Learn & Play (Rhodes No 1) Pty Limited as Trustee for Rhodes 1 Childcare Centre Unit Trust v David John Frank Lombe [2011] NSWSC 1506

Learn & Play (Rhodes No 1) Pty Limited as Trustee for Rhodes 1 Childcare Centre Unit Trust v David John Frank Lombe [2011] NSWSC 1506

Neither ostensible authority nor estoppel applies as there was no representation by or on behalf of the company and no reliance by the bank; ratification fails as the principal did not have full knowledge of the material facts, having been unaware of the true nature and terms of the charge and guarantee until years later.

Parties
First Plaintiff: Learn & Play (Rhodes No 1) Pty Ltd; Second Plaintiff: Learn & Play Early Learning Pty Ltd; Third Plaintiff: Rhodes 1 Childcare Centre Pty Ltd; First Defendant: David John Frank Lombe; Second Defendant: Bank of Western Australia Ltd
Jurisdiction
Australia
Judgment Date
01 December 2011
Procedural Posture
Principal Judgment / Final Judgment, Pending Orders and Costs
Outcome
Declarations and orders in favour of the plaintiffs; proceedings stood over for finalisation of orders and costs.
Legal Topics
Ostensible Authority, Ratification, Representation, Estoppel
Equity Agency Estoppel Ostensible Authority Ratification Representation

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Parties

Learn & Play (Rhodes No 1) Pty Ltd

First Plaintiff

Learn & Play Early Learning Pty Ltd

Second Plaintiff

Rhodes 1 Childcare Centre Pty Ltd

Third Plaintiff

David John Frank Lombe

First Defendant

Bank of Western Australia Ltd

Second Defendant

Procedural Posture

Principal Judgment / Final Judgment, Pending Orders and Costs

Legal Issues

  1. 1 Whether the fixed and floating charge and guarantee and indemnity executed by a non-director had legal effect and were binding on the company
  2. 2 Whether there was ostensible authority, estoppel or ratification to validate the execution of the documents

Ratio Decidendi

Neither ostensible authority nor estoppel applies as there was no representation by or on behalf of the company and no reliance by the bank; ratification fails as the principal did not have full knowledge of the material facts, having been unaware of the true nature and terms of the charge and guarantee until years later.

Court Disposition

Declarations and orders in favour of the plaintiffs; proceedings stood over for finalisation of orders and costs.

Orders

  • Plaintiff entitled to declarations and orders set out in prayers 9 to 15 of the amended statement of claim.
  • Proceedings stood over to 9 December for finalisation of orders and costs.