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Compliance with the constitution and replaceable

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Unformatted text preview: compliance with the constitution and replaceable rules {s 129(1) Corporations Act} Persons listed as directors or secretary with ASIC are duly appointed and have their customary authority {s 129(2)(a) and (b) Corporations Act} Persons held out by company to be an officer or agent of the company are duly appoint and have authority to exercise the powers and perform the duties customarily exercised or performed by that kind of officer or agent of a similar company {s 129(3)(a) and (b) Corporations Act} That the directors involved have discharged their duties {s 129(4) Corporations Act} A Document (without seal) that appears to be executed without seal in accordance with s 127(1) may be assumed to have been duly executed by the company {s 129(5) Corporations Act} A Document (with seal) that appears to be executed with seal in accordance with s 127(2) and fixing of STS Corporations Law Hadi Mazloum: [email protected] 5 Corporate Authority common seal has been witnessed {s 129(6)(b) Corporations Act} can be assumed to be duly executed by company {s 129(6) Corporations Act} (3) Notes on the Assumptions [s 129(1) Corporations Act } essentially is a rewording of the indoor management rule [s 129(5) and (6) Corporations Act} attempt to cure defects in the formal authority o These provisions follow Mason J’s approach in {Northside} because it essentially says if you have a document that looks like its been validly executed then it has been o However Dawson J’s approach in {Northside} would require this assumption in addition to another assumption such as the ‘holding out’ to be able to rely on the document {s 129(3) Corporations Act} appears to be rewording of the apparent authority doctrine (4) Limitations A third party cannot rely on the statutory assumptions if they knew or suspected an assumption was incorrect {s 128(4) Corporations Act} o This is essentially the put on enquiry test discussed in {Northside} however under the statute the subjective nature of the test makes it favour the third party – possibly closer to { Mason J in Northside} ‘s approach rather than Dawson J. Under the statute, this test is subjective and requires that the Company provide evidence that the Outsider had: o Actual knowledge – they outsider actually knew that the assumption was incorrect Note that some courts may try to put an objective spin on it by saying that knowledge can be actual OR “should’ve known” however the legislature seems quite clear in its intent that this not be the case E.2 Indoor Management Rule Prior to the enactment of the Statutory Assumptions, the Indoor Management Rule was approved by the High Court in {Northside Developments} There are two approaches outlined by Mason CJ and Dawson J in Northside which vary slightly in terms of when the IMR does NOT apply Indoor Management Rule: The basic proposition is that a person dealing with a Company can assume due compliance with all the steps necessary to clothe that person with authority...
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