STAIR HOLDINGS PTY LTD V CELESTINO  VSC 235
Supreme Court of Victoria– 7 June 2000
Celestino was the director of V & M Celestino Investments Pty Ltd. The company made arrangements to have Stair Holdings build a house for it and a contract between the company and Stair Holdings was prepared. Celestino signed the contract on behalf of the company and before signing he was told that he was signing the contract on behalf of the company and was not personally bound by the contract.
Clause 9 of the contract provided that “The client is considered to be the signatory to the acceptance of this quotation and such client is considered to be personally liable, for the settlement of the goods supplied in the event of the clients company defaulting on payments.”
The company went into liquidation and Stair Holdings lodged a proof of debt for outstanding accounts with the liquidator. Stair Holdings later became aware that the company owed over $300,000.00 to creditors and demanded payment from Celestino personally.
When Celestino refused to pay, Stair Holdings issued proceedings in the Victorian Civil and Administrative Tribunal. The Tribunal dismissed the claim and Stair Holdings appealed to the Supreme Court.
Was Celestino a party to the contract or bound by clause 9 of the contract?