Black v Smallwood [1966] HCA 2

High Court of Australia Barwick C.J. Kitto, Taylor, Windeyer and Owen JJ. Black v Smallwood [1966] HCA 2

ORDER Appeal dismissed with costs.

Cur. adv. vult.

The following written judgments were delivered:—

1966, Feb. 25 Barwick C.J., Kitto, Taylor and Owen JJ.

On 22nd December 1959 the appellants purported to enter into a contract for the sale of certain land at Ingleburn to Western Suburbs Holdings Pty. Limited. The contract incorporated the conditions of sale approved by the Real Estate Institute of New South Wales and was executed by the appellants as vendors and it bore the following subscription as the signature of the purchaser:

Western Suburbs Holdings Pty. Ltd. Robert Smallwood Directors. J. Cooper

It was subsequently found that Western Suburbs Holdings Pty. Limited had not at that time been incorporated but it is common ground that both the appellants and the respondents, Smallwood and Cooper, who subscribed the name Western Suburbs Holdings Pty. Limited to the form of contract and added their own signatures as directors, believed that it had been and that the latter were directors of the company. Thereafter the appellants instituted a suit for specific performance against the respondents alleging that by a written contract made between the appellants as vendors and the respondents who "described themselves therein as "Western Suburbs Holdings Pty. Limited" " agreed to purchase the subject land from the appellants. No attempt was made at the trial to make this allegation good but, without amendment, the case proceeded as one in which the appellants sought to impose a liability in accordance with the terms of the contract upon the respondents as agents contracting on behalf of a principal not yet in existence.

Upon the trial the appellants were successful in obtaining a decree for specific performance but on appeal to the Full Court the decree was set aside and the suit dismissed. All members of the Full Court thought the case was covered precisely by the decision of the Court of Appeal in Newborne v. Sensolid (Great Britain) Ltd. [1] and although one of their number was, perhaps, more than disposed to doubt the correctness of that decision, the Court as a whole decided that it should be followed. It is from this decision that this appeal is brought. At the outset of the case we should say that the decision in Newborne's Case [1] is directly in point but we propose to deal briefly with the arguments that were presented to us and which, if they were accepted, would establish that decision to be wrong.