Clarke & Walker Pty Ltd v Thew - [1967] HCA 28

HIGH COURT OF AUSTRALIA

Barwick C.J., McTiernan, Taylor, Windeyer and Owen JJ.

CLARKE &WALKER PTY. LTD. v. THEW

(1967) 116 CLR 465

20 September 1967

Guarantee

Guarantee—Consideration—Undertaking not to take "proceedings" against principal debtor—"Proceedings"—Demand for payment with threat of winding-up petition—Companies Act, 1961 (N.S.W.), s. 222 (2) (a).*

Decisions

September 20.
The following written judgments were delivered:-
BARWICK C.J., TAYLOR, WINDEYER AND OWEN JJ. On 30th June 1964 the respondent, in consideration of the appellant "undertaking not to sue or take any proceedings against Property Modernising and Service Co. Pty. Limited . . . in respect of the sum of 2,000 pounds" which that company owed to the appellant, guaranteed the payment of the said sum or such part thereof as should not have been repaid within six months "from the date hereof". No part of the said sum having been repaid by the company by 22nd January 1965 the appellant brought an action in the District Court against the respondent on his guarantee. In answer to the appellant's claim the respondent set out the guarantee and alleged that the appellant "did sue Property Modernising and Service Co. Pty. Limited and it did take proceedings against the said company whereby the defendant was discharged from his said guarantee". (at p466)

2. It is clear enough that the appellant's undertaking not to sue or take any proceedings against the company in respect of the debt was a promise not to do so within the period of six months specified in the guarantee and the only question which has been debated is whether a written demand made by the appellant upon the company and left at its registered office constituted the taking of "proceedings" against the company in respect of the outstanding debt. The learned District Court judge was of the opinion that it did not and entered judgment for the appellant. But on appeal a majority of the Court of Appeal thought otherwise, and directed that judgment should be entered in the action for the respondent. (at p467)

3. The demand which was served was couched in formal language and was expressed to be a notice pursuant to s. 222 (2) (a) of the Companies Act, 1961 (N.S.W.). It recited that the company was indebted to the appellant in the sum of 2,229 pounds 10s. 1d. for goods sold and delivered and the notice intimated that unless the outstanding amount was paid before 5 p.m. on 11th November 1964 action would be taken by the appellant "to petition that the company be wound up for the reason that the company is within the meaning of s. 222 of the Companies Act, 1961, unable to pay its debts". The demand was not complied with but no petition for a winding-up order was filed within the six months' period. In the circumstances the question is whether service of such a demand constitutes the taking of "proceedings" within the meaning of that expression as it is used in the guarantee. We are firmly of…

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 Clarke & Walker Pty Ltd v Thew

Details

AGLC: Clarke & Walker Pty Ltd v Thew [1967] HCA 28
Case: [1967] HCA 28
Decision Date: 20 September 1967

CaseChat Overview and Summary

Clarke & Walker 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 damages arising from a collision between a motor vehicle owned and driven by the appellant and a motor vehicle driven by the respondent. The collision occurred on a public road, and the respondent suffered injuries and damage to his vehicle.

The High Court was required to determine whether the appellant was vicariously liable for the negligence of its employee, who was driving the appellant's vehicle at the time of the accident. Specifically, the court had to consider whether the employee was acting within the scope of his employment at the time of the collision, or if he had deviated from his employment for his own purposes.

The court found that the employee had been instructed to drive the appellant's vehicle to a particular destination for a work-related purpose. However, the employee had taken a significant detour to visit a friend before proceeding to his intended destination. The court applied the principle that an employer is vicariously liable for the acts of an employee if those acts are done in the course of employment. A deviation from the employer's instructions, even if for the employee's own purposes, does not necessarily take the employee outside the scope of employment if the deviation is not so substantial as to amount to a complete departure from the employer's business. In this instance, the court held that the detour, while a breach of instructions, was not so extensive as to remove the employee from the scope of his employment.

The appeal was dismissed, and the appellant was held liable for the damages awarded to the respondent.

Orders