Jeff has never been formally appointed as a director of Delta Pty Ltd (‘Delta’) and his name does not appear as a director on the public records of the company available at ASIC (Australian Security and Investments Commision). However, Jeff attends all directors’ meetings as if he were a director, he receives a copy of all board papers and minutes, the directors permit his vote to be counted at board meetings, employees of the company treat him as if he is the managing director and he has negotiated many contracts with clients of the company over the years. Jeff approached Delta’s bank (Cheatem Ltd) seeking to borrow $200 000 on behalf of Delta. Cheatem Ltd had been the company’s bank for many years and had knowledge of Jeff’s role in the company’s affairs. Jeff advised Cheatem Ltd that the money was required to purchase an interest in a tax-effective ostrich farming scheme. After a few days, Cheatem had Jeff execute a loan document on behalf of Delta. The money was placed into Delta’s account and Jeff promptly withdrew it and is now living in Majorca.

Required:

i. Is Jeff a director of the Delta? You must refer to relevant legislation and case law to support your answer.(5 marks)

ii. Is Delta bound by the loan agreement? You must refer to relevant legislation and case law to support your answer.(10 marks)