Currabubula Holdings & Anor v State Bank of NSW

Currabubula Holdings and another party (the appellants) appealed to the High Court of Australia against a decision of the Supreme Court of New South Wales. The dispute concerned the validity of a mortgage granted by the appellants to the State Bank of New South Wales (the respondent). The appellants sought to have the mortgage set aside, alleging it was void due to a lack of proper corporate authority.

The central legal issue before the High Court was whether the mortgage, executed by a director of Currabubula Holdings without the company's seal or the signature of a second director, was validly granted under the relevant provisions of the *Companies (New South Wales) Code* and the common law principles governing corporate authority. Specifically, the court had to consider the effect of the company's constitution and the statutory presumptions of regularity.

The High Court, in dismissing the appeal, affirmed that the mortgage was valid. Gleeson CJ and Callinan J held that the company's constitution did not mandate the use of the company seal for such transactions, nor did it require the signatures of two directors. They applied the principle that a company can be bound by the actions of its directors even if those actions do not strictly comply with internal procedural requirements, provided the director has ostensible authority and the transaction is otherwise within the company's powers. The court found that the director had apparent authority to execute the mortgage on behalf of the company, and the bank had acted in good faith.

The appeal was dismissed.