Northside Developments Pty Ltd v Registrar-General (1990) 93 ALR 385

You are here:
< Back


  • The Registrar General registered a mortgage in favour of Barclays Credit Corporations Holdings (Barclays) over some land.
  • Northside Developments Pty Ltd (Northside) was the registered proprietor of the land.
  • The mortgage purported to have been executed by Northside under common seal.
  • Robert Sturgess, a director of Northside, attested to affixing this common seal.  His son, Gerard Sturgess, also signed as “company secretary”.
  • The articles of association required either two directors present when affixing the seal, or a director and company secretary. Gerard Sturgess was not the company secretary.
  • The mortgage secured a loan to companies which were owned by Sturgess.  Northside had no interest in these companies.
  • Following default of the mortgage, Barclays sold the land at auction to a third party.  Northside sued the Registrar General for damages under section 127 of the Real Property Act 1900 (NSW) for having registered its land to another entity.
  • Young J held that the nature of the mortgage should have put the Registrar General on inquiry and no inquiry was made.  The Registrar General appealed.


  • Should Barclays have been put on inquiry or could it have relied upon the common seal as evidence of Northside’s agreement?


  • The High Court held that a third party dealing with a company is not entitled to relying on the affixing of a common seal as evidence of the validity of an instrument if the very nature of the transaction is enough to put him on inquiry.
  • A person dealing with a company is put on inquiry when the nature of the transaction appears unrelated to the purpose and business of the company and the company seems to gain no benefit.
  • There was no representation from the directors that the seal was affixed with their authority or approval.
  • The transaction was completed without Northside’s actual or apparent authority.


“The affixing of the seal to an instrument makes the instrument that of the company itself; the affixing of the seal is in that sense a corporate at, having effect similar to a signature by an individual …Thus it may be said that a contract executed under the common seal evidences the assent of the corporation itself and such a contract is to be distinguished from one made by a director or officer on behalf of the company, that being a contract made by an agent on behalf of the company as principal.”

(Mason J at page 392)

Full Text

The full text is available here:

-- Download Northside Developments Pty Ltd v Registrar-General (1990) 93 ALR 385 as PDF --

FavoriteLoadingSave this case