DH Ltd entered into a contract with All Bricks Pty Ltd (AB Pty Ltd) for the supply of bricks. The contract established AB Pty Ltd as DH Ltd's exclusive brick supplier. Within six months of entering into the contract, DH Ltd investigates the bricks supply market and discovers it can import bricks for half the price of locally made products. It then registers Quick Bricks Pty Ltd (QB Pty Ltd), as a wholly owned subsidiary of DH Ltd, for the sole purpose of importing and supplying bricks. Soon after DH Ltd relies on QB Pty Ltd for the exclusive supply of its bricks.

1. Would the directors of AB Pty Ltd be successful in taking legal action for breach of contract against: DH Ltd; and QB Pty Ltd? Discuss fully applying company law only.
2. In the past eight months the demand for new housing construction has slumped. The directors of DH Ltd ordered an oversupply of timber to the value of $5M (five million dollars) from Oz Timber Co. The order was placed three months ago even though the directors were aware the demand for housing construction had slowed down considerably. Oz Timber Co is still owed $4M (four million dollars) for the timber supplied.

Could Oz Timber Co take legal action against the directors of DH Ltd to recover the debt outstanding? Discuss applying company law.