Alpha Bravo Pty Ltd ("AB") is a company incorporated in 2015. It is the holding company of a number of subsidiary companies and trusts. The subsidiaries operate a variety of different businesses. One particular subsidiary is Charlie Delta Pty Ltd ("CD"), which was incorporated in 2017, was established for the sole purpose of being the trustee of a trust, the Echo Foxtrot Trust ("EF").

CD as the trustee of EF operates an import-export business, buying and selling widgets in a number of different areas.

AB has 5 directors: Georgia (the chair), Hans (the managing director and Georgia's husband), Ivy, Juliet and Kari. Each of the directors owns two voting shares in AB. Leo and Mona are not directors, but are major shareholders of AB: Leo owns 10 voting shares in ABC, while Mona owns 14 shares in ABC. Leo is keenly involved in the business of AB, regularly attends board meetings, and Georgia and Hans look to him for guidance.

The company's head office is in Brisbane. All its directors and shareholders live in Brisbane, except for Juliet, who lives in Broome.

AB follows the replaceable rules, with one exception. There is a clause that states that AB cannot enter into any loan, or guarantee any loan, in excess of $50,000 without the approval of the general meeting.

CD has no other business other than acting as trustee of EF. Its directors are the same as AB's, but it does not appear to hold board meetings: the directors merely sign resolutions (which they term "circulating resolutions of CD") when they are meeting at the board meetings of AB.

EF is a unit trust with three unit holders, Leo, Mona and AB. AB holds 50% of the units and Leo and Mona each hold 25% of the units. The trust deed for the unit trust gives the unit holders limited liability: that is, it provides that the trustee can only be indemnified for any trustee expenses or liabilities from the assets of the trust, and not from the unit holders themselves. EF 2 maintains books of accounts. However, its operations are intrinsically linked with AB: AB employs all the employees that work in the business of EF and incurs most of the expenses on behalf of EF. It also operates the bank account for EF: all revenue of EF is automatically paid into the bank account of AB, who also issues tax invoices to customers (in the name of EF). At the end of every financial year, the accountant for the group, November Accountants, prepares accounts for EF, as well as the minutes of the supposed meetings of CD as trustee of EF, which declare that all profits are to be paid to unit holders. AB then pays 25% of the profits earned by EF to Leo and Mona as unit holder distributions of profit from EF: AB retains the other 50% as its own distribution, which it books in its accounts as a trust distribution.

The bankers of DE, Oscar Wilde Bankers, are worried about its liquidity. They therefore approach Georgia and Hans about signing a guarantee, to guarantee all the debts that EF owes to Oscar Wilde Corp (which amount to $750,000). This guarantee includes a charge over the property of AB.

Georgia calls an emergency board meeting, giving 3 day's notice via email, saying that this needs to be done because financing will be pulled if it does not occur. She does not explain exactly what will occur in the board meeting. Georgia, Ivy and Leo attend in person, at the offices of AB. As the remaining directors cannot attend in person, Georgia arranges for a Zoom hook up. Kari cannot attend the meeting, as her computer has issues with Zoom. She emails this fact to Georgia before the meeting, but Georgia does not read the email. Hans and Juliet both attend via Zoom. Hans is cut off halfway through meeting, but no-one takes any notice. Juliet is unhappy with the guarantee, arguing that the reason they set up EF was to ensure that AB was not exposed to this liability. When no-one is listening to her, she exits the meeting. Georgia, Ivy and Leo vote in favour of the guarantee.

Hans and Leo attend a meeting with Papas, the loan officer of Oscar Wilde Bankers. They sign the guarantee, including the charge, with Leo signing "for ABC Pty Ltd" and Hans signing as managing director. Papas knows that Leo is not a director of ABC. He also knows that ABC's constitution requires that the general meeting approve this guarantee and asks Hans about the matter. Hans is evasive merely says "It's all good".

Kari and Juliet are angry with the contract and call a general meeting. The notice is posted to all shareholders on 1 February, with the meeting to be held via WebEx, with Juliet hosting from her home in Broome. Kari, Juliet and Mona all attend, and vote to rescind the contract. They also vote to sack Georgia, Ivy and Hans from the board, although this resolution was not included in the notices to shareholders. They send notifications to this effect to the other shareholders and Kari contacts Papas to state that the guarantee has been rescinded. The following day, Oscar Wilde Bankers registers the charge.

Your client is Juliet, who approaches you after finding out that the charge has been registered. You need to advise Juliet on whether AB will be held liable for the liabilities of EF, either under this guarantee or otherwise. In particular, you need to advise as to whether the charge could be valid.