Lang v Morrison
In Lang v James Morrison & Co Ltd (1912) 13 CLR 1, an action was brought by an English company, James Morrison & Co Ltd, against three defendants, J McFarland, T Lang and W Keates. The plaintiffs carried on the business of receiving and disposing of frozen meat from abroad. They alleged that the three defendants carried on business in Melbourne as partners under the names ‘T McFarland & Co’ and on occasions ‘McFarland, Lang and Keates’. Before the action commenced, J McFarland and W Keates became insolvent and the action proceeded against their assignees and Lang. At the trial, judgment was given for the plaintiff and Lang appealed to the High Court.
The High Court held that there was no partnership. According to Griffith CJ at 6:
... the real substance of the transaction was that the plaintiffs and Thomas McFarland agreed to enter into a joint venture. They were not partners as against third parties, but each party had certain rights against each other.
Evidence for this finding was found in the fact that separate bank accounts were kept as it was apparent that neither Lang nor Keates operated on the account of T McFarland & Co. Further Lang and Keates took no part in the business of the new firm other than to sign two letters. Griffith CJ saw this as decisive. According to his Honour:
Now in order to establish that there was a partnership it is necessary to prove that JW McFarland carried on the business of Thomas McFarland & Co on behalf of himself, Lang and Keates, in this sense, that he was their agent in what he did under the contract with the plaintiffs. In the circumstances the court found that there was no such agency.
The High Court held that there was no partnership. According to Griffith CJ at 6:
... the real substance of the transaction was that the plaintiffs and Thomas McFarland agreed to enter into a joint venture. They were not partners as against third parties, but each party had certain rights against each other.
Evidence for this finding was found in the fact that separate bank accounts were kept as it was apparent that neither Lang nor Keates operated on the account of T McFarland & Co. Further Lang and Keates took no part in the business of the new firm other than to sign two letters. Griffith CJ saw this as decisive. According to his Honour:
Now in order to establish that there was a partnership it is necessary to prove that JW McFarland carried on the business of Thomas McFarland & Co on behalf of himself, Lang and Keates, in this sense, that he was their agent in what he did under the contract with the plaintiffs. In the circumstances the court found that there was no such agency.