Keynes v Rural Directions Pty Ltd [2010] FCAFC 100

Keynes v Rural Directions Pty Ltd [2010] FCAFC 100

The forward contracts between the applicants and ABB Grain/Glencore Grain were not 'derivatives' or 'financial products' as defined by Chapter 7 of the Corporations Act 2001 (Cth), due to the operation of s 761D(3). The contractual provisions (including 'washout') did not permit the seller's obligations to be wholly settled by cash or set-off, and there was no evidence of usual market practice or market rules enabling such closing out. Consequently, no obligation arose to provide a Product Disclosure Statement, and no duty of care was established. The summary dismissal and refusal of leave to amend were correct.

Parties
Applicant/appellant: Timothy Keynes; Applicant/appellant: Elizabeth Keynes; Applicant/appellant: Christopher McCourt; Applicant/appellant: Robert Keynes; Respondent: Rural Directions Pty Ltd; Respondent: Grain Pool Pty Ltd; Respondent: ABB Grain Ltd; Respondent: Glencore Grain Pty Ltd; Respondent: Grain Corp AG Finance Ltd
Jurisdiction
Australia
Judgment Date
13 August 2010
Procedural Posture
Appeal / Full Court Determination of Appeal From Orders for Summary Dismissal and Refusal of Leave to Amend Statement of Claim
Outcome
Appeal dismissed with costs, including costs of the notice of motion for leave to appeal.
Legal Topics
Forward Contracts and 'derivative' Status, Product Disclosure Statements Under Corporations Act, Summary Dismissal – S 31 a Federal Court of Australia Act 1976
Contract Law Corporations Law Practice and Procedure Forward Contracts and 'derivative' Status Product Disclosure Statements Under Corporations Act Summary Dismissal – S 31 a Federal Court of Australia Act 1976

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 2 Authorities cited 3 Party arguments 2 Amounts and remedies 4
Sign in to unlock

Parties

Timothy Keynes

Applicant/appellant

Elizabeth Keynes

Applicant/appellant

Christopher McCourt

Applicant/appellant

Robert Keynes

Applicant/appellant

Rural Directions Pty Ltd

Respondent

Grain Pool Pty Ltd

Respondent

ABB Grain Ltd

Respondent

Glencore Grain Pty Ltd

Respondent

Grain Corp AG Finance Ltd

Respondent

Procedural Posture

Appeal / Full Court Determination of Appeal From Orders for Summary Dismissal and Refusal of Leave to Amend Statement of Claim

Legal Issues

  1. 1 Whether the forward contracts were 'financial products' or 'derivatives' within Chapter 7 of the Corporations Act 2001 (Cth)
  2. 2 Whether obligations under the grain forward contracts could be discharged by cash or set-off (satisfying s 761D(3)(a)(ii))
  3. 3 Whether market rules or market practice allowed closing out of sellers' obligations (s 761D(3)(a)(iii))

Ratio Decidendi

The forward contracts between the applicants and ABB Grain/Glencore Grain were not 'derivatives' or 'financial products' as defined by Chapter 7 of the Corporations Act 2001 (Cth), due to the operation of s 761D(3). The contractual provisions (including 'washout') did not permit the seller's obligations to be wholly settled by cash or set-off, and there was no evidence of usual market practice or market rules enabling such closing out. Consequently, no obligation arose to provide a Product Disclosure Statement, and no duty of care was established. The summary dismissal and refusal of leave to amend were correct.

Court Disposition

Appeal dismissed with costs, including costs of the notice of motion for leave to appeal.

Orders

  • Applicants have leave to amend the notice of motion filed on 10 June 2009 inserting reference to order 1 of the order made by Besanko J on 10 June 2009.
  • Applicants have leave to appeal.