Gray v Dalgety and Co Ltd - [1914] HCA 81

DALGETY &CO. LTD.

RESPONDENTS. DEFENDANTS,

ON APPEAL FROM THE SUPREME COURT OF Contract-Agency-Agreement to procure loan on mortgage-Evidence-Contract

concerning interest in land-Instruments Act 1890 (Vict.) (No. 1103), sec. 208 (Statute of Frauds (29 Car. II. c. 3), sec. 4). MELBOURNE,

In an action in which the plaintiff alleged an oral contract by which the Oct. 21, 22,

defendants agreed to raise for the plaintiff the sum of £84,000 upon the 23, 24.

security of the plaintiff's station, of which £72,000 or thereabouts was to be SYDNEY,

secured upon first mortgage of the station at 4 per cent., and £12,000 upon second mortgage of the station at 5 per cent., and that the defendants had not raised that sum or any part thereof,

Held, by Isaacs and Powers JJ. (Griffith C.J. dissenting), (1) that upon the evidence reasonable men might have come to the conclusion that the defen- dants for valuable consideration had undertaken to find some person or persons able and willing to lend the plaintiff £72,000 at 4 per cent. on first mortgage, and £12,000 at 5 per cent. on second mortgage, of the plaintiff's station, other terms being reasonable; (2) that such an agreement was an enforceable contract; (3) that under such a contract the defendants were not entitled to lend their own money; and (4) that such a contract was not a contract concerning an interest in land, and was therefore not within the Statute of Frauds, sec. 4 (Instruments Act 1890 (Vict.), sec. 208).

Decision of the Supreme Court of Victoria reversed.

APPEAL from the Supreme Court of Victoria.

An action was brought in the Supreme Court by John Guthrie

19 CLR 357

Gray against Dalgety &Co. Ltd., in which the plaintiff by his statement of claim alleged that in August 1907 he was in posses- sion of a station called " Kentucky,". in New South Wales, under a lease from the City of Melbourne Bank Ltd. to him with an option of purchase at a certain price which he then contemplated exercising and that the defendants at all material times had knowledge of those facts. The statement of claim then pro- ceeded :-

8. The defendant for reward to it and in consideration of the plaintiff entrusting it exclusively with the raising of money for the purchase of Kentucky Station aforesaid and refusing an offer of one Griffiths to lend to or procure for the plaintiff the sum of £84,000 at per centum per annum on the security of the said Kentucky Station agreed with the plaintiff on or about 26th August 1907 to raise for the plaintiff and promised that it would raise for the plaintiff the sum of £84,000 upon the security of Kentucky Station aforesaid of which the sum of £72,000 or thereabouts was to be secured upon first mortgage of the said station at 4 per centum per annum and the balance of £12,000 or thereabouts on second mortgage of the said station at 5 per centum per…

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.

Continue reading Gray v Dalgety and Co Ltd

Details

AGLC: Gray v Dalgety and Co Ltd [1914] HCA 81
Case: [1914] HCA 81
Decision Date: 18 December 1914

CaseChat Overview and Summary

John Guthrie Gray (the plaintiff) brought an action against Dalgety & Co Ltd (the defendants) in the Supreme Court of Victoria. The plaintiff alleged an oral contract whereby the defendants agreed, for reward, to raise £84,000 for him on the security of his station property, "Kentucky". The sum was to be secured by a first mortgage of £72,000 at 4% interest and a second mortgage of £12,000 at 5% interest. The plaintiff claimed damages for the defendants' failure to raise the money. The defendants denied the contract and pleaded the Statute of Frauds. The trial judge directed a verdict for the defendants, which was upheld by the Full Court of Victoria. The plaintiff appealed to the High Court of Australia.

The legal issues before the High Court were: (1) whether, on the plaintiff's version of the conversation, there was sufficient evidence upon which reasonable men could conclude that the defendants had undertaken to find lenders for the specified sums and interest rates; (2) whether, if such an agreement existed, it constituted an enforceable contract; (3) whether the defendants were entitled to lend their own money under such a contract; and (4) whether the contract was one concerning an interest in land, and therefore subject to the Statute of Frauds.

By majority, the High Court (Isaacs and Powers JJ., Griffith C.J. dissenting) held that the evidence was capable of supporting a finding that the defendants had undertaken for valuable consideration to find persons willing to lend the plaintiff the specified sums on the terms outlined, with other terms being reasonable. The Court further held that such an agreement was an enforceable contract, and that under its terms, the defendants were not entitled to lend their own money. Crucially, the majority found that the contract was not one concerning an interest in land, and thus was not barred by the Statute of Frauds.

The High Court reversed the decision of the Supreme Court of Victoria, finding that there was evidence upon which a jury could find a contract existed and that it was not void under the Statute of Frauds. The case was remitted for a new trial.

Orders