NATHAN NOMINEES PTY LTD v BOULTON [1993] NSWCA 188

NATHAN NOMINEES PTY LTD v BOULTON

SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

GLEESON CJ, SHELLER and Cripps JJA 27 August 1993, 20 September 1993

[1993] NSWCA 188

CONTRACT — ESTOPPEL BY CONVENTION — A deed of charge was expressed to secure certain debts by one company to an individual. In truth the only relevant debts were owed, not to the individual, but to a company with which the individual was associated. No reliance was placed upon estoppel by convention at the trial, and it was conceded that it was too late to raise it on the appeal.

HELD: in those circumstances the deed of charge was ineffectual. Greer v Kettle [1938] AC 156, Amalgamated Investment and Property Co Ltd v Texas Bank [1982] 1 QB 84 considered.

Gleeson CJ The issue in this appeal concerns the meaning and effect of an instrument of charge. The information that was put before the trial judge, Brownie J, by way of explanation of some puzzling features concerning the form of the instrument was economical in the extreme. The proceedings were inappropriately constituted, in that a party having a vital interest in the issue for determination was missing. The charge contains provisions that are internally inconsistent, and there was no evidence from the persons who were responsible for its preparation. Labouring under those difficulties, Brownie J made certain declarations as to the effect of the instrument of charge, and those declarations are challenged in this appeal.

The facts, insofar as they appear from the evidence, may be summarised as follows.

In July 1988 Mr Robert Boulton, and a company with which he was associated, and which was suggested by some of the evidence to be controlled by him, now named Idyam Pty Ltd, sold a factoring business to interests associated with a Mr Nathan. The contract of sale was contained in an agreement dated 1 July 1988. The factoring business was owned and conducted by Idyam, but Mr Boulton owned some computer software which was associated with the business and which was also the subject of the sale. Idyam sold the goodwill of the business, the right to use the name under which the business had been conducted, and some computer hardware. Mr Boulton sold the computer software. The purchaser was a company that is now named Boulton Factors (NSW) Pty Ltd. It is now in liquidation.