Bendigo and Adelaide Bank Limited (ACN 068 049 178) v Kenneth Ross Pickard - [2019] SASC 123

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
BENDIGO AND ADELAIDE BANK LIMITED (ACN 068 049 178) & ORS v KENNETH ROSS PICKARD & ANOR
[2019] SASC 123
Judgment of The Honourable Justice Stanley
16 July 2019
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS
CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - CONSIDERATION
DEEDS
This is a claim for moneys owed under a guarantee.
The plaintiff’s claim the defendants are guarantors pursuant to a loan deed which provided for a loan of $505,250 by the third plaintiff to a company, Kenrop Ptd Ltd (now in liquidation) (‘Kenrop’) of which the defendants were directors. Kenrop applied for interest in three agribusiness managed investment schemes, namely, plantations, wine grapes and cattle. Investors in the schemes were offered finance by an associated entity, Great Southern Finance Pty Ltd (GSF) or a preferred lender, ABLN, with the loans secured by investors’ interests in the scheme. All three schemes ultimately failed.
Kenrop made payments in the order of $350,000 until it became apparent that the schemes had failed. Kenrop was subsequently placed into liquidation at the petition of one of the plaintiffs.
The plaintiffs now claim moneys owing by Kenrop in relation to the cattle scheme from the defendants as guarantors. In issue is whether the defendants signed the loan application only in the name of the Kenrop or also personally as guarantors; whether GSF was authorised to enter into the loan deed on behalf of the defendants as their attorney; whether the guarantees were within the limited scope of the power of attorney; whether the guarantees in the loan deed were validly executed by GSF as the defendants’ attorney; whether the loan deed, if not a valid deed, nonetheless took effect as a contract; and whether the defendants’ conduct ratified the loan deed.
Held:
1. The loan application was entered into by Kenrop as the applicant and by the defendants personally as guarantors.
2. The guarantees in the loan deed were not ultra vires or in breach of fiduciary duty.
3. The loan deed was not validly executed as it did not meet the requirements in section 127 of the Corporations Act 2001 (Cth). The guarantees in the loan deed are therefore invalid.
4. The purported deed is not enforceable as a binding contract as there was no consideration.
5. Had the loan deed been validly executed, the defendants’ execution of the Mortgage and Amendment Deed would have ratified the guarantees under the loan.
6. The plaintiffs’ claim is dismissed.
Corporations Act 2001 (Cth) s 127; Property Law Act 1974 (Qld) s 44, s 45; Property Law Act 1969 (WA) s 9; Electronnic Transactions Act 1999 (Cth) s 10; Acts Interpretation Act 1901 (Cth) Part 2, referred to.
Bendigo and Adelaide Bank Ltd & Anor v DY Logistics Pty Ltd [2018] VSC 558; Bendigo and Adelaide Bank v Laszczuk [2018] VSC 388, applied.
400 George Street (Qld) Pty Ltd v BG International Ltd [2012] Qd R 302; Backstop Nominees Pty Ltd v Goscor Pty Ltd [1990] VR 468; Interchase Corporation Ltd (In Liq) v Commissioner of Stamp Duties (Qld) (1993) 27 ATR 154; ABL Custodian Services Pty Ltd and Bendigo and Adelaide Bank Ltd v Wade [2013] VCC 878; Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95; Alonso v SRS Investments (WA) Pty Ltd [2012] WASC 168; Burrell & Family Pty Ltd v Harris [2010] SASC 184; ABL Custodian Services Pty Ltd v Kunz [2016] SADC 145; Nurisvan Investment Ltd & Anor v Anyoption Holdings [2017] VSCA 141, discussed.
Comptroller of Stamps (Vic) v Papalia (1982) 12 ATR 866; Berkeley v Hardy (1826) 108 ER 132; Scook v Premier Building Solutions Pty Ltd (2003) 28 WAR 124; Manton v Parabolic Pty Ltd (1985) 2 NSWLR 361; Pozzan v Gibbons (2006) 200 FLR 287; Xenos v Wickham (1866) LR 2 HL 296; Dean & Westham Holdings Pty Ltd v Lloyd (1991) 3 WAR 235; Follacchio v Harvard Securities (Aust) Pty Ltd [2002] FCA 1067; Sweeney v Howard [2007] NSWSC 852; Tobin v Broadbent (1947) 75 CLR 378; McKay v National Bank [1998] 1 VR 173; Natouk v Entrance Seabreeze Pty Ltd [2010] NSWSC 649; Spackman v Evans [1868] LR 3 HL 171; Bedford Insurance C Ltd v Instituto de Resseguros do Brasil [1984] 3 All ER 766; McKeand v Thomas [2006] NSWSC 1028; Leybourne v Permanent Custodians Ltd [2010] NSWCA 78; Bremner v Sinclair (2002) ANZ Cov R 29; Hewlett-Packard Aust Pty Ltd v Exeed Pty Ltd [2004] FCA 135; Mirzikinian v Tom & Bill Waterhouse [2009] NSWCA 296; Pratap v Permanent Custodians Pty Ltd [2013] NSWSC 1918, considered.

BENDIGO AND ADELAIDE BANK LIMITED (ACN 068 049 178) & ORS v KENNETH ROSS PICKARD & ANOR
[2019] SASC 123
Civil
STANLEY J:
Introduction

This is a claim for moneys owed under a guarantee.
The plaintiffs bring this action against the defendants claiming the defendants are guarantors pursuant to a loan deed dated 17 November 2008 (the loan deed)[1] which provided for a loan of $505,250 by the third plaintiff, ABL Nominees Pty Ltd (ABLN) to a company Kenrop Pty Ltd (now in liquidation) (Kenrop) of which the defendants were directors. Kenrop was the trustee of the K & A Pickard Family Trust which held the investments of the defendants in various Great Southern Group projects. The Great Southern Group (Great Southern) marketed and facilitated a number of agribusiness managed investment schemes. Investors in the schemes were offered finance by an associated entity, Great Southern Finance Pty Ltd (GSF) or a preferred lender, ABLN, with the loans secured by investors’ interests in the scheme. All of the Great Southern investment schemes ultimately failed.
[1] Described by the parties as the Third Loan Deed.
In 2006 and 2007 Kenrop applied for interests in three such schemes, namely, plantations, wine grapes and cattle. The cost of the investments totalled around $988,650. Kenrop made payments in the order of $350,000 until 2009 when it became apparent that the schemes had failed. Kenrop ceased making repayments, and was subsequently placed into liquidation at the petition of one of the plaintiffs.
The plaintiffs now claim moneys owing by Kenrop in relation to the cattle scheme from the defendants as guarantors. The plaintiffs’ claim is that the defendants appointed GSF as their attorney to enter into and execute a loan deed by signing an application for term finance (the loan application)[2] on or about 23 February 2007. The plaintiffs claim that subsequently, on or about 17 November 2008, GSF as attorney for and on behalf of the defendants, executed such a loan deed guaranteeing Kenrop’s liabilities to ABLN and GSF.
[2] Described by the parties as the Third Loan Application.
In dispute is whether the defendants signed the loan application only in the name of the borrower Kenrop or also personally as guarantors. The power of attorney in the loan application authorised GSF to enter into the loan deed for and on behalf of the donees of that power of attorney. The plaintiffs claim GSF executed the loan deed for Kenrop and the defendants as guarantors on or about 17 November 2008. In issue is whether the defendants granted the power of attorney to permit that to occur. The plaintiffs submit they did. For reasons I will come to shortly, the defendants deny this. They contend that the power of attorney could only be conferred by deed and the loan application executed was not a valid deed. Further, the defendants submit the loan deed, which purports to be a deed, was not valid as a deed. Accordingly, the guarantee in the loan deed is not enforceable. The plaintiffs contend that if GSF did not execute the loan deed for the defendants as a deed, it was alternatively executed as a loan agreement and they were bound by the guarantee.
In any event, the plaintiffs submit that in 2009 the defendants formally ratified the loan deed that had been executed on or about 17 November 2008 by GSF as attorney for or on behalf of Kenrop and the defendants. The act of ratification was the signing by the defendants of a Mortgage and Amendment Deed with knowledge that the plaintiffs were asserting they were guarantors, without sounding any protest.
The plaintiffs further submit that Kenrop’s failure to make payments under the loan deed from 30 June 2009 resulted in an “acceleration event” under clause 11 with the consequence that all moneys payable were repayable from around July 2009 or October 2009. ABLN then became entitled to demand immediate repayment of all moneys payable from the defendants or ABLN suffered loss for which the defendants were then liable to indemnify ABLN. Interest accrued on the moneys payable under a default rate of 13.5 per cent as specified in the loan deed.
The defendants deny that they are liable as guarantors to repay moneys for which Kenrop is liable.
The defendants contend that the loan deed could only be effective and binding as against them as guarantors, if, by signing the loan application, the defendants, in their personal capacities: appointed GSF as their attorney to execute a deed in the form of the loan deed; the loan deed is a valid deed which has been properly executed and attested by GSF; and the load deed satisfies the relevant requirements for a binding deed. They contend that on the contrary, they did not appoint GSF as their attorney to execute a deed by signing the loan application. Further, the loan deed does not comprise a valid deed which has been properly executed and attested, and does not satisfy the relevant requirements for a binding deed. In any event, the loan deed is inconsistent with the loan application. As a result, even if GSF was validly appointed as the defendants’ attorney, its execution of the loan deed was beyond the scope of its authority. Accordingly, it was executed in breach of the grant of the power of attorney. Even if the deed was not valid, it did not take effect as a contract. Finally, there was no subsequent ratification of the guarantee by the defendants by the signing of the Mortgage and Amendment Deed.
Findings of fact
There is little that is in dispute factually in this matter. I make the following findings:
1.   The defendants were the directors of Kenrop. Kenrop was the trustee for the K & A Pickard Family Trust. The defendants were objects of the trust.
2.   On 23 February 2007, Kenrop made an application for term finance to fund an investment in the Great Southern Cattle Project. Part 1 of the application recorded that the application was for finance for 100 “droves” of cattle, each drove costing $5,000, for a total investment in the scheme of $500,000. There were two alternative boxes to tick for the preferred lender. Both boxes were ticked. On the second page of the application was a “check list” for applicants. It contained this sentence which was read by Mr Pickard:
Directors of corporate applicants will be required to provide a personal guarantee.
It further included this sentence:
The applicants and guarantors are not required to sign the loan deed attached to this application (and other documents connected with, or related to, the loan deed) as the loan deed will be completed and signed by the lender (or the lender’s attorney) as attorney for the applicants and guarantors pursuant to Part 6 of this application.
3.   Part 2 of the loan application was entitled “PERSONAL DETAILS (to be completed by all individuals, including company director and personal trustees)”. That was to be completed by hand. The document recorded the defendants’ details as “BORROWER/GUARANTOR”, but neither term was struck through. Mr Pickard’s personal information was set out in full, including his personal income. Only Mrs Pickard’s name and date of birth were recorded.
4.   In Part 3 of the loan application, Kenrop’s details were recorded under the section entitled “CORPORATE/TRUST BORROWERS”.
5.   Part 4 is entitled “STATEMENT OF ASSETS & LIABILITIES FOR BORROWER/GUARANTOR (delete as applicable)”. Neither term was deleted. The words “as attached” were written in this section. A personal assets and liabilities statement of Mr Pickard as at 30 June 2006 was stapled to the document. Mr Pickard’s personal income protection insurance and death and disability insurance cover was also recorded on the application.
6.   Part 6 contains a power of attorney clause. The signature page was signed by the defendants, and each of their signatures were witnessed. Their signature appeared below the words “SIGNATURE OF APPLICANT/GUARANTOR”. Neither term was struck out. Above the signature clause were eight dot points. The first dot point read:
I/We hereby apply for term finance as detailed in this finance application or agree to guarantee the loan as detailed in this finance application.
The fourth dot point read:
I/We grant the Power of Attorney as set out in Part 6.
The sixth dot point read:
I/We declare that I/we have read and understood the finance application, including the “Risk Disclosure Statement & Declaration” and the “Loan Deed”.
The loan application referred to the need for independent legal advice to be sought, both in the check list for applicants and the signature clause box. A pro forma loan deed was included within the loan application. This deed contained the relevant guarantee provisions.
7.   The power of attorney in Part 6 of the application provided that, where ABLN was to be the lender under the proposed loan, inter alia, GSF and its directors and its secretary were appointed jointly and severally the attorneys for the borrower and the guarantors; GSF was authorised to enter into and execute a loan deed in the form attached to the application on behalf of the borrower and the guarantors; GSF was authorised inter alia to fill in the blank spaces in the Schedule to the loan deed, consistent with the provisions of the application; and the clause was expressed to be a deed. Prior to signing the loan application, a product disclosure statement (PDS) for the cattle project was promulgated, describing the project and also the available finance options and scheme application forms. A supplementary PDS was also issued. I find Mr Pickard received these documents.
8.   A product ruling from the ATO concerning the cattle project was issued. This ruling contained details of the interest rates for the finance options, noting that, for a lender other than GSF (referred to as the “preferred financier”), interest rates would be 10 per cent per annum for the loan with a term of three years or less and 10.5 per cent per annum for loan with the term of four or five years. I find that Mr Pickard received this document. The defendants also completed the application form and direct debit form attached to the PDS, indicating that they wished to take up the offer of finance on the five-year terms, with one year interest only. ALBN was the only financier offering this type of loan for this project. GSF did not do so.
9.   A formal declaration of financial position, dated 1 March 2007, was prepared by Mr Pickard for the K & A Pickard Family Trust, described as the “applicant”, and himself personally, described as the “guarantor”. A letter, dated 6 March 2007, was sent by Great Southern to Kenrop confirming receipt of the application for a scheme interest in the cattle project. Another letter, dated 8 August 2007, was sent by Great Southern to Kenrop advising that Kenrop had been issued with an interest in the cattle project, attaching a certificate.
10.   In mid-June 2007, ABLN paid the sum of $505,250 to GSF in relation to Kenrop’s investment.
11. On 17 November 2008, the loan deed was electronically “signed” by Cameron Rhodes and Neil Hackett of GSF, under power of attorney for Kenrop and the defendants. They “signed” purportedly pursuant to s 127 of the Corporations Act 2001 (Cth). The loan deed attached to it a “Loan Repayment Schedule” which listed the repayment amounts and dates, and also included an express reference to an interest rate of 10.5 per cent per annum. The loan deed identified Kenrop as the borrower. The deed referred to “the parties (if any) described in item 11 of the Schedule (Guarantor)”. Item 11 of the Schedule records the names of the defendants. The loan deed was signed by Mr Romeo and Mr Gaitskell, as attorneys for ABLN.
12.   On 22 April 2009, the defendants signed an “Application for Variation to Loan Deed”. That document included a check list on the second page that provided:
The declaration at Part 7 of this application must be signed and dated by all applicants and guarantors.
The defendant signed Part 7 of the document.
13.   On 2 May 2009, Mr Pickard signed a Mortgage and Amendment Deed. The deed was signed by Kenrop as “the mortgagor” and by Mr Pickard under the following execution clause:
Signed, sealed and delivered by the party identified as the Guarantor in the presence of ...
14.   On 8 May 2009, Great Southern wrote to Mr Pickard acknowledging receipt of the Mortgage and Amendment Deed, but asking for him to arrange the signature of his wife as the second guarantor. Mrs Pickard subsequently signed the annexure contained within the Mortgage and Amendment Deed as “Guarantor”.
15.   On 11 May 2009, the bank sent an email to Mr Pickard seeking more information from him in relation to the loan amendment application, including an updated statement of position for the “guarantor”, Mr Pickard. The Mortgage and Amendment Deed related to “Project Transform”. Project Transform was a restructure of certain Great Southern schemes, including the cattle project.
16.   I find that from 23 February 2007, Mr Pickard understood that he and Mrs Pickard would be required to personally guarantee the repayment of any loan made to Kenrop for the purposes of acquiring an interest in the Great Southern Cattle Project. That remained the position up to and including the execution by each of them of the Mortgage and Amendment Deed in May 2009. While there is no evidence that Mrs Pickard did not share that understanding, I am satisfied that the defendants made joint investments at the instigation and direction of Mr Pickard. Mrs Pickard executed documents in relation to investments made by Kenrop at her husband’s direction. Mrs Pickard gave evidence by affidavit that she does not believe that, when signing the loan application for the cattle project investment, she was binding herself as a guarantor of the loan to be advanced. I am satisfied that she did not turn her mind to the question of whether, by her conduct, she was binding herself as a guarantor of Kenrop’s liabilities. However, their subjective understanding of the position in relation to the guarantee is immaterial. What is relevant is whether, by their objective conduct, they evidenced an intention to be bound by deed as guarantors of Kenrop’s liabilities in respect of the ABLN loan.[3] I am satisfied they did.
[3]    Alonso v SRS Investments (WA) Pty Ltd [2012] WASC 168 at [46]-[49]; 400 George Street (Qld) Pty Ltd v B G International Ltd [2010] QCA 245 at [30]-[32], (2012) 2 Qd R 302 at 316.
Was GSF authorised to enter into a deed of guarantee on behalf of the defendants as their attorney?
For the plaintiffs’ claim on the guarantee to succeed they must establish that GSF had authority to enter into a deed of guarantee on behalf of the defendants as their attorney. For that purpose the plaintiffs must establish that GSF was appointed by a power of attorney. It is common ground that a power of attorney must be conferred by deed.[4]
[4] Comptroller of Stamps (Vic) v Papalia (1982) 12 ATR 866 at 869; Berkeley v Hardy (1826) 108 ER 132.
The plaintiffs submit that the loan application was a deed, or alternatively, Part 6 of the loan application was executed as a deed. The defendants contend that the loan application was not a valid conferral of power of attorney by deed. In any event, the defendants submit that the loan deed was not a binding deed and accordingly no enforceable contact of guarantee came into existence.

The loan deed, as its name and style suggests, purported to take effect as a deed and to have been executed as a deed. It was executed on the defendants’ behalf by GSF as their duly appointed attorney, and by employees of GSF as the attorney of ABLN. Accordingly, the loan deed will only have been effective and binding as against the defendants as purported guarantors under it if, by signing the loan application, the defendants in their personal capacities appointed GSF as their attorney to execute a deed in the form of the loan deed; and the loan deed was a valid deed which was properly executed and attested by GSF in its claimed capacities and which satisfied the relevant requirements for a binding deed.
The defendants submit that by signing the loan application they did not appoint GSF as their attorney to execute a deed in that a power of attorney, or at the very least a power of attorney which purportedly authorises the attorney to execute a deed, can only be conferred by deed and the loan application did not meet the requirements of an appointment by deed of GSF as an attorney.
The defendants further submit that the loan application is a unilateral and contingent application for finance by Kenrop; while Part 6 refers to a power of attorney, it does not comprise a separate instrument executed as such or by deed; the language of the clause is prospective (“agree to appoint”); and the signing clause contains a single place for directors of corporate applicants to sign and lacks the indicia and solemnity of a deed or any suggestion that by execution any deed is to be taken to be delivered.
At issue is whether the common law requirements for the making of a deed, as modified by a statute, have been satisfied.
A deed is the most solemn act that a person can perform with respect to a particular property or right.[5] At common law there are three requirements for a deed. First, it has to be written on paper, parchment or vellum. Second, it has to be sealed by the party or parties executing the document. Third, it has to be delivered and is not enforceable until delivery had occurred.[6]
[5] Manton v Parabolic Pty Ltd (1985) 2 NSWLR 361 at 369.
[6] Scook v Premier Building Solutions Pty Ltd (2003) 28 WAR 124 at [132].
At common law the issue of whether an instrument is a deed turns on whether the parties intended that the instrument take effect as a deed.[7] That intention is to be determined objectively.
[7] Bendigo and Adelaide Bank Ltd & Anor v DY Logistics Pty Ltd & Ors [2018] VSC 558 at [24]; Pozzan v Gibbons (2006) 200 FLR 287; 400 George Street (Qld) Pty Ltd v BG International Ltd [2010] QCA 245, [2012] Qd R 302.
In Backstop Nominees Pty Ltd v Goscor Pty Ltd[8] Tadgell J, citing with approval the statement of principle by Blackburn J in Xenos v Wickham,[9] said:[10]
It is clear law that no particular technical form of words or acts is necessary to render an instrument the deed of the party sealing it. The intention, expressed or appropriately to be inferred, with which the instrument was executed and thereafter dealt with is of cardinal significance.
[Citation omitted.]
[8] [1990] VR 468.
[9] (1866) LR 2 HL 296 at 312.
[10] [1990] VR 468 AT 470.
The intent of the parties may, in appropriate cases, be discerned from extrinsic evidence concerning the words or acts of the parties, or from an examination of the words contained in the document itself.[11]
[11] Dean & Westham Holdings Pty Ltd v Lloyd (1991) 3 WAR 235 at 252.
The common law position is to be considered by reference to statutory provisions which modify the requirements for a valid deed. In this case the statutes which are said to apply are the Property Law Act 1974 (Qld) and the Property Law Act 1969 (WA). Sections 44 and 45 of the Property Law Act 1974 (Qld) provide:
44      Description and form of deeds
(1)A deed between parties, to effect its objects, has the effect of an indenture although not indented or expressed to be indented.
(2)Any deed, whether or not being an indenture, may be described (at the commencement of the deed or otherwise) as a deed simply, or as a conveyance, deed of exchange, vesting deed, trust instrument, settlement, mortgage, charge, transfer of mortgage, appointment, lease or otherwise according to the nature of the transaction intended to be effected.
45      Formalities of deeds executed by individuals
(1) Where an individual executes a deed, the individual shall either sign or place the individual’s mark upon the same and sealing alone shall not be sufficient.
(2) An instrument expressed—
(a)     to be an indenture or a deed; or
(b)     to be sealed; shall, if it is signed and attested by at least 1 witness not being a party to the instrument, be deemed to be sealed and, subject to section 47, to have been duly executed.
(3) No particular form of words shall be requisite for the attestation.
(4) A deed executed and attested under this section may in any proceedings be proved in the manner in which it might be proved if no attesting witness were alive.
(5) Nothing in this section shall affect—
(a)     the execution of deeds by corporations; or
(b)     how instruments are validly executed under the Land Title Act 1994; or
(c)     any deed executed before the commencement of this Act.
Section 9 of the Property Law Act 1969 (WA) provides:
9.     Formalities of deed
(1) Every deed, whether or not affecting property —
(a)     shall be signed by the party to be bound thereby; and
(b)     shall be attested by at least one witness not being a party to the deed but no particular form of words is required for the attestation.
(2) It is not necessary to seal any deed except in the case of a deed executed by a corporation under its common or official seal.
(3) Formal delivery and indenting are not necessary in any case.
(4) Every instrument expressed or purporting to be an indenture or a deed or an agreement under seal or otherwise purporting to be a document executed under seal and which is executed as required by this section has the same effect as a deed duly executed in accordance with the law in force immediately prior to the coming into operation of this Act.
The plaintiffs submit that whether the law of Queensland or Western Australia applies is irrelevant as the application of s 44 and s 45 of the Property Law Act 1974 (Qld) or s 9 of the Property Law Act 1969 (WA) leads to the conclusion that the loan application was executed as a deed.
The law applicable to the creation of a power of attorney is the law of the jurisdiction in which it was made. However, the law applicable to its construction and operation is that of the jurisdiction where the power operates or is intended to operate.[12] In this case the loan application was signed by the defendants in Queensland while Western Australia is the jurisdiction where the power of attorney was intended to be exercised. Accordingly Queensland law governs the issue whether the signing by the defendants of the loan application constituted the making of a valid deed granting the power of attorney.
[12] Bendigo and Adelaide Bank Ltd & Anor v DY Logistics Pty Ltd [2018] VSC 558 at [27].
In 400 George Street (Qld) Pty Ltd v BG International Ltd[13] Muir JA, with whom Fraser JA and Mullins J agreed, referred to the provisions of s 45 of the Property Law Act 1974 (Qld) and held that whether an instrument is intended to take effect as a deed requires consideration not only of the text of the instrument but also the surrounding circumstances known to the parties and the purpose and object of the transaction evidenced by the instrument.[14] Muir JA held that the use of the words “executed as a deed” in an agreement to lease were intended to inform the parties and any other relevant entity of the legal nature of the instrument.[15]
[13] [2010] QCA 245, (2012) 2 Qd R 302.
[14] [2010] QCA 245 at [30]-[32], (2012) 2 Qd R 302 at 316.
[15] [2010] QCA 245 at [34], (2012) 2 Qd R 302 at 316.
The effect of s 45 is to deem a document to be sealed if it is expressed to be a deed.
Section 45(2)(b) is expressly made subject to s 47. Section 47(1) provides that “execution of an instrument … in the form of a deed …. shall not of itself import delivery, nor shall delivery be presumed from the fact of execution only, unless it appears that execution of the document was intended to constitute delivery of the document.”
Section 47(2) provides that “… delivery may be inferred from any fact or circumstance, including words or conduct, indicative of delivery”. Delivery is defined as “the intention to be legally bound either immediately or subject to fulfilment of a condition”. In Interchase Corporation Ltd (In Liq) v Commissioner of Stamp Duties (Qld)[16] it was said by the Court that s 47(1) displaces a common law presumption that execution of an instrument in the form of a deed imports delivery but nevertheless the section contemplates that a document may evince an intention that delivery should be inferred from execution.[17]
[16] (1993) 27 ATR 154 at 156.
[17] Cited with approval in 400 George Street v BG International [2010] QCA 245 at [16], (2012) 2 Qd R 302 at 313.
In 400 George Street Muir JA considered that while s 47(1) provides that execution of an instrument in the form of a deed will not, necessarily, import delivery, it may do so where it appears that execution was intended to constitute delivery. The intention of the executing party is the critical matter.[18] It is enough to meet the requirement of delivery that there be acts or words sufficient to show that the document is intended by the party to be executed as his or her deed, presently binding on him or her. There is no need for any physical handing over of the deed. Delivery is a question of fact. It can be inferred from circumstances.[19]
[18] [2010] QCA 245 at [52], (2012) 2 Qd R 302 at 320.
[19] Scook v Premier Building Solutions Pty Ltd (2003) 28 WAR 124 at [25].
In this case Part 6 of the loan application is expressed to be a deed. Part 6(a) of the loan application provides that by signing the application the borrower and the guarantor (if any) (the Appointor) agree to appoint GSF and each director, company secretary and attorney of GSF, jointly and severally to be their attorney in the terms specified in Part 6 and to exercise the powers prescribed therein. Part 6(b) provides that the Appointor agrees at all times to keep the attorney indemnified against all claims et cetera arising as a result of the exercise of the power of attorney granted. Part 6(c) provides that the Appointor authorises the attorney to exercise the powers under the power of attorney even if the exercise of the power involves a conflict of interest. Part 6(d) provides that the Appointor undertakes to ratify all that the attorney lawfully does or causes to be done under the power of attorney granted. Part 6(e) provides that the power of attorney granted by way of the Appointor’s signature on the loan application will remain in full force and effect until notice of the Appointor’s death or notice of the revocation of the power of attorney is received by the attorney. Part 6(f) provides that the Appointor declares that anything the attorney does in exercising the powers under the power of attorney will be as binding as if the Appointor had done that act personally. Part 6(g) provides that any person dealing with the attorney or a person purporting to be an attorney under the power of attorney is entitled to rely on execution of any document by that person as conclusive evidence that:
(i)the person holds the office set out in the power of attorney;
(ii)the power of attorney has come into effect;
(iii)the power of attorney has not been revoked;
(iv)the right or power being exercised or being purported to be exercised is properly exercised and that the circumstances have arisen to authorise the exercise of that right and power; and
(v)they are not required to make any enquiries in respect of any of the above matters.
Finally, Part 6(h) expressly provides that the power of attorney is executed as a deed.
I reject the defendants’ submission that the loan application was solely intended to be an application for finance rather than a deed.
I am satisfied that the confirmations appearing immediately above the execution clause, particularly, the words “I / We grant the power of attorney set out in Part 6” evidence the requisite solemnity of the loan application for its validity as a deed. Further, as the power of attorney is required to be in the form of a deed, the entire transaction contemplated by the loan application would be ineffective if the loan application was not what it is expressed to be, namely, a deed. This provides cogent support for the loan application being a deed. I note that similar reasoning was found persuasive in 400 George Street.[20] Further, the loan application was signed by each of the defendants and witnessed, thereby meeting the execution requirements of s 45. Accordingly, it was not necessary to seal the deed. The intention of the parties that the loan application is intended to be executed as a deed binding on the defendants is sufficient to meet the requirements of delivery. I am satisfied that the loan application complied with s 44 and s 45 of the Property Law Act 1974 (Qld).
[20] [2010] QCA 245 at [40]-[42], (2012) 2 Qd R 302 at 318.
The defendants seek to rely upon the judgment of Judge Lacava of the Victorian County Court in ABL Custodian Services Pty Ltd and Bendigo and Adelaide Bank Ltd v Wade.[21]As the reasons of Croft J in Bendigo and Adelaide Bank Ltd & Anor v DY Logistics Pty Ltd & Ors[22] make clear, Wade is distinguishable. In Wade Judge Lacava held that the signing of the finance application in that case did not validly grant a power of attorney, inter alia, because:
(a)the use of the words “agree to appoint” constituted an agreement to appoint in the future, and was not itself a grant of any power;
(b)the reference to the power of attorney being “executed as a deed” is not part of the purported exercise of the grant of power, only the application for finance had been signed;
(c)powers of attorney must be executed as deeds; and
(d)the application for term finance was not a deed, including because it was not expressed to be “SIGNED, SEALED AND DELIVERED”.
[21] [2013] VCC 878.
[22] [2018] VSC 558.
In DY Logistics Croft J distinguished Wade because of relevant differences in the finance applications in that case compared to the documentation in Wade. Croft J rejected the submission that the words in Part 6 of the finance application “to agree to appoint” only applied to some future appointment and was not effective to appoint GSF as attorney by the execution of the finance application. Relying on the inclusion in the execution of the finance application of the words “grant the power of attorney as set out in Part 6”, which was not to be found in the application in Wade, Croft J held that reading the application as a whole, and in particular this provision, evidenced an intention that the grant of the power of attorney was to be effective immediately.
Croft J held that when regard was had to the scheme for financing and allocating interests to investors in the various Great Southern schemes, the relevant product disclosure statements made it clear that the parties contemplated no other step in the creation of a power of attorney for the purpose of enabling execution of the loan deeds. The parties intended that the schemes succeed, and that the investors gain interests in the schemes and that the interests were to be financed in accordance with the product disclosure statements.
It appears the documents in DY Logistics are relevantly the same as in this case. I would adopt the reasons of Croft J. I would reject the defendants’ submission that their execution of the loan application did not validly grant a power of attorney to GSF for the purposes of executing the loan deed and guarantee.
I am satisfied that the loan application was entered into by Kenrop as the applicant and by the defendants personally as guarantors. Importantly, I am satisfied the defendants affixed their signatures to the application as a deed immediately binding upon them in their personal capacities.
In Ermogenous v Greek Orthodox Community of SA Inc[23] the High Court said that a party’s intention to be bound to a contract is manifested in light of “the subject matter of the agreement, the status of the parties to it, their relationship to one another, and other surrounding circumstances”.[24] In Alonso v SRS Investments (WA) Pty Ltd[25] Edelman J considered whether the defendants in that action had signed a lease containing a guarantee personally or only for and on behalf of the corporate lessee. Referring to Ermogenous Edelman J said that:[26]
… the presence of a signature is a relevant circumstance in ascertaining whether there is objective or manifest intention to be legally bound. The act of signing is a formal act “which itself ordinarily conveys a representation to a reasonable reader of the document. The representation is that the person who signs either has read and approved the contents of the document or is willing to take the chance of being bound by those contents”.
[23] [2002] HCA 8, (2002) 209 CLR 95.
[24] [2002] HCA 8 at [25], (2002) 209 CLR 95 at [105].
[25] [2012] WASC 168.
[26] [2012] WASC 168 at [49].
In Burrell & Family Pty Ltd v Harris[27] White J considered whether a director of a company had personally bound himself as guarantor to an agreement in addition to the company of which he was a director. White J said:[28]
In determining whether a person signing a contract intended to be personally bound by it, the Court must consider the contract as a whole and not just the manner of its execution. This was the conclusion of Giles J in Clark Equipment Credit of Australia Ltd v Kiyose Holdings Pty Ltd:
… I conclude that the proper approach is to inquire whether there is to be found an intention that the signatory be personally bound to the contract evidenced in the document, meaning thereby not a subjective intention but an intention to be found objectively, notwithstanding a qualification attached to the signature. That intention, or lack thereof, is to be found upon the construction of the document as a whole, including but not being limited to the qualification attached to the signature, in the light of the surrounding circumstances to the extent to which evidence thereof is permissible. The inquiry is not limited to consideration of the signature and its qualification in order to determine whether or not the signature indicates an assent to be personally bound.
Giles J rejected the approach suggested by Atkin LJ in Ariadne Steamship Company Ltd v James McKelvie & Co. The decision of Giles J in this respect was endorsed by the Full Court in this State in Rawcliffe v Bianco Hiring Service Pty Ltd.
[Citations omitted].
[27] [2010] SASC 184.
[28] [2010] SASC 184 at [30]-[31].
White J held that it is possible for a person to intend his or her signature to have a dual effect so as to bind a principal and to accept personal responsibility.[29] Relying on a provision in the agreement which provided that the “director of the borrowing entities also acknowledges personal liability for all debt remaining after the loan repayment date inclusive of all interest and recovery costs”, White J held that the provision could have no operation if the director was not personally bound. On this basis he found the director liable.[30]
[29] [2010] SASC 184 at [46], citing with approval Follacchio v Harvard Securities (Aust) Pty Ltd [2002] FCA 1067 at [9].
[30] [2010] SASC 184 at [47].

While the principles distilled from these authorities are concerned with cases in contract, I consider they also apply to the requirements for the execution of a deed.
In this case the loan application provided that directors of corporate applicants were required to give guarantees and that GSF would execute the attached pro forma loan deed for the guarantors under a power of attorney provided for in the loan document. Mr Pickard admits that he saw that statement in the loan application. Part 2 of the application refers to the defendants’ personal details and requires the provision of Mr Pickard’s annual income. Further, Mr Pickard was required to provide a personal statement of his assets and liabilities. These would be unnecessary if the loan application was only being made by Kenrop. The signature clause makes reference to “applicant / guarantor”. The defendants did not strike out either term thereby evidencing that they intended their signatures to have a dual effect. Immediately above their signatures the loan application refers to them having read the pro forma loan deed attached. The loan deed refers to guarantors. Prior to signing this loan application the defendants had signed two loan applications that were substantially the same and had been sent executed loan deeds which recorded them as being guarantors. As a result, I infer they must have understood that in signing this loan application they were agreeing that GSF would enter into a guarantee of Kenrop’s liabilities on their behalf.
Further, on 1 March 2007 Mr Pickard signed another statement of financial position of the K & A Pickard Family Trust and of himself personally in which he expressly referred to himself as a guarantor. Subsequently in 2009 as part of the amendments to the loan arrangements for the cattle project the defendants referred to themselves as guarantors of the loan.[31]
[31] It is permissible for the Court to consider post contractual conduct in deciding the parties to a contract: Nurisvan Investment Ltd & Anor v Anyoption Holdings [2017] VSCA 141 at [77]-[84].
In this case, as in Burrell, the statements in the loan application[32] that directors of corporate applicants will be required to provide a personal guarantee but would not be required to sign the loan deed as that would be completed and signed by the attorney for the applicants and guarantors pursuant to Part 6 of the application, would be meaningless unless the defendants were personally bound.
[32] Checklist for Applicants.
Were the guarantees within the limited scope of the power of attorney?
The appointment of an attorney is contractual. The terms of the appointment will define the extent and scope of the power. The power can be conferred by express terms or necessary implication.[33] The scope of the power will be strictly construed.[34]
[33] Sweeney v Howard [2007] NSWSC 852 at [54].
[34] Tobin v Broadbent (1947) 75 CLR 378 at 390-391.
In this case the scope of the appointment of the attorney is confined by the provisions of the loan application, which only permit the attorney to enter into and execute a loan deed in the form attached to the loan application on behalf of the appointor and to date the loan deed and complete the blank spaces in the schedule thereto consistent with the provisions of the loan application. Further, the “Risk Disclosure Statement & Declaration” stated “I/We declare that … If this finance application is accepted by the Lender and the finance is provided, the Loan Deed (and other documents connected with, or related to, the Loan Deed) will be executed on my/our behalf by attorneys whom I/we have authorised to do so in part 6 of the finance application”.
The defendants submit that the loan application does not specify any interest rate (or default interest rate) that applies to the loan. Nor does the pro forma deed attached to the application. In addition, the defendants submit that they ticked two inconsistent options in the loan application. In electing for a particular option GSF made an election beyond the scope of its power. As a result, the defendants submit that the loan deed was ultra vires the power of attorney and in breach of the fiduciary duty GSF owed to the defendants as their attorney.
In DY Logistics Croft J had to consider a substantially similar submission. As noted earlier, the documents under consideration in DY Logistics are substantially, if not wholly, identical with the documents in this case. Croft J held that the completion of the schedule to the loan deeds in DY Logistics was within the scope of the power of attorney granted even where the finance application did not specify the relevant information, including the rate of overdue interest.
The defendants in this case rely upon the reasons in ABL Custodian Services Pty Ltd v Kunz.[35]In Kunz the Court found that the power of attorney in that case was insufficient to authorise the insertion of an overdue interest rate in the defendant’s loan deed. Accordingly, to that extent, the loan deed was unenforceable. Kunz was considered in DY Logistics. Croft J distinguished the reasoning on the basis that in Kunz the Court did not give consideration to the express provision of the power of attorney authorising the attorney to exercise their powers “even if the exercise of that power involves a conflict of interest” and that many items contained in the schedule to the loan deed were not contained in the finance application. Croft J construed the power of attorney as meaning that GSF was not permitted to complete blanks in the schedule in a manner that was inconsistent with the finance application. Croft J reasoned that because the finance application did not stipulate any default rate, the inclusion of a default rate was not inconsistent with the terms of the loan application. Accordingly, Croft J held that it was within the scope of the power of attorney to complete the interest rates in the schedule to the loan deeds. Croft J further reasoned that there would be no breach of fiduciary duty in doing so as the insertion of the overdue interest rate was otherwise within power.
[35] [2016] SADC 145.
The defendants submit that this Court should not follow the reasons of Croft J on this issue. I would decline to do so only if I was satisfied that the reasons relied upon by Croft J were clearly wrong. I am not so satisfied. I would follow the approach of Croft J. Further, I would adopt the same approach in relation to the insertion of the interest rate.
The defendants further submit that Croft J did not consider the argument raised in these proceedings that two inconsistent options were ticked in the third loan application and that by electing for a particular option GSF has acted beyond power and in breach of fiduciary duty. The submission that there was a breach of fiduciary duty by the defendants’ attorney depends upon the conclusion that the election made by GSF as the defendants’ attorney was outside the scope of the attorney’s power. I do not accept this submission. In my view there was no election made by GSF as the defendants’ attorney for a particular loan. I accept the plaintiffs’ submission that the only loan which Kenrop selected was a principal and interest loan with a term of five years with one year interest only. This is apparent from the face of the document and the direct debit form attached to the PDS indicating that the defendants wished to take up the offer of finance on five year terms with one year interest only as well as the record of client contact dated 23 February 2007 completed by Mr Edwards recording that Kenrop wished to select the five year one year interest only loan. This had the consequence that the lender was ABLN as GSF was not offering five year loans with one year interest only.
As a result, there was no election made by GSF. What was involved was a question of the construction of the application. This did not involve any act or conduct which was ultra vires the terms of GSF’s appointment as attorney or any breach of fiduciary duty.
In any event, the power of attorney in Part 6 of the loan application includes permitting GSF “to make and initial any necessary alterations to the Loan Deed which are not prejudicial to the interests of the Appointor in the considered opinion of the Attorney”. Even if GSF made an election in relation to the loan, there was no prejudice in the selection of the ABLN loan.
For these reasons I find that the guarantees in the loan deed were not ultra vires or in breach of fiduciary duty.
Were the guarantees contained in the loan deed executed by GSF as the defendants’ attorney?
The defendants submit that the loan deed is not enforceable against them as a guarantee as the loan deed has been signed by GSF as the defendants’ attorney by the affixation of electronic signatures of two of its officers to an electronic version of the document. The defendants submit that because the loan deed was signed electronically it does not meet the common law requirement that a deed be written on paper, parchment or vellum (the paper requirement).
The loan deed was executed by GSF as attorney for the defendants pursuant to s 127 of the Corporations Act 2001 (Cth) (Corporations Act). The plaintiffs submit that s 127 overrides all other requirements for a deed, including the paper requirement. They submit that the common law paper requirement has been extinguished or at least modified by statute. I accept that Bendigo and Adelaide Bank v Laszczuk[36] is authority for this proposition. Section 127 provides:
[36] [2018] VSC 388 at [44].
Execution of documents (including deeds) by the company itself
(1)A company may execute a document without using a common seal if the document is signed by:
(a)     2 directors of the company; or
(b)     a director and a company secretary of the company; or
(c)     for a proprietary company that has a sole director who is also the sole company secretary--that director.
Note: If a company executes a document in this way, people will be able to rely on the assumptions in subsection 129(5) for dealings in relation to the company.
(2)A company with a common seal may execute a document if the seal is fixed to the document and the fixing of the seal is witnessed by:
(a)     2 directors of the company; or
(b)     a director and a company secretary of the company; or
(c)     for a proprietary company that has a sole director who is also the sole company secretary--that director.
Note: If a company executes a document in this way, people will be able to rely on the assumptions in subsection 129(6) for dealings in relation to the company.
(3)A company may execute a document as a deed if the document is expressed to be executed as a deed and is executed in accordance with subsection (1) or (2).
(4)This section does not limit the ways in which a company may execute a document (including a deed).
The plaintiffs submit that s 127(3) expressly gives effect as a deed to any document expressed to be a deed which is signed in accordance with s 127(1).
At issue is whether the loan deed has been executed in accordance with s 127(1).
In this case the loan deed purports to have been executed by someone affixing the electronic signatures of Mr Hackett and Mr Rhodes as secretary and director respectively signing the document for GSF (as attorney).
In DY Logistics Croft J had to consider whether a company may execute a document as a deed under s 127(3) of the Corporations Act if two directors sign the document, for the purpose of s 127(1), by authorising their facsimile signatures to be affixed to the document.
In DY Logistics the evidence was that the loan deeds were not physically signed by the officers of GSF. Further, there was no evidence adduced as to the identity of the person who affixed or personally authenticated the affixing of the officer’s facsimile signatures on the loan deeds.
Croft J accepted the proposition that s 127 does permit a company to execute a deed if the document is “signed” by one director and one secretary of the company. However, Croft J held that s 127 requires a deed to be physically signed by the relevant company officer or for the person to authenticate personally the mark appearing on the document as his or her signature. Accordingly the copying and pasting of a facsimile signature by a person unknown is not sufficient for the purposes of s 127.
Croft J reasoned that the word “signed” is not defined in the Corporations Act. The Corporations Act excludes the operation of s 10 of the Electronic Transactions Act 1999 (Cth). Accordingly, the Commonwealth legislation dealing with whether a legislative requirement may be met by electronic means expressly excludes s 127 from its operation. Croft J reasoned that there was otherwise no indication given by Parliament that “signed” is intended to have any other meaning than its ordinary meaning. That meaning is elucidated by the common law. What is required for signing to be effective is that there be some kind of “personal authentication of the individual ‘signing’”.
Croft J concluded that the loan deeds had not been validly executed for the purposes of s 127. He said:[37]
In the present circumstances, there is no evidence with respect to the Loan Deeds of authentication. More particularly there is no evidence that either the director or secretary whose signatures are purportedly affixed to those Deeds authenticated their facsimile signatures in any way. There is not even evidence in the form of GSF Board Minutes authorising and, depending on their content, authenticating such signatures generally, or more particularly. Moreover, there is no evidence that, after the facsimile signatures were attached, either Mr Young or Mr Rhodes personally authenticated the affixation of their signatures. I accept that Bendigo and Adelaide Bank Ltd v Laszczuk is not an authority to the contrary. The question in that case was whether a signature within the meaning of s 127 of the Corporations Act could be impressed upon a document by a stamp. The question in this case is whether the affixing of a facsimile purporting to be the signature of a director or secretary of a company constitutes the signature of that officer for the purposes of s 127 of the Corporations Act, notwithstanding that the officer did not intend to authenticate the document by authorising the affixing of the facsimile to that particular document and, indeed, had no involvement in the production or authentication of the particular document.
[Citation omitted].
[37] [2018] VSC 558 at [54].
The plaintiffs submit that Croft J erred in concluding that the copying and pasting of a facsimile signature by a person unknown is insufficient for the purposes of s 127. They submit that Croft J did not consider the phrase “signed by” in the context of the definition of “document” in the Acts Interpretation Act 1901 (Cth) (Acts Interpretation Act). I do not accept this submission. It is evident that in DY Logistics Croft J had regard to the definition of “document” in the Acts Interpretation Act.
Further, the plaintiffs submit that Croft J did not have regard to the line of authority where documents have been held to have been “signed” electronically. I do not accept this submission. A footnote in Croft J’s reasons in Laszczuk[38] referring to an article by Loxton “Not Worth the Paper They’re not Written on?”[39] which is based on that line of authority, indicates that his Honour was aware of that line of authority but that did not lead to him reaching a different conclusion in DY Logistics.
[38] [2018] VSC 558 at [45]-[46] footnote [99].
[39] (2017) 91 ALJ 133 and 205.
The plaintiffs submit that in this case Mr Rhodes gave evidence the standard practice by which authorisation was obtained for the affixation of GSF’s officer’s signature was by a directors’ resolution to accept the loan applications for a particular scheme. Mr Rhodes accepted in cross-examination that he did not review loan deeds to which his electronic signature had been applied on a frequent basis and that a standard form signature page was likely used. The plaintiffs submit that this does not mean that Mr Rhodes’ and Mr Hackett’s electronic signatures were applied to the particular document without their authorisation. They authorised the affixing of the electronic signatures to a class of documents by the GSF board resolution. The authorisation is not vitiated merely because neither Mr Rhodes or Mr Hackett turned their attention to and approved a particular document to which their signatures were required. The board resolution obviated the need to do so, with the effect that the placing of their electronic signatures on the class of documents authorised was the relevant act of authentication. The plaintiffs submit that this analysis is consistent with Croft J’s earlier decision in Laszczuk.[40]Further, they submit that this approach is consistent with the purpose of s 127 to simplify the execution of documents, including electronic documents, by corporations.
[40] [2018] VSC 388.
I do not accept the plaintiffs’ submission. In this case the evidence of Mr Rhodes was that the content of the resolutions passed by the board was limited to approval of the loans other than bank originated loans. In DY Logistics Croft J held that there was no evidence that either director authenticated their signatures, not even in the form of minutes authorising their signatures, either specifically or generally. The resolutions in this case did not go so far as authorising the placement of signatures on loan deeds. The resolutions were limited to formally accepting various loan and finance applications.[41]
[41] Transcript 65-66.
Finally, Croft J distinguished the factual position in DY Logistics from his earlier judgment in Laszczuk. Laszczuk was concerned with a stamp rather than facsimile signatures applied by electronic means. Croft J made clear in Laszczuk the stamped signature was authorised by the person “signing”. In DY Logistics Croft J concluded that as the officers did not intend to authenticate the document by the placement of their facsimile signatures, and had no involvement in the production or authentication of the document, s 127 had not been complied with and the loan deed had not been validly executed. I am satisfied that also is the position in this matter. I am not persuaded to the contrary by resort to nebulous arguments based on a purposive construction of s 127. The purpose of s 127 is to enable a natural person i.e. a director to act as and for a company by a particular form of execution. Its purpose is not to permit a company to execute a document which, if executed by a natural person, would not amount to a deed. Given that s 127(1) contemplates a document being executed by two officers signing it, there is good reason to consider there must be a single, static document rather than a situation where two electronic signatures are sequentially applied to an electronic document. As Seddon has noted, it is insufficient that two signatures appear on different counterparts or copies of the same document because no one counterpart or copy would be properly executed by the company under s 127(1).[42]
[42] Seddon on Deeds 2015, 2^nd ed at [2.12].
For these reasons I find that the plaintiffs cannot rely upon the provisions of s 127 to prove the loan deed was validly executed. It follows the guarantees contained in the loan deed are invalid.
In the circumstances, it is unnecessary to consider the defendants’ submission that the basis upon which ABLN executed the loan deed by Mr Romeo and Mr Gaitskell is unclear.
Nonetheless, did the loan deed take effect as a contract?
In these circumstances the plaintiffs submit that even if the loan deed was not a valid deed because of irregularities in its execution, the loan deed still takes effect as a binding contract. The plaintiffs rely upon the judgment of the Victorian Court of Appeal in Nurisvan Investment Ltd & Anor v Anyoption Holdings Ltd.[43]In Nurisvan the Court held that in an appropriate case a party may expressly or impliedly accept or attach itself to the obligations contained in a deed not executed by that party so as to be bound in contract by the terms contained in the deed.[44] The defendants submit that in this case the loan deed did not take effect as a binding contract. The defendants submit if a document purports to be a deed but the parties to it do not cause the document to be executed as a deed, so as to bind themselves to it, it would be contrary to principle to hold they have in fact bound themselves, not to a deed, but to a contract. I do not accept this submission. It is contrary to Nursivan. However, the defendants submit that Part 6 of the loan application did not authorise their attorney to execute anything other than a deed. I accept this submission. Nurisvan is not to the contrary. The proposition in Nurisvan is qualified. A deed, not executed by a party, can become binding as a contract in an appropriate case. For the reasons set out earlier the terms of the deed are to be strictly construed.[45] In my view where an instrument purporting to be a deed, but which is unenforceable as a deed because of a failure to execute the instrument in accordance with the requirements of a deed, is held to be enforceable as a contract, its terms should also be strictly construed.
[43] [2017] VSCA 141 at [56]-[64].
[44] [2017] VSCA 141 at [63].
[45] Tobin v Broadbent (1947) 75 CLR 378 at 390-391; Sweeney v Howard [2007] NSWSC 852 at [54].

In any event, I consider that the purported deed fails as a binding contract for want of consideration. The plaintiffs submit that the defendants were shareholders of Kenrop and beneficiaries under the K & A Pickard Family Trust (or at least objects of the discretionary trust). On this basis the plaintiffs submit the defendants obtained consideration for their provision of guarantees, namely, the loan being advanced to Kenrop, a company under their control. I do not accept that submission. ABLN advanced funds in relation to Kenrop’s acquisition of units in the cattle project in June 2007. The loan deed was brought into existence in November 2008. The entry by ABLN into the loan deed at that time could not have amounted to valuable consideration. A guarantee given to secure a debt already incurred, but unsupported by any further consideration, will fail for want of valuable consideration.[46] The provisions of funds by ABLN was “past” consideration. It does not cease to be “past” consideration because there might be an arguable incidental benefit to the defendants through the trust.
[46] McKay v National Bank [1998] 1 VR 173 at 177.
On the other hand, if contrary to my view, a binding contract was brought into existence, I do not accept the claim in contract is statute barred. Section 13 of the Limitation Act 2005 (WA) provides for a general limitation period of six years from the date on which the cause of action accrued. The question is when did the cause of action accrue. The guarantee provision in the loan deed is found in clause 16. Clause 16.1 provides that in consideration of the lender having agreed to enter into the loan deed the guarantor unconditionally and irrevocably guarantees to the lender the payment of all of the Moneys Payable and the performance by the borrower of all its obligations under the loan deed. Clause 16.2 provides that if any and all of the Moneys Payable is not paid when due or is not paid in the manner as the Moneys Payable is required to be paid, the guarantor must immediately on demand from the lender pay to the lender the Moneys Payable. It further provides that a demand may be made at any time and from time to time. I am satisfied that clause 16 is an “on demand” obligation such that the “Moneys Payable” only fell due from the defendants upon the making of a demand by the lender ABLN.[47] The making of a demand upon the defendants was a condition precedent to liability under the guarantee in the loan deed. The making of a demand first occurred on 11 August 2015 when ABLN’s solicitors wrote to the defendants making demand upon them for the “Moneys Payable”. Accordingly, the cause of action only accrued at that time.
[47] Matouk v Entrance Seabreeze Pty Ltd [2010] NSWSC 649 at [75]-[84].
Notwithstanding this conclusion I find that the loan deed is not enforceable as a binding contract.
Ratification
In any event, the plaintiffs submit that in 2009 the defendants ratified the loan deed as guarantors by signing two documents which sought to vary the terms of the loan deed. The plaintiffs submit that ratification is a complete and overarching answer to the defendants’ technical arguments, including those concerning s 127 of the Corporations Act.
The principles applicable to ratification are stated in Halsbury’s Laws of Australia[48] as follows:
Ratification may be expressed, whether in writing or oral, or may be implied by conduct, and even where a contract is unenforceable unless evidenced by writing, the ratification need not be in writing. The execution of a deed by an agent without authority, however, can only be ratified by deed.
Ratification must be evidenced by clear and unequivocal acts (or acquiescence) such that they are not open to any other interpretation. Ratification will be effective where it is in terms sufficiently unqualified as to justify the inference that the principal intended to take responsibility for whatever transaction the agent entered on the principal’s behalf. This may be so where, for example, the principal commences proceedings to enforce the contract effected by the agent.
The act of adoption of acquiescence must be accompanied by full knowledge of all the essential facts, but it is not necessary that the principal should know the legal effect of the act ratified. The receipt of purchase money is generally sufficient evidence of ratification of a sale, but not if it is received in ignorance of the true facts. If the act alleged to be ratified is a fraudulent act, full knowledge and unequivocal adoption thereafter must be proved, or the circumstances of the alleged ratification must be such as to warrant the clear inference that the principal was adopting the agent’s acts whatever they were and however culpable. The assignment by the principal of the benefit of a contract entered into by the agent without authority is a ratification of that contract.
A contract cannot be ratified in part and repudiated in part; if ratified, the whole contract must be ratified, and the agency accepted with all its obligations. Ratification of one of a series of acts constituting one transaction operates as a ratification of the entire transaction.
[Citations omitted.]
[48] At [15-150].
The defendants signed both documents expressly as guarantors. One of those documents, namely, the Mortgage and Amendment Deed, formally ratified the loan deed including the defendants’ guarantee contained within the loan deed. Accordingly, irrespective of whether the loan deed was validly executed as a deed, the plaintiffs submit these acts of ratification render the defendants liable as guarantors of Kenrop’s debts.
The defendants first submit that ratification does not arise in the circumstances where the loan deed was not effectively executed. Ratification is available to cure a want of authority to make a contract on behalf of a principal, but that was not this case. Second, in any event, the defendants deny that ratification occurred. They submit that as they were not possessed of all the relevant material facts, the signing of the Mortgage and Amendment Deed did not constitute ratification of the guarantee in the loan deed because the Mortgage and Amendment Deed did not refer to any guarantee and ABLN’s reliance on the defendants’ inaction is equivocal and ratification must be unequivocal.
The plaintiffs rely upon the defendants’ conduct in signing the application for variation of loan deed and the Mortgage and Amendment Deed, and thereby applying for a variation of Kenrop’s facilities, as clear and unequivocal conduct which adopted GSF’s execution of the loan deed on behalf of the plaintiffs personally as guarantors. They submit this conduct constituted ratification of the transaction described by the loan deed, namely, the loan and the guarantee, if not the form of the document as a deed.
I do not accept the plaintiffs’ submission.
As a general rule, every act, other than one which is void at its inception for some reason other than that it was unauthorised, may be ratified.[49] The plaintiffs’ case as pleaded on ratification is that in the event that GSF did not have the requisite power or agency to cause Kenrop and the defendants to enter into the loan deed, the defendants, by their subsequent conduct ratified GSF’s execution of the loan deed on behalf of the defendants as guarantors. It is apparent that the plaintiffs’ case on ratification seeks to cure a lack of power or authority. Ratification involves the retrospective conferral of authority on an agent to do something which the agent has done without the requisite authority.[50] Ratification does not transform something that has not been done into something else. The loan deed was void at its inception because it was not validly executed by the party against whom it is now sought to be enforced. The doctrine of ratification cannot be applied to this case to validate the ineffective execution of the loan deed. The conclusion that the loan deed was not validly executed means there is no act to be ratified. This is reflected in the plaintiffs’ submission that what is sought to be ratified is a “transaction”, namely, the loan and the guarantee, if not the loan deed as a deed.
[49] Spackman v Evans [1868] LR 3 HL 171 at 244; Bedford Insurance Co Ltd v Instituto de Resseguros do Brasil [1984] 3 All ER 766.
[50] Union Bank of Australia Ltd v McClintock [1922] 1 AC 240 at 248; Jones v Peters [1948] VLR 331 at 335; McKeand v Thomas [2006] NSWSC 1028 at [81]; Leybourne v Permanent Custodians Ltd [2010] NSWCA 78 at [131].
For these reasons, the plaintiffs’ claim in ratification fails.
This makes it unnecessary to consider the defendants’ submission that the claim in ratification could not succeed in any event because the conduct relied upon as constituting ratification was equivocal, and the plaintiffs failed to prove that those acts were done by the defendants with full knowledge of all the relevant material facts and circumstances.
I should indicate that, in any event, I would not have accepted the defendants’ submissions in this regard.
By letter dated 5 March 2009, GSF wrote to Kenrop about the cattle project, referring to a conversion of Kenrop’s interests in the cattle scheme into shares in Great Southern Limited via a scheme proposal and advising that the loan guarantee arrangements would need to be amended as a result. The letter encloses a range of documents to give effect to the variation.
The accompanying memorandum advised that the documents needed to be signed, failing which the loan would be considered to be in default which would trigger an obligation to repay. Relevantly, the memorandum provided at [3.1]:
You and, if applicable, your Guarantor will ratify, confirm, acknowledge and/or agree that or to:
...
·You and your Guarantor’s rights, liabilities and obligations under your Loan Agreement and the guarantee by your Guarantor (each as amended by the Mortgage and Amendment Deed, which is explained in further detail below):
· Continue in full force and effect; and
· Are not limited in recourse to the amount recoverable upon the enforcement of the security over your GSL Shares.
...
By document entitled “Application for Variation of the Loan Deed” dated 22 April 2009, the defendants made a formal application to vary the terms of the loan deed. The application for variation to the loan deed included a further power of attorney to GSF to enter into an attached pro forma variation loan deed, clause 4.1 of which expressly contemplated ratification of the loan deed (as amended).
At about the same time, Kenrop and the defendants executed the Mortgage and Amendment Deed. This deed referred expressly in item 4 of the Schedule to the defendants being guarantors; it referred expressly in item 8 of the Schedule to the loan deed; it has affixed to it the defendants’ signatures expressly as guarantors, in addition to signing as mortgagors; and provided in clause 2 that each “guarantor” ratifies “rights, liabilities and obligations under the loan deed ...”.
While the copy of the Mortgage and Amendment Deed discovered in the proceedings is not signed by ABLN, the defendant signed both the application for a variation to the loan deed and the Mortgage and Amendment Deed. Mr Pickard provided the documents to Great Southern on 2 May 2009, under cover of a handwritten letter.
Clause 22.13 of the Mortgage and Amendment Deed provided:
This document binds and is enforceable against each person who executes it despite:
(a) Any other person not executing this document or its execution being defective in any way; or
(b) Any obligation or liability of any other person under this document not binding, or not being enforceable against, that person for any reason.
Clause 22.14 of the Mortgage and Amendment Deed provided:
This document may be executed in any number of counterparts and by the parties on separate counterparts. Each counterpart constitutes the deed of each party who has executed and delivered that counterpart.
On 8 May 2009, Great Southern wrote to Mr Pickard pointing out that his wife had failed to sign the Mortgage and Amendment Deed as “second guarantor” and asking that she do so. This subsequently occurred.
The requirement for full knowledge of all the material circumstances in which the act was done for ratification by the principal to be effective depends on the particular facts of the case. The extent of the knowledge necessary should be enough for the principal to decide whether or not to adopt the unauthorised act.[51]
[51] Bremner v Sinclair (2001) ANZ Conv R 29 at [32]; Leybourne v Permanent Custodians Ltd [2010] NSWCA 78 at [134].
In this case, the material circumstances which the defendants were required to know, for the purposes of ratification, is that they had guaranteed Kenrop’s obligations under the loan deed. The requisite knowledge merely was the fact of the guarantee. I am satisfied the defendants understood this. Their knowledge was sufficient if there had been scope for the application of the doctrine of ratification.
The defendants rely on a number of matters which they submit evidence that the acts of ratification relied upon by the plaintiffs were not clear and unequivocal. They are that the Mortgage and Amendment Deed was not executed by ABLN; that the document refers to the guarantee being the “guarantee and the indemnity identified in item 10 listed in Annexure A” when there is no such document; that GSF effectively required the defendants to execute the document on pain of the loan being called in; that the document does not contain recitals, so that the actual factual basis for the deed is unclear; and the terms of clause 2 of the deed cannot exhaustively apply to the guarantors. Importantly, clause 2(e)(f) does not create new obligations where they did not previously exist, or extend obligations which were previously limited. Accordingly, there is nothing unequivocal about the document that amounts to ratification in a relevant sense. The whole commercial purpose of the Mortgage and Amendment Deed was not to create or cure antecedent obligations, but to ensure that whatever rights existed were not affected by the need to change security as a result of Project Transform.
I do not accept this submission. First, the fact the Mortgage and Amendment Deed was not executed by ABLN is immaterial. What is critical is whether the conduct of the defendants evidences the intention of the principal to ratify the unauthorised acts of its agent. The acts and/or omissions of the other party to the deed is irrelevant. In any event, a deed executed by only one party can still be valid and binding on that party, even if the other parties have failed to execute the deed.[52] The Mortgage and Amendment Deed is clearly executed as a deed, signed, sealed and delivered. As a matter of fact, it was delivered under cover of Mr Pickard’s letter to Great Southern of 2 May 2009. The objective meaning of clauses 23.13 and 23.14 is clear. Second, the definition of the “Guarantee” in the Mortgage and Amendment Deed as meaning “the Guarantee and Indemnity identified in item 10 listed in Annexure A”, where no such document existed, does not contradict the otherwise unequivocal nature of the defendants’ objective conduct in signing the Mortgage and Amendment Deed as “Guarantors”. Third, the fact that the defendants executed the Mortgage and Amendment Deed in circumstances where the failure to do so would result in the loan to Kenrop being called in is not inconsistent with the unequivocal nature of their conduct in executing the Mortgage and Amendment Deed as guarantors. There is no suggestion that the defendants’ conduct was induced by unconscionable conduct on the part of the plaintiffs. On the contrary, I am satisfied that the defendants executed the Mortgage and Amendment Deed as “guarantors” because the objective circumstances indicate they believed they had previously guaranteed Kenrop’s liabilities under the loan. Fourth, the absence of recitals in the Mortgage and Amendment Deed does not detract from the above. Fifth, the terms of clause 2(e) and (f) of the Mortgage and Amendment Deed make plain that, by executing the deed, the defendants’ reiterated their intention to be bound as guarantors under the loan deed. Clause 2 provided:
Each of the Mortgagor and Guarantor ratifies, confirms, acknowledges and/or agrees (as the case may be) that or to:
...
(e) its rights, liabilities and obligations under the Loan Deed (as amended by this document), the Guarantor (as amended by this document) and the Related Securities continue in full force and effect, and that those rights, liabilities and obligations are in no way limited to the amount recovered or recoverable upon the enforcement of the Mortgage against the Mortgaged Property;
(f) it continues to be liable for all amounts owing or payable by it under the terms of the Loan Deed (as amended by this document), the Guarantee (as amended by this document) and the related Securities;
...
[52] Hewlett-PackardAust Pty Ltd v Exeed Pty Ltd [2004] FCA 135 at [35]; Mirzikinian v Tom & Bill Waterhouse [2009] NSWCA 296 at [50]; Pratap v Permanent Custodians Pty Ltd [2013] NSWSC 1918 at [8].
Had the loan deed been validly executed, the defendants’ execution of the Mortgage and Amendment Deed would have been effective to ratify the guarantees under the loan deed. However, for the reasons set out above, I have found against the plaintiffs on the anterior issue of whether there was a validly executed deed capable of ratification.
Conclusion
I would dismiss the plaintiffs’ claim.