ON APPEAL FROM THE SUPREME COURT OF Mortgage Deed-Action for detinue by mortgagee-Verdict for amount made up of
mortgage debt and interest-Payment by defendant of amount of verdict-Action by mortgagee against mortgagor to recover mortgage debt and interest-Suit in SYDNEY,
equity by defendant in action for detinue to restrain mortgagee's action-Refusal April 3;
of interlocutory injunction-Subsequent payment by mortgagor to mortgagee- May 2.
Appeal to High Court-Remedy on appeal.
In an action in the Supreme Court of New South Wales by a mortgagee against a firm of solicitors, who had charge of the mortgage deeds, for detinue of the deeds a verdict was given for return of the deeds or their value, being the amount of the mortgage debt and interest thereon up to the date of the writ, and also one shilling damages for detention of the deeds. The amount of the verdict was paid by the solicitors. Subsequently the mortgagee instituted an action against the mortgagors to recover the amount of the mortgage debt and interest thereon. A suit in equity against the mortgagee and the mortgagors was then brought by the solicitors, claiming (inter alia) a declaration that they were entitled to the benefits of the mortgage and the use of the mortgagee's name in enforcing the same; alternatively, that the mortgagee should be declared a trustee of the mortgage and of all the rights thereunder for the solicitors an injunction restraining the mortgagee from receiving any of the moneys secured by the mortgage or from further proceeding with the action against the mortgagors and an injunction restraining the mortgagors from paying any moneys to the mortgagee. Interim injunctions, in the terms mentioned, to continue until a fixed date
were granted, but the Court dismissed a substantive application to continue the injunctions until the hearing of the suit. Subsequently the mortgagors paid the amount of the mortgage debt and the interest thereon to the mortgagee. On appeal to the High Court from the order refusing to continue the injunctions,
Held, by Knox C.J., Gavan Duffy and Starke JJ. (Isaacs and Rich JJ. dissenting), without determining whether the order was rightly or wrongly made, that in the absence of evidence that the mortgagee was impecunious or in such a position that the moneys in question could not be recovered by the solicitors if they should establish any right to such moneys, the appeal should be dismissed without prejudice to the solicitors' right (if any) to the moneys in question in the suit.
Decision of the Supreme Court of New South Wales (Harvey J.): Heavener V. Loomes, (1923) 24 S.R. (N.S.W.) 104, varied and affirmed.
APPEAL from the Supreme Court of New South Wales.
A suit was brought in the Supreme Court in its equitable jurisdiction by Bertram Theodore Heavener and Clarence Ernest Chapman against Johannah Loomes, Percy Victor Dennis, Daisy Margaret Dennis, Herbert William Dennis and Martha Dennis, in which the statement of claim…
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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Heavener v Loomes [1924] HCA 10
Case
[1924] HCA 10
Decision Date
CaseChat Overview and Summary
The case of *Heavener v Loomes* concerned a dispute arising from a mortgage. The plaintiffs, solicitors, had been sued in detinue by the mortgagee, Mrs. Loomes, for the return of mortgage deeds. A verdict was entered for Mrs. Loomes, requiring the return of the deeds or payment of their value, which was assessed at the amount of the mortgage debt plus interest up to the date of the writ. The solicitors paid this amount. Subsequently, Mrs. Loomes commenced a new action against the mortgagors to recover the mortgage debt and interest. The solicitors then sought an injunction to restrain Mrs. Loomes from pursuing this action and from receiving any payments from the mortgagors, arguing they were entitled to the benefit of the mortgage security. The Supreme Court of New South Wales refused to continue the interlocutory injunctions, and the solicitors appealed to the High Court.
The central legal issues before the High Court were whether the solicitors, having paid the assessed value of the mortgage deeds in the detinue action, were subrogated to the mortgagee's rights and entitled to recover the mortgage debt from the mortgagors, and whether the mortgagee was estopped from pursuing the mortgagors after accepting the assessed value of the deeds. The court also had to consider the effect of the mortgagors subsequently paying the mortgage debt and interest to the mortgagee after the appeal had been lodged.
A majority of the High Court (Knox C.J., Gavan Duffy and Starke JJ.) dismissed the appeal. They noted that the mortgagors had paid the mortgage debt and interest to the mortgagee after the Supreme Court's decision. In the absence of evidence that the mortgagee was impecunious or unable to repay the moneys if the solicitors were found to be entitled to them, the majority considered it best to dismiss the appeal without prejudice to the solicitors' rights in the ongoing suit. Isaacs and Rich JJ. dissented, arguing that the Supreme Court should have determined the legal question of whether the solicitors were entitled to the mortgage debt, rather than deferring the decision. They believed that the payment of the assessed value of the deeds in the detinue action, which represented the mortgage debt and interest, effectively constituted an involuntary sale of the mortgage security to the solicitors, thereby entitling them to the benefit of the mortgage.