Question
TKD Pty Ltd is situated in Australia. It has three directors: David, Sneha and Chen. David signed a mortgage and guarantee in favour of Quickloan
TKD Pty Ltd is situated in Australia. It has three directors: David, Sneha and Chen. David signed a mortgage and guarantee in favour of Quickloan Bank Ltd on behalf of TKD Pty Ltd. The guarantee secured a personal loan by Quickloan Bank Ltd to David. The loan is guaranteed by a mortgage over TKD Pty Ltd's land in Ballarat. The documents were signed by David and appeared to have been signed by the other directors. However, David had forged the signatures on the documents and the other directors were unaware of the transactions. TKD Pty Ltd's constitution provides that loan agreements could only be executed if authorized by directors' resolution. In this instance, no such resolution had occurred. Quickloan Bank Ltd had not undertaken searches to establish whether David, Sneha nor Chen were directors of TKD Pty Ltd prior to accepting the guarantee and mortgage. David has failed to repay the loan and has now left Australia. Quickloan Bank Ltd is attempting to enforce the guarantee and mortgage against TKD Pty Ltd. Required: Discuss whether Quickloan Bank Ltd can enforce the guarantee and mortgage (contracts) against TKD Pty Ltd. You should support your answer with reference to relevant sections of the Corporations Act 2001 (Cth) and to relevant cases
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