Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Australia and New Zealand Banking Group Ltd v Frenmast Pty Ltd [2013] NSWCA 459 Hearing dates: 4 September 2013 Decision date: 19 December 2013 Before: Macfarlan JA at [1]; Meagher JA at [2]; Barrett JA at [50] Decision: (1) Appeal allowed. (2) Orders 2, 4, 5, 6, 7 and 8 made by Adams J on 22 April 2013 be set aside. (3) Order that order 3 made by Adams J on 22 April 2013 be varied by omitting the reference to "paragraphs 5 & 7" and substituting therefor "paragraph 5". (4) Judgment for the appellant against the respondent in the sum of $1,724,498.50 (being $1,697,994.60 together with interest from 5 September to 20 December 2013 at a daily rate of $247.70). (5) Order the respondent to pay the appellant's costs of the appeal. [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] Catchwords: CORPORATIONS - management and administration - Corporations Act 2001 (Cth), ss 128, 129 - guarantee executed by respondent company signed by two directors - signature of one director forged - whether appellant able to rely on assumption in s 129(5) that guarantee signed in accordance with s 127(1)(a) - whether appellant had "dealings" with respondent company - whether person dealing on behalf of company required to have actual or ostensible authority to enter into transaction which is the subject of the assumption Legislation Cited: Companies (NSW) Code, s 68A Companies (Vic) Code, s 68A Corporations Act 2001 (Cth), ss 126, 127, 128, 129 Cases Cited: Armagas Ltd v Mundogas SA [1986] 1 AC 717 Brick and Pipe Industries Ltd v Occidental Life Nominees Pty Ltd [1992] 2 VR 279 Crabtree-Vickers Pty Ltd v Australian Direct Mail Advertising & Addressing Company Pty Ltd [1975] HCA 49; 133 CLR 72 Freeman & Lockyer v Buckhurst Park Properties (Magnal) Ltd [1964] 2 QB 480 Lysaght Bros & Co Ltd v Falk [1905] HCA 7; 2 CLR 421 Maronis Holdings Ltd v Nippon Credit Australia Pty Ltd [2001] NSWSC 448; 38 ACSR 404 Northside Developments Pty Ltd v Registrar-General [1990] HCA 32; 170 CLR 146 Pico Holdings Inc v Wave Vistas Pty Ltd [2005] HCA 13; 79 ALJR 825 Soyfer v Earlmaze [2000] NSWSC 1068 Story v Advance Bank Australia Ltd (1993) 31 NSWLR 722 Category: Principal judgment Parties: Australia and New Zealand Banking Group Ltd (Appellant) Frenmast Pty Ltd (Respondent) Representation: Counsel: D L Cook (Appellant) R W Tregenza, P Macarounas (Respondent) Solicitors: Norton Rose Australia (Appellant) Licardy & Company, Edgecliff (Respondent) File Number(s): 2012/365548 Decision under appeal Jurisdiction: 9111 Citation: ANZ Banking Group Ltd v Tiricovski [2012] NSWSC 1304 Date of Decision: 2012-10-28 00:00:00 Before: Adams J File Number(s): 2010/137578 Judgment 1MACFARLAN JA: I agree with the reasons and proposed orders of Meagher JA. I would only add, consistently with what his Honour says in [37], and for the reasons he there gives, that "the nature of the transaction was not such as to excite a reasonable apprehension [on the part of the bank] that the transaction [was] entered into for purposes apparently unrelated to the Company's business" (Northside Developments Pty Ltd v Registrar-General [1990] HCA 32; 170 CLR 146 at 160 - 161; Maronis Holdings Ltd v Nippon Credit Australia Pty Ltd [2001] NSWSC 448; 38 ACSR 404 at [447] - [449]). As a result, the evidence here did not indicate that ANZ was on notice of Robert's lack of authority. 2MEAGHER JA: On or after 3 September 2008 a guarantee was executed in favour of the appellant (ANZ). The guarantee purported to be signed for the respondent company (Frenmast) in accordance with s 127(1)(a) or (b) of the Corporations Act 2001 (Cth) (the Act) by Robert Tiricovski, a director and the company secretary, and by Vlado Tiricovski, a director. The signature of Vlado was forged. In proceedings brought to enforce the guarantee, ANZ relied upon the assumption under s 129(5) of the Act that the document had been duly executed. Section 128(1) provides that a person is entitled to make the assumptions in s 129 "in relation to dealings with a company". 3The primary judge (Adams J) held that ANZ was not entitled to rely upon an assumption that the guarantee had been duly executed in accordance with s 127(1)(a) or (b) because it had not had any relevant dealings with the company in relation to the procuring of the guarantee: ANZ Banking Group Ltd v Tiricovski [2012] NSWSC 1304. His Honour so concluded for two reasons. The first was that there was no evidence as to any negotiation or communication or other step which might have constituted a dealing between ANZ and Frenmast prior to the execution of the guarantee: [43]. The second was that if there was any dealing between ANZ and Robert Tiricovski, it was not a relevant dealing with Frenmast because, although he was a director of Frenmast, Robert Tiricovski did not have actual or ostensible authority to give the guarantee on its behalf: [44], [47], [50]. Issues in the appeal 4Although there are 18 grounds of appeal relied on by the amended notice of appeal, there are in substance only two issues in the appeal. The first is whether ANZ had dealings with Frenmast "concerning the giving of the 2008 guarantee". Specifically, the questions are whether there were any communications, negotiations or other steps, answering the description "dealings", between ANZ and Robert Tiricovski concerning the giving of that guarantee in which he was at least purporting to act on behalf of the company; and, if so, whether he had actual or ostensible authority to engage in those communications or negotiations. Those questions are raised by grounds of appeal 2, 3, 4, 5, 6 and 9. 5The second issue concerns the construction of s 128(1) of the Act. It is whether the expression "dealings with a company" describes any transaction or negotiation between someone acting on behalf of the company with actual or apparent authority to do so or whether it only describes dealings with someone who has actual or ostensible authority to enter into the transaction to which the dealings are said to relate. That issue is raised by grounds of appeal 7, 8 and 10. 6Ground of appeal 1, which is that on its proper construction s 128(1) did not require that there be any relevant dealings with the company, was not pressed in oral argument. Ground of appeal 12 is that the primary judge erred in failing to find that ANZ was entitled to assume, in accordance with s 129(4), that officers of the company were properly performing their duties to the company. That ground is relevant to the resolution of the second issue because of Frenmast's argument that Robert Tiricovski's ostensible authority to negotiate and communicate with ANZ on its behalf did not extend to doing so in relation to transactions for his own benefit. 7Ground of appeal 14 is that the primary judge should have held that Robert Tiricovski had actual authority to enter into the guarantee on behalf of the company. That ground is not relied on to support an argument that, by signing the guarantee, he bound the company as an agent having express authority to do so: see s 126(1) of the Act. It is relied on in the event that the primary judge's construction of s 128(1) as requiring dealings with someone who has actual or ostensible authority to enter into the transaction in question is upheld. The remaining grounds of appeal 11, 13, 15, 17 and 18 do not raise any further or different arguments. 8Frenmast also argued before the primary judge that ANZ was precluded by s 128(4) from assuming that the guarantee had been duly executed because at the time of any relevant dealings it "knew or suspected" that that such an assumption was incorrect. That argument was rejected: [51]. A notice of contention was filed which, by ground 3, sought to support the primary judge's ultimate conclusion by reference to this argument. That contention was not pressed on the hearing of the appeal. 9The resolution of these issues depends on a consideration of the relationship between the various parties, in particular that between the shareholders and directors of Frenmast, and the circumstances in which the guarantee was taken. Except for the primary judge's findings as to whether there had been relevant "dealings" between ANZ and Frenmast and as to Robert Tiricovski's actual and ostensible authority with respect to those dealings, none of the facts as found by the primary judge is controversial. Relationship between the three Tiricovski brothers 10By 1998 the three brothers, Robert, Vlado and Steve Tiricovski (who I will refer to by their first names) were engaged in a business which manufactured liquorice. Three corporate entities were involved in that endeavour - Frenmast, RV & Sons Pty Ltd (RV) and Australian Fresh Confectionery Pty Ltd (AFC). Documents lodged with ASIC concerning those companies contained the following information. The three brothers were the shareholders in and directors of Frenmast, and Robert was company secretary. Robert and Vlado appear to have been the equal shareholders in and only directors of RV - it had only two issued shares and Steve gave evidence that his interest was only in Frenmast. Before 2000, Robert and Vlado also were the shareholders in and directors of AFC and Vlado was company secretary. In about May 2000 Vlado was replaced as a shareholder and director of AFC by Robert's wife, Slavica, who also became company secretary. 11Frenmast was the registered owner of a factory and land at Carlton, a suburb of Sydney. RV occupied that land and manufactured the liquorice products which were sold either to its retail clients, which included the major supermarket chains, or to AFC, which in turn sold to other retailers. There was no written agreement between Frenmast and RV for the lease of the land and factory. The arrangement between them included that RV pay Frenmast's outgoings and mortgage repayments in respect of the land. 12Against that background, the primary judge made the following findings at [5]: "Although Vlado did a little office work, this was limited because he could not write (but he could, with difficulty, read) in English. From shortly after the commencement of the liquorice business, Robert managed the business in terms of its administration, including the arrangement of finance, whilst Vlado concentrated on undertaking and supervising the manufacturing of the product, as I understand it, for RV. A third brother, Steve, was also a director of Frenmast but spent most of his time overseas and, it appears, did not participate actively in the management of the company. In 2006, Steve and Vlado had a major disagreement with Robert and no longer communicated with him. There is no evidence as to how [Frenmast] was thereafter conducted, except that Steve and Vlado's evidence is to the effect that they played no part in its affairs (which, of course, were merely static as the owner of premises rented out to RV), though they remained as directors, and did not authorise Robert or the company to enter into any arrangements of any kind with the bank." 13ANZ was the banker to the three companies and also to Robert and Slavica and had been so from before 2000. Vlado's evidence was that Robert "did everything related to finances" and that whilst he, Vlado, "was always doing production", Robert and Steve were "doing office work". Steve's evidence was that whilst Frenmast was part of a corporate group which included RV and AFC, he was "only involved in Frenmast" and was overseas between 2000 and 2006. Circumstances in which the guarantee was taken 14The guarantee was purportedly signed and returned to ANZ on or shortly after 3 September 2008. It was given as security for two existing facilities under which ANZ had made advances to Robert and Slavica and to AFC. At that time there was also an outstanding advance to Frenmast. The following brief history of those facilities places the events of September 2008 in context. 15On 13 September 2001 ANZ offered Frenmast a loan of $923,000 for a maximum term of 15 years. The letter of offer was addressed to the directors of Frenmast and commenced "Dear Robert, Slavica & Vlado". The acceptance of that offer was signed by Vlado, Robert and Slavica. The loan was to be secured by a cross-guarantee and indemnity between ANZ, AFC, RV, Frenmast and Robert and Slavica. In addition, Vlado was to give a guarantee of Frenmast's liability and a registered mortgage was to be taken over the Carlton property. On 23 November 2004 ANZ offered to increase Robert and Slavica's existing loan facility by $600,000 to $3,155,000. At that time the amount advanced to Frenmast was approximately $920,000. An offer was also made to extend the interest only term of the Frenmast loan for a further 12 months. That offer was accepted by the signing and returning of the original letter by Robert on behalf of Frenmast as "one of its authorised representatives". The securities held for the obligations of Robert and Slavica included registered mortgages over properties owned by them at Kurnell and Taren Point. 16By March 2006 the amount owing under the Frenmast loan was approximately $917,000 and the amount owed by Robert and Slavica was in excess of $3,150,000. Those facilities were secured by the cross-guarantee and indemnity referred to above as well as the registered mortgages over the three properties at Carlton, Kurnell and Taren Point. On 9 May 2006 ANZ offered to AFC an overdraft facility of $300,000. That offer was addressed to the directors of Frenmast and commenced "Dear Robert and Slavica". It was accepted on behalf of AFC by Robert and Slavica. The proposed security arrangements included the release of the existing cross-guarantee and indemnity and the taking of guarantees from Robert, AFC and RV in respect of the liabilities of Frenmast, a guarantee from Robert and Slavica in respect of the liability of AFC and guarantees from AFC and RV in respect of the liabilities of Robert and Slavica. The result was that Frenmast ceased to be liable as a guarantor, Slavica ceased to be liable as a guarantor of Frenmast and RV ceased to be liable as a guarantor of AFC. 17As at 8 November 2006 Frenmast owed ANZ approximately $917,000, the amount owing by Robert and Slavica was slightly in excess of $3,150,000 and AFC had an overdraft limit of $300,000. The securities held remained as before. 18On 3 September 2008 ANZ wrote separately to Robert and Slavica and to AFC offering variations to the terms of their existing facilities. By this time AFC also had a loan of $500,000. Each letter offered a variation to the existing security arrangements. The offered variations included the taking of a guarantee from Frenmast in respect of the obligations of AFC and Robert and Slavica which was unlimited as to amount and the release of the mortgage over the Taren Point property owned by Robert and Slavica. The registered mortgage over the Kurnell property was to continue to be held. Neither of the letters was concerned with any variation of the existing security arrangements in relation to the Frenmast facility which, it would seem, included the guarantees by Robert, AFC and RV of Frenmast's liability and the registered mortgage over the Carlton property. 19Each letter required acceptance of the offer by the addressee as well as an acknowledgement from the existing guarantors - AFC, Robert and Slavica and RV - and from the proposed guarantor, Frenmast. Each of those acknowledgements was signed and returned to ANZ on 3 September 2008. The two acknowledgements of Frenmast were purportedly signed by Robert and Vlado as directors of Frenmast. Vlado's signature was forged. 20The guarantee does not bear a date. It is signed by Robert above the printed words "Signature of Director" and by Vlado above the printed words "Signature of Secretary". Again, Vlado's signature was forged. The original signed guarantee was received by ANZ. It was not in issue that it also was signed and returned on or about 3 September 2008. Were there dealings concerning the guarantee between ANZ and Frenmast? 21Section 128(1) provides: "A person is entitled to make the assumptions in s 129 in relation to dealings with a company. The company is not entitled to assert in proceedings in relation to the dealings that any of the assumptions are incorrect." 22Those assumptions may be made "even if an officer or agent of the company acts fraudulently, or forges a document, in connection with the dealings": s 128(3). 23The assumptions in s 129 which may be made under s 128 relevantly include: "(4) A person may assume that the officers and agents of the company properly perform their duties to the company. (5) A person may assume that a document has been duly executed by the company if the document appears to have been signed in accordance with subsection 127(1)." 24By subsection 127(1) a company may execute a document without using a common seal if the document is signed by either "(a) 2 directors of the company; or (b) a director and a company secretary of the company". 25Here it appeared from the information provided by Frenmast that was available to the public from ASIC, that the directors of Frenmast were Robert and Vlado and that Robert was company secretary. On the guarantee as signed the signature of Robert appeared as director and the purported signature of Vlado appeared as company secretary. It nevertheless remained the position that the guarantee appeared to be signed by two directors so as to satisfy the condition in s 127(1)(a). In Brick and Pipe Industries Ltd v Occidental Life Nominees Pty Ltd [1992] 2 VR 279 at 364, the equivalent condition in s 68A(3)(e) of the Companies (Vic) Code was held to have been satisfied in circumstances where one director had signed as secretary. The primary judge was correct to conclude that this matter was of no significance: [42]. In Story v Advance Bank Australia Ltd (1993) 31 NSWLR 722 at 732, Gleeson CJ expressed agreement with that conclusion although the question did not arise for consideration in that case. 26In relation to whether there had been dealings between ANZ and Frenmast, the primary judge made the following findings: "[43] ... As has already been mentioned, no evidence was produced by the bank as to the circumstances in which the guarantee came into existence. That it dealt with Robert as director of Frenmast at the time is a distinct possibility, of course, but the evidence is not such as to permit such an inference to be drawn to the point of probability. [44] ... I have already mentioned that there is not even any evidence that the bank dealt with Robert in connexion with the transaction either as Frenmast's agent or, indeed, at all." At [50] the primary judge repeated his conclusion that ANZ did not deal with Frenmast in relation to the guarantee. 27In my view these findings involved error. They do not take into account the letters of 3 September 2008 and the signed acknowledgements and guarantee, and the fact that each was returned to ANZ on or about that date. 28The acknowledgements enclosed with each of the letters of 3 September 2008 were the subject of a request directed to Frenmast that they be signed and returned to ANZ. Each was at least signed by Robert as a director, dated and returned to ANZ on that day. For that to have occurred each had to have been communicated to and considered by Robert in his capacity as a director of Frenmast and then returned to ANZ either directly or by the agency of AFC or himself or Slavica. On any view there were written communications by ANZ to Frenmast which were responded to by the signing and return of the acknowledgements. 29The subject matter of those communications was the guarantee proposed by the letters of offer. Specifically, they included an acknowledgement on behalf of Frenmast that in relation to the "Variation letter dated 03 September 2008 ... ii) the securities given, or to be given by [the guarantor] secure all present and future obligations of the Client(s) to ANZ, including obligations in respect of the facilities". 30At the same time the guarantee was signed and returned to ANZ. That also involved the transmission of the guarantee to Frenmast for execution and return. The signed guarantee was then returned, or arranged to be returned, by Robert purporting to act on behalf of Frenmast. 31These communications constituted a dealing or dealings between ANZ and Robert, as a director of Frenmast and purporting to act on its behalf. Each related to the taking of the guarantee. The primary judge's conclusion that the evidence did not permit such a finding on the balance of probabilities was wrong. 32There then arises the question whether Robert had actual or ostensible authority to engage in those communications on Frenmast's behalf. That is a different question from whether he had actual or ostensible authority to bind Frenmast to a guarantee in the terms sought. 33Since at least 2001 ANZ had been communicating in writing with Robert in relation to the banking facilities of himself and Slavica, Frenmast, AFC and RV. Before 2006 the communications in relation to Frenmast were taking place with the knowledge and agreement of Vlado and Steve. After 2006 they must be taken to have known, notwithstanding that they were no longer actively participating in the business of Frenmast, that Robert was continuing to act on its behalf in day to day communications with the ANZ concerning its ongoing banking facilities. 34In those circumstances, by their conduct over a period which commenced before 2000, Vlado and Steve created an apparent authority in Robert to be at least the point of communication between ANZ and Frenmast. They were the other shareholders and directors of Frenmast and, together with Robert, as the three directors of the company, had actual authority to manage Frenmast's business. By their conduct, as was confirmed by their oral evidence (see [12] and [13] above), they permitted Robert to manage Frenmast's banking relationship with ANZ. That management included receiving and responding to communications from ANZ. 35The relevant principles were stated by Diplock LJ in Freeman & Lockyer v Buckhurst Park Properties (Magnal) Ltd [1964] 2 QB 480 at 505-506 and applied by the High Court in Crabtree-Vickers Pty Ltd v Australian Direct Mail Advertising & Addressing Company Pty Ltd [1975] HCA 49; 133 CLR 72 at 78. Those principles are not limited to the ostensible authority of an agent to bind his principal to a contract. They apply equally to other acts by an agent including, for example, the making of representations in the course of communications with a third party: Armagas Ltd v Mundogas SA [1986] 1 AC 717 at 732; Northside Developments Pty Ltd v Registrar-General [1990] HCA 32; 170 CLR 146 at 172 (Brennan J). 36Frenmast submits that even if Robert had ostensible authority to have communications with ANZ on its behalf, his actual authority did not extend to communications concerning a guarantee of the facilities of AFC and Robert and Slavica because that transaction was solely for his or their benefit and not for the benefit of Frenmast. The principle relied upon is that if a third party has notice of an agent's lack of actual authority, it cannot rely on the agent as having ostensible authority to do the relevant act. That is because, in such circumstances, the third party will not have relied on the agent as held out as possessing the relevant authority. That principle is referred to and applied by Griffith CJ in Lysaght Bros & Co Ltd v Falk [1905] HCA 7; 2 CLR 421 at 431. 37This principle does not apply in the present case. ANZ is not shown to have had notice, if it was the fact, that Robert was acting contrary to the interests of Frenmast and solely in his own interests. ANZ was entitled to assume by reason of ss 128(1) and 129(4) of the Act that Robert, as a director, was properly performing his duties and accordingly acting with care and diligence, in good faith and in the best interests of Frenmast and for a proper purpose; and Frenmast is debarred from asserting to the contrary: Pico Holdings Inc v Wave Vistas Pty Ltd [2005] HCA 13; 79 ALJR 825 at [58]. There, the argument that Mr Voss could not have been acting on behalf of the company of which he was a director as he was acting contrary to its interests was rejected because the party with whom he was dealing was entitled to make the assumption in s 129(4). It was also not obvious, or necessarily the case, that the proposed guarantee was not in Frenmast's interests. The giving of the guarantee was a matter for the commercial judgment of the directors of Frenmast. There was a connection between its business and that of AFC. Its factory was used for the manufacture of liquorice products by RV which were sold to AFC. Frenmast also had the benefit of guarantees of its indebtedness to ANZ from Robert and AFC and Robert was a shareholder of Frenmast. 38Accordingly, the position was that there were purported dealings concerning the guarantee between ANZ and Frenmast. Those dealings were undertaken by Robert on behalf of Frenmast and it was within his actual or ostensible authority to do so. It remains to be considered whether, as the primary judge held, it was also necessary that he have actual or ostensible authority to enter into the guarantee transaction before ANZ was entitled to make the assumptions in s 129 in relation to those dealings. Were the dealings required to be with someone having actual or ostensible authority to enter into the guarantee? 39The primary judge answered this question in the affirmative: [47]. He did so on the basis of a wrong understanding of a statement made by Hodgson CJ in Eq in Soyfer v Earlmaze [2000] NSWSC 1068 at [82]. That statement was made with respect to an earlier observation of Gleeson CJ (with whom Cripps JA agreed) in Story v Advance Bank Australia Ltd at 733 to which it is necessary to refer. 40In Story, the bank took a mortgage over property owned by a company, the directors and shareholders of which were a husband and wife. The wife's signature as director to the affixing of the company's common seal was forged by her husband without her knowledge of the relevant transaction. The bank relied upon s 68A of the Companies (NSW) Code. On behalf of the company its was argued that the bank did not have any dealings with it within the meaning of s 68A(1). That submission was rejected by Gleeson CJ (with whom Mahoney and Cripps JJA relevantly agreed) on the basis that the wife permitted the husband to have de facto control of the conduct of the company's business and part of the loan moneys were in fact applied for purposes of the company. Those facts were sufficient to justify the conclusion that when the bank negotiated and agreed with the husband to take the mortgage it was having dealings with the company. Gleeson CJ then observed (at 733): "It should be added that, since the subject matter of s 68A, by hypothesis, includes dealings with purported company agents who lack actual authority, and, by virtue of s 68D, extends to forged instruments, the concept of having dealings with a company must embrace, subject to the qualifications contained in the legislation, purported dealings. If the statutory provisions only extended to cases where the person representing the company had actual authority then they would be largely unnecessary." 41The same observation may be made with equal force with respect to the provisions of Part 2B.2 of the Act with which this case is concerned. Story was not a case in which it was necessary to consider how the relevant provisions might operate with respect to an act which occurred or instrument which came into existence in circumstances where there had been no relationship between the party asserting that it had dealt with the company and someone who had actual or ostensible authority to do anything for or on behalf of the company. In his judgment, Mahoney JA (at 741-742) expressly reserved that question for further consideration. 42The question was the subject of the following observation by Hodgson CJ in Eq in Soyfer at [82]: "In fact, some protection to the company is given by the requirement that the person must be engaged in dealings with the company in the first place; which in my opinion means that there must be dealings (in the sense of negotiations or other steps in relation to a contemplated transaction) with someone on behalf of the company which are dealings authorised by the company, and the document in respect of which the assumptions may be made must be a document which is "in relation to" those authorised dealings (and I take this to extend to a document arising out of authorised negotiations or other steps). I note that in Story at 733, Gleeson CJ suggested that the concept of having dealings with a company must embrace purported dealings, because if the provisions only applied where the person representing the company had actual authority, they would be largely unnecessary. I take this as meaning that it is not necessary that the person representing the company have authority from the company to commit the company to the relevant transactions or execute the relevant documents; but in my opinion, it is necessary that the person have authority to undertake some negotiation or other steps, so that the dealings, in relation to which the document is executed, are properly considered to be dealings with the company." 43Having referred to the passage from the judgment of Gleeson CJ and this observation of Hodgson CJ in Eq in Soyfer, the primary judge continued at [47]: "If I may, with respect, expand slightly on the explanation of his Honour of the suggestion of Gleeson CJ, I understand his Honour to mean that the person representing the company must have ostensible authority to bind the company to the particular transaction by virtue of his actual authority to take steps of that or a related kind. In the present case, where Robert (assuming him to have been the agent in question) was only a director amongst others, that office did not give any actual authority to bind the company in respect of a guarantee, nor did it confer any ostensible authority to do so." 44The statements of Gleeson CJ and Hodgson CJ in Eq in fact are to the opposite effect of this last observation of the primary judge. Gleeson CJ pointed out that if the provisions of s 68A only applied where the person representing the company had actual authority to enter into the transaction in relation to which the assumptions may be made they would be, in his words, "largely unnecessary". Hodgson CJ in Eq agreed and emphasised that whilst it followed that the person representing the company need not have authority to commit the company to the relevant transaction or execute the relevant document, that person must at least have authority "to undertake some negotiation or other steps" so that the relevant negotiation or other step which constitutes the dealing is properly considered to be a dealing with the company. 45In this case, for the reasons I have already given, Robert did have actual or ostensible authority to undertake communications and negotiations with ANZ on behalf of the company. For that reason, those communications and other steps were "dealings with the company". The primary judge erred in concluding otherwise. Conclusion 46The appeal should be allowed. ANZ was entitled to rely on the assumptions in s 129(4) and (5) and Frenmast was not entitled to assert that the guarantee had not been duly executed in accordance with subsection 127(1)(a). It follows that the guarantee was enforceable against Frenmast and that ANZ was entitled to judgment for the amount claimed. 47The primary judge's decision was delivered on 26 October 2012 and orders were made on 22 April 2013. Evidence was led in this Court to enable the calculation of the amount which is currently due. That evidence is that the amount due under the guarantee as at 4 September 2013, the date of the hearing in this Court, was $1,697,994.60, and that the daily rate at which interest has accrued since that date is $247.70. Those calculations are not disputed by Frenmast. 48A number of issues which were not the subject of this appeal were dealt with by the primary judge. On some of those issues Vlado and Frenmast were successful. The orders made on 22 April 2013 do not include any orders for costs. That being the position, and no submissions having been addressed to this court concerning the question of costs in the court below, it is not appropriate that this Court make any order in relation to those costs. If the parties wish to take that matter further, they can do so before the primary judge. 49The following orders should be made: (1)Appeal allowed. (2)Orders 2, 4, 5, 6, 7 and 8 made by Adams J on 22 April 2013 be set aside. (3)Order that order 3 made by Adams J on 22 April 2013 be varied by omitting the reference to "paragraphs 5 & 7" and substituting therefor "paragraph 5". (4)Judgment for the appellant against the respondent in the sum of $1,724,498.50 (being $1,697,994.60 together with interest from 5 September to 20 December 2013 at a daily rate of $247.70). (5)Order the respondent to pay the appellant's costs of the appeal. 50BARRETT JA: I agree with Meagher JA. ********** 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: 19 December 2013