ON APPEAL FROM THE SUPREME COURT OF Local Government-Power of municipal corporation to make contracts-Statute
providing that council of municipality " may" make contracts in manner pre- scribed-Whether statute exhaustive of power-Contract by officer of council on its behalf-Claim by other contracting party on common count for work and labour done-Local Government Act 1928-1946 (No. 3720-No. 5119) (Vict.), SYDNEY,
Costs-Alternative claims against two defendants-Plaintiff succeeding as against
one, failing as against other, defendant.
The Local Government Act 1928 (Vict.), S. 501 (1), provided: The council of every municipality may in the name and on behalf of the municipality enter into contracts for the purposes of this Act and every such contract may be
(c) any contract which if made between private persons would be by law valid although made by parol only and not reduced into writing the councillors or any two of them acting by the direction and on behalf of the council may make by parol only without writing."
A shire council passed a resolution that its steam roller should be repaired then, while the council was still in session, the shire president, with the assent of the other councillors, directed the shire engineer to ascertain whether the plaintiff company was willing to do the work and, if so, to send the roller to the company. The engineer delivered the roller to the company with a request for its repair. The company repaired the roller and returned it to the council. The council relied on S. 501 (1) (c) of the Local Government Act 1928 and refused to pay for the work done. The company brought an action against
the corporation of the shire and its engineer, claiming payment on a common count for work and labour done, and, in the alternative, as against the engineer, damages for breach of warranty of authority. The trial judge gave judgment
Held that the company was entitled to recover from the shire payment for By Latham C.J., Starke, McTiernan and Williams JJ., because a contract binding on the municipality in accordance with S. 501 (1) (c) of the Act for the execution of the work had been made by the councillors through the agency of the engineer.
By Dixon J., because, for a purpose for which the municipal corporation was established, it had obtained the benefit of the work done by the plaintiff company in pursuance of a simple contract made under the authority of the council and the acceptance of the executed consideration implied a promise to pay which was enforceable by a common money count notwithstanding 8.
Per Dixon and Williams JJ.: Section 501 is permissive merely and is not an exhaustive statement of the manner in which municipal corporations may enter into binding contracts.
Shire of Gisborne v. Murphy, (1881) 7 V.L.R. (L.) 63, President, &., of Shire of Leigh v. President, &., of Shire of Hampden,…
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.
Continue reading Johnsons Tyne Foundry Pty Ltd v Maffra Corporation
Johnsons Tyne Foundry Pty Ltd (the plaintiff) brought an action against the Shire of Maffra (the defendant) and its engineer, H. J. Hallows, seeking payment for repairs undertaken on the Shire's steam roller. The plaintiff claimed the sum of £1,470 3s. 6d. for work and labour done and materials provided. The plaintiff also brought alternative claims against the engineer for breach of warranty of authority. The Supreme Court of Victoria, per Lowe J., dismissed the action against both defendants, finding that the plaintiff had failed to establish a contract with the Shire that complied with section 501(1)(c) of the Local Government Act 1928 (Vic), and that the engineer had not warranted an authority he did not possess. The plaintiff appealed to the High Court of Australia regarding the judgment in favour of the Shire.
The High Court was required to determine whether a binding contract for the repair of the steam roller had been made between the plaintiff and the Shire. Specifically, the court had to consider the interpretation and application of section 501 of the Local Government Act 1928 (Vic), which prescribed the manner in which municipal councils could enter into contracts. The central question was whether this section was mandatory, precluding the formation of a binding contract if not strictly followed, or merely permissive. The court also considered whether, even if section 501 was not strictly complied with, a contract could be implied at common law, or if the actions of the councillors and the engineer constituted a valid contract under section 501(1)(c) through agency.
A majority of the High Court, comprising Latham C.J., Starke, McTiernan, and Williams JJ., held that the plaintiff was entitled to recover from the Shire. Their Honours reasoned that a contract binding on the municipality had been made in accordance with section 501(1)(c) of the Act, with the councillors acting through the agency of the shire engineer. Dixon J. concurred in the outcome, finding that the municipality had obtained the benefit of the work done under a simple contract made with the council's authority, and that the acceptance of the executed consideration implied a promise to pay, enforceable by a common money count, notwithstanding section 501. Dixon and Williams JJ. also expressed the view that section 501 was permissive and not exhaustive of the ways in which municipal corporations could enter into binding contracts.
The High Court allowed the appeal, setting aside the judgment of the Supreme Court in favour of the Shire. The plaintiff was awarded judgment against the Shire for the full amount claimed, £1,470 3s. 6d., together with costs. The court also ordered that the Shire pay the plaintiff's costs of the appeal and the costs incurred by the plaintiff in the Supreme Court in favour of the engineer, applying the principle in *Bullock v. London General Omnibus Co.*.