Heavener v Loomes

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.