Winston Dior (Winston) is the inventor of a unique and innovative 3D printing technology and self-serve system that allows retail customers to operate their own 3D printing. Customers can bring in a photo or drawing and the 3D printing machine will scan the image and then print the 3D item in self-serve booths. The printer gives the customer a choice of materials to print with, and sizes to print. Both the 3D printing technology and the self-serve system are innovative and cutting edge. The trading name of the 3D printing business is The Third Dimension and the company that owns The Third Dimension business is TTD Pty Ltd. TTD Pty Ltd has six stores throughout Melbourne and each store has three staff (two full time staff and one part time working 20 hours per week on Thursdays, Fridays, and Saturdays). There are also three staff who work in the head office. The Third Dimension stores are all located in major shopping centres in Melbourne. Winston is also a director of TTD Pty Ltd and its major shareholder. Winston's wife Hazel Dior is a director and a minority shareholder. Winston had been intending to launch The Third Dimension shops into other states, including New South Wales, Queensland and Western Australia, given that the Victoria shops have taken off so well. Unfortunately, all the hard work involved in the start-up phase of the business left Winston and Hazel totally burnt out. Winston decides to sell the business, The Third Dimension, as a going concern. Winston and Hazel plan to take an extended break, probably including an international luxury holiday cruise once they sell the business. Eleanor Mitzakis and her sister Melania have been looking for a business to buy, something that involves new technology, and allows them scope to grow and expand the business. When they see The Third Dimension for sale, they think the business fits the bill perfectly because the technology is innovative and cutting edge, and they see the scope to expand the business into other states beyond Victoria and possibly even overseas. Ultimately Winston and Hazel (the Vendors), and Eleanor and Melania (the Purchasers) reach an agreement about the sale of the business. The sale price is $2.5 million, made up of 2 $1 million goodwill and $1.5 million of plant and equipment. The Contract of Sale contains the following clauses: Clause 1 - The Parties Clause 1.1 - the Vendors are TTD Pty Ltd and its shareholders and directors, Winston Dior and Hazel Dior, and a reference to 'the Vendor' includes TTD Pty Ltd and its directors, Winston Dior and Hazel Dior. Clause 1.2 - the Purchasers are Eleanor Mitzakis and Melania Mitzakis. Clause 2 - The Business Clause 2.1 - the Business sold under this Agreement is TTD Pty Ltd and all of its operations known as 'The Third Dimension' and including all of the business property including leases of premises, assets, employee contracts, stock on hand, and goodwill. Clause 3 - Settlement Clause 3.1 - the Purchasers will pay the purchase price to the Vendor on the Settlement Date of 1st of July 2022. Clause 3.5 - the Vendors will work with the Purchasers in the business to train the Purchasers in the operations of the business for a period of one month from Settlement Date. Clause 15 - Post Settlement Conduct Clause 15.1 - this clause 15 applies to each of: Winston Dior, director of TTD Pty Ltd, and Hazel Dior, director of TTD Pty Ltd (collectively referred to as the Vendors' Directors). Clause 15.5 - The Vendors' Directors, individually or as a group, must not engage in any other business similar to The Third Dimension business for the period of five years from the Settlement Date without the written permission of the Purchasers within the following jurisdictions: any state, territory of Australia, or within New Zealand, or within the Asia-Pacific region. Clause 15.6 - if clause 15.5 is determined by a court to be too broad, then the Vendors' Directors, individually or as a group, must not engage in any other business similar to The Third Dimension business for the period of two years from the Settlement Date without the written permission of the Purchasers within Australia. Further facts On the 1st of September 2022 the Purchasers, Eleanor and Melania, come to your office. They tell you that the vendors provided the one-month training. They also tell you that they are unhappy because they have heard that Winston is speaking to shopping centre landlords in regional Victoria about potentially leasing shops where he proposes to run a business called The 5th Dimension. This business would allow customers to bring photographs or 3 drawings of images into the stores and then have those images printed in ultra-realistic 3D format. Customers also have an option to have the 3D printed object mechanised, allowing customers to print their own working machinery. Because the technology is so complex, customers bring the images to the shop and then specially trained staff will do the 3D mechanised printing. Further investigations revealed that Winston is clearly proposing to open this new business and has leased a shop in central Mildura (which is in a town in North-West Victoria, and you can assume it is more than 500kms from Melbourne). Winston and Hazel incorporated a new company, Fifth of Five Pty Ltd, through which to run the business. The business is now operating and has a number of employees including a manager and assistant manager, a social media manager, a head of technology, a head of mechanisation, two administration staff and four sales assistants. It turns out that Winston, a serious start-up entrepreneur, became excruciatingly bored at the end of just one week's holiday and resolved to get back into the business game and pursue further developments in printing technology. Question 1 (16 marks) Eleanor and Melania seek your advice about whether they can successfully rely on clause 15 to prevent Winston's venture. Refer to relevant legislation and case law. Further facts On 1 October Eleanor and Melania come to see you and tell you that Winston is operating his new business in NSW and the staff in their The Third Dimension shops have reported decreased sales, and that customers report that they are sending their images to Winston's The 5th Dimension shop by email for printing in the advanced format. They tell you that this is very stressful for them as they are already struggling financially given the high purchase price they paid for the business, The Third Dimension. They also tell you that in a moment of distress and after a few drinks, Melania posted on her Facebook page about how terrible she thought Winston is. Some of the comments that Melania made include the following: 1. "Winston doesn't seem to care about contract law", 2. "I hope Winston fails in business and in life", 3. "Winston and Fifth of Five Pty Ltd are all lying scumbags", 4. "The Fifth of Five Pty Ltd is rotten to the core and I advise everyone to stay away from doing business with it as that company is out to rip you all off". Melania's friend from her days studying at Sydney University, Michelle Woo, was sitting on her poolside patio in Double Bay, Sydney, when she read Melania's Facebook posts. Michelle posted in response saying "It is good you have warned everyone about these untrustworthy business people, Melania. Thanks for the warning. I will make sure I keep away from doing business with any of them." 4 Question 2 (16 marks) Melania is now concerned whether she went a little too far in her rant about Winston and she seeks your advice about the following: whether any of her statements may be actionable in defamation, who may be able to bring a defamation action against her, in which jurisdiction a defamation action against her might be brought. Refer to relevant legislation and case law. Question 3 (8 marks) Explain whether you think the defamation laws applicable in Question 2 are fair or not, and whether the law appropriately balances competing interests of the parties who can potentially get involved in defamation litigation.