Shush Doggies Ltd carries on a shoe-making business. Two months ago, the Board of Directors held a meeting where it was decided that Alan, the in-house legal adviser, be made a director.

The only action taken by the company since that meeting was to have business cards printed, with Alan described as a director of the company. However, no formal appointment has taken place and neither has there been any formal discussion by the Board of Directors of the extent of his involvement in the company's affairs as a director.

Last week, without consulting the other directors, Alan purchased $100,000 worth of leather on behalf of the company from a leather supplier, Hides Pty Ltd.

Shush Doggies Ltd believes it is not bound by this purchase and refuses to pay Hides Pty Ltd.

Advise Hides Pty Ltd of its legal position, citing any relevant statutory provisions and case law.