PRIVY COUNCIL JUDGMENT

Press, Volume LXXIV, Issue 22345, 8 March 1938, Page 14

PRIVY COUNCIL JUDGMENT

WORD "STERLING" IN AGREEMENT EMPLOYMENT OF TAILOR BY CHRISTCHURCH FIRM " (MOM OUB OWH COBBISPORDMT.) LONDON, February 18. A ruling that the term "sterling" in agreements made in England, means English currency, notwithstanding the fact that payment is to be made in New Zealand, has been given by the judicial committee of the Privy Council in the appeal brought by Mr Charles Francis Martin de Bueger. The respondents were J. Ballantyne and Company, Ltd., of Christchurch. The appellant was employed by the respondents under an agreement made in London in 1932, as a tailor-cutter in New Zealand, at a salary of £7OO a year; and the point at" issue was whether payment should be in English or New Zealand money. The Privy Council's decision reverses the ruling of the New Zealand Appeal Court and restores that given by Mr Justice Northcroft in the Supreme Court. The action was heard before Lord Wright, Lord Romer, Sir Lancelot Sanderson. Sir Sidney Rowlatt, and Sir George Rankin. Mr J. D. Casswell and iMr J. A. Lloyd, instructed by Lloyd and Lloyd, appeared for the appellant and Mr A. Ross and Mr P. Tyrie. instructed by Wray, Smith, and Halford, for the respondents. In delivering reserved judgment. Lord Wright said that at the date of the agreement the New Zealand pound was at a discount of about 10 per cent compared with the English poijnd, but M later, during the period of service y_ under the agreement, the discrepancy rose to 24 or 25 per cent. It was clear that under such a cantract what mattered to the parties was the medium in which the obligation was to be discharged. In their lordships* judgment the word "sterling" was added in the agreement to define what means of discharge—that was. what currency—was being stipulated. The necessity for adding the word was simply because the "unit of account," the word "pound" or the symbol "£." was the same both in England and in New Zealand. If the word "sterling" had not been Inserted the salarv would have been payable in New Zealand currency, that being the place of payment, on the principles laid down in the Adelaide case. "Not Common Form" In the agreement here in question the word "sterling," in their lordships' judgment, was an express term intended to exclude, and in fact excluding, the prima facie rule according to which the New Zealand pound would be meant, as being the currency of the place of payment. It was impossible in their judgment to regard the wording as indicating simply legal tender at the place of payment, NewZealand. The agreement was clearly on its face a formal and studied document. It was drawn up and executed in London between the respondents' London house and the appellant, a London resident. The insertion of the word "sterling" was not common form in a service agreement like that. If it was used in any business document in London it naturally meant "British sterling" and nothing else. It was used in that sense habitually in exchange quotations and in documents dealing with international transactions in which it was necessary to define the currency intended, including transactions with the Dominions. Having regard to the place where, and the parties between whom, the contract was made, their lordships were satisfied that the appellant's claim was well founded. It was not to be forgotten that in August. 1932. exchange Questions were matters of business moment The appellant, who was going to New Zealand, might naturallv desire to be assured that he would be paid in the currency with which he was familiar. Their lordships did not desire to express any opinion on whether the construction of the agreement would have been the same if it had been made and entered into in New Zealand. The agreement was obviously drafted with the idea of eliminating any doubt or dispute that the appellant would be paid the same amount of salary as if he were working in England. If the parties were unable to agree on the sum involved there must be an order for a reference to the Supreme Court to fix it. The appellant would have his costs of the appeal and in thm. , courts below.