McLaughlin v Freehill [1908] HCA 15; (1908) 5 CLR 858 (23 April 1908)

HIGH COURT OF AUSTRALIA

McLaughlin Defendant, Appellant; and Freehill Plaintiff, Respondent.

H C of A

On appeal from the Supreme Court of New South Wales.

23 April 1908

Griffith C.J., Barton and Isaacs JJ.

Cullen K.C. and Watt, for the appellant.

Gordon K.C., Harvey and Carlos, for the respondent,

August 23

Griffith C.J.

This is an action by a solicitor for recovery of costs due to him, as he alleges, as solicitor for the appellant. The appellant had been declared by the Supreme Court of New South Wales to be an insane person. He naturally desired to have that order set aside, and consulted the respondent for that purpose. Now, it is settled that work done for the benefit of an insane person, although he is incompetent technically to make a contract, may nevertheless be regarded as something in the nature of necessaries. Consequently an action will lie against him, as it will in some other cases, for necessaries. The only plea to the action was never indebted, but there was a counterclaim for negligence, on which nothing turns, as it was abandoned. The only question left to the jury was whether the work done by the plaintiff for the defendant was necessaries, and the jury found a verdict for the plaintiff. Application was then made to the Supreme Court for a new trial, or nonsuit, and a rule nisi was granted and afterwards discharged. The Court thought that the only question was whether the jury were justified in coming to the conclusion that the work was in the nature of necessaries. It is not contested here now that they were justified in doing so, and that the respondent is consequently entitled to succeed in the action, unless, although the work was of such a nature as to be necessaries, the other circumstances of the case negative the idea of any contractual or quasi-contractual obligation between the parties.

Let us consider for a moment what was the relative position of the parties. The application to set aside the order, which is alleged by the plaintiff to have been necessary, might have been successful or unsuccessful, and the question whether the work done was or was not necessary might possibly have depended on the result of the application. The application was successful, and this work was necessary. The plaintiff is therefore entitled to recover the money in some way. If the lunacy had continued he would not have been entitled to recover the money directly against the lunatic's estate, because that was in the hands of a committee, and the only course open to him would have been to invoke the aid of the Court, through the committee, and he might or might not have been successful in obtaining an order for payment of the debt. Under those circumstances the solicitor very sensibly made application to the Court, with the knowledge of the committee, for an order that any costs he might incur in the contemplated proceeding might be paid out of the estate, and the Court made that order, which was, in effect, an intimation or assurance from the Court that, whatever might be the result of the application, when the time came to consider whether the costs incurred ought to be paid out of the estate, the Court would consider that they should be granted. I fail to see how that can alter the character of the transaction as between the plaintiff and the defendant. It seems to me to be quite a collateral matter.

Dr. Cullen contends that there was no intention on the part of the solicitor that the costs should constitute a debt due by the defendant to him. There was no direct evidence on the point, and it does not appear to have been considered by the jury I agree with what was said by Lopes L.J., In re Rhodes; Rhodes v. Rhodes[1]:—"I do not think that unless the intention of the party making the payment was that it should constitute a debt, any obligation could be implied against a person under disability." But the obligation implied against a person under disability is obligatio quasi ex contractu. Here there was prima facie an implied obligation or contract. There is nothing to show that there was any intention on the part of the solicitor—when he did the work—that he would not look to the defendant for payment. If the defendant continued insane, of course he would have to look to the estate, but if he recovered he would look to him. The first application was unsuccessful. Subsequently another application for a declaration that the appellant was sane was granted, and the Court ordered, amongst other things, that the present appellant's taxed costs should be paid by the committee of the estate to his solicitor, the plaintiff in the action. It is suggested that that amounts to an order of the Court as between the appellant and his solicitor that the debt should not be paid by the appellant to his solicitor, and that any previous contractual obligation was merged in that order.

We are all familiar with the rule that an obligation may be merged in a judgment. That is purely a technical rule, but the application of the rule implies litigation between parties. The order in this case is an order made on the defendant's application that his costs should be paid out of his estate to his solicitor. In my opinion, that did not affect any contractual obligation between the appellant and his solicitor any more than an order made in an action for the administration of a trust, or of the estate of a deceased person, that the plaintiff's costs shall be paid out of the estate. The order may be to pay them to the plaintiff, or it may be that they are to be paid to his solicitor. In either case the direction operates as an authority to pay the money to the person designated, but it does not operate as a judgment between the plaintiff and his solicitor. The doctrine advanced, therefore, seems to me to have no application at all to the present case. Moreover, no such defence is pleaded. Application was made to the Full Court, and removed to this Court, to be allowed to plead res judicata, but that application was refused. In this case it would be most unreasonable to allow such an amendment. The debt is not denied, and the objection taken is purely formal. Therefore I think the appeal should be dismissed.

Barton J.

I agree with what has fallen from the learned Chief Justice, and I do not think it necessary to add anything further.

Isaacs J.

I agree that this appeal should be dismissed. It is not disputed that the claim of the respondent was for necessaries. It also is not denied that the appellant did receive, and had full benefit of, the work done and the money that has been expended, and which forms part of the respondent's claim. In In re Meares[2] James L.J. said—and the same applies to money expended and work done of which a lunatic has had the benefit:—"In Williams v. Wentworth25 Beav., 325. the Court held that in the case of money expended for the necessary protection of the person and estate of a lunatic, the law would raise an implied contract, and give a valid demand against the lunatic or his estate." That seems to me to be quite applicable to this case. Here the respondent did what is described in In re Cumming[4]. He applied to the Court and obtained security for reimbursement of his costs from the defendant, a lunatic. The Court acceded to the application, because the costs incurred in defending the interests of the lunatic would be as described in Howard v. Earl Digby[5], where Lord Brougham L.C. said:—"In the eye of that Court, be it a Court of Law, or a Court of Equity, or the Chancellor sitting in lunacy, they are valid debts incurred by the insane person, and are discharged by the justice of the Court."

Therefore, his plea of never indebted fails absolutely. The only other plea was negligence, causing damages, pleaded by way of a set-off, or counterclaim. That, too, has failed, and is not now urged. That is an end of the case it seems to me.

The question of merger, so-called, has been raised. I do not understand how it applies exactly in the way of merger, but it has not been raised properly in the pleadings. Leave to add it was refused, and, in my opinion, properly refused. But I am also of opinion that if it had been raised formally it would not, for the reasons given by the learned Chief Justice, have been successful. On these grounds I think the appeal should be dismissed.

Appeal dismissed with costs.

Solicitor, for the appellant, J. H. McLaughlin.

Solicitors, for the respondent, Freehill & Donovan.

[1] 44 Ch. D., 94, at pp. 103, 104.

[2] 10 Ch. D., 552, at p. 553.

[3] [1842] EngR 928; 5 Beav., 325.

[4] 1 D. M. & G., 537.

[5] 2 C. & F., 634, at p. 663.