Forgery of guarantee

Case Note by Roslyn Kaye

Australia and New Zealand Banking Group Limited v Frenmast Pty Ltd [2013] NSWCA 459

The New South Wales Court of Appeal allowed this appeal brought by the ANZ bank.  The trial judge had found that the bank was not entitled to rely upon an assumption that a forged guarantee document had been duly executed.  The Court of Appeal held that the bank was entitled to rely upon the assumptions in sections 129(4) and (5) of the Corporations Act 2001 that the guarantee had been duly executed, and accordingly the guarantee was enforceable against the respondent company. 


By way of factual background, in September 2008 a guarantee was executed to secure a loan advanced by the bank.  The guarantee purported to be signed by two individuals – a director/secretary (Robert Tiricovski) and another director (Vlado Tiricovski) of the respondent company.  Vlado Tiricovski’s signature was a forgery.

The bank relied upon sections 127, 128 and 129 of the Corporations Act 2001 in submitting that it was entitled to enforce the guarantee.

Section 127(1) provides that a company may execute a document without using a common seal if the document is signed by either two directors or a director and secretary of the company.  In relation to section 127, the ASIC register recorded that both Robert Tiricovski and Vlado Tiricovski were directors of the respondent company, and that Robert Tiricovski was the company secretary.

Section 129(5) provides that “A person may assume that a document has been duly executed by the company if the document appears to have been signed in accordance with subsection 127(1)).”  Under section 128(1), “A person is entitled to make the assumptions in section 129 in relation to dealings with a company.”

The appeal

The issues in the appeal concerned the interpretation of the phrase “in relation to dealings with a company” in section 128(1), and specifically whether the respondent company had had “dealings” with the bank concerning the giving of the guarantee.

The Court of Appeal held that there had been “dealings” between the bank and the respondent company, as one company director, Robert Tiricovski, had actually signed the acknowledgment which accompanied the guarantee and had also signed the guarantee itself.  The Court further held that Robert Tiricovski did have apparent authority to engage in those communications with the bank, as the other directors had allowed Robert to manage the company’s relationship with the bank around the period in question.

Roslyn Kaye – CommBar profile

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