Sanwa Australia Finance Ltd v Finchill Pty Ltd, GIO Finance Ltd v Finchill Pty Ltd

The appeals concerned claims by Sanwa Australia Finance Ltd and GIO Finance Ltd (the appellants) against Finchill Pty Ltd (the respondent) for conversion and unjust enrichment arising from the respondent's dealings with certain cheques. The dispute centred on the respondent's actions in receiving and dealing with cheques payable to third parties, which the appellants alleged constituted conversion of their property or unjust enrichment at their expense. The matter was heard in the Court of Appeal of New South Wales.

The primary legal issues before the Court of Appeal were whether the respondent had converted the cheques by receiving and dealing with them in a manner inconsistent with the rights of the true owners, and whether the respondent had been unjustly enriched by its actions, thereby giving rise to an obligation to repay the appellants. The court was required to consider the elements of conversion in the context of negotiable instruments and the principles of unjust enrichment, particularly in relation to the receipt of funds under circumstances where the recipient was not entitled to them.

The Court of Appeal allowed the appeals, finding that the respondent's actions did indeed constitute conversion. The court applied the principles of conversion, which require a defendant to have dealt with goods in a manner inconsistent with the rights of the true owner, and that such dealing must be sufficiently serious to amount to a denial or repudiation of the owner's rights. In this instance, the respondent's receipt and negotiation of cheques payable to entities other than itself, without proper authority, were held to be inconsistent with the rights of the appellants, who were the holders of those cheques. The court also considered the principles of unjust enrichment, but ultimately found the claim in conversion to be determinative. The final orders of the court were that the appeals be allowed.