Automobile Finance Company of Australia Limited v Law

The case of *Automobile Finance Company of Australia Limited v Law* concerned a dispute over a promissory note. The plaintiff, Automobile Finance Company of Australia Limited, sought to recover the principal sum due on a promissory note from the defendant, Samuel Law, who was the maker of the note. The core of the dispute revolved around whether an alteration made to the note after its creation rendered it void, even in the hands of a holder in due course. The matter was heard in the High Court of Australia on appeal from the Supreme Court of Victoria.

The legal issues before the High Court were twofold. Firstly, whether the addition of a place of payment to the promissory note, without the maker's authority, constituted a material alteration of the note under section 69 of the *Bills of Exchange Act 1909-1932*. Secondly, if it was a material alteration, whether that alteration was "apparent" within the meaning of the proviso to section 69(1) of the Act, which would otherwise protect a holder in due course.

A majority of the High Court, comprising Gavan Duffy C.J., Rich, Dixon, and McTiernan JJ., held that while the addition of the place of payment might have been a material alteration, it was not an "apparent" alteration as required by the proviso. They reasoned that for an alteration to be apparent, the document itself must show that its text has undergone a change, and its appearance must be consistent with a revision having occurred after completion or issue. The mere fact that different handwriting and ink were used was not, in their view, sufficient to make the alteration apparent, as it did not necessarily indicate that the change occurred after the note's completion. Starke J. agreed that the alteration was not apparent, stating that it must be visible as an alteration upon inspection, and that a prudent businessman being put on inquiry was not sufficient. Evatt J., dissenting, considered the insertion of a place of payment to be a material alteration, as it could lead to specific legal consequences under section 93 of the Act, regardless of whether it was apparent.

The High Court allowed the appeal. The judgment of the County Court, which had been affirmed by the Supreme Court of Victoria, was discharged. In its place, judgment was entered for the appellant, Automobile Finance Company of Australia Limited, for the principal sum of £64, along with interest from January 15, 1933.