Banque Nationale De Paris v Falkirk Developments Ltd

The High Court of Australia considered an appeal concerning a dispute between Banque Nationale De Paris (BNP) and Falkirk Developments Ltd. The core of the disagreement related to the enforceability of a guarantee provided by Falkirk Developments Ltd in favour of BNP.

The central legal question before the High Court was whether the guarantee, which was executed by a director of Falkirk Developments Ltd without the company's seal, was valid and binding on the company. This involved an examination of the requirements for the due execution of deeds by companies under the relevant legislation and at common law.

The Court's reasoning focused on the provisions of the Companies Act 1961 (NSW) and the common law principles governing the execution of deeds. It was held that, in the absence of the company's seal, a deed could still be validly executed by the company if it was signed by two directors or by a director in the presence of a witness. As the guarantee was signed by only one director and lacked the company seal, it did not meet the statutory requirements for a deed. Consequently, the guarantee was not enforceable against Falkirk Developments Ltd. The appeal was dismissed.