SCHRODERS AUSTRALIA Ltd v QINTEX AUSTRALIA FINANCE Ltd (RECEIVERS and MANAGERS APPOINTED) [1992] NSWCA 225

SCHRODERS AUSTRALIA Ltd v QINTEX AUSTRALIA FINANCE Ltd (RECEIVERS and MANAGERS APPOINTED)

SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

GLEESON CJ, KIRBY P and CLARKE JA 19 August 1992, 8 October 1992

[1992] NSWCA 225

CONTRACT — contracting parties — purchase of foreign exchange by broker on behalf of group of companies — supervening insolvency of companies in the group — assertion by broker that contract was with solvent and not insolvent company — assertion rejected by Rogers CJ Comm D — on appeal to the Court of Appeal — held: (per Gleeson CJ; Kirby P and Clarke JA concurring): (1) The identification of the contracting parties within the group was to be determined by reference to the intention of the parties imputed to them, objectively. Air Great Lakes Pty Ltd v K S Easter (Holdings) Pty Ltd (1985) 2 NSWLR 309 (CA); ABC v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 (CA) applied; (2) The rights and interests of the parties required attention to distinctions which were regarded as unimportant at the time of the transactions. Walker v Winbourne (1976) 137 CLR 1 applied; (3) Upon the facts, the trial judge had correctly determined that the dealing in question was with a company which became insolvent and not with a solvent company in the group; (3) The alternative arguments (a) that the insolvent company acted as agent for an undisclosed principal (the solvent company), (b) that the broker was acting on behalf of all companies in the group and (c) that the broker was entitled to choose and assign to any company in the group as it determined should be rejected as inconsistent with the contemporaneous facts; (4) Appeal, accordingly, dismissed.

Gleeson CJ In August 1989 the appellant, Schroders Australia Ltd, entered into a forward exchange contract with a member of the Qintex group of companies. The contract was made orally, in a telephone conversation, but it was later made the subject of written memoranda. Under the contract the appellant agreed that, on 4 December 1989, it would exchange 1.2 billion yen for an amount in Australian currency in excess of $12,000,000.