Business Law

David had a great idea for a new app, called Bookface, which allowed book enthusiasts to discuss their favourite novels.

David incorporated a new company, Start Up Pty Ltd to market the app. He was the sole director of Start Up Pty Ltd but the company had three shareholders, David and his brother and sister John and Jane. Each held one share each. John and Jane were not involved in the company other than to the extent that they contributed start-up capital and were in turn provide with shares.
Start Up Pty Ltd entered a contract with a web developer, Susan, to develop the app and paid a small deposit out of the monies contributed to Start Up Pty Ltd by John and Jane.
Susan worked day and night on the Bookface project for one month but just before completing her work saw a news story featuring David, who had sold his Bookface idea to Big Blue Co Ltd for a large undisclosed sum.
Susan tried to contact Start Up Pty Ltd but their office had been shut down. A search of the company confirms that it has no assets and Susan is unable to obtain payment for the work she has performed.
Advise Susan if she has any recourse against David? John and Jane have also been left empty handed as David’s contract with Big Blue Co Ltd was in his own name, making no reference to Start Up Pty Ltd. Do John and Jane have any recourse against David?

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