Donohoe v Schroeder [1916] HCA 73; (1916) 22 CLR 362 (14 November 1916)

HIGH COURT OF AUSTRALIA

Donohoe Informant, Appellant; and Schroeder Defendant, Respondent.

Donohoe Informant, Appellant; and Kabutz Defendant, Respondent.

H C of A

14 November 1916

Griffith C.J., Barton, Isaacs, Gavan Duffy and Rich JJ.

H. E. Manning, for the appellant.

Windeyer, for the respondent Schroeder, and Curlewis, for the respondent Kabutz, were not called upon.

Griffith C.J.

At the time of the commencement of the War two persons named Hardt who were resident in Germany carried on business in New South Wales under the firm name of G. Hardt & Co. On the outbreak of the War it became impossible for that business to be carried on for them. It had been managed by the two respondents and a third person, who acted under a power of attorney. In September 1914, about a month after the outbreak of the War, an arrangement is said to have been made by which the respondent Schroeder bought the whole of the assets of the firm of G. Hardt & Co. in Australasia. The contract of sale was embodied in a document which was executed by Schroeder as purchaser and by the respondent Kabutz (who had authority to do so under the power of attorney) as attorney for the vendors. The principals were informed of what was done, and so far as is known no objection was taken to the transaction.

The present charges are that the respondents by entering into that contract, which is alleged to have been a contract for the benefit of the enemy, traded with the enemy. Whether, as a matter of law, a resident of Australia who buys from an enemy property which is situated in Australia on the terms (as in this case) that the price is not to be paid until after the War is ended thereby trades with the enemy is a question which may some day deserve consideration. It may, I think, be fairly presumed that any sale by a vendor to a purchaser is a contract for the benefit of the vendor, but whether when the owner of a property is a person resident in an enemy country such a contract is necessarily to be regarded as trading with the enemy is a different matter. But trading with the enemy is not an offence if it is done with the licence of the Crown. The contract of sale embodied in the document executed by the respondents was submitted to the Attorney-General of New South Wales, to whom at that time was de facto entrusted the exercise of the prerogative to grant licences to trade with the enemy, and was by him approved. The Crown does not suggest that that authority should be disputed. The charge made in each case is the making of this contract. The fact that it was made with the licence of the Crown is a complete answer to the charges.

Another point is sought to be raised which is of so shadowy a nature that it is difficult to grasp it. It is suggested—that is the strongest term that can be used—that, although in form there was an out and out sale by G. Hardt & Co. to Schroeder, the real transaction was one by which Schroeder was to be a trustee for G. Hardt & Co. to carry on the business for them during the continuance of the War and to restore it to them at the end of the War. But there is not a scintilla of evidence to support the suggestion. To support such a charge it would be necessary to give evidence of facts which would entitle G. Hardt & Co. at the end of the War to come to a Court here and ask for an account of Schroeder's dealings with the trust property and restitution of it to them. There is not a shred of evidence to support such a suggestion.

That is all there is in the case.

I have assumed that there is no objection to the Crown raising such a case on these informations. But I think that where the Crown charges a person with trading with the enemy by entering into a particular contract, describing it by its date, the Crown cannot afterwards be allowed to say "We did not mean that contract at all but we meant another contract of which we cannot give particulars, and which can only be conjectured from the document itself and from correspondence which is consistent with the view that the document does not express the real contract." There may be other states of facts of which there is no evidence whatever, which if proved would show that what the Court has before it, namely, the document, is misleading. It is conceivable that something was said or happened which would render the respondents liable to a prosecution for trading with the enemy. But there is no evidence of any such facts, and the whole matter rests on conjecture, which, so far as appears, is unfounded.

The appellant's case entirely failed, and the Magistrate was right in his decision.

Barton J.

I am of the same opinion.

Isaacs J.

I agree.

Gavan Duffy J.

I agree.

Rich J.

I agree.

Appeals dismissed with costs.

Solicitor for the appellant, Gordon H. Castle, Crown Solicitor for the Commonwealth.

Solicitors for the respondents, Minter, Simpson & Co.