BT Securities v Lobel [2011] NSWSC 335

A lender sought for monies owing to it following a default by the borrower and the borrower claimed he was not liable because the loan was not a deed and that the power of attorney was limited to deeds only and the did not authorise the attorney to sign the loan agreement.

The law is that an agent cannot execute a deed unless the agent is appointed under seal. Although the agreement was expressed to be executed as a deed, the authority pursuant to which it was signed was not under seal, hence it could only take effect and did take effect as an agreement. There was nothing in the agreement that said it could only take effect as a deed. The court also found that the power of attorney properly authorised the borrower’s attorney to sign the agreement.

The court found the defences so obviously untenable that they cannot possibly succeed and gave summary judgment for the lender .

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