Aotearoa Kiwifruit Export Limited v ANZ National Bank Ltd HC Tauranga CIV 2011-470-000697

[2011] NZHC 1437

IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

CIV 2011-470-000697

BETWEEN  AOTEAROA KIWIFRUIT EXPORT LIMITED

Applicant

ANDANZ NATIONAL BANK LTD Respondent

Hearing:         4 October 2011

Appearances: D P Weaver for the Applicant

I J Thain for the Respondent

Judgment:      4 October 2011

Reasons:        7 October 2011

ORAL JUDGMENT OF ASSOCIATE JUDGE CHRISTIANSEN

Solicitors/Counsel:

D Weaver, Barrister, Tauranga –  [email protected]

I Thain, DLA Phillips Fox, Auckland –  [email protected] / [email protected]

AOTEAROA KIWIFRUIT EXPORT LIMITED V ANZ NATIONAL BANK LTD HC TAU CIV 2011-470-

000697 4 October 2011

[1]      Decision

[2]      At  the  conclusion  of  counsels‟ submissions  I  informed  counsel  that  the applicant‟s (AKE) application to set aside the respondent‟s (ANZ) statutory demand was dismissed.

[3]      I  informed  counsel  that  the  application  focussed  upon  claims  by AKE‟s director Mr Norman that he never intended AKE to be a guarantor for his company‟s Maheatataka Coolpack Limited (MCL) borrowing from ANZ.  Mr Norman says he did not authorise his daughter to sign a guarantee on behalf of AKE.

[4]      I  said  that  in  fact  Mr  Thomas  had  arranged  for  his  daughter  (hereafter referred to as Ms Norman) to be appointed as his alternate director of both MCL and AKE; that he gave her unfettered authority to do what she did namely to sign on MCL‟s behalf as borrower and on AKE‟s behalf as guarantor.  I noted that he having given notice as director of both companies of his appointment of Ms Norman as an alternate, the only document signed on behalf of AKE was the deed of guarantee.

[5]      I said in response to AKE‟s claims of changes having been made to the signature page of the guarantee and other documents post-execution by Ms Norman that those changes were not corrections but merely additions by way of explanation about on whose behalf Ms Norman was in her different capacities signing.

[6]      Concerning AKE‟s  issue with the fact that the Ms Norman‟ consent to her appointment as an alternate director was not signed until the day following her execution of documents as a director, I noted that the signing of all the documents concerned was part of a single process which was set up to involve Ms Norman, in her father‟s absence overseas, for the purpose of securing ANZ‟s loan funds on a short notice basis.

[7]      I  said  in  response  to  the  submissions  of AKE‟s counsel  that  ANZ  had knowledge of issues affecting Ms Norman‟ capacity to sign as a director that s 18 of the  Companies  Act  1993  (the  Act)  did  not  assist  it.    Referring  to  counsel‟s

submission that s 158 did not apply because Ms Norman did not sign a consent to act as a director until the day after the security documents were signed, I said any perceived lack of authority to sign the documents amounted to a defect only and was not a nullity.  My conclusion of these arguments was that a proper interpretation of ss

18 and 158 operated to defeat these claims of a technical nature advanced on behalf of AKE.

[8]      I noted further that a solicitor‟s certificate confirmed that a full explanation of

all documents had been given to Ms Norman prior to her signing them.

[9]      In that outcome I dismissed AKE‟s application.  I then heard Mr Thain upon ANZ‟s  application for an immediate order for liquidation pursuant to ss 291(1)(b) and 241(4) of the Companies Act 1993.  I held the clear evidence, even from AKE itself, was that it was unable to pay its debts and was therefore insolvent.  I noted AKE‟s concern for funds held in ANZ accounts which AKE says had been received and were held by it in trust on behalf of kiwifruit growers to whom it says those funds were due.

[10]     AKE‟s position notwithstanding I held that the authority vested in a liquidator pursuant to the provisions of the Companies Act ensured that due deference would be given to claims of a trust over funds held in AKE‟s name.  I further held there was no purpose in forestalling an order for liquidation and then made an order appointing Mr K S Tompson as liquidator of AKE and noted that his appointment was to be effective when the Court received an original of his consent to appointment.

[11]     I noted the time of the order of liquidation at 1:07pm.

Reasons for judgment

[12]     On 22 August 2011 ANZ served a statutory demand upon AKE demanding payment of $1,281,161.43.

[13]     The claim was in respect of the AKE‟s guarantee of a loan by from ANZ to

MCL.  MCL is now in receivership and in liquidation.

Application to set aside statutory demand

[14]     AKE applies to set the statutory demand aside.  It says:

1.The guarantee was executed by Ms Norman who at the time the guarantee was executed did not have the authority to sign the guarantee document.

2.ANZ did not properly and fairly advise AKE of the loan arrangements.

3.The guarantee document was altered after it had been executed by Ms Norman.

4.Ms Norman signed as alternate director but at that time she had not herself consented to her appointment as a director and accordingly had no express authority to bind AKE to the guarantee.

AKE’s evidence

[15]     Mr  and  Ms  Norman  and  have  both  filed  affidavits  in  support  of  the application.  That from Mr Norman notes he is a director of AKE and that he was also a director of MCL at the time of the loan by ANZ.

[16]     He deposes he was notified by ANZ on 23 June 2008 that the loan had been approved.  He says he was due in Taiwan on business at the time the loan was to be uplifted and was informed he would have to organise a power of attorney so that the documents could be signed on behalf of AKE and MCL.

[17]     He instructed  Mr  Kirkland  of  Fenton  McFadden  Lawyers, Te  Puke  who prepared a notices of appointment for an alternate director in respect of both AKE and MCL.  The lawyer duly prepared those and they were signed on 7 July 2008 by Mr Norman.  Mr Norman deposes that Ms Norman was appointed alternate director of AKE to assist and carryout daily business operations.  He says he did not intend

and nor was he aware that AKE was to be a guarantor for the loan to MCL.  He says he did not learn that AKE had guaranteed MCL‟s loan until after MCL was placed into receivership in July 2011. Thereupon he requested copies of relevant documents from his Te Puke solicitors.   In addition to the notices of appointment of alternate director he was provided with a copy of the consent to appointment.

[18]     He says he was astounded to discover that the guarantee had been signed by his daughter as director of AKE.  He said he had given no authorisation for such a guarantee to be given and was not aware prior to appointing his daughter as an alternate director that ANZ would require a guarantee from AKE.  He said he would not have agreed to such a guarantee being given.

[19]     He notes that whilst he signed a notice of appointment of alternative director on 7 July 2008, the consent to appointment was not signed by his daughter until 17

July 2008 i.e. the day after the guarantee was executed.

[20]     Ms  Norman  confirms  her  father‟s  account.     She  recalls  that  in  the arrangements for her father‟s travel to Taiwan he had asked her to act on his behalf for MCL and AKE.   She said she understood she was to approve daily business operations in respect of each company on behalf of her father.  At the time she was asked to act as an alternate director she was not aware that would involve executing documents in respect of a loan.

[21]     On 15 July 2008 she said she was contacted by „Trevor‟ [Mr Owen], the manager of the respondent‟s Rotorua branch.  She said he informed her that she was to go to the companies‟ solicitor‟s office to sign documents on behalf of her father. She recalls being aware it was in relation to finance for MCL.   At the lawyer‟s offices she did not read the document in detail and assumed her father had seen it and was happy with it being signed by her.  She signed on behalf of MCL and AKE. She says she did not understand she was executing guarantee documents on behalf of anyone.

[22]     Having recently looked at the pages of the guarantee she signed, she says some alterations had been made to it after she signed it. Those include:

(a)      Where her father‟s name appeared in the guarantee document, the notation “by his attorney Tawhai Lesley Norman” has been added;

(b)Where  she  signed  on  behalf  of  MCL the  words  “Tawhai  Lesley Norman as alternate director” had been added and her father‟s typed name has been crossed out.

(c)      Where she has signed as director of AKE the words „Tawhai Lesley Norman as alternate director” had been added and her father‟s typed name was crossed out.

[23]     She  says  those  amendments  were  not  made  at  the  time  she  signed  the document.

[24]     She says when she signed she was not aware her father had not seen the document.   She signed under the assumption ANZ had provided her father with a copy of the entire agreement.

[25]     In support of her recollection she has looked at the documents following a discussion with her father about what happened.   Initially the documents provided the names of Mr Norman signing for himself, for MCL and for AKE as a director. Since, she has seen a copy of the guarantee and other documents which show the alterations  to  which  she  has  referred.    As  each  copy  bears  her  signature  she concludes there has been a change of the name of the person as signor.

[26]     She recalls it was the day after she signed those documents that she was asked to sign a consent to appointment, as a copy of the relevant documents show.

[27]     In  response  affidavits  Mr  Norman  deposes  that AKE  would  never  have offered to be a guarantor for the reason it only ever holds money on trust for growers and has no substantial assets that could be used as security for a loan.  Ms Norman says her engagement as an alternate director was to run the operations of MCL and AKE in order to make payments due to growers.

Opposition to application

[28]     In its notice of opposition ANZ asserts:

(a)      The guarantee was executed by Ms Norman who held herself out to be a director of AKE at the time and as having the authority to execute the guarantee on its behalf.

(b)      ANZ   had   no   knowledge   of   any   deficiency   in   Ms   Norman‟s

appointment as director or having authority to act.

(c)       The  execution  of  the  guarantee  was  valid  even  if  Ms  Norman‟s

appointment as director was invalid.

(d)Through  its  solicitor  AKE  confirmed  in  the  attestation  on  the guarantee and in its solicitor‟s  certificate provided on 16 July 2008 that he explained the nature and effect of the guarantee to AKE and that AKE acknowledged its understanding and agreement to its terms.

(e)       In any event AKE (through Ms Norman and/or Mr Norman) was

aware of ANZ‟s requirement for a guarantee, and agreed to provide it.

ANZ’s evidence

[29]     ANZ‟s  case  is  supported  by  the  affidavit  of  Mr  McGinley  a  chartered accountant and assistant manager in the commercial lending services division of ANZ. He attaches a number of documents. They include:

(a)       Facsimile, 3 July 2008 from ANZ to Fenton McFadden solicitors

(i)It is dated 3 July 2008.  It refers to MCL as customer and notes the names of AKE and Mr Norman as security provider(s)/guarantor(s).   [It predates Mr Norman‟s departure overseas, for the notices of Ms Norman‟s appointment as an alternate, were signed on 7 July 2009.]

(ii)The letter informed the solicitors they were to act for ANZ and of ANZ‟s understanding that the solicitors were also be acting on behalf of Mr Norman and AKE and were to advise ANZ if this was not the case.

(iii)The letter enclosed various documents including the form of guarantee.   It required the solicitors to explain the meaning and effect of all the documents and to ensure all documents were signed and that attention was drawn to any security disclosure clauses.

(iv)It  notes  ANZ  required  a  cross  guarantee  from  MCL,  Mr Norman and AKE guaranteeing the obligations of MCL, Mr Norman and AKE.    It  directed the solicitors  to  ensure the guarantor signed the guarantee and that the guarantor obtained legal advice from the solicitor and for the  guarantor to be advised as to the importance of obtaining independent legal advice i.e. independent of any lawyer advising ANZ.

(b)      Copy of signed loan agreement

(i)It  referred  to  a  loan  of  $1.2m  to  MCL  and  noted  the guarantors‟ names  as  AKE  and  Mr  Norman.    It  bore  the signature of Ms Norman as signing on behalf of MCL pursuant to a resolution of that company on 16 July 2008.

(ii)Additional copies (provided to ANZ on 17 July2008) of pages bearing Ms Norman‟s signature note below the signature of Ms Norman handwritten words showing that in the case of MCL  and  AKE  the  signatures  were  provided  by  „Tawhai Lesley Norman – alternate director‟, and in the case where the signature of Mr Norman was required there is noted in handwriting „by his attorney Tawhai Lesley Norman‟.

(iii)Also  attached  are  copies  of  the  notices  of  appointment  of alternate  director  of  both  AKE  and  MCL  signed  by  Mr Norman on 7 July 2008 which appoint Ms Norman:

... to be an alternate director in my place during any absence overseas with full power during my absence of mine from meetings or any other business of the company to act as a director in my place including the right  to  be  counted  in  the  quorum,  to  vote  at  any meeting of directors and to otherwise do or exercise all or any acts, powers or things which I could or might have done if personally present.

(c)       Copy of the guarantee document signed by Ms Norman on behalf of

Mr Norman, MCL and AKE

It is dated 16 July 2008 and also shows, in copies of the signature pages provided to ANZ the following day, the handwritten additions of Mr Kirkland showing the capacity Ms Norman which she signed. Also attached is a copy of the Power of Attorney dated 18 November

1999 authorising Ms Norman to sign on behalf of her father in respect

of his personal guarantee of MCL‟s borrowing.

(d)      A Land Information form

Confirming the registration of a mortgage in favour of ANZ over MCL‟s Te Puke property.  It was signed by Ms Norman and confirms she was duly authorised to do so by MCL.  The document refers to the guarantee also being a document covered under execution of the director‟s certificate.

(e)       The director’s certificate on behalf of AKE

It bears Ms Norman‟s signature after her name and the description of her position as alternate director.  It refers to an unlimited guarantee of the documents covered under execution of the director‟s certificate.

(f)       Solicitor’s certificate dated 16 July 2008

It bears the signature of Mr Kirkland.

It certifies and irrevocably undertakes to provide to ANZ valid and enforceable securities, deeds and agreements; that each party has validly executed those documents to which they are a party; that there was no limitation on the contractual capacity of any signatory; and that  the  nature  effect  and  implications  of  the  documents  were explained to the signatory who appeared to have understood that explanation.

(g)      Facsimile, ANZ to Fenton McFadden dated 17 July 2008

It confirms that on that date the loan funds were paid to MCL. It states:

We refer to your email of even date and enclose:

1.Signing pages of the documents naming Tawhai Norman and under what capacity she is signing;

2.        Consent to appointment.

[30]     Evidence for ANZ was given also by a Mr Owen.  He said he dealt directly with Mr Norman in mid-2008 in relation to the loan request by MCL.

[31]     Referring to Mr Norman‟s assertions that he did not intend nor was aware that AKE was to be a guarantor for the loan to MCL and that he was not aware that AKE had guaranteed MCL‟s debt until following the appointment of receivers, Mr Owen says he rejects those assertions.

[32]     He says he has a clear recollection about MCL‟s loan.  He feels certain Mr Norman was aware of and agreed to ANZ‟s requirement that AKE provide a guarantee for the loan prior to the documents in question being signed.

[33]     He recalls MCL urgently sought a loan in the sum of $1.2m to refinance its borrowings.   Mr Norman placed urgency on this because he said MCL‟s  existing loan was due to be rolled over in which case substantial fees (possibly in the tens of thousands of dollars) would have been charged.

[34]     Mr Owen recalls meeting Mr Norman at MCL‟s premises several times to discuss the loan request.  In the discussions MCL‟s role and its relationship with the applicant was discussed.  It was apparent that MCL and the applicant and „a grower pool‟ operated as a group – for the growing, processing marketing and selling of kiwi fruit.  Further these relationships were directed and controlled by Mr Norman who effectively had majority shareholdings in both companies.

[35]     In the outcome of his discussions with Mr Norman, Mr Owen prepared a Credit Application.    It  referred  to  the  inter  relationship  of MCL and AKE  and referred to borrowings being secured by a cross guarantee together with a registered mortgage over MCL‟s commercial property.

[36]     Mr Owen recalls Mr Norman advising him that his daughter had authority to execute relevant documentation on behalf of himself, AKE and MCL.

Principles

[37] An applicant to set aside a statutory demand must show there is a genuine and substantial dispute about whether it is liable for the amount claimed [1]. Section

290(1) of the Act provides that the Court be satisfied there is a substantial dispute or there appears to be a counterclaim, set off or cross demand available.

[1] Taxi Trucks Ltd v Nicholson [1989] 2 NZLR 297, 299.

[38]     In this case there is an apparent level of factual dispute between ANZ‟s claims that the documents on their face have clearly vested authority in Ms Norman to act on behalf of AKE and MCL.  The evidence of Mr Norman and Ms Norman is that not only was there a limitation to that authority, in fact when Ms Norman purported  to  commit AKE  to  the  guarantee,  she  had  no  authority  to  bind  that

company because she had not at the time been appointed a director because she had

not consented to that appointment in writing, as s 152 of the Act requires her to have done.

Company Act provisions

[39]     Section 152 provides:

Director’s consent required

A person must not be appointed a director of a company unless he or she has consented in writing to be a director and certified that he or she is not disqualified from being appointed or holding office as a director of a company.

[40]     Section 18 provides:

Dealings between company and other persons

(1)       A company or a guarantor of an obligation of a company may not assert against a person dealing with the company or with a person who has acquired property, rights or interests from the company that

–

(a)      this Act or the constitution of the company has not been complied with:

...

(c)      a person held out by the company as a director, employee, or agent of the company –

(i)       has not been duly appointed; or

(ii)      does not have authority to exercise a power which a director,   employee,   or   agent   of   the   company carrying on business of the kind carried on by the company customarily has authority to exercise:

...

unless the person has, or ought to have, by virtue of his or her position with or relationship to the company, knowledge of the matters referred to in any of paragraphs (a), (b), (c), (d), or (e), as the case may be.

[41]     Section 158 provides:

Validity of director’s acts

The acts of a person as a director are valid even though –

(a)       the person‟s appointment was defective; or

(b)      the person is not qualified for appointment.

Overview of statutory provisions

[42]     Agents including directors of a company may bind a company to the extent they have actual or apparent authority to do so.  Under s 152 of the Act a person may not be appointed as a director without first consenting to the appointment in writing. In this case this was also specified in paragraph 19.3 of AKE‟s constitution.

[43]     The settled law is that third parties are not affected by the invalidity of a director‟s appointment or irregularities which may take place in the internal management of the company Mahony v East Holyford Mining Co [2]. This proposition is known as the “indoor management rule”.

[2] 1875 LR 7 HL869.

[44]     The Courts have consistently held the presumption of validity and regularity cannot be relied upon by those who have notice of those and who have been put on enquiry Cromwell Corp Ltd v Sofrana Immobilier (NZ) Ltd [3].

[3] Court of Appeal 10 September 1991.

[45]     If a third party has knowledge of an issue relating to the validity of the documents or irregularities then the indoor management rule cannot be relied upon. Section 18 defines the indoor management rule and prevents a company claiming a director has not been validly appointed or does not have appropriate authority unless the party relying upon that authority knew or ought to have known by virtue of its position with or relationship to the company, of the irregularity or lack of authority.

The case for AKE

[46]     Having on 17 July 2008 received a copy of the documents signed by Ms Norman on 16 July 2008, ANZ faxed Mr Kirkland querying Ms Norman‟s capacity to sign those documents and requested a copy of her consent to appointment as a director of AKE.  Mr Weaver submits that by that query ANZ was on notice about

Ms Norman‟s lack of capacity/authority to execute the guarantee.   Further that in

providing ANZ with copies of amended signing pages indicating the capacity which Ms Norman signed, ANZ had cause to suspect an irregularity with Ms Norman‟s capacity and her appointment as a director.  Mr Weaver submits that thereby ANZ had knowledge, or ought to have had knowledge of defects in the guarantee and therefore ANZ cannot rely on the internal management rule and the proviso in s

18(1) of the Act therefore applied.

[47]     Mr Weaver submitted that the „apparently authority‟ provision in s 18 could only apply if the representation that Ms Norman had authority to sign the guarantee was made by a person who had that authority and if ANZ was induced by the representation to accept the guarantee she signed.

[48]     Mr Weaver submits ANZ‟s email to Mr Kirkland on 17 July indicates its concerns, suspicion even, that Ms Thomas did not have the capacity or authority when  she signed  the  guarantee documents,  despite which ANZ now asserts  the validity of those documents.

[49]     Moreover AKE relies upon Mr Norman‟s claims that he never made any representation to ANZ that AKE would guarantee MCL‟s loan, or that Ms Norman had authority to do so.  It points to the fact of Mr Norman‟s claims he never saw the loan offer document prior to the guarantee being executed.   It says there is no evidence AKE sighted Mr Owen‟s  credit application form at any time prior to it being adduced in evidence for this hearing.

[50]     Also, there is Ms Norman‟s evidence of claim of a limited purpose for which

her appointment as an alternate director was provided.

[51]     Finally, and conclusively from AKE‟s point of view is that Ms Norman had not consented to her appointment as a director and therefore had no authority to sign the guarantee ANZ now relies upon in this proceeding.

[52]     AKE‟s position is that the evidence of Mr and Ms Norman gives credence to claims of a lack of capacity or authority in Ms Norman to sign; that challenges to the quality of the affidavit evidence of Mr and Ms Norman ought properly be left to trial.

Considerations

[53]     There are two key considerations:

(a)      Where  there  is  an  arguable  case  that ANZ  cannot  rely  upon  the guarantee document because they were aware or ought to have been aware of Ms Norman‟s lack of capacity to sign them.

(b)The  guarantee  document  is  invalid  because  Ms  Norman  had  not already consented in writing to her appointment as a director when those documents including the guarantee had been signed.

[54]     The  first  element  concerns  the  proviso  to  s  18.     The  second,  to  an interpretation of the provisions of s 158.

[55]     AKE through Mr Norman claims Ms Norman was not authorised to sign any guarantees.   That suggests an element of miscommunication between Mr Norman Ms Norman.  However there is no evidence ANZ knew or could have known of any possible miscommunication.  Suspicion only supports any inference by its email to Mr Kirkland on 17 July 2008 that there was any query regarding the authority by which Ms Norman signed the documents.

[56]     In my view the handwriting provided by Mr Kirkland to those signature pages  sent  the  day  after  the  documents  were  signed,  were  nothing  more  than additions by way of explanation to satisfy ANZ about the authority by which Ms Norman signed instead of her father.  They were just that, i.e. additions.  They were not alterations for there is no doubt that in each case the documents bore Ms Norman‟s signature.

[57]     In my conclusion no proper basis lies for a claim to invoke the proviso to s

18(1) to exclude the indoor management rule that the documents ought to be treated as on their face they appear.

[58]     Rather this case is really about s 158 of the Act. AKE‟s position is that at the

time the documents were signed Ms Norman had not been appointed a director; that

she had no authority to sign and that lack of authority nullified any capacity for her to sign.  Therefore it is a matter not about a question of a defect in Ms Norman‟s appointment as an alternate director; rather it is about the fact that she was not at the time appointed at all i.e. the guarantee was therefore a nullity insofar as it purported to bind AKE at all.

[59]     In my view this case is not about there being no appointment at all.  Rather that by the claim that Ms Norman had not signed her consent to appointment before executing the documents her lack of consent amounted to no more than a defect for which s 158 provides validation of her signature on AKE‟s behalf to the guarantee.

[60]     Section 158 operates to provide validation of the acts of a person even if their appointment was defective.  Therefore if an action is tainted by a defect it remains valid nonetheless.  It is equally so that if there is no appointment at all as a director then any action by that person purporting to be so is invalid as having been done by a person without any genuine authority to act at all.  In the former case there has been a purported appointment.  In the latter, there has been no appointment at all.

[61]     I  consider  that  our  case  is  not  a  case  about  there  having  been  „no appointment‟. At best I think the failure to sign the consent until the following day is a matter of defect.

[62]     Mr Norman did his best to appoint Ms Norman, in circumstances when he knew he would be overseas at a time when documents were required to complete loan arrangements with ANZ.  He signed notices of appointment of Ms Norman as an alternate director, after the loan application had been approved and before he travelled overseas.   He made those arrangements because he would be overseas. Notices of appointment to Ms Norman as an alternate director were made without limitation at all and certainly not within those constraints that both he and Ms Norman claim were imposed.

[63]     Further, Ms Norman knew she was to be appointed, that she was to sign documents and went to the lawyer‟s office to do that and that she signed where indicated a director should.

[64]     Although  not  formally  until  the  following  day,  clearly  before  then  she consented to her appointment as a director.  The only formality not observed was a requirement provided by s 152 and, of that provision the section does not say that

„unless‟ a person signs a consent, then they cannot be or are not a director.  Clearly as s 18 provides, they can be.  The consequences of a breach of s 152 are to invoke the penalty provisions under the Companies Act.  Also s 152 was designed among other reasons to avoid people being appointed a director without their knowledge.

[65]     It is not questioned that Mr Norman had the power to appoint Ms Norman, as he did.  The terms of that appointment are, as previously noted, wide and unlimited i.e. full power and authority was conveyed.

[66]     I accept the submission of Mr Thain that in the circumstances ANZ could not have been on notice of concerns regarding Ms Norman‟s appointment or her power to act.  She said the appointment was for limited purposes i.e. to conduct day to day business.  However, she went to Mr Kirkland‟s office knowing that she was signing documents in connection with borrowings from ANZ.  If, as she claims, her authority on behalf of AKE was limited, then why did she not say anything of this when she signed?

[67]     Mr  Norman‟s  claims  of  him  having  conveyed  limited  authority  to  Ms Norman to act need be compared to his statement in paragraph 4 of his first affidavit where he says:

I was notified by the ANZ Bank that the loan had been approved.  At that time, I was in Taiwan on business matters and I was told that I would have to organise a power of attorney so that documents could be signed on behalf of AKE and [MCL].

[68]     Ms Norman‟s own affidavit is, I think, unhelpful.  She referred to the fact that she was told her father had seen the loan documentation.  She does not say when or by whom.  She does not say that she attempted to contact her father for his authority to sign documents in circumstances when, she claimed she had authority only to attend  to  the day to  day business  of the company.    She does  not  deny having consented to her appointment as an alternate director.

[69]     Arguably her signature to the security documents did provide the consent to her  appointment  as  director,  as  s  152  of  the Act  requires.    The Act  unlike  its predecessor does not require written consent to appointment in a prescribed form. As earlier noted s 152 is designed to protect a person appointed to be a director, not third parties affected by that appointment.

[70]     AKE‟s position relies in part upon claims that because Mr Norman did not authorise his daughter to sign the guarantee and would not have in any case, that that should have some bearing upon the fact that she committed AKE as a guarantor. But, having been invested with full authority by her father to do so she, without limitation upon that authority committed AKE in circumstances that Mr Norman is not  capable  of  changing.    Further  that  commitment  made  in  consideration  of receiving the loan monies was conducted through services of AKE‟s own solicitors who were for document signing purposes required by ANZ to advise if there was any impediment with their acting in the interests of AKE.   None was advised.   The subsequent solicitor‟s certificate confirmed all proper advice had been given.  The fact is that nothing in the way of a legal challenge arises from the claims of Mr Norman and Ms Norman of a misunderstanding about what Ms Norman was supposed to do with the authority vested in her by her father.

Summary

[71]     No genuinely arguable defence has been raised upon AKE‟s application.  No

proper reason prevails to delay an order for immediate liquidation.

Associate Judge Christiansen