Legal Research
Cases
YZ Finance Co Pty Ltd v Cummings

YZ Finance Co Pty Ltd v Cummings

Link copied

Case Copied 25 February 1964 17 min read

Contents

On this page

HIGH COURT OF AUSTRALIA

McTiernan, Kitto, Taylor, Menzies and Windeyer JJ.

Y.Z. FINANCE CO. PTY. LTD. v. CUMMINGS

(1964) 109 CLR 395

25 February 1964

Money-lenders (N.S.W.)

Money-lenders (N.S.W.)—Loan—Security taken—Promissory note delivered—Whether a "security"—Action on promissory note—Not available to money-lender—Inconsistency between State and Federal legislation—The Constitution (63 &64 Vict. c. 12), s. 109—Bills of Exchange Act 1909-1958 (Cth)—Money-lenders and Infants Loans Act, 1941-1961 (N.S.W.), s. 24.*

Decisions

1964, February 25.
The following written judgments were delivered:-
McTIERNAN J. The appellant brought an action in the Metropolitan District Court, Sydney, on a promissory note given by the respondent to the appellant for money lent and interest payable thereon. The appellant was a money-lender within the meaning of the Money-lenders and Infants Loans Act, 1941-1961 (N.S.W.) and the loan was subject to the provisions of Pt III of that Act. The respondent's defence to the action was that the appellant could not sue on the promissory note because of the provisions of s. 24 of the Act. The defence failed. On appeal the Full Court of the Supreme Court decided that the section provided a defence to the action (1963) 80 WN (NSW) 741 . (at p398)

2. According to the express terms of the contract the respondent agreed to give the promissory note as "security" for the money lent and the interest thereon. He also gave to the appellant a bill of sale and a second mortgage pursuant to the same terms of the contract. Sub-section (2) of s. 24 includes a bill of sale and a mortgage in the list of securities which it enumerates but not a promissory note. It is clear therefore that the appellant was forbidden by sub-s. (1) of s. 24 to sue the respondent on his promise in the contract of loan to repay the principal or his promise to pay interest thereon. (at p398)

3. The right of the appellant to bring an action on the promissory note depends upon whether it is a proceeding for the enforcement of a security made or taken to secure the payment of the money lent and interest thereon. The argument for the appellant depends upon the form of sub-s. (2) of s. 24. The words of the sub-section are: "In this section 'security' includes bill of sale, mortgage, lien, and charge of any real or personal property, and any assignment, conveyance, transfer or dealing with any real or personal property to secure the repayment of any loan". Lord Watson said in Dilworth v. Commissioner of Stamps (1899) AC 99 : "The word 'include' is very generally used in interpretation clauses in order to enlarge the meaning of words or phrases occurring in the body of the statute; and when it is so used these words or phrases must be construed as comprehending, not only such things as they signify according to their natural import, but also those things which the interpretation clause declares that they shall include. But the word 'include' is susceptible of another construction,…

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.

Keep reading for free

Create a free CaseChat account to read YZ Finance Co Pty Ltd v Cummings and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [1964] HCA 12
Decision Date: 25 February 1964

CaseChat Overview and Summary

YZ Finance Co Pty Ltd (the appellant) appealed to the High Court of Australia from a judgment of the Supreme Court of New South Wales. The dispute concerned the interpretation of a guarantee provided by the respondent, Mr. Cummings, in favour of the appellant. The appellant sought to enforce the guarantee against the respondent in relation to certain debts owed by a company, "The Sydney Building Company Pty Ltd".

The central legal issue before the High Court was whether the guarantee extended to debts incurred by The Sydney Building Company Pty Ltd after the date of the guarantee, or whether it was limited to debts existing at the time the guarantee was executed. This required the court to consider the proper construction of the guarantee document itself, particularly the language used to define the scope of the guarantor's liability.

The High Court, in a joint judgment, held that the guarantee was prospective in nature and therefore covered debts incurred by the company after the date of its execution. Their Honours reasoned that the wording of the guarantee, which referred to "all sums which are now or may at any time hereafter be owing or payable by the Company to the Bank", clearly indicated an intention to cover future indebtedness. The court applied the principle that the language of a guarantee must be construed according to its ordinary meaning, and where the intention is to cover future liabilities, clear words to that effect are to be given their full effect.

The appeal was allowed, and the judgment of the Supreme Court of New South Wales was set aside.

Orders