Majeau Carrying Co Pty Ltd v Coastal Rutile Ltd

High Court of Australia|1973-07-01|Before: Stephen JJ, Menzies J, Stephen J, Gibbs J, Lucas J

High Court of Australia Menzies, Gibbs and Stephen JJ. Majeau Carrying Co Pty Ltd v Coastal Rutile Ltd [1973] HCA 22

ORDER Appeal dismissed with costs. Cross-appeal dismissed with costs.

I agree with the judgment of Stephen J. and with the order proposed therein.

I do not find it necessary to decide the question whether at common law a warehouseman had a general lien upon the chattels deposited with him for all moneys owed to him by the owner of those chattels. If the common law did confer a right to such a lien it was extinguished when The Warehousemen's Liens Act of 1938 Q was enacted. By s. 3 of that Act a warehouseman was given a lien for the amount of his charges as defined by s. 4 on goods deposited with him for storage, subject however to his giving the notice required by s. 5 when the goods were deposited by a person entrusted by the owner with the possession of the goods or by his authority rather than by the owner himself or by his authority. In addition to all the other remedies provided by law for the enforcement of liens or for the recovery of a warehouseman's charges, the warehouseman was given a right to sell the goods by public auction, on giving notice and advertising the sale, and to satisfy his lien out of the proceeds: ss. 6, 8. It is impossible to suppose that the legislature intended the rights given by this enactment to be additional to any right to a lien that might have existed in favour of a warehouseman at common law, and the proper conclusion is that the intention in expressly granting to warehousemen a right to a lien in accordance with the provisions of the statute was to displace any right to a lien which they might otherwise have had at common law. The decision of the Court of Queen's Bench, affirmed in the Exchequer Chamber, in Dresser v. Bosanquet [1] strongly supports this view. While The Warehousemen's Liens Act of 1938 remained in operation it was not possible to say that the rules of the common law in force in Queensland recognized that warehousemen had a right of general lien. However, that Act was repealed by s. 24 of The Disposal of Uncollected Goods Act of 1967 Q. That repeal did not revive the common law right to a warehouseman's lien, assuming that such right had existed. By s. 20 (1) (a) of The Acts Interpretation Act of 1954 Q it is provided that the repeal by one Act of a former Act shall not unless the contrary intention appears (inter alia) -

Revive anything not in force or existing at the time at which such repeal took or takes effect. This provision raised the presumption that the intention of Parliament, in repealing the Act of 1938, was not to revive the common law rules (if any) that were displaced by the repealed enactment: cf. Marshall v. Smith [1] . There is nothing in the Act of 1967 to rebut that presumption. The result is that a warehouseman in Queensland had not at any material time any common law right to a lien such as is claimed in the present case. 1. (1863) 4 B. & S. 460, at pp. 484, 488 [122 E.R. 531, at pp. 542, 543]. 2. (1907) 4 C.L.R. 1617, at pp. 1635, 1645.

The appellant then contends that the evidence established that there was a usage in the trade of warehouseman in Brisbane (or perhaps Queensland) by which a person who received goods for storage was entitled to retain the goods until payment of all the debts due to him by the depositor. Evidence was given for the appellant by two experienced warehousemen and by the managing director of the appellant company itself that they had in many cases asserted a general lien on goods deposited with them. This evidence was undisputed. Of course, during the period from 1938 to 1967 warehousemen had a statutory right to a lien but not all the cases in which, according to the evidence, liens were asserted were within that period and in some instances the lien asserted went beyond that which would have been allowed by the statute. These claims to a lien were sometimes disputed but never, it appears, litigated. The two independent warehousemen had adopted standard printed forms of contract, the conditions of which conferred a right to a lien, so that the assertion of a lien in many cases could be explained by reference to agreement rather than by the existence of usage apart from agreement. However, these printed forms of contract were not used in all cases and their existence did not account for all the instances in which liens were asserted. The learned trial judge (Lucas J.) was satisfied that on occasions since 1967 a lien had been asserted and not disputed but he held that the evidence did not "go as far as to establish that the notoriety of the warehouseman's lien is such that persons must be taken to contract with warehousemen upon the basis that the right to it forms part of the contract" [2] . The authorities to which my brother Stephen refers show that the burden of proving a custom which is so notorious that everybody in the trade contracts on the basis that it forms a term of the contract is a difficult one to discharge. I have not been persuaded that Lucas J. was wrong in concluding that the evidence, which to my mind was lacking in detail and precision, was not sufficient to discharge the onus of proof that lay on the appellant.

The cross-appeal brought by the respondent should in my opinion be dismissed for the reasons given by my brother Stephen, with which I agree.

I would dismiss both the appeal and the cross-appeal.

When the respondent began this action in May 1972 the appellant had in its Brisbane warehouse large tonnages of bagged and bulk minerals derived from beach sands which were worth over $103,000 and were the property of the respondent. On 23rd March 1972, a receiver and manager of the respondent's assets and business had been appointed by a secured creditor of the respondent. At that time the appellant had long been engaged in undertaking the cartage and storage of the respondent's minerals. Following the subsequent failure of the respondent to pay the large amounts owed by it to the appellant in respect of pre-receivership transactions, and no doubt fearing the insolvency of the respondent, the appellant refused to deliver up to it the minerals which it held in store and the respondent commenced this action to recover them.

The appellant justified its refusal to deliver up these minerals by reliance upon a general possessory lien, to which it claims to be entitled as a warehouseman.

At trial the learned trial judge rejected the appellant's right to any lien [1] and from this decision it now appeals. A cross-appeal by the respondent involves quite distinct questions which I put aside for the moment.

The possessory lien relied upon by the appellant was said to arise either as a matter of common law or by custom and usage; it is claimed as a general rather than a particular lien, enuring to the appellant in its capacity as a warehouseman, being particularized in the defence as follows:

At all material times in the State of Queensland persons dealing with and engaged in the trade or business of warehousemen recognized and observed the right of a warehouseman, (in the event of failure of the depositing owner to pay the warehouseman's charges in relation to the storage of goods deposited by him with the warehouseman), to retain the possession of such goods until the payment in full to the warehouseman of all monies owned by the said owner to the warehouseman. (see [2] ). The lien claimed is therefore a general lien in the full sense of that term; not only does it secure charges due on goods no longer held by the defendant but it also extends beyond bare storage charges to charges for cartage and other like charges not necessarily associated with the simple act of warehousing. 1. [1973] Qd. R. at p. 72.

The appellant called evidence in support of the existence of a trade custom whereby there was conferred upon warehousemen in the Brisbane area the general lien which it pleaded as its defence. Before considering the nature of that evidence it is appropriate to consider the alternative basis for the claimed lien, said to be founded upon a right at common law. I note in passing that no claim was made to a lien arising under contract; accordingly in what follows I omit reference to such liens.

There are two general categories of persons who have long been recognized by the common law as entitled to a particular lien not in any way dependent upon usage or custom; those whose quasipublic calling casts upon them a common law duty towards the public at large, such as innkeepers and carriers, and who in return are entitled to this special remedy for their charges, and those who in plying their trade improve the goods of others by the expenditure on those goods of skill and labour.

This class of possessory lien has been recognized by the common law since at least the seventeenth century - Holdsworth, History of English Law, vol. vii, p. 511 et seq; it is a particular lien only and does not enable the lienee to have recourse to it for the general balance owed by the lienor. Even were it claimed by the appellant it could not avail since it is clear that the mere keeping of goods in safe custody does not give rise to such a lien; the authorities to this effect are reviewed by Pennycuick J. in Re Southern Livestock Producers Ltd. [1] . American courts have in this respect taken a different view and, by a process described by Gibson C.J. in the Pennsylvania Supreme Court, in Steinman v. Wilkins [2] , as "a struggle of the judicial mind to escape from the narrow confines of the earlier precedents", have frequently held that those who care for goods by warehousing them have a particular lien.

[1964] 1 W.L.R. 24. 2. (1844) 42 Am. Dec. 254, at p. 255.

In quite a large number of other occupations the law now recognizes a right of general lien; instances are collected in Bowstead on Agency, 12th ed. (1959), p. 155 et seq. These too are sometimes described as common law liens. They owe their origin to custom, principally to the custom of merchants, and have become part of the law by a process of judicial notice. Of one of these, the banker's general lien over his customer's securities in his possession, Lord Campbell said, in Brandao v. Barnett [3] , that it was "part of the law merchant" and held it to be a matter of judicial notice, saying that "when a general usage has been judicially ascertained and established it becomes a part of the law-merchant, which courts of justice are bound to know and recognize." Lord Lyndhurst spoke to the same effect [1] . It is by such a process that the general liens of solicitors, stockbrokers, factors and insurance brokers have been established. The assertion of such a lien calls for no evidence but arises as a matter of law once the necessary relationship between the parties is shown to be that of banker and customer, solicitor and client or otherwise as the case may be.

(1846) 12 Cl. & F. 787, at p. 805 [8 E.R. 1622, at p. 1629]. 2. (1846) 12 Cl. & F., at p. 810 [8 E.R. 1622, at p. 1631].

Encouraged no doubt by references in a number of text-books to the possibility that warehouse-keepers might also have become entitled by a like process to such a general lien, the appellant sought, on one limb of its argument, to found its claim to a general lien on the common law, meaning by that, as I understand it, not a root of title similar to that enjoyed by those trades on which the common law for so long has conferred a particular lien but rather an origin in judicial notice of a right to a general lien, similar to that of bankers, solicitors and the like.

There are other cases again of a general lien being recognized, on proof of custom or usage, not as applicable to a whole trade but only to that trade as engaged in in a particular locality. The distinction is often a fine one and by the process of judicial decision the latter may widen into the former. Moreover in the older cases it is not always easy to discern whether the general lien found to exist is based upon judicial notice or upon proof of a particular custom.

The process whereby judicial notice comes to be taken of the right to a general lien may be seen in two cases concerned with a wharfinger's general lien, Naylor v. Mangles [2] and Spears v. Hartly [3] ; in the first, counsel for the defendant wharfinger stated that "it had been decided in three earlier cases that they had" (a general lien) "and called witnesses to prove it, with which the jury seemed completely satisfied" [4] and Lord Kenyon said that such a lien arose from usage and was a matter for evidence but where, as in the present case, the usage had been proved so often "it should be considered as a settled point that wharfingers had the lien contended for" [5] . In Spears v. Hartly [3] , Lord Eldon referred to Lord Kenyon's ruling and said he would "hold it as settled law on the subject" that a wharfinger had such a general lien, no evidence being apparently required on the point [6] .

(1794) 1 Esp. 109 [170 E.R. 295]. 2. (1800) 3 Esp. 81 [170 E.R. 545]. 3. (1794) 1 Esp. 109 [170 E.R. 295, at p. 296]. 4. (1794) 1 Esp. at p. 110 [170 E.R. at p. 296]. 5. (1800) 3 Esp. 81 [170 E.R. 545]. 6. (1800) 3 Esp. 81 [170 E.R. 545, at p. 546.]

However it may be debatable whether, like bankers etc., wharfingers generally had thus conferred upon them as a matter of law a right to the exercise of a general lien. The contrary view was taken by Chancellor Spragge of the Ontario Court of Chancery in Sills v. Bickford [1] when he said of those two decisions:

I apprehend that at common law there was no lien for wharfage These decisions are cited in some text books as authority for the general proposition that a wharfinger is entitled to lien; but it is to be observed that these decisions were at the sittings, the one at Guildhall, the other at Westminster. The proof of usage referred to by Lord Kenyon must have been of usage at a particular port, probably at the port of London, for as was observed by Bayley J., in Holderness v. Collinson: "There may be usage in one place varying from that which prevails in another". In Holderness v. Collinson [2] , the custom of wharfingers at Hull was in question and Bayley J., having had cited to him the decisions of Lord Kenyon and Lord Eldon, nevertheless treated those decisions as not necessarily throwing light upon the particular custom at Hull. 1. (1879) 26 Gr. 512, at pp. 513-514. 2. (1827) 7 B. & C. 212, at p. 216 [108 E.R. 702, at p. 704].

I have dealt at some length with the case of the wharfinger not merely because it illustrates the difficulty, in some cases, of determining whether a general lien has, by repeated decision, become a matter of law applicable to all members of the particular trade rather than a matter for proof of custom in each instance; it is also a feature of the appellant's case that most of the decisions which are relied on are concerned in one way or another with wharfingers, a trade which, especially before the growth of road and rail transport, was closely associated with that of warehousemen.

The earliest of the authorities upon which the appellant relies for its contention that at common law warehousemen have a general lien is R. v. Humphery [3] , in which case a London wharfinger claimed a general lien and a special jury found such a custom and usage of the trade [4] . Graham B. described it [5] as perhaps a matter of some doubt whether that lien would extend to warehousing charges but went on to hold that the case of a warehousemen's general lien stood on the same ground as that of a wharfinger. Garrow B. and Hullock B. [6] expressly stated that they were not prepared to agree to this proposition and on reconsideration the Court, finding it unnecessary to determine the point, resolved to give no opinion on what was described as this "abstract point" [1] . This case is no authority upon which the appellant can rely.

(1825) M'cle. & Yo. 173 [ 148 E.R. 371]. 2. (1825) M'cle. & Yo. at p. 186 [ 148 E.R. at p. 377]. 3. (1825) M'cle. & Yo., at p. 195 [ 148 E.R., at p. 380]. 4. (1825) M'cle. & Yo. at p. 195 [ 148 E.R. at p. 380]. 5. (1825) M'cle. & Yo. at p. 196 [ 148 E.R. at p. 381].

In Buxton v. Baughan [2] , Alderson B. did treat one who for reward allowed carriages to stand on his premises as having a lien over them for standing charges. The real point in that case was, however, the power of a bailee to create a lien in favour of a third party without the bailor's authority and it does not appear whether the more fundamental question whether in any event a lien would arise was ever argued.

In re Witt; Ex parte Shubrook [3] was concerned with the general lien of a packer, not a warehouseman; Mellish L.J. pointed out [4] that packers were formerly in the habit of acting as the financiers of their customers and for that reason came to be treated as having a general lien. This case is, if anything, an authority against the appellant's proposition since from the judgment of Mellish L.J. it clearly emerges that the lien there successfully claimed was established only by proof of custom and not as a matter of common law. The case also provides a further example of the practice to which I earlier referred whereby the courts tend not to require evidence of a well established custom, Mellish L.J. saying [5] that "if a single affidavit of the custom had been produced, that would have been sufficient evidence, if any evidence is required at all."

(1876) 2 Ch. 489. 2. (1876) 2 Ch. at pp. 491-492. 3. (1876) 2 Ch. at p. 492.

In Moet v. Pickering [6] , the defendants were wharfingers and in argument their counsel asserted a lien, to which it was said that they were entitled "as wharfingers for warehouse expenses" [7] ; in fact a part of those charges for which the lien was claimed was for wharfage and a part for warehousing. James L.J. described the defendants as wharfingers throughout his judgment and referred to the lien claimed as being "for wharfingers' charges" [8] , although he later referred to the defendants' "warehouse charges". Cotton L.J. also referred to the defendants as wharfingers but referred to the lien as being in part for "rent" and, later, for "warehouse expenses" [9] . The origin of the lien was not an issue in the case either at first instance before Fry J. [10] or on appeal, and the case is in truth of no authority on the point.

(1878) 8 Ch. 372. 2. (1878) 8 Ch. at p. 374. 3. (1878) 8 Ch. at p. 375. 4. (1878) 8 Ch. at p. 376. 5. (1877) 6 Ch. 770.

The two cases of Ex parte Ludlow, In re Hancock [1] and Re Catford; Ex parte Carr v. Ford [2] are no more than instances of successful proof of a custom of the trade whereby warehousemen in the port of Bristol were shown to be entitled to a general lien for their charges; the whole tenor of these two decisions is against any right to a general lien without proof of custom.

In Nicholson v. Harper [3] , the lien point was not in issue; however North J. and no doubt also the parties, appear to have assumed that the warehouseman was entitled to his charges before releasing goods. The absence of any discussion much reduces the value of this case as any authority on the point.

In Hill v. London Central Markets Cold Storage Co. Ltd. [4] , it was a matter of admission by the plaintiff that the defendant had a general lien on goods held in cold storage in London and Hamilton J. accordingly treated the matter as "common ground" [4] . The making of this admission is perhaps explained by the later case of Jowitt & Sons v. Union Cold Storage Co. [5] , in which Scrutton J., to whom Hill's Case [4] was cited in argument, said [6] , that a general lien was one of "the ordinary and customary terms for cold storage in London". Neither of these cases is any authority for the existence of a warehouseman's general lien arising otherwise than by proof or admission of a particular custom.

(1910) 102 L.T. 715. 2. (1910) 102 L.T. 715. 3. [1913] 3 K.B. 1. 4. (1910) 102 L.T. 715. 5. [1913] 3 K.B. 1, at p. 10.

In Tappenden v. Artus [7] , reference was made to a warehouseman's lien as having been asserted in Singer Manufacturing Co. v. London & South Western Railway Co. [8] . However in the Singer Case [8] Mathew J. was able to discern a right of lien in the railway company in respect of goods deposited in one of its cloak rooms only as an extension of its lien as a carrier and it was thus that his Lordship was able to say that "the lien which the defendant has as carriers they had also as owners of the cloak room" [9] . The other member of the Divisional Court, Collins J., took a like view that the cloak room was a facility incident to the carriage of passengers and their baggage. Thus in the Singer Case [8] no true general lien was in question but rather a particular lien growing out of the defendant's status as a common carrier. In Paton on Bailment in the Common Law, (1952) at p. 188, the learned author suggests this case to be an instance of a lien implied by statute.

[1964] 2 Q.B. 185. 2. [1894] 1 Q.B. 833. 3. [1894] 1 Q.B. 833. 4. [1894] 1 Q.B. at p. 836. 5. [1894] 1 Q.B. 833.

These authorities do not, I think, support the view that any judicial recognition has been accorded to any general right of warehousemen to a possessory lien. Such decisions as may be said to lend some support for the appellant's contentions are, at most, instances confined to particular localities and do not ever appear to have reached that stage at which, without evidence of custom and usage, even a local right to such a lien has been accorded judicial notice. There are other authorities which specifically deny such a right. In Bowman v. Malcolm [1] , the defendant claimed a general lien as warehouseman; his right to a general lien for any wharfinger's charges owed to him was conceded but Parke B., concluding that none of the amount for which the lien was claimed was due on account of wharfinger's charges, went on to say that as a warehousekeeper "he could have no general lien unless by contract" [2] or by usage, of which there was no evidence. Gurney B. and Rolfe B. concurred [3] .

(1843) 11 M. & W. 833 [152 E.R. 1042]. 2. (1843) 11 M. & W. at p. 844 [152 E.R. at p. 1047]. 3. (1843) 11 M. & W. at p. 845 [152 E.R. at p. 1047].

In two earlier cases Parke B. held that having the custody and care of a chattel did not of itself confer any right to the exercise of a general lien. In Jackson v. Cummins [4] , he denied any right of lien to an agister of stock and said that the case of a livery stable keeper would be no different; Alderson B. and Maule B. concurred. In Binns v. Pigot [5] Parke B. refused any possessory lien to an innkeeper who had looked after a horse which had come into his custody otherwise than being left there by a guest so as to give rise to the innkeeper's common law particular lien. See also Judson v. Etheridge [6] , per Lord Lyndhurst. Other cognate decisions are discussed by Pennycuick J. in Re Southern Livestock Producers Ltd. [7] .

(1839) 5 M. & W. 342 at pp. 349-351 [151 E.R. 145, at pp. 147, 148]. 2. (1840) 9 C. & P. 208, at p. 209 [173 E.R. 804, at p. 805]. 3. (1833) 1 Cr. & M. 743 [149 E.R. 598]. 4. [1964] 1 W.L.R. 24.

In the slightly earlier case of Leuckhart v. Cooper [8] , a custom among public warehouse-keepers in the City of London of exercising a general lien was found by the jury to exist but was held by the Court to be unreasonable and therefore bad. The relevance of this case lies in the fact that there was no suggestion that without proof of a particular local custom any right of general lien could have been asserted.

In Bock v. Gorrissen [1] Lord Campbell said of general possessory liens:

But I am bound to say that I cannot entirely concur in the view which His Honour the Master of the Rolls appears to have taken of this question, if he said, according to the report of his judgment in the Jurist, "wholly independent of any evidence of custom according to the general law of principal and agent in mercantile dealings and transactions, the Defendants are entitled to a lien on these bonds for their general balance". I do not think that a general lien can be claimed according to any general law of principal and agent. The law of England does not favour general liens, and I apprehend that a general lien can only be claimed as arising from dealings in a particular trade or line of business, such as wharfingers, factors and bankers, in which the custom of a general lien has been judicially proved and acknowledged, or upon express evidence being given that, according to the established custom in some other trade or line of business, a general lien is claimed and allowed. Modern authorities on the point are not numerous but to the same general effect are Hatton v. Car Maintenance Co. Ltd. per Sargant J. [2] and Kilners Ltd. v. John Dawson Investment Trust Ltd. per Jordan C.J. [3] . 1. (1860) 2 De G., F. & J. 434, at p. 443 [ 45 E.R. 689, at p. 693]. 2. [1915] 1 Ch. 621, at p. 624. 3. (1935) 35 S.R. (N.S.W.) 274, at p. 280.

Despite the occasional references in text-books to a warehouseman's right to a general lien, and despite the doctrine which appears to have developed in the United States and which confers upon warehousemen a specific lien said to be founded on the common law, a modern instance being provided by Jewett v. City Transfer & Storage Co. [4] (and see the brief annotation touching on this topic in 76 Am. L.R. (2d) 1322) I have concluded that the appellant cannot succeed in this case except by satisfactory proof of some actual custom entitling it to such a lien.

The extent of the evidence necessary to establish a custom of this sort has been the subject of much judicial learning. It suffices for present purposes to refer to two aspects. First it is material that the custom sought to be proved is one establishing a general lien which of its nature is prone to operate to the detriment of other creditors of the lienor. General liens have, for this reason, always been regarded by the courts "with jealousy": Lord Ellenborough in Rushforth v. Hadfield [5] . In that case the rigorous proof required to establish such a general custom of trade was stressed. In Hall on Possessory Liens (1917) at pp. 35-36 other instances are given of the reluctance with which such a custom is granted judicial recognition. Secondly, because it is a particular custom which is being proved not only do requirements as to certainty and lack of ambiguity, reasonableness and long standing have to be satisfied but the standard of proof required is a high one. In an article in the Law Quarterly Review, vol. 9, p. 153, F. A. Greer, later Greer L.J., examines the proof of particular customs, and in Maxwell v. Official Assignee [1] and Thornley v. Tilley [2] , this Court adverted to the extent to which evidence of the existence of a custom must go.

(1806) 7 East 224, at p. 228 [103 E.R. 86, at pp. 87, 88]. 2. (1909) 8 C.L.R. 553. 3. (1925) 36 C.L.R. 1.

In Maxwell's Case [1] the displacement of the doctrine of reputed ownership in bankruptcy was in question, and the judgment of Isaacs J. in particular dealt at length with the strict requirements necessary to establish a custom. In Thornley v. Tilley [3] Knox C.J. adopted the words of Jessel M.R. in Nelson v. Dahl [4] , describing the alleged existence of a usage as

a question of fact, and, like all other customs, it must be strictly proved. It must be so notorious that everybody in the trade enters into a contract with that usage as an implied term. It must be uniform as well as reasonable, and it must have quite as much certainty as the written contract itself. Reference may also be made to Summers v. The Commonwealth per Isaacs J. [5] , affirmed on appeal [6] . In Anderson v. Wadey [7] , Darley C.J. adopted a passage from Browne on Usage and Custom (1875) which accords with what I understand to be the law: Seeing that custom is only to be inferred from a large number of individual acts, it is evident that the only proof of the existence of a usage must be by the multiplication or aggregation of a great number of particular instances; but these instances must not be miscellaneous in character, but must have a principle of unity running through their variety, and that unity must shew a certain course of business and an established understanding respecting it. In Shire of Rodney v. Vibert [8] , Madden C.J. approached the matter in much the same way. 1. (1909) 8 C.L.R. 553. 2. (1925) 36 C.L.R. 1, at p. 8. 3. (1879) 12 Ch. D. 568, at p. 575. 4. (1918) 25 C.L.R. 144, at p. 148. 5. (1919) 26 C.L.R. 180. 6. (1899) 20 L.R. (N.S.W.) 412, at pp. 417-418. 7. [1915] V.L.R. 388.

In the present instance the learned trial judge concluded that the evidence of custom was insufficient and it suffices to say that I respectfully agree in that conclusion. Because of the existence from 1938 until 1967 of a statutory right of lien conferred by The Warehousemen's Lien Act Q the task of the appellant in establishing by evidence any custom such as is alleged was rendered very difficult indeed and in the outcome it is, I think, correct to say that the appellant clearly failed in the task attempted.

Accordingly, on neither of the two grounds asserted is the appellant entitled to the lien claimed. It is unnecessary in these circumstances to consider whether or not the credit arrangements between the parties might amount to a waiver of any lien. The appeal should in my view be dismissed.

For the purposes of disposing of the cross-appeal certain additional facts must shortly be stated. It seems that after the appointment of the receiver two payments were made to the appellant by the receiver; a sum of $6,470.24 was paid in the belief that this represented that part of the pre-receivership indebtedness of the respondent which related to storage and local cartage of mineral sands in the metropolitan area and on such payment the appellant released 252 tons of bagged rutile which it was holding. A further sum of $5,507.58, representing post-receivership indebtedness on the part of the respondent, was, by accident, paid twice over to the appellant.

The sum of $6,470.24 in fact was much in excess of the pre-receivership indebtedness attributable to storage and local cartage, only later did the receiver discover that it involved an overpayment of $2,851.81. The appellant applied that overpayment in reduction of the respondent's outstanding indebtedness on account of other charges which the receiver had not intended to pay and for which he intended the appellant to look to the general funds of the respondent, inadequate though they might prove to be.

The further sum of $5,507.58, when accidentally paid a second time, was retained by the appellant and applied in part in reduction of other pre-receivership indebtedness of the respondent to it.

Dealing first with the mistaken second payment of $5,507.58, it was included as part of a total payment of $7,792.42 made at a time when post-receivership liabilities of the respondent to the appellant then outstanding and which the receiver intended thereby to discharge were considerably less than that total. Accordingly there were no post-receivership debts to which much of that total could be applied; there were however substantial pre-receivership debts then outstanding. The respondent contends that from all the circumstances an agreement is to be implied whereby moneys received by the appellant should be applied only in payment of post-receivership debts, the appellant accordingly being prevented from applying that total payment, to the extent that it exceeded post-receivership liabilities, in discharge of pre-receivership indebtedness. Instead the appellant should have returned it to the receiver and is to be treated now as holding it in trust accordingly.

In the absence of any agreement to that effect, there being no such express agreement and no implied agreement being shown to have arisen, I see no ground upon which the respondent can complain when the appellant, receiving moneys from it, applies them, after satisfying all post-receivership indebtedness, in reduction of the only indebtedness then remaining, being the pre-receivership indebtedness. No question of appropriation really arises since there was no choice to be made as between two debts; only one debt, the pre-receivership debt, was then owed and it must follow that it was pro tanto diminished. Accordingly any delay on the part of the appellant in expressly appropriating the available balance of the total payment towards payment of pre-receivership indebtedness, and this does appear to have been delayed until a time when new post-receivership debts again arose, is of no relevance.

There is likewise no ground upon which the respondent can complain of the application by the appellant of part of the payment of $6,470.24 to charges other than for storage and local cartage. The learned trial judge has held that so far as the respondent was concerned it intended the payment not to exceed accrued storage and local cartage charges; it was to that extent paid under a mistake of fact; however, as his Honour points out, the appellant, as recipient, was not concerned with the items of indebtedness which the payment was intended to discharge but only with whether it was, in return for the payment, releasing so much of the stored minerals as to endanger the efficacy of its lien. Amounts considerably in excess of the total payment received were then due and owing to the appellant and with respect I entirely agree with his Honour's conclusion that the respondent cannot now seek to avoid the consequence that the over-payment went in reduction of other pre-receivership indebtedness of the respondent to the appellant.

In thus dealing with these two instances of mistaken payment I have assumed that it is open to the respondent to pursue its cross-appeal. By that cross-appeal it seeks, curiously enough, to have the order of the Court varied by increasing the total amount of the judgment awarded against it. It does so so that it may thereby, as it thinks, overcome some of the difficulties which may be encountered, in any separate action to recover these two sums from the appellant, by the existence of the present order, the effect of which is to treat these two sums as having, on payment by the respondent, thereby reduced its indebtedness to the appellant. Thus the respondent, which in this action sought no relief in respect of these two sums, seeks to have the order in favour of the appellant varied in a manner ostensibly adverse to itself; the apparent insolvency of the respondent is, of course, the explanation for its adoption of this course. In the circumstances it is unnecessary for me finally to determine whether the respondent can in any event cross-appeal as it seeks to do; even if this course be open to it it should not, in my view, succeed upon that cross-appeal.

I would therefore dismiss both the appeal and the cross-appeal.

At a glance

Court

Decision date

Before

Source

Judgment (62 paragraphs)

Parties

Cited By (2)