Cowell v Rosehill Racecourse Company Limited [1937] HCA 17

Cowell v Rosehill Racecourse Company Limited [1937] HCA 17 - HCA 1937 case summary — Zoe

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defendant from pleading the plea set up by it in that case. The sound ground upon which that case can be founded is as stated in J.C. Williamson Ltd. v. Lukey and Mulholland (1), where the principles on which a court of equity does grant an injunction were discussed. The test is not whether equity would revoke the licence, but whether equity would grant an injunction. The fact that Hurst's Case (2) was decided after the Judicature Act does not render it inapplicable to New South Wales. That Act did not confer new rights; it only confirmed rights previously existing in the courts either of law or of equity (Britain v. Rossiter (3); British South Africa Co. v. Companhia de Mocambique (4) ). The decision in Wood v. Leadbitter (5) was good law before the introduc- tion of equitable pleadings, but the introduction of equitable pleadings means that it has to be read in the light of the change in procedure. The licence was not revocable ; therefore the appel- Jant was not a trespasser and the assault upon him cannot be justified. The decision in Hurst's Case (2) has never been questioned or doubted by any judicial tribunal, and has been accepted or favour- ably commented upon in Cox v. Coulson (6); British Actors Film Co. Ltd. v. Glover (7); Said v. Butt (8); Messager v. British Broad- casting Co. Ltd. (9); and Barnswell v. National Amusement Co. (10), but it has been the subject of unfavourable comment (See article by Sir John Miles in Law Quarterly Review, vol. 31, p. 217, but compare article by Professor Winfield, Law Quarterly Review vol. 51, p. 257; Hanbury, Modern Equity (1935), p. 117; Holdsworth's History of English Law, vol. vu., p. 328; and Cheshire's Modern Law of Real Property, 3rd ed. (1933) p. 261). The question considered by the court in Butler v.. Manchester Sheffield and Lincolnshire Railway Co. (11) was not one of licence, but was one which arose ex contractu. Where there is a negative covenant there is a prima facie right to an injunction (Doherty v.

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But it is urged that equity would have granted an unconditional and perpetual injunction restraining the defendant from setting up an unconscientious plea, namely, a plea based upon his own wrongful withdrawal of a licence. This argument is suggested in a note to the article of Sir John Miles criticizing Hurst's Case (1) in the Law Quarterly Review, vol. 31, p. 217. In the first place there is no authority to support the contention in such a case as the present case. The real rule is that an equitable defence to a common law action is admissible under the Common Law Procedure Act only " where it discloses facts which would entitle the party pleading it to an absolute and unconditional injunction in a court of equity against the judgment which the opposite party might otherwise have obtained at law" (Stephen's Principles of Pleading, 7th ed. (1866), at p. 210). If the suggested principle were sound, it is remarkable that it was never advanced as a practical means of avoiding the law as laid down in Wood v. Leadbitter (2). Secondly, the contention appears to me to be based upon an idea that equity will always do whatever it can to bring about the specific performance of any contract according to its terms. The argument rests upon a vague assumption that equity would, by limiting the pleading in a common law action of a party who had broken a contract, seek to prevent him from merely paying damages for his breach if an injunction against his pleading would prevent him from gaining some " unconscientious " advantage by his breach. There is no such general equitable principle (see per Pollock C.B., Hyde v. Graham (3)). In cases of wrongful dismissal, for example, the only remedy for the breach of contract is to be found in damages. Even though the employer admits the wrongful dismissal, he cannot be ordered to re-employ his former servant. If the servant under an ordinary contract of service sues for wages in respect of a period after dismissal, the employer would never have been restrained from pleading that he had dismissed him, though wrongfully. In such cases - and there are many others, for example, sale of goods and commercial contracts generally - equity left the parties to their remedies at law. The equitable

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conclusion of the performance " (at p. 13). I hope it is superfluous to add that neither Buckley L.J., nor Kennedy L.J., was unaware of the fact that the right to see a theatrical performance was not a proprietary right in the nature of an easement. Indeed, Kennedy LJ. said that the plaintiff's "interest," '' whether you call it an easement or not, is an interest which I can now acquire in equity by parol" (at p. 14). And he referred to an important passage in Pollock on Torts, 9th ed. (1912), at p. 390, which I mention below. Further, the dissenting judgment of Phillimore L.J. is of great significance, for he is not unwilling to concede (at p. 18) that equity would give specific performance of the contract to see the entertain- ment. The main difficulty of Phillimore L.J. was that, assuming that equity would intervene, the plaintiff in equity could not neces- sarily be regarded as having already occupied the legal position which springs into existence only after he obtains specific performance. In other words, although the licence would be regarded in equity as irrevocable, still, until a court of equity actually pronounced its order, the existing legal relationship between the parties should be deemed to continue. In support of this view Phillimore L.J. adopted Pollock's suggestion in the passage mentioned above, that the plaintiff might have obtained an injunction, and so have been restored to the enjoyment of his licence, but that, in the meantime, he should be deemed a trespasser. With respect, it is difficult to appreciate the force of the difficulty which alone seemed to prevent Phillimore LJ. from concurring. The plaintiff in Hurst's Case (1) did not need to invoke the principle of Walsh v. Lonsdale (2), for the assumption of Hurst's Case was that no estate or interest in land was intended to be created by the contract. But equity's inter- vention in order to prevent a party from exercising his legal rights in breach of a contractual obligation is based on broader grounds than the principle of Walsh v. Lonsdale (2). If, as Phillimore L.J. was prepared to admit, a court of equity would have restrained the revocation of Hurst's licence, it could hardly treat the defendant as having improved his position at law solely because, in the nature of things, Hurst was unable to approach a court of equity before his forcible removal from the theatre. In other words, if a court

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Judgment (201 paragraphs)