COURT
IN THE FEDERAL COURT OF AUSTRALIA
GENERAL DIVISION
BANKRUPTCY DISTRICT OF THE STATE OF NEW SOUTH WALES AND THE AUSTRALIAN CAPITAL
TERRITORY
Jackson J.

CWDS
  Bankruptcy - creditor's petition - petitioner a company - petition executed
by individual director of company - whether director had authority to present
petition on behalf of company - retrospective ratification by all directors -
whether effective - opening words of petition referred to individual director
as petitioner - whether formal defect or irregularity.
  Bankruptcy Act 1966 ss. 33(1)(b), 306(1).
  Alexander Ward & Co. Ltd. v. Samyang Navigation Co. Ltd. (1975) 1 WLR 673
  Danish Mercantile Co. Ltd. v. Beaumont (1951) Ch. 680
  Re Spitzer; Ex parte Weltrans Agency Establishment (1979) 25 ALR 447
  Growden v. Wiltshire (1935) 52 CLR 286

HRNG
SYDNEY
#DATE 25:3:1986
  Counsel for the debtor: No appearance by or on behalf of the debtor
  Solicitors for the debtor: No appearance by or on behalf of the debtor
  Counsel for the petitioning creditor: Mr A. Cramer-Roberts
  Solicitors for the petitioning creditor: A.R. Yates & Co. by their city
agents Duncan Barron & Co.

ORDER
  It be declared that Mr Hine had authority to sign the petition on behalf of
the company.
  The petitioning creditor be granted leave to amend the petition in
accordance with these reasons for judgment.
  The need for re-verification and re-service of the petition be dispensed
with.
  A sequestration order be made against the estate of the debtor.
  Costs be taxed and paid according to the Act, but the costs shall not
include the costs of making the amendments above referred to.

NOTE: Settlement and entry of orders is dealt with in Rule 124 of the
Bankruptcy Rules.

JUDGE1
  This is a petition for a sequestration order on the ground that the debtor
failed to comply with the requirements of a bankruptcy notice served on him in
November 1984.
2.  The bankruptcy notice referred to the judgment debt as a debt due to
Edsill Pty. Limited and that company is the petitioning creditor named in the
heading to the creditor's petition. The difficulty which arises, however, is
that the petition commences with the words:-

    "I, ROBERT HINE, Company Director of Edsill Pty. Limited,
    of 11 Shoobert Crescent, KEIRAVILLE in the State of New
    South Wales, petition the Court for a sequestration
    order against the estate of NICK MANIAS whose address
    was care of Normandi Motor Inn, 30 Bourke Street,
    Wollongong but more recently of "Le Sands" Restaurant,
    The Grand Parade, Brighton-le-Sands, N.S.W., and whose
    occupation is a Chef hereinafter referred to as "the
    debtor""

The petition is also signed by Mr Hine without there being any indication that
he signs on behalf of Edsill Pty. Limited.
3.  Mr Hine was a director of that company at the time when the petition was
presented and at all material times. I am not satisfied, however, that at the
time when the petition was presented Mr Hine had authority to do so on behalf
of the company. The evidence on this question is contained in the affidavit of
Mr Wilson, another of the directors of Edsill Pty. Limited who said,
relevantly:-

    "2. On the 4th September, 1984 I met with my co-director
    Robert Hine and discussed the indebtedness of Nick
    Manias with our company. It was agreed between us that
    Robert Hine would have all necessary authority to act on
    behalf of Edsill Pty. Limited to commence bankruptcy
    proceedings against Manias.

    3. It was resolved at our meeting that all necessary
    steps be taken by Robert Hine on behalf of Edsill Pty.
    Limited for the purpose of making Nick Manias bankrupt."

4.  That evidence does not show, of course, that Mr Wilson and Mr Hine were
the only directors - indeed it seems probable that they were not - or that any
other directors had notice of the meeting to which Mr Wilson refers.
5.  A further feature, however, is that the three directors of Edsill Pty.
Limited (Hine and Wilson, and a Patricia Collins) met on 18 March 1985 and
resolved:-

    "(a)  That it be recorded in the minutes as at this date,
          notwithstanding there is (sic) no minutes for the
          4th September, 1984 that the Board authorised
          Robert Hine to act as its Agent in doing all things
          necessary on behalf of the Company for the purpose
          of the company obtaining a sequestration order
          against Nick Manias.

    (b)   That whereas Robert Hine acted on behalf of the
          Company as its Director and signed his name as
          petitioner to the Company's petition dated 14th
          March, 1985, such action of Robert Hine and all
          such other steps as may have been taken by him be
          hereby approved, ratified and confirmed."

I am not prepared, in the absence of oral evidence to clarify the point, to
accept that resolution (a) shows that Mr Hine in fact had the necessary
authority at the time when the petition was presented. It is clear, however,
that resolution (b) purports to be a ratification of the earlier actions of Mr
Hine in the presentation of the petition.
6.  In Alexander Ward & Co. Ltd. v. Samyang Navigation Co. Ltd. (1975) 1 WLR
673 the House of Lords approved the decision of the Court of Appeal in Danish
Mercantile Co. Ltd. v. Beaumont (1951) Ch 680 to the effect that if legal
proceedings are initially commenced by an agent without the authority of his
principal the institution of the proceedings may be later ratified and the
ratification respectively clothes with authority what was earlier done. I see
no reason why such a principle should not apply in the presentation of a
petition for a sequestration order. It is clear from the terms of the petition
that Mr Hine was purporting to act on behalf of the company and it seems to me
that the principle to which I have referred applies in the present case.
7.  The result of the remarks which I have so far made would be that the
authority of Mr Hine to sign the petition on behalf of the company, a matter
of which proof is normally required (see Re Spitzer; Ex parte Weltrans Agency
Establishment (1979) 25 ALR 447 at 449) is established. The petition remains
defective in form, however, because the opening words of it refer to Mr Hine
as the petitioning creditor. In Growden v. Wiltshire (1935) 52 CLR 286 the
High Court rejected an argument that a petition was invalid because it was
brought in the name of a liquidator rather than in the name of the company in
liquidation, a matter which it regarded as an irregularity. It directed the
Judge of the Court of Bankruptcy to amend the petition by substituting the
name of the company for that of the liquidator and to make any consequential
amendments.
8.  I am satisfied that I should adopt a similar view when dealing with the
present case where an officer of the company, stating his position as such,
has purported to present a petition on behalf of the company but has used his
own name. Accordingly, I shall give leave to the petitioning creditor to amend
the petition as it may be advised to deal with this aspect of the case.
9.  There is also another matter which I should mention at this point and that
is in relation to a date mentioned in paragraph 4 of the petition and I give
leave to the petitioning creditor to amend paragraph 4 of the petition, by
deleting the date, 14 December 1984, and substituting in lieu the date, 13
December 1984.