Legal Research
Cases
Cloverdell Lumber Co Pty Ltd v Abbott

Cloverdell Lumber Co Pty Ltd v Abbott

Link copied

Case Copied 17 March 1924 34 min read

Contents

On this page

34 CLR 122

THE CLOVERDELL LUMBER COMPANY

PROPRIETARY LIMITED AND OTHERS ABBOTT

APPEAL FROM THE SUPREME COURT OF Practice-Specially endorsed writ-Final judgment--Leave to defend-Money lender-

Excessive rate of interest---unles of the Supreme Court 1916 (Vict.), Order XIV., r. 1 - Money Lenders Act 1915 (Vict.) (No. 2701), secs. 4, 5, 6. MELBOURNE, Mar. 12, 13,

By a specially endorsed writ issued in the Supreme Court of Victoriz-against a company and several persons, the plaintiff claimed against the company a cer- tain sum as being principal, interest and other moneys due under a covenant in a mortgage of land by the company to the plaintiff, and against the other Gavan Duffy JJ.

defendants the same sum as being due under an agreement in writing between them and the plaintiff. The mortgage, which was in respect of a loan of £3,000, contained a covenant for payment of interest at fourteen per cent per annum reducible to twelve per cent on punctual payment, with a proviso that on default in due payment of interest the principal should forthwith become due. On a motion by the plaintiff under Order XIV. of the Rules of the Supreme Court 1916 (Vict.) for leave to sign final judgment, it was stated in an affidavit by one of the other defendants, who was a solicitor and a director of the defendant com- pany, that the loan was to the defendant company and that the other defendants were guarantors that the defendants "are advised that the amount of the loan can be raised within a short time at a lower rate of interest that the defendant company agreed to the rate of fourteen per cent, only because it would have lost its interest under certain contracts had it not secured a loan at the time; that, if the company and its advisers had not considered the rate of interest excessive, the interest in arrear would have been duly met and the present claim would not have existed that at a date before the alleged default in payment of interest the company reduced its liability by payment of £600, but that this sum had been wrongly apportioned between capital and interest ;

34 CLR 123

that the plaintiff held security which before such reduction of liability " was ample and is still more than ample" that the value of the security, which is freehold," is between £6,000 and £8,000; that the plaintiff is not and was not at the time of making the loan registered as a money lender; and that the deponent "has been advised by counsel and verily believes" that the trans- action of the loan was illegal. The defence sought to be raised was based on the provision of sec. 5 of the Money Lenders Act 1915 that, in a case in which there is evidence which satisfies the Court that the interest charged in respect of the sum actually lent is excessive, the Court may reopen the transaction and relieve the borrower from payment of any…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Keep reading for free

Create a free CaseChat account to read Cloverdell Lumber Co Pty Ltd v Abbott and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [1924] HCA 4
Decision Date: 17 March 1924

CaseChat Overview and Summary

In Cloverdell Lumber Co Pty Ltd v Abbott, the plaintiff, Mima Evelyn Abbott, sought final judgment against the defendant company, Cloverdell Lumber Co Pty Ltd, and several guarantors for moneys due under a mortgage and a related agreement. The claim included principal, interest at 14% per annum, and costs. The plaintiff applied for leave to sign final judgment under Order XIV of the Supreme Court Rules 1916 (Vict.).

The legal issues before the High Court of Australia were whether the defendants had disclosed sufficient facts to entitle them to defend the action, particularly in light of the provisions of the Money Lenders Act 1915 (Vict.). The defendants' opposition to the summary judgment application was based on an affidavit alleging that the plaintiff was not a registered money lender, that the loan transaction was illegal, that the interest rate of 14% was excessive, and that a recent payment of £600 had been wrongly apportioned between principal and interest. The defendants argued that these matters raised a triable issue under the Money Lenders Act, which allows courts to reopen transactions where excessive interest is charged.

A majority of the High Court, comprising Knox C.J. and Gavan Duffy J., held that the defendants had not satisfied the requirements of Order XIV. They reasoned that the affidavit lacked specific facts demonstrating that the interest charged was excessive, which was a prerequisite for relief under the Money Lenders Act. While acknowledging the defendants' desire to defend on terms, the Court varied the order of the Supreme Court, granting leave to defend only upon the condition that the defendants provided security for a portion of the claimed sum within seven days. Isaacs J., dissenting, argued that the defendants' affidavit did disclose sufficient facts to raise a reasonable doubt and entitle them to defend, particularly given the substantial security held by the plaintiff and the potential implications of the Money Lenders Act.

Orders