Following on from Heath's brief employment at NDM, heath decides to 'become his own boss'. He establishes a lawn mowing business and quickly builds up a steady client base. Heath cannot keep up with the work and so he decides to look for a partner to help with maintaining the workload and hopefully expand the business. Heath approaches Victor, who does some landscaping work part time, to join the business. Victor agrees, bringing not only a good set of skills, but also some landscaping equipment and an injection of funds into a new joint business account. Both Heath and Victor are deeply distrustful of lawyers and therefore wish to come up with a partnership agreement on their own. They discuss at length and decide the following matters.

Profits and losses will be shared 50:50

Both parties will work a minimum of 35 hours per week mowing lawns (as long as they have client bookings).

Heath Will manage the bookkeeping and make sure the front office is running smoothly, whilst Victor will do the purchasing and ensuring the equipment is well maintained and safe to use.

All property (such as the lawn mowers and other landscaping equipment) and money injected into the business remain the property of the partnership and may not be used for purposes outside of the business unless both partners agree.

All transactions over $10,000 must be agreed to by both partners.

They decide to Call the business HV Partners (HVP). The business is running quite smoothly in the opening months, however as bookkeeper, Heath notices costs have increased far beyond what he expected in expanding the business. Heath notes that the mower blades are wearing out twice as fast as normal and the fuel consumption is enormous. Heath queries Victor on this, but Victor responds that many of his clients had 'very large backyards' and he felt he was in a position where he couldn't charge more than the usual rate. Heath agrees that is 'probably the right thing to do' and is still pleased with additional revenue. Heath becomes unwell during the year and whilst still able to manage the lawn mowing, he neglects the partnership's books. Heath only returns to the business accounts at the end of the financial year, at which point, the business is struggling and in its first year has posted a loss. In checking the finer details of HVP's financial position, Heath notes a large transaction of $50,000, seemingly from their usual supplier of lawnmowing equipment.

Heath rings up Don Jeere Mowers asking about the large transaction. Heath speaks with the manager Don Jeere, who states 'Yes, we sold Victor an expensive ride on lawn mower, is there a problem?' Heath replies 'Yes, Victor didn't have approval to spend that amount of money and I haven't even seen this lawnmower'. Don, a bit concerned now states 'it was a larger purchase than normal, but we asked Victor and he said "Heath wants to expand into the big commercial markets" because of how well the business was going'. Heath is annoyed, but thanked Don for the information. Heath investigates further and discovers that Victor has set up a side business on the weekend doing landscaping for a variety of golf courses and the ride on mower was necessary for this purpose. It turns out that Victor bumped into Keith, the Chairman of Brisbane Royal Golf Club, whilst mowing his private residence, which led to Keith engaging Victor as the club's gardener, and through referrals, Victor has been able to secure other clients. Heath is furious and comes to you for advice on whether he has any remedy against Victor.

Will Heath be liable under contract for the ride on lawnmower and could he take action against Victor.