Donohoe v Schroeder

The case of *Donohoe v Schroeder* involved appeals to the High Court of Australia from decisions of a Stipendiary Magistrate of New South Wales. The appellant, John Thomas Tamplin Donohoe, laid informations against Eugen Schroeder and Max Kabutz, alleging they had traded with the enemy contrary to the *Trading with the Enemy Acts 1914*. The core of the dispute concerned a contract entered into shortly after the outbreak of the war, whereby Max Kabutz, acting under a power of attorney for German residents Fritz Hardt and Gustav Engelbert Hardt, purported to sell the assets of their Australian business, G. Hardt & Co., to Eugen Schroeder. The purchase price was to be paid only after the termination of the war.

The legal issues before the High Court were whether the contract constituted trading with the enemy, and if so, whether this trading was permissible under a licence from the Crown. The informations alleged that the contract was for the benefit of the enemy. The respondents argued that the contract, as documented, was a sale of assets located in Australia, with payment deferred until after the war. The appellant contended that the written contract did not represent the true agreement, suggesting it was either a scheme to continue the business for the benefit of the German principals or that the principals retained the option to disregard the sale.

Griffith C.J., with whom Barton and Gavan Duffy JJ. agreed, held that even if the contract could be construed as trading with the enemy, the prosecution failed because the contract had been approved by the Attorney-General of New South Wales, who was the officer entrusted with granting licences to trade with the enemy. This approval served as a complete answer to the charges. His Honour also dismissed the appellant's alternative argument that the sale was a sham, finding no evidence to support the suggestion that Schroeder was merely a trustee for the German principals. The Court found that the appellant's case rested on conjecture rather than evidence.

Consequently, the High Court dismissed the appeals with costs, upholding the Magistrate's decision that there was no evidence to support the informations.