Ita Vuletic v Contributory Mortgage Nominees Ltd
- Court
- Court of Appeal
- Judgment
- 31 July 2006
Areas of law
Judgment analysis
AI-generated summary
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Facts
Contributory Mortgage Nominees Limited sold a property to Harris Road No 10 Limited for $2.5 million plus GST. The sale agreement contained a clause (clause 26) stating that the agreement 'shall be personally guaranteed by ITA VULETIC'. Mrs Vuletic, a director of Harris Road, signed the agreement once in the space provided for the purchaser's signature, writing the word 'Director' underneath her signature. Harris Road subsequently failed to pay the GST component of the purchase price, amounting to $312,500. The respondent commenced proceedings and obtained summary judgment against Mrs Vuletic in the High Court. The High Court judge found that Mrs Vuletic's single signature bound both the company as purchaser and herself as guarantor (a 'dual capacity' signature). Mrs Vuletic appealed that decision to the Court of Appeal. The company, Harris Road, had been struck off the register of companies.
Held
- Where a director signs a contract once in the signature block for the company and adds their title ('Director'), there is a presumption they are signing only in their capacity as a director on behalf of the company.
- This presumption is reinforced where the structure of the agreement does not name the director as a party, provides no separate signature block for a guarantor, and where the guarantee clause is worded as a future obligation ('shall be personally guaranteed') rather than a present guarantee.
- In the absence of extrinsic evidence of an intention to be personally bound, the addition of the word 'Director' under the signature strengthens the inference that the signatory was not signing in a dual capacity.
- On this basis, it is 'fairly arguable' that the signatory did not bind herself as a personal guarantor, making summary judgment against her inappropriate, and the matter should proceed to trial.
Orders
The appeal is allowed. Orders 1, 2, and 4 of the High Court judgment are set aside. The respondent's application for summary judgment against the appellant is dismissed. The proceeding must now proceed to trial.
Key passages3
It is possible for a person to sign a contract once but in a dual capacity.
“No one disputes that it is possible for a person to sign a contract once but in a dual capacity.”
There is a presumption that if the signer purports to sign on behalf of a company or another, he or she is signing only in that capacity.
“But there is a presumption that, if the signer purports to sign on behalf of a company or another, he or she is signing only in that capacity.”
The presumption that a person signs only on behalf of a company may be displaced by clear words within the contract or by extrinsic evidence from which the signer's intention to be bound personally may be inferred.
“Such presumption may be displaced by clear words within the contract or by extrinsic evidence from which may be inferred the signer’s intention when affixing his or her signature.”
Cases mentioned in judgment
Legislation mentioned
- Companies Act 1993, s 180
- Court of Appeal (Civil) Rules 2005, rule 54