136, 140; Ding v Sylvania Waterways Ltd*

Gambotto v WCP Ltd*

Tracy v Mandalay Pty Ltd*

711, 728; Erlanger v New Sombrero Phosphate Co*; Gluckstein v Barnes*

729; Case law as above for remedies at common law

Using the following law from Australian corporations act and case law:

Aztech Science Pty Ltd v Atlanta Aerospace (Woy Woy) P/L

131, 132

126, 127, 198A

128, 129, 130

46, 47, 50; Bluebird Investments Pty Ltd & Ors v Graf

134, 135, 141

125, 136

45A, 112, 113, 162, 254M, 254P, 254Q, 254R

Gilford Motor Co v Horne*; Creasey v Breachwood Motors Ltd; Re Darby*; CSR Ltd v Young

Industrial Equity Ltd v Blackburn*

140; Eley v Positive Government Security Life Assurance Co*

ASIC Act: 13, 14, 19, 30, 33, 49, 50, 68 CA: 117, 119, 124, 142, 145, 147 CA: 124; 516; Salomon v Salomon & Co Ltd*; Lee v Lees Air Farming Ltd*; Macaura v Northern Assurance Co Ltd*

Question:

Axel and Paul, two young entrepreneurs, decided to form a small proprietary limited company to operate a restaurant. The company was to be called Fine Food Fine Wine Pty Ltd. On 22 February, wanting the business to be operational as quickly as possible, Axel entered into a contract with Irish Linen Ltd to buy 24 monogrammed tablecloths and 12 aprons. Although Axel did not discuss this contract with Paul, Axel still executed the contract in the name of Fine Food Fine Wine Pty Ltd.

On 24 February, the proposed company was registered with the Australian Securities and Investments Commission (ASIC). The company did not adopt a separate written constitution. Axel and Paul each took 50 percent of the issued capital, and both were appointed as directors. Due to a dispute between Axel and Paul regarding the contract with Irish Linen Ltd, that contract was not ratified by Fine Food Fine Wine Pty Ltd until 30 March.

On 1 April, Axel ordered 10 x (tables and 4 chair settings) from Domestic Bliss Pty Ltd. Axel affixed the company seal to the contract and signed it.

It is now 1 May. Both the tablecloths and aprons supplied by Irish Linen Ltd and the table and chair settings from Domestic Bliss Pty Ltd have been delivered, but not paid for.

Question: Are Axel, Paul, or Fine Food Fine Wine Pty Ltd liable to pay for:

(i) the tablecloths and aprons, and/or

(ii) the table and chair settings?

Justify your answer using the ILAC method and the available evidence.