Utilizing IRAC Format,

1) Explain whether Westside Bank can or cannot enforce its mortgage over the building and whether or not it can rely on the assumptions in s129 of the Australian Corporations Act (Cth).

Mr & Mrs Jaquerie operate a popular transport business in Darwin through a company called 'Go Go Transports Pty Ltd'. Mrs Jaquerie is a director of the company and Mr Jaquerie is also a director and secretary of the company. The shareholders in the company are: Mr&Mrs Jaquerie 50%; and Mr Daniels 50%. Mrs Jaquerie goes to Westside Bank where 'Go Go Transports Pty Ltd' has its accounts and asked to borrow $500,000. Westside Bank has been the company's banker for many years and the bank manager knows Mr & Mrs Jaquerie reasonably well. Mrs Jaquerie tells the bank manager that she wants the money to invest in a pine plantation which would give the company substantial tax benefits. The bank manager thinks this is rather odd but makes no further enquiries and agrees to lend the money as long as it can take security over the company's major asset which is the building from which 'Go Go Transports operates from. Mrs Jaquerie obtains the loan and mortgage documents from the bank. She affixes the common seal of Go Go transport Pty Ltd and forges her husband's signature as secretary. The bank advances the money to Mrs Jaquerie's personal account. Mrs Jaquerie invests the money, however the pine plantation was a scam and never existed. Mrs Jaquerie did not undertake any research into the pine plantation and relied solely on her friend for advice (her friend had no experience in business). Nor did Mrs Jaquerie advice or husband of the loan or the investment. Westside bank becomes aware that the pine plantation was a scam and has requested Go Go Transport Pty Ltd pay back the outstanding loan