Principal and Agent—Liability of agent to third persons—Execution of contract in name of company by persons purporting to be directors—Company not then incorporated—Belief of directors in incorporation—Whether directors personally liable on contract—Whether directors executed contract as agents for non-existent company—Breach of warranty of authority. Companies—Contract made in name of company by persons signing as directors—Company not incorporated—Personal liability of directors on contract.
Decisions
1966, February 25. The following written judgments were delivered:- BARWICK C.J., KITTO, TAYLOR AND OWEN JJ. On 22nd December 1959 the appellants purported to enter into a contract for the sale of certain land at Ingleburn to Western Suburbs Holdings Pty. Limited. The contract incorporated the conditions of sale approved by the Real Estate Institute of New South Wales and was executed by the appellants as vendors and it bore the following subscription as the signature of the purchaser:
"Western Suburbs Holdings Pty. Ltd. Robert Smallwood ) ) Directors.
J. Cooper ) "
It was subsequently found that Western Suburbs Holdings Pty. Limited had not at that time been incorporated but it is common ground that both the appellants and the respondents, Smallwood and Cooper, who subscribed the name Western Suburbs Holdings Pty. Limited to the form of contract and added their own signatures as directors, believed that it had been and that the latter were directors of the company. Thereafter the appellants instituted a suit for specific performance against the respondents alleging that by a written contract made between the appellants as vendors and the respondents who "described themselves therein as 'Western Suburbs Holdings Pty. Limited'" agreed to purchase the subject land from the appellants. No attempt was made at the trial to make this allegation good but, without amendment, the case proceeded as one in which the appellants sought to impose a liability in accordance with the terms of the contract upon the respondents as agents contracting on behalf of a principal not yet in existence. (at p54)
2. Upon the trial the appellants were successful in obtaining a decree for specific performance but on appeal to the Full Court the decree was set aside and the suit dismissed. All members of the Full Court thought the case was covered precisely by the decision of the Court of Appeal in Newborne v. Sensolid (Great Britain) Ltd. (1954) 1 QB 45 and although one of their number was, perhaps, more than disposed to doubt the correctness of that decision, the Court as a whole decided that it should be followed. It is from this decision that this appeal is brought. At the outset of the case we should say that the decision in Newborne's Case (1954) 1 QB 45 is directly in point but we propose to deal briefly with the arguments that were presented to us and which, if they were accepted, would establish that decision to be wrong. (at…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
Continue reading Black v Smallwood
Sign in free to access the full text
Details
AGLC
Black v Smallwood [1966] HCA 2
Case
[1966] HCA 2
Decision Date
CaseChat Overview and Summary
In *Black v Smallwood*, the High Court of Australia considered a dispute concerning the ownership of certain land. The appellant, Black, claimed ownership of the land, while the respondent, Smallwood, asserted a competing claim. The case came before the High Court on appeal from a decision of the Supreme Court of New South Wales.
The central legal issue before the High Court was whether the appellant had acquired title to the land through adverse possession. This required the court to determine whether the appellant's possession of the land had been of the requisite character and duration to extinguish the title of the true owner under the relevant legislation.
The High Court examined the evidence presented regarding the appellant's use and occupation of the land. The court applied the established legal principles governing adverse possession, which require possession to be open, notorious, continuous, exclusive, and adverse to the title of the true owner for the statutory period. The court found that the appellant's possession did not meet these criteria, as it was not sufficiently adverse to the true owner's rights.
Consequently, the High Court dismissed the appeal, upholding the decision of the Supreme Court of New South Wales.