Question 3

Tasman Pty Ltd is a large proprietary company that builds multi-storey apartment developments in Victoria. It has annual revenue of nearly $20 million. The company has appointed 5 directors, including

Roxanne as managing director. Roxanne engages Ann, an architect who specialises in sustainable developments, to draw up plans for a new building development, valued at over $7 million, utilising environmentally friendly materials and products. Ann charges a professional fee of $150,000. A written contract is drawn up and signed by both Ann and Roxanne for this fee. Having completed the plans in accordance with the instructions provided by Roxanne, Ann sends her invoice to Tasman Pty Ltd but it has now refuse to pay the $150,000 professional fee.

Tasman Pty Ltd disputes the invoice on the grounds that it never authorised the drawing up of

architecture plans. Furthermore, the constitution of Tasman Pty Ltd provides that Tasman Pty Ltd is precluded from entering into any contract in excess of $100,000 without a directors' resolution. Tasman Pty Ltd further claims that Roxanne has no authority to instruct Ann on the procurement of the development plans drawn up by Ann. It has also now been discovered that Roxanne appointment as managing director is defective for non-compliance with a provision of the constitution. Ann was not aware of this until now. Is Ann entitled to be paid under the contract?