Hans has set up a company Hans Pty Ltd. The company was set up to deal in sports equipment and has been very successful. Hans and his son Jake are the two directors of the company. Jake thinks it would be good to expand the business and add to it the running of sport events such as social sport teams. In order to minimize the risk, Hans Pty Ltd sets up a subsidiary called Jake Pty Ltd for the purpose of running these sporting events. Both Hans and Jake are directors of Jake Pty Ltd. The initial uptake is great and Jake Pty Ltd make a number of contracts with local schools and community centers to run sporting events. However the demand is more than their capacity and Jake Pty Ltd is unable to meet the obligations under these contracts. Several community centers including the Hooraly Council would like to bring an action. Hooraly Council has come to you seeking advice. Jake Pty Ltd has no assets and therefore is unlikely to be able to meet their monetary obligation should they be awarded compensation. The council would like to know if it is possible to sue either Hans Pty Ltd which has abundant assets or Hans as the director of Hans Pty Ltd. Would your answer be different if Hans Pty Ltd appointed Jake Pry Ltd as an agent for the purpose of running these events?

Answer rating: 100% (QA)

Answer Yes because Hans Pty Ltd the father who just appointed his son Jake Pty Ltd as partner direct... View the full answer