Hay v Dalgety and Company Ltd

[1907] HCA 5

4 C.L.H.] OF AUSTRALIA.

913

[HIGH COURT OF AUSTRALIA.]

HAY

Appellant;

Plaintiff,

DALOETY & COMPANY LTD.

Respondents.

D efendants,

ON APPEAL FROM THE SUPREME COURT OF

VICTORIA.

Practice—Trial with a ju ry—Cause “ heretofore unthiu the coijnizance of the Court H. C. of A.

in its Equitable Jurisdicliou ’’—Action for damar/es fo r breach of covenant— 1907.

MorUjayor and mortyayee—Prolonyed, examination of documents or accounts—

-̂---- '

Rules of Su))7'eme Court (Viet.) 1884, Order X X X V I . , rr. 3, 4, .5, 6, 7. Melbourne,

March 25, 26.

A plaintiff alleged in his statement of claim, that, by a covenant in a mort-

____

Griffith C.J., Barton,

gage deed between himself as mortgagor and the defendants as mortgagees,

the defendants covenanted not to realize on the mortgage security until they O’Connor and

had realized on the security of a prior mortgage between the same parties

Hijrcins JJ.

given to secure the same debt, and that the defendants had committed a

breach of such covenant, and he claimed damages for such breach.

HeW, that the cause was one “ heretofore within the cognizance of the Court in its Eriuitable Jurisdiction,” within the meaning of Order XXXVI., r. 3 of Rules of the Supreme Court 1884, and therefore that the action must be tried before a Judge without a jury, unless the Court otherwise ordered.

Per Griffith C .J.:—The words “ any prolonged examination of documents or accounts ” in Order XXXVI., r. 5, refer to an examination by the jury.

Decision of the F’ull Court affirmed, but on a different ground.

Appeal from the Supreme Court of Victoria.

An action was brought in the Supreme Court by Adam Hay against Dalgety & Company Limited, in which the plaintiff by liis statement of claim made the following allegations :—That by an indenture dated 4th April 1889 made between the plaintifl

914 HIGH COURT

[1907.

H.	C. OF A. and the defendants, the plaintiff assigned to the defendants b}’
1907. way of mortgage to secure the repayment of moneys due and to

H aybecome due by the plaintiff" to the defendants, certain interests to

V.

Dalgety &

which he was entitled under the wills and in the estates of John

Co. Lt d .Moffat and Robert Moffat, deceased, and under the wills or in the

estates of various beneficiaries under these wills : That by another indenture dated 25th April 1885 made between the plaintiff and Robert Hay, of the one part, and the defendants of the other part, the plaintiff and Robert Hay assigned to the defendants, by way of mortgage to secure the repayment of the moneys therein referred to, a certain station known as Palparara in Queensland with the stock and working plant; That by the provisions of the indenture of 4th April 1889 it was covenanted and agreed by the defendants with the plaintiff that none of the powers of sale and realization contained in such indenture should be exercised by the defendants or their assigns until the powers of sale and realization contained in the indenture of 25th A]:)ril 1885 had been exercised for the purpose of enforcing repayment of moneys secured by the indenture of 4th April 1889 : That the defendants in breach of the provisions of the indenture of 4th April 1889, exercised the powers of sale and realization therein contained before the powers of sale and realization in the indenture of 25th April 1885 were exercised, and had received large sums of money on account thereof. The plaintiff alleged as particulars of breach that the defendants collected, received and retained moneys representing the interests of the plaintiff and the income there­ from. As particulars of special damage, the plaintiff alleged that the defendants collected, received and retained the moneys as aforesaid ; that at the time of such collection and receipt Palparara Station and the stock and working plant was of sufficient value to pay all moneys owing by the plaintiff to the defendants, and might have been realized by the defendants for a sum sufficient to pay the moneys owing as aforesaid ; and that Palparara Station and the stock and working plant had since depreciated in value and become insufficient to pay moneys owing to the defendants at the time of such collection and receipt as aforesaid or at all. The plaintiff claimed £40,000 damages for such breach. By their defence the defendants denied the breach and, gener-

4 C.L.R.] OF AUSTRALIA.

91.5

ally, alleffed that by virtue of assignments by the plaintiff' and H. C. of A.

by a sequestration of his estate in Queensland the plaintiff had

lost all his interest in the property and interests the subjects of H ay

r.

the mortgages.

D a i.gety' &

Co. Ltd.

On summons for directions the plaintiff sought to have the action tried bj' a jury, but Hodges J., who heard the summons, directed that the trial should be by a Judge without a juiy, holding that the action was one which involved a prolonged examination of documents and accounts, within the meaning of Order XXXVI.,

r.

5 of the Rules of the Supreme Court, 1884. From this order the plaintiff appealed to the Full Court, but

the appeal was dismissed.

The plaintiff, having obtained leave, now appealed to the High

Court.

Mitchell K.C. and Starks, for the appellant. This action comes within r. 6 of Order XXXVI. of the Rules of the Supreme Court, 1884, and the plaintiff has a right to a trial with a jury. The action is an ordinary common law action for damages for breach of covenant. R. 6 is supplementary to r. 2: Jenkins v. Bmhby (1). R. 5 only applies where, if the action were tried with a jury, there would be required a prolonged examination of documents or accounts by the jury, and tliat would not be the case here. See Shafto v. Bolckuw, Vaughan & Co. (2); The “ Temple Bar ” (3j. The only (juestion is the amount of damages, and that depends upon the value of the plaintiff’s interests.

Irvine K.C. (with him Pigoit), for the respondents. The plaintiff has no right to a trial with a jury. The action does not come under r. 6, but under rr. 4 and 7 («). See sec. 258 of the Common Law Procedure Statute 1865.

[ G u i f f i t h C.J.—This action would have been cognizable by the Court in its equitable jurisdiction, and w'ould therefore come within r. 3 : Bank of New South [Vales v. O’Connor (4).]

The real foundation of the action is that by reason of some principle of equity the defendants were under an obligation.

(1) (1891) 1 Cli., 484, at p. 490.(3) II P.D., 6.

(2) 35 W.R., 686.

(4) 14 App. Cas., 273.

916 HIGH COURT

[1907.

H. C. OF A. when they had to realize on any of the securities, to realize on

the station property first.

H av

[Griffith C.J. referred to Baring Brothers & Co. v. North

V.

Dalgety &

Western of Uruguay Railway Co. (1).

Co.

Ltd .

H iggins J. referred to Clow v. Harper (2); Mayer v. Murray (3); Coote on Mortgages, 7tli ed., p. 922.]

Counsel also referred to Angell v. Felgate (4); Coles v. Civil

Service Supply A.ssociation (5).

Mitchell K.C. in reply. The relief claimed is simply for breach of covenant, and the action could only have been brought in the Courts of common law, even if the damages recoverable are only nominal. In Bank of New South Wales v. O’Connor (6), the Court held that an action by a mortgagor against a mortgagee for detinue of deeds will not lie, but that the mortgagor must bring an action for redemption. In Baring Brothers & Go. v. North Westeini of Uruguay Railway Co. (1) there was a claim for a declaration that the defendants were trustees.

[H iggins J. referred to Deverges v. Sandeman, Clark & Co. (7).] Counsel also referred to Story’s Equity Jurisprudence, 13th ed., vol. II., p. 122 ; Barns v. Queensland National Bank Lid. (8); Rogers V. Mutton (9); Bindley on Partnership, 7th ed., p. 594.

Griffith C.J. In this case, which is an action by a mortgagor against his mortgagees claiming damages in respect of a breach of a covenant entered into in one of two mortgage transactions, an application was made by the plaintiff to Hodges J , upon summons for directions as to the mode of trial, that the case should be tried before a jury. The learned Judge refused to make an order for trial before a jury, and the Full Court dismissed an appeal against that refusal.

The case made by the plaintifl' depends upon Order XXXVI., rr. 4, 5 and 6, of the Rules of the Supreme Court 1884. Rule 4 provides th a t:—“ The Court or a Judge may, if it shall appear

(1) (1893) 2 Q.B., 406.

[(6) 14 App. Cas., 273.

(2) 3 Ex. D., 198.(7) (1902) 1 Ch., .579.

(3) 8 Ch.D., 424.(8) 3 C.L.R., 92a.

(4) 7 H. & N. 396 ; 31 L.J. Ex., 41.(9) 7 H & N., 733 ; 31 L..J. Ex., 275.

(5) 32 W.H., 407.

4 C.L.R.J OF AUSTRALIA.

917

desirable, direct a trial without a jury of any que.stion or issue of R- t-'. or A.

fact, or partly of fact and partly of law, arising in any cause

or matter whicli previously to the pa.ssing of the Act could, H av

V.

without any con,sent of parties, have been tried without a jury.”Dalgety &

Rule 5 provides th a t;—“ The Court or a Judge may direct the Co. Ltd .

trial without a jury of any cause matter or i.ssue i-equiring pro­

Griffith C.J.

longed examination of documents or accounts, or any .scientific or local investigation, whicli cannot in their or his opinion con­ veniently be made with a jury.” Rule (i provides th a t:—" In any other cause or matter, upon the application of any partj’ thereto for a trial with a jury of the cause or matter or any issue of fact, an order shall be made for a trial with a juiy.” Tlie plaintitf relied upon r. 6. '̂ Î’he defendants relied upon r. 5, alleg­ ing that the case was one which required a prolonged examina­ tion of documents and accounts which could not conveniently be made with a jury. That view commended itself to the learned Judge of first instance, ddie pleadings, which alone were before the learned Judge, .set out a number of mortgages and assign­ ments, and the learned Judge thought that those documents would have to be examined at length, and that there would be a prolonged examination of them within the meaning of r. 5. He also thought that, as the measure of damages would depend on the amount owing under the main mortgage and the subsidiary mortgages, that would involve a prolonged examination of accounts. The learned Judges of the Full Court appear to have been of the same opinion.

In my opinion the words “ any prolonged examination of documents or accounts ” refer to an examination by the jury before they can give their verdict, and not to an examination b}’ the Judge, altliough the documents or accounts may be long and may take some time to examine. In the present case the docu­ ments referred to would not be submitted to the jury, but it would be for the Judge to tell the jury what was their legal effect. As to accounts, there would be no more than a few sums in arithmetic. So that I cannot agree with the reason of the learned Judges in either Court in refusing a jury.

But attention is now called to rule 4, which provides that “ the Court or a Judge imxy . . . dii-ect a trial without a jury of

918 HIGH COURT

[1907.

H. C. OF A. a n y question or issue of fact, or partly of fact and partly of law,

arising in any cause or matter which previously to the pa.ssiug of

H aythe Act could, without any consent of parties, have been tried

V.

without a jury.”

It is settled by the case of Baring Brothers if-

Dalgety &

Co. L td.Go. V. North Western of Uruguay Railway Co. (1) that, if tlie Griffith C.J.action is one which before the Judicature Act might liave been brought in Cliancery, the circumstance that the plaintitf frames his action as one in the Queen’s Bencli does not entitle Iiim to a jury as of right.

Could, tlien, this action have been brought in the eipiitable jurisdiction of the Court and tried without a jury before the passing of the Judicature A ctt Rxile 3 is called in aid. It says ;—“ Cau.ses or matters Iieretofore witliin the cognizance of the Court in its equitable jurisdiction shall be tried by a Judge without a jury, unless the Court or a Judge shall otlierwi.se order.” Could, then, this action be cognizable in the eipiitable juri.sdiction of the Court ? The plaintitf's claim is thus stated; — He is the mortgagor and the defendants are his mortgagees. Under the terms of the mortgage he was entitled to have certain parts of the mortgaged property realized in a specified order, and he alleges that, by reason of the defendants failing to perform that expre.ss obligation, he sustained considerable loss. That is obviously a claim of precisely the same nature as a claim ba.sed on wilful default on the part of a mortgagee. It is called here a breach of covenant. It cannot be disputed that, in a suit for redemption by a mortgagor, he would be entitled to have all those matters investigated, and to get credit for all money which would have been received by the mortgagee if he had performed his covenant instead of breaking it. It .seems to me perfectly obvious that this is a case which before the Judicature Act would have been within the cognizance of the Court in its equit­ able jurisdiction; and, therefore, that it must be tried without a jury unless otherwise ordered. The learned Judge refused to make .such an order, and I am of opinion that his order was right.

B arton J. I entirely concur.

I think it is impossible to

(1) (1893) 2 Q.B., 406.

4 C.L.R.] OF AUSTRALIA.

919

escape from the authority of Bariitg Brothers & Co. v. North

H. C. OF A.

1907.

Western of Uruguay Raihvay Co. (1).

One cannot help feeling

glad that a jury need not be summoned to try a case of this H ay

V.

kind.D algety

k

Co. L t d .

O’CONNOK J. I am of the same opinion. It is quite clear that the defendants have not established that the case is one coming under Order XXXVI., r. 5. The onus is upon the party a.sserting that the case requires a prolonged examination of docu­ ments or accounts to bring the case within that rule, and there is no evidence furnished by the pleadings themselves to support that assertion. I agree witli His Honor the Chief Justice that the prolonged examination of documents or accounts must mean a prolonged examination by the jury and not by the Judge. But, on the ground last argued, I tliink it is clear that the right to a trial before a Judge without a jury exists in this case, inasmucli as it is a cause or matter wliich w'as heretofore within the cognizance of the Court in its ecjuitable jurisdiction. From the authority of Baring Brothers & Co. v. NortJt WeUern of Urthguay Railway Co. (1) it is impossible to escape. The substance of that case is this;—That where a cause of action is one which might be brought eitlier in a Court of equit}' or in a Court of common law, the plaintiff cannot insist on a right to a jury merely because he puts his claim in a form in which it would be cognizable in a Court of common law. For these reasons I am of opinion that the appeal should be dismissed.

O'Connor J.

H iggins J.

I also am of opinion that the appeal should be

dismissed.

Appeal dismissed with costs.

Solicitor, for appellant, D, H. Herald.

Solicitors, for respondents, Blake <&

Riggall.

B. L.

(1) (1893) 2 Q.B., -106.