Leipner v McLean

The appellant, Mary S. Leipner, sued the respondent, Norman McLean, for damages for breach of contract. The dispute concerned an alleged agreement by the respondent to pay a sum of money to the Master in Equity on behalf of the appellant, which the appellant claimed was a term of a larger transaction involving a mortgage and further charge over her property. The respondent pleaded that the agreement was within the Statute of Frauds and lacked a sufficient memorandum in writing. The High Court of Australia heard the appeal from the Supreme Court of New South Wales.

The legal issues before the court were whether the alleged agreement to pay money to the Master in Equity was a term of the main written agreement for the mortgage and further charge, or a collateral agreement, and consequently, whether it was subject to the Statute of Frauds. Additionally, the court had to determine whether there was sufficient evidence of authority for the respondent's agent to bind him to such a collateral agreement.

The High Court held that it was a question of fact for the jury to determine whether the verbal promise to pay the money to the Master in Equity was intended to be a term of the main agreement, which was subsequently reduced to writing, or whether it constituted a collateral agreement relating solely to the application of the advanced money. The court reasoned that if it was a collateral agreement, it would not be subject to the Statute of Frauds. Furthermore, the court found that there was sufficient evidence from the respondent's own affidavits in separate proceedings to raise an inference that the agent had the authority to enter into the alleged collateral agreement, even if the written documents did not explicitly record it.

The High Court allowed the appeal, reversed the decision of the Supreme Court, and ordered a new trial. The court indicated that objections based on procedural defects that could be cured by amendment would not prevent it from dealing with the case as if such amendments had been made.