Mainka v Custodian of Expropriated Property

The High Court of Australia heard an appeal from the Central Court of the Territory of New Guinea. The dispute concerned the rights of a shareholder, Karl Nauer, in a company established under German law prior to World War I. The appellant, Karolina Charlotte Mainka, was the other shareholder. The core of the disagreement revolved around whether Nauer had effectively paid his share of an increased capital contribution to the company, thereby entitling him to an equal interest in that new capital as Mainka.

The legal issues before the High Court were twofold: firstly, whether the High Court possessed jurisdiction to hear an appeal from the Central Court of the Territory of New Guinea, and secondly, on the merits, whether a payment made on behalf of Nauer to the company's banker constituted a valid "payment in" of his share of the increased capital, as required by a company resolution and subsequent public notice. This notice had reserved Nauer's right to take up his portion of the new capital until six months after the conclusion of peace, provided he paid in his share with interest.

The Court determined that it did have jurisdiction to hear the appeal, finding that the Central Court of New Guinea was a Federal Court established under the authority of the Commonwealth Parliament, which derived its power from section 122 of the Constitution. Regarding the merits, the Court reasoned that the payment made to Hernsheim & Co., the company's banker, was a valid "payment in" to the company. This was because the company had not disavowed the payment, and in the absence of its primary representative, the payment was authorised by the remaining manager and made to the company's banker, effectively satisfying the requirement for Nauer to contribute his share of the increased capital with interest. The Court affirmed the decision of the Central Court.