National Bank of A/asia Ltd v Scottish Union & National Insurance Co Ltd [1951] HCA 78

High Court of Australia Latham C.J. Dixon, Williams, Webb and Fullagar JJ. National Bank of A/asia Ltd v Scottish Union & National Insurance Co Ltd [1951] HCA 78

ORDER Appeal allowed in respect of answer to Question 4 in originating summons. Answer to Question 4 amended by substituting Australian for English therein. Appeal otherwise dismissed. Cross-appeal allowed. Answer to Question 2 amended by substituting English for Australian therein. Costs of all parties of appeal and cross-appeal to be paid by respondent liquidator out of the assets of the Queensland National Bank Ltd.

Cur. adv. vult.

The following written judgments were delivered:—

1951, March 19 Latham C.J.

This is an appeal from an order of the Supreme Court of Queensland (Macrossan C.J.) made under s. 258 of The Companies Acts 1931 to 1942 Q. in order to determine questions arising in the winding up of the Queensland National Bank Ltd. The bank suspended payment in 1893 and a scheme of arrangement was authorized by the Supreme Court but the scheme failed. In 1897 another scheme of arrangement was authorized by the Supreme Court of Queensland and was adopted also by the Supreme Court of New South Wales and the High Court of Justice in England. Under this scheme there were special provisions for paying the debt due to the Government of Queensland. There were other creditors who were depositors in the bank in Australia and in Great Britain. Under the earlier scheme they had been given, and had been compelled to accept in discharge of their debts, either deposit receipts, or negotiable deposit receipts payable to bearer, or inscribed deposit stock. The scheme of arrangement which was approved by the courts in 1897 provided for the creation of interminable inscribed deposit stock. The creditors of the bank who held the securities issued under the old scheme were required to accept such stock bearing interest at 3½% per annum in satisfaction of their debts. The new scheme provided for stock registries in Queensland, Sydney and London. The original holders have in many cases transferred their stock to other persons, and stock has also been transferred from an original registry to another registry and sometimes transferred again to its original registry. The bank is now in liquidation and the question has arisen whether a holder of, e.g., £100 stock, is entitled to be paid £A100 or £E100. Macrossan C.J. has held that the answer to the question depends upon the place of original issue and registry of the stock, with the result that stock which was originally registered in England must be paid off at its face value in English currency, whereas the liability of stock which was originally issued and registered in Australia will be discharged by payment in Australian currency. There are now practical difficulties in ascertaining the original place of registry of much of the stock, but this fact cannot affect the legally ascertained liability of the bank. The questions submitted to the Supreme Court of Queensland inquired as to the currency in which the deposit receipts were to be paid off in six separate cases. I propose to tabulate the various classes of stockholders, to state how they are represented upon this appeal and to state the decision of the Supreme Court in each case as to the liability to pay the face value of the stock [1] .