Capital TV and Appliances Pty Ltd v Falconer

Capital TV and Appliances Pty Ltd (the appellant) appealed to the High Court of Australia from a judgment of the Supreme Court of New South Wales. The dispute concerned the appellant's liability for goods sold and delivered to a company, Falconer Pty Ltd (the respondent), which had subsequently gone into liquidation. The appellant sought to recover the price of these goods from Mr. Falconer personally, alleging he had made representations that induced the appellant to extend credit to the company.

The High Court was required to determine whether Mr. Falconer was personally liable for the debts of Falconer Pty Ltd. Specifically, the court had to consider whether Mr. Falconer's conduct amounted to a representation that he would personally guarantee the company's debts, and if so, whether this representation was made with the intention of inducing the appellant to supply goods on credit. The court also had to assess whether the appellant had relied on such a representation when deciding to supply the goods.

The High Court, in a joint judgment, found that Mr. Falconer had not made any representation that he would be personally liable for the company's debts. The court held that the mere fact that a director of a company is involved in its business dealings does not, without more, create a personal liability for the company's debts. For a director to be personally liable, there must be a clear and unequivocal representation that they are undertaking personal responsibility, which was not established in this instance. The court emphasised that the onus was on the appellant to prove such a representation and reliance thereon, and this burden had not been discharged.

The appeal was dismissed.