secured - " In gold, or in currency equivalent thereto" - Interest due, £900 - Nine hundred Australian pound notes paid by mortgagor - Satisfaction of debt SYDNEY,

-Legal tender-Treaty of Peace Act 1919 (9 &10 Geo. v. c. 33)-The Constitution April 27;

(63 &64 Vict. c. 12), secs. 51 (VI.), (XXIX.), (xxxix.), 122-New Guinea Act Aug. 31.

1920-1926 (No. 25 of 1920-No. 15 of 1926), secs. 13, 14-Commonwealth Bank Act 1911-1931 (No. 18 of 1911-No. 6 of 1931,) sec. 60H (1) (b)*. Constitutional Law (Cth.)-Mandated Territory of New Guinea-Authority of Common-

In pursuance of an agreement for the sale and purchase of land situate in the Mandated Territory of New Guinea, mortgages, executed in 1926 at Rabaul by the appellant in favour of the respondent, provided that all payments there- under " shall be made in gold or in currency equivalent thereto at the market or exchange rate current at the time when every such payment is actually made." The principal sums secured by the mortgages were expressed in pounds. On 1st May 1931 the appellant paid to the credit of the respondent's account with a bank at Rabaul nine hundred Australian one pound notes in full pay. ment of £900 interest falling due under the mortgages on 30th June 1931. At all material times the equivalent of £900 in gold in Rabaul was eleven hundred and seventy-two Australian pound notes. * The Commonwealth Bank Act 1911-

pounds or any multiple of ten pounds, 1931 provides, by sec. 60H (1), as

(b) be a legal tender follows :-" Australian notes may be

throughout the Commonwealth |and issued in any of the following denomina-

throughout all territories under the tions, namely, five shillings, ten

control of the Commonwealth." shillings, one pound, five pounds, ten

49 CLR 243

Held that the provisions of sec. 60H (1) (b) of the Commonwealth Bank Act 1911-1931 applied to the Territory of New Guinea and, therefore, the payment of nine hundred Australian one pound notes satisfied the debt of £900 due under the mortgages.

The nature and extent of the authority of the Commonwealth Parliament over the Mandated Territory of New Guinea discussed.

Decision of the Central Court of the Territory of New Guinea reversed.

APPEAL from the Central Court of the Territory of New Guinea.

The plaintiff, Karolina Charlotte Mainka, was the owner of two freehold blocks of land, Livuan and Londip Plantations, which latter included what was known as Londip Reserve, situate in the Kokopo District in the Territory of New Guinea. An agreement for the sale of these lands by the plaintiff to the defendant, Frederick Reidy Jolley, was made between the parties at Rabaul in the Terri- tory of New Guinea on 26th November 1926. In pursuance of the agreement, mortgages over the properties sold were executed by the defendant in favour of the plaintiff for…

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.

Continue reading Jolley v Mainka

Details

AGLC: Jolley v Mainka [1933] HCA 43
Case: [1933] HCA 43
Decision Date: 31 August 1933

CaseChat Overview and Summary

The appellant, Frederick Reidy Jolley, appealed to the High Court of Australia from a decision of the Central Court of the Territory of New Guinea. The dispute concerned the payment of £900 in interest due under mortgages executed in 1926. The mortgages stipulated that payments were to be made "in gold or in currency equivalent thereto at the market or exchange rate current at the time when every such payment is actually made." The appellant paid £900 in Australian one pound notes, but at the time, the equivalent of £900 in gold in Rabaul was £1172 in Australian pound notes. The respondent argued this payment was insufficient, while the appellant contended it satisfied the debt.

The legal issues before the High Court were whether Australian notes constituted legal tender in the Territory of New Guinea and, if so, whether the contractual stipulation for payment in gold or its equivalent rendered the payment of Australian notes insufficient to discharge the debt. The court was required to consider the constitutional authority of the Commonwealth Parliament over the Territory of New Guinea and the effect of Commonwealth legislation, specifically the Commonwealth Bank Act 1911-1931, on contractual obligations within the Territory.

The High Court, in allowing the appeal, reasoned that section 60H (1) (b) of the Commonwealth Bank Act 1911-1931, which declared Australian notes to be legal tender throughout the Commonwealth and all territories under its control, applied to the Territory of New Guinea. This was based on the interpretation that the Territory, acquired by the Commonwealth under mandate, fell within the scope of "territories under the control of the Commonwealth" as contemplated by the Act and the Constitution. The Court held that once Australian notes were established as legal tender, a contractual provision attempting to stipulate for payment in a specific form of legal tender to the exclusion of other forms of legal tender was ineffectual. Therefore, the payment of £900 in Australian pound notes was a valid discharge of the debt.

The High Court ordered that the appeal be allowed, the judgment of the Central Court of the Territory of New Guinea be reversed, and the cause be remitted to that court.

Orders