Left Bank Investments Pty Ltd v Ngunya Jarjum Aboriginal Corporation

Left Bank Investments Pty Ltd (the appellant) appealed to the Court of Appeal of New South Wales against a decision of the primary judge concerning the authority of the Chief Executive Officer (CEO) of Ngunya Jarjum Aboriginal Corporation (the respondent) to bind the corporation to a new lease agreement. The dispute arose when the CEO instructed solicitors to accept an offer for a new lease, despite the Board of the respondent corporation not having formally accepted the offer or delegated such authority to the CEO.

The Court of Appeal was required to determine whether the CEO possessed implied actual authority to bind the respondent to the new lease agreement, given that the CEO was not a director and the Board had not expressly authorised the acceptance of the offer. Furthermore, the Court had to consider whether the respondent had clothed the CEO with ostensible authority to accept the offer, thereby estopping it from denying his authority. A key distinction to be examined was whether the CEO was merely acting to communicate the Board's decision or had the authority to make the decision to bind the corporation.

The Court of Appeal dismissed the appeal, finding that the CEO did not have implied actual authority to accept the offer of the new lease. The Court reasoned that the power to enter into a lease agreement was a significant decision that ordinarily resided with the Board of the corporation, and there was no evidence that this power had been delegated to the CEO. Regarding ostensible authority, the Court held that the respondent had not held out the CEO as having the authority to make such a decision. The CEO's actions in instructing solicitors to accept the offer were found to be beyond the scope of any authority, actual or ostensible, that he possessed. Consequently, the appellant's appeal was dismissed, and the appellant was ordered to pay the respondent's costs.