Supreme Court New South Wales Medium Neutral Citation: BT Securities Limited v Lobel [2011] NSWSC 335 Hearing dates: 15 April 2011 Decision date: 21 April 2011 Jurisdiction: Common Law Before: Harrison J Decision: 1. First plaintiff is entitled to summary judgment. 2. Parties to bring in short minutes of order. Catchwords: PRACTICE & PROCEDURE - UCPR 13.1 - summary judgment - where plaintiffs advanced money to the defendant - where defences so obviously untenable that they cannot possibly succeed - summary judgment ordered Legislation Cited: Powers of Attorney Act 2003 Cases Cited: Gibbons v Pozzan [2007] SASC 99; (2007) 209 FLR 233 MYT Engineering Pty Ltd v Mulcon Pty Ltd [1999] HCA 24; (1999) 195 CLR 636 Powell v London and Provincial Bank [1893] 2 Ch 555 Windsor Refrigerator Co. Ltd v Branch Nominees Ltd [1961] Ch 375 Category: Procedural and other rulings Parties: BT Securities Limited (First plaintiff) Westpac Banking Corporation (Second plaintiff) Brent Calvin Lobel (Defendant) Representation: Counsel: J Hynes (Plaintiffs) S Ipp (Defendant) Solicitors: Minter Ellison (Plaintiffs) Watson Mangioni Lawyers Pty Ltd (Defendant) File Number(s): 2010/28280 Judgment 1On 29 August 2006, BT Securities Limited provided financial accommodation to Mr Lobel. They entered into what was described as an Absolute Investment Facility. On 1 February 2010 BTS commenced these proceedings by statement of claim alleging that Mr Lobel had defaulted under the terms of the loan and that he owed BTS $540,559.56. Mr Lobel filed a defence in which he put in issue the fact that the loan application form was not a deed. He also declined to admit that he had executed a power of attorney in favour of the person who purported to exercise the power when executing the loan agreement or, to similar effect, that BTS was thereby authorised to execute it. Mr Lobel maintained that he was not in these circumstances liable to pay BTS any of the money that it had advanced to him and which it now claimed. 2BTS contended that these matters do not amount to a defence to its claim and by its motion filed on 20 January 2011 applied for summary judgment pursuant to UCPR 13.1. For the reasons that appear below, I consider that Mr Lobel has no defence to BTS's claim and that BTS is entitled to the relief that it seeks. Background 3Paragraph 4 of Mr Lobel's defence is as follows: "4 In relation to paragraph 4 of the Statement of Claim, the defendant: (a) admits that on 28 August 2006 he signed a document styled 'EBBIII Absolute Investment Loan Application Form'; (b) says that the Absolute Loan Application Form is not a deed; (c) does not admit that he executed a power of attorney in favour of Clare Munnelly; (d) does not admit that [the] plaintiff was authorised to execute the BT Absolute Investment Loan Facility Agreement dated 29 July 2006 on behalf of the defendant as it purported to do; and (e) otherwise denies the matters pleaded therein." 4By paragraph 5 of the defence Mr Lobel repeated paragraph 4, denied that the Absolute Investment Loan Facility Agreement was validly executed "on his behalf" and denied that he is bound by its terms and conditions. There appears to be no dispute that the sum claimed by BTS was advanced and received by Mr Lobel. No restitutionary claim for the money has so far been made. 5The BT Absolute Investment Loan Facility Agreement contained the following explanation under the heading "Important": "This Facility will be executed by BTS as your attorney under the power of attorney that you grant in its favour. Once BTS signs this Facility, it is binding on you, BTS and BTQ. The date BTS signs is the commencement date of this Facility." 6The Absolute Investment Loan Application Form was completed by Mr Lobel and executed on 28 August 2006. It sought an amount of $500,000. It contained a power of attorney that Mr Lobel granted to "BTS and each authorised officer of BTS separately" as Mr Lobel's attorneys. In particular the power of attorney could not be revoked without BTS's consent, was expressed to be given for valuable consideration and authorised an attorney to do "everything needed (including completing blanks) to execute and deliver the documents listed in Item 1 of the Schedule": see "Section 9: POWER OF ATTORNEY ". Item 1 of the Schedule refers to a "BT Absolute Investment Loan Facility Agreement" between Mr Lobel "(possibly together with other borrowers), BTS and BTQ": see "Section 10: BORROWERS' SIGNING SECTION ". 7Following execution of the application by Mr Lobel, the Facility Agreement was physically signed and accordingly executed by Clare Munnelly, thereby giving effect to the loan. The signature page of the document contains the following words: " Signed, sealed and delivered by the Borrower CLARE MUNNELLY As attorney for Mr Brent Calven Lobel Under the power of attorney dated 28-Aug-2006 Signature of attorney [signed] Clare Munnelly By executing this deed the attorney states that the attorney has received no notice of revocation of the power of attorney." 8Ms Munnelly's authorisation as BTS's attorney is contained in a power of attorney granted by BTS on 30 July 2004, expressly authorising her to execute a broad range of BTS documents relating to BTS's financial products. The Facility Agreement purports in terms to have been executed as a deed. It is apparent that Clare Munnelly herself executed the Facility Agreement in her capacity as a BTS authorised officer on behalf of Mr Lobel under that power of attorney. Mr Lobel's first proposition 9Mr Lobel argued that because the grant by him of the power of attorney to BTS was not under seal, the execution of the Facility Agreement "as a deed" was invalid or inoperative. He relied upon the principle that an authority to execute a deed must itself be given under seal: see Powell v London and Provincial Bank [1893] 2 Ch 555. At 563 of the report, Bowen LJ said: "It is well-known law that an agent cannot execute a deed, or do any part of the execution which makes it a deed, unless he is appointed under seal." 10BTS did not suggest that that principle was in doubt. It did suggest that it was irrelevant to the present case. That is because there was no requirement that the Facility Agreement be a deed, despite the reference to it having been executed as such. Where the instrument in question need not be executed as a deed, formalities such as the appointment of BTS under seal did not need to be satisfied. The agreement therefore operated or took effect according to its terms. 11BTS relied upon MYT Engineering Pty Ltd v Mulcon Pty Ltd [1999] HCA 24; (1999) 195 CLR 636 at [9]: "Section 444B(2) speaks of a company 'execut[ing] the instrument' that has been prepared by the administrator. (That instrument must set out the terms of the deed and must specify the matters identified in s 444A(4).) As was said in a different context by King CJ, '[t]o execute a document is to do what the law requires to be done to give validity to the document'. It follows that what is meant by a company 'executing' the instrument depends, in part, upon whether the instrument must be executed as a deed. If it must, it may then be (as Powell JA pointed out in the Court of Appeal) that the instrument must be executed under seal or, if executed by an agent, that authority to execute the instrument must be given by instrument under seal. But, if the instrument need not be executed as a deed, those formalities need not be satisfied ." [Emphasis added, citations omitted] 12In Gibbons v Pozzan [2007] SASC 99; (2007) 209 FLR 233 at [53] - [55], Duggan J also said this: "[53] There is no challenge to the factual conclusion arrived at by the trial judge that there was evidence external to the document which indicated that KIF intended to be bound by it. In my view, the trial judge's further conclusion that this was an additional reason for finding that the loan agreement takes effect as a binding agreement on all three parties to it is correct. [54] I should add that I see no reason why the loan agreement cannot take effect even if it is not a deed. If the loan agreement is not a deed, it is an agreement under hand. There is no statutory requirement for it to be under seal; there is a clear intention to create a legal relationship; the parties have expressed the terms of their agreement in writing; and the requirement for consideration is met. [55] As the trial judge pointed out, the obligations of the appellant are not made clear under the loan agreement. However, there is no doubt that the agreement is effective in creating the obligation upon KIF to repay the principal sum and interest. This result is achieved whether the document is a deed or an agreement under hand." 13See also Windsor Refrigerator Co. Ltd v Branch Nominees Ltd [1961] Ch 375 at 394-5 per Lord Evershed MR. 14Section 15 of the Powers of Attorney Act 2003 deals with the requirements of an irrevocable power of attorney. Under this provision, an instrument creates an irrevocable power of attorney if, as here, the instrument is expressed to be irrevocable and is given for valuable consideration. Section 43(1) provides that an attorney may, under a power of attorney, execute an instrument with the attorney's own signature and do anything else in the attorney's own name. Section 43(2) provides: "43 Attorney may execute instruments and do other things in own name (1) ... (2) An assurance or instrument executed, or thing done, in accordance with subsection (1) is as effectual in law as if executed or done by the attorney with the signature and seal or, as the case may be, in the name, of the principal." 15Section 3 of the Act provides that an instrument includes a deed. There is nothing in the Act that requires the instrument itself to be a deed. In the case of a loan agreement there is no requirement that it be a deed. If a loan agreement is not a deed, it is an agreement under hand and, subject to any other matters affecting its validity, it will be enforceable as such: see, for example, Gibbons v Pozzan . 16Subject only to his second argument, Mr Lobel did not contend that the Facility Agreement did not, or could not, otherwise take effect according to its terms. I consider that it does so. I reject Mr Lobel's argument that the claim by BTS fails because BTS was not appointed as his attorney under seal. Mr Lobel's second proposition 17Mr Lobel also challenged Ms Munnelly's authority to execute an agreement that binds him. He contended that he did not authorise her to do so and contested the validity or enforceability of the Facility Agreement against him at the suit of BTS in the circumstances. 18By the 30 July 2004 instrument, BTS appointed a series of nominated persons as its attorney so that any one of them was authorised in the name of BTS to "do, perform and execute all or any of the acts, deeds and documents" referred to in a schedule attached to the grant. Clare Munnelly was one of the persons referred to in the schedule. The documents referred to were specified. They included the following reference: "For the purposes of this schedule ... 'BT Margin Lending Documents' means the BT Margin Loan Application booklet or any equivalent or replacement document(s) or any application form in relation to a BT Margin Loan or any document which the attorney considers fulfils the functions of any of those documents or part of them or any documents contemplated in or related to any of those documents." 19Under the heading "General", the following also appears in the schedule: "1. Any loan agreement, mortgage or charge with any person named as the borrower or third party mortgagor in a form or version which generally replaces one or more of the documents referred to above. ***** 9. Any document which the relevant attorney may deem necessary, advisable or incidental in connection with any other documents or any transaction contemplated by any other document." 20In these circumstances I have some considerable difficulty with Mr Lobel's contentions. Ms Munnelly's authority to execute the documents in question on behalf of BTS, and the description of the documents that she was authorised in that capacity to execute, are obvious. I am unable to discern any viable challenge to the execution of the loan agreement. Ms Munnelly was clearly authorised to execute certain documents as BTS's attorney. The loan agreement that she executed fell squarely within the description of documents that she was, by the power appointing her, authorised on its behalf to execute. Conclusion 21Mr Lobel has no defence to BTS's claim. There is in my opinion no prospect of the defences that he relies upon succeeding. Mr Lobel does not assert that any defence other than those I have considered is available. The defences asserted are so obviously untenable that they cannot possibly succeed. BTS is entitled to judgment. 22Some issue concerning the precise quantum of the sums claimed by BTS was faintly raised at the hearing before me. I will in the circumstances therefore invite the parties to bring in short minutes of order to give effect to these reasons. I will also hear the parties then on the question of costs if required. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 27 April 2011