Facts of the case:
In the case of (Australia and New Zealand Banking Group Ltd v Frenmast Pty Ltd (2013) NSWCA 459) three brothers – Robert, Vlado and Steve Tiricovski ran a liquorice manufacturing business which involved three separate companies – RV & Sons Pty Ltd (‘RV’), Australian Fresh Confectionery Pty Ltd (‘AFC’) and Frenmast Pty Ltd (‘Frenmast’). All three brothers were shareholders and directors of Frenmast which owned a property and a factory in which RV leased to manufacture the liquorice and sell it to AFC. Robert managed the business finances and administration tasks whilst Vlado was in charge of manufacturing. Steve was overseas during the majority of the period and did not actively participate in the running of the company. Due to a falling out in 2006, Vlado and Steve stopped communications with Robert.
Before the disagreement, Australian and New Zealand Banking Group Ltd (‘ANZ’) had provided Frenmast with facilities with cross-guarantees by the other two companies and Robert and his wife Slavica. On the 3rd of September 2008, ANZ proposed another guarantee from Frenmast over a loan for AFC and Robert in which acknowledgement and acceptance of the offer were signed by Robert and Vlado as directors of Frenmast. However, Vlado’s signature was forged…show more content… - In the appealed decision (ANZ Banking Group Pty Ltd v Tiricovski (2012) NSWSC 1304), the primary judge (Adam J) held that there were no such ‘dealings’ between Frenmast and ANZ in relation to the guarantee. Thus ANZ’s entitlements to rely on section 129 were void because it had not satisfied the conditions under section 128. Justice Adam based his decision around the issue that ANZ had contacted Robert as an individual whom did not have the authority to guarantee on Frenmast’s behalf without a signature of another director or secretary. In effect, the guarantees were non-binding for Frenmast and Robert alone could not have partaken in any ‘dealings’ with ANZ on behalf of