision for him. Brenda was aware that a month ago, Andrew had entered into an oral contract with Andrew's brother, Callum, to purchase Callum's interest in 100 ordinary shares in SimCo Pty Ltd, a family company. All shares in SimCo are registered in the name of the family's accountant, Earnest, who holds them on trust for family members. Brenda arranged for Andrew, Kye and herself to visit her solicitor. The solicitor arranged for 3 Andrew to enter into a voluntary deed whereby he agreed to transfer to Kye Andrew's interest as the purchaser of Callum's interest in the shares. Andrew has now discovered that Sonil has been paid $20,000 to remodel the jewellery for Aisha and feels betrayed by his long-term employee. To make matters worse, after he had given notice to BusPro Pty Ltd, he followed up with Mia to formalise the lease of the Double Bay shop. Mia has only a vague recollection of the conversation and is unwilling to grant the lease on the terms Andrew claims they agreed to. Finally, Brenda has announced she is leaving Andrew for Sonil, whom she thinks has 'better prospects for the future'. Andrew has come to you for advice. Andrew wants to know: 1. Are there any grounds to recover the $20,000 from Sonil? 2. Are there any grounds to enforce the promise made by Mia concerning the lease of the Double Bay property? 3. Are there any grounds to have the voluntary deed in favour of Kye set aside? Regardless of whether the deed can be set aside, is the transfer from Andrew to Kye of the interest in the SimCo shares valid? At the time Andrew sees you, he advises that he (Andrew) has paid Callum in full the agreed purchase price for the shares, however Callum had not yet taken any steps to transfer his interest in the shares to Andrew. If you need further information to advise Andrew, identify the information you need, and why it is relevant to answering these questions. (What further questions would you ask Andrew?) As this exercise is intended to assess your understanding of Modules 2 and 3 of the Equity & Trusts subject materials, you should ignore any potential statutory claims. Focus your advice on discussion of the principles covered in our course.

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