Hume v Monro (No 2) [1943] HCA 7

Hume v Monro (No 2) [1943] HCA 7 - HCA 1943 case summary — Zoe

[31]

original company for a lease of about 103 acres, 2 roods, 24 perches of the land for a period of ninety-nine years from Ist July 1899 upon terms and conditions set forth in his written application. This application was accepted by the company, and suitable records were made in its books. The statement of claim alleged the devolution of Marien's interest to the plaintiff Stanley William Huon Hume by means of various instruments communicated to the company and recorded in its books, the " transfer " to Hume being made in June 1921. No lease was executed. Rent was paid by Hume from time to time to the " new company " and also to the defendant company. Hume also applied to be recorded in the rate books of the Shire of Sutherland as the owner of the land and paid rates from time to time. The "new company " was dissolved and the defendant company was incorporated in 1933. Payment of rent and rates fell into arrears and in 1939 the defendant company sued Hume for the sum of £551, representing arrears of rent and rates. In the declaration it was alleged that the defendant company let to Hume the land in question for a period of seventy-seven years from 6th June 1921 and that he had agreed to pay rent and rates. Hume did not appear and the defendant company obtained judgment against him by default. Hume's solicitor had misappropriated moneys sent to him by Hume and apparently the solicitor did not inform Hume of the fact that he had accepted service of the writ in the action, so that Hume had no opportunity of defending the action. The solicitor died and another solicitor acting on behalf of Hume paid the amount of the judgment. In July 1940, Hume addressed to the defendant company a document in which he disclaimed any privity of estate or contract between him and the defendant company in respect of the land surrendered and disclaimed any interest in them, denied that he was, or ever had been, as tenant liable to pay money to the defendant company, and gave one month's notice in writing under sec. 127 of the Convey- ancing Act 1919, determining any tenancy which might be held to exist. The defendant company acknowledged the receipt of this communication and stated that that company "does not accept this notice as being effective for any purpose and that it holds you to the terms of the lease." When Hume's solicitors pointed out that there was no lease, the defendant company, on 2nd September 1940, replied by saying that the word " lease " was used " to describe the arrangement which exists between your client and my company regarding the above land, which arrangement is evidenced by the documents which have been inspected by you."

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Maughan K.C. (with him McKillop), for the appellant Stanley William Huon Hume. This appellant could not be successfully sued at law or proceeded against in equity or any jurisdiction. On the facts the respondent company could not have succeeded at common law. Under the New South Wales procedure the company, being merely the assignee of the benefit of the contract, could not sue at law. When lands are under the Real Property Act 1900 and the purported lease is an unregistered or informal document the person who styles himself lessor has no remedy for the rent at common law (Davis v. McConochie (2); Hume v. Monro (3)). The facts disclose several defences which would be available to the appellant in equity if he were sued. The document of assignment did not amount to novation as held by the trial judge, but only to an assignment. Therefore, there was no privity between the appellant and the old company. Assuming, however, that there was direct privity of contract between them the document whereby the interest was trans- ferred to the appellant and accepted by the appellant is not sufficient to comply with the requirements of the Statute of Frauds (Thomson v. McInmes (4)). There is not any evidence of any assignment by the old company to the respondent company or its predecessor of the benefit of any contract. Estoppel which contradicts a fact admitted on the pleadings is not open to the respondent. In any event, the question of estoppel does not arise in this case. It is not open to the respondent to raise it ; if it had been raised on the pleadings it would have involved an alteration in the pleadings. The question was not raised by the respondent and is not now open to it on the pleadings. What estoppel arises after a judgment by default was considered in Trish Land Commission v. Ryan (5) and New Brunswick Railway Co. y. British and French Trust Corporation Ltd. (6), where a cautionary reference was made to Hoystead v. Commissioner of Tawation (7). The statement in Howlett v. Tarte (8) was too widely expressed

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Lid. (1) ). The judgment only estops the appellant from setting up a traverse. He is not estopped from setting up anything by way of a special plea. A person who either at common law or in equity has allowed an allegation of fact to go by default is estopped from denying that fact, but he is not estopped from raising a matter by way of special plea which could not be raised as a matter of traverse. The appellant is not estopped from setting up a special matter by way of confession and avoidance by a special plea as in Davis v. McConochie (2), that the lands are under the Real Property Act: see also Roach v. Bickle (3) and Maritime Electric Co. Ltd. v. General Dairies Ltd. (4). In the light of New Brunswick Railway Co. v. British and French Trust Corporation Ltd. (5) it is very questionable whether Humphries v. Humphries (6) is good law. The conditions imposed by the private Act entitling the company to lease were not fulfilled and cannot be fulfilled. The consent required by sec. 6 of that Act was not, and cannot now be, obtained. Its absence would prevent the making of any order for specific performance. In the circumstances the respondent company cannot rely upon the earlier documents. The respondent company, being the assignee of the contracting party, that is the proposed lessor, cannot succeed in specific performance or in giving a lease without joining the assignor (Fry on Specific Performance, 6th ed. (1921), p. 99; Halsbury's Laws of England, 2nd ed., vol. 31, p. 419) - and see Curtis Moffat Ltd. v. Wheeler (7). This point is not concluded against the appel- lant by the decision in Tolhurst y. Associated Portland Cement Manufacturers (1900) Ltd. (8). It is a question of the circumstances of each particular case. The respondent company has no claim against the appellant in any jurisdiction, therefore under sec. 10 of the Equity Act 1901 this Court can make a declaration. The fact that it is a negative declaration is irrelevant. (Srarxe J. referred to Nixon v. Attorney-General (9).]

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"taken an assignment of whatever interest there was in the land ; and he was holding on behalf of a syndicate which desired to deal with the land by way of subdivision. No equitable claim was made by the respondent company before suit. In the circumstances the appellant is not entitled to a declaration (In re Clay ; Clay v. Booth (1)). The evidence establishes, either actually or inferentially, novation of the agreement (In re European Assurance Society Arbitra- tion Acts and Wellington Reversionary Annuity and Life Assurance Society; Conquest's Case (2); In re Times Life Assurance and Guarantee Co. (3); In re Anchor Assurance Co. (4)). It also shows that there is in all probability a legal assignment and tenancy by estoppel arising out of the declaration and judgment. The appellant would be unable to plead a plea inconsistent with any traversable allegation in that declaration (Howlett v. Tarte (5)). In Humphries v. Humphries (6) it was not a traverse that was subse- quently sought to be pleaded. The effect of antedating the commenc- ing date of a term was dealt with in Cadogan (Earl) v. Guinness (7) and Jervis v. Tomkinson (8). For forms of traverse applicable, see Bullen and Leake's Precedents of Pleadings, 3rd ed, (1868), pp. 630, 631. The appellant's suggested plea is only an argumentative traverse: see Bullen and Leake's Precedents of Pleadings, 3rd ed. (1868), p. 819, and Betts, Louat and Hammond's Supreme Court Practice (N.S.W.), 3rd ed. (1939), p. 55. The point in Davis v. McConochie (9) was that rent flows out of an estate in the land

no estate, no rent - and the finding was that the rent depended ultimately on the existence of an estate. This is not a case of estoppel against the statute, that point does not arise. It is sufficient that in a similar action the appellant could not traverse the allegation that the company had let to him (Cooke v. Rickman (10) ). Having regard to the terms of sec. 4 and sec. 6 of the private Act, which is the later Act, the Real Property Act 1900 is no impediment to the granting of a lease for any term by deed. At this stage it is irrelevant

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incorporated in 1933. Payment of rent and rates fell into arrears and in 1939 the defendant company sued the plaintiff for a sum of £551, representing arrears of rent and rates. In the declara- tion it was alleged that the defendant company let to the present plaintiff Hume the land in question for a period of seventy-seven years from 6th June 1921 and that he agreed to pay rent and rates. The plaintiff Hume (defendant in the action of 1939) did not appear and the defendant company obtained judgment against him by default. Hume's solicitor had misappropriated moneys sent to him by Hume and apparently the solicitor did not inform Hume of the fact that he had accepted service of the writ in the action, so that Hume had no opportunity of defending the action. The solicitor died and another solicitor acting on behalf of Hume paid the amount of the judgment. In July 1940 the plaintiff Hume addressed to the defendant company a document in which he disclaimed any privity of estate or contract between him and the company in respect of the lands surrendered and disclaimed any interest in them, denied that he was, or ever had been, as tenant liable to pay money to the company, and gave one month's notice in writing under sec. 127 of the Conveyancing Act 1919, determining any tenancy which might be held to exist. The defendant company acknowledged receipt of this communication and stated that the company "does not accept this notice as being effective for any purpose and that it holds you to the terms of the lease." When the plaintiff's solicitors pointed out that there was no lease, the company on 2nd September 1940 replied by saying that the word "lease " was used " to describe the arrangement which exists between your client and my company regarding the above land, which arrange- ment is evidenced by the documents which have been inspected by you." There is no other evidence than that to which I have referred which indicates the character of any claim made by the company before the institution of this suit.

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The land was vacant land, but the plaintiff Hume was rated as the person liable to pay rates in respect thereof and did so pay some, if not all, that fell due. And so too he paid rent, if not all, that fell due to the defendant company. The defendant company has never specifically asserted any equitable right or title against the plaintiff Hume despite the interpretation given to the pleadings by this Court, and, if the plaintiff Hume be right, the defendant company has no equitable right which it can assert. The defendant company has asserted and enforced a claim to a legal right and no other. Under these circumstances the equitable jurisdiction of the Supreme Court of New South Wales is not, I think, attracted in the suit now before this Court on appeal. But, even if it were attracted, the Court should not in the exercise of its discretion make any declara- tion of right. No consequential relief of any sort is claimed. And in New South Wales the Supreme Court cannot make declarations of the existence or the non-existence of any legal right for the reasons already mentioned. Its authority extends only, as already men- tioned, to suits for equitable relief or relating to equitable rights and titles and legal rights if incidental to some equitable claim. But I agree that there is no objection to making declarations denying the existence in the plaintiff of such rights. But such declarations, as was said in Gray v. Spyer (1), "should be carefully watched. Properly used, they are very useful; improperly used, they almost amount to a nuisance." In my opinion they should not be made unless the controversy between the parties is clearly formulated and defined (In re Clay; Clay v. Booth (2)) and the declaration sought clearly subject matter for the exercise of the jurisdiction of the Supreme Court in its equitable jurisdiction. The object of the suit before this Court is to establish that the defendant company has no rights whatever against the plaintiff Hume, whether legal or equitable, and incidentally, I apprehend, to establish that: the default judgment obtained against the plaintiff Hume was the result of a misapprehension of his rights or a want of proper consideration of his case. A declaration to that effect should not be made.

At a glance

Court

Decision date

Before

Source

Judgment (140 paragraphs)