Metal Manufactures Limited v Lewis

Metal Manufactures Limited applied to the High Court of Australia for special leave to appeal a decision concerning director's liability for company debts. The dispute arose under section 556(1) of the Companies Code, which imposes joint and several liability on directors for company debts incurred when there are reasonable grounds to expect the company will be unable to pay them, unless the debt was incurred without the director's express or implied authority or consent.

The central legal issue before the High Court was whether the respondent, a director of the company, had discharged the onus of proving that the debt in question was incurred without her express or implied authority or consent. Specifically, the court considered whether a general authority given to her husband to conduct the company's business, and her acquiescence in his management, was sufficient to establish that the debt was incurred with her consent, or if consent to the particular debt was required.

The applicant argued that the respondent's general authority and acquiescence in her husband's conduct of the company's affairs meant she had failed to satisfy the court that the debt was incurred without her authority or consent. The court considered whether the respondent's consent could be inferred from this general authority, or if a more specific consent to the particular debt was necessary. The applicant challenged the conclusion reached in the court below, which appeared to require more than a general agreement for consent to be established.