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High Court of Australia |
H C of A
On appeal from a justice of the High Court.
20 November 1922
Starke J.
Ham, for the plaintiff.
Lowe, for the defendants.
Nov. 20, 1922
Starke J
. delivered the following written judgment:—During the last week of March 1920 the parties to this action communicated with each other by telegram. Ultimately the plaintiff agreed to sell and the defendants to buy "two parcels of Wales A scrip each 50,000 bushels at ¾d. per bushel for final dividend." The agreement was subsequently reduced to writing. It was forwarded by the plaintiff to the defendants on 8th April 1920, and confirmed in writing by the defendants on 12th April 1920. The writing was as follows:—"I, Samuel G. See, 19 Queen Street, Melbourne, agree to sell and Messrs. P. Cohen & Co. of 115 Pitt Street, Sydney, agree to buy New South Wales negotiable wheat certificates season (1915-1916) representing about 100,000 (one hundred thousand) bushels at ¾d. per bushel. Delivery on the date of declaration of the final payment. All payments of dividends declared between the date of this contract and the final payment inclusive to be credited to the buyers and adjusted at the time of settlement, but sellers have the option of delivering the scrip, or of making or claiming a cash adjustment, i.e., payment to be made by sellers to buyers or vice versa of the difference between ¾d. per bushel and the amount or amounts per bushel declared from time to time, inclusive of final dividend of the New South Wales 1915-1916 Pool."
The subject matter of the contract was certificates issued by the Government of the State of New South Wales under a scheme for marketing the wheat harvest of 1915-1916. The scheme was not gone into before me; but it is sufficient to say that the certificates entitled the holders to an account from the Government for the balance, over any advances then made, of the purchase price of wheat sold to the Government under the scheme. These certificates passed from hand to hand, and were freely bought and sold on the market. Both parties to the contract apparently anticipated further advances or dividends to the holders of the certificates, and these prospective dividends were in truth the subject of the contract. But the prospect of further dividends faded away. The Minister for Agriculture during November 1921 stated that the 1915-1916 pool had been largely overpaid, and in point of fact no further dividends were paid or declared in respect of that pool. And the parties have in this action mutually admitted as a fact "that on or about 24th January 1922, and not before, it was duly declared and announced by the proper authority that no further dividend would be declared with respect to the said wheat" —that is, the wheat represented by the certificates referred to in this case. The plaintiff on 8th February 1922 tendered to the defendants wheat certificates for 101,768 bushels 12 lb. in performance of his contract, but the defendants refused to accept delivery of the certificates or to pay the ¾d. per bushel mentioned in the contract note. The certificates became valueless so soon as it became known that the 1915-1916 wheat pool had been overpaid. The object of the action is to recover £318 0s. 6d., representing 101,768 bushels 12 lb. at ¾d. per bushel.
At the time of the tender the defendants did not object to certificates for 101,768 instead of 100,000 bushels being tendered, and they are, in my opinion, precluded by their pleadings, pursuant to an order in Chambers made by me on 12th October 1922, from now objecting to such a tender under the contract, if it be in other respects effective.
Originally the defendants pleaded that the plaintiff was not ready and willing to perform the contract on his part, but on 7th July 1922 the defendants notified the plaintiff that this defence had been abandoned. Later the defendants applied for leave to reinstate it, and were allowed to do so, but so that the defendants were limited to the allegation that the plaintiff's obligation was to deliver wheat certificates on the date of the declaration of final payment and that delivery was not given on that date.
The rights and obligations of the parties rest upon a proper construction of the written agreement between them. Did the defendants agree to pay for the wheat certificates in the events which have happened? The case for the defendants was that their obligation to pay was conditioned upon a delivery of the certificates on the date of the declaration of the final payment and that no delivery was made or tendered upon that date. And, as a further defence, the defendants alleged that the agreement was a contract by way of gaming and wagering, and therefore unenforceable. The former argument appears to accept 24th January 1922 as the date of declaration of final payment within the meaning of the contract. But in my opinion it was not. As I construe the contract, the parties contracted on the basis that there would be one or more dividends to holders of wheat certificates after the date of the contract, and that payment and delivery or settlement under it would take place so soon as one of those dividends should be declared to be the final payment. The parties did not contemplate that no further dividend would in fact be paid or declared, and they did not provide for that contingency in their contract. The basis of the obligation to pay and deliver or settle under the contract, was, in my opinion, a payment subsequent to the date of the contract, declared by the proper authority to be the final payment. As this event never happened, no obligation arose on the part of the defendants to pay the purchase-money.
The argument that the agreement was a contract by way of gaming or wagering cannot be supported. An agreement to sell a dividend, not declared, is not a wagering contract (Marten v. Gibbon[1] ). It was, no doubt, a speculative contract, but the question is, what were the intentions of the plaintiff and the defendants respectively at the time of the making of the contract? Did the parties actually intend to sell and purchase the wheat certificates or the prospective dividends on these certificates? Did they intend to create a real obligation or to simulate an obligation? If the transaction was intended to be a real one, then it cannot be regarded as a gambling transaction and unenforceable. I see no reason to doubt the reality or the genuineness of the agreement before me (Grizewood v. Blane[2] , Shaw v. Caledonian Railway Co.[3] and Lowenfeld v. Howat[4] , cited in Coldridge's Law of Gambling, 2nd ed., pp. 14-19).
Judgment must be for the defendants with costs of action, less any costs exclusively attributable to the allegation that the contract was by way of gaming and wagering.
Appeal dismissed. Plaintiff to pay costs of action and of appeal.
Solicitor for the appellant, J. W. McComas.
Solicitors for the respondents, Read & Read, Sydney, by Henderson & Ball.
H C of A
On appeal from a justice of the High Court.
28 August 1923
Knox C.J., Isaacs and Higgins JJ.
Ham, for the plaintiff.
Lowe, for the defendants.
Nov. 20, 1922
Starke J
. delivered the following written judgment:—During the last week of March 1920 the parties to this action communicated with each other by telegram. Ultimately the plaintiff agreed to sell and the defendants to buy "two parcels of Wales A scrip each 50,000 bushels at ¾d. per bushel for final dividend." The agreement was subsequently reduced to writing. It was forwarded by the plaintiff to the defendants on 8th April 1920, and confirmed in writing by the defendants on 12th April 1920. The writing was as follows:—"I, Samuel G. See, 19 Queen Street, Melbourne, agree to sell and Messrs. P. Cohen & Co. of 115 Pitt Street, Sydney, agree to buy New South Wales negotiable wheat certificates season (1915-1916) representing about 100,000 (one hundred thousand) bushels at ¾d. per bushel. Delivery on the date of declaration of the final payment. All payments of dividends declared between the date of this contract and the final payment inclusive to be credited to the buyers and adjusted at the time of settlement, but sellers have the option of delivering the scrip, or of making or claiming a cash adjustment, i.e., payment to be made by sellers to buyers or vice versa of the difference between ¾d. per bushel and the amount or amounts per bushel declared from time to time, inclusive of final dividend of the New South Wales 1915-1916 Pool."
The subject matter of the contract was certificates issued by the Government of the State of New South Wales under a scheme for marketing the wheat harvest of 1915-1916. The scheme was not gone into before me; but it is sufficient to say that the certificates entitled the holders to an account from the Government for the balance, over any advances then made, of the purchase price of wheat sold to the Government under the scheme. These certificates passed from hand to hand, and were freely bought and sold on the market. Both parties to the contract apparently anticipated further advances or dividends to the holders of the certificates, and these prospective dividends were in truth the subject of the contract. But the prospect of further dividends faded away. The Minister for Agriculture during November 1921 stated that the 1915-1916 pool had been largely overpaid, and in point of fact no further dividends were paid or declared in respect of that pool. And the parties have in this action mutually admitted as a fact "that on or about 24th January 1922, and not before, it was duly declared and announced by the proper authority that no further dividend would be declared with respect to the said wheat" —that is, the wheat represented by the certificates referred to in this case. The plaintiff on 8th February 1922 tendered to the defendants wheat certificates for 101,768 bushels 12 lb. in performance of his contract, but the defendants refused to accept delivery of the certificates or to pay the ¾d. per bushel mentioned in the contract note. The certificates became valueless so soon as it became known that the 1915-1916 wheat pool had been overpaid. The object of the action is to recover £318 0s. 6d., representing 101,768 bushels 12 lb. at ¾d. per bushel.
At the time of the tender the defendants did not object to certificates for 101,768 instead of 100,000 bushels being tendered, and they are, in my opinion, precluded by their pleadings, pursuant to an order in Chambers made by me on 12th October 1922, from now objecting to such a tender under the contract, if it be in other respects effective.
Originally the defendants pleaded that the plaintiff was not ready and willing to perform the contract on his part, but on 7th July 1922 the defendants notified the plaintiff that this defence had been abandoned. Later the defendants applied for leave to reinstate it, and were allowed to do so, but so that the defendants were limited to the allegation that the plaintiff's obligation was to deliver wheat certificates on the date of the declaration of final payment and that delivery was not given on that date.
The rights and obligations of the parties rest upon a proper construction of the written agreement between them. Did the defendants agree to pay for the wheat certificates in the events which have happened? The case for the defendants was that their obligation to pay was conditioned upon a delivery of the certificates on the date of the declaration of the final payment and that no delivery was made or tendered upon that date. And, as a further defence, the defendants alleged that the agreement was a contract by way of gaming and wagering, and therefore unenforceable. The former argument appears to accept 24th January 1922 as the date of declaration of final payment within the meaning of the contract. But in my opinion it was not. As I construe the contract, the parties contracted on the basis that there would be one or more dividends to holders of wheat certificates after the date of the contract, and that payment and delivery or settlement under it would take place so soon as one of those dividends should be declared to be the final payment. The parties did not contemplate that no further dividend would in fact be paid or declared, and they did not provide for that contingency in their contract. The basis of the obligation to pay and deliver or settle under the contract, was, in my opinion, a payment subsequent to the date of the contract, declared by the proper authority to be the final payment. As this event never happened, no obligation arose on the part of the defendants to pay the purchase-money.
The argument that the agreement was a contract by way of gaming or wagering cannot be supported. An agreement to sell a dividend, not declared, is not a wagering contract (Marten v. Gibbon[5] ). It was, no doubt, a speculative contract, but the question is, what were the intentions of the plaintiff and the defendants respectively at the time of the making of the contract? Did the parties actually intend to sell and purchase the wheat certificates or the prospective dividends on these certificates? Did they intend to create a real obligation or to simulate an obligation? If the transaction was intended to be a real one, then it cannot be regarded as a gambling transaction and unenforceable. I see no reason to doubt the reality or the genuineness of the agreement before me (Grizewood v. Blane[6] , Shaw v. Caledonian Railway Co.[7] and Lowenfeld v. Howat[8] , cited in Coldridge's Law of Gambling, 2nd ed., pp. 14-19).
Judgment must be for the defendants with costs of action, less any costs exclusively attributable to the allegation that the contract was by way of gaming and wagering.
Appeal dismissed. Plaintiff to pay costs of action and of appeal.
Solicitor for the appellant, J. W. McComas.
Solicitors for the respondents, Read & Read, Sydney, by Henderson & Ball.
2. [1851] EngR 899; (1851) 11 C.B., 526.
3. (1890) 17 R. (Ct. of Sess.), 466.
4. (1891) 19 R. (Ct. of Sess.), 128.
6. [1851] EngR 899; (1851) 11 C.B., 526.
7. (1890) 17 R. (Ct. of Sess.), 466.
8. (1891) 19 R. (Ct. of Sess.), 128.
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