Ocean Road Motel Pty Ltd v Pacific Acceptance Corporation Ltd

Upon the hearing of the application some question arose as to whether it was competent for the appellant to lodge the caveat in question but the learned judge of first instance found it unnecessary to pronounce upon it. For reasons, which will hereinafter appear, I also find it unnecessary to consider this question which, I may add, was not fully argued before us.

The substance of the appellant's claim by the caveat was that a registered mortgage which it had given to secure a loan and future advances by the respondent was unenforceable by reason of the provisions of the Money Lenders Act 1958 Vict.. The mortgage was executed on 2nd December 1959 and it is common ground that it was a security to which that Act applied and, further, that the provisions of s. 23 of the Act rendered the security unenforceable. But the Act has been materially amended on two occasions since the mortgage was given. The first of these amendments was effected by the Money Lenders (Amendment) Act 1959 which, inter alia, added a new sub-s. (4) to s. 3 of the principal Act. So amended s. 3 (4) of the principal Act provided that notwithstanding anything contained in the Act the provisions of the Act should not apply - "(a) to any loan made to any body corporate". This amending Act came into operation on 11th January 1960, that is to say, nearly six weeks after the mortgage was given. Both in the Supreme Court and before us it was contended by the respondent that this amendment should be regarded as having had a retrospective operation and, therefore, as having had the effect of removing the security from the ambit of the Act. This contention was denied - and I think rightly denied - by the appellant's argument. Before coming to the second amending Act, however, I pause to observe that if the respondent's contention were to be accepted it is clear that the appeal must fail. On the other hand, if it be rejected, as I think it should, then the conclusion is inevitable that s. 23 of the Act not only applied to the appellant's security when it was given, but continued to apply to it after the Act had been amended in January 1960. This was so notwithstanding that the Act, when so amended, had no application to loans made thereafter to any body corporate.

However, s. 3 of the principal Act was further amended by the Money Lenders (Amendment) Act 1961 which came into operation on 12th December 1961. This Act added to s. 3 of the principal Act a further sub-section in the following terms: "(5) This Act shall be deemed not to have applied to any transaction entered into before the commencement of the Money Lenders (Amendment) Act 1961 if this Act would not apply to the transaction after the said commencement and if any transaction entered into before the said commencement was in contravention of any of the provisions of this Act as in force at the time the transaction was entered into the transaction shall be deemed not to have been in contravention of the Act as so in force if a like transaction would not be a contravention of this Act as amended by the said Money Lenders (Amendment) Act 1961." Considerable argument was addressed to us on the meaning of the expression "this Act" which appears twice in what I regard as the first limb of this sub-section. But, in my view, it is not open to question that where by amendment a new provision is inserted into a principal Act and that provision speaks of "this Act" it speaks of the whole Act of which from the time of amendment it forms part and, of course, of the Act in the form which it may from time to time thereafter assume.

On the assumption that the amendment introduced on 11th January 1960 had no retrospective operation, it is clear that the Act as amended on that date continued to apply to the transaction of loan in question here. Equally clearly, if the transaction had been entered into after 12th December 1961, that is to say, after the commencement of the second amending Act, none of the provisions of the principal Act would have applied to it. This would have been so because on the stated hypothesis it would have been excluded by the provisions of sub-s. (4) which had been introduced by the first amending Act nearly two years earlier. In these circumstances, I think the first limb of sub-s. (5) of s. 3 clearly covers the present case and operates to exclude the present transaction from the operation of the Act. To me the new sub-s. (5), having regard both to its character and association with the preceding sub-section, reveals itself as a provision intended to supplement the effect of the first amending Act by, inter alia, removing from the operation of the Act all past transactions of loan to any body corporate. I should add that I see no force in the suggestion that because the second amending Act itself excluded other specified transactions from the operation of the principal Act the first limb of sub-s. (5) should be read in some qualified way so as to restrict its exempting effect to transactions which by reason of the 1961 Act itself were excluded from the provisions of the Act. Nor do I feel any difficulty because of the presence of the thrice used word "contravention" in the second limb of sub-s. (5). That limb is concerned with the fact that the principal Act penalizes money lending transactions conducted otherwise than in a specified manner (see e.g. s. 7 (3) (a) and (b)) and exposes to penalties persons who are money lenders within the meaning of the Act for certain forbidden associated acts or transactions. And, of course, a person may become a money lender as the result of one transaction. To my mind the first limb of sub-s. (5) was designed to restore the efficacy of transactions which fall within the description therein contained and the second limb was designed to extinguish, ex post facto, any penalty incurred before the amendment where the same conduct would not constitute an offence under the Act after its final amendment.

For these reasons I think that the appeal should be dismissed.

On 2nd December 1959 the first-named respondent (whom I shall call "the respondent") lent the appellant £3,000 and took by way of security for the repayment of that sum and other loans to be made - the total in the event being £18,000 - a mortgage over land to which the appellant was and is the registered proprietor. This mortgage was in due course registered. Because of non-compliance with s. 23 of the Money Lenders Act 1958 the mortgage when it was given was not enforceable. The Money Lenders Act 1958 was amended by the Money Lenders (Amendment) Act 1959, which came into operation on 11th January 1960 and which inter alia put loans to companies outside the operation of the Money Lenders Act 1958, so that had what was done on 2nd December 1959 been done on 12th January 1960 the mortgage would have been enforceable. The question whether the 1959 Act of itself made the mortgage which was not enforceable up to the date of its commencement enforceable thereafter is one raised by these proceedings. In 1961 the Money Lenders Act 1958 was amended by the Money Lenders (Amendment) Act 1961, which came into operation on 12th December 1961 and which amended certain of the definitions in s. 3 of the Money Lenders Act 1958 so that some transactions which have been within the operation of the Act no longer fell within its prospective operation. These amendments were followed by a provision adding a new sub-s. (5) to s. 3 of the Money Lenders Act 1958. It was in these terms: "This Act shall be deemed not to have applied to any transaction entered into before the commencement of the Money Lenders (Amendment) Act 1961 if this Act would not apply to the transaction after the said commencement and if any transaction entered into before the said commencement was in contravention of any of the provisions of this Act as in force at the time the transaction was entered into the transaction shall be deemed not to have been in contravention of the Act as so in force if a like transaction would not be a contravention of this Act as amended by the said Money Lenders (Amendment) Act 1961." It is clear that the object of this amendment was to take out of the application of particular legislation some transactions which theretofore had been within its application. The second question requiring consideration was whether, if the mortgage was unenforceable immediately prior to its enactment, this new sub-section made it enforceable.

The proceeding instituted in the Supreme Court to raise the two questions to which I have adverted was a summons for the removal of a caveat which the appellant had lodged in the Office of Titles referring to the mortgage and forbidding any foreclosure thereunder or the registration of any instruments executed by the mortgagee under the powers conferred thereby. The application was heard by Smith J. before whom the respondent contended that it was entitled to have the caveat removed on three grounds: - 1. That the mortgage was rendered enforceable by the passing of the Money Lenders (Amendment) Act 1959; or 2. that it was rendered enforceable by the passing of the Money Lenders (Amendment) Act 1961; or 3. that even if it is still unenforceable it is not a nullity, and it qualifies the applicant to claim the removal of the caveat, which, it is said, is defective in form and was lodged by an unauthorized person. His Honour did not find it necessary to consider the third ground and he decided against the applicant on the first ground but in its favour on the second ground, relying upon the first part of the new s. 3, sub-s. (5), but not the second. I propose to consider first the ground upon which his Honour decided in favour of the respondent for, if that decision is correct, it is unnecessary to go further.

It is important to observe that the form of amendment adopted in 1961 to give the legislation some retrospective operation was not merely to provide that the amendments made by the 1961 Act itself with prospective operation should also operate retrospectively to the commencement of the 1958 Act; what was done was to exclude particular transactions from the operation of specified legislation under which they had been unenforceable. The legislation specified was clearly enough the Money Lenders Act 1958 as it stood amended from time to time, for the words "this Act" in the new sub-section of s. 3 of the 1958 Act, when taken with s. 5 (3) of the Acts Interpretation Act introduced by the Acts Interpretation Act 1960, could have no other meaning. The relevant effect of the amended Acts Interpretation Act is that the words "this Act" in the new sub-section introduced in the 1958 Act are to be read as a reference to that Act as amended from time to time. Consequently, certain transactions falling within the operation of the 1958 Act as it stood up till 11th January 1960, because they were entered into after the coming into operation of the 1958 Act and before that date, were taken outside the operation of the legislation, and certain transactions falling within the operation of the 1958 Act as amended by the 1959 Act, because they occurred between 12th January 1960 and 12th December 1961, were taken outside the operation of the legislation. The description of the transactions excluded retrospectively from this legislation is not so clear. In terms it is a description of transactions within the operation of the legislation before 12th December 1961 but to which the legislation as then amended "would not apply". In the context this is, I think, a reference to transactions which, had they been entered into after 12th December 1961, would have been outside the operation of the Money Lenders Act 1958 as amended up to and including that date. Assuming that the 1961 Act, without the provision in question, did not apply to transactions entered into before it came into operation, it is clear that the provision under consideration is directed to taking out of the operation of the legislation some transactions which the 1961 Act would not otherwise affect and it is not directed to excluding retrospectively existing transactions excluded prospectively by some other provision of the 1961 Act; in other words, the provision puts outside the operation of the money lenders legislation transactions which the 1961 Act itself would otherwise leave wholly within the operation of that legislation. Bearing this in mind, the words under consideration naturally mean transactions to which, if entered into after the coming into operation of the 1961 Act, the 1958 Act as then amended would not apply. I find support for this construction in the language of the second part of the new sub-section, for whether or not the mortgage when it was given was in contravention of s. 23 of the 1958 Act so that the latter part of the sub-section would itself apply to it, it seems to me that sub-section as a whole is dealing with the one class of transaction and that the second part is dealing with another aspect of transactions dealt with in part by the first part of the sub-section. These transactions, as appears from the latter part of the sub-section, are those which, having been entered into before 12th December 1961, were in contravention of the legislation as it stood but are such as "would not be a contravention of this Act as amended by the said Money Lenders (Amendment) Act 1961." A construction of the retrospective provision that would by implication restrict its operation to transactions which the other provisions of the 1961 Act themselves would take outside the operation of the Money Lenders Act in the case of future transactions is not what the words used naturally mean and to arrive at such a construction would require the making of an implication which neither the words nor the sense of the provision requires and which, as Smith J. points out, would create serious anomalies.

Accordingly I think the judgment appealed from was right in deciding that the first part of the new sub-s. (5) of s. 3 of the 1958 Act made enforceable the mortgage if before that provision came into operation it was unenforceable notwithstanding the coming into operation of the 1959 Act.

I have had the advantage of reading the reasons of Taylor J. I agree with them and that the appeal should be dismissed.