Rosenhain v Commonwealth Bank of Australia

The High Court of Australia heard an appeal from the Supreme Court of Victoria concerning a dispute between the Commonwealth Bank of Australia, as indorsee, and Kurt Victor Rosenhain and Rio Olaf Rosenhain, trading as Rosenhain & Co., as acceptors, of a document purporting to be a bill of exchange. The Bank sought to recover a sum representing principal and interest, alleging it was due on the instrument. The defendants sought to set aside the writ of summons, arguing the document was not a valid bill of exchange.

The legal issues before the High Court were whether the document constituted a bill of exchange under the Bills of Exchange Act 1909. This required determining if it was an unconditional order in writing to pay a sum certain in money at a fixed or determinable future time. Specifically, the court had to consider whether the inclusion of interest payable "until arrival of payment in London" rendered the sum uncertain, and whether the words "documents against acceptance" made the order conditional. The court also considered whether a purported custom could establish a certain sum payable despite the apparent uncertainty in the wording regarding interest.

The High Court held that the document was not a bill of exchange. It reasoned that the provision for interest payable "until arrival of payment in London" created an uncertainty as to the sum payable, as the arrival date in London was not fixed or determinable from the face of the document. While section 14 of the Bills of Exchange Act allows for interest to be included, it contemplates a sum that is certain or capable of being made certain. The court found that the evidence did not establish a custom that could overcome this inherent uncertainty or that was consistent with the plain meaning of the words used. The court also noted, but did not definitively rule on, the potential impact of the "documents against acceptance" clause on the unconditional nature of the order.

Consequently, the High Court allowed the appeal, reversed the decision of the Supreme Court of Victoria, and set aside the writ of summons and its service. The Commonwealth Bank of Australia was ordered to pay the costs of the action, the motion to set aside the writ, and the appeal.