Problem: Fraser is a director and majority shareholder of Beltham Pty Ltd. The company wishes to borrow money from Fin Bank to fund development of a new mobile phone but has no assets to put up as security. Fraser is also a director of Gladiola Ltd, a company that specialises in corporate cleaning services. Gladiola Ltd owns a commercial property. Fraser arranges from Gladiola to put up the commercial property as security for the loan to Beltham Pty Ltd by fixing the common seal to the mortgage document and signing along with Tim, the company secretary (although Tim has never been formally appointed). The new mobile phone is a failure and Beltham Pty Ltd goes into liquidation. Fin Bank seeks to repossess the commercial property to recover the loan. This is the first time the other directors of Gladiola Ltd learn about the loan to Beltham Pty Ltd and wish to stop the repossession.