At a meeting of directors of Greenslopes Pty Ltd, a seedling and plant nursery supplies company, in January this year, it was decided that Ros, the company secretary be appointed a director of the company. The only action taken by the company subsequent to the meeting of directors was to have business cards printed noting Ros as a director of the company. No formal appointment has taken place and no decision has been made as to the extent of her involvement in the company’s affairs as a director.
Subsequent to the meeting, Ros purchased outdoor furniture, for retail purposes, to the value of $1 million from Des on behalf of the company. She undertook the purchase without the consent of the directors.
After the goods were delivered, Des read the company’s constitution and discovered that the company has no power to purchase outdoor furniture. On this basis, the company believes it is not responsible for Ros’s actions and is refusing to pay for the goods on this ground.
Advise Des whether he will be able to hold the company to the contract. Also advise the company of its legal position regarding Ros’s actions and the debt of $1 million.