Sami S Svendsen Inc v Independent Products Canada Ltd

Sami S Svendsen Inc and Independent Products Canada Ltd were parties to a dispute concerning the interpretation and enforceability of a contract. The matter came before the High Court of Australia, with Kitto J delivering the judgment.

The central legal issue before the Court was whether a contract for the sale of goods, which stipulated payment in Canadian dollars, was rendered void or unenforceable under Australian foreign exchange control regulations that were in force at the time of the agreement. Specifically, the Court had to determine if the contract's terms contravened the *Banking (Foreign Exchange) Regulations* (Cth) and, if so, what the consequences of that contravention were for the validity of the contract.

Kitto J reasoned that the *Banking (Foreign Exchange) Regulations* did not operate to invalidate a contract that merely stipulated payment in a foreign currency. His Honour held that the regulations were concerned with the *process* of making payments and the obtaining of necessary approvals, rather than prohibiting the creation of contractual obligations to pay in foreign currency. The Court found that the contract was not inherently illegal or void for illegality, as it was possible to perform the contract lawfully by obtaining the requisite foreign exchange approvals. The legal principle applied was that a contract is not void for illegality merely because its performance might require compliance with statutory regulations, provided that lawful performance is possible.

The Court therefore found in favour of Independent Products Canada Ltd, upholding the validity of the contract.