Antonio is a scientist who has patented a new process for making Covid-19 anti-viral drugs. On 1 January 2023, Antonio registered a company with ASIC called AV-Covid 19 Pty Ltd. Antonio is the sole shareholder and Managing Director of the company. However, he has ten other scientists working for him. In preparation of the AV drugs, Antonio had signed a contract to buy nirmatrelvir and ritonavir, with Plaxo Tiger Ltd.Under the terms of the contract PlaxoTiger Ltd would supply 100 kg of both ingredients, a crucial component of the anti-viral drug. The contract specified that both payment and delivery would take place on 31 January. Antonio signed the contract as 'Antonio Braganza, Managing Director, AV-Covid 19 Pty Ltd'. Plaxo Tiger Ltd agrees to supply the ingredients in 2 instalments on May 1 and June 30, 2023.

The early production of the drug has proved successful, and Antonio needs more capital. Antonio persuades a few relatives to invest in the company and five of his relatives buy large pockets of shares in AV-Covid 19 Pty Ltd. Because Antonio issues a large number of shares, he ends up being a minority shareholder. On 20 February, in a shareholders' meeting, a new board consisting of Susan and Peter and the Managing director, Mamamia is elected.

The new board met on 28 February and decides not to proceed with the contract with PlaxoTiger Ltd. The board believes that they can source the ingredients for their product more cheaply from another supplier.

AV-Covid 19 Pty Ltd sent a letter to PlaxoTiger Ltd. informing that the company would not proceed with the contract, pay for it, or take delivery of, the nirmatrelvir and ritonavir.

PlaxoTiger Ltd insists that AV-Covid 19 Pty Ltd has signed a contract and thus the company is bound by the contract and must pay for the drugs on delivery. On the other hand, AV-Covid 19 Pty Ltd argues that the contract has not been signed by the company, but by Antonio, so he is liable under the contract. AV-Covid 19 Pty Ltd writes a letter to Antonio to pay for the nirmatrelvir and ritonavir and sort out the matter with Plazo Tiger Ltd.

In the meantime, Antonio decides to branch off privately into the business of selling firearms for which he needs a licence from the relevant government authority. The legislation prohibits the granting of a licence to 'any person who has a criminal conviction involving threatening to harm others.'

Many years ago, when Antonio was a student at the university, he had been convicted of 'threatening to harm' his opponent in the university election. Antonio asks his friend Anthony to form a company, AA Shooters Pty Ltd. Antonio owns 99 shares and his friend, Anthony holds only 1 share. The company appoints Antonio as the Managing Director, and his friend Anthony becomes the Company Secretary. Antonio asks the company to lodge an application with the Firearms Board Victoria for a licence on behalf of the company. AA Shooters Pty Ltd has received a letter from the Firearms Board refusing the licence application. The reason given by the Firearms Board is Antonio's previous criminal conviction of 'threatening to harm others'.

Antonio approaches you for legal advice in relation to a lawsuit brought against him by PlaxoTiger Ltd for breach of contract.

AA Shooters Pty Ltd also wishes to challenge the refusal of a licence by the Firearms Board.

Answer rating: 100% (QA)

In the scenario you described there are several legal aspects to consider 1 Contract with Plaxo Tiger Ltd Antonio initially signed the contract with P... View the full answer