BT Securities Limited v Lobel

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.

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