MUST use the legal system of referencing according to the Australian

Guide to Legal Citation (AGLC), edn 4 available online from VU Library

http://libraryguides.vu.edu.au/law/aglc

QUESTION:

Tony is an accountant skilled in preparing budgets and cash flow statements for

new businesses. On 20 March 2019, he is hired by two former university friends,

Mark and Graham to prepare budgets and cash flows for a new company that is to

be set up, to be called Silvana Pty Ltd.

Tony goes to the printer ABC Printing Ltd (ABC) on 21 March 2019 and orders

stationery for the proposed new company and signs on behalf of the as-yet-to-be

incorporated company. Tony then prepares the budgets and cash flow statements

however is not paid for his work by Mark and Graham. The new company, Silvana

Pty Ltd, is registered on 30 March 2020 with its own Constitution.

Silvana Pty Ltd immediately begins to operate as a commercial printing business

with Mark and Graham as its directors. On registration, Mary, Mark's wife is

appointed as company secretary. By 21 April 2019, the stationery which Tony

originally ordered from ABC, has still not been paid for. Tony also is still waiting for

payment for his work.

The company's constitution provides that contract documents may be executed

without a common seal but they must be signed either by both of the directors, or by

one of the directors and the company secretary. On 30 May 2019, Mary decides to

order a new company car under a lease in the company name for her own use as

she is tired of driving to clients using her own car. The lease reflects current market

prices. No payments have yet been made on the car lease.

Mary also decides to purchase $10,000 worth of photocopying paper which PaperCo

Pty Ltd is selling at a greatly reduced price for a short period of time, and also

employs a new personal assistant for herself to "ease her workload". When Graham

discovers what Mary has done he refuses to pay for the bills and tells her that she

will be personally liable. She resigns immediately.

Required:

(a)Analyse and determine who is liable to pay for the stationery to ABC, and to Tony

for his accounting work.

(b)Discuss whether Silvana Pty Ltd may be liable for any of the contracts entered into

by Mary. If not, how can Mary be held liable?