Last week's post looked at the way in which the Corporations Act applies to the signing of documents.
A previous post has also considered the decision in the primarily superannuation related case of Re Narumon [2018] QSC 185.
This case also offers a related lesson, relevant for deeds of any form of trust, not simply super funds.
As mentioned last week, a sole director and secretary can bind a company where they sign and specifically note this capacity.
In the case here, a deed of variation was signed by the sole director and secretary of the corporate trustee, however the relevant capacity was noted simply as 'authorised representative'; and thus not in accordance with the Corporations Act.
Some years later the invalid execution of the deed of variation was identified by an adviser and a 'Deed of Ratification and Variation' was, validly, signed.
In apparently accepting that the approach that a deed of ratification can remedy errors in an earlier, ineffective, document the court also confirmed that care must be taken. In particular:
** for the trainspotters, the title here is riffed from the Whitesnake song, ‘Here I Go Again’.
This case also offers a related lesson, relevant for deeds of any form of trust, not simply super funds.
As mentioned last week, a sole director and secretary can bind a company where they sign and specifically note this capacity.
In the case here, a deed of variation was signed by the sole director and secretary of the corporate trustee, however the relevant capacity was noted simply as 'authorised representative'; and thus not in accordance with the Corporations Act.
Some years later the invalid execution of the deed of variation was identified by an adviser and a 'Deed of Ratification and Variation' was, validly, signed.
In apparently accepting that the approach that a deed of ratification can remedy errors in an earlier, ineffective, document the court also confirmed that care must be taken. In particular:
- Any variation of any invalid document will need to rely on a variation power in the last valid deed in existence;
- If no specific variation power is mentioned in the document purporting to amend the invalid document it should be possible to assume that the correct variation power is being relied on;
- In contrast, if the deed purporting to make a variation specifically seeks to rely on a power in the invalid document it will itself likely be invalid; and
- Practically, there would seem to be merit in retaining all previous versions of a trust deed, even if it is assumed they have been superseded by later variations.
** for the trainspotters, the title here is riffed from the Whitesnake song, ‘Here I Go Again’.