Nielsen v Capital Finance Australia Ltd
[2014] QCA 139
To print this judgment please return to the case and click on the PDF icon
next to the
case name. For court use, a full PDF copy is required or preferred.
Exit Distraction Free Reading Mode
Please Note: You are about to print a copy of the onscreen
version of
this judgment. For court use, a full PDF copy of the judgment is required or preferred. Please
return to
the case for PDF printing options.
- Unreported Judgment
- Appeal Determined (QCA)
- Nielsen v Capital Finance Australia Ltd[2014] QCA 139
- Add to List
Nielsen v Capital Finance Australia Ltd[2014] QCA 139
Reported at [2014] 2 Qd R 459
Nielsen v Capital Finance Australia Ltd[2014] QCA 139
Reported at [2014] 2 Qd R 459
SUPREME COURT OF QUEENSLAND
CITATION: | Nielsen v Capital Finance Australia Ltd & Ors [2014] QCA 139 |
PARTIES: | MATTHEW PETER NIELSEN |
FILE NO/S: | Appeal No 8588 of 2013 DC No 3419 of 2012 |
DIVISION: | Court of Appeal |
PROCEEDING: | General Civil Appeal |
ORIGINATING COURT: | District Court at Brisbane |
DELIVERED ON: | 6 June 2014 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 7 March 2014 |
JUDGES: | Margaret McMurdo P and Muir JA and Douglas J Separate reasons for judgment of each member of the Court, each concurring as to the order made |
ORDER: | Appeal dismissed with costs. |
CATCHWORDS: | APPEAL AND NEW TRIAL – APPEAL – GENERAL PRINCIPLES – RIGHT OF APPEAL – WHEN APPEAL LIES – ERROR OF LAW – WHAT IS – GENERALLY – where the appellant commenced proceedings in the District Court claiming against the first respondent mortgagor $181,523.50 under a written chattel mortgage agreement and each of the second, third, fourth and fifth respondents the same sum together with interest pursuant to a written guarantee and indemnity – where the guarantee and indemnity was executed by the director of the second and fifth respondent companies – where the director also signed as guarantor on his own behalf and purported to sign separately on behalf of the appellant – whether the director’s signature was binding on the appellant at common law – whether non-compliance with s 69(2) of the Powers of Attorney Act 1998 (Qld) invalidated the signature Acts Interpretation Act 1954 (Qld), Sch 1 Powers of Attorney Act 1971 (UK), s 7 Powers of Attorney Act 1998 (Qld), s 69 Property Law Act 1974 (Qld), s 56, s 172 BT Securities Ltd v Lobel [2011] NSWSC 335, considered Clauss v Pir [1987] 2 All ER 752; [1988] Ch 267, considered Combes’s Case (1613) 77 ER 843; [1572] EngR 80, considered Commonwealth Bank of Australia v Muirhead [1997] 1 Qd R 567; [1996] QCA 241, followed France v Dutton [1891] 2 QB 208, considered Frontin v Small (1726) 92 ER 423; [1790] EngR 710, considered In re Whitley Partners Ltd (1886) 32 Ch D 337, considered J Wright Enterprises Pty Ltd (in liq) v Port Ballidu Pty Ltd [2010] QSC 213, cited Lawrie v Lees (1880) 14 Ch D 249, followed London County Council v Agricultural Food Products Ltd [1955] 2 QB 218, considered McRae v Coulton (1986) 7 NSWLR 644, followed NZI Securities Australia Ltd v Poignand (1994) 51 FCR 584; [1994] FCA 1219, cited Parker v Kett (1796) 88 ER 1454; [1796] EngR 1447, considered Parkin v Williams (1986) 1 NZLR 294; [1985] NZCA 112, cited Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28, followed R v Justices of Kent (1873) LR 8 QB 305, followed Re International Contract Co, Pickering’s Claim (1871) LR 6 Ch App 525, cited UBAF Ltd v European American Banking Corporation [1984] QB 713; [1984] 2 All ER 226, considered Vella v Permanent Mortgages Pty Ltd [2008] NSWSC 505, cited White v Cuyler (1795) 101 ER 497; [1795] EngR 4043, considered Wilks v Back (1802) 102 ER 323; [1802] EngR 52, considered Windsor Refrigerator Co Ltd v Branch Nominees Ltd (1961) Ch 375, cited Wright Enterprises Pty Ltd v Port Ballidu Pty Ltd [2008] QSC 78, cited |
COUNSEL: | R Derrington QC for the appellant G Beacham for the respondents |
SOLICITORS: | OMB Solicitors for the appellant Thynne & Macartney for the respondents |
- MARGARET McMURDO P: The appellant, Matthew Peter Nielsen, at the relevant time a former professional sportsman, granted an enduring power of attorney to a businessman, Shane Heal, on 13 October 2005 authorising Mr Heal to do anything that the appellant could lawfully do by an attorney. The authority was not subject to any conditions or restrictions. On 29 August 2007 the first respondent, Capital Finance Australia Limited, gave a loan to Victoria Point Café Pty Ltd (the company), secured by a chattel mortgage incorporating a guarantee and indemnity. The guarantee listed five guarantors including the appellant, Mr Heal and Shyfox Pty Ltd. Mr Heal purported to execute the deed of guarantee on behalf of the appellant in terms replicated in Muir JA's reasons at [29]. It stated it was "SIGNED SEALED AND DELIVERED BY MATTHEW PETER NIELSEN" and Mr Heal signed his name next to the appellant's name. Mr Heal also signed the document in three other places: as a director of the company, personally as a guarantor and as a director of Shyfox Pty Ltd as a guarantor. The appellant had no actual knowledge that Mr Heal had purported to execute the guarantee on his behalf under the power of attorney but Mr Heal was authorised to do so by the power of attorney.
- The company defaulted under the mortgage and the first respondent sued the appellant and others under the guarantees. The appellant claimed he was not bound by the guarantee as Mr Heal, in signing the guarantee for the appellant, did not include any words to the effect that, as the appellant's attorney, he was authorised to sign the guarantee on behalf of the appellant. The first respondent accepted below and in this appeal that Mr Heal's purported execution on behalf of the appellant did not comply with s 69(2) Powers of Attorney Act 1998 (Qld), although, as I will explain, I have some reservations as to whether that concession was rightly made.
The primary judge's reasons
- The primary judge determined that Mr Heal's execution of the document on behalf of the appellant did not comply with s 69(2) but considered that this did not render the execution invalid for all purposes and did not render Mr Heal's signature invalid.[1] At common law, principals are not bound on a deed by their attorneys' signatures unless the attorney signs the principal's seal.[2] A guarantee must be in writing.[3] An agent may bind its principal by executing a document in the principal's name or in the agent's name.[4] Whilst Mr Heal placed his signature in the execution clause concerning the appellant, this clause identified the guarantor as the appellant, not Mr Heal. He had elsewhere signed in his personal capacity as guarantor, as a director of Shyfox Pty Ltd as guarantor, and as a director of the company. Mr Heal signed as the appellant's agent and would reasonably be understood to have done so. The necessary inference was that Mr Heal, as agent for the appellant, intended to create privity of contract between the appellant and the first respondent. Mr Heal held an unqualified authority from the appellant to act on his behalf. Even if the signature was not properly executed under s 69(2), at common law it was effective to bind the appellant as guarantor.[5]
The appellant's contentions
- The appellant contends the primary judge erred in two ways in finding that the appellant was bound by Mr Heal's signature. First, Mr Heal's manner of signing did not comply with s 69(2) and this necessarily meant the guarantee was ineffective. Second, at common law the donee of a power of attorney can validly execute a deed in the name of the principal only in a way which shows that the donee is exercising the power of attorney. The guarantee did not comply with the common law and was ineffective.
The position at common law
- The resolution of these contentions is not straightforward. It requires an understanding of the common law relating to how the donee of a power of attorney must sign a document on behalf of the principal.
- In Powers of Attorney,[6] Professor GE Dal Pont states:
"The basic principles of agency law … largely translate to powers of attorney. The one exception appears to be that, at general law, an attorney is required to express himself or herself to be acting in the name of the principal and to sign, where signing is required, not the attorney's name but the principal's name."[7]
The learned primary judge rejected that as "an accurate statement of the general law of agency as it pertains to documents that need not be executed under seal."[8] In support of the quoted proposition, Prof Dal Pont cited Lawrie v Lees[9] and Clauss v Pir.[10]
- In the 1880 case of Lawrie v Lees James LJ rejected the contention that the committees in lunacy of Sir Henry Meux in signing a deed on his behalf did not bind him. First, the committees did not profess to be the parties; the deed was between Sir Henry by his committees, his partners and the lessee. Second, throughout the deed Sir Henry was expressed to be acting by his committees. It was clear that the committees were not acting in their private character but as committees. James LJ stated that (although not the case for his consideration):
"It has been settled, and it is not for us to question the propriety of that decision, that where an attorney describes himself as an attorney, and professes to grant as an attorney and executes as an attorney, but does not execute in the name of and on behalf of his principal, that is a bad execution."
- Baggallay LJ noted that:
"if the lease had been indorsed, 'signed, sealed, and delivered by [the committees] acting for and on behalf of Sir Henry Meux,' it would have been perfectly correct. But the whole of the deed must be read together, and when I find that instead of having the statement in the attestation clause that they are acting for and on behalf of Sir Henry Meux, that statement is found within the body of the deed, I can come to no other conclusion but that this was a deed perfectly valid to bind the estate and interest of Sir Henry Meux in the property the subject of the demise."[11]
- Bramwell LJ considered that the instrument purported to be between Sir Henry by his committees, his partners and the lessee. It proceeded as if Sir Henry:
"had been actually a party to it and it concludes by saying, 'In witness whereof the parties to these presents have hereunto set their hands and seals,' and there are affixed the seals of the other two lessors, and the seal of the lessee, and seals which may be the seals of Sir Henry Meux."[12]
- Ultimately, Bramwell LJ considered that the court should hold the seals to be those of Sir Henry Meux.[13]
- In the more recent case of Clauss v Pir,[14] Judge Ferris QC held that a defendant's duty to verify by affidavit the discovery of documents could not be delegated under a power of attorney. His Honour referred to s 7(1) of the Powers of Attorney Act 1971 (UK) and made the observation, not central to the outcome of the case, that apart from that provision,
"the correct mode in which a donee of a power of attorney should act is to express himself to be acting in the name of his principal and to sign, where signing is required, not the donee's name but the principal's name."[15]
I am unpersuaded that any great weight should be given to that obiter dictum unless it is otherwise supported.
- There are decisions preceding Lawrie v Lees which are relevant to an attorney's execution of documents on behalf of the principal. In the early 17th century in Combes's Case,[16] the court considered whether Thomas Combes could surrender interest in land to the lord of the manor through his attorney. The court noted:
"that when any has authority, as attorney, to do any act, he ought to do it in his…name who gives the authority; for he appoints the attorney to be in his place, and to represent his person; and therefore the attorney cannot do it in his own name, nor as his proper act, but in the name, and as the act of him who gives the authority."[17]
- Combes' Case was also followed and considered in the early 18th century in Parker v Kett[18] which held that a person authorised to bind a principal could do so by his own authority:
"For where one has an authority, and does an act which can be good no other way but by virtue and in pursuance of that authority, it shall rather be understood to have been by force of his authority than void…"[19]
- In the early 18th century in Frontin v Small,[20] the plaintiff, Martha Frontin, as attorney for James Frontin, leased a house to the defendant, Mr Small. She sued him for non-payment of rent. The defendant, relying on Combes's case, claimed the lease was void because the plaintiff was acting as an attorney so that the lease should have been from the principal and in his name. The court held that the lease was void because it was not made in the name of the principal, with the result that the plaintiff could not maintain the action.[21]
- Late in the 18th century in White v Cuyler,[22] the defendant's wife agreed under seal to take the plaintiff to the West Indies as her maid; to pay her an annual wage as long as she continued in her service and to pay for her passage and other incidental expenses during the voyage. If the defendant's wife dismissed her, she would pay the plaintiff's passage home to England. When the defendant's wife did not pay the plaintiff's passage home, the plaintiff brought an action against the defendant. The jury found against the defendant. On appeal, the court held that:
"The covenant by [the defendant's wife] cannot bind her husband, she having no authority to bind him by a deed. Besides, in executing a deed for the principal under a power of attorney, the proper way is to sign in the name of the principal."[23]
- In the early 19th century in Wilks v Back,[24] the plaintiffs, Mr Wilks and his late partner, Mr Browne, were in dispute with the defendant, Mr Back. They entered into bonds of submission agreeing to refer the dispute to arbitration. The arbitrator awarded a sum to be paid but, on a motion to set it aside, the question became whether Mr Wilks had competent authority to bind Mr Browne by executing the bond of submission for him. Mr Wilks had Mr Browne's irrevocable power of attorney:
"to ask, demand, sue for, compound, and receive all the debts and effects of the said partnership; with full power for Wilks to sign, seal, and deliver in the name of Browne any deed, &c. whatsoever necessary for the purposes therein mentioned".
- Mr Wilks executed the bond of submission in this form:
"'Mathias Wilks' (L.S.). 'For James Browne, Mathias Wilks,', (L.S.), and it was sealed and delivered by Wilks for himself, and also for his … late partner Browne; but the latter was not present at the time."[25]
- Grose J, accepted that Combes's case, White v Cuyler and Frontin v Small required that an attorney must execute his power in the name of his principal and not in his own name but found that this was done here:
"for where is the difference between signing J.B. by M.W. his attorney (which must be admitted to be good) and M.W. for J.B.; in either case the act of sealing and delivering is done in the name of the principal and by his authority. Whether the attorney put his name first or last cannot affect the validity of the act done."[26]
- Lawrence J distinguished this case from White v Cuyler where the attorney simply demised in her own name without any mention of the principal and considered that Mr Wilks had executed the bond for and in the name of his principal; this was distinctly shown by the manner of his signature. He first signed:
"his own name alone opposite to one seal to denote the sealing and delivery on his own account and then opposite the other seal he denotes that the sealing and delivery was for James Browne. There is no particular form of words required to be used, provided the act be done in the name of the principal."[27]
- Le Blanc J considered that it made no difference in what order Mr Wilks signed the bond of submission: he signed first for himself and then again for the principal.[28]
- What is clear from a review of these cases is that a donee acting under a power of attorney must execute a document in the name of the principal. So much was recognised by the 1973 report of the Queensland Law Reform Commission which resulted in the enactment of s 172 Property Law Act 1974 (Qld).[29] The report noted:
"172. Execution of instruments etc by donee of power of attorney
Under the general law the rule is that an instrument executed by an attorney should be executed in the name of the principal: cf Stuckey, op. cit. at p. 314, citing Wilks v Back [1802] 2 East. 142; Lawrie v Lees (1881) 7 App.Cas. 19."
Relevant statutory enactments
- The common law relating to the execution of documents by a donee of a power of attorney was modified or, arguably, clarified, by s 172 Property Law Act, which relevantly provided:
"172 Execution of instruments etc. by donee of power of attorney
(1)…the donee of a power of attorney, may, if he thinks fit –
(a)execute any instrument with his own signature and, where sealing is required or employed, with his own seal; and
(b)do any other thing in his own name;
by the authority of the donor of the power, and any instrument executed or thing done in that manner shall be as effective as if executed or done by the donee of the power –
(c)with the signature; or
(d)with the signature and seal; or
(e)in the name (as the case may be)
of the donor of the power.
(2)Notwithstanding the provisions of sub-section (1), an instrument executed by the donee of a power of attorney shall be executed in such a way as to show that he does so as attorney for the donor of the power.
(3)This section applies to a power of attorney whether created before or after the commencement of this Act."
- That provision was replaced by s 69 Powers of Attorney Act, which now relevantly provides:
"69. Execution of instrument etc
(1)If necessary or convenient for the exercise of power given to an attorney, the attorney may –
(a)execute an instrument with the attorney's own signature and, despite the fact that the power of attorney was given under hand, if sealing is required or used, with the attorney's own seal; and
(b)do any other thing in the attorney's own name.
(2)An instrument executed by an attorney must be executed in a way showing that the attorney executes it as attorney for the principal.
(3)An instrument executed, or thing done in the way specified in this section is as effective as if executed or done by the principal –
(a)with the principal's signature; or
(b)with the principal's signature and seal; or
(c)in the principal's name.
… ."
Conclusion
- The exercise of a power of attorney is a form of agency. The cases I have discussed demonstrate that at common law a donee of a power of attorney signing a document on behalf of the principal must execute it in the name of the principal. In determining whether this has been done, as Baggallay LJ noted in Lawrie v Lees, the whole of the document must be considered. And as Lawrence J noted in Wilks v Back, no express form of words need be used. Prudent donees would state in the document that they are acting in the name of the principal and sign the principal's name, not the donee's name. But I do not consider that the cases establish an absolute common law rule that a donee must sign the principal's signature, not the donee's signature where it is otherwise clear that the donee is executing the document in the name of the principal and is authorised to bind the principal. Whether a donee has executed in the name of the principal will depend on the circumstances of the case, particularly the terms of the document being signed and the mode of execution.
- In this case, the names of all guarantors appear on the first page of the chattel mortgage incorporating the guarantee and indemnity. Mr Heal's mode of execution on behalf of the appellant is replicated in Muir JA's reasons at [29]. It states "SIGNED SEALED AND DELIVERED BY MATTHEW PETER NIELSEN" and is signed by Mr Heal. On the page on which that purported execution appears, Mr Heal's signature appears three times; once as director of the company, once as guarantor personally, and once next to the full name of the appellant who is also a guarantor. The executions continue onto the following page where Mr Heal signs again, this time as director of the guarantor Shyfox Pty Ltd. In those circumstances, consistent with the approach taken in Parker v Kett, Lawrie v Lees and Wilks v Back, the only rational inference is that Mr Heal executed the guarantee on behalf of the appellant in a way which clearly expressed that he did so in the name of the appellant and not in his own name. This followed from the terms of the document and the method and format of Mr Heal's execution of it, which clearly differentiated between Mr Heal's execution of the document as a company director binding the company and later as a guarantor personally, as a director of Shyfox Pty Ltd as guarantor, and, critically, on behalf of the appellant as guarantor. He was authorised to bind the appellant under the power of attorney. In my view, Mr Heal's method of executing the document on behalf of the appellant sufficiently complied with the common law; he executed it in accordance with his authority as donee in the name of the appellant so that the guarantee was as effective as if the appellant executed it with his own signature.
- It is arguable that Mr Heal also executed the guarantee on behalf of the appellant in accordance with s 69, which allows a donee of a power of attorney to execute an instrument with the donee's own signature (s 69(1)), provided he does so in a way showing that he executes it as attorney for the principal (s 69(2)). The prudent donee seeking to benefit from s 69 would sign the document with the donee's own signature and expressly state that he did so as attorney for the named principal. Nothing in s 69, however, mandates the use of any precise mantra to take advantage of its terms. But, as the first respondent accepted below and in this appeal that the execution did not comply with s 69, it is unwise and unnecessary to further explore this issue. I agree with Muir JA that s 69 is facilitative and does not codify the law relating to the execution of instruments by a donee of a power of attorney. The use of 'may' in s 69(1) does not support any legislative intention other than to supplement the common law. The term 'must' in s 69(2) requires nothing more than that a donee who wishes to act under s 69(1) execute the document in a way showing that the donee is doing so as an attorney for the principal. Section 69 does not have the effect that any non-compliance with it renders invalid the signature of a donee of a power of attorney otherwise validly executing a document on behalf of the principal under the common law.
- For these reasons, I consider the appellant's contentions are not made out. The primary judge was right in concluding the appellant was bound by the guarantee and in giving judgment for the company against him. The appeal should be dismissed with costs.
- MUIR JA: Introduction The appellant commenced proceedings in the District Court claiming against:
- the first respondent mortgagor $181,523.50 under a written chattel mortgage agreement entered into on or about 29 August 2007 together with interest;
- each of the second, third, fourth and fifth respondents the same sum together with interest pursuant to a written guarantee and indemnity entered into on or about 29 August 2007.
- The trial of the proceedings concerned only the claim by the plaintiff/first respondent (referred to subsequently as “the respondent”) against the third defendant/appellant. The guarantee and indemnity, which was included in the form of the chattel mortgage, was executed by Shane Douglas Heal as director of the second and fifth respondent companies. He also signed as guarantor on his own behalf and purported to sign separately on behalf of the appellant as follows:
![Nielsen v Capital Finance Australia Ltd [2014] QCA 139](/judgmentview/image?name=84624.001.png&id=84624)
- The signature of Mr Heal appeared above “(Signature)” and the signature of Ms Williams as witness appeared above “(Signature of Witness)”. These signatures and others were under a heading “SIGNATURE(S) – GUARANTOR”.
- At the time he signed the guarantee, Heal was the appellant’s duly appointed attorney pursuant to a power of attorney which contained the provision:
“I AUTHORISE my attorney to do on my behalf anything that I can lawfully do by an attorney.
The authority of my attorney is subject to no conditions or restrictions.”
- The sole issues for determination on this appeal are:
- whether Heal’s signature was binding on the appellant at common law; and
- if so, did non-compliance with s 69(2) of the Powers of Attorney Act 1998 (Qld) invalidate the signature?
Was Heal’s signature binding on the appellant at common law?
- The appellant argued that the primary judge’s findings that, at common law, a principal is not bound on a deed by the attorney’s signature unless the attorney “signs the principal’s name and uses the principal’s seal”[30] and that “… an agent must be authorised by deed in order to be able to execute a deed on behalf of their principal”[31] were correct in law.
- It was submitted that as the appellant was sued on a deed which was not binding on the appellant, not being signed in the principal’s name or with his seal, the primary judge should have found for the appellant.
- Another argument advanced was that the failure of Heal, acting as the appellant’s attorney, to execute the guarantee in the name and on behalf of his principal resulted in the guarantee not being binding on the appellant.
- The first of these arguments cannot be accepted. The guarantee did not need to be executed as a deed. The only formal requirement for its due execution was that it be in writing and signed by the appellant guarantor or a lawfully authorised person.[32] As counsel for the respondent submitted, a document ineffective as a deed may nevertheless take effect as a simple agreement under hand.[33]
- Counsel for the respondent submitted to the following effect. An attorney appointed by power of attorney was simply an agent whose appointment, as such, was formalised in a particular way.[34] If the appellant’s contention is correct, it has the consequence that an agent appointed by power of attorney is subject to a greater restriction than an informally appointed agent. No authority supports that proposition.
- In order to assess the merits of these submissions it is necessary to consider the authorities and texts relied on by the appellant.
- Powers of Attorney by W Stokes published in 1861, against a marginal note, “the attorney’s execution of a deed” states:
“In executing a deed pursuant to the power, the attorney, unless the authority be coupled with an interest, must seal and deliver in the name of his principal. He should also sign in his principal’s name thus: ‘A. B. [the principal] by his attorney C. D.’ But as signature is not of the essence of a deed, inaccuracy in this will not vitiate. This at least is Mr Preston’s opinion.”
- Plainly, the author is addressing the execution of deeds.
- The passages from the 15th edition of Bowstead on Agency on which the appellant relies[35] are also concerned with deeds. Professor Dal Pont in Powers of Attorney[36] states, “The correct mode, at general law, in which an attorney should act is to express himself or herself to act in the name of the principal and to sign, if signing is required, not by the attorney’s name but the principal’s name”. Clauss v Pir[37] is cited as authority for this proposition but offers slight support for it. The question for determination was whether an attorney could swear an affidavit verifying discovery of documents on behalf of his principal or whether the rules of the High Court imposed upon the principal a personal duty to swear the affidavit himself. It was held that an agent could not swear such an affidavit on his principal’s behalf. The scope of s 7 of the Powers of Attorney Act 1971 (UK) (the Act) was relevant to the Court’s determination. The reasons contained this dicta:[38]
“Apart from section 7, as I understand the law, the correct mode in which a donee of a power of attorney should act is to express himself to be acting in the name of his principal and to sign, where signing is required, not the donee’s name but the principal’s name.”
- The judge did not purport to determine the consequences of failure to execute an instrument by the “correct mode”.
- The report of the Queensland Law Reform Commission,[39] states:
“Under the general law the rule is that an instrument executed by an attorney should be executed in the name of the principal: cf. Stuckey, op. cit., at p. 314, citing Wilks v. Back (1802) 2 East.142; Lawrie v. Lees (1881) 7 App. Cas.19.”
- Counsel for the respondent submitted that the reference to “instrument” must be seen in context. In the draft Bill (and the Property Law Act 1974 (Qld) as passed) it is defined as including “a deed, will and Act”. It was noted also that the two cases cited were both decided in relation to the execution of deeds.
- The following passage from Powers of Attorney in Australia and New Zealand,[40] was relied on by the appellant:
“At common law, an attorney must sign the principal’s name to, and affix the principal’s seal to, any deed executed by him or her on behalf of the principal if the principal is to have the right to sue on the deed and the attorney is to escape personal liability.”
- The authors cite Bowstead & Reynolds on Agency[41] and Lawrie v Lees[42] as authority for those propositions. The passage quoted from Powers of Attorney in Australia and New Zealand concerns only deeds.
- Particular reliance was placed on the following passage from the reasons of James LJ in Lawrie v Lees:[43]
“It has been settled, and it is not for us to question the propriety of that decision, that where an attorney describes himself as an attorney, and professes to grant as an attorney and executes as an attorney, but does not execute in the name of and on behalf of his principal, that is a bad execution.”
- James LJ’s next sentence is, “That is not the case we have before us”.
- Lawrie v Lees concerned a deed effecting a demise of real property. The central issue for determination was whether the deed, executed by a committee empowered by an order in lunacy to concur in all deeds and hereditaments belonging to the firm in which Sir Henry Meux was a partner, in the name on behalf of Sir Henry, was binding on him. The deed was expressed to be made between Sir Henry Meux, by A B and C D his committees, and D C M and R B (the said Sir H M, D C M and R B, carrying on business in co-partnership, the lessors of the one part and a lessee of the other part. The testimonium clause was “In witness whereof the parties to these presents have hereunto set their hands and seals”. A B signed his name against one seal and C D against another and the attestation clause was “Signed, sealed, and delivered by the within named A. B. and C. D. in the presence of”, etc.[44] There was no reference in the testimonium clause to the capacity in which the committees signed. The seals did not purport, on their face, to be the personal seals of any person.
- It was held that the lease was duly executed on behalf of Sir Henry Meux. The members of the Court found, in substance, that as it was plain from the deed, read as a whole, that the committees were acting on behalf of Sir Henry Meux, the fact that the signatures of the committees did not state the capacity in which they were signing did not affect the validity of the deed.
- The principles applicable to the signing of documents by agents on behalf of principals is discussed in 4 Halsbury’s Law of England as follows:[45]
“Signature of document. At common law the general rule is that a person sufficiently signs a document if it is signed in his name and with his authority by someone else; and in such case the agent’s signature is treated as that of his principal. Although it is usual and the better practice to indicate on the document that the signature the agent has written is not that of the principal, omission so to do, though misleading and undesirable, does not invalidate the document.”
- Halsbury cites as authority for the proposition advanced in the first sentence of the above paragraph London County Council v Agricultural Food Products Ltd [46] and France v Dutton.[47] Both cases support the proposition.
- Halsbury,[48] dealing with instruments under hand only, states:
“Signature by agent. In general, where a contract or other document is required to be in writing, a signature by an agent on behalf of the party to be bound is sufficient, and it is not necessary that the agent should be appointed in writing … An agent can either sign in the name of his principal or in his own name but in the latter case the fact of the agency should appear on the document, or he will be liable as principal.” (references omitted)
- Paragraph 1341 of the same volume, which relates to “Deeds executed by an attorney”, states:
“The deed executed by attorney must be so expressed that it is apparent that the act evidenced by it is the act of the principal and not of the attorney…”
- The third edition of Halsbury states the position slightly differently:[49]
A deed executed in pursuance of [a] power [of attorney] is properly executed in the name of the principal or with the words to show that it is the agent signing for him.”
- As later discussed, it is my view that this requirement was met.
- The issue in London County Council was whether a notice to quit, required to be signed by the valuer to the Council, but signed by an assistant to the valuer was a valid notice. Although there was nothing on the document to indicate that the signature was by proxy, it was held to be effective. After stating that it was “bad practice” for the assistant valuer not to have added the letters “P.P.” to his signature and observing that, were it not for authority, he would have regarded such failure as fatal, Denning LJ said:[50]
“But there are two cases which show the contrary. In Reg. v. Kent Justices (1873) L.R. 8 Q.B. 305 and France v. Dutton [1891] 2 Q.B. 208 a clerk wrote the name of the principal, being duly authorized so to do, but did not add anything to show that it was done by proxy. Nevertheless the signature was held good. I do not think that we should disturb cases of such long standing; especially when section 91(1) of the Bills of Exchange Act, 1882, proceeds on the same footing.”
- Romer LJ said:[51]
“It is established, in my judgment, as a general proposition that at common law a person sufficiently ‘signs’ a document if it is signed in his name and with his authority by somebody else; and in such case the agent’s signature is treated as being that of his principal… The definition of ‘signature’ in Stroud’s Judicial Dictionary is also in conformity with the principle.”
- Parker LJ, after, quoting the definition of “sign; signature” in the third edition of Stroud’s Judicial Dictionary observed:[52]
“So far as the present case is concerned the relevant words are ‘by his authority’ and these words are in accord with what Blackburn J. said in Reg. v. Kent Justices, namely: ‘No doubt at common law, where a person authorizes another to sign for him, the signature of the person so signing is the signature of the person authorizing it; nevertheless there may be cases in which a statute may require personal signature.’”
- The issue for the Court in France v Dutton[53] was whether particulars of a costs claim and copies thereof were signed by the claiming solicitor as required by the County Court Rules 1889 if signed by the solicitor’s clerk who had a general authority for such purpose. In holding the signature to be good, Lord Coleridge CJ said:[54]
“I agree with the decision of the Queen’s Bench in Reg. v. Justices of Kent, in which Blackburn, J., explained that at common law, where a person authorizes another to sign for him, the signature of the person so signing is the signature of the person authorizing it; nevertheless there may be cases in which a statute may require personal signature.”
- Halsbury’s Laws of England[55] states the following general rule:
“It may be stated as a general proposition that whatever a person has power to do himself he may do by means of an agent.
The converse proposition similarly holds good that what a person cannot do himself he cannot do by means of an agent…
There are, however two exceptions to the general rule that a person may do by means of an agent whatever he has power to do himself:–
- Where the transaction is required by statute to be evidenced by the signature of the principal himself;
- Where the competency to do the act arises by virtue of the holding of some public office or by virtue of some power, authority, or a duty of a personal nature and requiring skill or discretion for its exercise.”
- This statement of principle in R v Justices of Kent[56] has been reaffirmed frequently. For example, In re Whitley Partners Ltd[57] it was held that the signature of a person verbally authorised by a principal to sign a memorandum of association of a company on the principal’s behalf was binding. The agent signed in the name of the principal without any indication of the capacity in which he was signing. Cotton LJ observed:[58]
“The signature in the present case is irregular, for it ought to have been ‘P. Callan by Oakley his attorney;’ but this irregularity will not make the signature invalid if there was authority to affix it.”
- Arguments that an agent, whether appointed under a power of attorney or not, must sign in particular way if signing an instrument on behalf of the agent’s principal are unlikely to gain much traction. I refer, of course, to the general position and not to circumstances in which there is a legislative requirement which must be followed. In McRae v Coulton,[59] the Court of Appeal in NSW considered, amongst other matters, whether an application for a joint water supply scheme authority made by solicitors on behalf of a number of applicants complied with the terms of the prescribed form which “provides at its end for ‘signatures of all applicants’”.[60] Hope JA, with whose reasons Kirby P and McHugh JA agreed, observed:[61]
“It has long been the law that, where a provision of a statute or of delegated legislation requires that a document shall be signed by a particular person, prima facie that provision does not exclude the common law rule qui facit per alium facit per se and if the person authorises another to sign on his behalf, a signature made by the other pursuant to the authority is equivalent to the signature of the person giving the authority …”
- The appellant argued to the effect that:[62]
“… assuming signature by an agent is permissible, the agent must sign the principal’s name, albeit in his capacity as agent, and it is not sufficient for him to sign as agent for the principal. On this view if Richard Roe wished to sign as agent for John Doe, he can sign John Doe by his agent Richard Roe, but he cannot sign Richard Roe as agent for John Doe.”
- Hope JA observed:[63]
“This distinction seems to take literalism to its extreme and I would have little hesitation in rejecting it in the absence of authority to support it. There is authority: London County Council v Agricultural Food Products Ltd [1955] 2 QB 218. The terms of the statute or other regulating instrument may make it clear that an agent must place his principal’s name before his own. To suggest that what he does is to place his principal’s signature first is of course false because the principal’s signature does not appear at all; what appears, if this practice were adopted, would be the writing by the agent of the name of his principal before the writing of his signature. No authority seems to suggest that what the agent writes must be a copy of the principal’s signature or in the same form as the principal’s signature; thus, if the principal, John Doe, signs his name ‘J Doe’, it is not suggested that a signature by an agent writing ‘John Doe’ in full by himself as agent would not be sufficient.”
- Hope JA then considered cases dealing with the validity of signatures by officers of corporations on behalf of corporations noting his understanding that it was decided by the English Court of Appeal in UBAF Ltd v European American Banking Corporation,[64] that:[65]
“…the signature of an authorised agent of a company will satisfy the requirement of the statute and at any rate where his signature is in terms one made on behalf of the corporation, its form is irrelevant.”
- His Honour continued:[66]
“I would accordingly doubt very much the inflexibility of any principle that where a statute or other instrument requires a signature but a signature by an agent is permitted by the principle I have discussed, the agent must first write his principal’s name. In other situations, it is of course common for agents to sign on behalf of their principals in much the same way as was done in the present case, and there are countless decisions as to whether, having regard to the way in which the agent has signed, the agent can be made personally liable… Since I regard what has been put as the legal principle as extremely artificial, assuming it is a principle of law, I have no doubt that what was done was sufficient compliance. Even if I did not have this view as to artificiality I would come to the same conclusion. The distinction between what is submitted is required and what was done is purely one of form and not of substance, and in my opinion is an example of the type of technicality which should not invade this important aspect of rural activity in New South Wales. Accordingly the original application was a valid application.”
- Referring to McCrae v Coulton, it is stated in Bowstead & Reynolds on Agency:[67]
“The crucial question must surely be whether signature by an agent is permissible: so long as the purport of such signature is clear, it is difficult to see that the form should be of particular consequence.”
- In Commonwealth Bank of Australia v Muirhead,[68] McPherson JA, with whose reasons, Macrossan CJ agreed, observed that the decision in London County Council was contrary to decisions of three different appellate courts in Australia including the decision in McRae v Coulton. His Honour said:[69]
“Unless and until constrained by higher authority, it is conceived that the rule to be followed in this country is that, in the absence of express provision or other indication to the contrary, legislation requiring ‘‘signature’’ of a document is not to be taken to preclude signature by agent, whether that signature is written in the name of the principal or of the agent. See McRae v. Coulton …”
- Here the signature of Mr Heal was applied so as to bind the appellant under common law principles. It is even apparent on the face of the document that Heal was purporting to sign on behalf of the appellant in that part of the signing clause set out above; Heal signed opposite the appellant’s name, not his own. Elsewhere he had signed on his own behalf and on behalf of corporations.
The consequences of failure to comply with s 69 of the Powers of Attorney Act 1998 (Qld)
- It was conceded by the respondent that the guarantee was not “executed in a way showing that the attorney execute[d] it as attorney for the [respondent]”.[70] Whether the concession was warranted was not debated on the hearing of the appeal.
- The primary judge held that the purpose of s 69 was remedial rather than prescriptive and that the consequence of non-compliance with s 69(2) was that s 69(3) did not operate but that there was no resulting invalidity.
- The appellant criticised these conclusions. It was submitted that in considering the question of construction of s 69, the primary judge erroneously asked whether or not non-compliance with the requirements of s 69 invalidated the signature of the attorney rather than whether, without the remedial effect of s 69 the signature of an attorney which did not satisfy the requirements of s 69 was valid. It was argued in the alternative that a correct application of the principles articulated in Project Blue Sky Inc v Australian Broadcasting Authority[71] necessitated the conclusion that the consequence of non-compliance with s 69(2) was invalidity. Counsel for the appellant pointed in particular to the mandatory expression “must” in s 69(2). He further submitted that the section “covers the field” and displaces common law rights; and that the primary judge’s construction rendered s 69(2) meaningless and otiose.
- Section 69 provides:
“69Execution of instrument etc.
- If necessary or convenient for the exercise of power given to an attorney, the attorney may—
- execute an instrument with the attorney’s own signature and, despite the fact that the power of attorney was given under hand, if sealing is required or used, with the attorney’s own seal; and
- do any other thing in the attorney’s own name.
- An instrument executed by an attorney must be executed in a way showing that the attorney executes it as attorney for the principal.
- An instrument executed, or thing done, in the way specified in this section is as effective as if executed or done by the principal—
- with the principal’s signature; or
- with the principal’s signature and seal; or
- in the principal’s name.
- This section applies subject to the Property Law Act 1974, section 46.
Editor’s note—
This section deals with the execution of documents by corporations.”
- Section 69 is remedial in nature. The explanatory memorandum to the Powers of Attorney Bill explains:[72]
“Execution of instrument
Clause 68 enables an attorney to execute documents under seal.”
- The indication provided by the explanatory memorandum is supported by the structure and words of the section itself. Subsection (1) is permissive. It enables an attorney to execute an instrument with the attorney’s own signature and with the attorney’s own seal if sealing is required. It also entitles the attorney to do “any other thing in the attorney’s own name”. Subsection (2) is mandatory in terms. Subsection (3) provides, in effect, that if something is done “in the way specified” in s 69, it is as effective as if executed or done by the principal.
- Both subsections (1) and (3) have functions facilitative in nature. Subsection (3) is the only part of the section which addresses the consequences of compliance with the requirements of the section. No provision addresses the consequences of non-compliance. That in itself is significant.
- Some guidance in determining the consequences of failure to execute an instrument in accordance with s 69(2) is to be found in the following passages from the joint reasons in Project Blue Sky:[73]
91An act done in breach of a condition regulating the exercise of a statutory power is not necessarily invalid and of no effect. Whether it is depends upon whether there can be discerned a legislative purpose to invalidate any act that fails to comply with the condition. The existence of the purpose is ascertained by reference to the language of the statute, its subject matter and objects, and the consequences for the parties of holding void every act done in breach of the condition.
…
93… A better test for determining the issue of validity [than whether the provision is mandatory or directory] is to ask whether it was a purpose of the legislation that an act done in breach of the provision should be invalid. This has been the preferred approach of courts in this country in recent years, particularly in New South Wales. In determining the question of purpose, regard must be had to ‘the language of the relevant provision and the scope and object of the whole statute’.” (citations omitted)
- A conclusion that non-compliance with subsection (2) results in invalidity would be inconsistent with the facilitative function of s 69, the express statement in the section of the consequences of compliance with particular requirements of the section and the absence of any indication that a failure to comply with sub-section (2) results in invalidity.
- Section 69 is in Part 1 of Chapter 5 of the Powers of Attorney Act 1998 (Qld). Except where otherwise provided, it applies to powers of attorney generally. There is nothing in Part 1 which suggests that the legislative purpose was to codify the law relating to powers of attorney or to otherwise interfere with the common law relating to principal and agent except as may appear from the words of the provisions of Part 1.
- The section is not rendered otiose by the primary judge’s construction. Among other things, it permits a document that would otherwise require execution under seal to be executed under hand. As counsel for the respondent submitted, in the case of a deed, s 69(2) serves the purpose that despite the deed being executed other than in the name of the principal, as the common law requires, it will be valid because of its execution by an attorney under a power of attorney. The respondent’s counsel also submitted, with some force to my mind, that there was no obvious reason why the legislature would intend to render all non-compliance signatures invalid, when agents other than attorneys, who are appointed with less formality, can validly sign on behalf of their principal without indicating that they are doing so as agent.
- Counsel for the appellant cited as authority for the proposition that execution of an instrument by an attorney in his or her own name was valid only if there was compliance with s 69, Caltabiano v Electoral Commission of Queensland & Anor (No 4),[74] J Wright Enterprises Pty Ltd (in liq) v Port Ballidu Pty Ltd[75] and Wright Enterprises Pty Ltd v Port Ballidu Pty Ltd.[76] None of these cases is of assistance for present purposes. The issue now under consideration was not raised in any of them.
Conclusion
- Accordingly, I find that non-compliance with s 69(2) did not prevent Mr Heal’s signature from binding the appellant.
- For the above reasons, I would dismiss the appeal with costs.
- DOUGLAS J: I have had the advantage of reading the reasons of the President and Muir JA and gratefully adopt their recitation of the facts. I agree that Mr Heal’s signature as the appellant’s agent was effective to bind the appellant at common law for the reasons expressed by Muir JA.
- The legislative history of s 69 of the Powers of Attorney Act 1998 (Qld) referred to by Muir JA suggests that the purpose of s 69 was to widen the effect of the execution of documents under seal by an attorney even though the term “instrument” is defined in Schedule 1 of the Acts Interpretation Act 1954 (Qld) to mean “any document”. Before the Powers of Attorney Act was passed such documents were covered by Pt 9 of the Property Law Act 1974 (Qld) which defined “instrument” inclusively to cover “deed, will, and Act”. The explanatory memorandum referred to by Muir JA described the clause in the Powers of Attorney Bill as one to enable an attorney to execute documents under seal. When one takes that background into account it seems clear that the purpose of the section was to permit an attorney to execute an instrument in more situations than the law then allowed.
- As Mr Beacham for the respondent submitted, a facultative interpretation of the section permits attorneys to execute deeds in their own name, protects those who do so and facilitates other actions. The use of the word “must” is given effect in s 69(2) as compliance with that section is mandatory if the signature is to have the effect provided for under s 69(3). Where the execution concerned a deed, he submitted, it alerted others to the fact that, despite the deed being executed other than in the name of the principal as the common law requires, it was valid or may be valid by reason of the use of a power of attorney, so that the demonstrated legislative intention was only to make compliance with s 69(2) a condition of obtaining the benefit of s 69(3). Those submissions seem persuasive to me.
- It would be odd, against that background, to conclude that s 69(2) operated so as to invalidate an attorney’s signature when the attorney is acting simply as an agent.
- I agree, therefore, that the appeal should be dismissed with costs.
Footnotes
[1] Capital Finance Australia Ltd v Nielsen [2013] QDC 183, [10] and [16]-[18].
[2] Above, [15].
[3] Above, [19].
[4] Above, [25].
[5] Above, [28]-[29].
[6] G E Dal Pont, Powers of Attorney, (Lexis Nexis Butterworths Australia, 2011).
[7] Above, 229 para 9.8.
[8] Capital Finance Australia Ltd v Nielsen [2013] QDC 183, [21]-[22].
[9] (1880) 14 Ch D 249, 256, James LJ.
[10] [1988] Ch 267, 272.
[11] Above, 259.
[12] Above, 260.
[13] Above, 261.
[14] [1988] Ch 267.
[15] Above, 272.
[16] (1613) 9 Co Rep 75; 77 ER 843.
[17] Above, 847.
[18] (1706) 88 ER 1454.
[19] Above, 1456.
[20] (1726) 2 Ld Raym 1418; 92 ER 423.
[21] Above, 424.
[22] (1795) 6 TR 178; 101 ER 497.
[23] Above, 497.
[24] (1802) 2 East. 142; 102 ER 323.
[25] Above, 323.
[26] Above, 324.
[27] Above, 324.
[28] Above, 324.
[29] QLRC 16.
[30] Re International Contract Co, Pickering’s Claim (1871) LR 6 Ch App 525; Bowstead & Reynolds on Agency, 19th ed, Sweet & Maxwell, London, 1996 at 8-085.
[31] Capital Finance Australia Pty Ltd v Nielsen [2013] QDC 183 at [15] referring to Vella v Permanent Mortgages Pty Ltd [2008] NSWSC 505 at [206] per Young CJ; Bowstead & Reynolds on Agency, 19th ed, Sweet & Maxwell, London, 1996 at 2-040.
[32] Property Law Act 1974 (Qld), s 56.
[33] Windsor Refrigerator Co Ltd v Branch Nominees Ltd (1961) Ch 375 at 393–394, 397, 398; NZI Securities Australia Ltd v Poignand (1994) 51 FCR 584 at 590–592; BT Securities Ltd v Lobel [2011] NSWSC 335 at [10]–[15].
[34] Parkin v Williams (1986) 1 NZLR 294 at 299; Bowstead & Reynolds on Agency, 19th ed, Sweet & Maxwell, London, 1996 at 2-039.
[35] Article 80 pp 325–327 and Article 109 pp 452–453.
[36] LexisNexis Butterworths, Chatswood, 2011 at para [7.8].
[37] [1988] Ch 267 at 272.
[38] Clauss v Pir [1988] Ch 267 at 272.
[39] Entitled Bill to Consolidate, Amend and Reform the Law Relating to Conveyancing, Property and Contract and to Terminate the Application of Certain Imperial Statutes, Report No 16, February 1973 at 97.
[40] Collier & Lindsay, Powers of Attorney in Australia and New Zealand, Federation Press, Annandale, 1992 at 65.
[41] 15th ed, Sweet & Maxwell, London, 1985, article 80 at 325–327 and article 109 at 452–453.
[42] (1880) 14 Ch D 249.
[43] (1880) 14 Ch D 249 at 256.
[44] Lawrie v Lees (1880) 14 Ch D 249 at 249.
[45] Reissue Vol 1 (2) at [61].
[46] [1955] 2 QB 218.
[47] [1891] 2 QB 208.
[48] 4 Halsbury’s Laws of England, Vol 12 at [1452].
[49] 3 Halsbury’s Laws of England, Vol 1 at [394].
[50] [1955] 2 QB 218 at 223.
[51] [1955] 2 QB 218 at 223–224.
[52] [1955] 2 QB 218 at 225.
[53] [1891] 2 QB 208.
[54] [1891] 2 QB 208 at 210.
[55] 2nd ed, Vol 1 at [346].
[56] (1873) LR 8 QB 305.
[57] (1886) 32 Ch D 337.
[58] In re Whitley Partners Ltd (1886) 32 Ch D 337 at 340.
[59] (1986) 7 NSWLR 644.
[60] McRae v Coulton (1986) 7 NSWLR 644 at 663.
[61] McRae v Coulton (1986) 7 NSWLR 644 at 663.
[62] McRae v Coulton (1986) 7 NSWLR 644 at 664.
[63] McRae v Coulton (1986) 7 NSWLR 644 at 664.
[64] [1984] QB 713.
[65] McRae v Coulton (1986) 7 NSWLR 644 at 665–666.
[66] McRae v Coulton (1986) 7 NSWLR 644 at 666.
[67] 19th ed at [2-024].
[68] [1997] 1 Qd R 567.
[69] Commonwealth Bank of Australia v Muirhead [1997] 1 Qd R 567 at 572.
[70] Powers of Attorney Act 1998, s 69(2).
[71] (1998) 194 CLR 355.
[72] Powers of Attorney Bill 1997 (Qld) Explanatory Notes at 18. Clause 68 became s 69 of the Powers of Attorney Act 1998 (Qld).
[73] (1998) 194 CLR 355 at [91]–[93].
[74] [2010] 2 Qd R 1 at [415].
[75] [2010] QSC 213 at [10], [77]–[82].
[76] [2008] QSC 78.