BILLIS v BAIN SECURITIES LTD BAIN SECURITIES LIMITED v CURMI [1990] NSWCA 24

BILLIS v BAIN SECURITIES LTD; BAIN SECURITIES LIMITED v CURMI

SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

KIRBY P, MEAGHER and HANDLEY JJA 19-20 July 1990, 5 October 1990 [1990] NSWCA 24

AGENCY — complex dealings in sale and purchase of company shares — whether there can in law be a disclosed principal acting as agent for a further undisclosed principal — held: There can be.

SALE — sale and purchase of shares in gold mining company — whether evidence existed of agency between nominal purchaser and party having an interest in their purchase — held: There was such evidence — the conclusion of the trial judge was supported by his findings as to the credibility of the controller of the shares — other evidence sustained his conclusion which should not be disturbed on appeal.

JUDGMENT — election — judgment entered against agent and principal in respect of the same debt — whether two judgments may stand — hed: They may not — there cannot be more than one judgment on one entire contract — the judgment creditor is obliged to elect — upon election, judgment entered below amended to delete judgment against the disclosed principal leaving only the judgment entered against the undisclosed principal. Petersen v Maloney (1951) 84 CLR 91; Marainson v Ian Potter and Co (1976) 136 CLR 161 applied.

ESTOPPEL — purchase of shares — whether conversations between a customer and a stockbroker estop the customer from denying that he was the purchaser of the shares — held: Having regard to the contemporaneous evidence and in particular a letter of demand sent to the customer on behalf of the stockbroker soon after the purchase, the purchaser was a disclosed company for which, at most, the customer was an agent — claim of estoppel rejected.

Kirby P I agree with Meagher JA.

Meagher JA By a transaction effected on the Melbourne Stock Exchange, on 16 December 1988, there was sold a parcel of 2.4 million shares in a small gold mining company called Tern Minerals Limited. The issued share capital of that company was 12.2 million shares, so that the parcel in question amounted to just under 20% of its capital. The vendor of the shares was a company called Lof Pty Limited, whose controllers were Messrs Lasky and Herzog. The vendor's broker was Bunny McGhee. The purchaser's broker was Bain Securities Limited. As required by the Rules of the Stock Exchange, the purchaser's broker has paid the agreed price to the vendor's broker. The agreed price was $1 per share (at a time when the shares were trading on the floor of the Exchange at 75 cents per share). The purchaser's broker has been paid neither the purchase money nor its commission. These proceedings are concerned to identify the person who is responsible to pay Bain Securities Limited, or in other words to determine who is the purchaser.