LUNDIE v Rowena Nominees Pty Ltd (Receiver and Manager Appointed) (in Liq) - [2006] WASCA 106

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE COURT OF APPEAL (WA)

CITATION: LUNDIE & ANOR -v- ROWENA NOMINEES PTY LTD (RECEIVER & MANAGER APPOINTED) (IN LIQ) [2006] WASCA 106

CORAM: STEYTLER P
MCLURE JA

HEARD: 7 MARCH 2006

DELIVERED : 15 JUNE 2006

FILE NO/S: CACV 53 of 2005

BETWEEN: ROBERT CHARLES LUNDIE AND JUDITH DIANNE LUNDIE
Applicants
AND
ROWENA NOMINEES PTY LTD (RECEIVER & MANAGER APPOINTED) (IN LIQUIDATION)
Respondent

ON APPEAL FROM:
Jurisdiction              :  SUPREME COURT OF WESTERN AUSTRALIA
Coram  :MASTER SANDERSON
Citation  :ROWENA NOMINEES PTY LTD (RECEIVER & MANAGER APPOINTED) (IN LIQ) - v - LUNDIE & ANOR [2005] WASC 72
File No  :CIV 2427 of 2004

Catchwords:

Appeal against interlocutory decision - Whether Master erred in not awarding summary judgment against respondent - Statement of claim discloses triable issue - Leave to appeal refused

Contracts - Construction and interpretation - Whether respondent entered loan agreements as principal or agent - Respondent intended to contract as agent for unidentified lender

Contracts - Validity - Loan agreements made pursuant to non-existent power of attorney not necessary invalid

Agency - Where respondent entered loan agreements as agent for non-existent principal - Where identity of lender not significant to other contracting party - Arguable that respondent entitled to sue on agreements, whether or not agreements construed as deeds

Legislation:

Finance Brokers Control Act 1975 (WA), s 4
Property Law Act 1969 (WA), s 84
Rules of the Supreme Court 1971 (WA), O 16

Supreme Court (Court of Appeal) Rules 2005 (WA), s 25

Result:

Leave to appeal refused

Category: A

Representation:

Counsel:

Applicants: Mr J R Ludlow
Respondent: Mr G R Donaldson SC

Solicitors:

Applicants: Lawrence Legal Solutions
Respondent: Jackson McDonald

Case(s) referred to in judgment(s):

Anderson v Effexseven (1999) 10 ANZ Ins Cas 61‑424
Appleton v Binks (1804) 5 East 148
Australian Securities and Investments Commission v Rowena Nominees Pty Ltd (2003) 45 ACSR 419
Cameron v Troy & Co [2001] WASCA 400
Daily Telegraph Newspaper Co Ltd v McLaughlin (1904) 1 CLR 479
Dean and Westham Holdings Pty Ltd v Lloyd (1991) 3 WAR 235
Elliot v Ince (1857) 7 De GM & G 475
Fraser v Thames Television Ltd [1984] QB 44
Frontin v Small (1726) 2 Ld Raym 1418
Harmer v Armstrong [1934] 1 Ch 65
Harper & Co v Vigers Brothers [1909] 2 KB 549
Leigh and Sillivan Ltd v Aliakmon Shipping Co Ltd (The "Aliakmon") [1983] 1 Lloyd's Rep 203
MacCormac v Bradford [1927] SASR 152
Marsh & McLennan Pty Ltd v Stanyers Transport Pty Ltd [1994] 2 VR 232
Marzo v Land and Homes (WA) Ltd (1931) 34 WALR 62
McLaughlin v Daily Telegraph Newspaper Co Ltd (No 2) (1904) 1 CLR 243
McNally v Jackson (1938) 42 WALR 27
Nicolene Ltd v Simmonds [1953] 1 QB 543
Plant Engineers (Sales) Ltd v Davis (1969) 113 SJ 484
Schmaltz v Avery (1851) 16 QB 655
Wilson v Metaxas [1989] WAR 285

Case(s) also cited:

Annetts v McCann (1990) 170 CLR 596
Bacon v Dubarry (1697) 1 Ld Raym 246
Baker v Courage & Co [1910] 1 KB 56
Baltic Shipping Co v Dillon (1993) 176 CLR 344
Barnes v Addy (1874) LR 9 Ch App 244
Brenner v First Artists’ Management Pty Ltd [1993] 2 VR 221
Cadorange Pty Ltd (in liq) Tanga Holdings Pty Ltd (1990) 20 NSWLR 26
Cass v Rudele (1692) 2 Vern 280
Commissioner of State Revenue (Vic) v Royal Insurance Australia Ltd (1994) 182 CLR 51
Conlan v Registrar of Titles (2001) 24 WAR 299
Coral (UK) Ltd v Rechtman [1996] 1 Lloyd’s Rep 235
Darlington Futures Ltd v Delco Australia Pty Ltd (1986) 161 CLR 500
David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353
Dexter v Hall 82 US 9 (1872)
Duvuro Pty Ltd v Wilkins (2003) 215 CLR 317
Dye v Griffin Coal Mining Co Pty Ltd (1998) 19 WAR 431
Earnshaw v Gorman & Sons Pty Ltd [2001] WASCA 50
Equuscorp Pty Ltd v Glengallon Investments Pty Ltd (2004) 218 CLR 471
Esso Australia Resources Ltd v Commissioner of Taxation of the Commonwealth of Australia (1999) 201 CLR 49
Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87
Fitzgerald v Masters (1956) 95 CLR 420
Flotilla Nominees Pty Ltd v Western Australian Land Authority (2003) 28 WAR 95
Forsayth NL v Northern Gold NL, unreported; FCt SCt of WA; Library No 940012, 20 January 1994
Gibbons v Wright (1954) 91 CLR 423
Griffith University v Tang (2005) 221 CLR 99
Hancock Prospecting Pty Ltd v BHP Minerals Pty Ltd [2003] WASCA 259
Hollman v Pullin (1884) C & E 254
Hoyt’s Pty Ltd v Spencer (1919) 27 CLR 133
Hypec Electronics Pty Ltd (in liq) v Mead (2004) 61 NSWLR 169
Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896
J Gadsden Pty Ltd v Strider 1 Ltd (The “AES Express”) (1990) 20 NSWLR 57
Kelner v Baxter (1866) LR 2 CP 174
Kleinwort Benson Ltd v Lincoln City Council [1998] 3 WLR 1095
Knight v FP Special Assets Ltd (1992) 174 CLR 178
Metcalf v Permanent Building Society (in liq) (1993) 10 WAR 145
Monarch Petroleum NL v Citco Australia Petroleum Ltd [1986] WAR 310
Morgan v Banning (1999) 20 WAR 474
Owen v Tate [1976] QB 402
Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451
Pantorno v The Queen (1989) 166 CLR 466
Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221
Peel (Regional Municipality) v Canada [1992] 3 SCR 762
Re International Contract Co (Pickering’s Claim) (1871) LR 6 Ch App 525
Royal Botanical Gardens and Domain Trust v South Sydney City Council (2002) 76 ALJR 436
Shephard v ANZ Banking Corporation Ltd (1996) 41 NSWLR 431
Stead v State Government Insurance Commission (1986) 161 CLR 141
The Commonwealth of Australia v SCI Operations Pty Ltd (1998) 192 CLR 285
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165
Torrens Aloha Pty Ltd v Citibank NA (1997) 72 FCR 581
Universal Steam Navigation Co Ltd v James McKelvie & Co [1923] AC 492
Wilton v Farnworth (1948) 76 CLR 646
Winterton Constructions Pty Ltd v Hambros Australia Ltd (1991) 101 ALR 363
Young v Murphy [1996] 1 VR 279

STEYTLER P: The applicants have sought leave to appeal against the decision of a Master dismissing their application, brought pursuant to O 16 of the Rules of the Supreme Court 1971 (WA), for summary judgment against the respondent ("Rowena").
Rowena is now in liquidation. Between 8 May 1996 and 31 May 1999 it was a licensed finance broker under the terms of the Finance Brokers Control Act 1975 (WA). It carried on business in that capacity under the name "Graeme Grubb Finance Broker".

The prospectus

On 25 March 1998 a company, Karri Oak Ltd ("Karri Oak"), lodged with the Australian Securities and Investments Commission a prospectus dated 23 March 1998. The prospectus offered to potential investors ("growers") the opportunity to participate in the establishment of a vineyard to be known as the "Karri Oak Vineyard" in the Mount Barker region of Western Australia.
The prospectus essentially put forward the following proposal. Wine producing land would be divided into lots. Each grower who subscribed to the prospectus would enter into a lease agreement to lease a designated lot for approximately 20 years from a company, Sandgate Corporation Pty Ltd ("the Lessor"). Grapevines would be planted and grown on each lot. The grower would enter into a management agreement pursuant to which Karri Oak, as Manager, would be responsible for planting, maintaining and generally managing the lots during the term of the lease. Management fees would be paid to Karri Oak for the term of the lease. The grower would be entitled to the commercial value of the produce of the lot and all costs incurred by each grower were said to be fully tax deductible. Growers were offered the option of financing their investment by way of a loan facility. The prospectus provided that, if a grower should chose to utilise the loan facility, funds to a maximum of $30,818 would be available on payment of a $100 deposit. The loan would be secured by a mortgage over the leased area and interest would be charged on the loan at a rate of 12 per cent per annum for the first three years and at a rate to be set by a stated mechanism in subsequent years. The loan facility was said to cover the management fees of $23,900 for the first year and the annual rent of $1200, less any deposit paid. It was also said to cover the annual management fees and the rent for each subsequent year through to the year 2013, based on projected figures.
The prospectus contained a summary of the agreements which, it said, were required to establish the project. These were said to be:
"A.Trust Deed
B.Lease and Management Agreements
C.Agreement for the sale of grapes, processed juice and bulk wine
D.Summary of Loan Agreement
E.The Loan Agreement."
The summary in respect of the trust deed contained, amongst others, the following paragraphs:
"This prospectus is issued by the Manager and seeks to raise a total of $8,157,500 for 325 leased areas in the vineyard (subject to a minimum subscription of $2,510,000 equivalent to 100 leased areas).
All subscription moneys received under this prospectus will be held by the Trustee in a trust bank account until the minimum subscription is received and the Trustee is satisfied that the conditions in the Trust Deed that must be fulfilled to ensure that the land for the vineyard has been acquired by the Lessor and the Project can be established on all the leased areas applied for, have all been satisfied.
If those conditions are not satisfied or the minimum subscription is not received within 4 months from the date of issue of this prospectus or by 30th June 1998 (whichever is the sooner), all of your subscription moneys will be refunded."
The summary of the loan agreement included the following paragraphs:
"The parties to each Loan Agreement are the registered finance broker Rowena Nominees Pty Ltd (ACN 008 818 273) as agent for various of its clients ('The Lenders') who may vary with each Loan Agreement, the grower and any guarantor of the grower.
Parties
Upon acceptance by the Manager of an application to enter into a Lease and Management Agreement for the leased area and a loan from the Lender, a Loan Agreement in all material respects in the form included in this prospectus will be entered into. Each Loan Agreement will be executed by the Manager as attorney for and on behalf of the grower and any guarantor (if required) pursuant to the Power of Attorney forming part of the application under this prospectus and shall be executed by the finance broker Rowena Nominees Pty Ltd (ACN 008 818 273) as Attorney for each Lender.
The Principal Sum
Under each Loan Agreement the Lender agrees to advance by instalments (as set out in Table A) the Principal Sum of up to $30,818 payable by the grower to the Trustee for each leased area allocated to the grower pursuant to his application to enable the grower to pay the moneys due by the Trustee during the initial period under the Lease and Management Agreement.
The Lender is directed to remit all funds advanced under the Loan Agreement to the Trustee direct to meet the payments due by the grower to the Trustee under the Lease and Management Agreement."
The summary went on to deal with the term of the loan, interest payable, interest review dates, repayment of principal and other matters, including the following:
"Power of Attorney
The grower irrevocably appoints the Lender as the grower's attorney for the purposes of giving effect to the powers conferred on the Lender under the Loan Agreement in the event of default by the grower, the Lender may sell, assign, or surrender the Lease and Management Agreement."

The standard form loan agreement

A standard form of loan agreement was attached to the prospectus. The opening paragraph of that agreement reads, relevantly, as follows:
"In consideration of the Principal Sum defined below now due and owing or to become due and owing by the Mortgagor to the Mortgagee, THE MORTGAGOR for the purposes of securing the repayments in manner hereinafter provided of the Principal Sum and interest thereon at the rate mentioned below and all other moneys intended to be hereby secured MORTGAGES … the land … and … COVENANTS with the Mortgagee as follows ‑ … "
There followed a number of terms and conditions, including an acknowledgement (cl 1.3(c)), that "the Grower" (defined to mean the mortgagor) had requested that "the Lender" (defined to mean the mortgagee) lend funds to the grower from time to time, such funds not to exceed the sum of $30,818 (the "Principal Sum"), upon the terms and conditions contained in the loan agreement.
Clauses 10, 11 and 12 of the standard form loan agreement read as follows:
"10. Power of Attorney
The Grower irrevocably appoints the Lender as its attorney to do and execute all acts matters things and documents that are necessary, or which the Lender considers expedient for the Lender to do or execute ‑
(a)for the purposes of complying with any of the obligations imposed on the Grower by this Loan Agreement or the Lease and Management Agreement in the event that the Grower fails to do so;
(b)for the purposes of giving effect to the powers conferred on the Lender by this Loan Agreement including the power of sale, transfer or assignment of the Lease and Management Agreement should the right to exercise such powers or any of them arise;
AND the Grower agrees to ratify and confirm all acts done by the Lender in the name of the Grower pursuant to this clause.
11.Execution by Attorney
The Grower agrees that this Loan Agreement will be executed by ‑
(a)the Manager as Attorney for the Grower and any Guarantor pursuant to the Power of Attorney incorporated in and forming part of the application for the Lease and Management Agreement; and
(b)ROWENA NOMINEES PTY LTD (ACN 008 818 273) for the Lender pursuant to a power of attorney granted by the Lender to that company;
AND the Grower and Guarantor will be bound by the terms of this Loan Agreement once executed by the Manager and ROWENA NOMINEES PTY LTD.
12.Deed
This instrument is intended to be a Deed and should take effect accordingly."
The execution clauses provided for by the standard form loan agreement showed that it was to be executed by Rowena, under its seal, "as attorney for and on behalf of the Lender" and that it was to be executed by the Manager, under its seal, "as attorney for and on behalf of the Grower".

The application form

A standard application form was also attached to the prospectus. This form provided two options. Option A was "Finance not required" and option B was "Finance required". It also provided a box in which the total number of leased areas applied for might be specified and another in which the total loan applied for might be specified.

The application and the loan agreements

On 9 June 1998 the applicants applied, on the standard application form, for four lots or leased areas. They selected option B and indicated that the total loan applied for was $123,272 ($30,818 x 4). The application form included a clause acknowledging that, by their execution of it, the applicants appointed the Manager as their attorney to execute the lease and management agreement and the loan agreement.
On about 30 June 1998 four loan agreements were executed in respect of the applicants. The loan agreements were in identical terms. Each was also identical to the standard form agreement which had been annexed to the prospectus. Each was executed by Rowena, under its seal, as attorney for and on behalf of "the Lender" (defined, as I have said, to mean "the Mortgagee"). Each was also executed under seal by the Manager, Karri Oak, as attorney for and on behalf of the applicants.

The movement of funds

In his affidavit sworn on 28 January 2005, the liquidator says (pars 10, 11 and 12) that, on 30 June 1998, Rowena drew a cheque payable to the Trustee (Charters Securities Pty Ltd) for $3,650,000, representing $25,000 for each of the 146 subscribers (out of a total of approximately 185 subscribers) who had applied for loan funds and that, on that date, the cheque was deposited into the Trustee's account. He says (par 11) that, on 3 July 1998, the Trustee paid $180,000 to the Lessor for rent for the first year of the project and $3,585,000 to Karri Oak in payment of management fees. In par 12 he says that, as a result, all subscribers, including the applicants, were issued the lots they applied for. He also says (par 21) that, on 3 July 1998, and subsequent to the payment to it by the Trustee of the sum of $3,585,000, Karri Oak paid Rowena $3,650,000 for the purpose of investment. The liquidator goes on to say that Rowena subsequently made payments to Karri Oak, which were applied by way of a reduction of the capital amount invested by it, and that Karri Oak has never suggested that it did not receive the subscription funds advanced by Rowena and paid by the Trustee to it for the growers, including the applicants (pars 22 and 23).

Subsequent events

Rowena's liquidator contends that, in breach of the terms of each of the loan agreements entered into by the applicants, they failed to repay an instalment of $10,000 due in respect of each leased area on 30 September 1998 and, by the terms of each loan agreement, the full principal sum outstanding became due and payable on demand. Demand was made accordingly on 3 July 2003, but the applicants have not made any payment. Instead, the applicants deny that either of them ever entered into a loan agreement with Rowena and "do not admit that there was ever any loan agreement between themselves and a Lender" (par 14 of the affidavit sworn by the first‑named applicant on 7 September 2004). They also do not admit the authenticity of the loan agreements which were produced by the liquidator, nor that any of them were validly executed.
Notwithstanding his denial that there was ever a loan agreement with any lender, the first‑named applicant has said, in an affidavit sworn by him on 15 February 2005, that each of the applicants claimed a tax deduction in respect of lease and management fees for the Karri Oak Vineyard project for the year ended 30 June 1998, but that the Australian Taxation Office disallowed those claims.

Rowena's statement of claim

Rowena commenced proceedings against the applicants claiming the repayment of the loan funds. The statement of claim recites the material terms of the prospectus, the application form and each loan agreement. Paragraphs 7, 8, 10 and 11 of the statement of claim plead the alleged breach of the loan agreement, the making of demand and the applicants' failure to make payment of the balance due by them under each loan agreement. The total unpaid balance was claimed together with interest.

Pullin J's judgment

Paragraph 9 of the statement of claim records that, by order of the Supreme Court of Western Australia made on 6 June 2003 in COR 131 of 1999, Rowena was authorised to make demand for, and to institute proceedings to recover, funds advanced by it as loans to the applicants. This was a reference to the judgment of Pullin J in an ex parte application which had been made by Rowena's liquidator for directions under s 479(3) of the Corporations Act 2001 (Cth): Australian Securities and Investments Commission v Rowena Nominees Pty Ltd (2003) 45 ACSR 419.
In his judgment, Pullin J referred to some of the circumstances outlined above. He also referred (at [9] ‑ [10]) to the standard form loan agreement. He said that that agreement did not identify the "lender", that Rowena executed the agreement "as attorney" for the lender and that Rowena purported to act for an undisclosed principal. However, he added that "[i]n fact, no principal lenders can be identified". He went on to say (at [13] ‑ [16]):
"It is not at all clear who provided the funds to Rowena in order to make the advance to the growers. It seems that some moneys came from the trust account. The trust account was in credit to the extent of approximately $200,000 on the day that the transaction took place. In so far as that money was used, it was used without authority and therefore used in breach of trust by Rowena. The rest of the money may have been advanced by Rowena itself.
In my view, as between Rowena and the growers, it does not matter where Rowena obtained the money from in order to make the advance.
In so far as Rowena used trust moneys to make the payment, it must, as trustee, take action to recover the moneys lost to the beneficiaries. In so far as trust moneys were paid over in return for a promise to repay, the chose in action is an asset which would belong to the beneficiaries of the trust account.
The liquidator must do all things necessary for winding up the affairs of Rowena, and therefore he must take steps to identify assets of the company and to ascertain whether particular assets are beneficially owned by the company or others. … In my opinion, in the winding up, in the absence of some conflict making it inappropriate to do so, the liquidator (rather that (sic) a court appointed receiver or new trustee) should cause Rowena to recover trust assets."

Pullin J proceeded to give (at [21]) a direction, amongst others, that Rowena's liquidator would be justified in causing Rowena "to issue demands for the repayment of, and to institute proceedings to recover, funds advanced by Rowena as loans to the … growers … ". However, he said (at [20]) that nothing that he had said about the background circumstances, and no directions that he gave, would "have any binding effect in relation to proceedings between Rowena and the growers" or "resolve any legal issues which may exist between Rowena and lenders (who might be identified)".

The application for summary judgment

By a summons dated 30 August 2004, the applicants applied for summary judgment under O 16 r 1(1) of the Rules. They contended that the action that had been brought against them by Rowena was frivolous and vexatious, alternatively that they had a good defence on the merits and, in the further alternative, that the action should be disposed of summarily. Rowena thereupon applied for summary judgment against the applicants, contending that they had no defence to its claim. Both applications were heard by the Master on 21 March 2005. On 5 May 2005 he delivered judgment, dismissing both summary judgment applications.

The Master's reasons

In his reasons, the Master said (at [10] ‑ [11]) that the applicants' position was that Rowena was not the lender under each loan agreement, that, at most, it was an attorney for, or an agent for, a third party lender and that, in either case, it had no right to bring proceedings in its own name to recover the loan amount. He concluded (at [14]) that this position was arguable and that Rowena's application for summary judgment consequently failed. Then, he went on to consider the applicants' claim for summary judgment. He said, in that respect (at [15]):
"I am not satisfied that there is no answer to Rowena's [sic] defence to these proceedings. It is by no means clear on the present state of the evidence where the funds loaned to the defendants came from. They may have come from third party lenders, they may have come from Rowena, or it may not be possible to ascertain precisely where they came from. But this issue of fact needs to be explored. For instance, were it to be found that the funds came from trust moneys held by Rowena in circumstances where the beneficial owner of the funds was unaware they were being used to loan to persons such as the defendants, then Rowena may have a right, and indeed a duty, to recover those funds. But until the factual background is determined it is not possible, in my view, to say that Rowena does not have an arguable case to recover funds from the defendants."

Grounds of appeal

The applicants raise three grounds of appeal, as follows:
"1.The learned Master denied the Appellants procedural fairness by dismissing their application for summary judgment on a basis:
(a)for which the Respondent had not contended;
(b)that was inconsistent with the manner in which the Respondent had conducted its case before the learned Master and before Pullin J in Australian Securities and Investments Commission v Rowena Nominees Pty Ltd (2003) 45 ACSR 419; [2003] WASC 106 (6 June 2003).
Particulars
The learned Master dismissed the Appellants' application for summary judgment on the basis set out in par 15 of his reasons for decision, when:
(c)the Respondent had not contended for dismissal of the application on that basis;
(d)the Respondent had led evidence before Pullin J to the effect that it was impossible to identify any Lender in relation to any loan transaction, and had conducted its case before the Master on a similar basis.
2.The learned Master erred in law in failing to confine himself to the question whether there was a serious question to be tried upon any cause of action raised in the Statement of Claim.
Particulars
The learned Master dismissed the Appellants' application for summary judgment on the grounds that, for example, … the Respondent may have had a right, and indeed a duty, to recover trust funds, when the only cause of action the Respondent had pleaded against the Appellants was a flawed cause of action in contract.
3.The learned Master erred in law and in fact in failing to conclude that the Appellants' case was unanswerable so that summary judgment ought to be entered for the Appellants.
Particulars
On the evidence before the learned Master:
(a)the Appellants' application for a loan was incapable in law and in fact from being accepted by the Respondent as Lender;
(b)in any event, the Respondent had purported to accept that application as attorney for a disclosed but unidentified Lender, and the Respondent was therefore precluded in law and in fact from being a party to any loan agreement that might have been created by that purported acceptance;
(c)there was no basis for the Court to conclude that there was (relevantly) any valid power of attorney appointing the Respondent as attorney for any proposed Lender, and thus no basis for the Court to conclude that there was any valid loan agreement at all;
(d)any moneys paid by the Respondent had been paid not to the Appellants, but to a third party that in law and in fact had no authority, actual or ostensible, from the Appellants to accept, and give a good discharge on their behalf for, any moneys paid by the Respondent to the third party;
(e)even if (which is not admitted) any loan agreement to which the Appellants might have been a party authorised the Respondent to issue a notice of demand in its own name against the Appellants, that did not give the Respondent a cause of action in contract against the Appellants."

Grounds 1 and 2

As will be apparent, the Master said, at [15] of his reasons, that, if the loan funds came from trust moneys held by Rowena in circumstances where the beneficial owner of the funds was unaware they were being loaned to persons such as the applicants, then Rowena might have a right, and indeed a duty, to recover those funds. The applicants contend that no argument to this effect had been advanced on behalf of Rowena before the Master and that it had, in any event, led evidence and made submissions before Pullin J, at the hearing of the application by Rowena's liquidator for directions, to the effect that it was impossible to identify any lender in relation to any loan transaction.
The first of those contentions seems to me to have some substance. Counsel for Rowena did not suggest that he had advanced any such argument before the Master and, as I shall later explain, the statement of claim that had been filed did not encompass an allegation of that kind. As to the second contention, Pullin J remarked (at [19]) that Rowena's liquidator "considers that it is impossible to identify any lender in relation to any loan transaction". He also said (at [14]) that, as between Rowena and the growers, it did not matter where Rowena obtained the money in order to make the advance. Moreover, counsel for Rowena conceded that there was no evidence before the Court as to who the lenders were or from where the loan funds had come.
However, none of this matters. The appeal is by way of rehearing: Supreme Court (Court of Appeal) Rules 2005 (WA) r 25. I have come to the conclusion below (when dealing with ground 3) that the applicants have failed to discharge their onus of showing that there is no serious question to be tried on the cause of action that has been raised by Rowena in its statement of claim (see Anderson v Effexseven (1999) 10 ANZ Ins Cas 61‑424 at 74,756, 75,757 (FCt SCt of WA)), and that summary judgment should consequently not be entered in the applicants' favour. It accordingly seems to me that it does not matter whether the Master was right or wrong in what he said at [15] of his reasons, or whether or not the applicants' counsel had an opportunity to be heard in that respect, or whether or not the respondent had pleaded, or could plead, a cause of action of that kind.

Ground 3

In a nutshell, the applicants make the following propositions in support of ground 3:
1.The application for a loan sought a loan from a person or persons other than Rowena, given that the prospectus, in summarising the loan agreement, said that it would "be executed by the finance broker Rowena … as Attorney for each Lender", that "The Lenders" were defined in the prospectus to mean "various of … [Rowena's] clients" and that the standard form loan agreement annexed to the prospectus provided for that agreement to be executed by Rowena "as attorney for and on behalf of the Lender".
2.It was consequently not open to Rowena to accept that application as lender.
3.Rowena executed each loan agreement "as attorney for and on behalf of" a disclosed but unidentified lender and, hence, could not itself be a party to the loan agreement.
4.There was no power of attorney appointing Rowena as attorney for any proposed lender and no other proposed lender has been, or can be, identified.
5.There was consequently no valid loan agreement.
6.Any money paid by Rowena in purported pursuance of the loan agreement was paid to a third party who had no authority from the applicants either to receive it or to give a discharge for it on their behalf.
7.The fact that the purported loan agreements authorised Rowena to issue a notice of demand in its own name against the applicants did not give it a cause of action in contract against them when there was no valid contract.
Propositions 1 and 2 were said to be supported by the subsidiary proposition that the expression "finance broker" was defined by s 4 of the Finance Brokers Control Act 1975 (WA) as meaning "a person who, as an agent, in the course of business negotiates or arranges loans of money for or on behalf of other persons". Counsel for the applicants contended that, because Rowena was described in the prospectus, and was in fact, a finance broker, it could not have been negotiating or arranging for the loan to be made by itself.
Propositions 3, 4 and 5 were said to be supported by the subsidiary proposition that the word "attorney" is a term of art referring to a special case of agency, namely one created by an instrument conferring an authority, and that, if a person purports to execute an agreement as attorney, and if there is no power of attorney, the agreement purportedly executed by the alleged attorney is a nullity. This last proposition is said to be supported by the decisions of the High Court and the Privy Council respectively in McLaughlin v Daily Telegraph Newspaper Co Ltd (No 2) (1904) 1 CLR 243 and Daily Telegraph Newspaper Co Ltd v McLaughlin (1904) 1 CLR 479; [1904] AC 776. It is also said to be supported by s 84 of the Property Law Act 1969 (WA), which provides that "The donee of a power of attorney may execute … any … instrument … in and with his own name and signature and his own seal … by the authority of the donor of the power" (s 84 (1)) and that "Every … instrument … so executed … shall be as effectual in law to all intents as if it had been executed … by the donee of the power in the name and with the signature and seal of the donor thereof" (s 84 (2)). Counsel for the applicants contends that it is implicit in these provisions that, if there is no donor of the power, the instrument signed by the purported attorney will be regarded as if it had not been executed.
Propositions 3, 4 and 5 were said to be supported by three other subsidiary propositions. The first of these is that, if Rowena is right in its contention that it is able to sue on the loan agreements, then, by analogy of reasoning, it would have to sue the Manager and not the applicants, because the Manager had executed each loan agreement as attorney for the applicants. The second is that it is non‑disclosure of the existence of a principal that is the foundation of liability of an agent and, hence, that the general law of agency, as well as the "special law" relating to attorneys, dictates that, in the case of a disclosed but unidentified principal, the contract is, prima facie, between the third party and the principal. Counsel for the applicants relies, in support of this second subsidiary proposition, on Marsh & McLennan Pty Ltd v Stanyers Transport Pty Ltd [1994] 2 VR 232 at 234 and McNally v Jackson (1938) 42 WALR 27 at 29. The third subsidiary proposition is that the agreements of loan should not be construed as having been made with Rowena as principal because this would render the prospectus misleading or deceptive, placing the issuer, Karri Oak, in breach of the Trade Practices Act 1974 (Cth), a result which could not have been intended.
Propositions 1 to 5, and the subsidiary propositions advanced in support of them, are said to result in the position that the applicants did not authorise the Manager to execute the loan agreements with Rowena as lender, or as a party, and also to support proposition 6 because, by inference, the applicants did not authorise either the Manager or the Trustee to accept any money from Rowena in such a way as to bind the applicants to an agreement with it as lender or other party.
I will return to all of these propositions below.
Next, counsel for the applicants advanced the proposition, not falling within the grounds of appeal, that, because the statement of claim does not adopt "the common pleading practice" of stating that the plaintiff will refer at trial to the relevant documents for their full terms and effect, those documents are not admissible. It is enough to say, in this respect, that the authority cited for that extraordinary proposition, Cameron v Troy & Co [2001] WASCA 400, does not support it. In that case, the documents in question were inadmissible because they were irrelevant to any pleaded issue, not because of a failure to adopt the practice referred to by counsel for the applicants. If documents are relevant to a pleaded issue, the mere fact that the practice referred to has not been adopted (even if it can be described as a common practice) does not have the consequence of making them inadmissible.
Finally, counsel for the applicants referred to FMB Reynolds Bowstead and Reynolds on Agency (17th ed) 2001 at 9-092, in support of the proposition that, if an agent signs on behalf of an unidentified principal who does not exist, the agent can only intervene if he or she fits such description (if any) as has been given of the supposed principal. He submits that Rowena does not fit the description of the supposed principal in this case. I will return to this proposition below.
Counsel for Rowena advanced a number of contentions in response.
The first of these was that the statement of claim is not limited to a claim in contract. He relied, in this respect, upon the fact that par 1.4 thereof pleads that Rowena was the trustee of money received by it in the course of its business as a finance broker and contended that the statement of claim is wide enough to encompass an action for an agreed sum, an action for money had and received and an action brought by Rowena as trustee in respect of the trust property, being the chose in action against the applicants.
This contention can be disposed of quite shortly. It seems to me, firstly, that the statement of claim is quite plain in its allegation that the loan in question was one from Rowena. Paragraph 3.2 pleads that the prospectus offered the growers the opportunity to finance their investment with a loan "from the plaintiff" and par 4.2 pleads that the applicants "applied to the plaintiff for a loan". Paragraph 5.2 pleads that Rowena advanced $100,000 to the Manager on behalf of the applicants pursuant to the terms of the loan agreement. Paragraph 8 pleads that, by reason of the applicants' breach of the loan agreement, all of the principal sum outstanding "to the plaintiff" became due and payable on demand. I am not at all persuaded that the pleading encompasses, at least with any sufficient clarity, a cause of action either for money had and received or for the recovery of trust property.
I should mention that, on 22 July 2005, after the Master had given his judgment, Rowena filed an amended statement of claim so as to plead that the applicants had been enriched as a consequence of the events that have happened in circumstances giving rise to an entitlement in Rowena to recover the amounts claimed by it as moneys had and received. Counsel for the applicants contends that the amendment discloses no arguable cause of action and that it is, in any event, statute‑barred by the provisions of the Limitation Act 2005 (WA). Because I have come to the conclusion, for reasons that I will explain, that the statement of claim, as it was before the Master, discloses a serious question to be tried, there is no need for me to consider whether or not the amended statement of claim raises an additional triable issue or, if it does, whether the cause of action so raised is statute‑barred. Once the conclusion is arrived at that summary judgment was rightly refused, those are not matters which properly arise in the appeal and they should more appropriately be dealt with an in application before the Master, should the applicants wish to pursue it.
The second contention advanced by counsel for the respondent is that the loan agreements were not, and were not intended to be, deeds.
Next, counsel for Rowena contended that an agreement executed by an alleged attorney is not a nullity merely because there is no power of attorney and that counsel for the applicants has misunderstood what was said by the High Court and the Privy Council in McLaughlin.
The fourth contention advanced on behalf of Rowena is that each loan agreement is open to the construction that Rowena was the lender under the terms of that agreement and, hence, was entitled to sue on it. Counsel for Rowena contends that this construction does no harm to the essential terms of the agreement, that it is evident from the terms of the prospectus that the identity of the lender was a matter of irrelevance and that the construction requires only the disregard of cl 11(b) of each agreement and of words in the execution clause.
Next, counsel for Rowena contended that the applicants have affirmed each loan agreement, or are estopped from denying the enforceability of each loan agreement, as a consequence of their subsequent conduct, in particular their conduct in claiming a tax deduction in respect of lease and management fees for the year ended 30 June 1998.
Finally, counsel for Rowena contended that, if Rowena contracted as an agent of an unidentified or non‑existent principal, it was nevertheless entitled to bring proceedings pursuant to each loan agreement as a principal, in circumstances in which the identity of the lender was immaterial. Because this last submission was not addressed in any detail by either party (at least in the context of deeds), each of the parties was given leave to lodge additional written submissions in that regard. Those submissions have since been received.
The various propositions and counter propositions advanced on behalf of the parties in their submissions, including the subsequent written submissions, can be addressed by answering five questions. I will deal with each in turn.

Was Rowena the lender on the proper construction of the contract?

In my opinion, each contract of loan should be construed upon the basis that Rowena contracted as agent, and not as principal. I agree with counsel for Rowena that the fact that Rowena was a licensed finance broker is irrelevant, there being nothing to preclude a finance broker from lending money. I agree (for reasons which I will later explain), too, with the submission that the identity of the lender was a matter of no significance to the applicants. It also seems to me that the question whether any other reading of each loan agreement might result in what, in my opinion, would be a very minor breach of the Trade Practices Act by the Manager is irrelevant. However, I am unable to accept the proposition, advanced on behalf of Rowena, that the loan agreements are open to the construction that Rowena was the lender under the terms of each.

It seems to me to be quite plain from cl 11(b) of each agreement that Rowena was not intended to be the lender. By that clause the applicants agreed that the loan agreement would be executed by Rowena "for the Lender" pursuant to a power of attorney granted by the "Lender". While the "Lender" was not identified (the words "the Lender" were defined to mean "the Mortgagee" and the identity of the mortgagee was not disclosed), it is obvious, from this clause, that it was to be someone other than Rowena. I have mentioned that the summary of the loan agreement contained in the prospectus identified the "parties" to each loan agreement as Rowena, "as agent for various of its clients ('The Lenders') who may vary with such Loan Agreement, the grower and any guarantor of the grower". While this lends some support to the contention that Rowena was itself to be a party to each loan agreement (see, in this respect, Bowstead and Reynolds at 9‑035 (15) and (16) and the cases there cited), that contention seems to me to be negatived by the terms of each loan agreement to which I have referred. That Rowena was intended to be an agent seems to me to follow, also, from the fact that Rowena executed each agreement "as attorney for and on behalf of the Lender". For similar reasons, it seems to me (although this might be more debatable) that, on the proper construction of each agreement, the parties did not intend that Rowena should be personally liable and entitled, together with the purported principal. However, for reasons which I shall later explain (when dealing with the third of the five questions that seem to me to arise) a conclusion to that effect is not dispositive of the appeal.

Does the absence of a power of attorney of itself render each agreement invalid?

I have said that counsel for the applicants contends that the absence of a power of attorney rendered each agreement invalid both under the common law and by virtue of the operation of s 84 of the Property Law Act.
I will deal, first, with the suggested statutory basis for this proposition. That can be done briefly. As I read s 84 of the Property Law Act, that section merely addresses the case in which there is a donee of a genuine power of attorney. In such a case the donee may execute an instrument in its own name and under its own seal and, if it does so, the instrument is as effectual as if it had been executed by the donee of the power in the donor's name and with its seal. If there is no power of attorney, the section has no application, regardless of whether or not the signatory to the agreement claims to have executed it as agent, pursuant to a power of attorney. There is nothing in the section which either expressly or impliedly addresses this last situation.
That brings me to the common law. I have mentioned that counsel for the applicants rely, in this respect, on the decisions of the High Court and the Privy Council in McLaughlin. The plaintiff, in that case, had executed a power of attorney giving his wife absolute power to dispose of his real and personal estate. Acting under the power of attorney, she sold and transferred shares held by him to third persons. The plaintiff's case was that the power of attorney, although it bore his signature, was void because, at the time when his signature was obtained, he was of unsound mind and incapable of understanding what he was doing. He sought orders against the defendants to compel them to rectify their registers by entering his name as holder of a number of shares equal to the number sold and also as holder of certain other shares to which he would, if he had remained the registered holder of the original shares, have been entitled in respect of them.
When the matter came before the High Court, it concluded (at 279) that, when the plaintiff executed the power of attorney, he had no knowledge of what he was doing except that he knew that he was signing his name, which, under the circumstances, was merely a mechanical act. The High Court held, in that circumstance, the power of attorney was void (at 279, 280) and that it followed that the defendants had failed to discharge the burden cast upon them of showing that they removed the plaintiff's name from the share register by his authority. The Court went on to find that the plaintiff was entitled, as against the defendants, to the relief claimed by him. It declared that the transfers by the plaintiff's wife were invalid and directed the defendants to rectify their register accordingly.
In the appeal from the High Court to the Privy Council, the Privy Council saw no reason to doubt that the judgment of the High Court was right. Lord McNaughten, who delivered the judgment of the Privy Council, referred, amongst others, to the case of Elliot v Ince (1857) 7 De GM & G 475, in which Lord Cranworth LC had said that, in that case, everything had depended on the validity of a power of attorney, and that, if the person who executed it was of unsound mind, "the substratum" was "removed". Lord McNaughten went on to say (at 482):
"Now, if the power of attorney is mere waste paper, it is difficult to see how anything which rests on it as the foundation and groundwork of the whole superstructure can be of any validity … "
This last quotation is particularly relied upon by counsel for the applicants.
It seems to me that nothing said by the High Court or by the Privy Council in McLaughlin lends support to the contention made by counsel for the applicants. In each case the Court was concerned with the consequences, for the purported donor of the power, of the use, by the donee, of a void power of attorney. If the transaction purportedly entered into on his behalf was one that had not, in truth, been authorised by him, and if there had been no other basis for holding him bound by it, it is hardly surprising that the Court should have held that the transactions made pursuant to the power were invalid. However, the judgments in McLaughlin do not address the question, where there is no power of attorney at all, whether the purported agent is entitled to sue and be sued under the agreement purportedly made by it as agent. Consequently, in the absence of any other authority to this effect (none was referred to and I have not, through my own researches, been able to find any), I would not be prepared to accept the proposition that the absence of a power of attorney, without more, renders any agreement purportedly made pursuant to it invalid. Rather, the question of the validity of the agreement seems to me to depend upon wider common law principles, to which I shall return later in these reasons.

Did it matter to the applicants who the lender was?

I propose, next, to deal with the issue, mentioned above, whether the identity of the lender was a matter of any significance to the applicants. It seems to me that the answer to that question may be of significance to the answer to the question, dealt with below, whether Rowena could sue on the loan agreements as principal.
Counsel for the applicants contended that the identity of the lender was a matter of significance to the applicants. He said, in this respect, that if the lender was to be Rowena, which he described as "a suburban finance broker", "there would be a far greater risk that the transaction would have to be a 'commercially bizarre' back to back arrangement than would be the case if the lender or provider of finance were a client of the finance broker, which client could reasonably be expected to be a retiree, with a large quantity of real funds to invest". He also said that, because "one would expect the clients of a finance broker, but not the finance broker itself, to have substantial real funds … , the presumed relevant solvency of the clients, and the presumed relevant lack of solvency of the finance broker, are reasons why the finance broker cannot lend any funds as principal if the person seeking to borrow moneys has made an offer to borrow from the clients only".
In my opinion there is no basis for these assertions, which were not supported by any evidence. The mere fact that a lender happens to be a finance broker, whether suburban or otherwise, does not mean that the loan transaction is likely to be some "commercially bizarre" arrangement. Nor is there anything to suggest that a finance broker is less likely to be solvent than one of its clients, least of all in circumstances in which none of the clients has been identified. Rather, it seems to me to have been a matter of complete indifference to the applicants who the lender or lenders might be. It is common cause, at least as matters presently stand, that no lender or lenders was or were ever identified (other than by saying that they would be clients of Rowena) and that no inquiry was ever made by, or on behalf of, the applicants in that respect. The summary of the loan agreement in the prospectus mentions, in this respect, that the lenders "may vary with each Loan Agreement". I have mentioned that each agreement was to be, and was, executed on behalf of the applicants by the Manager, Karri Oak, with the consequence that, even if the applicants had assumed that the lender or lenders would be identified in the loan agreements, the applicants would not necessarily have been aware of who they were until after the agreements had been executed.

Could Rowena sue on the loan agreements as principal?

That brings me to the question, which seems to me to be central to the determination of the appeal, whether there is a triable issue that Rowena is entitled to sue on the loan agreements, notwithstanding that it executed them as agent.
I have mentioned that counsel for the applicants contends that, under the general law of agency, as well as what he described as the "special law" relating to attorneys, an agent contracting for a disclosed, but unidentified and unidentifiable, principal cannot itself be a principal. I have also mentioned that he sought to bolster this contention by reference to Bowstead and Reynolds at 9‑092, where the authors suggest that, in a case in which an agent signs on behalf of an unidentified principal who does not exist, the contract is with the unidentified principal and the agent can only intervene if he or she fits the description, if any, that has been given of the supposed principal. Counsel for the applicants points out that, in this case, the only description was that contained in the prospectus, to the effect that the lenders were to be Rowena's clients.
Before turning to the law in this respect, I should, first, deal with a subsidiary issue that arose between the parties. That issue relates to the question whether the loan agreements were, or were intended to be, deeds. I have mentioned, in this respect, that counsel for the respondent contended that they were not. In my opinion, each loan agreement was, and was intended to be, a deed. That seems to me to be plain from the provisions of cl 12 thereof which, as I have said, expressly records that the "instrument is intended to be a Deed and should take effect accordingly": see, in this respect, Dean and Westham Holdings Pty Ltd v Lloyd (1991) 3 WAR 235 at 251 ‑ 252 per Ipp J. However, for reasons that I shall explain, I am not persuaded that anything turns on this for the purposes of the appeal.
I propose, first, to approach the question on the assumption that each loan agreement was a deed, as seems to me to have been the case. In my opinion, it is arguable, on that assumption, that, because Rowena executed each agreement in its own name (even though it described itself as doing so on behalf of an unidentified principal), it was both personally liable and entitled under it.
Bowstead and Reynolds (at 9‑047) sets out, as Article 104, the following proposition:
"Where an agent is a party to a deed and executes it in his own name, he is personally liable and entitled on it, even when he is described in the deed as acting for and on behalf of a named principal."
The authors go on to say, by way of commentary (at 9-048):
"This rule, which is an application of the strict rules relating to deeds, applies even though he executes it specifically on behalf of the principal: a fortiori if he executes it personally, merely adding descriptive words. To escape liability the agent must purport to execute the deed as the principal's deed … However, by virtue of section 7(1) of the Powers of Attorney Act 1971 … an agent with a power of attorney may execute a deed with his own signature, and it may be that he is exempt from liability if he does so, at least so long as he indicates that he signs in a representative capacity. If so, the rules for deeds are now in these circumstances the same as for other written contracts."
They also point out (at 8‑089) that, prior to the enactment of s 7(1) of the Powers of Attorney Act 1971 (UK) (which is in similar terms to s 84 of the Property Law Act) and its predecessor, s 123(1) of the Law of Property Act 1925 (UK), the rule was that the holder of a power of attorney should exercise it in the principal's name, that is, by signing the principal's name and using his or her seal. The authors go on to say that, otherwise, the principal would not be bound or entitled at common law, although in some cases the agent might personally be bound: Appleton v Binks (1804) 5 East 148. They make the point that it would be more difficult for the agent to show that, in such a case, he or she was entitled to sue. They refer, in support of this last proposition, to Frontin v Small (1726) 2 Ld Raym 1418. In that case, the plaintiff, Martha Frontin, entered into an agreement, in her capacity as attorney of James Frontin, with the defendant Small, by which, in that capacity, she demised to Small a house on terms that he would pay a stipulated rent. The Court held that, if an attorney had a power, by writing, to make leases by indenture, she could not make an indenture in her own name, but only in the name of the person who gave her his warrant. The Court held that the lease was consequently void. However, that case seems to me to turn upon its own circumstances, given that it involved a demise of property in which, presumably, the plaintiff had had no interest of her own. It consequently has no bearing upon the more general rule mentioned by Bowstead and Reynolds at Article 104 (as to which see, also, GE Dal Pont, Law of Agency 2001 at 23.29).
Bowstead and Reynolds cites, in support of Article 104, Plant Engineers (Sales) Ltd v Davis (1969) 113 SJ 484. The very brief report of that case reveals that the defendant, acting expressly as the voluntary liquidator of M Ltd, entered into a deed of assignment by which the plaintiffs were indemnified in respect of claims against them by T Ltd. T Ltd, having obtained judgment against the plaintiffs, issued a writ against the defendant personally for the amount of the judgment debt. The defendant contended that, since he had entered into the assignment not in his personal capacity, but as liquidator, he could not be personally liable under it. In giving judgment for the plaintiffs, Fisher J relied on what he described as an anomalous old rule of common law which, he said, was still a good rule in law. This was to the effect that, in the case of agreements under seal, even though a person entering into such an agreement did so expressly as agent for some other person, or in a particular capacity, the agreement nonetheless created rights and imposed liabilities on the signing party. He mentioned that the rule was stated still to be in existence in Harmer v Armstrong [1934] 1 Ch 65.
This last reference seems to be one to the judgment of Romer LJ in Harmer. In his judgment, Romer LJ distinguished between two principles. The first was that, where a right was held by a trustee for the benefit of certain cestuis que trust, the cestuis que trust may, where justice demands it, themselves enforce the right in an action to which the trustee is made a party, and may do so whether it is an express trust or a constructive trust or whether the right to be enforced is a right arising under an instrument under hand or an instrument under seal (at 90 ‑ 91). The second was the common law principle described by Romer LJ as follows (at 94 ‑ 95):
"Where in a document not under seal A contracts with B, A being the agent for C, C can enforce the contract himself, and B, on the other hand, can enforce the contract against C. But be it observed in that case that when C enforces the contract he does not enforce it in the name of A, his agent; he enforces it as against B in his own interest and the contract is performed by B to C. If the document be under seal that rule does not apply at all, and if it be under seal C cannot sue B, nor can B sue C."
While Article 104, and the cases to which I have referred, relate to named principals whose existence is not in doubt, I can see no reason, at least on a provisional view, why the position should be any different in a case in which the principal has not been identified or does not exist. Indeed, there is something to be said for the proposition, in such a case, that the contracting party should be taken to have executed the agreement personally (more especially if the identity of the contracting party in question is a matter of indifference to the other party). It may be significant, in this case, that, by the concluding sentence of cl 11(b), the applicants agreed to be bound by the terms of the loan agreement once executed by the Manager and Rowena.
That brings me to the position if the loan agreements are not to be construed as deeds (as was initially contended by counsel for Rowena). It seems to me, once again, to be arguable that Rowena is nonetheless entitled to sue on them. In Bowstead and Reynolds (at 9‑085), the following appears as Article 110:
"(1)Where a person professes to contract as agent, whether in writing or orally, and it is shown that he is, in fact, himself the principal, and was acting on his own behalf, he is (perhaps) personally liable on the contract.
(2)Where a person who enters into a contract professedly as an agent is in fact the real principal, he may (perhaps) sue on the contract:
(a)where the identity of the contracting party is not a material element in the making of the contract, provided that he gives notice to the other contracting party, before action, that he is the real principal;
(b)where it has been partly performed or otherwise affirmed by the other contracting party with knowledge that he is the real principal."
In their commentary in respect of this Article, the authors suggest that, while these propositions have slender authority in their support and are difficult to justify on principle, they have appeared in all editions of the book and are probably generally accepted. They refer, in this respect, to Leigh and Sillivan Ltd v Aliakmon Shipping Co Ltd ("The Aliakmon") [1983] 1 Lloyd's Rep 203 at 207 (where counsel accepted the agent's right to sue in such a case) and Fraser v Thames Television Ltd [1984] QB 44 at 54 ‑ 55.
Also, in Schmaltz v Avery (1851) 16 QB 655; 117 ER 1031 (referred to in Bowstead and Reynolds at 9-092), the Court decided that an agent who signed a charterparty containing a cesser clause purportedly as agent for an unidentified principal could show that he was himself the principal and could sue on the contract, on the grounds that it was irrelevant to the third party who contracted on such terms to whom he was liable, and that the agent could say that he was his own principal. This case is criticised in Bowstead and Reynolds. The authors suggest that the true analysis is that the contract is with the unidentified principal and that the agent can only intervene if he fits such description (if any) as having been given of the supposed principal. They also point out that the case arose in the context of a particular form of the cesser clause on which there had been much case law. However, it does arguably lend some support to Rowena's contentions in this case: see also Nicolene Ltd v Simmonds [1953] 1 QB 543 at 551; Harper & Co v Vigers Brothers [1909] 2 KB 549; MacCormac v Bradford [1927] SASR 152; and the discussion in Dal Pont, above, at [23.6].

In this State, in Marzo v Land and Homes (WA) Ltd (1931) 34 WALR 62, the plaintiff company used a printed form of contract for the sale of land to the defendant, the opening words of which were, "We Land and Homes (W.A.) Limited for and on behalf of the owner … ". The plaintiff company in fact owned the land. It sued the defendant for instalments of purchase money in arrears and recovered judgment. The defendant contended, on the appeal, that the contract was unenforceable because it did not mention the name of the vendor, and further that, as the plaintiff was described in the contract as agent, it could not sue as vendor. Northmore ACJ, at 63, summarily rejected both propositions. However, Dwyer J, at 64, was more expansive in his reasoning. He said:
"A person who makes a contract in his own name without disclosing the existence of a principal, or who, though disclosing that he is acting as agent, renders himself personally liable on the contract, is in general entitled to enforce it against the other contracting party. If, in making a contract, he discloses the existence but not the name of the principal on whose behalf he is acting, he is personally liable on the contract to the other contracting party, unless a contrary intention appears. Further, he is personally liable on the contract if it is shown that he is the real principal, or that the principal named by him is non‑existent or incapable of making the contract in question. That statement of the law in Halsbury, vol. 1, pp. 219, 221 and 227, pars. 463, 464 and 473, is confirmed in Bowstead on Agency, 5th ed. Article 121 reads: 'Where a person professes to contract as an agent, whether in writing or verbally, and it is shown that he is, in fact, himself the principal, and was acting on his own behalf, he is personally liable on the contract.' Article 122 reads: 'Where a person professes to contract on behalf of a principal, and the principal is a fictitious or non‑existing person, the person so professing to contract is presumed to have intended to contract personally, unless a contrary intention be proved'. Article 128 reads: 'Where a person who enters into a contract professedly as an agent is in fact the real principal he may sue on the contract if it has been partly performed or otherwise affirmed by the other contracting party with the knowledge that he is the real principal; and (probably) in all cases where the identity of the contracting party is not a material element'.
In this case it is admitted that the identity of the vendor is not a material element; and it is also admitted that the contract has been partly performed (and therefore affirmed) by the purchaser with knowledge that Land and Homes (W.A.) Limited were the real principals. Therefore the points of law fail."
It consequently seems to me that, on the present state of the authorities to which I have referred, there is a triable issue whether or not Rowena is entitled to sue on the loan agreements.

Does the cause of action pleaded in the statement of claim disclose a triable issue?

That leaves the question whether there is sufficient in the statement of claim to disclose a triable issue. In my opinion, there is. While the statement of claim is less than a model of its kind in a case such as the present, it makes the essential contentions that, on the date specified, the loan agreements were entered into between the applicants and Rowena as principal, that the agreements were breached by the applicants by failing to pay what was due under them, that demand was made as required by the agreements and that the demands have not been satisfied. While it does not plead the basis, or alternative bases, upon which Rowena should be treated as a principal contracting party, any deficiency in that respect can be cured by amendment. I do not accept the contention, advanced by counsel for the applicants in this regard, that a cause of action of the kind that I have found to be arguable is "very different" from that which has been pleaded.
I should also deal with the suggestion, made by counsel for the applicants, that, because the Manager executed each loan agreement as attorney for the applicants, Rowena, if entitled to sue at all, should sue the Manager, which had "also" signed pursuant to a power of attorney. That suggestion cannot be right. The Manager, unlike Rowena, executed the agreement pursuant to a valid power of attorney, as agent for persons who were in existence and whose identity was disclosed. In those circumstances it is quite plainly open to Rowena to enforce the agreements against the applicants as principals.
As to the contention, also advanced on behalf of the applicants, that the Manager had no authority to execute, on their behalf, a loan agreement with Rowena as lender, it seems to me to follow, from what I have earlier said, that this issue, too, is reasonably open to argument, particularly having regard to the fact that the identity of the lender appears to have been a matter of no consequence to the applicants.
Similarly, proposition 6 advanced on behalf of the applicants seems to me to be at least debatable. If it is accepted that the identity of the lender was a matter of no significance to the applicants, and if the loan agreements should be treated as if they had been executed by Rowena as principal, and if (which appears to be probable on the evidence as it stands), the loan funds were paid to the Trustee for further disbursement in satisfaction of the applicants' obligation as contemplated by the prospectus, it cannot be said that the Trustee had no authority from the applicants either to receive them or to give a discharge for them on the applicants' behalf.
Finally, I have mentioned that counsel for Rowena contended (although no like contention was advanced before the Master) that the applicants have affirmed each loan agreement, or are estopped from denying the enforceability of each, as a consequence of their subsequent conduct. If there is any such affirmation or estoppel that, of course, would be pleaded only by way of reply to a defence which asserted that there were no valid loan agreements. Given the conclusion at which I have already arrived, it is unnecessary (and perhaps inadvisable) for me to embark upon any analysis of the conduct relied upon in order to see whether there was, at least arguably, an affirmation, with knowledge that Rowena was the real principal, or an estoppel.

Conclusion

In all of the circumstances I am not satisfied that this is a case in which summary judgment should have been entered against Rowena. I

would accordingly exercise my discretion (as to which see Wilson v Metaxas [1989] WAR 285 at 294) by refusing leave to appeal. That conclusion renders it unnecessary for me to deal with submissions which were advanced on behalf of the applicants as regards the appropriate order which should be made for costs in the event that the appeal should succeed. However, I cannot leave that issue without making the comment that the submissions made by counsel for the applicants in respect of it were entirely inappropriate. He suggested, in what can, at best, be described as adjectival language, that the behaviour of Rowena's legal advisers was improper in pursuing an action which they should have known was doomed to fail. As will be apparent from what I have already said, the action is not one which can, at this stage, be described as "doomed" to fail and there is no basis at all for the suggestion that the conduct of Rowena's legal advisers in bringing the action was in any sense improper.

MCLURE JA: I have had the advantage of reading the judgment of Steytler P. I agree that leave to appeal should be refused generally for the reasons he gives. The respondent's statement of claim pleads a cause of action in contract. The applicants rely on general principles of contract law to support their assertion that the claim is untenable. However, the legal position is complicated by the intrusion of rules relating to the relationship of principal and agent. Those rules affect the identification of persons who can sue or be sued on a contract made with a third party. Where a contract is entered into by an agent, there are three possibilities: the agent may be a party, the principal may be a party, or both agent and principal may be parties (or deemed parties): FMB Reynolds Bowstead and Reynolds on Agency (17th ed) 2001 at 9‑002.
Not all of the rules relating to principal and agent can be satisfactorily explained on the basis that they reflect the objectively determined contractual intention. An obvious example is the situation where an agent acts for an undisclosed principal. In that event, either the principal or the agent can sue or be sued on the contract. There are three arguable rules (identified in Bowstead and Reynolds as "Articles") that may, depending on the facts established at trial, entitle the respondent to sue on the loan agreements. They are Articles 109, 110 and, if the loan agreement is a deed, Article 104. Article 109(1) provides:
"At common law, where a person purports to contract on behalf of a principal, and the principal is a fictitious or non‑existent person, the person so purporting to contract may sometimes be regarded as having contracted personally.

On the facts before the Court, there is a probability that there were no lenders (being clients who had agreed to advance money) in existence when Rowena executed the loan agreements.
Article 110(1) provides:
"Where a person professes to contract as agent, whether in writing or orally, and it is shown that he is, in fact, himself the principal, and was acting on his own behalf, he is (perhaps) personally liable on the contract."
Article 110 may overlap with Article 109. Finally, if the loan agreement is a deed, Article 104 may apply. Article 104 provides:
"Where an agent is a party to a deed and executes it in his own name, he is personally liable and entitled on it, even when he is described in the deed as acting for and on behalf of a named principal."
According to GE Dal Pont Law of Agency 2001 (at [23.29]), an agent who executes a deed in his or her own name is personally liable upon it, irrespective of whether or not the agent has disclosed the name or existence of the principal.
Whether or not these Articles correctly state the law is a matter to be determined at trial in light of the facts found at trial concerning the source and circumstances of the lending.