Young v Queensland Trustees Ltd

Young v Queensland Trustees Ltd - [1956] HCA 51 - HCA 1956 case summary — Zoe

[11]

It is, of course, true that at the time when the once celebrated Regulae Generales of Hilary Term 4 Will. IV. were adopted pursuant to s. 1 of 3 & 4 Will. IV. c. 42 payment as well as other discharges could be given in evidence under the general issue in an action of assumpsit. But this was because by what was considered a relaxation of the ancient course of common law pleading the courts had extended the general issue to mean that at the time of suit the plaintiff's cause of action did not exist. It came to be much more than a denial of the essential ingredients of the cause of action upon which the plaintiff declared. It was taken to cover all or at all events most of the grounds upon which a cause of action once existing might be discharged. For example Lee C.J. and Denison J. say in Barker v. Dixon [2] , "a defendant in an action on the case may give in evidence any matter that destroys the plaintiff's action" [3] . Blackstone explains the course of development: "Formerly the general issue was seldom pleaded, except when the party meant wholly to deny the charge alleged against him. But when he meant to distinguish away or palliate the charge, it was always usual to set forth the particular facts in what is called a special plea; which was originally intended to apprize the court and the adverse party of the nature and circumstances of the defence, and to keep the law and fact distinct. And it is an invariable rule, that every defence which cannot be thus specially pleaded, may be given in evidence upon the general issue at the trial. But, the science of special pleading having been frequently perverted to the purposes of chicane and delay, the courts have of late in some instances, and the legislature in many more, permitted the general issue to be pleaded, which leaves every thing open, the fact, the law, and the equity of the case; and have allowed special matter to be given in evidence at the trial." - Blackstone Commentaries, Bk. III, pp. 305, 306. In the second report of the commissioners appointed in 1828 to inquire into the procedure and practice of the courts of common law this latitude was condemned and as a result the Regulae Generales of 1834 already mentioned required that all matters by way of confession and avoidance should be pleaded specially. In opening this topic the commissioners said: - "One of the most important questions which has presented itself in the course of our inquiries is, whether it is expedient to continue to any, and to what extent, the use of that kind of plea denominated the general issue. Under this plea, which is in its shape a summary form of denial of the allegations in the declaration, or some principal part of them, a defendant is at present allowed in certain actions to put the plaintiff to the proof of every thing alleged in the declaration; and in some not only to do this, but at the same time to prove in his own defence almost any kind of matter in confession and avoidance; that is matter which, admitting the truth of the plaintiff's allegations, tends to repel or obviate their effect That the present state of the practice on this subject requires alteration, seems to be universally felt." - cited by Stephen on Pleading 4th ed. (1838) notes, p. lviii.

[14]

The rules of 1834 provided that in every species of assumpsit, all matters in confession and avoidance including not only those by way of discharge, but those that show the transaction to be either void or voidable in point of law on the ground of fraud or otherwise shall be specially pleaded. It is significant that in doing so the rules expressly include payment as an example. (See Chitty on Pleading 7th ed. (1844) vol. III, p. 27 and Stephen on Pleading 4th ed. (1838) p. lv.). But although under the development which theretofore had taken place in pleading a defence of payment might be established under the general issue, yet, because it was a matter of discharge, it might also have been specially pleaded. The special plea must give colour but, if it did so, it was valid and not demurrable on the ground that it amounted to a traverse which formed part of the general issue. This is shown by the following extract from the report of Hatton v. Morse [1] : "In assumpsit, &c. The defendant pleaded, that true it is he did promise, but that ante diem impetrationis billae, he paid the money; and upon a demurrer to this plea it was objected, that it amounted to the general issue. But per Holt Ch. Just. This doth not amount to the general issue; for though payment may be given in evidence upon non assumpsit pleaded, yet it was long before that obtained; it is likewise giving colour, for he says, there was a promise, but that he performed it: now there are many things which may be given in evidence upon the general issue, and yet those things may be pleaded specially: as for instance, in an action of debt the defendant may plead a release, or he may give it in evidence upon nil debet pleaded, so in debt for rent upon a demise, the defendant may plead an entry and eviction, before any rent became due, or he may give it in evidence upon nil debet " [1] . The report goes on to deal with the requirement that colour be shown. The reason why it was always a rule that payment might be pleaded specially even during the period when it might be established under the general issue is because generally payment operates as a discharge. It is possible to imagine cases of a special contract to pay a sum certain on a specified day and it may perhaps be true that in some cases of that kind a traverse of the allegation of breach was the only proper way of putting in issue non-payment on and perhaps before that day. But in such cases after 1834 a traverse would not enable the defendant to rely upon payment post diem as distinguished from punctual payment on the very day. For example in Little-child v. Banks [2] , in an action of debt for goods sold and delivered under a plea of never indebted the defendant's counsel sought to show that payment was made for the goods as delivered, a stack of hay bound on the premises by the buyer's servants. On the trial before Coleridge J. the jury found a verdict for the defendant, which the Court of Queen's Bench set aside. The court gave no formal reasons but, as plainly appears from the report of what was said during the argument, the grounds were first that there was no plea of payment and second that there was no evidence of payment. This case has a place in a difference of view that arose about that time as to the effect of a ready money sale. If money was paid over the counter in exchange for goods should the transaction be resolved notionally into indebtedness and contemporaneous payment or should it be treated as one where there was no debt even notionally? In Dicken v. Neale [1] , the Court of Exchequer seemed to accept the latter position without question and in Bussey v. Barnett [2] , the same court expressly asserted it. But in Littlechild v. Banks [3] , Patteson J. says: "I cannot agree in that law" [4] , and the Court of Queen's Bench appear to reject the proposition. In Smith v. Winter [5] , in the Common Pleas, Williams J. says that Bussey v. Barnett [2] went to the very verge of the law. Lord Campbell C.J. in the same year expresses the view that a debt notionally arose and was discharged. In Timmins v. Gibbins [6] , the Chief Justice said: "In fact it is difficult to say that there be any case in which the debt is not antecedent to the payment. Even where the money is paid over the counter at the time of the sale, there must be a moment of time during which the purchaser is indebted to the vendor" [7] . However in Wood v. Betcher [8] , the contrary seems to have been decided. There is a relevance in this controversy to the present question. For the basis upon which it proceeded is the tacit assumption that if a debt arose payment by way of discharge must be pleaded by way of confession and avoidance and that means that the burden of proof would rest on the defendant.

[16]

A loan of money payable on request creates an immediate debt. Speaking of a promissory note payable on demand Parke B. in Norton v. Ellam [9] , said: "It is the same as the case of money lent payable upon request, with interest, where no demand is necessary before bringing the action. There is no obligation in law to give any notice at all; if you choose to make it part of the contract that notice shall be given, you may do so. The debt which constitutes the cause of action arises instantly on the loan. Where money is lent, simply, it is not denied that the statute begins to run from the time of lending" [10] . This was settled at the end of the seventeenth century, as appears from the report of Collins v. Benning [11] : "In an indebitatus assumpsit, the plaintiff declared on a promise to pay on demand, and non assumpsit infra sex annos pleaded: To which the plaintiff demurred; because declaring on a promise on demand, he thought nothing was due till demand; and he should have pleaded non assumpsit infra sex annos after demand, or that no demand was within six years. Per Curiam. If the promise were for a collateral thing, which would create no debt till demand, it might be so; but here it is an indebitatus assumpsit, which shews a debt at the time of the promise, therefore the plea is good" [1] . In Goodchild v. Pledge [2] , an action of debt, the question was put by Parke B: "Is the statement of the breach in debt anything more than a mere form? The moment the goods are delivered, is there not a cause of action, throwing the proof of its discharge on the defendant? If the breach is mere form, you cannot traverse it; then your plea is in discharge, and ought to conclude with a verification. Suppose nil debet pleaded, under the old form; would it not be sufficient to prove the debt contracted? The new general issue, that the defendant never was indebted, that is, at no instant of time, was framed for the express purpose of making all these defences pleadable by way of discharge" [3] . In delivering judgment the learned Baron said: "I think it will be found, on looking into the cases, that the statement of the breach is mere form; if so, the plea admits the debt, and is a plea in confession and avoidance and it is so treated in the new rules. Under the general issue, as now framed, you deny the existence of a debt at any one time: if you admit a debt, you must plead every matter specially by which you seek to discharge it" [4] . That this was the nature of a debt is further shown by the fact that in a common money count the allegation of request, the " licet saepius requisitus ", was mere form and was not traversable: see The Case of an Hostler [5] ; Giles v. Hart [6] . " where the declaration is upon a contract to pay a precedent debt as in the case of common counts for goods sold, work and labour, money lent &c. no request need be stated or proved. And in these instances, although the promise has been laid on request, the " licet saepius requisitus " need not be laid or proved." ( Chitty on Pleading 7th ed. (1844) vol. 1, p. 339).

[24]

The purpose of the foregoing discussion is to show that the two reasons are mistaken which substantially led the Supreme Court of Victoria in Nelson v. Campbell [4] , to decide that the burden rests on a plaintiff to disprove a defence of payment. A debt recoverable under an indebitatus count was not and is not now conceived of simply as a cause of action for breach of duty or obligation. In other words it is a mistake to regard the liability to pay a debt of a kind formerly recoverable in debt or indebitatus assumpsit as no more than the result of a breach of contract, a breach which the creditor must affirmatively allege and prove. It is, too, a mistake to suppose that the general issue was always a plea doing no more than negativing the essential ingredients in the plaintiff's prima facie cause of action. For a long period before 1834 it had come to be a plea denying that at the commencement of the suit a cause of action subsisted in the plaintiff, whether because having existed it had ceased to exist or because it had not come into existence or was incomplete. The law was and is that, speaking generally, the defendant must allege and prove payment by way of discharge as a defence to an action for indebtedness in respect of an executed consideration. It is interesting to notice that it was soon settled that upon a plea of payment the defendant had the right to begin at the trial: see " An Exposition of the Practice in relation to the Right to Begin and to Reply ", by W. M. Best (1837) pp. 60, 61. The same author in his well known work on Evidence treats the rule placing upon the defendant the burden of proving payment as a special application of the presumption of continuance. Writing of this presumption he includes as a case requiring special consideration, "the presumption of the continuance of debts, obligations etc. until discharged or otherwise extinguished". And he says "a debt once proved to have existed, is presumed to continue unless payment, or some other discharge, be either proved, or established by circumstances." - Best on Evidence, 12th ed. (1922) p. 346, s. 406. Though this no doubt supplies a rationale that is not unsatisfactory, the truth is that the rule arises from the nature of debt itself.

[27]

He gave the following account of the borrowings represented by the eight receipts of 14th February 1950, which amount to £9,542. About the end of April 1950 he found that he might be short of money for a settling day. He fixes the settling day as Tuesday, 2nd May. He said that he telephoned to Miss Halley a week before and asked whether, if he needed any money, he could obtain it from her. She asked how much he might want. He replied: "It might be £10,000". She said that that would be all right if he wanted it. After the races he rang her up and asked her if he could get the money which she had said he could have. She said: "Yes, I will fix it up for you". She said that she would meet him on Tuesday morning at the G.P.O. in Brisbane, the place where he had met her before. He met her there on Tuesday, 2nd May, about a quarter to ten or ten o'clock in the morning. His evidence goes on that she said to him: "You want £10,000?" He said: "Yes". She said: "Oh, well, I will be back here in half an hour or so", and she went away. He waited about until she came back. They then went to a cubicle in the Post Office where telegrams are written. She had several slips of paper and said: "I have got the money here for you. Will you sign these receipts just according to this list?" She had slips of paper one of which was dated 14th February 1950. She asked him to make receipts out in the same way for that date and to make the respective receipts for the amounts of money she had enumerated on the slip. In accordance with her request he made out the receipts on separate slips and signed them. She had certain letters written down on a slip of paper and she requested him to put the letters on the back of the receipts, a "W" on that one and a "B" on that one, and something else on another one. He followed her instructions without enquiry. She produced duty stamps and he affixed them. She paid him over the money. He said that he would come back in a fortnight or at all events within a month and she said that that would be all right so long as it was within a month. He said in his evidence that he did not know why the receipts were dated 14th February or what was the significance of the letters and characters he wrote on the back of the receipts. His evidence in support of the plea of payment is that he kept accumulating money as it came in and when he found that he had enough to pay her he telephoned to her. He said: "You can come and get the money". They met at the G.P.O. again and he paid her.

At a glance

Court

Decision date

Before

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Judgment (32 paragraphs)

Parties