Brown v Brook

This saving provision seems to have been enacted by Parliament on an assumption that the law was not as stated in the decisions of the Supreme Court that I have mentioned and that these must be taken to have been overruled by the Mayfair Trading Co.'s Case [1] . I do not think that that is so, for reasons that I have given. But the subsection is not to be ignored. It provides an answer to the proposition that the Parliament of Queensland, when it had the Act before it for amendment, must have endorsed the interpretations that courts had put upon it except to the extent that it made amendments. That is in any event a most unreliable proposition today, even in the case of a consolidating Act, for the reasons that Dixon C.J. gave in Reg. v. Reynhoudt [1] . Leaving aside procedural difficulties that were raised in the argument for the appellants on the basis that this case began in an application for summary judgment, I go to the substance of this appeal. If it should not be altogether dismissed, the question would be what order the Supreme Court ought to have made having regard to s. 4C (6). By virtue of that provision the respondent was entitled to recover the amount of the principal of the loan, and to have its entitlement to interest determined pursuant to s. 4C (2). The respondent has an indisputable right to recover at all events the principal amount: and a judgment to that effect at least should I apprehend have been given on the summons for judgment. However, I consider that the judgment as entered was correct and that the appeal should be dismissed.

1. (1958) 101 C.L.R. 428. 2. (1962) 107 C.L.R. 381, at p. 388. Owen J.

The plaintiff in this action, who is the respondent in the appeal, issued a writ against the defendants claiming the repayment of money lent together with certain interest. In his statement of claim the plaintiff alleged that on or about 10th October 1969 he had lent the defendants an amount of $18,000 repayable on 1st March 1970 with interest at the rate of 15 per cent per annum. He alleged further that the defendants had failed to repay the loan and some of the interest due thereon. The defendants entered an appearance to the writ and in August 1970 delivered their statement of defence. It admitted the making of the loan and the fact that it had not been repaid and went on to allege that "the agreement or contract on which the plaintiff sues is governed by the laws of the State of Queensland, and in particular by the Money Lenders Act 1916-1969 " and that the plaintiff was a "money-lender" as defined in these Acts in that he had lent money at a rate of interest exceeding $8 per cent per annum. It alleged also that on or about 27th October 1967 the plaintiff had lent $7,000 to the first defendant or to a named company at an interest rate of $20 per cent per annum; that the plaintiff was not at any time registered as a "money-lender" and that for this reason he could not successfully maintain his claim. The plaintiff then sought an order for summary judgment upon an affidavit stating, inter alia, that he believed that there was no defence to the action. The matter came before the Acting Chief Justice and the plaintiff was cross-examined on his affidavit. In the course of that cross-examination he denied that in October 1967 he had made a loan of $7,000 as alleged in the statement of defence. That transaction, he said, was not one of loan. The amount alleged to have been lent was his contribution to a joint venture of buying and selling cattle upon which he and the defendant had embarked. He said, however, that on an occasion in 1967 he had lent the wife of one of the defendants $5,000 or $7,000 for a period of three weeks; that he had told the borrower that he wanted no interest on it but that in fact the latter had insisted on paying interest at the rate of 9 per cent per annum for the period of the loan. The learned Acting Chief Justice ordered that judgment be entered for the plaintiff for $18,675, that being the amount endorsed on the writ. His Honour gave no reason for his decision but I think it is plain that he dealt with the matter in a summary way because he was of opinion that authorities which bound him had decided that the statement of defence did not disclose any answer to the plaintiff's claim.

An appeal was made to the Full Supreme Court and was dismissed. In the course of their judgment their Honours said [1] :

Notwithstanding that there was matter in respect of which there was a contest of fact on the face of the record, we were asked to consider the matter on the basis that three transactions had in fact taken place, for the purpose of economy of proceedings. They went on to say: The central question is, accepting the three transactions, do they constitute the respondent as a money-lender who was obliged to register? This I read as meaning that on the assumption that there were two transactions of loan prior to the one on which the action was based, the question was whether the plaintiff was a "money-lender" who was bound to register under s. 6 (1) of the Acts. For the purposes of the case I am prepared to assume without deciding that if he was bound to register, his failure to do so prevented him from recovering the money lent and interest thereon. 1. [1971] Q.W.N. 25, at p. 59.

At all relevant times s. 3 of the Money Lenders Act of Queensland provided that "unless the context otherwise indicates", the term "Money-lender" includes "every person whose business is that of money-lending, or who advertises or announces himself or holds himself out in any way as carrying on that business, or who lends money at a rate of interest exceeding eight pounds per centum per annum". Then follow certain exceptions which are not material for present purposes. No suggestion was or is made that the plaintiff had at any time carried on the business of money-lending or that he had advertised or announced himself or held himself out in any way as carrying on that business. The only allegation was that he came within the definition because he had earlier lent money at a rate of interest exceeding 8 per cent per annum.

(a) Register himself as a money-lender in accordance with this Act, under his own and usual trade name (if any) and in no other name, and with the address, or all the addresses if more than one, at which he carries on his business of money-lender; and

(b) Carry on the money-lending business in his registered name and in no other name and under no other description, and at his registered address or addresses and at no other address; and

(c) Not enter into any agreement in the course of his business as a money-lender with respect to the advance and repayment of money, or take any security for money in the course of his business as a money-lender, otherwise than in his registered name; and

(d) On reasonable request and on tender of a reasonable sum for expenses, furnish the borrower with a copy of any document relating to the loan or any security therefor; and

(e) When selling, assigning, transferring, or assuring any debt, promissory note, bill of exchange, chose in action, or security taken or received by him in his business as a money-lender, give to the purchaser, assignee, or transferee full particulars in writing of the transaction in connection with the same.

In J. B. Witts Pty. Ltd. v. Wholesalers (Australia) Pty. Ltd. [1] I expressed the opinion that s. 6 (1) had no application to a person who became a "money-lender" merely because he had lent money at a rate of interest exceeding 8 per cent. Taylor J., I think, took the same view. In reaching that conclusion I was of opinion - as was Taylor J. - that the decisions to that effect of the Queensland Supreme Court in Baker v. Pryor [1] and Buchanan v. Kiley [2] were correct. I adhere to that view. It is true that in J. B. Witts Pty. Ltd. v. Wholesalers (Australia) Pty. Ltd. [1] the loan transaction upon which the plaintiff sued was not preceded by any earlier loan, but that, I think, does not affect the position since I am of opinion that s. 6 (1) is not designed to include a person who is included by s. 3 in the term "money-lender" but who does not carry on business as such. I should add that I agree with Philp J. in Arnall v. Gray and Doneley, where his Honour said [3] : So far as I can see, the primary, if not the only, reason for including in the definition of "money lender" a person who makes an isolated loan is to make the loan transaction when it has been completed reviewable under s. 4. In my opinion the Full Supreme Court rightly dismissed the appeal to it in the present case and this appeal should also be dismissed. 1. (1963) 109 C.L.R. 322. 2. [1932] Q.S.R. 66. 3. [1948] Q.S.R. 274. 4. (1963) 109 C.L.R. 322. 5. [1941] Q.S.R. 122, at p. 125. Walsh J.

This appeal raises a question which was regarded by the Full Court of the Supreme Court of Queensland, from whose decision the appeal is brought, as governed by earlier decisions of that Court which ought to be followed. The question concerns the operation of s. 6 (1) (a) of the Money Lenders Act 1916-1969 Q. (the Act). The cases upon which the Full Court based its judgment were Baker v. Pryor [1] and Buchanan v. Kiley [1] . Reference was made also to Arnall v. Gray and Doneley [2] .

1. [1932] Q.S.R. 66. 2. [1948] Q.S.R. 274. 3. [1941] Q.S.R. 122.

In Baker v. Pryor [1] the Court was concerned with the question whether a person who lent money on one occasion only, at a rate exceeding the rate specified in the definition of Money-lender in s. 3 of the Act, was required to register himself as a money-lender and was precluded, if not registered, from enforcing a security taken by him in that transaction. In Buchanan v. Kiley [1] the facts were different in that there were numerous transactions, antecedent to that out of which the action arose, in which money was lent at a rate exceeding the specified rate. In the cases in Queensland that difference has not been regarded as leading to a different result with respect to the obligation to register. The view has been accepted that the requirement of registration imposed by s. 6 (1) of the Act is not imposed upon those who lend money at a rate of interest in excess of the specified rate, whether once only or more than once, but who do not carry on, or intend to carry on, the business of money-lending. In Baker v. Pryor [1] , where the Court was concerned with one isolated transaction out of which the action arose, the reasons given for holding that there was no obligation to register included the statement of R. J. Douglas J. [3] , that "it was never contemplated that anyone who was not carrying on the business of a money lender is obliged to register" and the statement by E. A. Douglas J., [4] : "A person who occasionally lends money, but not as part of a business of money-lending, is not required to be registered."

1. [1932] Q.S.R. 66. 2. [1948] Q.S.R. 274. 3. [1932] Q.S.R. 66. 4. [1932] Q.S.R., at p. 70. 5. [1932] Q.S.R., at p. 76.

In Buchanan v. Kiley [1] it was argued that Baker v. Pryor [1] had been affected by amendments of the Act and of the Regulations made under it. The argument was rejected. The Court held that the law was still the same as it had been declared to be in Baker v. Pryor [1] and that only those persons who carried on business as money-lenders were required to register.

1. [1948] Q.S.R. 274. 2. [1932] Q.S.R. 66. 3. [1932] Q.S.R. 66.

The same conclusion was reached in relation to the Money-lenders and Infants Loans Act, 1941-1948 N.S.W. in Hyde v. Sullivan [1] , in which the court approved the reasoning in the cases of Baker v. Pryor [1] and Buchanan v. Kiley [2] .

1. (1956) 56 S.R. (N.S.W.) 113. 2. [1932] Q.S.R. 66. 3. [1948] Q.S.R. 274.

In Mayfair Trading Co. Pty. Ltd. v. Dreyer [3] , those cases were mentioned by Dixon C.J. [4] and by Taylor J. [5] , but it was not necessary in that case to consider whether the earlier cases were correctly decided and no definite opinion about them was stated. However, Dixon C.J. made an observation from which the appellants in this case sought to obtain support for the contention that the respondent was bound by s. 6 of the Act to register himself as a money-lender. Speaking of the Western Australian legislation, his Honour referred to provisions in it which seemed inappropriate for the registration as a money-lender of a man who did not carry on the business of money-lending. His Honour went on to say [6] : "The better view perhaps is that the machinery or procedure must yield to the substantial intention of the main provisions." But as Taylor J. pointed out subsequently in J. B. Witts Pty. Ltd. v. Wholesalers (Australia) Pty. Ltd. [7] , the point did not arise for decision in the Mayfair Trading Co. Case [3] and no concluded view was there expressed.

1. (1958) 101 C.L.R. 428. 2. (1958) 101 C.L.R., at pp. 445-446. 3. (1958) 101 C.L.R., at p. 465. 4. (1958) 101 C.L.R., at p. 448. 5. (1963) 109 C.L.R. 322, at pp. 327-328. 6. (1958) 101 C.L.R. 428.

In J. B. Witts Pty. Ltd. v. Wholesalers (Australia) Pty. Ltd. [8] , the question was whether securities taken by a person who lent money in an isolated transaction at a rate above the rate mentioned in the definition, without having registered himself as a money-lender, were avoided by reason of his failure to register. Menzies J. considered it unnecessary to express an opinion concerning the correctness of the Queensland cases to which I have referred above. His Honour based his decision on the ground that a person, who is not a money-lender before the making of a loan at a rate of interest exceeding the specified rate and who becomes a money-lender only as a result of making such a loan, is not at the time when he makes it under any obligation imposed by the Act upon money-lenders and his right to recover the money lent cannot be affected by a failure to carry out any such obligation. Taylor J. was of opinion that s. 6 (1) (a) of the Act, which is the provision which requires a money-lender to register, does not apply to a person who is a money-lender only because he lends money at a rate of interest exceeding the specified rate. He went on to say, [9] , that even if that provision did apply to such a person, s. 6 (1) (c) could have no application to him. That provision forbids a money-lender to enter into any agreement in the course of his business as a money-lender with respect to the advance and repayment of money or to take any security for money in the course of his business as a money-lender, otherwise than in his registered name. That provision has no direct relevance in this appeal, in which the appellants have not contended that in relation to the transaction upon which the respondent sued there was a breach of s. 6 (1) (c). But because of the presence in s. 6 (1) of par. (c) and also of par. (b), it is plain that the words "as defined by this Act" at the beginning of the subsection cannot have the effect that all persons who come within any of the descriptions contained in the definition provision are bound to observe all the requirements of the sub-section. Plainly it is only those who carry on the business of money-lending who can come under the obligations set out in pars. (b) and (c). This seems to me to weaken the force of the argument that because the words "as defined by this Act" have been included in s. (6) (1), that provision must be taken to apply to all the classes of money-lenders mentioned in the definition in s. 3, without any qualification based upon the words "unless the context otherwise indicates" which appear in s. 3. The argument is that unless this be so the words "as defined by this Act" can serve no purpose. Those words do present a difficulty. But when it is clear that most of the provisions of s. 6 (1) are quite incapable of applying to a money-lender who does not carry on and does not propose to carry on business as such, it cannot be said that the purpose of including the words "as defined by this Act" must have been to ensure that all persons answering the statutory definition should be bound by the provisions of the subsection.

1. (1963) 109 C.L.R. 322. 2. (1963) 109 C.L.R., at p. 328.

In J. B. Witts Pty. Ltd. v. Wholesalers (Australia) Pty. Ltd. [1] , Owen J. held that s. 6 (1) has no application to a case in which a person falls within the definition in s. 3 merely because he has made a loan at an interest rate exceeding the specified rate.

In my opinion this Court should not depart now from the interpretation of s. 6 (1) (a) which has long been adopted in Queensland. As Taylor J. pointed out in the J. B. Witts Pty. Ltd.'s Case [1] , that has been accepted as the law in Queensland since 1932 and notwithstanding a number of intervening amending Acts, the legislature has not seen fit to change it. It was approved by two members of the Court which heard that case and left open by the third member of it. The distinction which made it unnecessary in the view of Menzies J. to deal with the point is, in my respectful opinion, a valid distinction. But it is not one upon which the cases in Queensland have been based. The case of Baker v. Pryor [1] in which there were no antecedent money-lending transactions and the case of Buchanan v. Kiley [1] , in which there were such transactions, were treated alike as cases in which the Act imposed no obligation to register. In my opinion, that is an acceptable interpretation of the provisions of s. 6 (1) (a) and of s. 6 (4) (a), by which a penal consequence is attached to a failure to register. A different interpretation would not merely involve the difficulties, to which the decisions have drawn attention, concerning the manner in which the requirements laid down by the Act and by the Regulations could be satisfied by a person who made loans occasionally but did not carry on a business of money-lending and had no intention of doing so. It would raise other questions to which the Act provides no clear answer. If such a person is bound to register immediately after he makes one loan at a rate exceeding the specified rate, it may be asked whether his failure to register will affect the enforceability of any loan transaction into which he may enter at any time thereafter. It may be asked whether, if he does register, a failure to renew that registration from time to time (see s. 6 (2)) affects the enforceability of any loan which he may make after the initial registration has ceased to have effect. It appears to me that the fact that the Act provides for annual renewals of registration lends support to the conclusion that it is only those who are, or who hold themselves out to be, in the business of money-lending who are bound to register themselves as money-lenders.

1. (1963) 109 C.L.R., at p. 327. 2. [1932] Q.S.R. 66. 3. [1948] Q.S.R. 274.

Upon the view which I have taken it is not necessary to consider whether or not it would have been proper for the primary judge, upon an application for summary judgment, to give effect to the provisions of s. 4C of the Act (inserted therein in 1962) and in particular to give effect to sub-s. (6) of that section. If it had been held that the respondent was required to register but had failed to do so and that this failure would (apart from s. 4C) have prevented him from enforcing the contract of loan, it appears that he would nevertheless have been entitled to recover the principal of the loan, whether or not the Court, in the exercise of the discretion given to it by sub-ss. (2) and (3) of s. 4C, gave him any additional relief. Since, in my opinion, the respondent did not need to rely upon s. 4C, these matters do not require consideration. But I should state that I do not accept the argument that the enactment of s. 4C, and in particular sub-s. (6) thereof, indicates that the legislature acted upon the assumption that the decisions in the earlier Queensland cases were no longer to be accepted as correct. An occasional lender of money might fail to comply with a requirement of the Act otherwise than by failing to register and, therefore, it cannot be said that there could be no need to relieve such a person from the consequences of a failure to comply with the Act, except upon the assumption that he was bound to register.

Some questions were raised in the course of argument as to the propriety of the action taken by the primary judge in making any order for the entry of summary judgment. The parties were not in complete agreement as to the facts concerning two earlier transactions in which the respondent had taken part. One of these occurred in October 1967. The appellants alleged that the respondent lent money at that time at an interest rate of twenty per cent per annum, but the respondent said in evidence that this was not a loan but an investment in a joint venture. The other transaction was in August 1967. The respondent said in evidence that he had lent money then for a short period and did not want any interest on it but the borrower's husband "insisted" on paying interest at the rate of 9 per cent. If there had been an issue between the parties as to whether the respondent was carrying on the business of money-lending, it would probably have been thought that any questions of fact which were in dispute should be resolved at a trial and not in an application for summary judgment. Again, if a view of the law had been taken which made it important to determine, in relation to each of the antecedent transactions in 1967, whether it was a loan and, if so, whether it was a loan at a rate of interest exceeding the specified rate, then, as a general rule, such questions would not be decided in a summary application if there appeared to be a genuine dispute about the facts. But upon the view of the law which the learned primary judge was bound to take because of the earlier decisions and which was accepted by the Full Court and should, in my opinion, be accepted by this Court, there was no need to resolve any of those questions of fact. The Full Court stated that it was asked to consider the matter on the basis that three transactions had in fact taken place. I understand this to mean that the Court was asked to consider the case on the basis that there were two antecedent transactions as well as the transaction out of which the action arose and that all of these were loans at above the specified rate of interest. The effect of this was that the facts were assumed to be as favourable to the case for the appellants as they could ever be found to be at a trial. If on that assumption the respondent was entitled to succeed, there could be no valid objection to the making of an order for the entry of judgment in his favour. In this Court, counsel for the appellants submitted that we should deal with the matter upon the footing that there were two antecedent transactions of loans. In the circumstances of this case, I think that we may properly consider it on that footing. In general, we should not be asked to decide cases in which relevant facts have not been ascertained by agreement or by findings. But here the facts of the transaction upon which the action was brought are not in dispute. They are such that prima facie the respondent was entitled to judgment for the repayment of the money lent and for interest. The appellants raised a defence based upon the Act. They put forward certain facts to support that defence. In part, the respondent disputed those facts and he disclosed other facts upon which the appellants sought to rely. The only matters of fact not fully resolved relate to the claim of the appellants that, before the transaction upon which they were sued, the respondent had become a money-lender within the statutory definition, either by making one loan or by making two loans at a rate of interest greater than the specified rate. If they succeeded in establishing that he made two such loans they would still be left, in my opinion, with no defence to the action. The result would be the same if they should establish that he made one such antecedent loan or if they failed to establish that he made any. In those circumstances it is proper, in my opinion, to give effect to the conclusion that the respondent is entitled to judgment. There is no procedural ground for interference with the order which the Full Court made.