Lustre Hosiery Ltd v York

Lustre Hosiery Ltd. (the plaintiff) appealed to the High Court of Australia from a decision of the Supreme Court of New South Wales. The plaintiff had sued Henry Herbert York (the defendant) to recover a sum of money under an agreement where the defendant agreed to pay the plaintiff amounts due in respect of the sale of its goods, which would otherwise have been paid by a del credere agent. The plaintiff's case relied solely on alleged admissions made by the defendant. The defendant contended that he had been informed the del credere risk was approximately £3,500 and that this would be offset by commissions.

The legal issue before the High Court was whether the statements and conduct attributed to the defendant amounted to admissions of liability sufficient to establish the plaintiff's claim, or whether the Supreme Court was correct in ordering a new trial on the basis that there was insufficient evidence of such admissions. The High Court was required to determine the admissibility and probative value of statements made by a party concerning facts of which they had no direct knowledge, but which were based on information provided by others.

The High Court held that while admissions made by a party are admissible even if based on secondary information or belief, their probative force depends on the circumstances and the party's source of knowledge. The court found that the defendant's statements, including those made at board meetings and in correspondence, did not demonstrate a belief or judgment that the amount claimed by the plaintiff was due. Instead, his statements indicated a dispute regarding the figures and a reliance on earlier representations made to him. The court concluded that the defendant's conduct did not amount to an admission of the correctness of the plaintiff's audited accounts, and therefore, there was insufficient evidence to support the jury's verdict.

Consequently, the High Court discharged the order for a new trial and entered a judgment of nonsuit in favour of the defendant, upholding the Supreme Court's finding that the plaintiff had failed to prove its case through admissible admissions.