Motel Marine Pty Ltd v IAC (Finance) Pty Ltd [1964] HCA 7; (1964) 110 CLR 9 (25 February 1964)

HIGH COURT OF AUSTRALIA

MOTEL MARINE PTY. LTD. v. I.A.C. (FINANCE) PTY. LTD. [1964] HCA 7; (1964) 110 CLR 9

Money-lenders (Tas.)

High Court of Australia
Dixon C.J.(1), Kitto(2), Taylor(2), Menzies(3) and Owen(2) JJ.

CATCHWORDS

Money-lenders (Tas.) - Contract for loan - "Signed personally by the borrower" - Provision not applicable to a company - Lending of Money Act 1915 (Tas.), s. 13.*

HEARING

Hobart, 1964, February 12-14;
Melbourne, 1964, February 25. 25:2:1964
APPEAL from the Supreme Court of Tasmania.

DECISION

February 25.
The following written judgments were delivered:-
DIXON C.J. This is an appeal from a judgment of Burbury C.J. by which his an incorporated company called Motel Marine Pty. Ltd. which had borrowed money from the defendant, I.A.C. (Finance) Pty. Ltd. The loan was of the sum of 25,000 pounds at ten per cent per annum interest. The loan was made on the security of a first mortgage of land situated in Moonah. The defendant respondent is registered as a money-lender under Pt III of the Lending of Money Act 1915 (vol. 3, p. 520 of the Tasmanian Statutes 1826-1959 Reprint). The money was lent on 9th June 1960 to the plaintiff by the defendant. The plaintiff on 18th July 1962 issued a writ of summons and subsequently filed a statement of claim joining I.A.C. (Finance) Pty. Ltd. as the first defendant and Motel Panorama Pty. Ltd. as co-defendant. The purpose of the suit was to obtain declarations showing that the securities given for the loan were ineffectual and to restrain any remedy against the plaintiff in respect of the loan. The plaintiff had received the money lent and did not offer to repay it. The basis of the suit was that s. 13 which forms part of Pt III had not been complied with. It is, I think, necessary to set out s. 13 in full. (at p10)

2. "13. (1) No contract for the repayment by a borrower of money lent to him, or to any agent on his behalf, by a money-lender after the commencement of this section, or for the payment of interest on money so lent, and no security given by the borrower or any such agent to any money-lender in respect of any such contract or loan, shall be enforceable unless- (a) a note or memorandum in writing of the contract is made and signed personally by the borrower; and (b) a copy thereof is delivered to or sent by prepaid registered letter through the post addressed to the borrower within seven days of the making of the contract, and no such contract or security shall be enforceable if it is proved that the note or memorandum required by this section was not signed by the borrower before the money was lent or before the security was given, as the case may be. (at p11)

3. (2) The note or memorandum shall contain all the terms of the contract, and, in particular, shall show-(a) the date of the making of the loan; (b) the amount of the principal of the loan; (c) the interest charged on the loan expressed in terms of a rate per cent per annum; and (d) particulars of any sums of money demanded, received, or taken from, or debited or charged to, the borrower, or deducted from the amount of the loan, by way of bonus, commission, or premium for the making or negotiating or renewing of the loan. (at p11)

4. (3) No such note or memorandum, or copy thereof, shall be insufficient by reason only that in such note or memorandum or copy there is an omission, or an incorrect or insufficient description, or a misdescription, in respect of the particulars required to be contained in such note, memorandum, or copy, if the court before which the enforceability of any such contract or security comes in question is satisfied that such omission, incorrect, or insufficient description, or misdescription, was accidental or due to inadvertence, and was not of such a nature as to be liable to mislead or deceive any person to his prejudice or disadvantage. (at p11)

5. (4) A money-lender shall preserve the note or memorandum signed by the borrower in connexion with every loan made by him for a period of not less than three years from the date of the making of the loan." (at p11)

6. The defendant respondent, no doubt being conscious that it was a money-lender, had prepared a memorandum on a printed form which if adequately filled in might have provided a sufficient compliance with s. 13 as a note or memorandum of the contract of loan which preceded the giving of the securities. In addition to that the security formed a memorandum of mortgage, and drafts and duplicate copies were used between the parties. Ultimately one copy was registered with the Recorder of Titles in Tasmania. The defendant respondent, the mortgagee, took steps to exercise the power of sale, Motel Panorama Pty. Ltd. being the purchaser or intended purchaser. The action was brought to restrain this or any other step. No doubt it is for this reason that Motel Panorama Pty. Ltd. was joined as a second defendant. It is not however a party to the appeal. (at p12)

7. A great deal of discussion took place during this appeal as to the sufficiency or otherwise of the compliance with sub-ss. (1) and (2) of s. 13, due regard being had to sub-s. (3), that is to say of the compliance which could be extracted from these various steps. For my part I think the whole proceedings misconceived. The borrower, the plaintiff appellant, is an incorporated company and I do not think that s. 13 has any application to a borrower who is an incorporated company. Section 13(1)(a) says that the note or memorandum which sub-s. (1) requires must be a note or memorandum in writing made and signed personally by the borrower. I do not think that an incorporated company can sign anything personally or that the requirement so expressed is directed at the protection of companies. A study of s. 13 in its context shows that it is part of a set of provisions directed to the protection of borrowers who are natural persons and subject to the possibility of being over-reached in their indigence or necessities by persons possessing the persuasive force of greater money power and engaged in profiting by the lending of money. It is not directed to the protection of fictitious persons from the possibility of their directors or boards of management misunderstanding an ordinary business transaction or an extraordinary business transaction for that matter. I should have thought the use of the expression "signed personally by the borrower" would have been enough to show that s. 13(1) and therefore the whole provision had no application to fictitious persons. It happens, however, that in a case in which a company in course of voluntary winding up sought unsuccessfully to repudiate a loan in reliance upon the corresponding provision in England, namely Money-lending Act, 1927 (17 & 18 Geo. 5 c. 21) s. 6, sub-ss. (1) and (2), a director of the borrowing company had signed a memorandum which appeared sufficient had the section been applicable. Viscount Simonds, as he now is, sitting in the Chancery Division in In re British Games Ltd. (1938) Ch 240 , held that there had been a sufficient compliance, apparently assuming that the provision was applicable to a company. He did not mention the question whether it was applicable to a company or do more than decide that the defence was not made out. I cannot think that his Lordship would have thought the section applicable had his attention been called to its peculiarities and particularly to the word "personally". I therefore hold that the foundation on which the action was brought fails. Sir Stanley Burbury C.J. considered the action failed for other reasons which the now respondent seeks to justify but for the reasons I have given I think that the appeal should be dismissed. In this view I am under no necessity of considering the effects of a proceeding by a borrower of 25,000 pounds who relieved himself not only of the obligations imposed by the securities and the consequences of enforcing them, but of any obligation whatever to pay any of the money or any interest thereon, by resort to a provision which is obviously directed to the protection of those who are in want of money from the (shall I say) practices of those who have it. (at p13)

KITTO, TAYLOR AND OWEN JJ. We have reached the same conclusion, being unable to reconcile the use of the expression "signed personally by the borrower" with an intention to include in the word "borrower" any but a natural person. (at p13)

2. It is true that a reference in a statute to the signature of a person is not enough to show that the word "person" does not include a company, for the signing of a name by an agent acting within his authority is a signing by the principal: Hirst v. West Riding Union Banking Co. (1901) 2 KB 560 and a company may therefore sign by its agent. But the addition of the word "personally" excludes signing by an agent: see the judgments of Blackburn J. in Reg. v. Justices of Kent (1873) LR 8 QB 305, at p 307 of Coleridge C.J. and Bramwell B. in Swift v. Jewsbury (1874) LR 9 QB 301 , of Bowen L.J. in In re Whitley Partners Ltd. (1886) 32 ChD 337, at p 340 , and of O'Connor J. in Thomson v. McInnes [1911] HCA 30; (1911) 12 CLR 562, at pp 575, 576 . Cf. In re Prince Blucher (1931) 2 Ch 70 ; London County Council v. Agricultural Food Products Ltd. (1955) 2 QB 218 . It therefore excludes signing by a company. A corporation aggregate, being a mere artificial being, cannot act except through the instrumentality of an agent: Story on Agency, 9th ed. (1882) par. 16, p. 16. As Cairns L.J. said in Ferguson v. Wilson (1886) LR 2 Ch App 77 : "The company itself cannot act in its own person, for it has no person" (1866) LR 2 Ch App, at p 89 . "A corporation aggregate of many", said Lord Coke, "cannot appeare in person; for albeit the bodies naturall, whereupon the bodie politique consists, may be seene, yet the bodie politique or corporate itselfe cannot be seene, nor doe any act but by atturney, and homage must ever be done in person, &c.": Co. Litt. 66b. (In the case of Charles P. Kinnell & Co. v. Harding Wace & Co. (1918) 1 KB 405, at pp 412, 413 , it is shown that "atturney" is too narrow.) Even if the corporate seal be affixed in the proper manner and with the proper authentication, there is no personal signing of the document by the corporation, for the sealing is done through agents: Chambers v. Manchester and Milford Railway Co. [1864] EngR 601; (1864) 5 B & S 588, at pp 605, 606 [1864] EngR 601; (122 ER 951, at pp 957, 958) . To accept Salmond's observation that a corporation, having neither soul nor body, cannot act save through the agency of some representative in the world of real men: Jurisprudence, 7th ed. (1924) p. 343, is not to prefer Savigny's fiction theory of corporate personality over a realist or organic theory or any other of the theories that compete with them in the field of jurisprudence. It is simply to accept a fact. (at p14)

3. What is the consequence? In In re British Games Ltd. (1938) 1 Ch 240 , a case under an English section in terms similar to those of s. 13, a submission was put to Simonds J. (as he then was) which recognized the impossibility of a company's signing a memorandum personally, and was directed to meeting a contention that since the section could hardly have intended to make money lent to a company irrecoverable for non-compliance with an impossible condition it should be read as subject to an implication adapting to a memorandum under the section the provision found in all Companies Acts that a contract required to be made in writing signed by the parties to be charged may be made on behalf of the company in writing signed by any person acting under its authority. The judgment contains no discussion of the difficulty that exists in supporting the suggested implication. In the particular case there was a memorandum of the contract for repayment, signed expressly for and on behalf of the borrowing company by a director of the company and by its secretary. The memorandum did not bear the company's common seal. But even if the seal had been duly affixed, the contention would have been open which counsel for the money-lender sought to meet in the manner we have described; that is to say the contention that money lent by a money-lender to a company could never be recovered as there never could be a memorandum signed personally by the company. The correct answer to it was, we think, not that which counsel suggested to Simonds J., but an answer adapting to s. 13 what Lord Selborne L.C. said in Pharmaceutical Society v. London and Provincial Supply Association (1880) 5 App Cas 857 in relation to a statutory prohibition: "If a statute provides that no person shall do a particular act except on a particular condition, it is prima facie, natural and reasonable (unless there be something in the context, or in the manifest object of the statute, or in the nature of the subject-matter, to exclude that construction) to understand the Legislature as intending such persons as, by the use of proper means, may be able to fulfil the condition; and not those who, though called 'persons' in law, have no capacity to do so at any time, by any means, or under any circumstances, whatsoever" (1880) 5 App Cas, at p 862 . (at p15)

4. There are to be found in the books many illustrations of statutory provisions which, though expressed to apply to persons generally, have been held, because of their prescribing conditions incapable of performance save by natural persons, to have no application in respect of corporations aggregate. It will be sufficient to mention Guardians of St. Leonard's Shoreditch v. Franklin (1878) 3 CPD 377 ; In re West of England and South Wales District Bank; Ex parte Swansea Friendly Society (1879) 11 Ch D 768 ; In re Standard Manufacturing Co. (1891) 1 Ch 627 ; In re Rileys Ltd.; Harper v. Rileys (1903) 2 Ch 590 . (at p15)

5. The proper conclusion from the impossibility of the condition in s. 13 (1)(a) as applied to the case of a borrowing company is, in our opinion, that the legislature does not intend the word "borrower" in that section to extend to a company. (at p15)

6. We agree that the appeal should be dismissed and it is, therefore, unnecessary to consider the other matters discussed during the hearing of the appeal. (at p15)

MENZIES J. This appeal from a judgment of the Chief Justice of the Supreme Court of Tasmania seems to me to require the determination of a number of questions concerned with the meaning of the Lending of Money Act 1915 (Tas.), as amended, and its application to circumstances which occurred in 1960 and can be stated shortly. The appellant and the respondent were both bodies corporate. The respondent was registered as a money-lender under the foregoing Act. The appellant wanted to borrow from the respondent the sum of 25,000 pounds for one year at ten per cent interest payable monthly and offered as security for the loan a mortgage of freehold property. The respondent stipulated for guarantees by three of the directors of the appellant. Negotiations extended over a period but by 3rd May 1960 the respondent had agreed to make the loan and on that day one of the appellant's directors signed on behalf of the appellant a document headed "Memorandum of Contract Pursuant to the Lending of Money Act 1915". The document was as follows:-

"1. Name of Borrower Motel Marine Pty. Ltd. 2. Name of Lender I.A.C. (Finance) Pty. Ltd.

3. Date of Making of Loan To be advised
4. Principal moneys advanced 25,000 pounds .0.0
5. Rate of interest expressed
in terms of rate per centum
per annum 10% simple.
6. Particulars of any sums of
money demanded received
or taken from or debited or
charged to the Borrower or
deducted from the amount
of the loan by way of bonus
commission or premium for
the making of the loan or
negotiating or renewing of
the loan Nil.
7. Repayments required Repayment of loan 25,000 0 .0.
pounds
-One year from date of advance
and by 12 repayments of interest
208 pounds .6.8
each commencing one
month after date of advance.
8. Interest payable on See above.
9. Security for the loan to be First mortgage on land and
taken improvements situated at 153
Risdon Road, Moonah.
Improvements consist of Motel,
two weatherboard dwelling
houses, boat shed and jetty
(as described in application).
10. Any other special term or That repayment of the interest
conditions of the loan and loan be guaranteed by
Robert William Cooper, builder
6 MacGuinness Cresc. New
Town Peter Benson Walker,
Solicitor, 28 Elphinstone Rd.
Hobart John Edward Paine,
works manager, 153 Risdon
Road, Hobart."

On 30th May the respondent's solicitors sent to the appellant's solicitors a memorandum of mortgage in duplicate for execution. On 3rd June 1960 there was a meeting of directors of the appellant and the minutes of that meeting record that pursuant to a resolution then adopted the common seal of the company was affixed to the aforesaid memorandum of mortgage. On 7th June 1960 the appellant's solicitors returned the memorandum of mortgage in duplicate to the respondent's solicitors. Settlement was effected on 9th June. It was on this date that the loan was made. It is clear that as late as 8th June the mortgage was not dated and it did not show the date of the making of the loan, the dates for the payment of interest or the date for the repayment of the loan. There was conflicting evidence upon the question whether the mortgage was dated upon settlement. As to this his Honour's findings were: "I am not persuaded that in fact the mortgage was not dated upon settlement but on the other hand I am not persuaded that it was. Upon the whole of the evidence the only finding I can make is that the date (9th June 1960) and the corresponding date for repayment of principal (9th June 1961) the first monthly date for payment of interest (9th June 1960) and the subsequent monthly days (9th) were inserted at some time between the settlement on the 9th June 1960 and the 15th June 1960 when the documents were lodged at the Lands Titles Office for registration". This is not, I think, to be understood as a finding that the mortgage was not dated upon settlement, for that is a matter as to which his Honour said he was not persuaded. His Honour also found that 9th June was the only possible date for the mortgage to bear. The three directors of the appellant company who were to guarantee the loan joined in the mortgage as convenantors, so making themselves liable for the payment of the principal and interest. The mortgage was lodged for registration on 15th June 1960 and was thereafter registered. There was default under the mortgage. The principal was not repaid and on 26th June 1962 the respondent, in the exercise of the power to sell conferred by the mortgage, proposed to sell the land secured thereby. The appellant thereupon commenced proceedings for declarations that the contract for the repayment of the loan, the contract for the payment of interest and the mortgage security were unenforceable and claimed other relief including an injunction restraining the respondent from exercising the power of sale conferred by the mortgage and an order that the respondent execute and register a discharge of the mortgage. The basis for the relief claimed was the operation of s. 13 of the Act. That section is as follows:- "(1) No contract for the repayment by a borrower of money lent to him, or to any agent on his behalf, by a money-lender after the commencement of this section, or for the payment of interest on money so lent, and no security given by the borrower or any such agent to any money-lender in respect of any such contract or loan, shall be enforceable unless - (a) a note or memorandum in writing of the contract is made and signed personally by the borrower; and (b) a copy thereof is delivered to or sent by prepaid registered letter through the post addressed to the borrower within seven days of the making of the contract, and no such contract or security shall be enforceable if it is proved that the note or memorandum required by this section was not signed by the borrower before the money was lent or before the security was given, as the case may be. (at p18)

2. (2) The note or memorandum shall contain all the terms of the contract, and, in particular, shall show - (a) the date of the making of the loan; (b) the amount of the principal of the loan; (c) the interest charged on the loan expressed in terms of a rate per cent per annum; and (d) particulars of any sums of money demanded, received, or taken from, or debited or charged to, the borrower, or deducted from the amount of the loan, by way of bonus, commission, or premium for the making or negotiating or renewing of the loan. (at p18)

3. (3) No such note or memorandum, or copy thereof, shall be insufficient by reason only that in such note or memorandum or copy there is an omission, or an incorrect or insufficient description, or a misdescription, in respect of the particulars required to be contained in such note, memorandum, or copy, if the court before which the enforceability of any such contract or security comes in question is satisfied that such omission, incorrect, or insufficient description, or misdescription, was accidental or due to inadvertence, and was not of such a nature as to be liable to mislead or deceive any person to his prejudice or disadvantage. (at p18)

4. (4) A money-lender shall preserve the note or memorandum signed by the borrower in connexion with every loan made by him for a period of not less than three years from the date of the making of the loan. (at p18)

5. Penalty: Minimum, ten pounds; maximum, one hundred pounds." (at p18)

6. The action failed before Burbury C.J. who found that the memorandum of 3rd May was a sufficient memorandum for the purposes of the section. This the learned judge did after having reached the conclusion that the omission therefrom of anything which s. 13(2) required that it should contain was due to inadvertence and was not of such a nature as to be liable to mislead or deceive any person to his prejudice or disadvantage (s. 13(3)). (at p19)

7. Before considering whether or not this is correct, it is necessary to deal first with a point which was raised in this Court but not in the Supreme Court. It is that s. 13 does not apply to an incorporated body. I find no reason for doubting that other provisions of the Act cover a company which is a borrower and that sections such as 4, 5, 6, 12 and 14 apply when it is a company which is the borrower. The argument, so it seems to me, depends entirely upon the use in s. 13 of the words "signed personally by the borrower" and it is that, because a company cannot sign personally, this particular section can have no application when it is a company that borrows from a money-lender. It is, of course, true in one sense that a company cannot do anything personally notwithstanding that the Companies Act does give companies powers which are not really performed by agents, e.g. to alter capital or the memorandum and articles of association, and imposes liabilities upon companies themselves, e.g. not to purchase their own shares and to keep all sorts of records. These could be regarded as personal powers and personal obligations for which the company is itself accountable. But as Cairns L.J. (as he then was) said in Ferguson v. Wilson (1866) LR 2 Ch App 77 when speaking of the relationship between a company and its directors, "The company itself cannot act in its own person, for it has no person; it can only act through directors . . . (1866) LR 2 Ch App, at p 89 ". Recognition of this, however, does not seem to me to conclude the matter in issue here for the real question is whether s. 13 is rendered inapplicable to a company borrower because of the requirement of a personal signature. The alternative is to understand the requirement of the personal signature in s. 13 as being complied with in the case of a company by the signature of an agent or by the affixing of the company's seal in accordance with its constitution. The choice is between a construction of s. 13 that excludes companies altogether and one which, in a sense, gives an extended meaning to the words "signed personally by the borrower" such as would have been necessary to accommodate the section to companies if it had been expressly provided that s. 13 should apply to company borrowers. In In re British Games Ltd. (1938) Ch 240 Simonds J. (as Viscount Simonds then was) regarded the signature by an agent as sufficient for the purposes of a like section and did so in a case where it was assumed by all concerned that the sealing of a memorandum by a company would amount to a personal signature for the purposes of the section. As will appear subsequently, I take the view that, for reasons other than the form of signature, the memorandum of 3rd May is not a sufficient memorandum for the purposes of s. 13 and so it is not necessary for me to agree or disagree with the decision in In re British Games Ltd. (1938) Ch 240 or to consider the application of s. 111 (1833) 2 LJ (NS) Ex 179 of the Companies Act 1959 (Tas.) which had no counterpart in s. 29 of the English Companies Act, 1929. The critical question here, in my opinion, is whether a document which is sealed with a company's seal in accordance with its constitution is to be regarded as signed personally by the company for the purposes of a section in an Act that does in general apply to company borrowers. I think that it is. Cases dealing with the question whether a document sealed by a natural person is signed, such as Doe d. Phillips v. Evans (1833) 2 LJ (NS) Ex 179 where Bayley B. said: "Unless the 7th of Geo. 4 applies to proceedings under 1 Geo. 4, the consequence would be, that there would be no means of proving them, as the present officer has no right to sign. He seals only. Sealing is substituted for signing, and, perhaps, upon a liberal construction, the word 'signature' may be satisfied by sealing" (1833) 2 LJ (NS) Ex, at p 181 , do not seem to me to have much bearing upon the construction of the Act here in question but I do consider that some help on the question which has arisen can be obtained not only from the assumption made in In re British Games Ltd. (1938) Ch 240 but from the decision in Hirst v. West Riding Union Banking Company Ltd. (1901) 2 KB 560 which was concerned with the application of Lord Tenterden's Act. An acknowledgment under the Act must be signed by the person himself (see the cases cited in Stroud's Judicial Dictionary, 3rd ed. (1953) p. 2787) and in Hirst's Case (1901) 2 KB 560 it was submitted "that 'person' in the 6th section of Lord Tenterden's Act means a natural person, and does not include an artificial person, such as a corporation aggregate, which is incapable of personally signing a document. The section appears to assume that the 'person' referred to can 'sign'" (1901) 2 KB, at p 561 . This argument was rejected and it was held that, notwithstanding the requirement that the person should himself sign the memorandum, the section applied to a company. In the course of his judgment Stirling L.J. (1901) 2 KB, at p 563 cited a passage from the judgment of Lord Blackburn in Pharmaceutical Society v. London and Provincial Supply Association (1880) 5 App Cas 857 , concluding with the words: "I am quite clear about this, that, whenever you can see that the object of the Act requires that the word 'person' shall have the more extended or the less extended sense, then, whichever sense it requires, you should apply the word in that sense and construe the Act accordingly" (1880) 5 App Cas, at p 869 . The learned Lord Justice concluded his judgment by saying: "It appears to me that the object of the Act extends to affording the protection given by it to such a corporation" (1901) 2 KB, at p 564 . That appears to me to be the case here and, accordingly, to give effect to that object I consider that a document which is sealed by a company in accordance with its constitution should be regarded as "signed personally" for the purposes of s. 13. When the seal of a company is affixed to a document in accordance with the company's articles of association, that document can be said to be signed by the company. The document is marked with the company's seal which must contain the company's name for the purpose of authenticating the document. Furthermore, such signature by sealing is the company's signature and is not the signature of any other person on behalf of the company. In this sense a company has, by the sealing, signed the document personally. Sections such as s. 13 have in the past been regarded as applicable when the borrower is a company - see for instance Ocean Road Motel Pty. Ltd. v. Pacific Acceptance Corporation Ltd. (1963) 109 CLR 276 . I do not consider that such cases were decided upon an incorrect assumption. (at p21)

8. It is necessary, therefore, to consider the ground upon which the learned Chief Justice based his judgment. With great respect, I am not able to agree with him that the declaration of 3rd May 1960 was a sufficient memorandum of the contract for the repayment of the money lent or for the payment of interest thereon or for the security given in respect of that loan - all of which came into force for the first time on 9th June 1960 when the mortgage was given. It appears to me that, in addition to the omission from the memorandum of the dates for the making and for the repayment of the loan and for the payment of interest, the terms of the mortgage differ from the memorandum in at least two significant respects relating to the repayment of the purchase money and for the payment of interest. By cl. 9 thereof it was provided that "in the event of the mortgaged property being sold by the mortgagor its successors or assigns the whole of the principal moneys and interest shall immediately become payable to the mortgagee". This is something additional to anything disclosed in the memorandum. The covenant for the payment of interest is to the effect that interest at the rate of 10 pounds for every 100 pounds shall be made by payments of 208 pounds 6s. 8d. by equal monthly payments on the 9th day of each month, the first to be made on 9th July 1960. This, however, is subject to a proviso as follows:-"(a) That interest may be capitalized. But it is hereby agreed that the total principal moneys secured by this Mortgage shall not exceed the sum of Twenty seven thousand five hundred pounds. Provided however that when the aggregate principal moneys total the limit aforesaid simple interest only shall thenceforth be chargeable thereon at the rate and payable on the days aforesaid." This proviso was probably based upon the second paragraph of the Fifth Schedule to the Conveyancing and Law of Property Act 1888 but it may be that because interest is payable at monthly rather than six-monthly intervals - cf. s. 4(b) of the Lending of Money Act - the implication to be derived from the proviso is not that which is set out in the Schedule. Nevertheless I do regard the proviso as entitling the lender to compound interest in certain circumstances whereas the memorandum stipulates for simple interest only. (at p22)

9. I do not think the foregoing omissions or misdescriptions could be excused under s. 13(3) of the Act. None of them was due to inadvertence except in the sense that there may have been a failure to appreciate the significance of omitting from a memorandum something which s. 13(2) of the Act requires that a memorandum should contain. Such a failure does not, however, make the omission due to inadvertence in any relevant sense. The omission to show the necessary dates was, for instance, intentional and the form of the memorandum itself makes it clear that at least it was appreciated that the memorandum should contain the date of the making of the loan. Furthermore, cl. 9 of the mortgage operated to advance the date of repayment on a condition there stated and the proviso in relation to the capitalization of interest negatived the correctness of the statement that the rate of interest was ten per cent simple. These misdescriptions were not in any relevant sense accidental or due to inadvertence and, furthermore, both were of a nature liable to mislead any person referring to the memorandum to find out the terms of the loan. (at p22)

10. Disagreeing as I do with the ground upon which the judgment appealed from was based, it is necessary to consider whether the judgment itself ought to be supported upon some ground other than that the memorandum of 3rd May was a sufficient memorandum for the purposes of s. 13 of the Act. (at p22)

11. The respondent's most far-reaching argument was that s. 13 cannot apply to a simple mortgage transaction because in such a case where the mortgage is both the contract to pay and the security in respect of the loan it is impossible to have the requisite note "before the money was lent or before the security was given". I do not accept this. To take one case merely as an instance of what is possible, an additional copy of the proposed mortgage could be prepared and signed before the mortgage is executed and brought into force. (at p23)

12. The respondent then relied upon the memorandum of mortgage itself as a memorandum for the purposes of s. 13. If, however, the appellant's sealing of the mortgage on 3rd June could be treated as a signature of a memorandum for the purposes of s. 13, the difficulty that the mortgage was not then complete has to be faced, for it did not show the date of the making of the loan, the dates upon which interest was payable and the date for the repayment of the loan. These are all matters which s. 13(2) requires that a sufficient memorandum should contain and again it becomes necessary to consider whether the omissions from the memorandum were accidental or due to inadvertence. It seems to me the dates were omitted deliberately and any failure to appreciate the significance of the omissions, if the document sealed were to be regarded as a memorandum for the purposes of s. 13, is not to be excused on the grounds of accident or inadvertence. This conclusion makes it unnecessary to decide whether the mortgage, if completed, could itself have been regarded as a sufficient memorandum, a copy of which was delivered to the borrower and was so delivered "within seven days of the making of the contract". (at p23)

13. For the foregoing reasons I have come to the conclusion that s. 13 applied and that it rendered the contract to repay the loan and to pay interest and the security for the loan unenforceable and that the appeal ought to be allowed. (at p23)

14. There is, however, a further circumstance that bears upon the form of order which should be made. The Lending of Money Act 1915 has been amended with retrospective effect since the determination of the action in the Supreme Court and it is possible that the appellant might be granted some relief pursuant to the added section (s. 13A). It is not for this Court in this appeal to grant or foreclose the grant of relief under the section and in the circumstances I consider the appropriate order to be made is to allow the appeal, set aside the order of the Supreme Court and remit the matter to the Supreme Court to be dealt with in accordance with law. (at p23)

ORDER

Appeal dismissed with costs.