Attorney-General (NSW) v Peters

The Attorney-General of New South Wales appealed to the High Court of Australia from a decision of the Supreme Court of New South Wales. The Attorney-General, on behalf of His Majesty the King, had sought to have an agreement entered into on 4th July 1919 between the Minister for Agriculture and the respondent, Thomas Peters, rescinded. The Crown alleged that the contract was induced by false and fraudulent statements made by the respondent regarding significant losses incurred in the performance of a prior contract for the construction of the Barren Jack dam.

The legal issues before the High Court included whether the Crown was entitled to rescission of the contract on the grounds of misrepresentation, and if so, whether the necessary conditions for rescission, such as reliance on the representations and the possibility of restitution, were met. The Supreme Court had previously dismissed the suit, finding that while false representations may have been made, the Crown was not entitled to rescission because the respondent had stipulated that negotiations should proceed irrespective of the truth of those representations.

The High Court affirmed the decision of the Supreme Court. The Court reasoned that for the Crown to succeed in a claim for rescission based on misrepresentation, it must prove that the representations were made, were untrue, and that the Crown relied on their truth when entering into the contract. The Court found that while representations regarding losses may have been made to engineers advising the Government, the Ministers who ultimately made the decision to enter into the contract testified that they did not rely on these representations. Instead, their decision was primarily influenced by public interest considerations and the significant discrepancy in excavation quantities, leading them to disregard the specific claims of loss made by the respondent. The Court held that the right of the Crown to rescission depended on the effect of the representations on the minds of those who, as agents of the Crown, made the contract, and as these agents did not rely on the representations, the claim for rescission failed.

Consequently, the High Court dismissed the appeal with costs.