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Harvey v Edwards Dunlop & Co Ltd

Harvey v Edwards Dunlop & Co Ltd

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Case Copied 13 April 1927 18 min read

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EDWARDS, DUNLOP AND COMPANY LIMITED RESPONDENT.

ON APPEAL FROM THE SUPREME COURT OF Contract-Guarantee-Parol agreement to answer for the debt of another-Memorandum

in writing-Liability imposed on particular asset-Statute of Frauds (29 Car. II. c. 3), sec. 4--Instruments Act 1915 (Vict.) (No. 2672), sec. 228. MELBOURNE,

The respondent entered into an oral agreement with the appellant and a Mar. 18, 21.

company in which the appellant was interested, whereby it was agreed that SYDNEY,

in consideration of the respondent refraining from signing judgment in an April 13.

action against the company the appellant would execute a power of attorney authorizing the attorney to sell certain property of the appellant in Scotland at such time and upon such terms as would allow the attorney to pay the sum for which the company was sued to the respondent at its London office before a certain date, and the appellant would SO instruct the attorney. An implied term of the agreement was that the appellant had not done and would not do anything calculated to impede the sale. In an action in the Supreme Court of Victoria by the respondent against the appellant for a breach of this agreement, Dixon A.J. held that the agreement was not a special promise to answer for the debt of another within the meaning of sec. 228 of the Instruments Act 1915 (Vict.) and that therefore no note or memorandum in writing of it was necessary, and he gave judgment for the respondent. On appeal to the High Court,

Held, that the appeal should be dismissed: By Knox C.J., Gavan Duffy and Starke JJ., on the ground that, whether the agreement was or was not a special promise to answer for the debt of another, certain correspondence which took place between the solicitors of

39 CLR 303

the parties and the power of attorney were SO connected together as to constitute a memorandum in writing containing all the terms of the agreement, which was sufficient to satisfy sec. 228;

By Higgins J., on the ground that the agreement was not a special promise Decision of the Supreme Court of Victoria (Dixon A.J.): Edwards, Dunlop &Co. LTD. &Co. v. Harvey, (1927) V.L.R. 37; 48 A.L.T. 125, affirmed.

APPEAL from the Supreme Court of Victoria.

An action was brought in the Supreme Court by Edwards, Dunlop &Co. against James Allen Harvey in which, by its statement of claim, the plaintiff alleged that the defendant was at all material times a substantial shareholder in the Inter-State Stationery Manufacturing Co. Pty. Ltd., and that the plaintiff had instituted proceedings against the Inter-State Stationery Manufacturing Co. Pty. Ltd. in the County Court to recover payment for certain goods bought by the Inter-State Stationery Manufacturing Co. Pty. Ltd. from the plaintiff. Certain alternative agreements between the plaintiff and the defendant were then alleged, the only material one being stated as follows (par. 5) :- In consideration of the plaintiff agreeing not to proceed to judgment against the Inter-State Stationery Manu-…

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.

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Details

Case: [1927] HCA 13
Decision Date: 13 April 1927

CaseChat Overview and Summary

The case of *Harvey v Edwards Dunlop & Co Ltd* involved an appeal to the High Court of Australia from a decision of the Supreme Court of Victoria. The respondent, Edwards Dunlop & Co Ltd, had sued the appellant, Mr Harvey, for breach of an oral agreement. The agreement stipulated that in consideration of the respondent refraining from signing judgment against a company in which the appellant was interested, the appellant would execute a power of attorney authorising an attorney to sell certain Scottish property. The proceeds of this sale were to be used to pay the respondent a specific sum of money before a certain date, and an implied term was that the appellant would not impede the sale. The Supreme Court had found in favour of the respondent, holding that the agreement did not fall within the Statute of Frauds, thus not requiring a written memorandum.

The legal issues before the High Court were twofold: firstly, whether the oral agreement constituted a "special promise to answer for the debt, default or miscarriage of another" within the meaning of section 228 of the *Instruments Act 1915* (Vic), and secondly, if it did, whether there existed a sufficient note or memorandum in writing of the agreement to satisfy the statutory requirements. The appellant contended that the agreement was indeed a guarantee and that no sufficient written memorandum existed.

A majority of the High Court, comprising Knox C.J., Gavan Duffy and Starke JJ., dismissed the appeal. They found that even if the agreement was considered a special promise to answer for another's debt, a sufficient memorandum in writing was established through a series of connected correspondence between the parties' solicitors and the executed power of attorney. This documentation, when read together, contained all the essential terms of the agreement. Higgins J. concurred with the dismissal of the appeal, but on the primary ground that the agreement was not a special promise to answer for the debt of another, as the appellant's liability was confined to the proceeds of a specific asset and did not extend to his general assets. Therefore, the Statute of Frauds was not applicable.

Orders