Clarke v Union Bank of Australia Limited [1917] HCA 19

cautions (Moratorium) Regulations 1916 (Statutory Rules 1916, No. 284 and Ne, aston .0.5., eases 324), regs. 2, 3, 4. Rich JJ.

'The appellants had given a guarantee to the respondent Bank as security for the repayment by a certain company of the principal and interest owing on a mortgage thereafter given by the company to the respondent Bank in respect of an advance then made by the Bank to the company. The liability of appellants upon the guarantee was limited to £5,000. 'The respondent Ba having, by a specially indorsed writ, instituted an action in the Supren Court of Victoria against the appellants upon the guarantee, and having appli for leave to sign final judgment under Order XIV., r. 1, of the Rules of Supreme Court 1916,

Held, that the appellants should have leave to defend inasmuch as the q tion whether the War Precautions (Moratorium) Regulations 1916, No. 2 as amended by No. 324, afforded a good defence to the action was arguable.

Decision of Hood J.: Union Bank of Australia Ltd. y. Clarke, (1917) V.LR., 105; 38 A.L.T., 133, reversed.

An action was brought in the Supreme Court of Victoria by the Union Bank of Australia Ltd. against Herbert Clarke and Georgi Clarke to recover £5,135 6s. 10d. upon a guarantee. The writ specially indorsed, and the plaintiff Bank applied by summons ft final judgment under Order XIV., r. 1, of the Rules of the Supre Court 1916.

The guarantee, which was dated 12th May 1915, was, so far as material, as follows : - " In consideration of advances to be made by the Union Bank of Australia Limited to or for or on account of Vic torian Estates Proprietary Limited of Melbourne Victoria (hereinafti called 'the said Corporation') either by allowing the said Corpora-

jointly and severally undertake to pay to the said Bank all such advances and all debts now or hereinafter owing or accruing from th ; said Corporation to the said Bank and all interest on the same respectively in case the said Corporation shall make default in pay- ment of such advances debts and interest or of any part thereof respectively after payment of the whole amount then due from the said Corporation to the said Bank shall have been demanded by the | said Bank by notice in writing to the said Corporation delivered or left at or posted to the last known office or place of business of the said Corporation in Melbourne Victoria. This guarantee is to he a

continuing guarantee irrespective of any sum or sums which may at H- ©. or A. any time or times be paid into the said Bank to the account of the nats said Corporation . . . And we agree that the balance shown Crarge to be due in the account of the said Corporation on each half-yearly pysox Bank balancing day of the said Bank shall be considered as a new debt ,. OF cues owing by the said Corporation to the said Bank as upon an account

stated and shall be secured with interest by this guarantee

Provided always the amount at any time payable by us under this

guarantee shall not exceed five thousand pounds and interest."

The claim of the plaintiff Bank contained particulars in the form of an account between the plaintiff Bank and the Victorian Estates Proprietary Ltd., which showed on the debit side in addition to the £5,000 a number of entries in respect of interest, half-yearly charges

» for keeping the account, &c., and on the credit side a number of entries of payment into the account. The defendants by their affidavit stated that in May 1915 the Victorian Estates Proprietary Ltd., having purchased a station property which was mortgaged to the plaintiff Bank for £5,000, and desiring to take over the liability in respect of the mortgage, entered into negotiation with the plaintiff Bank, that the plaintiff Bank agreed to advance to the Victorian Estates Proprietary Ltd. £5,000 upon mortgage of the land provided that the defendants gave their guarantee, and that the guarantee and the mortgage were accordingly given. The mortgage purported to be in consideration of the advance of £5,000 and interest thereon and of any future loans or advances and interest thereon, and by it the Victorian Estates Proprietary Ltd. agreed to pay on demand the amount of the balance which might be owing to the plaintiff Bank for principal and interest upon the mortgage.

_ The summons was heard by Hood J., who made an order giving the plaintiff Bank leave to sign final judgment for the amount claimed : Union Bank of Australia Ltd. v. Clarke (1).

From that decision the defendants appealed to the High Court.

Pigott (with him Starke), for the appellants. The mortgage and the guarantee were part of the one transaction, and inasmuch as

H.C. oF A. payment of the mortgage debt could not be enforced except pur- 1917. snant tor. 4 of the War Precautions (Moratorium) Regulations 19 cee (No. 284, as amended by No. 324), the liability wpon the guarant Usiom Banx W28 also suspended. The appellants are mortgagors within the eae definition of that word in reg. 2. Reg. 3 does not apply, for the

• advance was not a fluctuating one. Having regard to the arguable nature of the grounds of defence raised, the appellants should have had leave to defend: Jacobs v. Booth's Distillery Co. (1).

Mitchell K.C. (with him Eager), for the respondent. The advance was a fluctuating one, and that was shown by the particulars of the claim. If the advance could as a matter of law be fluctuating, or if as a matter of fact it did fluctuate, then it falls within reg. 3.

Barton A.C.J. It is not my duty to say anything which can be construed as a decision by this Court on the construction of the Moratorium Regulations. This is not the time to discus 5 the correctness of the opirion of the Court below on that question. It is enough, so far as this appeal is concerned, to say that this is 4 case that ought to be heard. 1 think that the principle to be applied cannot be better stated than it was by Lord Halsbury in Jones y. Stone (3). Speaking of Order XIV., he said : - " The proceeding established by that order is a peculiar proceeding, intended only to apply to cases where there can be no reasonable doubt that a plaintiff is entitled to judgment, and where, therefore, it is inexpedient to allow a defendant to defend for mere purposes of delay. Th ; present case is not one of that kind." That is what I think of the case now before us. I think that there is an arguably good defence open to the defendants, and, therefore, that they ought to be heard.

The order appealed from should be set aside, and the defendant should have leave to defend, on undertaking to file their defene within seven days. I think also that the costs of the summons _

should be costs in the cause, and that the costs of this appeal should be the defendants' costs in the cause.

(1) 85 LT, 262. (2) (1894) A.C., 122. (3) (1894) A.C., at p. 124, :

23 C.L.R.] OF AUSTRALIA. 9 "Isaacs J. 1 agree. Ge itm a 1917. Ricu J. I agree. pa

Appeal allowed. Order appealed from set aside. V10% BAN®

or Avs- Defendants to have leave to defend on under- TRAUtA Lr.

Costs of summons to be costs in the cause. Costs of appeal to High Court to be defend-

Solicitors for the appellants, Corr & Corr. Solicitors for the respondent, McLaughlin & Eaves. Bes

Criminal Law - Larceny - Commonwealth Officer - * By virtue of his employment" 1, C, or A. Offence against laws of Commonwealth - Trial on indictment before State 1917. Court - Jurisdiction to reserve question of law for High Court - Crimes Act = wv 1914-1915 (No. 12 of 1914 - No. 6 of 1915), sec. 71 - Judiciary Act 1903-1915 MrtnourNr, (Wo. 6 of 1903 - No. 4 of 1915), sec. 72 (1). March 28.

Queere, whether on a trial on indictment for an offence against the laws __ Tmaacs, of the Commonwealth before a Court of a State the Court has jurisdiction S*{", Duty under sec. 72 (1) of the Judiciary Act 1903-1915 to reserve a question of law

for the consideration of a Full Court of the High Court.

Semble, that property does not come into the possession of an officer of the Commonwealth " by virtue of his employment," within the meaning of sec. 71 of the Crimes Act 1914-1915, unless he had authority as such officer to receive it.