See v Cohen - [1923] HCA 66

COHEN AND ANOTHER

RESPONDENTS DEFENDANTS,

ON APPEAL FROM A JUSTICE OF THE

HIGH COURT. Contract-Validity-Sale of wheat certificates-Future dividends-Payment - of differ 1922-1923.

ences-Contract of gaming or wagering-Police Offences Act 1915 (Vict.) (No 2708), sec. 96-Gaming and Betting Act 1912 (N.S.W.) (No. 25 of 1912), sec. 16 MELBOURNE,

The plaintiff agreed in writing to sell to the defendants negotiable wheat Oct. 17, Nov.

certificates of the season 1915-1916 representing a certain number of bushels of wheat, at a certain price per bushel. It was stipulated in the agreement that delivery should take place on the date of declaration of the final payment,' May 8, Aug.

and that all payments of dividends declared between the date of the 28, 1923.

contract and the final payment inclusive should be credited to the buyers and adjusted at the time of settlement, but that the seller should have the option of delivering the scrip or of making or claiming a cash adjustment, that is Higgins JJ.

that payment should be made by the seller to the buyers or vice versa of the difference between the price and the amount or amounts per bushel declared from time to time, inclusive of final dividend of the 1915-1916 pool. Th certificates in question were issued by the Government of New South Wale under a scheme for marketing the wheat harvest of the season 1915-1916 and entitled the holders thereof to an account from the Government for th balance, over any advances then made, of the purchase price of wheat solo to the Government under the scheme.

Held, by Knox C.J., Isaacs and Higgins JJ. (reversing the decision of Stark J. on this point), that the contract was one of gaming or wagering, and that n

33 CLR 175

Per Isaacs J.: Speculation does not necessarily involve a contract by way of wager: to constitute a wagering contract a common intention to wager is

Decision of Starke J. in favour of the defendants affirmed on another ground.

APPEAL from Starke J. An action was brought in the High Court by Samuel Grafton Norris See of Melbourne against Philip Cohen and Hugh Augustus Wolrige of Sydney, who formerly carried on business as P. Cohen &Co., to recover £318 Os. 6d. as being damages for breach of a contract by which the plaintiff agreed to sell and the defendants to buy certain wheat certificates.

The material facts are stated in the judgments hereunder. The action was heard by Starke J. Ham, for the plaintiff. Lowe, for the defendants.

Cur. adv. vult.

STARKE J. delivered the following written judgment -During the Nov. last week of March 1920 the parties to this action communicated with each other by telegram. Ultimately the plaintiff agreed to sell and the defendants to buy "two parcels of Wales A scrip each 50,000 bushels at 3d. per bushel for final dividend." The agreement was subsequently reduced to writing. It was forwarded by the plaintiff to the defendants on 8th April 1920, and…

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.

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Details

Case: [1923] HCA 66
Decision Date: 28 August 1923

CaseChat Overview and Summary

The plaintiff, Samuel Grafton Norris See, appealed to the High Court of Australia against a decision of Starke J. in favour of the defendants, Philip Cohen and Hugh Augustus Wolrige. The dispute concerned a contract for the sale of negotiable wheat certificates for the 1915-1916 season. The plaintiff sought to recover damages for the defendants' alleged breach of contract in refusing to accept delivery of the certificates or pay the agreed price.

The central legal issue before the High Court was whether the contract constituted a valid sale of wheat certificates or was a contract by way of gaming or wagering, rendering it unenforceable under relevant legislation in New South Wales and Victoria. A secondary issue, considered by Starke J. but not ultimately determinative for the majority of the High Court, was whether the plaintiff had fulfilled a condition precedent regarding the timing of delivery.

The High Court, by majority, held that the contract was one of gaming or wagering and therefore void. The Court reasoned that the contract's terms, particularly the provision for adjusting differences between the agreed price and declared dividends, coupled with the seller's option to deliver scrip or make a cash adjustment, indicated that the parties' intention was not a genuine sale and purchase of the certificates. Instead, the substance of the agreement was to settle differences based on the future, uncertain value of dividends, with neither party having a substantial interest beyond the potential gain or loss from this difference. Consequently, the appeal was dismissed, and the plaintiff was ordered to pay the costs of the action and the appeal.

Orders