Hookey v Paterno

Hookey v Paterno concerned a dispute between the appellant, Mr Hookey, and the respondent, Mr Paterno, regarding the enforceability of a guarantee. The case was heard in the High Court of Australia.

The central legal issue before the High Court was whether the respondent, Mr Paterno, had established that the appellant, Mr Hookey, had actual or ostensible authority to enter into the guarantee on behalf of a company, "The Property Group Pty Ltd". This involved an examination of the principles of agency, particularly the distinction between actual and ostensible authority, and the evidentiary requirements for establishing each.

The High Court considered the evidence presented regarding the communications and conduct of the parties. It was held that for ostensible authority to be established, it must be shown that the principal (The Property Group Pty Ltd) represented to the third party (Mr Paterno) that the agent (Mr Hookey) had authority to act, and that the third party relied on that representation. The Court found that the evidence did not support a finding that Mr Hookey had actual authority to bind the company to the guarantee. Furthermore, the Court concluded that the representations made by Mr Hookey were not sufficient to establish ostensible authority on his part to enter into the guarantee on behalf of the company.

The High Court allowed the appeal, setting aside the orders of the lower courts.