Australasian Brokerage Limited v Australian and New Zealand Banking Corporation Limited [1934] HCA 34

Australasian Brokerage Limited v Australian and New Zealand Banking Corporation Limited [1934] HCA 34 - HCA 1934 case summary — Zoe

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Zeacaxd final prints of a prospectus issued by the defendant, under da Fo Terai 30th June 1930, between 19th June and 30th September 1930, lm. 'The verdict upon the first count in deceit was returned by direction _ of the trial Judge, and upon the other after consideration by the jury. Upon appeal, the Full Court of the Supreme Court entered a verdict for the defendant upon all the counts. From this decision the plaintiff appealed to the High Court, which ordered a new trial of the counts in deceit. The re-trial resulted in a verdict for the defendant, and the plaintiff applied to the Full Court of the Supreme Court for a new trial. The application was based on the ground, amor others, that the trial Judge had not correctly directed the jury wi regard to the authority of Willis to make the representations i question on behalf of the defendant or with regard to the truth or - otherwise of the representations. The direction on the question of the authority of Willis sufficiently appears in the judgments here- under. As to the representations, it appeared from the evidence - that the defendant's first prospectus contained a statement that "the corporation will not proceed to allotment until 400,000 shares have been subscribed or underwritten"; in a subsequent draft prospectus, which was handed by Willis to Arnold, it was - stated that the defendant had proceeded to allotment "with the - required allotment figure of 400,000 shares over-subscribed by _ 32,000" and "the requirements . . . for such allotment were over-subscribed," and the printed prospectus contained the same statement with the exception that, for the phrase " over- subscribed by 32,000," the word " exceeded " was substituted. It also appeared that only 86,000 shares had been subscribed in cas and allotted, but the defendant had an underwriting contract covering the balance of the 400,000 shares, which had not been applied for. In the course of his summing up, the trial Tudge, 2 referring to the first prospectus, directed the jury that " you have ae

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Mr. Arnold upon which an action for breach of contract or misrepre- sentation could be founded." The learned Judges were inclined to think that the fourth count should have been left to the jury, as the fifth count was left to them ; but that as the same representations, though oral, were relied upon as to the fourth count as in the case of the fifth count, the same construction must be put upon them and the same result reached. | On a further appeal to this Court, however, a new trial was ordered on the fourth and fifth counts. Unfortunately, reasons were not given for this decision. It was suggested rather than argued before this Court that the fifth count disclosed no cause of action, but it was allowed to go down with the fourth count for a new trial, leavi : the question of law open for further consideration. But it is fairly clear, I think, that this Court was of opinion that there was evidences fit for submission to a jury that statements of the nature alleged in the fourth and fifth counts made by Willis to Arnold in the co of the negotiation of the agreement of 19th June 1930 were within the scope of his authority as a director or agent of the respondent. that the learned trial Judge was in error in rejecting such statements and that the learned Judges of the Supreme Court were in error in confining themselves to the legal construction of a somewhat con- fused document. The fact that Willis negotiated the agreement of _ 19th June 1930 with Arnold, and that the respondent accepted and - acted upon it, is some evidence that the scope of his authority extended to acts and statements calculated to bring about that agreement. The statements in the 1930 prospectus, taken in con- nection with the earlier prospectus of 1929, and in the context in_ which they are found, are capable of more than one meaning. And the questions were - in what sense a reasonable business man might understand those statements; in what sense Arnold understo and acted upon the statements ; whether, so understood, they were true or false ; and whether the respondent intended the statements - in the sense so understood and knew that they were false (Smith v. Chadwick (1); Angus v. Clifford (2)). But it is unnecessary pursue this topic further. A new trial was had on the fourth a fifth counts, and the jury returned a verdict for the respondent.

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the High Court that the evidence ought to be admitted. Thi conversations are between Mr. Arnold, who represents the plaint and Mr. Willis, who was a director of the defendant company, a was one of the directors who signed the agreement, and was a according to Mr. Arnold's evidence, the director whom he saw through in regard to the matter. Mr. Curtis puts it to you that might be all that, that he might have a right to do all these thin but as a director he has no right to make false representations to bind his company . . . Mr. Willis is a director who, according to Mr. Arnold, says certain things which are not true, and Mr. Cu says ' If he had no authority to do that from the company, he bind the company.' It will be for you to say whether he had authority. Mr. Windeyer says that these acts which I have put before you are sufficient to show that he had authority to bind company. If you find that Mr. Willis acting in that way hi authority to bind the company, then you will have to consider the representations as being the company's representations." At the conclusion of the charge, counsel for the appellant reques that the learned Judge direct the jury that Mr. Willis had authori to do all things incidental to the business he was admittedly ca on for the bank, but the Judge refused to do so. Counsel for respondent said that he did not object to a direction that the j should consider "all things necessarily incidental to the business Later the jury was thus addressed : - The Judge: Of course, in considering the position of Mr. Wil you have to remember that he was the managing director of company, and that he would have authority to do all such things a a managing director could do. ; Mr. Windeyer : He was chairman of directors. The Judge: Yes, that is so. Mr. Windeyer : And for a long time he was sole representative in Sydney. Mr. Curtis : I agree " all things necessarily incidental to his dutit as chairman of directors." i Mr. Windeyer: That is not what I am asking for, that he had authority to do all things necessarily incidental to the business was admittedly carrying on for the bank.

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Windeyer"' (the plaintiff company's counsel) " says that these acts which I have put before you are sufficient to show that he has _ authority to bind the company. If you find that Mr. Willis acting in that way had authority to bind the company, then you will have to consider these representations as being the company's repre- sentations." At the end of the charge, Mr. Windeyer, in the presence of the jury, applied for a direction " that Mr. Willis had authority to do all things incidental to the business he was admittedly carrying on for the bank." This was refused. : After another complaint had been dealt with, counsel for the defendant company said he did not object to a direction that thi jury should consider all things necessarily incidental to the business, The learned Judge observed, in effect, that Willis was the chairman of directors and would have authority to do all such things as a chairman of directors could do. Defendant company's counsel: "I agree 'all things necessarily incidental to his duties as chairman directors.'"" Mr. Windeyer: "That is not what I am asking for, that he had authority to do all things necessarily incidental to the business he was admittedly carrying on for the bank." His Honor: "Mr. Windeyer asks me to tell you that and I leave that to you, | and I will leave the same question to you, whether he had all that authority to make statements which were untrue." Mr. Windeyer: "T suggest formally that that is a misdirection." 2 This treatment of the question whether the defendant company was responsible for the representations of Willis was altogether wrong. Nothing could be more calculated to mislead than the question whether Willis had " all that " authority to make statements which were untrue. But that question was formulated by the 4 learned Judge at the beginning of the trial and submitted to the | jury at the end of the trial. If its board of directors confided the - conduct of the negotiations for the agreement to Willis, it followed as a matter of law that the defendant company was responsible _ for the statements which he made to the other party if they concerned the subject matter of the agreement. The scope One the authority is determined by the nature of the duty entrusted -

At a glance

Court

Decision date

Before

Source

Judgment (156 paragraphs)

Cited By (2)