Wilson v Moss - [1909] HCA 7

ON APPEAL FROM THE SUPREME COURT OF Money Re-opening transaction-Excessive - interest-Action to enforce agree-

ment or security - Promissory note-Retrospective effect-Money Lenders Act 1906 (Vict.) (No. 2061), secs. 2, 4 -Appeal to High Court-Cross appeal- MELBOURNE,

Rules of the High Court 1903, Part 11., Sec. III., Rule 13. March 4, 5, 12, 17, 19.

An action upon a promissory note is an action to enforce an agreement or security within the meaning of sec. 4 of the Money Lenders Act 1906.

Where the rate of interest charged by a money lender upon a loan is, either originally or in the result, larger than in the opinion of the Court is fair and reasonable under the circumstances, it is excessive within the meaning of sec. 4 of the Act, and the rate of interest may in itself be evidence that it is

The transaction which a County Court Judge may re-open under sec. 4 may include dealings between the parties prior to the colamencement of the Act if the Court is of opinion that they form part of a transaction of which the making or giving of an agreement or security after the passing of the Act is another part.

The authority given to a County Court Judge to re-open a money lending transaction is discretionary,

A money lender in October 1900 lent to an officer of the Victorian Public Service, with a salary of £350 a year, a sum of £50, and took from the borrower a promissory note for £55 10s. payable in three months, and indorsed by a third person. At the end of the three months the borrower paid £5 10s.

8 CLR 147

and gave a fresh promissory note for £55 10s. This was repeated every three 11 months until June 1904, when the borrower paid off £20 in addition to the £5 10s. then due, and gave a promissory note for £33 10s. payable in three months. Thereafter at the end of each three months the borrower paid £3 10s. and gave a fresh promissory note for £33 10s. This continued until, in January 1907, after the commencement of the Money Lenders Act 1906, the borrower gave a promissory note for £33 10s. The money lender having brought an action in the County Court upon the last promissory note,

Held, that from the original loan of £50 to the giving of the promissory Held also, that the rate of interest was excessive. H-ld further, that any rate above 35 per cent. per annum would have been unreasonable, and that as, even assuming a rate as high as 35 per cent. to be a reasonable rate, the payments which were in fact made before the com- the original debt and interest at that rate, judgment should have been given for the defendant on the promissory note.

Where in one action two distinct causes of action are sued upon, and a judgment is given for the plaintiff as to one cause of action…

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 Wilson v Moss

Details

AGLC: Wilson v. Moss [1909] HCA 7
Case: [1909] HCA 7
Decision Date: 19 March 1909

CaseChat Overview and Summary

This case concerned an appeal to the High Court of Australia from a decision of the Supreme Court of Victoria. The dispute originated in the County Court, where the plaintiff, a money lender, sued the defendant on two promissory notes. The primary note for £33 10s. arose from a series of transactions commencing with a £50 loan in October 1900. The defendant argued that the interest charged was excessive and sought relief under the *Money Lenders Act 1906* (Vic.).

The legal issues before the High Court included whether an action on a promissory note constituted an action to enforce an agreement or security within the meaning of section 4 of the *Money Lenders Act 1906*. The Court also had to determine whether the interest charged on the loan was excessive, and if so, whether the transaction could be re-opened, including dealings prior to the commencement of the Act. The Court was also required to consider the scope of the discretion granted to a court under section 4 of the Act.

The High Court held that an action upon a promissory note is indeed an action to enforce an agreement or security for the purposes of section 4 of the *Money Lenders Act 1906*. It found that the rate of interest charged was excessive, stating that any rate above 35 per cent. per annum would be unreasonable. The Court reasoned that the transaction, despite its renewals, should be viewed as a single, continuous transaction, and that the County Court had the power to re-open it, including dealings prior to the Act's commencement. The Court further determined that even at a rate of 35 per cent. per annum, the payments made by the defendant would have extinguished the original debt and interest before the Act came into force.

Consequently, the High Court reversed the decision of the Supreme Court. It ordered that judgment be entered for the defendant on the promissory note in question, effectively allowing the appeal in part. The Court also addressed the issue of a cross-appeal, finding that it was not applicable in this instance due to the distinct nature of the causes of action.

Orders