BNZ Bank's entitlement for mortgage of properties of company building

Running Head: CASE STUDY
CASE STUDY
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Author’s Note

CASE STUDY1
Issue
The concern in the given case is whether BNZ Bank is entitled for the enforcement of the
mortgage of the property of the building.
Rules
The Corporation Act 2001 explains the provisions with respect to the assumptions made
during dealings with the parties including a company or the person acquiring the title to such
deal of the company. Section 127 of the Act says about the provision for the implementation of
the document with and without the seal. In this scenario, it has been stated that a company can
implement documents without the common seal by the way of signatories of one director and
one company secretary appointed in that company. The signatories of two directors shall also
suffice the requisites for the implementation of such document. In case of singly proprietary, the
director and the company secretary are the one person and hence one signature of the singly
director and the company secretary shall be enough to meet the pointers for the implementation
of the document. On the contrary, dealing with the documents with the common seal, the
requisites lie with the witnesses of such seal. In this scenario, the witness would essentially
include two directors of the company. In certain circumstances, it may also include the witness
of one director and one company secretary of the company. In circumstances where, the director
and the company secretary is the same for the company which is the case of sole proprietary, the
signature of such single director and the company secretary shall form the witness to the
implementation of the documents. Nevertheless, the provision does not marginalize the
numerous mannerisms in which a document can be implemented by the company. A company’s
constitution guides the provisions for the implementation of the document according to which

CASE STUDY2
the document can be implemented even by way of passing resolution by the directors in a Board
Meeting.
Section 128 of the Act states about the entitlement for the assumption making. This
means that section 128 primarily lays down the requirements as to the assumptions that can be
made in accordance with section 129 of the Act. There are four main provisions for this section
to be enforced. The first provision states that in case of dealing between a person and company,
the assumptions can be made about the company and it’s related validity. The second provision
states that in case of dealing between a person and other person who has acquired the title to
manage the properties of the company, the assumptions can be made by the person with respect
to such person and their viability of appointment. Thirdly, in case of dealing with the agents or
the officers of company, and such agents or officers are acting fraudulently or with forged
papers, assumptions can be made by the other party. However, the fourth provision is a
conditional provision for all the other three provisions stating that the assumptions can be made
as per section 128(1), (2), (3), but such assumptions are subject to the validity of the correctness
of the assumptions. It means that if the assumption is incorrect, it shall not be enforceable.
However, the provision also states that at the time of dealing, if the assumptions we’re o
suspicious nature, or the person or party knew that the assumption is incorrect then such
assumption shall not be admissible.
Section 129 of the Act states that in accordance with the flexibility of the applicability of
the Constitution of the company, the assumption can be made with respect to the directors that
they have been appointed by the company members to perform the rights and duties as the
director to the company. Assumption should always be in positive nature stating that it should be
assumed that the officers and the agents of the company are personal their duties as bestowed