Australian Horticultural Finance Pty Ltd v Jekos Holdings Pty Ltd, CJZ Investments Pty Ltd & Ors

[1997] QCA 440

Queensland Court of Appeal

Built by Barristers,
For Australian Law.

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Interrogate

Catchwords

1. Contract
2. › Deed of Loan
3. › Performance of obligation to lend
4. › Meaning of 'lend'
5. › Whether circular exchange of cheques ('round robin') constituted lending of money
6. › Whether loan obligation discharged
1. Contract
2. › Construction
3. › Deed of Loan read in context of associated instruments
4. › Whether entire agreement clause precluded reference to related deeds
5. › Whether loan must be construed by reference to Investment Deed provisions
1. Banking and Finance
2. › Money lending
3. › Definition of 'money lent'
4. › Whether round robin of cheques constitutes payment of money
5. › Whether bank entries evidence payment as against non-parties to banking arrangements
1. Restitution
2. › Recovery of money paid
3. › Money paid under loans never made
4. › Right to recover interest and principal instalments paid on account of non-existent loans

Quick Take

A circular exchange of cheques ('round robin') does not constitute the making of a loan under a deed of loan where the borrowers were not parties to the round robin arrangement and the deed contemplated actual payment of money to a trustee. The cases of Lau v Commissioner of Taxation and [name withheld] v Official Trustee, which held that circular cheque transactions were not shams, are distinguishable where the question is not whether the transaction is a sham but whether it satisfies the contractual obligation to lend money to a non-party. Bank account entries evidencing credits and debits are not evidence of payment as against persons who are not parties to the banking arrangements.