Hume v Monro

The appellants, Stanley William Huon Hume and others, initiated a suit in the equitable jurisdiction of the Supreme Court of New South Wales against Cecil Owen James Monro and others, including Holt Sutherland Co. (1933) Ltd. The dispute concerned the alleged liability of the appellant Hume for rent and other payments in relation to certain land. The appellants sought declarations that there was no privity of interest or future liability between Hume and the respondent company concerning the land.

The primary legal issue before the court was whether the Supreme Court, in its equitable jurisdiction, possessed the power to grant the declaratory decrees sought by the plaintiffs, particularly when no consequential relief was claimed. This question arose from a preliminary point of law raised by the respondent company, which argued that the plaintiffs had no equity entitling them to proceed in equity and that any remedy lay at law.

The High Court, by majority, reversed the decision of the Supreme Court. The Court reasoned that the jurisdiction to make a declaratory decree under section 10 of the Equity Act 1901 (N.S.W.), as amended, extends to declaring the non-existence of equitable rights or interests in a defendant, not merely their existence in the plaintiff. Furthermore, when a submission of "want of equity" is argued as a preliminary point of law under rule 155 of the Consolidated Equity Rules, the court is entitled to consider the entire record, not just the statement of claim, to determine if an equity exists. The Court found that the statement of defence, when considered with the statement of claim, indicated that the respondent company was asserting a claim that could be considered equitable, thus attracting the jurisdiction of the equity court.

The High Court allowed the appeal, discharged the order of the Supreme Court, and ordered that the determination of the point of law be deferred until after evidence had been taken at the hearing. The parties were granted liberty to amend their pleadings, and costs were reserved.