Mayfair Trading Co Pty Ltd v Dreyer [1958] HCA 55

High Court of Australia Dixon C.J. McTiernan and Taylor JJ. Mayfair Trading Co Pty Ltd v Dreyer [1958] HCA 55

ORDER Appeal allowed with costs and cross-appeal dismissed with costs. Omit par. 8 of the order of the Supreme Court and in lieu thereof order that the respondents—except Russell Cox and Edward Peter McDonald—repay to the plaintiff company the sum of £7,437 10s. 0d.

Cur. adv. vult.

The following written judgments were delivered:—

Dec. 12 Dixon C.J.

The action out of which this appeal and cross-appeal arise was brought in the Supreme Court of Western Australia by a principal debtor and certain sureties against a firm claiming to be creditors in respect of a loan or loans secured by a deed creating, as to certain assets, a specific charge and, as to the rest of the company's undertaking, a floating charge. The company had made default and a receiver and manager of its business had been appointed and had gone into possession.

The interest rate charged exceeded twelve and one-half per cent per annum and the plaintiffs said that by this bare fact the defendant firm had constituted itself a money lender under the Money Lenders Act 1912-1948 W.A. if not for all purposes at all events pro hac vice. It was thus incumbent upon the defendant firm to register as money lenders and they had not done so. Moreover, it made it necessary that the note or memorandum mentioned in s. 9 of the Act should be signed and delivered as that provision requires and the requirements of the provision had not been fulfilled, the consequence being that the security and, indeed, the whole transaction were unenforceable in point of law.

In reliance upon this contention the company and the guarantors of the company's liability accordingly instituted the action and sought therein various forms of relief; a declaration that the company was under no liability and that the security and promissory notes given in respect of the loans were "unenforceable", that the promissory notes should be cancelled and delivered up, that a satisfaction of the security, treating it as a bill of sale, should be registered, that an injunction should be granted restraining the defendant firm from attempting to exercise their powers rights and remedies under the security, that the receiver and manager should be ordered to withdraw and to account to the plaintiff company and that he should be restrained from further acting in the capacity. There was also a general claim for damages and for further and other relief. Apparently at some stage of the progress of the action towards a hearing, two of the guarantors or sureties lost heart and dropped out as plaintiffs. They were then placed on the other side of the record. They are not parties to the appeal and it is unnecessary to give any special consideration to their position. The action was heard by Dwyer C.J. His Honour took the view that, inasmuch as more than twelve and one-half per cent per annum had been charged as interest and the firm were not registered money lenders, the transaction could not stand. His judgment or decree declared that the plaintiffs stood under no liability to repay the balance of the loans, an amount of £12,750, and that the promissory notes, the security given by the company and the guarantee were all unenforceable. Orders followed for the delivery up of these documents, for the registration of a satisfaction, for the withdrawal of the receiver and manager and for the taking of an account of the moneys, and of the proceeds of sale of the property of the company he had received and of the manner in which he had applied the same. But there the relief stopped; the decree did not go on to say that the moneys in the hands of the receiver should be paid over to the company. On the contrary the decree declared that the plaintiff company was not entitled to recover from the receiver or from the the defendants forming the firm of lenders any part of those moneys. They amounted to the sum of £7,437 10s. 0d. and that sum had been paid over by the receiver to the defendant firm. The sum had been applied by the firm in discharge pro tanto of the indebtedness which the defendant firm claimed against the plaintiff company. The amount of that alleged indebtedness had been £20,187 10s. 0d. It was thus that the indebtedness claimed by the defendant firm was reduced to the sum of £12,750, the amount in respect of which the first declaration had declared that the plaintiff company and the guarantors were under no liability.