Green Frog Pty Ltd (TC) operates three French restaurants in Newcastle. On 24th March 2012 Cindy DeMille was appointed to the position of Managing Director of GF for a two year period.

A return was lodged with ASIC indicating her appointment as a director on that date. Cindy was not formally reappointed at the end of the two years but has continued to act as Managing Director. No ASIC return has been lodged since the expiration of her contract term.

The terms of Cindy's employment contract with GF restrict Cindy from borrowing more than $100,000 on behalf of the company without obtaining prior approval from the Board of Directors.

On 10th May 2015, Cindy went to the Grand Credit Union (GCU) and asked to borrow $200,000 on behalf of GF Pty Ltd. Cindy told the Bank that the money was to be used to acquire an interest in a winery in the Hunter Valley which would give the company substantial tax benefits. GF was a long-term customer of GCU and the Credit Union was accustomed to dealing with Cindy as managing director of GF. However, GCU was not aware of the contents of Cindy's employment contract

Cindy signed the loan contract as Managing Director on behalf of GF. GCU advanced the money by a cheque payment to GF. Cindy misappropriated the money by diverting it to another similarly named account which she had opened at another Bank. She has disappeared overseas

Advise GCU as to whether, if the case went to court, Green Frog Pty Ltd would be obliged to honour the loan contract under the general law.

Advise GCU as to whether, if the case went to court, Green Frog Pty Ltd would be obliged to honour the contract if GCU relied on the statutory assumptions in sections 128 and 129 of the Corporations Act 2001 (Cth).