Currency—“ Pounds sterling ”—Debentures—Redemption—Debentures issued by Oovernment of Queensland in 1895, repayable in 1945—Conversion of debentures into Commonwealth, inscribed slock—Sums expressed in pounds sterling payable at option of debenture holder in Brisbane, Sydney, Melbourne or London.
In 1895, wlion the money of account of the Colony of Queensland was the same—and the money of payment was substantially the same—as that of Great Britain, the Government of the Colony, pursuant to statutory authority, issued a series of debentures in denominations of £1,000 and £500, some of which were subscribed for in England and others in Australia. Except for the variation in the amount, the debentures provided :—“ This debenture entitles the holder to the sum of one thousand pounds sterling . . . together with interest. . . . The principal sum will be jiayable on the first (lay of January 1945 either in Brisbane, Sj^dney, Melbourne or London at the option of the holder ”. In 1932, the Commonwealth of Australia having taken over the public debt of the State (as it had become) of Queens land, the holders of debentures which had been issued in Queensland surren dered them and were issued with Commonwealth inscribed stock, which, it was admitted, conferred on the holders rights conforming in all particulars with the rights conferred by the debentures. In 1945 the only currency which was legal tender in Australia was the Commonwealth currency which, except as to denomination, w'as distinct from that of Great Britain, the value in exchange of the £B being higher than that of the £A. The holders of the stock claimed that in respect of eaoli debenture of £1,000 they were entitled to be paid £151,000 in London or the equivalent in Australian <'urrency if the debentures were ])ayabie in .Australia.
Held that the question what on the true construction of the debenture according to its proper law—which was that of Queensland—was intended by the use therein of the words “ pounds sterling ” must be determined as at the date of the issue of the debenture ; at that time, although the money of account was the same and the money of payment substantially the same, the monetary system of Queensland was not in a real sense the same as that of Great Britain, because the former depended on the law of Queensland, which was a self-governing Colony ; it could not be inferred from the mere use of the word “ sterling ” in conjunction with the word “ pounds ” that the currency of Great Britain rather than that of Queensland was intended ; the substantial obligation of the debenture was the same whether it was payable in London or in Australia, and there w'as nothing to indicate that the debenture was to be repaid in anything but the lawful money of Queensland ; the Government of Queensland,…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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AGLC
Bonython v Commonwealth [1950] UKPCHCA 3
Case
[1950] UKPCHCA 3
Decision Date
CaseChat Overview and Summary
This case concerned an appeal to the Privy Council from a decision of the High Court of Australia. The appellants were holders of Commonwealth inscribed stock, which had been issued in exchange for Queensland Government debentures originally issued in 1895. The debentures stipulated that the principal sum was payable on 1 January 1945, at the option of the holder, in Brisbane, Sydney, Melbourne, or London. The core dispute revolved around the currency in which the debenture holders were entitled to be paid, particularly given that by 1945, the Australian pound (£A) and the British pound (£B) had diverged in value, with the £B being higher.
The legal issues before the court were primarily: (a) whether the debenture holders, having failed to provide the required notice by 1 July 1944, had lost their right to demand payment in London; and (b) more fundamentally, what was the intended currency for repayment of the debentures, specifically whether "pounds sterling" referred to British currency or the currency of Queensland at the time of issue. The appellants argued they were entitled to be paid in London in English currency, or the equivalent in Australian currency if paid in Australia.
The Privy Council held that the meaning of "pounds sterling" in the debentures had to be determined as at the date of their issue in 1895. At that time, while the money of account and substantially the money of payment were the same in Queensland and Great Britain, Queensland was a self-governing colony with its own distinct monetary system. The mere use of the term "sterling" did not automatically imply the currency of Great Britain, especially as the Queensland Government was issuing the debentures under its own law. The court concluded that the substantial obligation of the debenture was the same regardless of the place of payment, and absent any circumstances to the contrary, the Government of Queensland must be presumed to have referred to its own monetary system.
Consequently, the Privy Council determined that the obligation of the debenture would be discharged by the payment of £1,000 in Australian currency if payable in Australia, or the equivalent in English currency if payable in London. The court found it unnecessary to definitively rule on whether the appellants had lost their right to demand payment in London due to insufficient notice, as the central question of the currency of payment was resolved by interpreting the debenture's terms in light of the proper law of Queensland at the time of issue. The appeal was dismissed.