ANRC v Opera in the Outback P/L & Venue Tix P/L No. Scgrg-97-1522 Judgment No. S6772

[1998] SASC 6772

AUSTRALIAN NATIONAL RAILWAYS COMMISSION v
OPERA IN THE OUTBACK PTY LTD & VENUE TIX PTY LTD

Civil
Debelle J

This is an appeal from an order of a Master of this court dismissing an application by the second defendant for an order that the plaintiff's claim against it be summarily dismissed.  The application was made pursuant to Rule 25.04 of the Supreme Court Rules. 

The appeal arises out of an event called Opera in the Outback held in September 1997.  The plaintiff, Australian National Railways Commission (“ANR”), seeks to recover payment for the provision of a train from Adelaide to Beltana and return to enable patrons to attend Opera in the Outback.  The first defendant is Opera in the Outback Pty Ltd, which I will call “OITO”.  The second defendant is Venue Tix Pty Ltd, which I will call “Venue Tix”.  OITO and Venue Tix are related companies and Mr Robert Lott is a director of both companies.  Venue Tix is a ticketing agent.  It carries on business from the same offices as OITO. 

The statement of claim alleges that OITO was the company organising the staging of Opera in the Outback.  It is alleged that OITO contracted with ANR for the provision of a train to take patrons to Opera in the Outback for a total cost of $186,156.  The train was due to leave Adelaide on 20 September 1997.  On 5 June 1997, ANR wrote to Lott as agent for OITO asking for payment in full before the train left Adelaide.  On 20 June 1997, OITO paid an amount of $20,000.  On 11 September 1997, ANR sent a letter to Lott seeking the final payment of $166,156 prior to the close of business on Friday, 19 September.  On 19 September, ANR received a cheque for $76,000 in part payment of the sum due under the contract. 

There were further oral communications between Mr Duffy, the Manager, Passenger Services, of ANR, and Ms Robertson of Venue Tix.  That resulted in delivery to ANR of a cheque for $90,156, payable to ANR and drawn on the trust account of Venue Tix.  ANR presented the cheque to its bank for collection but, before collection, Venue Tix had stopped payment. 

In this action, ANR claims $90,156 which remains to be paid for the provision of the train service from both OITO and from Venue Tix.  OITO has, in the meantime, gone into administration and the action against it has thereby been stayed. 

The statement of claim does not allege that Venue Tix was a party to the contract between ANR and OITO. The claim against it is grounded on the stopping of the payment and subsequent dishonour of the cheque. ANR claims that Venue Tix is liable on the cheque it drew in favour of ANR for $90,156 relying upon ss70, 71 and 76 of the Cheques and Payment Orders Act, 1986 (Cth). 

Venue Tix applied for an order pursuant to Rule 25.04 that ANR's action against it be summarily dismissed.  That application was dismissed by a Master.  From that decision, Venue Tix now appeals. 

The onus cast upon Venue Tix is a heavy one.  According to the terms of Rule 25.04, Venue Tix will succeed only if it can demonstrate that the claim by ANR cannot succeed on any possible view of the facts or of the law: see also Rogers v Legal Services Commission of South Australia (1995) 64 SASR 572 at 588. The learned Master held that Venue Tix had not satisfied the requirements of Rule 25.04.

Three arguments were advanced before the Master.  The first was that the person who signed the cheques did not have authority to do so and, consequently, the cheque is bad.  That argument is not now pressed.  A second argument was that the plaintiff is endeavouring to take advantage of an illegality.  That argument is not now pressed, although it was referred to for the purpose of showing some of the difficulties that the plaintiff faces.  The argument which is now relied upon is the second of the arguments noted by the Master, namely, that there was no consideration for the giving of the cheque.  That is the only issue which is before me on this appeal. 

Venue Tix relies on the well-established principle that a cheque must be supported by valuable consideration and submits that there was no consideration as between Venue Tix, the drawer of the cheque, and ANR as the drawee.  In this context, there are several well-established principles:

1... A drawer of a cheque or other negotiable instrument is not liable to the drawee or holder thereof if no consideration has been given for it by the drawee or if the consideration totally fails or if value has not been given for it by any holder: Sidney Raper Pty Ltd v Commonwealth Trading Bank of Australia (1975) 2 NSWLR 227 and 232; see also s32 of the Bills of Exchange Act, 1909 and s35 of the Cheques and Payment Orders Act, 1986.

1. Valuable consideration for a cheque or other bill of exchange may be constituted by either any consideration sufficient to support a simple contract or by an antecedent debt or liability: see s32(1) of the Bills of Exchange Act, 1909 and s35(1) of the Cheques and Payment Orders Act, 1986.

3.There is a presumption that consideration has been given for a cheque or bill of exchange: see s35(1) of the Bills of Exchange Act and s36(1) of the Cheques and Payment Orders Act. 

4...... The presumption is rebuttable and, generally speaking, the burden rests upon the party who asserts that a bill or cheque was given without consideration to prove the assertion: Walsh & Others v Hoag & Bosch Pty Ltd (1977) VR 178 per Young CJ at 179.

Mr Cocks, who appeared for ANR, submitted that the fact that ANR had available to it a presumption of law, which presumption was capable of being rebutted by evidence, was sufficient to show that Venue Tix could not succeed on this appeal.  Plainly, he said, evidence had to be adduced to rebut the presumption.  It would be necessary for Venue Tix to lead evidence which would then, in turn, be tested by ANR.  ANR might also lead evidence on the same issue.  In all the circumstances, it could not be said, prior to the leading of that evidence, that the plaintiff could not succeed on any view of the facts or law.  There is considerable force in that submission and it is sufficient to dispose of the application. 

There are, I think, additional reasons why the application should fail.  It is apparent from the pleadings that one of the grounds upon which ANR relies is the fact that Venue Tix paid it a cheque in discharge of an antecedent liability of a third party, namely, OITO.  There are a number of authorities which consider the question whether a cheque given in payment of a pre-existing debt of a third party is capable of constituting consideration for the cheque.  It has been suggested by Young CJ in Walsh & Others v Hoag & Bosch Pty Ltd  (supra) that if the antecedent debt or liability of a third party is to be relied upon as supplying the consideration, there must, at least, be some relationship between the receipt of the cheque and the antecedent debt or liability.  In other words, if that relationship is established, there will be sufficient consideration.   In expressing that view, Young CJ purported to rely on the observations of Lord Evershed MR in Oliver v Davis (1949) 2 KB 727 at 735. Mr Whitington QC, who appeared for Venue Tix, submitted that that analysis was not supported by the reasons of Lord Evershed.

It is also open to question whether the views expressed by the Court of Appeal in Oliver v Davis are entirely consistent with earlier authority and, in particular, the decision of the Court of Exchequer in Currie v Misa (1875) LR 10 Ex 153. Some discussion of that question is to be found in Crawford & Falconbridge, Banking and Bills of Exchange (vol.2) at pp.1424-1426. 

The decision in Oliver v Davis has been followed in England in Hasan v Willson (1977) 1 Lloyds LR 431. Other decisions bearing on the issue are Belo Nominees Pty Ltd v Barellan Nominees Pty Ltd (1986) 3 SR (WA) 140; and Bonior v Siery [1968] NZLR 254. I interpolate that those latter two decisions might be decided on their own facts.

One of the difficulties with the submission made by Mr Whitington QC was that it required a decision to be made whether the reasoning of the Full Court of Victoria in Walsh & Ors v Hoag & Bosch Pty Ltd was consistent with Oliver v Davis, and whether the views expressed by Young CJ were inconsistent with those of his colleagues.  All of this points to the conclusion that, so far as the principles of law are concerned, they are not so settled that it could be said that the plaintiff could not possibly succeed on any view of the law. 

Venue Tix says that ANR will be unable to prove consideration since the pleadings aver that the contact was made between ANR and OITO, and ANR's case is that the train service would have been provided whether or not payment was received.  In support of that contention, Venue Tix relies on statements made on several occasions in different affidavits by Mr Duffy.  But that is only part of the picture.  There remain other issues to which Mr Whitington referred in the course of his submissions.   For example, there are questions whether the cheque was accepted in discharge of the debt due by OITO, and whether ANR accepted the cheque and released OITO from its obligation.  These are matters of fact which, again, it would be necessary to explore in evidence. 

Furthermore, questions might exist as to the nature of the financial arrangements between OITO and Venue Tix.   Notwithstanding their separate legal identity, their financial arrangements might have been such that Venue Tix might in certain circumstances have paid the debts of OITO.   There are questions as to whether Mr Lott might have authorised the payment with the express purpose that Venue Tix would discharge OITO's debt.  These are matters that can only be ascertained after the evidence has been led and tested. 

It is apparent, therefore, that Venue Tix has not shown that ANR cannot possibly succeed in its claim on any view of the law or facts.  I therefore dismiss this appeal. 

There will, therefore, be orders: 

1...... Appeal dismissed.  

2...... The appellant shall pay the respondents' costs of and incidental to this appeal in any event.