Skip to Content

Decisions of the Superior Courts of New South Wales, 1788-1899

Scott v Jones [1832] NSWSupC 63

promissory note - usury

Supreme Court of New South Wales

Forbes C.J., 17 September 1832

Source: Sydney Gazette, 20 September 1832

This was an action to recover the amount of a promissory note, in favour of the plaintiff, with interest at ten per cent., drawn by the late Robert Howe, to whose estate the defendants are executors.

Mr. F. Stephen said the debt was not disputed; but he would call witnesses to prove that the drawer of the note agreed to pay interest on the amount, at the rate of ten per cent.  Eight per cent., he was aware, was the general rate of interest in the colony, but there was no law to regulate the rate of interest here; and if the borrower covenanted to pay ten per cent., he contended that he was bound by that covenant.  The money, in this case, belonged to the trustees of one of the chapels in Sydney, who were empowered to let it out to the best advantage; and, if Mr. Howe had not agreed to give ten per cent interest on the amount he borrowed, they would have appropriated it in a different manner.  Mr. Stephen then called.

Launcelot Iredale [looks at papers]; this bill is in the handwriting of the late Mr. Robert Howe; this interest account is also in his handwriting; it is made up to the time of the date of this note, and calculated at ten per cent.  I was not a trustee of the chapel when this note was passed.

Thomas Hyndes - This note is in the handwriting of the late Mr. Robert Howe; I know that he passed plaintiff, and that the amount was to bear interest at ten per cent.; I know that he had borrowed other monies at the same rate of interest; he was in the habit of paying ten per cent. for money.

This was the plaintiff's case.

The Chief Justice - This evidence, I presume, Mr. Stephen, is to show that the borrower contracted to pay the ten per cent. interest?

Mr. Stephen - Yes, your Honor.

The Chief Justice - I shall put it to the assessors to say whether ten per cent. is a fair rate of interest.

The learned Judge then summed up, telling the assessors, that as the debt was not disputed, it only remained for them to consider the amount of interest claimed - whether it was a reasonable amount.

Verdict for the plaintiff, damages £189 9s. 2d.

Published by the Division of Law, Macquarie University