The partnership of Leanne, Bryan and Jodi in Queensland operates a plant nursery in

Brisbane. Each partner is a firm believer in the need for quality plants and they agree that they

will not use or recommend any products other than those supplied by certain approved

wholesalers. The partners operate their business in Rocklea, which is successful and grows

rapidly. Bryan convinces Leanne and Jodi that with a larger property owned by the business,

they could hold more stock and greatly increase their market share. They agree to buy a new

land for the nursery in Chelmer when their current lease on Rocklea expires in three months.

Further the partnership agreement prohibits the expenditure of the firm's funds beyond

$100,000 without the express written approval of all partners.

Leanne was at a plant nursery exhibition when she is approached by Preston, an old friend of

hers. Preston has made a lot of money from real estate development. Preston says he has a

vacant land for sale on a busy road that would really suit their business if they wish to expand.

Preston advises that he has had a lot of interest from other nursery businesses so she should

get in quick before it goes. Leanne advised Preston that she must obtain the approval from

other partners for the purchase of property. She tried to contact her partners, but both were

unavailable. Leanne sees an opportunity to further expand the business and immediately

decides to buy the land on behalf of the partnership. The cost of the premises is $450,000. At

a subsequent meeting of the partners Leanne announces she has signed the contract. The

other partners refuse to approve her purchase stating that the firm does not have sufficient

funds to pay. Preston is demanding payment.

Meanwhile Bryan, who considers himself to be an expert in Australian art, hears of an

exhibition by a well-known Australian artist. He attends the exhibition on Friday night and sees

a painting that looks like a real bargain at $50,000. He buys it on behalf of the firm saying to

the seller that it will look great in the entry way to the nursery. Bryan does not mention the

purchase to his other partners but several days later contacts a friend who deals in art and

asks if he would like to buy the painting for $60,000. The friend agrees and Bryan makes the

sale never mentioning it to Leanne and Jodi. He deposits the proceeds of sale - $10,000 into

his own bank account. Leanne and Jodi learn about the deposits and wish to expel Bryan and

to dissolve the partnership.

Using the legal problem-solving format of (1) Issues (2) Relevant law (3) Application of law

to the problem and (4) Conclusion, answer the following Questions. Explain your answers

making reference to case law and the Sections of the Partnership Act 1891 (Qld).

(a) Advise all the partners as to whether they are liable to pay Preston for the purchase

of the premises. (10 marks)