Wood v Little - [1921] HCA 50

ON APPEAL FROM THE SUPREME COURT OF Contract-Illegality-Public policy--Councillor of municipality---Agent for sale of

land to Closer Settlement Board-Duty to advise Closer Settlement Board- ExonerationProhibition against voting where councillor has pecumiary interest MELBOURNE,

-Discharged Soldiers Settlement Act 1917 (Vict.) (No. 2916), sec. 35-Dis- Oct. 11, 12.

charged Soldiers Settlement Act 1918 (Vict.) (No. 2988), sec. 2-Discharged SYDNEY,

Soldiers Settlement Act 1919 (Fict.) (No. 3939), sec, 17 -Local Government Act 1915 (Vict.) (No. 2686), sec. 181. Knox C.J.,

The defendant, who owned land in a certain municipality, employed the plaintiff, a land agent and a member of the council of that municipality, to sell his land to the Closer Settlement Board under the provisions of the Discharged Soldiers Settlement Acts 1917 to 1919 (Vict.). There was no stipulation in the contract of agency that the plaintiff should use his position or influence as shire councillor to push the sale. The plaintiff submitted the land to the Board, but took no further part in relation to the proposed sale, and shortly afterwards resigned his position of member of the council. What the plaintiff had done, however, was the effective cause of the sale to the Board which subsequently took place. Under the Dis- charged Soldiers Settlement Acts the plaintiff, as a member of the council, might be called upon to advise the Board in connection with the purchase by the Board of land within the municipality. In an action by the plaintiff to recover from the defendant commission on the sale,

Held, that the private interest of the plaintiff under his agreement with the defendant had a tendency to interfere with the proper discharge by the plaintiff

29 CLR 565

of his public duty under the Discharged Soldiers Settlement Acts, and there- fore that, on the authority of Horne v. Barber, 27 C.L.R., 494, the agreement was illegal and void as being against public policy.

Horne v. Barber, 27 C.L.R., 494, doubted by Higgins and Starke JJ. Held, also, that sec. 181 of the Local Government Act 1915 (Vict.), which prohibits any councillor from voting upon or taking part in the discussion of any matter before the council in which he has directly or indirectly any pecuniary interest, and imposes a penalty upon any councillor who knowingly offends against the section, does not enable a councillor to acquire a pecuniary interest in a matter in which, apart from the section, the acquisition of such an interest by him would be illegal as being against public policy, and, therefore, afforded no exoneration to the plaintiff.

Decision of the Supreme Court of Victoria Little v. Wood, (1921) V.L.R., 153 42 A.L.T., 159, reversed.

APPEAL from the Supreme Court of Victoria.

An action was brought in the County Court by Frederick Joseph Little against Herbert Edward Wood to recover £131 8s., being commission alleged to be due in respect of the sale of the defendant's land to the Closer Settlement Board of Victoria. One of the defences was that the contract…

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 Wood v Little

Details

AGLC: Wood v Little [1921] HCA 50
Case: [1921] HCA 50
Decision Date: 21 November 1921

CaseChat Overview and Summary

The High Court of Australia heard an appeal from the Supreme Court of Victoria concerning a dispute over a land agent's commission. The plaintiff, a land agent and a member of a municipal council, was employed by the defendant to sell his land to the Closer Settlement Board. The plaintiff's efforts were the effective cause of the sale. The defendant argued that the agency contract was illegal and void as it was against public policy, due to the plaintiff's dual role as a land agent with a pecuniary interest in the sale and a councillor who might be called upon to advise the Board on land purchases within the municipality.

The central legal issue before the High Court was whether the contract of agency was illegal and void as being contrary to public policy. This required the Court to determine if the plaintiff's private interest as a land agent had a tendency to interfere with the proper discharge of his public duty as a municipal councillor under the relevant Discharged Soldiers Settlement Acts. A secondary issue was whether section 181 of the Local Government Act 1915 (Vic.), which prohibits councillors from voting or discussing matters in which they have a pecuniary interest, provided any exoneration for the plaintiff.

The High Court, by majority, held that the agreement was illegal and void as being against public policy. The Court reasoned that the plaintiff's private interest in securing a commission on the sale had a tendency to interfere with his public duty to advise the Closer Settlement Board impartially. This principle was applied on the authority of *Horne v. Barber* (1920) 27 CLR 494. The Court further held that section 181 of the Local Government Act 1915 did not provide exoneration, as its purpose was to prohibit councillors from participating in matters where they had a pecuniary interest under penalty, not to permit them to acquire such interests in matters where doing so would otherwise be illegal due to public policy concerns.

The appeal was allowed, and the judgment of the Supreme Court of Victoria was reversed. The plaintiff was therefore not entitled to recover commission on the sale. The plaintiff was ordered to pay the costs of the action, the appeal to the Supreme Court of Victoria, and the appeal to the High Court.

Orders