Can a legal (or other) professional be validly appointed by a single director acting on behalf of their company?
In this case, the answer was 'no'.
The company's constitution required "the business of the company" to be "managed by the Directors [plural]". This was interpreted to mean that the appointment of solicitors (being part of the "business of the company") required both directors' "agreement and/or involvement" (at [12]). In addition, a separate part of the company's constitution required validly passed directors' resolutions to bear the signature of both directors.
Further, while the appointing director had held herself out as the managing director of the company (to whom the power of the board might have been delegated), it turned out that she was never validly appointed either (at [16]).
Does this mean that client onboarding now requires poring over prospective clients' constitutional documents and resolutions to ensure there is proper authority for the appointment?
Probably not in every case, but where there are disputes among the client's stakeholders (as in this case), it would be prudent to make extra sure one is validly appointed.
Leaving aside the question of professional fees (which might be recoverable relying on the indoor management rule), an invalidated appointment would almost certainly have a deleterious effect on steps taken on behalf of the company, potentially placing the company (and professional) in a precarious position.
#law #companies
Lim Jinn Tonn Zanelle v Royal Amulet Pte Ltd [2024] SGHC 205
Civil Procedure — Striking out
