Hi guys,
I was wondering if you could help me with 2 questions I have:
1. Acc Bank handed back its banking licence in 2014. Deed of Mortgage states that "the Bank may point (...) receiver BY WRITING UNDER ITS HAND". Is it legal that ACC LM Ltd authorised its employees (who are NOT Executive Director, Secretary or Law Agent) to appoint receiver "under hand of the bank" if they don't even have the banking licence?
2. The resolution that board of directors of ACC LM Ltd signed only in August 2015 (after Ben Gilroy won the case for Mr. McPhilips) is ratifing the authorisation of mentioned employees RETROSPECTIVELY - going back to 2010, when they have been given power to witness under seal only. Is that lawful?
Point 2.
In relation to poster Sarenco's second point, that it is very common for a board of directors to ratify the execution of documents on behalf of the company. This is true, however, the poster Sarenco neglects to inform you that this action, like most law, can never be retrospective in it's effect.
The rules governing who can sign on behalf of the bank don't exist to protect the other party. They exist to protect the bank shareholders from the bank management.
It is a check to prevent an unauthorised manager from committing the bank without the knowledge/consent of the proper authority of the bank.
For a third party to rely on it seems meaningless to me.
A board of directors retrospectively confirming a document on behalf of the bank has nothing to do with enacting law.
Thank you for clearing this one Sarenco. But can they go retrospectively, so other words, can they go back in time with changing rules around who can and who can't sign the documents on behalf of the bank/company? the effect is very clear - the receivers who were appointed invalidly according to the rules from before August 2015, will be perceived to have been appointed validly, which will have huge effect on many cases. Can they change the rules just to suit themselves? That doesn't seem right.
you are totally incorrect, you need to consult with a solicitor, barrister, or Judge. or indeed read the judgment of ACC Loan Management LTD V McPhilips which incorporates the very essence of the law that you have failed to comprehend.
So, in essence, ACC Loan Management LTD is indeed a new legal entity as opposed to ACC Bank PLC.
A LTD is prohibited from offering securities (equity or debt) to the public.
In relation to poster Sarenco's second point, that it is very common for a board of directors to ratify the execution of documents on behalf of the company. This is true, however, the poster Sarenco neglects to inform you that this action, like most laws, can never be retrospective in it's effect or application.
A limited company is prohibited from offering securities ( equity or debt ) to the public. Need I say anymore.
I lost my costs in a court case some years ago over the appointment of a receiver where the appointment was made outside the legal requirements. The court accepted this as fact, but ruled that I could not rely on it because the legal requirement was not designed to protect someone in my position.
The facts were not identical but I wish this case had been around then.
The mortgage document will set out how a receiver may be appointed and a lender (acting through its Board or otherwise) cannot unilaterally change this provision. So, if a receiver was invalidly appointed under the terms of the mortgage, the only thing a lender can do is re-appoint the receiver (or properly appoint a new receiver) but this will not have retrospective effect.
So, for example, if a mortgage deed provides that the appointment of a receiver has to be executed in a particular manner (e.g. under hand) and that the appointment can only be made by certain office holders, then the appointment will only be valid if and when it has been executed in that manner by those particular office holders.
The appointment of a receiver will only be effective from the date that he or she is validly appointed and an action for damages may lie in respect of the actions or omissions of an invalidly appointed receiver. However, that is not to say that the Board of Directors of a particular lender cannot ratify the signature by particular office holders (as opposed to approving the execution in advance). As cremegg says above, this is essentially to do with the internal corporate governance of the lender.
Hope that's clear.
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