Trade Practices Commission v Bata Shoe Company of Australia Pty Ltd

[1980] FCA 47

I N THE	COURT	OF	'INSOLVENCY
OF	THE	STATE	OF	SOUTH

AUSTRALIA, ADELAIDE EXERCISING

FEDERAL JURISDICTION I N

BANKRUPTCY

BANKRUPTCY DISTRICT OF THE

STATE OF SOUTH AUSTRALIA

Re: Linda Merle DUNN

Bankrupt

Ex Pa r t e Linda Merle DUiW

Apprlicant

and

DIE3CT-I?IX COMCFETE PTY. LIi\iI?'ED

Respondent

Judgment or ̂ His Honour Judge Rogerson delivered

the 2nd day of Apri l , l900

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This appl icat ion was made by Mrs. Linda Merle Dunn, aga ins t

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whom a sequestrat ion order was made on 14th Apr i l 1978. The appl icant ' ;

husband, Mr. T.J . {Junn was made bankrupt a t t h e same time, by a

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separa te seques t ra t ion o rder . Both orders were made i n the absence

of the apparently almost immediately after the orders applicant and her husband. However, they appeared a t t he Cour t , ,

i	had	been made, where-
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i upon accord ing to -+e t ranscr ip t , the fo l lowing conversa t ion took

place :	-
'!HIS HONOUR: These people were c a l l e d a t 10.35, and have
come s ince . I will t e l l them what has happened.
Mr. T.J . Dum! and Mrs. L.M. Dunn, t h i s m a t t e r , I am a f ra id ,
was j u s t deal t wi th . Is there anything you want t o t e l l me
about why an Qrder fo f bankruptcy i n t h e e s t a t e s of yourself

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and your wife should not	be	made ?
THE DEBTOR: 140.

H I S HONOUR:	'{ou	did no t come h e r e t o r e s i s t	o r oppose t h e
order?

THE DEBTOR: 140.

H I S HOVOUR: The order s tands ....... I1

The appl icant sa id i n evidence before me tha t t he l ea rned Judge had

no t spoken to her separa te ly bu t had ca l l ed he r husband forward and

t h a t t h e above conversation had been with him. She s a i d t h a t it was

no t u n t i l t he Of f i c i a l Rece ive r ' s Of f i ce , l a t e r t h a t day t h a t she had r e a l i s e d , a f t e r a t t e n d i n g a t

tha t she had had the r ight to "appeal

against", as she put it, t h e making of the seques t ra t ion o rder .

The pe t i t i on iqg c r ed i to r had obtained judgment by defaul t aga ins t

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the appl icant and he r husband on 3rd October 1977 but i t s s o l i c i t o r s

promlsed not t o en fc rce t he Judgment pending fur ther negot ia t ions .

I n DecFmber 1977 s o l i c j t o r s i n s t r u c t e d by t h e a p p l i c a n t ' s husband sought'

t o have the Judgment set as ide. Support ing the appl icat ion was an

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a f f i d a v i t s w o p by the so l lc i tor appear+ng f o r t he app l i can t and her

husband, which averred, as the ground f o r 2 e t t i n g a s i d e t h e judgment

aga ins t t he app l i can t , mere ly t ha t t he so l i c i to r had been in€onned

by the app l i can t ' s husband t h a t t h e a p p l i c a n t had a good defence to

the pe t i t ion ing c r e d i t o r ' s ac t ion . The a p p l i c a t i o n t o s e t aslde the

judgment on that ground failed. I am hard ly surpr i sed that it did,

though it may be t h a t it would have succeeded i f t h e f a c t s which

emerged during the course of the hearing before me had been put before

the learned Special Magistrate .

The appl icant yras served with and f a i l e d t o comply wi th a

Bankruptcy Notice and, on 28th March, 1978, was served with the - -

CrediTor 's Peti t ion. The a f f i d a v i t o f s e r v i c e s t a t e s t h a t t h e

appl lqant sa id , when asked i f she was indebted to the p e t i t i o n m g

c r e d i t o r i n t h e sum of $4,310.99, "You'll have t o check t h a t with my

husband, I don ' t knswl'. When asked a quest ion in very s imilar terms

on serv ice upon her of	t h e Bankruptcy Notice,	she had	rep l ied "1 don ' t	~
r e a l l y knowtt.

The applicant +ubmitted a Statement of Affairs t o t h e O f f i c i a l

Receiver on 18th Ju:Ly, 1978, T h i s l i s t e d t h e p e t i t i o n i n g c r e d i t o r

as a c r e d i t o r f o r t h e sum of $4,310.99 b u t , i n t h e r i g h t hand column,

which is headed "Nature of Debtll, she wrote t h e words "Concrete - dis-

puted". The appl icant consul ted a s o l i c i t o r - the first time she

had had independent legal advice on other than matrimonial matters -

i n August 1978. Delays which a r e n o t I t h i n k a t t r i b u t a b l e t o the

applicant ensued, but eventual ly t h i s application, under Section 99 ( l )

o f the Bankruptcy Act, 1966, (referred to hereafter as lithe Act"),

was .Logged i n November 1979, the Official Receiver having admitted

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I t he c red i tor ' s p roor o f debt. This debt was a judgment debt, and was,

indeFd, the judgment debt from which the appl icant ls act of bankruptcy

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and her subsequent pankruptcy resulted.

Mr. Kandelaars appeared for the applicant and M r . C la rke fo r t he

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respondent creditox.: The day before the hearing I saw counsel l n

chambers, t o discus? a t the.Lr request the order i n which Lhe hear ing

should proceed. T h ~ s i s a matter whlch may be of some importance,

p a r t i c u l a r l y when, as in t he p re sen t ca se , t he deb t whose admission

i s complained of i s a Judgment debt ( indeed, the judgment debt upon

which t h e a c t and the appl icant seeks to of batlkruptcy and the seques t ra t ion o rder were founded)

)'go behind" tha t judgment.

I will dea l flrst with t h e s i t u a t i o n where the debt whose

admission is comp1a;ned of is not a judgment debt. There i s some

' a s s i s t ance t o be ga;Lned here from an examlnation of the procedure which

i s followed in hear4ng applications under Section 104 of the Act.

Here it seems t o be establ ished that the procedure i s tha t of a re-

hear ing of t he d i s sp t i s f i ed c r ed i to r ' s c l a im. It is not that of an

appea l aga ins t the t rus tee ' s dec is ion .

But t h e two situations a re no t i den t i ca l . I n an app l i ca t ion

under Section appl icant under thac sect ion 104 o f the Act there i s no direct adversary. The i

is a creditor complaining about the

cor rec tness o f the dec is ion of the t rus tee in reJec t ing h i s proof of

debt . In appl icat ions under Sect ion 99 of the Act, however, there is

necessar i ly an immediate confl ic t of interest between the c red i tor

whose c la im the t rus tee has admitted and $he other creditor, o r the

bankrupt, whq a l l e g e s t ha t it has been vrrongly admitted. (A t r u s t e e

who applies ynder decis ion by qimself t h i s sec t ion w i l l be seeking to have corrected a

or some e a r l i e r truste9, without having any !

f i n a n c i a l i n t e r e s t i n t h e outcome). Thus, although under both sections I

of the Act a dec is ion p f t h e t r u s t e e i s complained o f , i n a p p l i q a t i o n s i

under Sectio?? 99 a claim already granted by t h e t r u s t e e , - and thus,

I n a way, 7 "vested r ight" , - i s challenged by an adversary, whereas

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under Sectio? 104 no "vested r ight" has emerged and the re is no adverse :

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party to challenge the claim.

I t applications under both sections seems to ye , however, t h a t t h e e s s e n t i a l f e a t u r e of

i s tha t the Court i s being asked t o

vary ~e dec is ion of a t r u s t e e , and i f a re-hearing i s considered to

be thy seems t o me correct procedure in appl icat ions under Sect ion 104 then it

t h a t i t i s appropriate to proceed by way of re-hearing

i n an	application	under	Section	99.	I am a l s o	l e d	t o	that conclusion	L '
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by thq t he app l i ca t ion , f a c t t h a t tl!e t r u s t e e i s not requi red to be given notice of

ths matter being apparently regarded as being one

so le ly between the app l i can t and the c r ed i to r whose admltted proof

i s challenged. I cannot think, If the procedure was intended to be

tha t o f an appeal, tha t the t r u s t e e whose dec is ion i s challenged should,

no t be required to pe notifled. Nevertheless, I th ink t ha t be fo re t he

c r e d i t o r whosq clailn is challenged should be c a l l e d upon once again

to put forward h i s Flaim the appl icant should first put forward some

p laus ib le ahd apparant ly bona f ide reason why the creditor should be

obl iged to do so. If such a reason has been advanced by the app l i can t 1

I can see no hardship , o r a t any r a t e none which cannot be redressed

by an appropriate order for c o s t s , i n t h e credi tor having once again

t o put, forward h i s claim, i f he thinks f i t . (He should, I th ink , be

a t l i b e r t y t o adduce fur ther evidence) . The f a c t s on which the

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credi tor ' s c la im are base: a r e w i th in h i s own knowledge. And i f , as I

i n t he p re sen t ca se? his claim i s i n r e s p e c t of a judgment debt i

production of evidence of t h e judgment will in ordinary circumstances

suf f ice	to	d i scharge	t i l e	burden	upon him.	The t r u s t e e , i n	my	opinion,	'
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would	ac t co r rec t ly i n admi t t i ng	a	proof	of	debt upon	such evidence,	l
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a t l e a s t i f there were nq suggest ion that the judgment was challenged.

The appl icat ion yhich came before me was, however, somewhat more

complicated. The appl icant ' s case as pleaded, and as supported by

aff ipavi t evidence, wgs such a s t o s a t i s fy me t h a t I should c a l l on

t h e Yespondeqt again to prove I ts claim on a re-hearing of the matter.

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But the esseflce of the applicant 's case was an attack on t h e judgment,

on v~h,htch, no doubt, the Off ic ia l Receiver relied, and on which I too,

would i n thf absence op chal lenge , have re l ied as suf l ic ien t ly

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estab;ishing the respondent 's claim. The applicant had decided not

i again to a t tFmpt to h+ve t h e judgment se t a s ide , no r t o appea l

aga ins t t he ye fusa l t o do s o , b u t sough: t o "go behind" t h a t judgment .

on	the ground	that	the re had never been	a	contractual debt	owing	t o
the	respondent.

I t is , I th ink , open to the Cour t to hear: an application under ~

Sect ion 99 0; t h e Act notwithstanding that the debt complained of i s

a ju,dgment debt, an@ t o "go behind" t h a t judgment when considering

such an In determining application. (See re Flanagan N . S . W . 370 of 1972, a t page 3 ) .

whekher it should llgo behind" the judgment the Court

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should pay close a t tent ion to the requirements for going behind

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judgments on the hea r ing of Fredl tor ' s pe t i t ions . The burden of i

persuading .the C o u r t that it should go behind t h e judgment will be on i

t he app l i can t , i t o r ' s p e t i t i o n , j u s t a s it i s on the debtor on the hear ing of a cred- '

and the matters which must be es tab l i shed a re , I think, .

the same. Where ths judgment was by default an allegation, vhich the ,

Court regards as bona f i d e , t h a t no real debt lay behind the judgment,

will be su f f i c i en t : In o the r ca ses , t he re must be made out a prima

facie case of f r a u d , col lusion, miscarr iage of j u s t i c e , o r something of

comparable seriousnpss. But once tha t burden has been discharged then

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the Court must e n q u i r e f u l l y i n t o t h e f a c t s of t h e c a s e i n which the

Judgment was given, and here the burden of proof l ies on the respondent.

The s i t u a t i o n is, however, confused somewhat by the f a c t t ha t t h e I

Court may already hpve been obliged to hear evidence adduced by the !

app l i can t abou t t he f ac t s of t h a t c a s e i n o r d e r t o determine whether

t h e r e is tha t ques t ion shoulg s u f f i c i e n t ground f o r going behind the Judgment. Idea l ly ,

be d e a l t with i n i s o l a t i o n , and decided i n f a v o u r ~

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I	of	t h q appl icant ,	before	the respondent i s required	again	to	prove
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his claim that the appl icant i s i n f a c t i n d e b t e d t o him. If t h e

formen i ssue But pnactical consiperations, including the need to is decided against the appl icant , that ends the matter.

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make t h e most

e f f i c i en t u se of t+ Court 's t ime, may d i c t a t e that evidence on both

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questions shoyld be hear4 beTore a dec is ion is made on the pselimlnary ,

i s sue , o thery ise two days may be partly taken up, when one would

suf f ice . A f u r t h e r and t o my mind p o t e n t i a l l y more s e r i o u s d i f f i c u l t y I

i n heqring a l l the evidence Pin a lump" i s tha t the appl icant who

gives his evidence on both issues may be p u t i n t h e p o s i t i o n of

havinq to counter the subs tan t ive case aga ins t him before the evidence

i n support of that case $as peen given by the respondent, although

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t h e bu,cden of es tab l i sp iqg tha t case is on the l a t t e r . However, i n a ,

case s,uch as the p re sen t , where the i s sues a re wcompl ica ted and

agreed on i n advance I dq no$ t h i n k t h a t Bny i n j u s t i c e might r e s u l t

which could.?ot proved t o be necessary. be cured by pe rmi t t i ng ev idence i n r ebu t t a l i f t h a t

I should say tha$ counsel i n t h i s case

d e s i r e d t h a t t h e i s s u e s qqd t h e i r argumenbs be n o t s p l i t .

The re5pondent, palled upon t o e s t a p l i s h pis claim, gave, as I

have said, prima facie proof of the debt py proving the judgment

c rea t ing it. It then became necessary for me t o r u l e on whether I

should IIgo behind" $hat judgqent and thus require the respondent to

prove the va l id i ty o f t he con t r ac tua l deb t i n r e spec t o f which the

Judgment was given. The judgment was a de fau l t Judgment and although

it a p p e a r s t q a t s o l i c i t o r s had been in s t ruc t ed by the applicant 's hus- ,

band a f t e r t h e Summons w a s rFceived it a l so appea r s t ha t t he app l i can t I

had no

knowledge had l a t e r been made t o s e t t h e e i t h e r o f t h i s or of t he f ac t t ha t an app l l ca t ion

judgment as ide. The appl icant had no

independent legal advice and seems t o have l e f t e v e r y t h i n g t o h e r

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husband. Thus, when asked when she became aware that the respondent

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was hold ing her l i ab le she sa id it was when she got the Summons.

Asked what she did when she received the Summons she said "I was

surpr t sed , and I sgoke t o my husband about it. He said not to worry

aboyt it, t h a t he yould organise things'! She said that he dld not

say how he would b$ going about that , and tha t she d i d not become

aware of t h e Bankruptcy Notlce she what actlon he subsequently took. When she was served with

said tha t she spoke t o h e r husband again,

but nqthing was done "He j u s t said 'I wlll. f i x it ', and I l e f t it a t

that" , I have already referred to the app l i can t ' s remarks t o the

process server wheq served with the Bankruptcy Notice and the Pe t l t i on ,

and t q the ground s p cursor i ly pu t forward for se t t ing as ide the

judgmTnt. In the Circumstances, although some l ega l a s s i s t ance was

obtained by The regpondent's husband, apparantly on her behalf as wel l

as h i ? own, I t h i n k t h a t I opght t o r ega rd t h i s a s a case where t h e

appl iqant w*as not independent ly , and cer ta inly not suff ic ient ly , rep-

resen4yd a t the t ime of the pefault Judgment and of the appl ica t ion to

s e t tha t judgment as lde , and t h a t t h i s i s ,a case where it is proper to

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Itgo beQind1' thy judgment? !Tile respondeqt yJas thus ca l led upon again

t o prqve h i s c l a i m t b u t t h i s time t o prove not perely that there was

a judgment i n h i s favour but that tha t judgment was properly based

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on the subs t an t ive con t rqc tua l l i ab i l i t y of the appl icant .

The grounds on whit$ the respondent1 s claim i s based a r e s e t

ou t i q an app l i ca t ion , t he a f f idav i t be ing t ha t a f f i d a v i t i n suppoyt of a not ice of i p t e n t i o n t o oppose t h e

of !l?. W.J. Mitchel l , the

respondent 's Sales Manager. The respondent maintains that "the

appl icant was e i t h e r a par tner with he r husband I n a concrete business

or a l t e r n a t i v e l y t h a t a s a pr inclpal she gave authori ty to her

husband t o o r d e r gopds on her behalf from $he respondent company f o r

whlcp she is l i ab le foy Rayment''. The a f fgdav i t makes c e r t a i n

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a l l ega t ions 02 fac! in support of these content ions, which I need

not a? t h i s p o i n t r e f e r t o , as Mr. Mitche l l a l so gave oral evidence

and I can consider those matters when I dea l with the oral evidence. I

It IS! however, necessary for me t o say t h a t M r . Clarkeargued what

appear to that the appl ;cant t even me to be two fur ther po in ts o f law, namely, and i n s h o r t , i

i f not a partner, had represented herself

t o be such, o r had su f fe red he r se l f t o be s o represented; the respon-

den t he re r e l i ed op Section 14 of the Par tnership Act , 1891 -'1975.

Mr. Kandelaars alsq raised, perhaps, since the respondent d i d not,un-

necesFarily, the question of the app l i can t ' s husband having apparent

au thor i ty as her agent . I will, however, dea l with t h i s i ssue a l so .

There a re thus f ive ques t ions to be d e a l t with. F i r s t , was t h e

app l i9an t i n pa r tne r sh ip with he r husband? Secondly, d id she rep-

r e s e n t h e r s e l f t o b e a par tner? Thirdly, d id she su f f e r he r se l f t o

be representea to be a partner? Fourthly, d id she, apa r t from any

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questlon o f ac tua l or suppospd par tnership, g ive actual authori ty to

h e r husband a s h e r a g e n t t o prder goods on her beha l f . F i f th ly , did

she so ac t a s t o l ead t he r e sponden t t o be l i eve t ha t he r husband was

her agent. was i n any o ther way than No suggestion wa? made by the respondent that the appl icant ,

those mentioned above estopped from denying ~

the respondent 's of an es toppyl ar iqing outs ide the f ie lds c la im, and I will therefore not canvass the question ~

p f partnershlp or of agency. I

The debt a l leged by thc respondent arose out of the supply of

concrgte - on a l a rge number of separate contracts of sale - between

1 st Oytober, 1976 and 31 s t Ju ly , 1977. T& respondent had been

supplying concrete 70 t he app l i can t ' s husband on a C.O.D. ba s i s a t

t h e e?d of 1975, and there is no doubt t ha t t he conc re t e supp l i ed t o

the agplicant 's husband l 1 on a C.O.D. basis yas suppl ied to him alone.

I n , 1; appears, January, 1976 the applicant 's hpsband sought t h e

supply of cor+crete on Fnedit , The form of appl ica t ion was tendered in

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evidence. I t was f i l l e d i n by Mr. Mitchel l , (who is now i ts Sa les

Manager, and who gave evidence), during the course o f a telephone

conyersation with $he appl icant ' s husband. It i s obviously incomplete, , ,

several spaces being unfil led. Nothing appears i n the spaces beside

the p r in t ed words !!Requested by", "Approved by", "Applicants name",

IIPhone", o r "Private addTess". I t i s not signed by any applicant.

Opposi te the pr lnted words "Busmess namet1 appear the names 'IT. J. and

L.M. Dunn", and aga ins t the words "Business address" appears the

address I l l7 I sabe l l a Chr i s t i e s Dns'l. (The appl icant and her husband

. t h e n r e s i d e d a t 17, I s a b e l l a Road, Morphett Vale, South Australia,

and the appl icant s t i l l does. However, she and her husband separated,

f i r s t in January , l978 and then , a f te r a brief re-union, again separated :

some months Tatell. The applicant does n o t know the present whereabouts,

of her	husband).	AgainsT	the p r in t ed	wqrd	"BankersIt	appear	t h e
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i n i t i a l s llC.B.A.ll and "PI/V", and aga ins t t he words V r e d i t L i m i t

required" t h e sum P$I ,OOO1l. The names q f two firms appear as

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referees. There appear also the words "Kentwood Homes" ( s a i d i n

evidence t o be a p ro jec t on winich the app l i can t ' s husband was working)

and t fPurchas~ ng own home'l:

A s a r e s u l t o f t h i s app l i ca t ion c r ed i t was granted by the respon- ,

dent , on a 30 day bas i s and numerous sales of concrete were sub-

sequently made l e a d i n g t o d e b i t s far in excess of the $1,000 limit

mentioned i n the app l i ca t ion , The app l i can t s a id t ha t she had never

a t any t ime authorised her husband to ob ta in supp l i e s from the respon-

dent. M r . M i t c h e l l s a i d t h a t it ylas Terry Dunn ( the appl icant ' s

husband) who had asked him TO open the account, that The appl icant

was not known t o him, anq tha t the appl ica t ion was made o u t i n t h e I

name of T . J . and L.M. Duxp because t h a t was the name Terry Dunn asked ;

him t o f i l l i t out in . Mr. Mitche l l sa id ILhat the appl icant had glven I

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him no i n s t r u c t i o n s i n r e l a t l o n t o t h e a p p l i c a t i o n form, tha t she

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was not known a l l t h e i n f o r r ! ~ a t i o n was to h@, that he d i d no t know h e r i n i t i a l s , and t h a t

g iven to him by the app l i can t ' s husband. He

said t h a t a l l t h e c o n c r e t e which was supplied C.O.D. was supp l i ed t o

the app l i can t l s husband, and tha t he had a t tha t t ime no knowledge of

t h e applicant: He l a t e r s a i d t h a t t h e a p p l i c a n t n e v e r conveyed t o

him a des i r e t o have t h e 30 day account opened i n h e r name.

Mr. Mitchel l sa id tha t he had very l i t t l e knowledge of the appl icant ' s

husband's operations prior to the opening' of the account. He was

asked what transpired when he was approached f o r an account, and

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rep l ied "He asked; me whether we would grant him a c red i t . He d id t e l l

me t h a t he had been work;ng i n t h e p u b l i c s e r v i c e , that he had given

t h a t away and t h a t he was going to do concrete f u l l t ime from that I .

po in t on1'. T+ere is, of course, no doubt that the appl icant ls husband

was l i a b l e t o the respondent for the amoupt claimed.

I n the ear ly days o f the re la t ionship bi l ls were sett led promptly,

but pqyments became e r r a t l c and the accqun t f e l l i n to a r r ea r s . S t a t e -

ments of account were sen t monthly to the then matrimonial home

addressed to "T.J. and L,M. D u n n I 1 , and invpices were sen t weekly. The

accounts were paid by cheque, usually posted, though on occasions

picked up by Mr. !"I$chell from t h e a p p l i c q l t t s husband a t t h e l a t t e r ' s

place of work. The cheques yere drawn on a joint business account , of

which I shal l say more lqter.: The appl icant said t h a t h e r husband

kept the cheque book fpI : tha-c account i n the car used for Dusiness

I

purposes. S9e said tha t she had occasionally, a t h e r husband's

d i r ec t ions , drawn cheque5 on tha t account: There was no evidence,

however, t h a t any cheque drawn by her had been received by the respon-

I

dent. Mr. Mitchel l was qsked i f It was reasonab le t o i n fe r t ha t "such :

accounts as went put ip the name of T. J. aud L.]?. Dunn d id s o because

of the opening of the accqun; i n t h o s e names and not because of any

... /11.

I . - - -

- 11 -

subsequent history of b?nking,business ?fxpuntS"(slc). He rep l ied

"The accounts were sent out under tha t ?am? because t h a t is what

( the app l i can t ' s husband) applied t o have them sent out as". I might

mention a t re fer to the account under bo th se t s t h i s s tage tha t the respondent ' s in te rna l records d id not

o f illitials on a l l occas ions , bu t

I a t t ach no importance t q t h l s , except in one minor respect .

Mr. Mitche l l sa id that he had spoken on the telephone about over- ,

I

due accounts asked the tenor of t o t h e a p p l i c a n t ' s husband and t o t h e a p p l i c a n t . He was '

I his conversat ion with the appl icant and sa id I ' I

I .informed he r t h a t the account was overdue and we would requi re a

t i

< cheque. That was bas i ca l ly it". He was asked Was anything ever con-

veyed to her about names on the account?Il and rep l ied W O , it was

never mentioned1!. He was asked "Did she ever speak for o r aga ins t

l	any	partnership?"	and rep l ied "No, she did not".	He descr ibed	her
I

I response as being neutral . cross-examination In Mr. Mitchel l said

t h a t it was ' the appl icant ' s husband whom he was seeking to contac t a t

home, b u t said it did no t r ea l ly ma t t e r who he spoke t o , a s what he

wanted was	t o g e t the message across that he wanted the money t h a t was
due.

I will consider first the quest ion o f whether there was a par t -

nership between the appl icant and her husband. If there was, the re

can pe respondent re l ied heavi ly no doubt tha!; t he app l i can t was indebted to the respondent . The '

on a form o f IIAuthority for Operations"

dated 12th March 1976 and signed by t h e a p p l i c a n t ' s husband and t h e

i

appl icant . The bank concerned was t h e Australia and New Zealand I

Banking Group Limited, (which I w i l l r e f e r t o a s t h e "A.N.Z. bank").

The €orm i s a pr in ted €orrn,	appropriate f o r "Partnership o r Firm (no t	.
i

Sole Propr ie torsh ips)" . I t refers several t imes, though in very small '

print , to t r ea t ing a s a l t e rna t ives I ' pa s tne r sh ip" I1partnershipl1 and "partnersl1, often, however, f o r some reason

and I 1 f i r m " , o r "partners" and

lImern$ep of firm". The word "Partnershipfl has on one of these occasions' '

... /l?.

I .

- 12 -

I 1

been s t ruck out of the words "Partnersh~p/Firm", though there i s no

way of knowing by v$ose hand or a t whose instance. A l l the handwritten

I

portion of the form is, however, i n a hand which 1 s obylously not that '

I

of the appl icant o r of hey husband.

Notwithstandipg the struck out Ymsd, t he sma l l p r in t and t h e

I

circumstances of signing yhich I w i l l a$o f t ly r e f e r t o t he re can be

I	l i t t l e doubt t h a t 50 f a r as the bank is concerned	the	applicant	would	:
I

be bound as a par tnpr by her s igna ture and l i a b l e t o t h e bank as such. :

The respondent, however, cannot rely on the document as crea t ing any

such contractual obl igat ion. I t r e l i e s on it as ev idence tha t the

! appl icant regarded herself as being in par tnership with her husbvld.

I Why, i f she was no t l would she have signed the form as a par tner /

! member of a firm? But although it i s evidence of there having a t t h a t I

time been a par tnersh ip it i s not, vis-a-vis the respondent, concluslve, , I

and must be looked a t along with the other evidence on the matter.

Moreover, i t s weight as evidence will depend on the-circumstances i n ~

which the form was signed by the app l i can t . I must therefore now say

something about the banking arrangements of the applicant	and	he r
husband.

Up t o a d a t e i n March, 1976, the app l i can t and her husband had a

jo in t pe r sona l cheque account wlth another bank. They had always had

join$ accounts since marriage, but had no business account, nor did

the app l i can t ' s huspand have a sole business account. They decided

t o change t h e i r bank because the A.N.Z. bank was wi l l ing , and t h e i r

then bank w a s po t , $0 advance them money t o buy a motor c a r f o r t h e i r

domestlc use. The app l i can t ' s husband went t o t h e A.N.Z. bank. I do

no t know applicant, her husband brought what discusslons took place there , but , according to the

home two forms of "authority for

operations" which she signed. She never went into the bank. One form

was f o r a "Jo in t Account {including Trustees, Executors and Admin-

. . ./13.

i

- 13 -

i s t r a t o r s ) " . It is dated 11th March, 1976. The o ther was t h a t t o

ylhich I have previously refer red . The appl icant was questioned about

s;gnirfg these , , forms Her examination-ir;-cknef 1s as follows:-

Do yo\! have a prec ise recol lec t ipn of completing the documents,

01' a r e YOU merely able to recognise your signature?---Really

I

only recognise my s tgnature .

HIS HONOUR: W$? wil; number these tWp exhib i t s separa te ly . i

Make A 3 a copy of the authori ty for . pperat ion of a Jo in t

~ccoul l t iqc luding t rus tees , execptqr f , adminis t ra tors . Make

The copy Of the au tho r i ty fo r ope rq t ions headed partnership

m- firmt not Sole proprietorships , A & .

MR. KANDELA4RSj Can you r e c a l l the; prcums tances i n which

you s igned t h i s document?---No.

Did you a t tend the bank?---No.

HIS HONOUR:	Wpere d id you do ity-;-My	husband would bring the
forms home.	H e always did t h a t .

Did he brmg these ones home?---I canpot remember, but I never

went t o t h e bank.

MR. KANDELAARS; If you look a t the au thor i ty for opera t ions ,

I '

par tnersh ip o r firm, can you r e c a l l whether the signing of

t h a t document ever gave r ise to discussion about enter ing a

par tnersh ip with your husband?---No.

You w i l l s e e t h a t it taFks of par tnership o r firm i n t h e name

of T.J. & L.M. Dunn; d id t h a t s u g g e s t t o you t h a t you were i n

. _.-

p a r t n e r s h i p m t h your husband a s fa r as th i s conc re t e con t r ac t ing

business was concerned?---No. I always just s igned. A s I sa id ,

he changed h i s banks tha t r egu la r ly . He would br ing th ings home

and I would J u s t s ign them. I never looked into it as bemg a

par tnersh ip to h i s bus iness . He would j u s t say, "sign here",

and t h a t is what I d id .

. . ./14. :

- 14 - I .

You will no te t he re a r e two au tho r i t i e s fo r ope ra t ions , one

f o r a j o m t account and one f o r t h i s par tnersh ip o r firm

Gccount; i f you were no t i n pa r tne r sh ip , what was the ob jec t

i n complFting those authorities?---I do no t know."

Her cross-eFamination i s as follows:-

"Looking a t the exhib i t before you now, which is the appl icat ion

form f o r p a r t n e r s h i p o r firm, can you repea t what your thoughts

Were when youn husband came home with this appl icat ion?---I was

not happy with it.

Why d id you s$gn it then?---I JUS^ always did. I might have

yoiced py opinion, p u t - - - I think you m 1 1 f ind Terry had

already res igned f r p m the government. I d id go along with him

To a c e r t a i n e x t e n t .

l

Did you read F t before you signed it?---No, I never d id , He

j u s t vjoyld say sign it, and I signed it.

'fou d id not no t ice Lmmediately aboye, t o t h e l e f t of your i

7fgnatuTe 'IFu11 names of a l l partneris, members 'of firmV?---No.

7

You d id not no t ice That there was, IIPul l ?ame of par tnersh ip

o r firm\'?---I f l ld not read it.

You d id not no t ice ivhere It says, We the undersigned being

a l l of	The	p reseq t pa r tne r s i n t he pFr tne r sh ip	of	the firm"?
---No.

So you jus t b l ind ly s igned t he fprm witho$ reading the contents? I

---I did.

Did you th ink tha t a b l t foolhardy a t the time?---I d id not a t

the t ime; I dq now."

To support I ts conte i l t ion tha t there was a par tnersh ip the res -

pondent sought t q shqw tha t the appl ica? t had been i n r e c e i p $ o f a

share o f t h e p r o f i t s of The concreting business. Such a r ece ip t i s

. . ./15,

I

I:, - t .

1

' I prima facie evidence of par tnership, but does not l tsel f make the

r ec lp i en t a par tner . The appl icant said $hat there had been no

I .

p r o f i t s , and it LS t rue tha t the bus iness eventua l ly became insolvent . :,

However, t h e r e i s no doubt t ha t t he bus iness produced income, and t h a t

.A

I

the applicant 's household was maintained by t h a t income. The I

a p p i i c a n t s a i d t h a t t h e money which went in to the jo in t personal

account a t t h e bank was llwagesl', o r ] ' l iv ing money1', and I do not th ink 'I ;

that the regular housekeeping money which the appl icant received from

I

her husband, nor tl!e money which she was given to pay gas and o ther

b i l l S , although It derlved from the concreting business, can be

I regarded as belng a share of t h e p r o f i t s on tha t bus iness . These - t

payments a r e , i n my v1 ew, more cons is ten t m t h a self-employed man i

g i v ~ n g money t o h i s w l f e t o run the household than they are with a !

par tnership in which t h e p r o f i t s were sllbred.

A been a partnership. Invoices and nunbe? of o ther fac t s a re cons lspnt wi th there ac tua l ly having

accounts from the respondent came

t o the house m Joint n21n?s, and nothing was done by the applicant t o

.I

have t h i s a l t e r e d . On the other hand, she said she attached no s ig-

nif icance t o t h i s , and sa id tha t accounts usua l ly came i n Joint names.

She said that she could Ldent l fy the respondent 's buslness le txers

from t h e i r namcxd envelopes, and d id no t open bhsiness mall. Again,

the applicant the other hand, she said that dr-w s o m cheques on the J o i n t business account. On

she drew few, and always on the express

in s t ruc t ion o f he r pusband..

Against there having been a par tnersh ip there i s a g rea t dea l of I

evidence, none of it d e c l s i v e i n i t s e l f , b u t , t aken as a vhole, In-

cons is ten t with the relaxlonship of partnership. There was no par t - l

nership agreement. The appl icant vas s t rongly opposed t o h e r

,-

husband leaving the Publ ic Service and going into the concreting

!

,

business, though, no doubt, she made the bes t of i-c once he had done so. '

i

:

... / lb . l

--- - . . _ _ _ - - .. . . -

- 16 -

He began work i n it appa ren t ly a s a par tner wlth another man. The

appl icant was qui te young and had l i t t l e bus iness expe r i ence , though

I t	she had b r i e f l y managed a dress shop.	She	d id	not	declare	any money
Ii
II

I	emanating froin the	concre t ing	bus iness	in	her	own income tax	re turns .	I .
l .
I :

,.

Her

husband par tnership

never

sent

in

any

income

t ax

r e tu rns

i n

r e spec t

o f

a

, I

o r , it would appear f o r t he r e l evan t pe r lod , a t all. No

_ .

attempt was t n u s made t o USE the device of partnership to reduce

income tax. The business account cheque book was kept in her husband's

car . She d i d noc open business mail, o r t ake any i n t e r e s t i n t h e b i l l s ,

and invoices. The c a r which he r husband used for business M ~ S

A regi.stered i n h i s name alone, and was sold by him as being hLs ovm.

It had been paid f o r i n c a s h from her husband's ovm funds. Her husband

re fused to d i scuss the s ta te of the business with her. She was sur-

p r i s e d t o r e - e l v e t h e Sumlnons, and d id nc t know t h a t h e r husband had

t r i e d t o g e t t h e judgmen-t s e t a s i d e . I have already mentioned her

replies to the server of the bankruptcy documents and t o her d i sput ing

the debt in her Statement of Affairs.

I~Iotwithstandlng the applicant 's signature on the bank form, and

the other lmore eclulvocal , evidence i n favour of there having been a

par tnership, I am q w t e c e r t a i n t h a t t h a t r e l a t i o n s h i p d i d n o t e x i s t

a s between the applicant and her husband.

I turn now t o t h e second pleaded allegation of the respondent,

that the appTicant , as pr inc ipa l , gave au thor i ty to her, husband t o

order goods on he r behalf', I will then daal with the three remaining

issues, a11 of whlch involve i n one o r ?nuther way questiorls of

os tens ib le o r apparent,	a5	opposed	to ac tua1 ,au tho r i ty	and	which
requi re c loser a t ten t ion .

There 1s no evldence on which I could f ind tha t the appl icant

had expressly authoriszd her husband to ace as her agent in o rder ing

goods from the respondent, nor i s t h e r e any from which I could infer

a grant of authority. There was i n my v i e r no yelat ionship of

- 17 -

i

pr inc ipa l and ageny between t h e applican:; and her husband i n r e s p e c t

of any dealings n t h the respondent. That i s no t t o s ay t ha t t he

!

r e s ondent through i t s employees may not have thought that the re was, '

P _ I

though I would have serious doubts even as t o that . On the other hand .

I tl l ipk and he r husband tha t the respondent may well have believed tha t the app l i can t

were in pa r tne r sh ip . If it did, the c ruc ia l ques t ions

will be, was the cpnduct of the appl icant responsible for that bel ief , I

and was that bel ief the cause of credi t being granted to the appl icant ' .

husbapd? I w i l l cuns idm first t h e e f f e c t of Section 14 (l) of the Part-

nership Act, 1891-1975. The sub-section is as follows:-

!'Every o@e who by words spoken o r w r i t t e n o r by conduct

represents h imsel f , o r who knowingly suf fers h imsel f to

)e represented, as a p a r t n e r i n a p a r t i c u l a r firm, i s

l i a b l e as a par tner t o any one who has on the f a i th of

any scch representat ion given credi t t o the firm, whether

the representa t ion has or has not been made o r communicated

to t he pe r son s o g iv ing c r ed i t by o r with the knowledge

?f the apparent par tner making the representa t ion , o r

yuffer ing it t o be made.I1

F i r s t , d id t he appl icant herse l f represent herse l f to be a

par tner of he r huspand, before o r on the opening of the 30 day c r e d i t

accqur!t by t h y respondent? If not then, did she so represent herse l f

t he rea f t e r? If she d id It is immaterial tha t t he app l i can t ' s

representa t ion was conveyed to the respondent by some medium without ,

t he app l i can t ' s knoyledge. However, the respondent must not only have

rece ived the representa t ion bu t must also have given credit t o the

appl icant on f a i t h t h e representa t ipn . of the I

I can f ind no evidence that any such representation was made by

t h e a p p l i c a n t f i t h e y by words o r conduct, to the respondent or to

I

../l€$

- 18 - i

. anyone After tpe account was else , before the respondent agreeq to open the credi t account .

Gpened invoices and s t a t emen t s i n r e spec t

of govds suppl+ed were sent by the respondent, addressed to the

l

appl iyant and he r husband. The appl icant was $ware that mail so

addreysed was emanating ffom the respondeqt. There is no evidence

t h a t any of the fey! chequss whlch she drew on the busmess account

was payable t q the respondent. The a p p l i c a n t i n f a c t &d no$ com-

municate with the respondent in any way about these matters. Her

explanation that tl;ey were b u s i n e s s l e t t e r s and t h a t she gave them

t o h e r husband t u deal with is cons is ten t with her conten t ion tha t

t he re was no par tnersh ip , bu t the ques t ion here i s not whether there

- was a par tnersh ip but whether the applicant represented tha t t h e r e was.

Does +e r s i l ence and i n a c t i v i t y amount t o a representat ion? It c l e a r l y

does not	amount t o g representa t ion by words.	Does it amount t o a
. _-

representa t ion by cpnduct? I think not. There must-be, I think,

something pps i t i ve done by way of conduct o r behaviour for t h a t conduct

o r behaviour t o be a representat ion. The next clause of the subsect ion

dea ls with the case where t h e supposed partner does nothing, and her

l i a b i l i t y here i s r e s t r i c t e d t o where what i s knowingly suffered t o be

made is a representa t ion by some other person. I t is , I th ink , t he

case tha t ,under the common law of es toppe1,s i lence may be t r e a t e d as '

i f it were a r ep resen ta t ion j n some circumstances, f o r example, where a !

person is under a l e g a l d u t y t o make d isc losure of a f a c t , b u t does not ;

do so, h i s conduct i n remain ing s i len t may be deemed t o have been a

represpntat ion of the non-exis tence of that fact . But I do not th ink i

t h a t t p e r e was any Such legal duty on the applicant i n t h e p r e s e n t

case: Such a $uty has been h e l d t o e x i s t where the person remaining i

s i l e n t h a s knoluledge that another person i s ac t ing under the mistaken j

be l i e f t ha t t he fo rqe r i s under a b inding ob l iga t ion to hlm, and i n a I

manner consis tent only with the ex is tence of such an obligation.

Spiro V. Lintei-n (1973) 3 A l l E.R. 319. Even if t h i s doc t r ine appl ies i

I ,

.	.	./Igf	i
I

. . . . .. _-

the Partnershlp Act, (1891-1375), I do not th ink tha t the appl icant

believed, or should be taken to have pel ipved, that the respondent,

i n s u p p l y i n g c o n c r e t e a t $he places whese her husband vfas working,

was a c t i n g i n respondent as p a r t q x of a maqper consis tent only vlitk he r be ing l i ab l e t o t he

he r husband. K/or can I f i n d any ind ica t ion

tha t i n he r so l e peqona ; con tac t wit;1 any representat ive of the

I .

respoydent, thqt i s , in the te lephone cql ls received from plr. Mitchel l ,

the appl icant represented to him tha t sqe )vas a partner of her husband,

.even i f she d i d not say that she was not. And, i n any event, no

c r e d i t was given on t h e f a i t h o f any such representation, even i f the re

was one. The c red lk had already been given when the goods, which were

a t the time of those telephone conversatiom unpaid for, had been

supplied.

This br ings me to the question of whether the applicant knowingly '

suffFred he;- husbaqd to represent to the respondent that she was h i s

par tner . The only possible representat ion by her husband to t he r e s -

pondent which might have been t o t h a t e f f e c t b e f o r e o r a t the opening

. ._

_-

of the c red i t account was tha t t he bus iness name was sa id by him t o

be 'IT.,.T. and L J I . Dunn" . The name of t h e a p p l i c a n t f o r c r e d i t

i s no t en t e red i n the space provided for it on t h e form f i l l e d i n by :

Mr. I h t c h e l l . I vrould have thought tha t th i s would have been a more

impol-tant item so f a r a s liability was concerned than the a l ias , if

there yas one, under which the app l i can t for c r e d i t was trading. Be

t h a t as a p p l i c a n t i n t h i s c a s e it may, even if t h e r e was a r ep resen ta t ion t he re in t ha t t he

was h i s p a r t n e r I am s a t i s f i e d t h a t t h e

appl icant knew nothing of	it, and d id no t knowingly s u f f e r it t o be
made

Did t h e a p p l i c a n t ' s husband, a t any time after the opening of

the account , m?ke any representa t ion to the respondent tha t the

appl lcant was Fis par tner? If so , d id t he app l i can t knowingly s u f f e r

. . . /20. I ,

- 20 - I

I

.

r

him

t? make

it;y

d i d

the

r e sponden t

t he rea f t e r

g ran t

c r ed i t

t o

t h e

!

I j	appl iyant ,	apd	d l d it	do	so	on	t h e f a i t h	9f	the appl icant ' s husband's
i

I mpresenta t ion? r lvlere, a t common lav, the representa t ion which was made was made

by th? person soug$t to be estopped, as i 4 S p i r o v. Lirl tern (supra),

it is not open t o him to s ay tha t he d ig not know of t & e f a l s i t y of

I . > I

I

the represenTation if he ?lad a c t e d i n sycfi a way tha t a reasonable

! I

man wquld take the representa t ion as being t r u e . However, under

I I

Sectiqn 14 o? the Par tnersh ip Act the p y r p estopped is not the person ,

I	yho m+es	t h ? represent+on	but	the	peaspn	who	knowingly s u f f e r s	t h a t
I

r ep resen ta t ion t o be made. I take it t $ a t t h e word "kqowinglyll

means t h a t t h e r e must be ac tua l knowledge tha t t he r epaesen ta t ion i s I

l I i

t o be made, bu t thaL the e f fec t o f the zepresenta t ion is t o be judged : .

by t h e e f f e c t it would have upon the mirfd p f a reasonable man, whether

o r not the person knowing that r ep resen tapon w?s to be made knew t h a t

it would Under Sec t ion 14 t he re must not have t h a t e f f ec t .

only pe knpwledge t h a t t h e I

r epresenta t ion is t o be madey b u t a l s o a !#suffering'' of i ts being made

by a medium who is n o t i n f a c t a u t h o r i s e d $0 make, o r i n s t iga t ed i n to

making, the representa t ion b u t who is allowed or permit ted to do so.

!

If a representa t ion i s made aga ins t the VI+, or without the knowledge,

of the person sought to be bound by the representa t ion it fo l lows t ha t '

that person i s not bound by it. I th ink tha t i f the person sought to

be bound has no power to prevent the representat ion being made he

cannot, even i f he knows t h a t it i s t o be made, be sa id t o su f f e r it.

-

I t may wel l be the same i f , a t l e a s t on reasonable grounds, he believes i

t h a t hF does not have the power.

Looking represpnta t ion by again a t the f a c t s of the present case, was there a

tbe app l i can t ' s husband that the appl icant was h i s

par tner? On tpe evidence, t h a t representat ion can have ar isen only

i n h i s having, i n payment of accounts sent to him and the appl icant ,

I . . ./21 ..,

- 21 -

signed cheques bearing the name of himself and the applicant.

l

i	It appears t h a t those	accounts	the	of	respondent	which were met
i

were paid by cheques d r a m by the app l i can t ' s husband. The appl icant I

saw e y e l o p e s from the respondent which were addressed t o h e r husband

I and hqrse l f , and knew that they contalned invoices . She must have

I known t h a t h e r h u s b s d hail. paid a t l e a s t some of the accounts of the

respondent by c h e q y , and knew that the brsiness account cheque forms I

I ' I

had hgr name ps in teg on l;?lem a s j o i n t o p e r a t o r of the accounl;. There

i s no evidence tha$ she actefnpted to pr$vf?nt her husband from paying

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*the respondent's acsounts with cheques bearing her printed name,

1

I thoug$ not sfgrred by her:

I I t h i n k t h a t it i s possiple regqrd to the appl icant ' s husband's

I conduct i n s o behaving as amounting t o 7 representa t ion tha t the person

named on the forms p f the cheques used t o pay business debts was i n

par tnersh ip y i th hiy. I a h i n k t h a t t h e ayrareness t h a t h e r husband

was so ac t ing which the appl icant had mys$ be taken as being knowledge

I

of h i s r ep resen ta t ion . I think that , becapse it was open t o h e r t o

cance l her ay thor i ty to the bank t o operat;? the account i n t h e i r J o i n t

names she may be taken to: have 'Isufferedt1 yhat per husband was doing.

But I do n o t t h i n k t h a t it was on the fait ;$ of such representation that

the respondent gave credit to the supposed I'firp'l. I n r e spec t o f t he

goods paid fq" by a$ any r a t e t h e first of such cheques there was ob- _ .

viously no sych givgng o f c r ed i t , f o r t ha t ; had been previously done.

There was, moreover,	not	a scrap of	evidenFe	that	the	respondent	acted	I
i

on t h e f a i t h on c red i t . o f these repr,esentations in continying to supply goods

The e r r a t i c and incons is ten t way i n which payments were

recorded by the respondent i s some indica t ion of i t s a t t i t u d e t o t h e

I

question of with whom it was dealing. But I th ink that , qu i t e apa r t

from the lack of such evidence there i s no doubt that , i f the respon-

dent granted p-edi;t t o t h e 'lfirm't, and not to the person who ac tua l ly

~ _.

. . . /2?,.

- 22 -

' , l

I . : - . -

1 . apRlied f o r c r e d l t , i . e . t h e a p p l i c a n t ' s husband, it did so because

of h l s i n l t i a l r e p r e s e n t a t i o n , when he opened the account , that the

, I 'business name" of the person seeking credi t was "T.J . and L+. Dunn".

And, a s I ,have sa ld , t he app l i can t knew nothing of t ha t representa t ion ,

I

I and q id no t therefore "knowingly suf fer" it t o be made. Moreover, i f

it were necessary so to ho ld , I t h i n k t h a t I would f i n d it t o be the

1 8 c a s e t h a t p l r , M i t c h e l l i n i t i a l l y d e c i d e d t o g r a n t c r e d i t t o t h e

husband, o € whom alone he made enqui r ies as to credi t -worthlness , and

sought the business name recorded on the' form of application f o r the

purpose of eqsurlng that the accounts were sent t o the proper person,

and n o t because he was r e l y m g on t h e f a c t t h a t he bel ieved that the

I app l icant \vas i n partnershi11- with he r husband a s a f a c t o r i n d e c i d i n g B

t o supply goods, o f a limited value, on c r e d i t , when they were

ordered by	t h e a p p l i c a n t ' s	husband	as,	it	appears , they invariably
were.

I tu rn j f i na l ly , t o t he ques t ion o f whether the applicant was

harsh to the respondent under the agency doctrine of apparent or

ostensible authoriTy. I haye above dea l t w i th t he c lose ly r e l a t ed

doctr ine of partnership law which appears i n Sect ion 14 of t he Pa r t -

nership Act. In t he ca se of agency, the doctr ine requires that a

person represents, o r permits it t o be represented, not t h a t he i s a

pa r tne r bu t t ha t a person purpor t ing to ac t for him has h i s au tho r i ty

t o a c t on 111s behal f as his agent. It i s a l so requi red , s imi la r ly t o

Section 14 of t h e Payynenshlp Act, tha t the th+rd person dea l ing wi th

the sppposed agent does s o on t h e f a i t h of such representation.

I pave above disposed of the quest ion ra ised by the respondent of

w h e t h ~ r t h e a p p l i c a n t had given actual aul.hority to her husband t o

I

a c t a s h e r a g e n t . I n r e s p e c t of the question v{hether she was bound

through the appl lcat ion p f the doc t r ine of apparent authori ty I must

a lso give a pegat iye reply. I do n o t t h i q k e i t h e r that the appl icant

made, o r p e r p i p e d , any repnesentat ion TO the respondent that her

. . . /23,.

- 23 -

husband was her agent w+th a u t h o r l t y t o buy goods on her behalf .

-

Fur ther , there yas no eyidence that the respondent a t any tlme

thought t h a t the re la t ionship o f p r inc ipa l and agent existed between

the appl icant and h e r husband. The respondent i n f a c t d e a l t with

the app l i can t ' s hqsband a s i f he were a principal, though, no doubt,

i n t h e b e l i e f , however i l l - f o u n d e d i n f a c t , t h a t he was i n p a r t n e r s h i p

with the applicanl;. Nothing was supp l i ed t o t he app l i can t ' on t he

f a i t h of any representat ion that her husband was her agent.

I have nq reason t o doubt tha t the respondent ac ted in good f a i t h

when It sued the applicant and when it pet i t ioned f o r the sequestration.

orden t h a t was made. For the reasons I have given above I now f ind

that the respondent did not have a val id c la im against the appl icant .

It is unfo r tuna te t ha t what I b e l i e v e t o be the t rue pos i t ion has

taken so long to emerge. In part , the respondent cannot be held blame-

less f o r i f it had made fur l ;her enquir ies when it opened the account

it yould, thlnk, have rea$ised what t h e t r u e s i t u a t i o n was and could I

hav? be t t e r s a fegua rded i t s e l f . But t he g rea t e r pa r t o f t he blame

l i e s w i t h $he a p p l i c a l t , who, no doubt i n which she now regards as a !

foo l i sh and un jus t i f i ed r e l j ance on he r husband, d id no th ing to b r ing

t h e t r u e s i t u a t i o n t o t h e knowledge o f the respondent , the court in

whiqh she yas sued, and the court which made her bankrupt. Apart

from the cos t s of t h i s a p p l j c a t i o n I do not th ink tha t her omiss ions ;

have caused the respondent t o i ncu r cos t s which it might otherwlse

have avoided, because the applicant's husband was sued, and was made . !

bankrupt i n the same proceedings as those taken against the appl icant ,

and h? remalns bankrupt. I o r d e r t h a t q e respondent's proof of debt,

which was ab1 t t e d i n I A e sqm of ?$4,310.W, be expunged. I also order

I

t ha t t he app l l can t , a1 thpu& her application has been successful, k

should pay h+€ of t h e p p s t q incurred by the respondent in opposing

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t h l s a p p l i c a t i o n . 8 .

,