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[1960] HCA 38
High Court of Australia
1960-07-01
Windeyer JJ, Fullagar J
Original judgment source is linked above.
For the reasons which I have given I am of the opinion that the appeal should be allowed, the order of the Full Court discharged and judgment in demurrer entered for the appellant.
I agree with the Chief Justice that this appeal should be dismissed and I have nothing to add to his reasons for this conclusion.
In my opinion the Supreme Court was right in upholding the demurrer.
The question turns on the meaning to be given to the expression "the Firm" in the indemnity clause that is set out on the certificate of insurance. The word "firm" has, in contexts relevant to the present, two meanings. Each is exemplified in this clause. In its older, and to-day less usual, sense it means, according to the Oxford Dictionary: "The "style" or name under which the business of a commercial house is transacted". This meaning - derived from the still earlier sense in which firm meant a signature, by which a writing was confirmed - appears in the opening words of the clause in question here: "whereas the person or persons named in the Schedule herein carrying on business under the firm and style stated in the said Schedule". From that use the word came to mean a partnership of two or more persons carrying on a business. Hence firm has become a collective noun, denoting the partners in a business. In that sense, still further expressly amplified, it appears in the latter parts of the clause in question. That clause expressly provides that, as used therein, " "the Firm" shall include the aforesaid persons (scil. Mr. Ellis and Mr. Price) and any other person or persons who may at any time and from time to time during the subsistence of this Policy be a partner in the Firm or any one or more of them". The undertaking to indemnify "the Firm" as thus defined should, I consider, be so read as to give full scope to the amplified meaning that the clause thus attributes to that expression. The result is, in my opinion, that the decision of the Supreme Court was right. I need give no further reasons for this conclusion than to say that I fully agree in those given by the Chief Justice.
It was argued that the policy was only intended to cover claims arising out of liabilities incurred, or alleged to have been incurred by the firm. And this, it was suggested, meant claims arising out of some act or omission done by one of the partners as a partner in the firm. But on examination this construction, which depends largely on the words "on the part of the firm", raises more difficulties than it solves. A firm of solicitors is not a legal entity. It may in one sense have a continuous existence, perhaps for a hundred years or more, just as any unincorporated body, whether a commercial house, a club or a regiment may have. And this existence and continuity may be real in a philosophical and historical sense. But the clause in question is concerned with claims alleging a legal liability on the part of an individual or individuals. It operates in a system of law that does not recognize partnerships as having, for legal purposes, personality or existence apart from the partners. The key to its meaning is in the words enclosed in brackets in the clause.
Halford
Price
High Court of Australia Dixon C.J. Fullagar, Taylor, Menzies and Windeyer JJ. Halford v Price [1960] HCA 38