CACHIA v ST GEORGE BUILDING SOCIETY [1993] NSWCA 46

CACHIA v ST GEORGE BUILDING SOCIETY

SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

GLEESON CJ CLARKE CRIPPS JJ 26 JUNE 1992, 2 March 1993

[1993] NSWCA 46

CONTRACTS — DUTY OF CARE CONTRACTS — Offer and acceptance — building society deed of transfer of engagements offers depositors shares in exchange for their deposits pursuant to an amalgamation with another building society — discretionary power of society to allot additional shares — depositor applies for shares in excess of entitlement under offer — power not exercised — power not an offer — application even if a counter offer not accepted. Held: No contract to allot. CONTRACTS — Offer and acceptance — offer made by building society to amalgamate with another — accepted and ratified by latter's members. Held: No contract exists between offerer and member of offeree society. CONTRACTS — Terms of contract — consideration of "on the same basis" where an offer was made to members of a group "on the same basis as a prior offer" — need to construe the offer reasonably. DUTY OF CARE — Duty of care generally owed by building society directors to the building society and not to individual members thereof. ORDERS The appeal is dismissed with costs.

Gleeson CJ In this matter I have had the benefit of reading in draft form the judgment of Clarke JA. I agree with the orders proposed by his Honour, and with his reasons for those orders.

Clarke JA In the second half of 1988 St George Building Society and the State Building Society negotiated and completed an amalgamation of the two societies. Consequent upon this amalgamation former members of the State Building Society were offered permanent shares in the new enlarged St George Building Society. These shares were offered in the same general terms as those of a previous offer of permanent shares which had been made to members of St George Building Society in 1987 (as it was then constituted). Mr Cachia, who was a member of St George in 1987, had applied for and received permanent shares in the St George Building Society in the 1987 issue. Being also a member of the State Building Society Mr Cachia also applied for shares in the 1988 offer.