Leipner v McLean [1909] HCA 17; (1909) 8 CLR 306 (22 April 1909)

HIGH COURT OF AUSTRALIA

Leipner Plaintiff, Appellant; and McLean Defendant, Respondent.

H C of A

On appeal from the Supreme Court of New South Wales.

22 April 1909

Griffith C.J., O'Connor and Isaacs JJ.

Bignold, (Nicholas with him), for the appellant.

E. Milner Stephen, (Broomfield with him), for the respondent.

April 22

Griffith C.J.

We have had an opportunity of considering this case in the interval which has elapsed since the argument, and do not see any necessity for deferring judgment.

The action was brought upon an alleged agreement by which the defendant agreed to pay into the Equity Court for the benefit of the plaintiff, by a certain time, a sum of money which it was necessary for her to pay in order that she might get the benefit of a purchase which she had made at a sale held under the authority of the Court of a property in which she was entitled to an interest. The money advanced was to be secured by a mortgage of the plaintiff's interest in the land which she was to acquire. At the trial evidence was given that the defendant's agents had agreed to lend her on the security of a mortgage a sufficient sum of money to enable her to complete the purchase, but that owing to some accident the amount payable by the plaintiff had been increased by some £25 or £30, and that she thereupon applied to the same agents for the defendant and asked them to advance the extra amount and to pay the whole sum into Court for her at once, and they agreed to do so. An application was made for a nonsuit on the ground that the contract should have been in writing under the Statute of Frauds, and the learned Judge granted the nonsuit on that ground. On an application by the plaintiff to the Full Court for a new trial, that Court did not deal with the question raised upon the Statute of Frauds, but refused a new trial on the ground that the authority of the alleged agent had not been established. In the view that this Court takes of the matter the case must go back for a new trial. On the question of authority the learned Judges of the Supreme Court referred exclusively to a power of attorney given by the defendant to his Australian agents, one of whom is a member of a firm of solicitors in Sydney. But it appears that the transactions in question were entered into on behalf of the defendant by another member of the same firm of solicitors. They were all carried on by him with the plaintiff, and it appeared from affidavits, which the defendant himself had put in in another proceeding in the Court, that the facts were such as to raise the inference that that gentleman had authority to make the contract sued upon. I say nothing as to whether that evidence was conclusive, or as to the weight that should be attached to it, but it is clear that upon that evidence the jury might have come to the conclusion that the gentleman who actually made the bargain with the plaintiff had authority to make it.

With regard to the question under the Statute of Frauds, I will read what was said by Sir G. Mellish L.J. in Erskine v. Adeane[1]:—"No doubt, as a rule of law, if parties enter into negotiations affecting the terms of a bargain, and afterwards reduce it into writing, verbal evidence will not be admitted to introduce additional terms into the agreement, but, nevertheless, what is called a collateral agreement, where the parties have entered into an agreement for a lease or for any other deed under seal, may be made in consideration of one of the parties executing that deed, unless, of course, the stipulation contradicts the terms of the deed itself." In De Lassalle v. Guildford[2], the same principle was laid down in a considered judgment of the Court of Appeal—that is to say, that there may be a collateral agreement to which the Statute of Frauds does not apply. In this case the plaintiff wanted £25 extra to be paid into Court, and she asked the defendant's agent to pay it for her. He said that he would do so on security being given. Accordingly security was given and a deed was executed, and it was agreed that the money should be paid into Court. Was that a collateral agreement—collateral to the arrangement to give the security, and to take effect when the money should be advanced? I think it may reasonably be contended that the particular stipulation to pay the money into Court was collateral. The two contracts may be independent of one another. I suggested during the argument, as an analogous case, that of a man who wishes to pay a debt, and sells a piece of land in order to be able to pay it, and at the time of the sale agrees with the purchaser that he will pay the purchase money to the creditor for him, and after the conveyance is executed the purchaser does not pay the creditor. Surely in such a case as that the agreement to pay the money to the creditor of the vendor instead of to the vendor himself is entirely collateral to the main transaction. The question is one of fact. In the present case I think that the jury might have come to the conclusion that the agreement was collateral, and I think, therefore, that the plaintiff is entitled to have the case sent down for a new trial.

O'Connor J.

I am of the same opinion and have nothing to add.

Isaacs J.

I think that the nonsuit was wrong. I think that the evidence was consistent with the contract to pay the money into Court being collateral to the other part of the transaction—namely, the agreement to advance money upon the security of a further charge—and there are circumstances which have been adverted to in argument which make that conclusion possible. I say no more about that, because I wish to be careful not to say anything that might influence the ultimate finding of the jury on that point.

Then as to the question of evidence of agency. That is also a question that will have to be determined again by the jury. But there was, in my opinion, ample evidence, as matters now stand, upon which the jury might find that, apart altogether from the power of attorney, Mr. Colin Stephen was authorized to make the bargain that he is said to have made, that he would pay this money into Court. It has been said that, although the authority to make the previous contract has been admitted by the defendant, that does not carry the plaintiff any distance with regard to the authority to make the other bargain. I will refer to a case which seems to me quite in point, namely, Hazard v. Treadwell[3], the circumstances of which are set out as follows: The defendant who was a considerable dealer in iron, and known to the plaintiffs as such, though they had never dealt together before, sent a waterman to the plaintiff to purchase iron on trust, and paid for it afterwards. He sent the same waterman a second time with ready money, who received the goods but did not pay for them, and the Chief Justice held that the sending him upon trust the first time and paying afterwards for the goods was an invitation to give him credit, so as to charge the defendant upon the second contract. That is exactly the case here. There is evidence that may be displaced or may be outweighed, but it is impossible to say that there was no evidence to go to the jury as to the agency.

Appeal allowed. Order appealed from discharged. Rule made absolute for a new trial with costs of the rule. Costs of the first trial to be plaintiff's costs in the cause. Respondent to pay the plaintiff such costs of appeal as are allowed in appeals in formâ pauperis.

Solicitor, for the appellant, H. E. McIntosh.

Solicitors, for the respondent, Stephen, Jaques and Stephen.

[1] L.R. 8 Ch., 756, at p. 766.

[2] (1901) 2 K.B., 215.

[3] 1 Stra., 506.