HIGH COURT OF AUSTRALIA
KIEFEL CJ,
GAGELER, GORDON, EDELMAN AND STEWARD JJMATTHEW WARD PRICE AS EXECUTOR OF
THE ESTATE OF ALAN LESLIE PRICE
(DECEASED) & ORS APPELLANTSAND
CHRISTINE CLAIRE SPOOR AS TRUSTEE & ORS RESPONDENTS
Price v Spoor
[2021] HCA 20
Date of Hearing: 4 March 2021
Date of Judgment: 23 June 2021B55/2020
ORDER
Appeal dismissed with costs.
On appeal from the Supreme Court of Queensland
Representation
T Matthews QC with D D Keane and J K Carter for the appellants (instructed by MA Kent & Associates)
N Andreatidis QC with A F Messina and S J Gibson for the respondents (instructed by Mullins Lawyers)
Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.
CATCHWORDS
Price v Spoor
Limitation of actions – Exclusion by agreement – Where mortgages over land secured loan – Where mortgagors failed to repay loan – Where mortgagees brought proceedings to recover monies owing and possession of land secured by mortgages – Where mortgagors contended mortgagees statute-barred from enforcing rights under mortgages as a result of expiry of relevant time period under Limitation of Actions Act 1974 (Qld) ("Act") – Where mortgagors contended mortgagees' title under mortgages extinguished by operation of s 24 of Act – Where mortgagees contended that mortgagors agreed not to plead any defence under Act by virtue of cl 24 of mortgages – Whether cl 24 effective to prevent mortgagors from pleading any defence under Act – Whether agreement not to plead any defence under Act unenforceable as contrary to public policy – Whether s 24 of Act operated automatically to extinguish mortgagees' title at expiry of relevant time period – Whether mortgagees' remedy confined to damages for mortgagors' breach of cl 24 of mortgages.
Words and phrases – "action", "agreement", "agreement not to plead", "benefit", "breach of contract", "contracting out", "defeated", "defence", "defence of limitation", "expiry", "extinguishment of title", "finality of litigation", "jurisdiction of the court", "limitation period", "limitations defence", "plea", "public interest", "public policy", "reasonable business person", "remedy", "shall not be brought", "statute-barred", "statute of limitations", "statutory bar", "statutory right", "waiver".
Limitation of Actions Act 1974 (Qld), ss 10, 13, 24, 26.
KIEFEL CJ AND EDELMAN J. The Limitation of Actions Act 1974 (Qld) ("the Limitation Act") contains provisions which prescribe the time within which actions founded upon simple contract or for the recovery of land or monies secured by a mortgage over land shall be brought. The principal question on this appeal is whether the parties to a mortgage may agree that the mortgagor will not plead the statutory limitation by way of defence to an action brought by the mortgagee or whether such an agreement is unenforceable as contrary to public policy. A second question concerns the operation of a provision of the Limitation Act respecting extinguishment of title. A third concerns the terms of a clause in the mortgages in question and whether they are effective to prevent the appellants…
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- AGLC
- Price v Spoor [2021] HCA 20
- Case
- [2021] HCA 20
- Decision Date
CaseChat Overview and Summary
The central legal issues before the High Court were whether clause 24 of the mortgages was effective to prevent the mortgagors from relying on the *Limitation of Actions Act*, whether such an agreement was unenforceable as contrary to public policy, and whether s 24 of the Act operated automatically to extinguish the mortgagees' title upon the expiry of the relevant limitation period, thereby confining the mortgagees' remedy to damages for breach of contract.
The High Court affirmed the principle that while parties may generally contract out of statutory rights, this is not permissible if the statutory provisions are dictated by public policy and enacted for considerations of State rather than for the benefit of individuals. Applying this principle, the Court held that the *Limitation of Actions Act* was not enacted for the private benefit of individuals, but rather for broader public policy reasons, including the promotion of finality in litigation. Consequently, clause 24 of the mortgages, which sought to prevent the mortgagors from pleading the statute of limitations, was found to be ineffective and void as contrary to public policy. The Court also confirmed that s 24 of the Act operates automatically to extinguish title upon the expiry of the limitation period, irrespective of any contractual provisions attempting to waive such rights.
The appeal was dismissed with costs.
Orders
Orders of the court
Appeal dismissed with costs.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
Established by: KIEFEL CJ, EDELMAN J, GAGELER AND GORDON JJ, STEWARD J
Section 24(1) relevantly provides:"Extinction of title after expiration of period of limitation(1) ... where the period of limitation prescribed by this Act within which a person may bring an action to recover land (including a redemption action) has expired, the title of that person to the land shall be extinguished." Section 5(5) relevantly provides that "[a] reference in this Act to a right of action to recover land includes a reference to a right to enter into possession of the land". Section 26 relevantly provides:"Actions to recover money secured by mortgage or charge or to recover proceeds of the sale of land(1)An action shall not be brought to recover a principal sum of money secured by a mortgage or other charge on property whether real or personal nor to recover proceeds of the sale of land after the expiration of 12 years from the date on which the right to receive the money accrued....(4)The provisions of this section do not apply to a foreclosure action in respect of mortgaged land, but the provisions of this Act with respect to an action to recover land apply to such an action.(5)An action to recover arrears of interest payable in respect of a sum of money secured by a mortgage or other charge or payable in respect of proceeds of the sale of land or to recover damages in respect of such arrears shall not be brought after the expiration of 6 years from the date on which the interest became due." To the extent of any overlap between the limitation periods in ss 10 and 13, no party disputed that it was open to the appellants to plead and rely upon the shorter period set out in s 10[83]. As it happens, the respondents brought both the possession claim and the money claim more than 12 years after these rights of action accrued to them.[83]Brisbane City Council v Amos (2019) 266 CLR 593 at 598 [4]‑[5] per Kiefel CJ and Edelman J, 615 [46] per Gageler J, 615 [48] per Keane J, 617 [54]-[55] per Nettle J.The decision below Before the Queensland Court of Appeal, the appellants relied upon certain decisions of the Supreme Court of Utah[84] and the Appellate Court of Connecticut[85] in support of the proposition that a person cannot contract out of a Statute of Limitations[86]. However, the appellants did not rely upon these cases before this Court; they can therefore be put to one side. Notwithstanding the appellants' submissions, Gotterson JA decided that one could contract out of the defences conferred by the Limitation Act[87]. His Honour did so largely in reliance upon the judgments of Mason CJ and Brennan J (as his Honour then was) in The Commonwealth v Verwayen[88]. [84]Hirtler v Hirtler (1977) 566 P 2d 1231. [85]Haggerty v Williams (2004) 855 A 2d 264. [86]Spoor v Price (2019) 3 QR 176 at 186 [30]-[32].[87]Spoor v Price (2019) 3 QR 176 at 189 [43]. [88]Spoor v Price (2019) 3 QR 176 at 187-188 [35]-[36], [38]‑[39], quoting The Commonwealth v Verwayen (1990) 170 CLR 394 at 404‑406 per Mason CJ, 426 per Brennan J. Two relevant propositions may be extracted from the reasons of Mason CJ in Verwayen. The first is not in dispute. Whether or not a person can waive the defences conferred by a particular Statute of Limitations depends on the scope and policy of that Act; the test is whether the applicable provisions are "dictated by public policy" and were enacted "not for the benefit of any individuals or body of individuals, but for considerations of State"[89]. If so, they cannot be excluded by contract. But if the benefit conferred by statute is otherwise private in nature, the law may permit the parties to exclude it. As Mason CJ said, "the critical question is whether the benefit is personal or private or whether it rests upon public policy or expediency"[90]. Gotterson JA also referred[91] to the more recent expression of that principle in Westfield Management Ltd v AMP Capital Property Nominees Ltd, where French CJ, Crennan, Kiefel and Bell JJ said[92]:"Windeyer J observed in Brooks v Burns Philp Trustee Co Ltd[93] that a person upon whom a statute confers a right may waive or renounce his or her rights unless it would be contrary to the statute to do so. It will be contrary to the statute where the statute contains an express prohibition against 'contracting out' of rights. In addition, the provisions of a statute, read as a whole, might be inconsistent with a power, on the part of a person, to forego statutory rights. It is the policy of the law that contractual arrangements will not be enforced where they operate to defeat or circumvent a statutory purpose or policy according to which statutory rights are conferred in the public interest, rather than for the benefit of an individual alone. The courts will treat such arrangements as ineffective or void, even in the absence of a breach of a norm of conduct or other requirement expressed or necessarily implicit in the statutory text[94]."[89]The Commonwealth v Verwayen (1990) 170 CLR 394 at 405, citing Admiralty Commissioners v Valverda (Owners) [1938] AC 173 at 185 per Lord Wright.[90]The Commonwealth v Verwayen (1990) 170 CLR 394 at 405, citing Brown v The Queen (1986) 160 CLR 171 at 208 per Dawson J.[91]Spoor v Price (2019) 3 QR 176 at 188 [36].[92](2012) 247 CLR 129 at 143-144 [46]. [93](1969) 121 CLR 432 at 456.[94]Caltex Oil (Australia) Pty Ltd v Best (1990) 170 CLR 516 at 522 per Mason CJ, Gaudron and McHugh JJ (Dawson J agreeing); Fitzgerald v F J Leonhardt Pty Ltd (1997) 189 CLR 215 at 227 per McHugh and Gummow JJ; International Air Transport Association v Ansett Australia Holdings Ltd (2008) 234 CLR 151 at 179 [71] per Gummow, Hayne, Heydon, Crennan and Kiefel JJ; Miller v Miller (2011) 242 CLR 446 at 457-458 [25] per French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ; Equuscorp Pty Ltd v Haxton (2012) 246 CLR 498 at 513 [23] per French CJ, Crennan and Kiefel JJ.