Hume v Monro [1941] HCA 39

Hume v Monro [1941] HCA 39 - HCA 1941 case summary — Zoe

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ee A suit, in which the plaintifis claimed declarations of right but Hows did not claim consequential relief, was brought in the equitable oe jurisdiction of the Supreme Court of New South Wales by Stanley Moxro. William Huon Hume, Norman Francis Rawdon Hume and Francis Albert Wakely against Cecil Owen James Monro, Jane Alice Nesbitt Wheat, as executrix of the will of Gerard Stephenson Wheat deceased, John Harrison Wheat, Arnold Victor Richardson, as official receiver of the estate of Ralph Mervyn Mitchell Houston deceased under the Bankruptcy Act 1924-1933, and Holt Sutherland Co. (1933) Ltd. The statement of claim alleged in substance : - (a) a written request by one Marien to a predecessor in title of the defendant company for a ninety-nine years' lease at a rent therein mentioned of certain land under the Real Property Act dealing with which said land was controlled by the Holt-Sutherland Estate Act 1900, the said request containing a promise to pay rates and taxes; (6) devolution of Marien's interest to the plaintiff Stanley William Huon Hume through a series of " purported transfers " by instruments in writing each containing a direction to the defendant company's predecessor " to transfer the land in its books and to have the lease made out in the name of" the transferee thereunder ; (c) accept- ance of the said transfers by the transferees thereunder, their handing to the defendant company's predecessor and their remaining in its custody or that of the defendant company , (d) the execution of no other instrument by Marien, any of the mesne transferees, or the plaintiff Stanley William Huon Hume, and the execution of no instrument by way of lease or otherwise by the defendant company or its predecessor in favour of Marien, any of the mesne transferees, or the said plaintiff; (e) the absence of any consent, as required by the Holt-Sutherland Estate Act 1900, to any appointment by way of lease to Marien, any of the mesne transferees, or the said plaintiff ; (f) the absence of any entry upon, or occupation or possession of, the said land by the said plaintiff ; (g) one month's notice in writing given by the said plaintiff to the defendant company determining any tenancy of the said lands which might be held to exist; and (h) the holding by the said plaintiff and the mesne transferees of their interests in the said land as agents for a partnership, the devolution of the interests of members of the partnership, and the

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at all material times title to the subject land was under the Real Property Act 1900. Rent under an unregistered lease in respect of land under that Act can be recovered only in a court of equity ; the landlord has not any remedy therefor at common law. A document that requires registration under the Real Property Act does not confer any rights at common law, either personal or pro- prietary, in favour of the person executing it (Davis v. McConochie (1) ). The consent required under the Holt-Sutherland Estate Act 1900 to the leasing of more than fifteen acres has not been obtained. The facts in the statement of claim disclose that the only remedy open to the respondent company when it sets up that there is a claim against the appellants to pay moneys and also a claim other- wise is to take proceedings against the appellants in equity. These proceedings attract the jurisdiction of the court under sec. 10 of the Equity Act 1901. The equity court, under sec. 10, can investigate the claim and, if it thinks fit, it can make a declaration that there is not a claim. Equitable principles and rights are involved in this suit; therefore the appellants are entitled to go into the equity court and to ask for a declaration. Having got into the court the whole of the facts will be investigated and the court will determine whether or not the appellants ought to get any sort of a declaration. In a proper case a court of equity will grant a negative declaration (Société Maritime et Commerciale v. Venus Steam Shipping Co. Ltd. (2)). The unlimited power of the court is shown in Burghes v. Attorney-General (3), Guaranty Trust Co. of New York v. Hannay & Co. (4), Hanson v. Radcliffe Urban District Council (5), and Cooper y. Wilson (6) - and see also In re Clay; Clay v. Booth (7). If there are facts in existence relating to a person's title to land he is entitled to invoke the aid of the equity court (Cooper v. Commissioners of Taxation (8) ). Although the decision in Tooth & Co. Ltd. v. Coombes (9) constitutes an exception to the generality of the rule as inter- preted in England, it does show that suits for equitable relief or relating to equitable rights and titles do come within the scope of sec. 10. That view was approved in David Jones Ltd. v. Leventhal (10) and Langman v. Handover (11). If in a dispute in respect of a transaction between parties one has a right to go into equity on any item of the dispute the court of equity is seised of all the items

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claim. The company did not counterclaim for specific perform- ance. It is a departure from principle that on a demurrer the court can look outside the statement of claim. Par. 13 of the statement of claim should be construed on its own terms and without reference to any other pleadings (Metropolitan Theatres Ltd. v. Harris (1)). The cases cited in support of the converse proposition show that the court may determine a point of law. The record may be looked at only for the purpose of determining, when the court has dealt with the point of law, whether leave to amend should be given. The point of law which arose was not whether the appellants had any equity, but whether the statement of claim was demurrable. None of the allegations in par. 13 amounts to a claim which would be cognizable in equity. The observa- tion made in Dams v. McConochie (2) to the effect that a court of equity, regarding, as it does, a lessee as invested with an equitable term, would order payment of rent, was obiter and goes too far. On the statement of claim there is no case made upon which money could be claimed in equity. Even if par. 13 be construed as alleging that the company had threatened the plaintiffs with equity proceed- Ings, that circumstance would not give an equity to entitle the plaintiffs to bring this suit. This is not a claim to equitable relief and it is not a suit relating to equitable rights and titles (Tooth & Co. Ltd. v. Coombes (3) ). It does not disclose any recognized head of equity, as in Cooper v. Commissioners of Taxation (4). See also Story on Equity, 3rd ed. (1920), p. 294, par. 694. The proposition that a suit to negative an alleged equitable personal lability can be maintained is directly in conflict with the decisions in Dawid Jones Ltd. v. Leventhal (5) and in Langman v. Handover (6). In those two cases the court accepted as correct that jurisdiction exists only in proceedings for equitable relief or remedy or as to equitable rights or titles, and they both establish that the matter is one of jurisdiction and not of discretion. A court of equity cannot determine purely legal questions, except in the course of an equity suit. An equity suit is a suit in which the plaintiff seeks not only determination of legal questions, but the granting of equitable relief in respect of the legal position created, and unless that equitable relief is claimed there is no jurisdiction to determine legal questions (Furphy v. Nixon

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The allegation in the statement of claim that the company claims that the plaintiff is liable to it in the manner alleged by the plaintiffs is admitted upon the record. It is consistent with the terms of this allegation that the company claims that the ability is at law. But the supposition upon which it is contended that the question whether the court, has jurisdiction to make the declaratory decrees sought by the plaintiffs is to be decided, is that the statement of defence discloses grounds upon which the company could seek specific performance, and, accordingly, that the claim which it admits that it has is an equitable claim for money payable by the first-named plaintiff as tenant of the land. The record does not disclose that the plaintiffs have any grounds for claiming equitable relief. There is no allega- tion of any circumstances of fraud or oppression that would attract the jurisdiction of a court of equity. A claim for a declaratory decree is not a claim for equitable relief (David Jones Lid. v. Leven- thal (1); Langman v. Handover (2) ). And the record discloses that the plaintiffs do not rely upon any equitable right or title in the lands. It discloses only, according to the supposition which has been made, that there are grounds upon which the company may obtain specific performance against the first-named plaintiff or against the syndica- tors, the other plaintiffs for whom he acted. "I find it difficult to say that the substance of the suit in equity exists where the plaintiff does not allege that he has any equitable right or title or any facts entitling him to equitable relief. In Langman v. Handover (3) Rich J. and Dixon J. said: "In David Jones Ltd. v. Leventhal (1) the decision of Harvey C.J. in Eq. in Tooth & Oo. Ltd. vy. Coombes (4) was approved, and it was held that this statutory provision did not enable the court to make a declaration of right, except in proceedings for equitable relief or relating to equitable titles." Their Honours continued: "It is, however, suggested that, if the subject of the suit is within the cognizance of the court in its equitable jurisdiction, sec. 10, as amended " (i.e., sec. 10 of the Equity Act 1901, as amended) " has the same effect as Order XXV.. r.5, of the English Rules of the Supreme Court has throughout the High Court of Justice and creates a new statutory remedy, which is to be administered without regard to equitable principles.

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company should transfer the lands in its books and have the lease made out in the name of the assignee. Par. 8 alleged that the several instruments were immediately upon their execution and acceptance by the successive assignees handed to the previous company and the same had since remained in the custody of that company or the defendant company. Par. 9 that no other instru- ments had been executed by or on behalf of Marien or his successors in title, and that neither of the companies had executed any instru- ment in respect of the lands or any part thereof pursuant to the original request or the various assignments by way of lease or other- wise to or in favour of or by direction of Marien or any of the assignees or of any person or persons or corporation or corporations on their behalf or claiming through under or in trust for any of them. Par. 10 charged it to be the fact that no consent to any appointment by way of lease by either of the companies to Marien or any of the assignees or any person or persons or corporation or corporations by their direction or on their behalf or claiming through under or in trust for them had been given as required by sec. 6 of the Act. Par. 11 alleged that the plaintiff Hume had not at any time entered upon the lands or any part thereof or ever been in occupation or possession of the lands or any part thereof pursuant to the transfer to him of 8th June 1921 or at all. Par. 12 that on or about 22nd July 1940 he delivered to the defendant company a notice in writing which, inter alia, gave it one month's notice pursuant to sec. 127 of the Conveyancing Act 1919 (as amended) determining any tenancy at law which might be held to exist between him and the defendant company in respect of the lands. Par. 13 that the defendant com- pany claimed that Hume was then and would continue in the future to be liable to make payments by way of rent and otherwise to it in respect of the lands under and by virtue of the aforesaid instru- ment dated 8th June 1921 from Houston to the plaintiff and threatened and intended to hold him so hable.

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the company, were never registered and were not in registrable form. They were therefore ineffective to pass any estate or interest in the land at law (Davis v. McConochie (1) ) and by themselves could only create an agreement specifically enforceable in equity (York House Piy. Ltd. v. Federal Commissioner of Taxation (2) ; Carberry v. Gardiner (3) ). If Hume entered into possession and paid rent, a tenancy at law would have been created between him and the company determinable under the Conveyancing Act, sec. 127, by one month's notice in writing. Such a tenancy would have been determined on 26th August 1940 by the notice which he gave to the company on 22nd July 1940, and therefore prior to the institution of the suit. If the statement of claim alone is looked at, it states that Hume never entered into possession and never paid rent or tates and taxes, so that when the pleader alleged in par. 13 that the defendant company claimed Hume was then and would continue in the future to be liable to make payments by way of rent and otherwise to the defendant company in respect of the subject lands under and by virtue of the instrument of 8th June 1921, the allega- tion could only refer to the assertion of an equitable right; and the parts of the statement of defence to which I have referred, coupled with the determination of any tenancy that could have existed at law by the notice of 22nd July, to the form of which no objection could be taken, and which could only have been rejected by the defendant because it was asserting that Hume was bound by some higher obligation, make this clear. This claim must be based on the equitable doctrine that an agreement for a lease which is specifically enforceable is equivalent in equity to a lease at common law, since equity can decree the preparation, execution and registra- tion of a proper memorandum of lease, and, if Hume had entered into possession, order the payment to the company of any moneys which would have become payable as rent and for rates and taxes if such a memorandum of lease had been executed and registered at the commencement of the tenancy. So it is not entirely inappro- priate to describe the company's claim against Hume as one for payment of money by way of rent and otherwise.

At a glance

Court

Decision date

Before

Source

Judgment (115 paragraphs)