Rich v Strelitz Bros and Moss

[1906] HCA 68

4 C.L.H.] OF AUSTRALIA.

601

O’Connor to proceed in forma paaperis, and the security was U-

1906.

reduced to £1.

The proper method, if the appellant has property

and should pay the costs, is to apply to have him dispaupered;

Brown

V.

but we will not grant leave to 4pply to dispauper, as we think

Brow .v.

this litigation has gone on long enougli. You will get the £1

Giittith C.J.

paid into Court.

Appeal dismissed.

Solicitor for respondent, E. IF. Downes.

C. A. W.

[HIGH COURT OK AUSTRALIA,

RICH . .

.

A i’I'El l a n t ;

P l .l in t if f ,

STRFLITZ BROS. & MOSS

R e s p o n d e n t s .

D e f e n d a n t s ,

ON APPEAL FRO.M THE SUPREME COURT OK

WESTERN AUSTRALIA.

Practice—New trial—Trial with ju ry—Misdirection—Fraud—Amendment oj H. C. OF A.

pleadings before High Court.

1906.

In a

.11 action tried witli a jury, the plaintiff sought to have a certain con­

P e r th ,

tract set aside on the ground of a conspiracy to defraud him.

The case was

Orf.29, .30, 31.

left to the jury generally, and they found for the defendants.

No objection

Nov. 1, 5.

was taken at the time to the Judge not having put specific questions to the

Griffith C.J., Barton and

jhry.

Held, th a t the plaintiff was not en titled to a new tria l on the ground of

Hijrsins, J.T.

m isdirection.

Qiuere, whether, under the circumstances, the plaintiff was, on the hearing of the appeal before the High Court, entitled to amend his pleadings in order to raise a new case suggested to be disclosed by the evidence, and to have a new trial.

By consent, and subject to terms, order of the Supreme Court of Western

Australia varied.

602 HIGH COURT

[1906.

H.

OF A.Tlie jjlaintirt’, a dealer in bark, l)eing in difficultie.s with lii.s

1906.        bark-.stripping contractors and witli tlie tinn that wa.s tinancing-

R ichhim, went to the defendants, Strelitz Bros., for assistance, and

V.

Strklitz

was by them referred to the defendant Moss, who helped liim

B ros, and out of his difficulties. Moss, who in reality was the agent of

Moss.

Strelitz Bros, in the whole transaction, except for about £500 of his own, exacted from plaintiff very stringent terms in a mort­ gage and contemporaneous agreement, controlling the disposal of all bark coming through the plaintiffs hands, and the distri­ bution of the proceeds to be derived from selling the bark and from a right of action which the plaintiff had against his former financial backers for not accepting deliver}" of the bark, whicli they were under contract to buy from him at a fixed price. After the defendant IMoss had advanced about £20,000 in relieving plaintiff, and in obtaining and marketing the bark, tenders were on IMoss’s advice called for the purchase of the whole quantity in one lot, and the tender of the defendants Strelitz Bros, was accepted for about £17,000, thus leaving the plaintiff heavily indebted under the mortgage and agreement. Plaintiff, having made a claim against his former backer.s, and compromised it for £3,000, brought the present action against Strelitz Bros, and Moss as joint defendants in which, after setting out in detail the facts on which he relied, he claimed to liave the agreement cancelled and the sale of the bark to Strelitz Bros, set aside, and for an account of their profits from the re-sale of the bark. At the trial the case Avas treated as a charge of a conspiracy by the defendants to defraud the plaintiff, and the jury were, in effect, asked whether they believed the plaintiff’s version of the facts or the defendants’. They found for tlie defendants, and judgment was entered for them. The plaintiff moved for a new trial on the groumls that the jury Avere misdirected, and that the Judge should have asked them certain questions ( avIucIi are set out in the judg­ ment of Griffith C.J.) This Avas refused by the Supreme Court, and the plaintiff appealed to the High Court.

Haynes K.C. and Bohinson, for the appellant. This action is brought by a mortgagor to set aside a sale made to mortgagees, because effected under pressure and by the advice of the mort-

4 C.L.H.l OF AUSTRALIA.

603

gajjee’s Holicitor. The mortgagor Jiad no independent advice, and

H. C. OF A.

1906.

the sale was at an undervalue.

The plaintiff is entitled to the

profits made on the resale of the bark.

K ick

V.

[(fniFK lTH C.J.—Yon suggest that the question is whether the

.Stk el itz

Bro s , Muss.and

sale to the mortgagees was effected with the full knowledge and

consent of the mortgagor, or under concealment and oppre.ssion.] d’hat question was never put to the ju ry; there has been a coTuplete mistrial ; it was wrong of the Judge to put it to the jury that the plaintiff must prove fraud throughout.

[G r if f it h C.J.—That is the case you made at the trial.

How

can you raise a different case now ?]

It was always before the jui-y upon the pleadings, and the case made by the plaintiff that the .sale by the plaintiff to the mort­ gagees was not free, fair, or voluntary; but the cfuestion was not properly sulmiitted to them. The proper questions raised by the statement of claim were never submitted to the jury, namelj", that the plaintiff had no independent advice at the time of the sale, but was under the dominion of the defendant Moss, who advi.sed and induced him to sell to the mortgagees at an undervalue. These allegations in the .statement of claim were borne out b}'̂ the evi­ dence, and afford ample ground for relief. The onus was upon the defendants to prove that the transaction was not unfair ; (rihsov V. Jeyes (1); Macleod v. Jones (2).

[H kigins J, referred to Frees v. Coke (3); Reeve v. fAsle (J) ;

Kevan v. Joyce (5).]

Kerr on Fraud, 3rd ed., pp. 394, 414-5; Wilde v. Gibson (6). No case for relief is made out by the pleadings and evidence. Although independent advice may not have been obtained, the plaintiff must show, in

Filkington K.C. (with him Korthmore), for the respondents. adventurers. A co-adventurer may take a mortgage over or purchase his partner’s share. The onlj' case set up by the plead­ ings or put to the jury bj' the plaintiff was one of plain fraud, which failed for want of proof. The respondents should not be Cidled on now to meet a new case altogether ;

( 1 ) 6 V'ea., ‘266, at p. 271.

(4) (1902) A.C., 461.

(2) 24 C'h. D., 2S9.(5) (1896) 1 I.R., 442, at p. 468.

(.1) L.H. 6 Ch., 645.

(6) 1 H.L.C., 605.

604 HIGH COURT

[1906.

H.C. OF A. the absence of proof of a fiduciary relation, that lie was actively

1906.prevented from getting the advice : Harrison v. Guest (1).

R ich [ B a k t o x J.— Where on the face of tlie bill there has been dis­

c.

.Stk eu tz closed enough to set up an eipiity to relief, besides several charges

Hros. and

of personal fraud which failed, the Court has dismissed with

Moss.

costs so much of the bill as was founded on the charges of personal fraud, and has granted the relief otherwise appearing to be claimable : Thomson v. Eastwood (2).]

A mortgage bargain for collateral advantage is only void if it is unconscionable or infringes the rule against a clog. The relation between a mortgagor and a mortgagee purchaser is governed by the same rules as between an ordinary vendor and purchaser : Ashburner on Mortgages, p. 511; Melbourne Banking Corporation V. Brougham (3); the party impeaching the sale must prove the

existence of oppression or undue influence : Salt v. Marquis of Xorthamp>ton (4). The plaintift', by his own conduct in destroy­ ing the right of action against Wills & Co., has made it impossible to restore the parties in integrum, and is therefore limited to an action for deceit, unless the defendants consent to redemption and an account upon plaintiff bringing the proceeds of the compromise into Court.

Even if the ((uestions suggested by the plaintift'’s counsel, but not pressed upon the Judge, were all answered in his favour, they would not have entitled him to judgment. There was never any demand that the (juestion whether plaintiff had acted freely and voluntarily in the sale should be put to the jury. A new case cannot be picked out from the pleadings and set up on appeal: Wilde v. Gibson (o); Archbold v. Commissioners of Charita.ble Bequests for Ireland, (6); Glasscott v. Lang (7); Hickson v. Lombard (8).

[Bartcjx j . referred to Parr v. Jeivell (9).]

If no proper direction was asked from the Judge, plaintiff can­

not now complain; Graham cfe Sons v. Mayor of Huddersfield

(10); Nevill v. Fine A rt and General Lnsurance Co. (11).

(1) 0 DeG. M. &G., 424; 8 H.L.C.,

(6) 2 H.L.C., 440.

482.  (7) 2 I’ll., 310.

(2) 2 App. Cas., 21.5, at p. 24.3.(8) L.R. 1 H.L., .324.

(3) 7 App. Cas , 307.(9) 1 Kay

& J., 671.

(4) (1892) A.C., 1, atp. 18.(10) 12 T.L.R., 36.

(5) 1 H.L.C., 605.

(11) (1897) A.C., 68.

4 C.L.R.] OF AUSTRALIA.

605

Rohinson in reply. The defendants tlieniselves raised the issue

H. C. OF A.

tliat the sale was free, fair and voluntary, and this was in i.ssue

1906.

throughout the case. The

2̂ h.iintitt' is entitled to amend, as the

R ich

V.

abortive trial was due to the action of the Judge in not leaving

Strelitz

Bro.s. and M o.ss.

to the jury the (juestions of fact jwoperly raised by the pleadings

which clai?ned relief otherwise than upon fraud.

C l̂r. ath'. vidt.

( l u i F F l T H C.J. This is an action brought by the appellant

against the respondents claiming relief in re.spect of a deed dated 4th November 1904, and also in respect of a sale of a large (|uantity of bark mortgaged bj" the plaintiff' to one of the defendants by mortgage of the same date. It is nece.ssary to refer somewhat in detail to the pleadings, becau.se it is not quite clear what is the nature of the relief which the plaintiff really claimed. The plaintiff was a dealer in mallet bark, the defendant ^loss was a solicitor at Fremantle, and the other defendants, Strelitz Brothers, were merchants carrying on busine.ss in Perth and Fremantle. Before November 1904, the plaintiff had given a mortgage by way of bill of sale to one Rischbeith, trading as Henry Wills and Co., over all the bark that he might have or might acipiire in the course of his busine.ss, and there was a separate agreement by which that firm was to buy from him all the bark at a fixed price. The plaintiff desired to pay them off, and applied to the defendants Strelitz Brothers for assistance. They referred him to IMoss, and the result was that on 4th Novemlier a bill of .sale was executed by which the 2̂ l6 intiff assigned all the mallet bark to Moss by way of mortgage on terms which it is not necessary to mention. He also executed a contemporaneous deed by which jDrovision was made for the division of any profits which might accrue to the plaintiff from his sjjeculation in the mallet bark over which he was giving .security. Among.st other stijjulations in that agreement was one to the effect that the defendant Moss, the mortgagee, should have the benefit of the plaintiff’s contract with Henry Wills and Co. for tlie 2̂ urchase of the bark at a fixed price. The benefit of this agreement was therefore jiart of the security which Moss obtained

606 HIGH COURT

[1906.

H.	C. OF A. under that transaction. It is alleged that very soon afterwards
1906. Henry Wills and Co. refused to perforin their contract for the

R ichpurchase of the mallet bark from the plaintiff, wliereupon it

V.

Strelitz became necessary to make some other arrangements for disposing

Bros, and

of it. The statement of claim, after setting out facts which I

Moss.

have stated in substance, goes on to allege that at the time of

Griffith C.J.making the deed and mortgage the plaintiff was pressed and

threatened with legal proceedings by Rischbeith and in straitened circumstances, and that the defendant J. D. Moss took advantage of his knowledge of the plaintiffs embarrassed position, and exacted wholly unreasonable and oppressive terms which the plaintiff was forced to accept to avoid being financially ruined. It then alleges that the plaintiff executed the mortgage and agreement and the defendant I\Ioss paid off Rischbeith, and that thereafter the plaintiff was in the power of the defendant Moss, who exercised complete dominion over him in all busine.ss trans­ actions, and thereafter acted as his legal adviser until June 1905: that at the instance and under the advice of the defendant Moss the plaintiff caused to be tendered to Rischbeith certain mallet bark of which acceptance was refused, so that an action for about £10,000 damages for breach of contract might be brought against Rischbeith in the name of and apparently for the benefit of dhe plaintiff, but in truth and reality for the benefit of the defendant J. 1). Moss: that at the in,stance and under the advice of the defendant Moss the plaintiff caused tenders to be called for the purchase of the whole of the bark in one lot so as to ascertain the amount of damages recoverable against Rischbeith as aforesaid : that owing to a mistake of the defendant Moss fresh tenders had to be called for, and that defendant negligently and improperly I'ailed to give due or proper notice, and the plaintiff acting under his advice and at his instance, and roljdng upon his representa­ tions, was induced to accept the tender of the defendants Strelitz Bros, for the purchase of the whole of the bark at £2 9s. (id. per ton although higher tenders had been sent in: that these repre­ sentations were, among.st others, that it was better to sell in one lot even though the price was lower, and that the plaintiff was Cjuite entitled to do so, and that in fact there would be no loss as the damages recoverable from Rischbeith would be the difference

4 C.L.R.] OF AUSTRALIA.

607

between the sale price ami tlie price at which he had agreed to

H. C. OF A.

purchase, and that in fact it did not affect the plaintiff and was a 1906.

matter more affecting the defendant Moss’s interest: that the

R ich

V.

bark was so sold to the defendants Strelitz Brothers at a price

Strei.itz

Bros, and Mo.*s.

much below its actual value : that subsequently to and on or

about 23rd June 1905 the defendant 3Ioss endeavoured to

force the plaintiff to sign a further champertous agreement with

Griffith C.J.

him, and the plaintiff, having refused, obtained independent advice and became aware for the first time (although he had sus- jiected it before) that the defendants Strelitz Brothers were the real mortgagees, and that the defendant ]\Ioss was used as a blind, and that the rendering of financial a.ssistance to the plain­ tiff was a ruse, and the sole oViject of the defendants Strelitz Brothers was to accjuire the plaintif^ ŝ property at an under value. The plaintiff claimed a declaration that the mortgage was for the benefit of the defendants Strelitz Brothers, and an order that the purchase by the defendants Strelitz Brothers of the mallet bark should be set aside and proper accounts taken, and further that the agreement of 4lh November should be declared void and be delivered up for cancellation. The bark was in fact sold, under circumstances to which it is not necessary to refer in detail, to the defendants Strelitz Brothers. It was sold nominally by the plaintiff, no doubt acting under the advice of the defendant Moss, or in concert with him—whether under his influence or not is a matter which is not material for my present purpose. Sub­ sequently the plaintiff made a claim against Henry Wills and Co. for damages for their refusal to accept the bark and com­ promised that claim for £3,000, and received the money. The bark, or the greater part of it, has since been re-sold by the defendants Strelitz Brothers the purchasers. In point of fact Strelitz Brothers were the lenders of the mone '̂ secured by the bill of sale of 4th November, and Moss was a trustee for them except as to a sum of £500 in whicli he was personally" interested. The defendants in their defence practically denied the case made by the plaintiff, and alleged that the sale of the bark to Strelitz Brothers was made with the plaintiff’s full consent and with full knowledge of all the facts. The case came on for trial before Barntiide J. and a jury. The jury wa.s not asked to tiinl any

608 HTGPl COURT

[1906.

H. C. OF A. specific facts, but the wliole case was left to them. The view

9̂06. -which the learned Judge took of the case made hy tlie plaintiff,

R ich

judging, I .suppose, by tlie wa}’ the case was conducted, appears

r.

Strei.itz

by his summing-up. He .said:—“Now what is the claim ? The

Bros, and

plaintiff saj’s tliat this was a fraudulent sale, and in his .statement

Moss.

of claim he sets out a set of circumstances which he sa}'s indicate

Griffith C.J.that this sale was the outcome of a conspiracy which found its

origin at the time of the entering into this hill of sale or agree­ ments on the part of Messrs. Strelitz Bro.s. whereby they intended to secretly get possession of his (plaintiffs) mallet hark at an undei’- value. Now, gentlemen, if you see evidence of such a conspiracy, and if from the circumstances of the case you come to that con­ clusion then, as I have said, you will be justified in .saying fhat this wa.s a fraudulent transaction. On the other hand the defendants deny it altogether, and they have told a story, which, as I have already indicated, may he worthy of your consideration.” Then practicall}' the learned Judge left the jury to say whether they believed the plaintiff"s version of the transaction, or the defendants’. The juiy found, with respect to the claim to set aside the agreement of the 4th November, that the plaintiff was in straitened circumstances to the knowledge of the defendant Moss who took advantage thereof to exact wholly unreasonable and oppressive term.s. Tliat finding, of course, did not of itself entitle the plaintiff to any relief; it did not entitle him to have the agreement set aside, and before us no point has been made on that finding of the jury. They also found that the sale of the bark to defendants Strelitz Brothers was not fraudulent, and on that finding the learned Judge gave judgment for the defendants. On appeal to the Full Court the appeal was dismissed. With respect to the sale of the bark, it is now claimed that there should be a new trial on the ground, in .substance, of misdirection. It is not disputed that there was such a conflict of evidence that the verdict of the jury cannot be impeached as one which reasonable men could not come to on the case left to them ; but the plaintiff says that there was in fact a misdirection because the learned Judge did not leave proper questions to the jury ; that he only left a general question, and not specific questions. The questions

4 C.L.R.] o r AUSTRALIA.

609

which tiie learned counsel for the plaintiff desired or suggested

H . C. OF A.

should be put to the juiy, as supplied by the learned counsel to 1906.

us here, though they do not appear on the Judge’s notes, were :—

R ich

V.

(1) When did the plaintiff first definitely know that Strelitz

Strelitz

Brothers were the real mortgagees ? (2) In calling for tenders did

Bros, and

Moss.

the plaintiff rely on the advice of Moss and Strelitz Brothers ? (3)

When selling, was the plaintiff advised or induced by the defend­

Griffith C.J.

ant Moss to accept Strelitz Brothers’ tender ? (4) Did Moss act diligently in plaintiff’s interests on and subsequent to the calling for tenders ? It is admitted that at one period of the trial the learned counsel for the plaintiff suggested that these questions should be put to the jury, but at the conclusion of the learned Judge’s summing up, after leaving the general question as I have stated, he said in the presence of counsel;—“ If you find that it was a fraudulent sale, in the circumstances I hav'e told you, you will say so ; and remember that the plaintiff has to prove to your satisfaction those circumstances which would justify such a verdict. On the other hand, if you are not satisfied that it was a fraudulent sale you will say so, and there will end the difficulties of the case so far as you are concerned. Neither counsel desire that I should put any special questions to you, so I shall leave the case at that.” The objection that the learned Judge did not leave to the jury those questions, which it is now said he ought to have left, can only be taken on the ground that it was in substance a misdirection, that is, that if the jury had been properly directed they would have been told, “ If you answer those questions or .some of them in favour of the plaintiff he will be entitled to a verdict.” I pass over for a moment the first question. Taking the second, “ In calling for tenders did the plaintiff relĵ on the advice of Moss and Strelitz Brothers?” it is obvious that the answer to that would not by itself carry the case anj?̂ further. The same observation applies to the next question, “ When selling, was the plaintiff advised or induced by the defendant Moss to accept Strelitz Brothers’ tender?” So to the next question, “ Did Moss act diligently in plaintiffs interests on and subsequent to the calling for tenders ?” The first question, “ When did the plaintiff first definitely know that Strelitz Brothers were the real mortgagees ?” raises a more difficult point. It is suggested now

VOL. IV.

40

610 HIGH COURT

[1906.

H. C. OF A. (we do not know what was suggested at the trial, but whatever

was suggested does not seem to have attracted the attention of

R ichthe learned Judge) that if the plaintiff did not know that

V.

Strelitz Strelitz Brothers, the purchasers of the bark, were the real

Bros, and

mortgagees of the bark, some question might arise dependent on

IMoss.

the relationship of the plaintiff, as owner of the equity of re­

Griffith C.J.

demption, to them as mortgagees. If the owner of an equity of redemption sells to the mortgagee, not knowing that he is the mortgagee, he might in some circumstances be entitled to some relief. He might or he might not. But there is a preliminary question of fact, “ Did the plaintiff know that the defendants Strelitz Brothers were the real mortgagees ?” Upon that there was a conflict of evidence, but it is contended for the de­ fendants that, even it the question had been answered in the negative, it would have been so contrary to the weight of evi­ dence that the verdict could not stand. On the other hand it is suggested that some case might be spelt out from the pleadings, or spelt out from tlie evidence, on which the plaintiff might be entitled to some relief; of what kind is not speci­ fied in particular. The most likely kind of relief suggested was that founded on the doctrine under which it is said that a bargain by a mortgagee with the owner of the equity of redemption to purchase the mortgage property may be set aside if it is oppressive and unconscionable; but even that was not suggested to this Court until argument had proceeded for two days. Under ordinary circumstances, the verdict of the jury being right, the parties having chosen their battle ground and the plaintiff having been beaten, there would be an end of the case. We were pressed with the authority of cases in which it has been held, in substance, that when a plaintiff comes into Court and makes a case of personal fraud against the defendants and is beaten, he cannot afterwards pick out fragments from the evidence and pleadings tending to show a case of constructive fraud, and say, “ I might have been entitled to judgment on that ground.” Reliance was also placed on the words of Lord Halsbury L.C. in the case of Nevill v. Fine A rt and General Insurance Co (1):__ What puts him (the appellant) out of Court in that respect {i.e.,

(1) (1897) A.C., 68, at p. 76.

4 C.L.H.] OF AU8THALIA.

611

in asking for a new trial) is this, that where you are complaining

H. C. OF A.

1906.

of non-direction of the Judge, or that he did not leave a question

to the jury, if j’ou had an opportunity of asking him to do it and

R ich

V.

you abstained from asking for it, no Court would ever have

Strelitz Bro.s. asd

granted you a new trial; for the obvious reason that if you Mos.s.

thought you had got enough you were not allowed to stand

Griffith C.J.

aside and let all the expense be incurred and a new trial ordered simply because of your own neglect.” On the other hand, it is said that from the evidence in this case it could be spelt out that the plaintiff did not know, when he sold the bark, that he was selling it to the mortgagees, that the defendant Moss was trustee for the mortgagees, and exercised some dominion over the plaintiff, and therefore the sale might have been oppressive and unconscionable ; and also that Moss was solicitor for the plaintiff, who therefore should have had independent .advice. This, it was said, showed that the plaintiff might be entitled, under some unspecified doctrine of equity, to have the sale of the bark set aside or to have an account of the profits made on the re-sale. If a new trial were granted, it is clear that the pleadings would have to be radically amended in some manner which has not been specified.

It would seem that, although the practice as to nonsuit is abolished by the rules of Court, yet the same result can be obtained by dismissing an action without prejudice to the bring­ ing of a new one: See Fox v. Star Newspaper Co. (1). If, therefore, the plaintiff is entitled to ask in this case (as to which I have grave doubts) for leave to amend his pleadings and make a new case, which would otdy be granted on stringent terms, the same result could be obtained in a more convenient manner, by giving leave to bring a new action. Mr. Pilkington offers no objection to leave being given to bring a fresh action on any ground other than actual fraud in the sale of the bark, which has already been dispo.sed of by the jury. I therefore say no more as to the merits of the case. It is admitted that if such leave is given to the plaintiff it should be on terms. The terms suggested, to which no objection is offered, wei’e that he should bring his action within a limited time, three months, that he should pay into Court the £3,000, the portion of

(1) (1S9S) 1 Q.B., 63C; (1900) A.C., 19.

612 HIGH COURT

[1906.

H. C. OF A

the security which lie lias or had in his pocket, and that he should

1906.        pay the costs of this unsuccessful action. On the other hand Mr.

R ich

Robinson very properly says that if that is done it would be

V.

Strelitz unfair to go on with the bankruptcy proceedings now pending

Bros, and

against the plaintiff. Under these circumstances, to do justice

Moss.

between the parties, I think the order .should be as follows :—

Griffith G.J.Order that judgment for the defendants upon the claim be varied

so that it shall stand as an order dismissing the action with costs without prejudice to any such action as the plaintiff may be advised to bring other than an action impeaching the sale of December 1904 on the ground of actual fraud in the sale itself. But this order is upon the condition that such action be brought within three months from this date, and that the plaintiff do within that time bring into Court in such action the sum of £3,000, and do further within that time pay to the defendant his taxed costs of this action and of this appeal, and that upon the failure of the plaintiff to comply with these conditions this appeal shall stand dismissed with costs. Liberty to apply. The order will be prefaced by a statement that the respondents by their counsel undertake to consent to a stay of the proceedings now pending in bankruptcy against the appellant for the period of three months from this date, and do not otter any objection to the order.

B a r t o n J. I am of the same opinion. I wish to refer to that portion of the proposed order which deals with the bringing of a new action. While I desire to abstain entirely from the use of , any expression which might prejudice either party in future proceedings, at the same time I must say that I have entertained considerable doubt as to whether, in the absence of any agree­ ment on the part of the defendants, this would have been a case in which the Court ought to have embodied in its order leave either to amend or to bring a fresh action. The cases of Wilde V. Gibson (1) and Hickson v. Lombard (2) are familiar, the one

affirming that, where a plaintiff' by his pleadings rests his case upon fraud, he cannot have liberty to support it on any other ground ; and the other, nineteen years later, in which Lord

(1) 1 H.L.C., 605.

(2) L.R. 1 H.L., 324.

4 C.L.R.] OF AUSTRALIA.

613

Cranworth put <a similar principle in this way (1):— “ I subscribe H- O

of A.

most readily to the doctrine that, where pleadings are so framed

as to rest the claim for relief solely on the ground of fraud, it is

R ich

V.

not open to the plaintiff, if he fails in establishing the fraud, to

Strelitz

Bros, and Moss.

pick out from the allegations of the bill facts which might, if not

put forward as proofs of fraud, have yet warranted the plaintiff

in asking for relief. A defendant, in answering a case founded

Barton J.

on fraud, is not bound to do more than answer the case in the mode in which it is put forward. If, indeed, relief is asked alternatively, either on the ground of fraud, or, failing that ground, then on some other equity, a plaintiff may fail on the first but succeed on the latter alternative. But, then, the atten­ tion of the defendant has been distinctly directed to it, and he has been called on to answer the case according to both alterna­ tives.” Lord Cramvo'/'th there, it seems to me, expresses the principle on which the Court should proceed, and I must say, looking at the statement of claim and upon due con­ sideration of the whole case—there being no alternative case set up, but simply one of fraud or nothing—that I have not been able to convince myself that there is such a separable case of what may be called constructive or legal fraud to be gathered from the pleadings as would justify the Court in saying that the case is not merely of one texture, and that upon the separable case or claim leave may be given to denude the pleadings of the matter pertaining to personal fraud upon which the plaintiff has claimed, and to proceed, on a remission of the case, with that separable case or claim on which he might have founded an alternative case in his statement of claim. I only say I am not satisfied on that point. I know it is a very difficult point, and it is as well perhaps that the action of the parties has relieved the Court of coming to a conclusion upon that admitted difficulty. All that I feel called upon to say is that, had consent not been given, I should, perhaps, not have been a party to the leave being granted, which now, upon consent, is given to the

plaintiff

I concur in my learned brother’s judgment.

H iggins J. I am of opinion that justice will be done sub-

(1) L.R. 1 H.L., 324, at p. 336.

614 HIGH COURT

[1906.

H.C, or A,stantiaily by the order indicated by the Chief Justice ; but as it

1906.	is my duty to make up ray own mind upon these matters, I desire
R ich	to add some remarks so as to prevent misapprehension. At tlie

V.

Strelitz same time, as there may be a re-trial of the matters in dispute, it

Bros, and

is my duty to avoid saying anything bĵ way of comment on the

Moss.

facts which is not absolutely necessary. The main question

Higsrins J.W'hich has been discussed is the validity of tlie sale of the mallet

bark to Strelitz Brothers. This case has been put forward in the statement of claim, and by the addresses of counsel at the trial, as one of actual fraud ; and in the summing up of the primary Judge it was put as if the only question were had there been a vile conspiracy from first to last. That case has failed, and the jury’s finding is conclusive. But there ai'e allegations and facts which may or may not be sufficient to enable the plaintiff to impeach the sale as void or voidable ; facts which were obscurely pointed at to some extent by certain questions which plaintiff s counsel sought to have put to the jury at the trial. In one aspect, it may possibly be put as a sale of the equity of redemption by the mortgagor to the mortgagees. In another aspect, in may be put as being in substance a sale by Moss the mortgagee, that is, by his principals, Strelitz Brothers the mortgagees,to Strelitz Brothers the mortgagees. • It may also be put as a sale by Strelitz Brothers the real mortgagees through Moss the solicitor, who was also solicitor for the mortgagor, and took benefits for himself and for his principal. If the transaction can be put in any of these aspects, the effect would be, of course, to throw the burden of proof in a different direction. The plaintiff now says he would like to mend his hand. He did not suggest any amendment before the primary Judge ; and the Full Court had to deal with the case as it was then presented, and made, I think, the proper order; but I take a strong view as to the duty of the Court when a party wants an amendment. I take it that it is the duty of the Court, providing it can compel compensation in the way of costs, to allow a party liberal opportunity for amendment before final judgment. I take the view which was expressed so strongly by Bramivell L.J. in Tildesley v. Harper (1) where he says: My practice has always been to give leave to amend unless

(1) 10 Ch. D., .393, at p. 396.

4 C.L.R.] OF AUSTRALIA.

615

I have been sati.sfied that the party applying was acting maid

H. C. OF A.

1906.

fide, or that, by his blunder, he had done some injury to his

opponent which could not be compensated for by costs or other­

R ich

V.

wise.” In

Cropper v.

Boiveti L.J. said :—“ I know of no

Strelitz

Bros, asd Moss.

kind of error or mistake which, if not fraudulent or intended to

overreach, the Court ought not to correct, if it can be done with­

out injustice to the other party.” Therefore, per.sonally speaking,

Higgins J.

1 would be inclined to give leave to bring a fresh action whether the defendants’ counsel had waived the objection or not; but at the same time a defendant must have full opportunity of meeting all these allegations and all these facts from their new a.spect. As the trial has been a fiasco owing to the plaintiff s way of putting the case, the plaintiff ought to bear the costs, and ought also to bring into Court the £8,000 which he wrongfullj^ took away from the security. Tliere has not been much discussion yet as to giving effect to the agreement of the 4th November 1904; and unless tlie .sale of the mallet bark to Strelitz Brothers he declared void the agreement of tlie 4th November is of little importance—I mean that any contest as to this agreement is of little importance, ina.smucli as there will be no money to be dis­ tributed as profits. With regard to this agreement, it cannot be forgotten that the jury have found that the bargain was oppres­ sive, and that the plaintiff was in straitened circumstances, to the knowledge of the defendant Moss, who took advantage thereof to exact wholly unreasonable and oppre.ssive terms. But if the sale of the mallet bark to the defendants Strelitz Brothers be declared \'oid, plaintiff would probablj' liave to attack the agreement, in which case the defendants may find out that he is put to it to support exceptional clauses under the agreement in regard to getting, not merely his principal interest and costs, but the best share of the profits as well. I am only anxious that the Court should not be treated as deciding that the provisions of that agreement can be supported, mj’ desire being to leave that ques­ tion absolutely open to the parties in any further litigation.

The respondents by their counsel undertaking to consent to a stay of the proceedings

(1) 26 Cli. IX, 700, at p. 710.

616 HIGH COURT

[1906.

H. C. OF A.

1101V pending in bankruptcy against the

1906.

appellant for the period of three months

R ich

from this date and not qfering any

i'.

objection to this order:

Ordered that

Strelitz Bros, and

the judgment for the defendants upon the claim be varied so that it shall stand as cm order dismissing the action with costs, witliout prejudice to any such action as the plaintiff may be advised to bring, other than an action impeach­ ing the sede of December 1904 on the ground of actual fraud in the sale itself', but this order is upon the con­ dition that any such action shall be brought w ithin three months from this date, and that the p la in tiff do within that time bnng into Court in such action the sum o /£3,000, and do further within that time pay to the defendants their taxed costs of this action and of this appeal, and that upon the failure of the p lain tiff to comply with these conditions this appeal stand dismissed

Moss.

tvith costs. Liberty to apply.

Solicitors, for the appellants, R. S. Haynes & Co.

Solicitors, for the respondents, NortJmiore, Lukin Hale.

N. G. P.