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

Brownlow v Graham [1833] NSWSupC 24

warrant of attorney, fraud - Liverpool - mortgage - usury - sheriff's auction, undervalue - reception of English law, usury - costs, legal

Supreme Court of New South Wales

Forbes C.J., Dowling and Burton JJ, 27 March 1833

Source: Sydney Herald, 1 April 1833[1 ]

Brownlow v. Graham. - Last term a rule nisi was obtained on the part of the defendant, calling upon the plaintiff to show cause why a judgment obtained in that case on a warrant of attorney, and all subsequent proceedings thereon, should not be set aside, on the grounds of fraud and irregularity, and that plaintiff should pay the costs.  This rule was obtained on the affidavits of defendant and Andrew Murray.  Graham stated that in 1829 he held a letter of possession of 640 acres of land, situated on the north bank of George's River, in the district of Liverpool.  That in 1831 plaintiff proposed to purchase the farm for £320 or £250, but he (defendant) refused, as he considered it worth £600.  The affidavit went on to state that he made considerable improvements on the land, when he became embarrassed, and applied to plaintiff for the loan of £100, which he agreed to lend for one year, paying £25 interest, and giving a mortgage on the farm; this was acceded to, and he gave a warrant of attorney for £125 for one year from that date.  When the warrant of attorney became due, defendant entered up judgment, and the farm was advertised for sale by the Sheriff, at Polack's London Tavern, on the 30th August, at one o'clock; he attended there accordingly, in company with Mr. Murray, and saw several persons there who intended to bid, but no sign of the Sheriff or his Deputy; having waited for some time, they proceeded to defendant's, who told them that it was put off, and he did not consider that it would be fair to sell, as the hour was past; notwithstanding this, at 2 o'clock Mr. Prout proceeded to sell the land, when the first bid was that of Mr. Jilks, at 5s. per acre; Brownlow called Jilks on one side, and they whispered together, when Jilks withdrew his bid, and some other person bid £25; seeing his property was about being sacrificed, he cautioned Mr. Prout not to continue the sale, but he persisted, and it was finally knocked down to plaintiff for 150l. Being but one half what he formerly offered.  The affidavit of Murray stated that he considered if Jilks' bid had been allowed to go on, the land would have produced a higher price: Graham had been used hardly, and he thought that Brownlow was trying to buy the farm himself.

Mr. Foster now opposed the motion on seven affidavits; Brownlow deposed that he never offered 300l. for the farm; that defendant offered it to him for 160l. in July, 1831, and he accordingly went and looked at it, but did not think it worth the money, and refused it; defendant becoming embarrassed, he advanced him 100l. on a mortgage on the land and warrant of attorney; after the time of payment became due, the defendant requested him to enter up judgment, and sell the land, this he repeated several times; deponent anxious to befriend him, wished to sell it by an auctioneer in the town; this defendant refused, and required that it should be sold by the Sheriff; deponent attended the sale, and purchased the farm for 150l. and there was ample opportunity for any one to bid, and so well satisfied was he, that he gave the value for it, that he offered to sell it again to the defendant for the same sum, if he would pay him 10l. for expense he had been to upon it; deponent did not interfere with the sale until Jilks withdrew his bid; after the sale he went with defendant to the farm, and he pointed out the boundaries to him; defendant said, he thought the farm was worth more, when deponent offered it back at the same sum he gave for it, and he repeated this several times, and he was ready to do so now, if he was paid for the improvements; further, that he never offered 320l. or 350l. for the farm, but that Graham offered it to him for 100l. and he actually paid some money on account, but defendant never would ratify the agreement.

The affidavit of Mr. Bodenham stated, that after the sale plaintiff offered the defendant the farm back for the same sum, who expressed himself thankful, and said he would get the money if he could.

Mr. Prout's affidavit stated, that at the time of sale Jilks bid 5s. per acre, but withdrew, on understanding no credit would be given, and that the farm was knocked down to Brownlow for 150l. being 10l. under that bid by Jilks; that the sale was not postponed or delayed, but took place in the regular course of business, and no delay took place; Brownlow did not interfere until Jilks withdrew his bid, and there was full opportunity for any one to bid; after the sale defendant called at the Sheriff's office, and requested him to pay several small sums out of the purchase money into the Court of Requests, which he did, amounting to 7l. 13s. 6d. and that there was in the Sheriff's hands now 2l. 1s. 6d.

There were several other affidavits as to defendant pointing out the boundaries, and plaintiff offering to return the farm on paying what he paid for it.

These affidavits the learned gentleman continued were sufficiently strong for the Court to dismiss the rule.

Mr. Wentworth, on behalf of defendant, addressed the Court.  The Court would scrutinise this case in the same way as the Equity side would, and if the case was referred to the Master, the utmost interest would be 8 per cent. if  any were allowed.  It was evident from the affidavit of Brownlow, that he was not entitled to interest, for he says that defendant was indebted to him for goods sold and delivered, and that he was indebted to some other person, to pay which the money was advanced, both amounts blended together, and 25 per cent, tacked upon the whole.  From the affidavits of defendant and Murray, it appeared that the sale was to have taken place, as per advertisement, at one o'clock, when the parties went to the appointed place, nobody was there; he went to plaintiff's house, who told him no sale would take place that day, as it would be unfair to him if it did; at half past two on that day the sale, however, did take place, and the only answer given by Prout to this was, that the sale took place according to advertisement, but this could not be considered an answer to that specific allegation.  The representation must have been for some object; it was clear, that it was to lull the suspicion, and deceive the defendant, and cause him not to be in attendance.  Then, as to the interference on the part of plaintiff the case was stronger than that of Hughes and Singleton, in which the Court on the same ground set aside all the proceedings, he trusted the Court would do so in this case.

The Court set aside the proceedings, on terms that defendant should pay the Sheriff's expenses, and refund the money paid for him out of the Sheriff's office.

 

Source: Dowling, Proceedings of the Supreme Court, Vol. 83, State Records of New South Wales, 2/3266

[p. 18] This was an application to set aside the judgement & all subsequent proceedings on the warrant of attorney given by Deft to plf in this case, on the ground of fraud and irregularity.

In 1829 the Deft obtained a letter of possession from the Crown of 646 acres of land on the George's River.  He had made considerable improvements on the land, & having occasion to borrow 100£ on security of the land, the plf agreed to lend him that sum for one year paying 25 per cent interest.  A mortgage was executed with the usual warrant of attorney.  At the end of the year the Deft being unable to pay off the morge & interest the Deft entered up judgement on the warrant of [p. 19] attorney sold the land, as was alleged without due notice of the sale, he himself becoming secretly the purchaser at the price of 133£.  The land having sworn to be worth 320£ - & the prisoners having offered to give 150£ for it, but were induced to withdraw the offer, as was suggested, by the plf.

Four points were made.  1st. That this was only an equitable estate & could not be absolutely sold without reference to a Court of Equity, which would adjust the lawful interest.  2d. That 25 per cent was usurious. -  3d That the sale was invalid & irregular for want of sufft. Notice. -  4th. That the plf was himself the purchaser & seller of the estate - which was incompatible & contrary to Equity.

The Court thought the transaction so tainted with fraud, [p. 20] that the rule must be made absolute.  They relied chiefly on the last three points.  Although they forbade giving any opinion as to the application of the statutes of England agt. usury, to this Colony, yet the Court would in Equity look into the reasonableness of a bargain, where undue advantage was taken of a borrower of money.  The taking of 25 per cent under the circumstances of this case, was a feature in the transaction, shewing that undue advantage had been taken of the Deft.

Dowling J agreed with Forbes C.J.

Burton J.  I do not accede to the proposition that the usury laws of England do not apply to this Colony.[2 ]  On the other [p. 21] grounds I concur.  No man ought to be buyer & seller in a transaction of this kind. -  In such a case, at all events, it should be shewn that the party as noted throughout with the utmost fairness. -

RA. without costs.

 

Forbes C.J., Stephen and Dowling JJ, 28 March 1833

Source: Sydney Herald, 1 April 1833

 

Brownlow v. Graham.  Mr. Unwin understood that the Court yesterday gave their decision that defendant should pay the costs, in consequence of it being stated, on affidavit, that he wished the sale to take place, and that he was to refund certain sums, which it was alleged had been paid on his account.  He wished now to put in affidavits to rebut these assertions, and to prove that no money had been paid out of the Sheriff's office on defendant's account - that no balance had ever been paid, and that he had never acquiesced in the sale.

Judge Dowling.  It would be a bad precedent, Mr. Unwin, we should never get through the business of the Court if it was permitted.

Mr. U.  I will not press it.

 

Notes

[1 ] See also Sydney Gazette, 30 March 1833.  On earlier proceedings, see Sydney Herald, 4 March 1833.

[2 ] On this point, see MacDonald v. Levy, 1833.

Published by the Division of Law, Macquarie University