Cohen v Cohen

Case [1929] HCA 15


42 CLR 91

Contract-Husband and wife-Arrangement as to dress allowance-No resulting contract

-Limitation of actions-Defendant receiving money for plaintiff--Whether to be accounted for specifically or merely as a debt-Express trust-Debt-Effect of Statute of Limitations-Acknowledgment in writing-Right of action accruing- Time within which-Onus of proof-Statute of Limitations 1623 (21 Jac. I. May 28, 29 c. 16)-Supreme Court Act (Vict.) 1915 (No. 2733), secs, 57 (2), 79, 85. Practice-High Court-Original jurisdiction-Statutes of Limitations-Whether in

force in action tried in High Court-Supreme Court Act 1915 (Vict.) (No. 2733), sec. 79-Judiciary Act 1903-1927 (No. 6 of 1903-No. 9 of 1927), secs, 79, 80.

42 CLR 92

(1) An arrangement between intending husband and wife for a dress allowance to the wife held not to be a contract because not intended to affect or give rise to legal relations or to be attended with legal consequences.

Balfour v. Balfour, (1919) 2 K.B. 571, and Rose &Frank Co. v. J. R. Crompton &Bros. Ltd., (1923) 2 K.B. 261, (1925) A.C. 445, applied.

(2) Though the Statute of Limitations 1623 (21 Jac. I. e. 16) by its terms does not operate directly upon equitable remedies, such remedies are barred in Courts of equity by analogy to the statute. The analogy is found in the case of constructive trusts, where the equity is fastened upon the trustee not because he intended to become the fiduciary of property but because of the character of his dealings and in spite of his intention to take the property for himself. But Courts of equity have refused to see any analogy when a person, intending to act in a capacity which is fiduciary, has received as and for the beneficial property of another, something which he is to hold, apply or account for specifically for his benefit. Such a person is either an express trustee or, if that name does not in strictness belong to him, he stands in the same position as a direct or express trustee.

Principles in Soar v. Ashwell, (1893) 2 Q.B. 390, Burdick v. Garrick, (1870) L.R. 5 Ch. 233, Lyell v. Kennedy, (1889) 14 App. Cas. 437, and Henry V. Hammond, (1913) 2 K.B. 515, applied.

Held, therefore, that where the plaintiff entrusted the sale of her furniture to the defendant and authorized him to receive the proceeds on her behalf, and where the defendant received money from an insurance company on account of a loss sustained by the plaintiff, the defendant was under an obliga- tion to account specifically for the money, the receipt of which was not intended to create a mere debt; and that, therefore, the Statute of Limitations did not apply to an action to recover such sums but that where the plaintiff was entitled to payment of a sum of money from a person in Germany and authorized the defendant to obtain such money and pay it to her, the transaction which the parties performed to enable the defendant to acquire such money showed that he was not expected to…

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Cohen v Cohen [1929] HCA 15
Case
[1929] HCA 15
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CaseChat Overview and Summary

This case involved a dispute between a husband and wife, Lionel Cohen (the defendant) and Dolly Cohen (the plaintiff), heard in the High Court of Australia. The plaintiff sought to recover a total of £1,200 across several causes of action, including money collected from Germany, proceeds from the sale of her furniture, an insurance payout, money paid at the defendant's request, arrears of a dress allowance, and sums due on promissory notes. The defendant raised defences including the Statute of Limitations and payment.

The court was required to determine several legal issues. Firstly, whether an arrangement for a dress allowance between the parties constituted a legally binding contract. Secondly, whether certain claims were barred by the Statute of Limitations, particularly in relation to whether the defendant held funds as an express trustee or merely as a debtor. Thirdly, whether a written document signed by the defendant constituted a sufficient acknowledgment of debt to take certain claims out of the Statute of Limitations. Finally, the court needed to ascertain the correct rate of exchange for converting German marks into sterling for one of the claims.

Dixon J. held that the arrangement for a dress allowance was not a contract, as it was not intended to create legal relations, applying the principles from *Balfour v. Balfour* and *Rose & Frank Co. v. J. R. Crompton & Bros. Ltd.*. Regarding the Statute of Limitations, the court distinguished between situations where a person receives money with a duty to account specifically for it, which is treated as an express trust and not barred by the statute, and situations where the recipient is merely a debtor. The court found that the proceeds from the sale of furniture and the insurance payout fell into the former category, meaning the Statute of Limitations did not apply to these claims. However, the claim relating to German marks was found to be subject to the Statute of Limitations. The court also determined that a document signed by the defendant stating "In case of my becoming bankrupt and death I owe you £1,000 for money lent" constituted a sufficient acknowledgment of debt to prevent the Statute of Limitations from barring claims that amounted to £1,000, despite the layman's description of the debt as "money lent." The court also noted that the onus of proof for a cause of action arising within six years generally lies with the plaintiff.

The court ordered that the plaintiff was entitled to recover sums for the insurance payout (£80) and the furniture proceeds (£123), as well as £60 for money paid at the defendant's request and £175 on seven of the eight promissory notes. Judgment was entered for the defendant on the dress allowance claim. An inquiry was ordered to determine the correct rate of exchange for the German marks claim, with the plaintiff to recover the sterling equivalent of 9,000 marks plus £12. The plaintiff's costs were to be paid by the defendant.

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Background

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