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

MacDonald v Levy (1833) 1 Legge 39; [1833] NSWSupC 47

usury - reception of English law, usury - reception of English law,  attitude of Burton J. - customs and usages - repugnance to English law - Burton J., personal circumstances - Burton J., attitude to New South Wales - Burton J., appointment of - Burton J., attitude to religion]

Supreme Court of New South Wales

Burton J, 8 March 1833

Source: Sydney Herald, 11 March 1833[1 ]

Macdonald v. Levy - This was an action to recover on a promissory note, and an account stated.  Verdict for plaintiff £15 0s. 7d.

Mr. F. Stephen for plaintiff, Mr. Keith for defendant.[2 ]

 

Forbes C.J., Dowling and Burton JJ, 8 June 1833

Source: Sydney Gazette, 11 June 1833[3 ]

 

In this case, which was an action on a promissory note, a question arose as to what was the legal rate of interest in this colony - whether, in fact, the usury laws applied here. At the trial, before Mr. Justice Burton, the point was reserved, and subsequently argued before the full court. Their Honors took time to consider, and this morning, at the sitting of the court, stated that they were prepared to give judgment in the case.

Mr. Justice Burton. - In this case two questions are presented for the consideration of the court - 1st. Whether there be in this colony any legal limitation to the rate of interest which may be taken of the forbearance of money; and if so, then, 2nd. What is that limitation ?

The question arises upon a point reserved on a trial before me and two assessors on the 8th of March last, of an action on a promissory note, upon which Mr. Francis Stephen the attorney for the plaintiff asked for a verdict with interest at 8 per cent, from the time the note became due; I directed the assessors to give a verdict for the plaintiff in the amount of the promissory note with lawful interest thereon, informing Mr. Stephen that he should move the court to ascertain what is lawful interest upon such an instrument in this colony.[4 ]

On the 6th of April, Mr. Francis Stephen moved the court accordingly; but to be allowed to calculate the interest at the rate of 10 per cent. as being the interest taken by the several Banks, and by usage and custom in this colony; and it was argued by him and by Mr. Norton, briefly, that the law of England, as to the rate of legal interest, does not apply to this colony. - And the statute 3 Geo. IV. c. 47, concerning mortgages executed in Great Britain for securing a greater amount of interest than is legal in England, was referred to, which makes legal such mortgages; as shewing that the colonies are empowered to make their own laws on this subject.

It was further argued that part of an an [sic] Act may apply and part not; that the rate of interest is local, and depends on the custom of the colony, and in this view the statute would then stand a blank as to the rate of interest in the colony, and the court may yet hold that the Usury Laws apply so far as to restrict the taking more than the rate allowed by custom, but that the rate of interest does not apply.  And reference was made to the Savings' Bank Act which authorizes that bank to take not less than 8 per cent interest, as shewing the opinion of the local legislature.

It was argued on the other side by Mr. Keith for the defendant, that 5 per cent is the lawful interest in this colony; that the constitution of this colony and its laws are founded on the statute 9 Geo. IV. C. 83; that the legislative council might have enacted that 10 per cent. should be legal, or 8 per cent., as by the laws of some West Indian islands, of 6 per cent., as in Canada; but not having done so, he referred to section 24 of that statute, whereby it is enacted, that all laws and statutes of England, in force at the time of the passing of that act, shall be applied in the administration of justice, so far as they can be applied; as shewing that the law of England on this subject is the law of this colony, if it can be applied; and the simple question was, can the usury laws of England be applied to this colony?  That as to the rate of interest, that allowed by the statute is the only rate which this court can allow; that the Savings' Bank Act, authorising a greater rate of interest in the particular case of that Establishment, shewed that the legislature did not consider it applicable to all cases.

I have approached the consideration of this subject, I will not say reluctantly, because it is my duty, but under many inducements, arising from the knowledge that my humble opinion is opposed to that of both my learned brothers - perhaps to that of many members of the legal profession - and certainly to the desires of many persons of great influence in this place, not to approach it at all; but I can suffer neither the one or other of these considerations to move me from the path of duty which my station in this court, as one of the Judges appointed under the provision of the stat. 9 Geo. 4, c. 83, has imposed upon me.  Early upon my arrival in this colony, I witnessed the uncertainty which prevails upon the subject of the legal interest of money; the looseness of practice at least, if not inadvertance to the true principles upon which it is founded.  I saw no particular rate of interest respected or adhered to even in this court, but that actions were brought, and judgments entered upon instruments bearing various and some exorbitant rates of interest, and without objection.  In one case a warrant of attorney appeared which was passed for a debt upon which 25 per cent., and in another a bond upon which 10 per cent. was reserved; in another, 15; whilst out of doors, 12, and 11½ per cent. were offered by public advertisement for loans of money; and it was proved before me in one case, that 45 per cent. had been taken for a discount, and the records of the different registry offices of this court, although they do not shew the whole truth, yet shew that most exorbitant and ruinous interest is exacted by the lenders of money.  I received no answer to my enquiries which could satisfy me that such a state of things was according to law, and I thought it contrary to my duty to suffer it to continue.  If there be no legal limitation to the rate of interest, then what every man contracts for is that which he has a right to claim in a court of law and a court of equity; for that is then legal interest.  It is only in certain cases, and between particular persons as trustee and cestry que trust, executor and next of kin, and the like; that a court of equity upon an account gives usually a lower rate that legal interest where none has been stipulated for, and none made out of the fund: but in no case can a court of law - and a court of law in this colony is by the statutes now in force, and by the special provisions of the rules of court kept as distinct in its functions from the court of equity in this colony as those courts are in England.  It is not competent for a court of law to act upon principles of supposed equity: and it is not the province of a jury or of assessors in such a court to say what is or what is not a reasonable rate of interest, whether there has been a specific agreement for interest or not; bus [sic] it is the province of the court alone to determine what is the legal interest: that is a question of law expressly left to the court by the statute under which justice is now administered; and if there be no limitation, the court is bound by law to give that which is contracted for, if there be, then the court is bound to give that alone.

It has been stated by the Attorney for the plaintiff in this cause, that the Court itself when the question has been left to its decision, (as for interest due on a mortgage) has uniformly decided not to allow more than 8 per cent, although the mortgage perhaps was given as a security for as much as 20 per cent.

I am however informed by the Registrar of the Court, that he knows of no instance of a bill for foreclosure upon a mortgage being filed; and by the oldest officer of the court, Mr. Gurner, the chief clerk, I am informed that it is not the practice to take an account of interest upon mortgages, unless a bill of foreclosure is filed; and he only recollects two references on bills of foreclosure during the 17 years he has been an officer of the late Supreme Court, and of the present court, whilst by a reference to the records in the sheriff's office, I have found that during the years 1829 and 1830 alone, there were many[ 5] writs of execution executed upon real property.

The fact is, that upon every mortgage actually executed a warrant of attorney is taken as a collateral security, the mortgaged property is taken in execution for the principal with all the accumulations of enormous interest, sold by the sheriff, that being the most prompt means by which the creditor can obtain satisfaction, as it is the most ruinous in the world for the debtor.

As to the argument which has been advanced by the attorney for the plaintiff, that before any legislature existed in the colony, a rate of interest of 8 per cent. prevailed by common consent or custom, I must observe that to the legality of a custom, there are several requisites in which this, if it even existed, are entirely wanting: -First - That it has been so long used that the memory of man runneth not to the contrary; so that if any one can shew the begining [sic] of it, it is no good custom; for which reason no custom can prevail against an express Act of Parliament, since the statute itself is a proof of a time when such a custom did not exist.

The settlement of this colony was within time of legal memory; the statute of Queen Anne was then in force here, and the beginning of the usage (for it cannot be called a custom) was, as I shall presently show; on the 14th July 1804, having had its origin in a publication of that date made by Governor King; and the first adjudication of interest thereon by the then Court of Civil Judicature, appears by the records in the office of the Supreme Court, to have been on the 13th August, 1810, in the case Jenkins v. Kelly.  A custom must also be uniform and consistent, and binding upon all, and not left to the option of every man, whether he will use it or not.

Immemorial usage is the proper evidence of custom; and if the usage be uniform and consistent, it proves it; otherwise, the contrary.  In the present case, the publication of Governor King, to which I shall presently refer, will shew how little uniformity and consistency prevailed before the 14th July, 1804. - The records of this court will shew how little there has been either before or since that period; and will further shew, that every man has been left to his own option, whether he will use it or not. On the 11th April 1811, in the case of Loane vs. Collins, the Court of civil judicature, gave judgment for plaintiff, on a bond with interest at 12 per cent.

On the 2nd February, 1813, in Broughton v. Feen, the Court gave judgment on a bill of exchange for £550, with interest at 8 per cent, and on the same day in the case of Riley vs. Kable for 12 per cent upon two prommisory notes.

In the year 1829, out of 119 cases in which judgments have been entered up by writ of the Court and subject to its process of execution, not being the whole number, but taken indifferently out of each term, there have been cases in which no rate of interest is expressed in the instrument (the interest being probably added to the principal; 75 at 8 per cent; 13 at 10 per cent; 29 at 12 per cent; 1 at 13 per cent.

In the year 1830, out of 122 cases taken in like manner; there have been cases in which no rate of interest is expressed; 86 at 8 per cent; 2 at 10 per cent; 31 at 12 per cent; 2 at 15 per cent.

[His Honor here read a statement of the number of warrants of attorney, and a memorandum of mortgages registered between the years 1829 and 1833, on which the rate of interest varied from five to twenty-five per cent.][6 ]

I am therefore of opinion, that there is no foundation for the argument advanced by the attorney for the plaintiff, of custom, usage, or common consent.  I will next enquire, whether there be any other foundation for this difference between the practice of this colony and the law of England?  I found, on examining the records of the former courts of civil judicature, deposited in the Supreme Court, an entry of the 13th August, 1810, to the following effect :-

"August 13, 1810,

"Robert Jenkins, Esquire, v. William Kelly. - Action for £100, with interest, at colonial rate, due for money lent and advanced by plaintiff to defendant. Defendant admit the same, and that he agreed to pay 8 per cent. interest, for the 2d December, 1809 - By Governor King's regulation 8 per cent. per annum was allowed as interest. - Verdict taken by consent. - Damages - £105 12s. and costs."

And on the 22d January, 1811, an entry to the following effect :-

"22d January, 1811.

"John M'Arthur v. Henry Kable. - Action on a bill of exchange, drawn by defendant, dated Sydney, Port Jackson, 23d March, 1809, upon Messrs. Plummer, Bashaw, and Plummer, London, directing them, at 90 days' sight, to pay the sum of £100 sterling to plaintiff, or his order, drawing the bull, presentment for acceptance and payment; and non-payment and protest admitted.  The disputed point was the rate of interest, the court referring to a Government Order of July 14, 1804, and to their former judgments, allow 8 per cent. interest."

A manuscript of the Government Order referred to is still extant at the Colonial Office, with a copy of which I have been furnished, it is as follows:-

"Whereas much litigation and many vexatious suits at law, have repeatedly occurred for want of an established and fixed rate of interest on monies and other claims within the territory and its dependencies.  It is hereby ordained, that no persons do directly or indirectly, for bills, bonds, or contracts, (to be made after the publication of this ordinance) take for the loan or use of money, or any other commodities, above the value of eight pounds sterling, for the loan or forbearance of one hundred pounds sterling, or the value thereof for one year, and so proportionably for a greater or less sum; any custom or usage to the contrary notwithstanding.

"And if any person or persons whatsoever do, or shall (after the publication of this ordinance) receive or take more than eight pounds per cent. per annum, or any bill, bond or contract as aforesaid, upon conviction thereof, they will be subject to the penalty of the laws of England respecting usury, which is a forfeiture of treble the value, to be appropriated to such public fund or purpose, as the Governor may direct."

1st, That it shews how great laxity existed in court and out of court at that day, and how little uniformity and consistency of usage. - 2d, that the Governor does not affect to repeal the English law. - 3d, that Governor King had no legislative authority, enabling him to repeal an English Act of Parliament. - 4th, that how little it was regarded as a law even prior to the passing of that Act, the records of the then existing courts have sufficiently shewn. - 5th, after the passing of the stat. 9 Geo. IV, c. 96, there can be no pretence for the existence in this colony of any law contrary to the law of England, not passed by the legislative authority erected in the colony by virtue either of the stat. 4 Geo. IV. C. 96, or stat. 9, Geo. IV. C. 96.  As to the argument used by the attorney for the plaintiff, arising from the supposed authority given by the local legislature, to the taking of interest beyond even 8 per cent. as is done in a particular instance in the Savings' Bank Act, 2d W. IV. No. 13, sec. 5, and adverting to that clause, I find that it is made lawful for the vice president or other trustees attending at such general meeting as is there mentioned, out of the balance in the hands of the treasurer, to discount at a rate of interest not less than 8 per cent. per annum; bills of exchange or promissory notes of an amount, not exceeding £500 &c.  The only remarks I will make on this Act are :- 1st, That it only applies, and is only intended to apply to the particular case of the Savings' Bank, and cannot be applied to any other: 2d, That had I been a Judge of this court at the time it was proposed to the legislature, I should have found it to be my duty in pursuance of the 22d sec. of the statute, 9 Geo. IV. C. 83, to transmit to His Excellency the Governor, a representation that the said clause is repugnant to the laws of England.  Having thus examined the arguments which have been adduced to prove that the law of England respecting the interest of money does not apply to this colony, I will now state the reasons which have induced me to form an opinion that it does.  It is well known that the first settlement in this colony took place in the year 1788, and that His Majesty having been empowered by the Statute  24, Geo. 3, c. 56, to appoint some place beyond the sea for the transportation of offenders from Great Britain, and having appointed the Eastern coast of New Holland for that purpose, was further empowered by Statute 27, Geo. 3, c. 2, to erect a Court of Criminal Judicature of the trial and punishment of offenders, in a more summary way than was used within the realm according to its known and establiihed [sic] laws, and also that His Majesty did by his letters patent, dated 2nd April 1787, appoint not only that there should be within this colony, a court to be called, a court of criminal jurisdiction, but by virtue of His Majesty's Royal Prerogasive [sic], it was also appointed that there should be a court of civil jurisdiction.  As to the forms and manner of proceeding in these courts, they varied from the usual course of the courts in England, but immediately upon their erection, the law to be administered by them (except as altered by the statute) would be the laws of England. For although in the one court its judgments would be chiefly passed perhaps, upon such as had no civil rights remaining to them, having for the most part been attainted felons, yet there were those who accompanied them as guards, or as settlers, and their issue, and the issue of even those attainted felons, whose civil rights were entire, and who might claim to have those rights enforced, except so far as they had been altered by the Act of Parliament.  To these the law of England, as far as it was immediately applicable, was their right, and its various provisions from their advancement as a colony and increasing numbers, and increasing transactions with each other, became daily more and more applicable.

I take it to be clear law, without the aid of an Act of Parliament to make it such that 'if an uninhabited country (as this at the time of its settlement must be considered to have been, for the wandering tribes of its natives, living without certain habitation and without laws were never in the situation of a conquered people, or this colony that of a ceded country); if such a country be discovered and planted by English subjects, all the English laws then in being which are applicable to their situation, and the condition of an infant colony, are immediately their bithright [sic], and as their applicability arises from their improving condition, come daily into force.  They are not in the situation of persons who go to settle in a conquered country, where laws have pre-existed, and which continue to exist until changed by lawful authority.  If they have not the law of England for their guidance, they have none. - In this manner the statute of 12th Anne, s. 12, c. 16, which was passed in the year 1713 for fixing the rate of 5 per cent. in England was a law of this colony at its first establishment, and was applicable the moment one person became a lender and another a borrower.  The precise reason why in certain other colonial possessions of the crown, which have been referred to for a contrary conclusion, a different rate of interest exists by law, is that which causes the statute of Queen Anne to apply to this colony; it is that those colonies were sttled [sic] before that statute was passed, and when the rate of interest was regulated by a previous statute, allowing a greater rate of interest, and that those colonies possessed legislative bodies of their own before the statute of Queen Anne was passed; and, after that period, law passed in England do not bind these colonies, unless they are specially named. - The History of Ireland affords a illustration of this principle. Ireland having been conquered by King Henry II., King John, in the 12th year of his reign, ordained that Ireland should be governed by the laws of England; but, as it still remained a distinct dominion, and had parliaments since the 12th year of King John's reign extended to that kingdom, unless it was specially named or included under general words, as 'within any of the King's dominions;' and by another law called Poyning's Law, passed in the 10th Henry VII., it was enacted, that all Acts of Parliament before made in England should be in force in Ireland, by the same rule that the laws passed between the 12th of King John, and 10th Henry VII., were not binding in Ireland.  Those passed subsequently to the 10th Henry VII., and consequently all the Usury Laws, beginning with the 37th Henry VIII. (Ireland not being expressly mentioned in them, or included under general words), are not in force there, and the rate of interest in Ireland is different from that in England, being six per cent.

Referring to the history of the Colonial Possessions of the Crown, in which a different rate of interest prevails, it will be found to exist upon the same rule.  Thus Jamaica was captured in the time of the commonwealth in 1655, and continued under Military Government until the time of the restoration of King Charles the Second, who, on the 13th February, 1661, granted a free constitution to the colonists, including the power of making their own laws, which is the reason that the statute of 12th Charles II. C. 13, by which the English rate of interest was fixed at 6 per cent., but not that of 12th Anne, by which it was fixed at 5, applied to the island; and by an act of the local legislature of Jamaica, 33 Char. 2, c. 19, the rate of interest was fixed at 10 per cent., and was subsequently reduced by the same authority to 6 per cent.  The island of Barbadoes was settled by letters patent, and a power was given to the colonists to make laws on the 2d June, 1627, which affords a reason why the statutes of Charles II. and of Queen Anne, subsequently passed, did not apply to that island, but the statute of 21 James I. C. 17, by which legal interest was limited to 8 per cent.  In the ceded colonies, as Trinidad, Berbice, Demerara, St. Lucia, the Cape of Good Hope, and Mauritiaus, a different rate of interest prevails, because those countries, at the time of their cession, possessed laws which continued until changed by the Imperial Parliament, or by the authority of His Majesty. - It was because that in these various possessions of the British Crown (but especially Ireland and the West Indies), a rate of interest legally existed different from that which in the year 1774, came to exist in England, that the stat. 13 Geo. III. c. 79, explained by 1 and 2 Geo. IV. C. 51, was passed to enable securities by way of mortgages, to be executed in England upon property situate in those countries, provided the rate of interest should not exceeded 6 per cent: most of the local legislatures of those colonies having at that period reduced, or in consequence of that statue they did afterwards reduce their local interest to that rate: but this statute by no means warrants the argument which was raised upon it by the plaintiff's attorney, that it authorises the existence of a rate of interest in this colony different from that in England: no different rate of interest having ever existed here previously to the settlement of the colony by British subjects; and where the law of England on this subject, did not then apply there was no law.  The only principle upon which the criminal laws of England, as to the definition and punishment of offences comprised in statutes, as well of the same reign as the statute of Queen Anne, as of many reigns prior and subsequent to that statute, but passes previous to the establishment of the colony, could be administered here upon its first settlement, or any other English law, upon which there never was a doubt, is precisely the same upon which the statute 12th Anne, became the law of this colony; and there is no reason for the one of those statutes being law which is not equally applicable to the statute of 12th Anne. The letters patent of His Majesty King George III. dated 2d April, 27th year of His Majesty's reign, first establishing a court of civil judicature in this colony, prescribes indeed a form proceeding, which it was His Majesty's prerogative to do; but, as to the laws to be administered, ordains, directs, and authorises 'the said court to give judgment and sentence according to justice and right,' which, it is remarkable, as the very terms used in Magna Charta, being only expressed in English instead of Latin -

'Nulli negabimus aut differemus rectum vel justitiam.'

His Majesty did not affect to prescribe in any other terms what laws should be administered: it was not in His Royal Prerogative to change the laws, but only in the power of the Parliament.  The letters patent of His Majesty, dated the 4th February, 1814, repealed the former letters patent, and erected three courts of civil judicature, viz. - the Governor's Court, and the Supreme Court, for this colony, and the Lieutenant-Governor's Court for Van Diemen's Land.  The first is directed and authorised "to give judgement and sentence according to justice and right;" the second "to give judgment and sentence according to law and equity;" and the third, which was for Van Diemen's Land, in the terms of the Governor's Court, 'to give judgment and sentence according to justice and right.'

It appears by the report of the Commissioner of Inquiry, on the judicial establishments of this colony, ordered by the House of Commons to be printed on the 21st February, 1823, that a difficulty had been expressed by Mr. Judge Advocated Wylde as to the applicability here of English statutes passed in England since the 27 Geo. III.  By the statute 4 Geo. IV. c. 96, the constitution of the several courts was changed, but the duty to administer the laws of England, in all matters coming before them, is plainly expressed in almost every clause; and by section 24 His Majesty was empowered to erect a legislative body in the colony, to make laws and ordinances, so as they should not be repugnant to the law of England, but consistent with such law, as far as the circumstances of the said colony will admit.  By the 9 Geo. IV. c. 83, further alterations were made in the constitution of the courts of the  colony, but as if to put an end to the difficulties which had been felt as to the application of laws passed in England since the establishment of the colony; and as if to put an end to all the irregularities which, for want of a legislative body pre-existing in the colony, had crept into practice; as put an also end to every supposed usage contrary to the law of England which had crept into practice, the Commissioner referring in his Report, which was before Parliament, to many such: by that statute, section 24, 'It is enacted, that all laws and statutes in force within the realm of England, at the time of the passing of that act, not being inconsistent therewith, or with any charter of letters patent, or order in council, which may be issued in pursuance thereof, shall be applied in the administration of justice in the courts of New South Wales and Van Diemen's Land respectively, so far as the same can be applied within the said colonies.'

I look upon this clause as the great charter of the colony, at once yielding to the colonists all that by the common law, or by the liberal, and enlightened, and accumulated wisdom of our ancestors, has been provided for the protection of life, liberty and property, and for regulating the transactions of men with each other.  All becomes by virtue of it the 'the justice and right' which the judges are sworn to do to all the King's subjects, and which it is expressly provided in one of the clauses of Magna Charta (itself under this provision the law of the colony) shall never be denied or delayed.

'Nulli negabimus aut differemus rectum vel justitiam.'

My construction of the 24th clause is, that only one point is left by it to the determination of the court viz. can the law which a party insists upon be applied in this colony or not?  Does there exist any legal bar to its being applied?  If it can be applied, if there be no legal bar, it is his right, and ought to be enforced.  There is no expression, as there might have been if such were the intention of the legislature, authorising the judges to apply the laws of England or not, as they may judge them to be convenient or expedient in the particular condition of the country at any particular time; there is no power given to them to dispense with any law of England which can be applied. - To judge of the expediency or convenience of any law is immediately afterwards in the same  clause confided to a different and more proper authority in the following words: -

'As often as any doubt shall arise as to the application of any such laws or statutes in the said colonies respectively, it shall be lawful for the Governors of the said colonies respectively, by and with the advice of the Legislative Councils of the said colonies respectively, by ordinances to be by them for that purpose made, to declare whether such laws or statutes shall be deemed to extend to such colonies and to be in force within the same, or to make and establish such limitations and modifications of any such laws and statutes within the said colonies respectively, as may be deemed expedient in that behalf.'

The power of the Judges is only 'to adjudge and decide as to the application' (i.e. whether they can be applied) 'of any such laws or statutes in the said colonies' and not to make and establish any limitations or modifications' therein.  The view which I take of my duty as a Judge deciding upon any law, is that I am bound to decide 'according to law,' and this, whether in the particular point it may by favorable to the subject, or restrictive, or may only concert private transactions: I have no power to bend the law; transactions in society must be adapted to the law; it is not in Judges, but in Legislatures to adapt the law to the state of society: the law is a main pillar of the Constitution, not to be removed, or bent, or deformed, according to the particular views of judges, but only by the authority of Parliament.  With me, therefore, arguments of expediency have no avail, if an expedient be necessary, a remedy is necessary, and that only lies with the legislature, and I have always thought that there has been too great a proneness in courts to resort to the use of expedients to prevent the execution of what they may consider a hard law, which has grown up to be an evil.  For a suitor who has law on his side has been sent out of court with a loss, because, in the judge's consideration, or that of a jury, perhaps the law is a hard one.  A new code becomes established not to be found recorded amongst the common or statute law, resting only in the breasts of judges, varying as they vary, and frequently varying as one and the same person varies in his vies and opinions. A code which none knows how to obey which is made ex post facto, and only serves as a trap for litigation, and as a reproach upon the uncertainty of the law.  Whereas if the law were to be administered as it is, its inadequacies, its inconvenience, its hardships, if any, which are concealed and glossed over by expedients would be apparent from being felt, and the legislature would be called upon to provide a remedy.  These are the considerations which have led me, not here alone, but elsewhere to refuse to depart from the line of my duty which is "jus dicere," and not "jus facere."  It is a good maxim in one law for the avoiding of uncertainties, "stare decisis," but it is a still better "stare legibus." If the argument of expediency, however, were legitimate in the present case, I am most clearly of opinion that it is all in favour of the law of England respecting usury, being applied and adhered to, in this colony.  The increasing disorder which had occurred since it was departed from shews this to be the case.

The enormous and ruinous change of property which occurred in this colony in the years 1829 and 1830, and still continue in a less degree, and a reference to the records in the office of the Supreme court of warrants of attorney and memorials of mortgages which I have already made, justify my own mind, at least my opinion, as applied to this colony.  For these reasons therefore I am of opinion :- First - That there is in this colony a legal limitation to the rate of interest, which may be taken for the forbearance of money. - Secondly - That that limitation is such as is imposed by the law of England, and is £5 per cent. therefore that the plaintiff should be allowed to enter up judgment for interest at the rate of £5 per cent., and no more."

 

Forbes C.J., Dowling and Burton JJ, 8 June 1833

Source: Sydney Gazette, 13 June, 1833

 

The Chief Justice then delivered his opinion to the following effect:- I regret at all times to entertain any difference of opinion, with either of my respected brethren on the Bench; and the more especially in a case of such great importance to this community, that it would have been desirable, the law should be removed from all doubt, and declared by the unanimous opinion of the court.  The question is, whether the usury laws of England, apply to this colony, a question which has never been formally raised in this court before, nor received, that I am aware, the solemn decision of the Judges.  It has, however, been the settled practice at nisi prius, by all of the Judges who have hitherto sat on this Bench, to allow interest at the rate of 8 per cent. where 5 per cent. would have been the rate allowed in England; and the practice necessarily involves the conclusion, that we all held the statute of Anne, the Act by which the rate interest is limited to 5 per cent. in England, not to be in force in this colony.  It shall be my endeavour, on the present occasion, to shew that this conclusion was right in principle, that the practice of the court has been correct, and that the laws of England for regulating the interest of money are not applicable to the condition of this colony, and therefore no in force.  Before I proceed to examine the principles upon which my own judgment has been formed, I must anticipate an argument which is frequently urged upon the court, and which appears to me to be founded on a mis-construction of the 24th section of the New South Wales Act, (9 Geo. IV. c. 83)  That clause has been read, as if it were an enactment, peculiar in its provisions to this colony, and introductory of a new principle of colonial law.  It will be found, however, that is neither peculiar, nor new; it is, on the contrary, affirmative of the law, as it stood before, as it is laid down by the oldest text writers on the subject, and confirmed by a long and uninterrupted current of legal authorities.  To read this clause rightly, we must look first at the law, as it stood exactly at the time of passing the Act, and then at the provisions of the Act itself, and by comparing the one with the other, it will be seen, at once, that all the parliament had in view was to fix the time at which English laws, in general, should cease to bind this colony, and to enable the local legislature, in cases of doubt, to declare whether any particular statute should apply or not.  The oldest authority which I can find extant upon this point, is a determination of the lords of the privy council upon an appeal from Barbadoes, whether the statute of frauds (29 Charles II.) extended to that island.  This decision was referred to by Sir Joseph Jekyll, Master of the Rolls, in 1772, and is shortly reported in 2 P. Wms. 75, as follows: "If there be a new and uninhabited country found out by English subjects, as the law is the birth-right of every subject, so, where-ever they go they carry their laws with them, and therefore such new found country is to be governed by the laws of England; though after such country is inhabited by the English, acts of parliament made in England, without naming the foreign populations will not bind them."  Taking this to be the text law upon the subject - and it is reported to be so laid down by the lords of the privy council, who are the judges in the last resorts upon appeal from the plantation, and stand in the same relation to the colonial courts as the House of Lords does to the superior court so flaw in England, - it will be seen that the point of time when a colony was first inhabited is a necessary preliminary to the correct application of the the [sic] rule, and that this point must frequently be vague and uncertain, and hence arose the necessity of some legal enactment to fix the point of time with more precision.  But there occurs another and a more important point.  Does the subject settling in a new place necessarily carry with him all the laws of his country, whether such laws may be suitable to his altered position or not?  Sir William Blackstone in commenting upon the resolution of the lords of the council, expounds it in the following clear and comprehensive terms. "But this must be understood with very many, and very great restrictions; such colonists carry with them only so much of the English law as is applicable to their own situation, and the condition of an infant colony; such for instance, as the general rules of inheritance, and of protection from personal injuries.  The artificial distinctions and refinements incident to the property of a great and commercial people - the laws of police and revenue - the mode of maintenance for the established clergy - and a multitude of other provisions are neither necessary nor convenient for them, and therefore not in force.  What shall be admitted, and what rejected, at what time, and under what restrictions, must, in case of dispute, be decided in the first instance by their own provisional judicature" (Bl. Co,. vol. I. p. 107).  This passage in the Commentaries is considered to be a sound exposition of the law by all the writers on colonial law; and is received as authority in our courts.  It is cited with approbation, by Sir William Grant, in a recent case which arose upon the extension of the statute of Mortmain (9 Geo. II. c. 1) to the island of Grenada, who said, "It is undoubtedly true, that all the laws of England are not, and cannot possibly be in force in that or any other colony (Attorney General v. Stewart, 2 Merivale 159). In Chalmer's Collection of Opinions upon points of jurisprudence concerning the colonies (vol. I. 198, 220.)  I find the opinions of the most eminent lawyers in accordance with the text, as laid down by Blackstone; Sir Robert Henley, and Mr. Yorke, Attorney and Solicitor-general in year 1757, in answer to a question put to them by the Committee of the Council for the Plantations, how far the statute for counterfeiting foreign coins was in force in Nova Scotia, state their opinion as follows:- "We are of opinion that the proposition adopted by the judges there, that the inhabitants of the colonies carry with them the statute laws of this realm, is not true as a general proposition, but depends upon circumstances, the effect of their charter, usage, and acts of their legislature; and it would be both inconvenient and dangerous to take it in so large an extent."  Sir Philip Yorke and Sir Clement Wearg had, in the year 1724, expressed their opinion to the same effect.  Upon a similar question referred to them, as to what English laws were to be considered in force in Jamaica, they replied, "Such acts of parliament as have been made in England, to bind the plantations in general, or Jamaica in particular, and also such parts of the common or statute law of England, as have by long usage, and general acquiescence, been received and acted under there, though without any particular law of the country for that purpose, are to be considered as in force."  Lord Mansfield in delivering the opinion of the Court of King's Bench, in the celebrated case of Campbell and Hall, is reported to have referred to this last opinion of the crown lawyers, in the following words: "a maxim of constitutional law, declared by two such men, in modern times as Sir Philip Yorke and Sir Clement Wearg, will required some authorities to shake."  I might multiply great names, in support of the principle I contend for; but those which I have cited will be sufficient to prove the existence of the principle itself, and the certainty with which it has been preserved and applied.  From these authorities I collect the true principles upon which the laws of England should be extended to the colonies, as follow: - 1st, Statutes passed after the settling of a new colony, do not bind such colony, unless they are extended to the colonies at large, or such colony in particular; 2d, of the statute which were passed before the settling of the new colony, only such extend to it, as are suited to the condition of the colony; 3d, in all cases of doubt, the applicability of any particular statute must be determined, in the first instance, by the local courts.  Now, carrying these plain principles with us to the consideration of the 24th section of the New South Wales Act, it will at once appear that they are all embodied in that clause, and that the two other provisions which are added to them, were intended to give them more complete effect; viz. by fixing the exact time, after which English acts of parliament should no longer bind this colony; and enabling the Legislative Council to remove any doubt as to the applicability of any statute, by declaring whether such statute did or did not extend to the colony, or under what limitations or modifications it should extend, reserving it still, as the duty of the Judges, in the meantime, to declare the law.  The terms of the Act, the anticipation of doubts which might arise, all clearly shew that parliament never intended to broad-cast, as it were, the whole body of English laws upon this colony, without reference to its condition or circumstances or considering whether such laws were applicable or otherwise.  Surely something more is required of the court, some higher obligation of intellectual duty is imposed on us, than simply to say whether there be a physical possibility of applying a law or not within the colony.  What, I would ask, is there in the peculiar constitution of this infant colony, which requires a different principles to be observed in the application of the laws of England, from that which has been observed in applying the same laws to every other colony?  We are all placed in the same relative position, having the same rights and obligation, and the same common dependency upon the parent country.  If it were both "inconvenient and dangerous" to extend all the laws of England to the elder colonies, how does it become less so in this?  The only legitimate object of all laws, is to provide for the protection and necessary wants of mankind - beyond this, every law is unnecessary; and, in proportion as it is inapplicable, it becomes a useless burthen.  Of all evils upon society, I know of none more to be deprecated, than to be governed by unsuitable laws - they interfere with the daily habits and pursuits of mankind; they are opposed to their feelings and opinions, and carry in them all the consequences of oppression.  If we, the judges, are merely to declare whether the laws of England can be applied or not, what is there to prevent the application of a "multitude" of provisions, as Blackstone expresses it, which hitherto no one has dreamed to extending to this colony - the law of marriage - the laws of tithes, with their particular exemptions - the poor laws - the excise laws - the particular rule prohibiting two persons (being in partnership) from underwriting the same policy?  I know of no argument against the application of these laws, except that they have never been used in this colony, and that reason concurs with circumstances, in declaring that they are inapplicable to the condition of an infant establishment.  Perhaps it will be urged that here is a want of the necessary machinery to execute such laws, and therefore, they are not in force, but his argument will fail, when it is considered that in some of those I have enumerated, there is machinery enough to admit at least, of a partial application; and in many others, which are in fact administered within the colony, there is a defect of the necessary machinery, as it exists in England. We have, for example, no sheriff's or county court, notwithstanding which, the remedy by replevin is as frequently resorted to in this colony, as if such a court were in full operation.  I might quote other instances, but they are unnecessary; the distinction of such laws as do, and such as do not, require the particular machinery created by the statute which creates the law, to carry them into effect, will be found to be neither a safe nor unerring standard.  The first, and leading principle should be, whether such laws are applicable in their nature and object, to the sate and condition of the colonists.  I am fully aware, that in the adoption of this standard, I shall be met by a strong argument, of the inevitable uncertainty which must remain as to what laws may or may not, a priori, be held to apply; a difficulty which many vain attempts have been made to remove, and which must continue until the legislature shall, by some positive code, embody the whole of the common and statute law of England, which it may intend to apply to the colony; I venture to affirm, in full confidence of the result, that it will be found impossible by any general clause, so to frame any general rule, as to decide, as by a scale, upon the applicability of any English law; or to place the principle upon a better foundation than it rests on at present.  In the absence of any positive code, or statutory declaration of the law upon the point under consideration, it appears to me that I am bound to regard it in the same point of view, as if I had been called upon to decide it in any other colony, or, as I think it would have been decided by the King's superior courts in England, if it had arisen incidentally before them.  Assuming then the true point of enquiry to be, whether the statute of Anne, limiting the legal rate of interest to 5 per cent. per annum, is applicable to the condition and circumstances of this colony, I shall proceed to examine it, for the sake of order, under two general heads; - first, as to the nature and object of the statute itself, and secondly, as to the usage of this colony, and the analagous practice of the other plantations.

Among the laws enumerated by Sir William Blackstone as not applying to the condition of an infant colony, are "the laws of police and revenue, especially such as are enforced by penalties."  This general distinction appears to have been adopted by the Master of the Rolls, in deciding against the application of the statute of Mortmain to the island of Grenada - "Whether the statute be in force in this island, will, as it seems to me," says he, "depend on this consideration, whether it be a law of local policy, adapted solely to the country in which it was made, on a general regulation of property, equally applicable to any country in which property is governed by English law.  I conceive that the object of the statute of Mortmain is wholly political - that it grew out of local circumstances, and was meant to have merely a local operation.  The thing to be prevented, was a mischief existing in England, and it was by the quality and extent of the mischief, as it there existed, that the propriety of legislative interference upon the subject was to be determined."  Attorney General v. Stewart 2, Meriv. 160.  Upon the same general ground, the Court of King's Bench, in the case of Rex. v. Vaughan (4 Burn. 2,500), held that the statutes 12 Ric. 2 C.2, and 5 and 6 Ed. 6, C. 16, against bribery in the sale of offices, did not extend to the island of Jamaica.  "These statutes being positive regulations of police, not adapted to the circumstances of a new colony, and therefore no part of that law of England, which every colony, from necessity, is supposed to carry with them at their plantation."  Adopting the distinction here drawn, by the judges in England, between such laws as are of a general and fundamental kind, upon which the constitutional government, and social rights of the community depend, and such as are of a political and local nature, calculated to suit the exigencies of particular times and places, and admitting of a deviation without affecting the general laws of the empire; and applying this distinction to the case under consideration, it appears to me that the laws for regulation the interest of money in England were never intended by the legislature that made them, to extend beyond the meridian of England; the usury laws are properly laws of police, suited only to local circumstances, varying in their provisions with time and place, and not alike, I believe, at this present moment, in any two of all the numerous possessions of the British crown.  In England, in the reign of Henry VIII., the rate of interest was regulated at ten per cent.; in the reign of his successor it was made unlawful to receive any interest at all.  A statute of Elizabeth restored the law as it stood under Henry the Eighth.  In the succeeding reigns of James and Charles the Second, the legal rate of interest was reduced, first to eight, and afterwards to six per cent.; and in the 12th year of Anne (statute 2, c. 16) it was finally reduced to five per cent., as it now stands.  In Ireland the rate of interest is higher than it is in England at the present time.  In the American Colonies the rate of interest has varied at different times from ten to six per cent.; and in the East Indies it was fixed by act of parliament at 12 per cent.: yet all these several rates of interest have been recognise by the courts of law in England; and although a doubt had been raised how far contracts made in England, did not fall within the express words of the statute of Anne, so as to render any contract at a higher rate of interest than is thereby prohibited, void, yet that doubt was removed by the 14th Geo. III. c. 79, and such contracts were expressly protected.  There never was a doubt but that they were at all times legal, and might be enforced in the the [sic] colony where they were made.  There is an opinion ascribed to Pemberton, in arguing the case of Blankard v. Galdy (4 Mod. 222), that the statute of Anne did not apply to Jamaica; but I rest no argument upon that dictum; my own opinion is formed upon the clear principles laid down by Lord Mansfield and Sir William Grant, in determining whether a particular statute applies to the colonies; upon the universal precedent of every colony under the crown; and upon the invariable usage of this colony, since its first settlement.  I think I understood a part of my Brother Burton's argument to be, that the American colonies were settled at different periods of time, and that they took with them the rate of interest in force in England at the date of their respective settlements.  Admitting the fact to be so, it does not appear to me to alter the case.  If the statute of James, limiting the interest of money at eight per cent., were in force when Jamaica was first admitted to the privileges of an English colony, it became the law of Jamaica, and could not afterwards be repealed or altered by the legislature of that island.  Yet my learned brother admits, that by an act of the assembly, passed after the settlement of that colony the rate of interest was fixed at 10 per cent.  By His Majesty's proclamation in 1763, the Island of Grenada was declared to be an English colony, and admitted to a full participation of all the rights and privileges which were enjoyed by the other American colonies; and consequently the common law of England, with all the modifications, additions, and restrictions, from time to time engrafted upon it by statue, became the law of that newly established colony, subject only to the consideration, how far they were applicable to the condition of the inhabitants.  If the statute of Anne were a necessary part of the English law, then it was a fully in force in Grenada, as if it had been expressly named in the statue, and the legal rate of interest was, and could only be 5 per cent.  Yet we find that the Assembly, of that island, shortly after it was established fixed the local rate of interest at 6 per cent.  In the East Indies, where His Majesty's subjects are governed by the general laws of England, it was never supposed that the usury laws were in force.  Indian interest, as it is called in the books, was always allowed upon Indian dealings.  The case of Ekins v. E.I.Comp. is in point. (1. P. Wms. 396)  That case was decided in the year 1717, and it was referred to the master, by the Chancellor, to compute interest according to the rate allowed in India at that time.  It is indeed true that the rate of Indian interest was afterwards fixed by act of parliament (13 Geo. 3. c. 63) at 12 per cent; the terms of the act imply that there was no legal prohibition to taking that, or any higher rate of interest in India before.  And yet what sound distinction can be drawn between the commercial dealings and money transactions of His Majesty's subjects in India, and in New South Wales, so as to support an argument in favour of the application of the usury laws to the one, and not the other? In principle I see no difference between them.  It will not be contended that India is a foreign country, governed by the laws of the Gentoo, the Hindoo or the Mussulman - these laws cannot apply to the contracts and dealings between His Majesty's subjects in India; they are governed by the laws of England, in the same manner as we are, that is, so far as such laws are adapted to their local circumstances; and if the statute for regulating the interest of money, be a necessery [sic] and inseparable part of those laws, then was it as binding upon British subjects in India, as it is upon the inhabitants of New South Wales.

But there is another objection which it appears to me, in the absence of all others, would be conclusive against the introduction of the statute of Anne into this colony, it has never been used by the inhabitants or enforced by the courts; and it has been the invariable practice to allow a higher rate of interest than is allowed by the English Act. That usage generally, in the colonies, is respected, it will not be necessary for me to contend, after the opinions of the eminent persons I have cited.  If it were, the statute 25 Geo. II. c. 6, would fully bear out the position.  That Act was passed to remover certain doubts which has been raised as to the execution of wills under the statute 29 Charles II. usually called, the statute of frauds, and as this latter statute was in force in some of the colonies, and not in others, it became necessary to extend and confine the provisions of the amending Act, to such of the colonies as had received and acted under the statue of frauds.  The act of Geo. II. therefore recites the partial adoption of the act of Charles II. and enacts that its own provisions should "extend to such of the colonies where the statue of Charles II. was by an act of assembly made, or by usage received, as law.  This recognition by parliament of the force and effect of local usage in determining the application of any particular statute to the colonies is too strong to be overthrown; it was used advisedly, and upon an occasion when the applicability of a statute was the subject of enactment; it amounts therefore to a parliamentary declaration of the law, and it is in perfect accordance with the opinion, and almost expressed in the language, used by the crown lawyers in 1757, which I have already referred to.  There is a wide difference between the usage here mentioned, and the particular customs which have been alluded to by my brother Burton, and which require, in order to entitle them to legal force, that they should have existed beyond the time of legal memory.  Such customs are in their nature partial usages, confined to particular places, as distinct from the country at large, and are a departure from the general law; they require therefore to be proved before they can be admitted; and are never extended beyond their local limits, or precise practice.  The usage I contend for, is not the custom of any particular place - it is the non-user of an English statute, by the whole of the inhabitants of the colony, since its settlement - of a statute confined in practice to the limits of England, and not observed in any other part of the British Empire.

Upon every view of the case, therefore, I am of opinion, that the statute of Anne forms no part of the received law of this colony; that it is wholly inapplicable to its condition, and is therefore not in force.  In coming to this conclusion, it is satisfactory to me to find that the principles of law are not at variance with the rules of equity, or opposed to the interests of the colony.  The adoption of the opposite conclusion, had it unfortunately been the opinion of the court, must have led to the most embarrassing results - results which it would be, perhaps, impossible to calculate in the extent of confusion and ruin that might have ensued.  What would be the probable consequence of this court, holding that all contracts for receiving a higher rate of interest than 5 per cent. were usurious, and therefore void?  The Banks must immediately close - confidence would be at an end - the dishonest debtor would avail himself of the decision of this court to avoid payment of his just demands.  It is true the legislature is at hand to remedy the mischief; but before I could consent to make this court the medium of so devastating a decision, as to call upon the legislature to apply a retrospective and wholesale remedy, I must first satisfy myself that such is the stern and inveterate decree of the law; that the obligation imposed upon me by positive law is too clear to be misconceived, and too strong to be evaded; and that I have no discretion but to say ita lex scripts est.

Let me not, however, be mistaken; the laws of England are our birth right, where they apply to our condition, and can be administered to us with advantage; but where they are inapplicable, they are not in force; and where they are silent, then there is no law, unless established by the general consent and usage of the colony at large, or the local legislature; both being alike subordinate to the great and sovereign principle, that our local laws and usages must be reasonable in themselves, and not repugnant to the general laws of the parent country.

Upon the second question, which arises out of the first, viz. - whether, assuming that the usury laws do not apply to this colony, the court will enforce any rate of interest whatever that may be agreed upon between the parties, - it is not necessary in this case that we should decide that point solemnly; but, as at present advised, I see no reason why judges and juries should not continue to apply the same considerations to all cases of this kind as they have done heretofore, and to give such interest, by way of damages, as they think reasonable, and according to the usage of the place - a usage which is presumed to be in the knowledge of all the parties, and to enter into, and form an implied portion of all their contracts.

For this course of proceeding it would not be difficult to find ancient precedents, if it were necessary to justify it by authority.  But I apprehend that we are not bound to give any solemn opinion upon the abstract question, whether there is any legal limit to the rate of interest which may be recovered, besides the convention of the parties; and I see no sufficient reason to disturb the practice which has hitherto prevailed at nisi prius. Should such a question be raised, of sufficient magnitude to require a complete and final adjustment, I apprehend that the legislature alone possesses the power of fixing the rate, at which interest in all cases may be demanded, and enforcing it by penal consequences.

In conclusion I must repeat my regret at being compelled to differ from my brother Burton, for whose opinion, in this case, I entertain so high a respect, that to dissent from his judgment, is to raise a doubt of the correctness of my own.  I fully appreciate the value of the reseaches [sic] he had made, and the alarming facts he has brought to light.  He has I think established a sufficient case to call for the interference of the legislature.

Mr. Justice dowling. - I entirely agree in the opinion delivered by the Chief Justice; and, after the elaborate view which His Honor has taken of the subject, I do not think it necessary to go very minutely into the grounds of my concurrence.  The substantial question involved in this case is, whether the English statutes of usury can now be enforced in this colony, by operation of the 24th section of the New South Wales Act 9 Geo. IV. c. 83, which enacts, "That all laws and statutes in force within the realm of England, at the time of the passing of this Act, shall be applied in the administration of justice in the courts of New South Wales, so far as the same can be applied within the said colony."

This is the first time, I believe, that the question of the applicability of the English usury laws to this colony has been formally raised, since its foundation.  I have made diligent inquiry to ascertain whether it has ever been a subject of discussion, and it seems to have been taken for granted, by the local government, by the authorities, and by the inhabitants, that those laws, through parts of the statute law of England do not extend to this colony, notwithstanding it had been originally settled by Eng[lish]men.  By a government order, issued on the 14th July, 1804 (now nearly 30 years since), after reciting that enormous interest had been theretofore enacted, the rate of interest was limited to 8 per cent., under pain of subjecting the parties taking a larger rate, to the penalties of the statute 12 Anne.  This, as far as it goes, though not a legislative declaration upon the subject, shews, as matter of practice, that the local government, as it then existed, did not recognise but disclaimed these laws as applicable to the colony.  From that time until the present, the rate of interest has fluctuated, and has generally been matter of contract, between the parties, but almost always exceeding 5 per cent.  Since the statute 4 Geo. IV. c. 96, New South Wales has had a local legislature of it own, and the only instance in which the legislature has legislated upon the subject of interest, has been by the late ordinance for establishing a savings' bank, by which the trustees are empowered to lend money at interest, not less than 8 per cent.  As far as the sense of the local legislature can be collected upon such a subject, by a solitary enactment, this goes to shew that they did not consider the English usury laws applicable to the colony.  In 1828, when I became a judge in the colony, I found that 8 per cent. was regarded by my brother judges, by the professors of the law, by the assessors and magistracy, by the whole mercantile body, and indeed by universal assent, as the just and reasonable rate of interest payable for money lent on securities.  I certainly do not know of any other foundation for this rate of interest, than the common assent of the whole community, that such was the fair value of the use of money in the colony; and I take it that the common assent of those who are to be affected by a practice or usage, though opposed to the express terms of an English act of parliament relating to the local police of the mother country, must be regarded of some validity with us, in determining the present question.  Until the present occasion this rate of interest has been allowed by the judges, assessors and juries, as the just rate of interest. On some occasions lately, parties have even gone the length of demanding 10 per cent., on the ground that this was the common rate of interest received by bankers and merchants on discount transactions; but I believe the court has in no instance allowed more than 8 per cent. to be taken, unless there was an express contract to the contrary.  Although it has thus been considered that the usury laws of England do not apply to this colony, yet the court has never yet held that the spirit of those laws is not in full operation, in the administration of its equitable jurisdiction.  Where fraud, collusion, or circumvention, has been used in taking advantage of a needy borrower, the court has invariably afforded relief against usury, in the odious sense in which that offence is treated in the statutes of usury.  However tacitly the usury laws of England may have hitherto been disregarded, I think my learned Brother Burton, who has conscientious doubts upon the subject of letting a matter of so much importance rest upon so very precarious and uncertain a footing as non-user, or rather disregard of the statutes of England, is by no means to be discommended for suggesting the necessity of having this matter duly considered.  This is certainly not the time nor the place to enter into any consideration of the policy of those statutes; but I may be permitted to observe, as matter of history, that very able and enlightened men in the mother country have questioned their policy, as they regard the commercial enterprise of Great Britain.  The simple question for out determination is, whether they can now, for the first time, be put into operation, without the help of the local legislature?  There is no doubt that the words of the New South Wales Act 9 Geo. IV. c. 83, s. 24, are very strong.  The laws of England, in force at the date of that Act, "shall be applied in the administration of justice, so far as the same can be applied within the colony."  I, however, agree with the Chief Justice in his exposition of this section.  I do not regard it as a positive mandatory obligation, that all the laws of England shall be applied in the colony, because by possibility they may be enforced.  If we were to read the act of parliament so we might be compelled to impart and act upon laws, wholly inapplicable to the state of society in this infant settlement, although we were possessed of the machinery proper for carrying them into operation.  It would be no difficult matter to recite numerous acts of Parliament passed before the 9 Geo. IV. c. 83, which could by posibility [sic] be put in force in this colony, though highly detrimental, and wholly unsuited to the wants and condition of the community.  As a general proposition therefore, it is not quite correct, that because an English statute can be applied to the colony, it must be applied.  Who is to determine the applicability of the law?  Parliament has made provision for this, by enacting in the same section that, "it shall be the duty of the Supreme Court as often as any doubts shall arise upon the trial of any information or action, or upon any other proceeding before them, to adjudge and decide as to the application of any such laws or statutes in the said colony."  By what test are the judges to perform this duty?  Surely by their local and judicial knowledge of the actual state of the country in which they are called upon administer justice, I admit that in this the judges have a very wide discretion vested in them; but this like all other discretionary function, is to be exercised, not wildly, and without rule, but upon a sound and deliberate consideration of the whole subject, with reference to the actual state of the colony.  I certainly am not prepared to say that the usury laws, are such as cannot be applied in the administration of justice in this colony.  I know of no local obstacle or want of machinery in the way of their administration.  As a matter of fact they have never yet been administered in, or been deemed applicable to the colony.  Their non applicability, rests upon one unbroken course of disuetude since 1787, when the first English fleet arrived.  The learning upon the subject of usuages and customs, applies only where there are no written laws to guide a court of justice.  If the actual rate of interest payable in this colony, were to depend upon usage and custom, it is clear that it could not stand, because the rate has been perpetually varying according to the actual value of money, from the fluctuations of the market and local circumstances.  I rely, not upon the usage as to the rate of interest, to shew the inapplicability of these laws, but upon the universal assent to their inapplicability manifested by acts and declarations of the local government; testified by decisions of the courts of justice, silently allowed by the local legislature since the colony has had a legislative council, (except in the confirmatory instance of the Savings' Bank Act), and practically acknowledged by the mercantile and agricultural interests of the community.  Are these considerations to be disregarded in determining the present question?  The point therefore, for us now to adjudge (as in duty bound by law) is, whether after the lapse of 45 years (i.e. from the formation of the colony) during which thousands upon thousands of pounds have been invested upon securities, bearing more than 5 per cent. interest, and when at his moment all pecuniary binding transactions in this colony are not regulated by the usury laws, but by the supposed fair, marketable value of money - we can hold that those laws must be applied.  It appears to me, that in the due exercise of the powers delegated to the judges of this court, we cannot, with reference to the post and present condition of the colony upon this subject, hold the usury laws to be applicable.  To do so, would be productive of great individual hardship and injustice, for if the usury laws have been always applicable to this colony, every money transaction in which more than five pre cent. has been stipulated for forbearance, must be set aside, and the usurers subjected to the most grievous penalties, the public credit of the colony must be shaken to its foundation, and the most irreparable injury produced.  If this determination, shall have the effect of calling the attention of the local legislature to the subject, and of suggesting to them the expediency of exercising the powers vested in them by the New South Wales Act, "to declare whether these laws shsll [sic] be deemed to extend to the colony, and to be of force herein, or to make and establish such limitation and modifications of those laws as may be deemed expedient in that behalf," this court will have done all that can be required of it by the provisions of the Act of Parliament. On t he whole of this case, I am of the opinion that the plaintiff is entitled to calculated interest, on the promissory not in question, at and after the rate which assessors and jurors have been in the habit of hitherto allowing in this court in like cases - namely, 8 per cent.

 

[Some errors have been pointed out to us in our report of the judgment delivered by Mr. Justice Burton in the above case, published in our last.  We will correct them in our next, and also lay before our reader some very important and curious documents which formed a chief part of the main data upon which the learned Judge arrived at his decision. These we omitted in our last for want of room.  Ed.]

 

Forbes C.J., Dowling and Burton JJ, 8 June 1833

Source: Sydney Gazette, 15 June, 1833

 

Macdonald v. Levey.

In our last number we expressed our regret that there were some errors in our report of the judgment delivered by Mr. Justice Burton, in the above cause; and also that we were obliged, for want of room, to omit some important documents referred to by the learned Judge.  We now proceed to correct the errors, and supply the deficiency of the report.

In the course of the judgment pronounced by His Henor [sic], he read the following

memorandum of mortgages registered from the 1st  of January, 1829, to the 5th of june, 1833.

2 at 5 per cent.; 15 at 8 per cent.; 187 at 10 per cent.; 2 at 11 per cent.; 20 at 12 per cent.; 34 at 11½ per cent.; 1 at 13 per cent.; 1 at 14 per cent.; 94 at 10 per cent.; 6 at 16 per cent.; 2 at 17 per cent.; 7 at 17½ per cent.; 2 at 18 per cent; 84 at 20 per cent.; 3 at 25 per cent.; 2 at 30 per cent.; without interest, 10; and 561 on which interest is not stated : making in all 1033.

warrants of attorney registered in the supreme court, from nov. 1831 to june 1833.

98 at 5 per cent; 18 at 8 per cent.; 118 at 4 per cent.; 2 at 11 per cent.; 8 at 12 per cent.; 15 at 12½ per cent.; 1 at 13 per cent.; 1 at 14 per cent.; 3 at 15 per cent.; 2 at 16 per cent.; 3 at 17 per cent.; 1 at 7½ per cent.; 20 at 18 per cent.; and 1 at 25 per cent.

During that space of time the total number of warrants of attorney registered amounted to 648; of which there were 329 with the rate of interest stated, and 319 on the face of which no rate of interest is expressed.

memorandum of the numbers and amounts of writs of execution against the person, and writs of execution against property; showing the amount directed to be levied, and the deficiency.

In the year 1829, there were issued 278 executions against the person; the amount to be levied being £16,929 11s. 10d.  The amount realized was £13,922 13s. 10¾sd.

In the year 1830, there were issued 256 executions against the person; the amount to be levied being £18,294 9s.d.  The amount realized was £13,928 19s.d.

In 1829, there were issued 530 executions against property; the amount to be levied being £71,859 14s.d.  The sum realized was £33,576 16s.d.

In 1830, there were issued 489 executions against property; the amount to be levied being £83,286 0s.d. The sum realized was £33,567 5s. d.  Total number of executions, 1553. Total amount to be levied, £190,269 16s.d.  Total amount realised, £94,995 15s. 5d.

"Thus," said the learned Judge, "all the soil, produce, and labour and mortgage money together, had not been sufficient to satisfy the incubus of debt which the avarice of creditors had laid upon the land."

In reference to this last document, the learned Judge is made to say, in our report, 2d column, 4th line from the bottom, "there were many writs of execution executed upon real property;" it should have been, "there were 1,019 writs executed upon property; how large a proportion of these were upon real property will appear from a comparison with the number of mortgages to which I shall refer, &c."  In the third column of our report, we should have stated that the rate of interest extended to 30 instead of 25 per cent. - [We have to apologise to the learned Judge for these unintentional errors. Ed.]

 

Forbes C.J., Dowling and Burton JJ, 8 June 1833

Source: Sydney Herald, 10 June 1833

 

Legal Interest. - McDonald v. Levy. - The Court proceeded to give judgment in this case.  Judge Burton observed, that as he differed from his learned brethren in this cases, he should deliver his reasons on which that difference of opinion was founded.  There were two questions to be decided - First, whether there were any legal limitation for the rate of interest in this Colony - And secondly, what was that?  This case was an action on a promissory note, on which a verdict was asked with interest at 8 per cent., but he directed that only legal interest should be given, with liberty for Mr. Stephen on behalf of the plaintiff to move the Court what was the legal interest.  Mr. S. did move, and argued that 10 per cent, was the legal rate of interest, and that the statute of Ann did not apply to this Colony.  Mr. Norton also followed on the same side, arguing that that was the rate of local interest, and defended it on the customs of the Colony, citing the Saving's Bank Act as an instance which directed that not less than 8 per cent. should be the interest taken.  On the other side, Mr. Keith had argued that 5 per cent. was the only legal rate of interest, and founded his argument on the 9 Geo. 4. 83, which directs the laws of England to be applied in this Colony, as far as they could be applied; and had the Legislative not intended that to have been the legal interest, they would have passed an act for the purpose, making it 10 per cent. as in some of the British West India Islands, or 6 per cent. as in Canada.  His opinion was different from that of his learned brethren, but he approached the question with confidence, as it was ripe for decision, and wished for by a large and influential body of the community.  The 24th section of the New South Wales Act directed the administration of the laws, and the 22d made them the guardians of the laws, and of the Legislature itself.  On his arrival in this Colony, he saw there was no settled rate of interest, but that enormous interests had been taken, on one warrant of attorney, 25 per cent.; on bonds, 10 and 15; on loans of money, 11 and 11½, and in one case of discount, 45 per cent. was taken; the registries in the office were very imperfect in many cases, and did not show the injurious interest exacted by lenders of money in this Colony; if there were no limitation, the Court would be bound to give that contracted for.  (The learned Judge here read a variety of extracts from documents in the Supreme Court office, showing the rates from 1817 up to the present time, to have varied from 5 to 30 per cent. and in one-half the cases, the rate of interest did not appear).  This showed that there was nothing in the argument respecting common custom, usage, or common consent.  The law of England must be applied as far as applicable; the argument of expedience would have no avail with him, the ruinous changes of property in 1829 and 1830, would justify his own mind in the opinion he held on this subject.  In 1829 there were issued out of the Sheriff's Office 278 writs of capias ad satisfaciendem; in 1830, 256 of such writs; in 1829, 530 writs of fiere facias; and 1830, 485 such writs, to recover the sum of £190,269, when all that was produced, was £94,995, showing that all the land and labour would not meet the avarice of those with regard to interest who held security upon the property; on these grounds he considered there was a legal limitation to the rate of interest in this Colony, and that limitation was 5 per cent.

The Chief Justice, with reluctance, differed from his learned brother, on the important point now under discussion, but he very far from regretted the Court were now called upon to pronounce a solemn decision in this case; numerous facts had been raised in argument, and if necessary, to apply to the Legislature to decide the point - the sooner that was done the better.  He should confine his argument to the narrow point raised at nisi prius, whether the Usury Law was applicable to, or in force in this Colony; supposing that it did not, could parties on their convenants, charge any rate of interest - and could the Court enforce that?  The latter part he should not apply himself to, but to the question, did the statute of Ann, apply to this Colony?   The Court were, in some cases, in the habit of allowing ten per cent.; putting the case to the Jury, as to the reasonableness of it, the Judges had therefore, deemed it did not apply, or they would have been bound by their office, to have allowed only five per cent.; all the Judges, up to the present time, who had set upon that Bench, were of opinion that it did not apply.  By the 24th section of the New South Wales Act, the Judges were empowered to apply the Laws of England, so far as they could be applied; but he was of opinion, that clause did not call imperiously upon the Judges to apply every Law of England to this Colony - or they might apply the Marriage Act, the Tythe System, the Poor Laws, the Excise, the Land Tax. or any other, which would be anything but a sound discretion.  He was of opinion, that the Usury Laws did not apply to this Colony, and that there was no law in this Colony limiting the rate of interest - and that the plaintiff was entitled to recover the rate of interest usually allowed, eight per cent.

Judge Dowling was also of the same opinion.

 

Forbes C.J., Dowling and Burton JJ, 8 June 1833

Source: Dowling, Proceedings of the Supreme Court, Vol. 83, State Records of New South Wales, 2/3266[7 ]

[p. 1] Dowling J.

This was an action of assumpsit on a promissory note for the sum of 15.£. payable after date with a count for interest after date.  The deft suffered judgment to go by default.  At the computation of principal and interest before Burton J. & two assessors last term, the plf claimed interest at and after the rate of 8£ per [?] from the time the note was dishonored, until the day of signing the final judgement, on the ground that such rate of interest, was the common and usual rate of interest for money in this colony.  The learned judge allowed the plf to take a verdict [p. 2] for the principal sum named in the promissory note "with lawful interest" and reserved for consideration, the question "what is lawful interest for money in this colony".

This question came in to be argued on the 6th April last.  The argument was conducted by Mr F. Stephen for the plf & Mr Norton for the deft.

The substantial question involved in this case, is whether the statutes of usury are in force in this colony.

This is the first time, I believe, that this question has been formally raised since the foundation of the colony.  I have made diligent inquiry to ascertain whether it has ever been a subject of discussion, and it seems to have been taken for granted that the usury laws, though part of the statute law of England, do not extend [p. 3] to this colony, notwithstanding it had been originally settled by Englishmen.  As matter therefore of history, and of practical non application, the rate of interest payable on contracts & securities, for the forbearance & giving day of judgement in money transactions has not been regulated in N.S.W by the provisions of any of the numerous English statutes of usury.  When I had the honor of taking my seat in this court, I found that 8 per cent was regarded, by the profession, by my Brother judges, & by the mercantile body, and indeed by universal assent, as the lawful rule of interest payable for money lent on securities in the colony.  I certainly do not know of any other foundation for this rate of interest, than common assent, that such was the fair value of the use of money, in the colony.  [p. 4] Until the present occasion this rate of interest has been allowed by the Judges & assessors as the just rate of interest in the colony.  On some occasion lately, parties have even gone the length of demanding 10 per cent, on the ground that this was the common rate of interest received by Bankers & Merchants on discount transactions; but I believe the court has in no instance allowed more than 8£ per cent to be taken.  Although, it has been considered that the usury laws of England do not apply to this colony, yet the court has never yet held that the spirit of those laws is not in full operation in the administration of its Equitable jurisdiction.  Where fraud, collusion, or circumvention has been used in taking advantage [p. 5] of a borrower of money, the Court has invariably afforded relief against usury, in the [?] sense in which that offence is heated in the statutes of usury.  Even in the very last term in the case of Brownlow v Graham (see post p. 18) the court acted upon this principle.  However tacitly the usury laws of England may have hitherto been disregarded, I think my learned Brother, who has conscientious doubts upon the subject of letting a matter of so much importance rest upon so very precarious & uncertain a footing as non user, or rather disregard of the statutes of English Parliament is by no means to be dis[?] for suggesting the necessity of having this matter considered.  This is certainly not the time nor the place to enter into any consideration of the policy of those statutes.  The simple question is whether they can now for the first time be put into operation without the help of the local legislature.  By the 9 G. 4. c. 83. S. 24. all laws & statutes in force [p. 6] within the realm of England at the time of the passing of that act, shall be applied in the administration of justice in the courts of N.S.W. so far as the same can be applied within the said colony.  I certainly am not prepared to say that the usury laws, are such as cannot be applied in the administration of justice, in this colony.  I know of no local [?] or want of machinery in the way of their administration.  As matter of fact they have certainly yet never been administered, in or deemed applicable to the colony Usuage to be considered nay if the sense of the local legislature upon the subject can be fairly collected by a single act, a very late ordinance for the [?] of a Savings Bank, [?] the Treaties there lend money not unless [?] 8 per cent which is certainly [p. 7] contrary to the terms of the English usury laws.

The question for us now to determine is whether after the lapse of 45 years (i.e. from the found.n of colony) during which thousands upon thousands have been invested upon securities paying more than 5£. per cent - taken at this amount all pecuniary lending transactions in the colony, are regulated not by the usury laws, by the supposed fair merchantable value of money, - we can hold that those laws are applicable?  It appears to me that in the present state of the Colony, those laws cannot now be be [sic] applied, without manifesting notice to individuals, & injury to the public credit of the colony.  If this determination, shall have the effect of [p. 8] calling the attention of the local legislature to the subject, & suggesting to them the expediency of exercising the powers vested in them by the 24 sec. of the 9 G 4. c. 83. to declare whether these laws shall be deemed to extend to the colony and to be of force herein, or to make and establish such limitations & modifications of those laws as may be deemed expedient in that behalf, - this court will have done all that can be required of it by the provisions of the N.S.W act.

 

Notes

[1 ] Burton's private correspondence (see Burton Letters) shows that he was concerned about his own financial position at the time this decision was delivered.  Burton was offended that he was removed from the Cape colony to Sydney without warning: he sought financial compensation from the British government (Burton to his brother Edmund, 4 October 1832).  The government had some sympathy on the latter point (Hay to Burton, 10 January 1833).  Justice Burton was still in debt when he wrote to his brother Edmund on 29 November 1833: he complained that prices were extremely high in Sydney, and ``the roguery extortion and tricks of the dealers and servants ... are I believe the worst in the world."  His dislike of the society of Sydney extended to its Supreme Court: ``In Court there is such filth and looseness of proceedings and want of all order and all convenience that I am disgusted."  Yet in this letter he also said of Forbes C.J. that he was a ``a remarkably clever well informed man."

In letters to Mr and Mrs Benjamin Austen, 19 June 1833 and 30 September 1833 (Mitchell Library document 2668), Burton said that his dissenting decision in Macdonald v. Levy was his ``one grand stand against ... usurious practices," in which he was in a ``glorious minority of one." His aim in the judgment was not to change the opinions of his colleagues, which he knew he would not do.  Instead he hoped through his ``exposure of the corrupt system which exists, that the attention of the Government here and at home will be called to the subject and a legal limitation put to the cupidity of the half reformed rogues of Botany Bay".

Burton repeated in these letters to the Austens that he hated Sydney and its corruption, in which even those who were opulent and influential were ``without Virtue, considering money as the criterion of excellence".  In this letter, he revealed that he had little respect for the legal actions of his colleagues.  He told Mr and Mrs Austen that

I found on my arrival, such a Court, such a looseness of regulation & practices---such advocates such attornies [sic] and such clients as the name of the place would lead me to expect: ---But the most distressing part of this subject was the disregard to legal principles & hence to uncertainty & reproach which existed as to the administration of the laws.  The capricious adoption of some English statutes & the libertine abandonment of others---so that although by the express words of the Statute of Geo 4 c 38 [sic]---`all the laws & statutes then in force in England were directed to be applied, in all cases where they can be applied' yet so loosely has this law been applied that Usury and Extortion are become the Rogue's honesty.

He went on to describe looseness, irregularity and drunkenness among the practitioners: ``I can only describe them as Botany Bay lawyers."

The anger, indeed horror, that he showed towards the colony and its inhabitants appears to be the key to many of his judgments.  Nothing good, he thought, had ever come out of New South Wales.

More of his character, perhaps, can be seen from the following: "Judge Burton refused to allow a witness who was a Catholic to cross himself before giving evidence in the Supreme Court, and he considered such a system if permitted, might have a tendency to encourage mental reservation."  Source: Australian, 1 November 1833; and see Australian, 17 January 1834, stating that Burton had argued that Catholics and protestants should be sworn in same way, unlike the present practice.

It must have been rather humiliating, then, that Burton J. felt obliged in August 1833 to seek the opinion of Forbes C.J. and Dowling J. as to whether he had been properly appointed to the Supreme Court.  They replied that they were sure that his appointment was valid: see Chief Justice's Letter Book, 1824 - 1835, State Records of New South Wales, 4/6651, pp 327-330.  See also Historical Records of Australia, Series 1, Vol. 16, p. 823.  (For the official version of the retirement of Stephen J. and his replacement by Burton J., see Goderich to Bourke, 30 March 1832, Mitchell Library, A 1269 (reel CY 1399).)

The newspapers had been calling for usury laws for several years: see Sydney Gazette, 15 September 1829; Australian, 24 September 1830, and 14 January 1831, but it was not until 1834 that, precipitated by this decision in Macdonald v. Levy, a New South Wales Act concerning interest rates was finally passed (5 Wm 4 No. 10; see Australian, 3 June 1834).  It fixed the rate recoverable in the courts at 8 per cent, but it did not penalise higher contractual rates.

After the Act was passed, Burton J. continued to protest that the English usury statute (12 Anne, Stat. 2, c. 16) was still in force, and that the new colonial Act was thus repugnant to it.  He expressed his opposition to the colonial Act in a letter to Governor Bourke dated 25 August 1834 (Historical Records of Australia, Series 1, Vol. 17, pp 536-537).  He stated the reasons for finding that the Act was repugnant to the laws of England as follows:

``First.  `That the provisions of that Act are repugnant to the Statute of 12 Anne, Stat. 2, C. 16, whereby it is enacted, That no person shall take directly or indirectly, for loan of any Monies, wares, merchandise, or other commodities whatsoever, above the value of five pounds for the forebearance of One hundred pounds for a Year, and so after that rate for a greater or lesser Sum, of for a longer or shorter time.'

``Secondly.  I am of opinion that the provisions of that Act are repugnant to the Statute of 9 Geo. IV, c. 83, upon the following grounds.

``1. That the Stat. 12 Anne, Stat. 2, c. 16, above referred to, was a Statute `in force within the Realm of England at the time of the passing of the Stat. 9 Geo. IV, c. 83.'

``2. That by the 24th Section of the last mentioned Act, it is enacted, `That all Laws and Statutes in force within the realm of England at the time of the passing of that Act' (not being inconsistent therewith, or with any Charter, or Letters Patent or order in Council which may be issued in pursuance thereof) shall be applied in the administration of Justice in the Courts of New South Wales and Van Diemen's land respectively, so far as the same can be applied within the said Colonies.

``3. That I am not aware of any reason why the Stat. 12 Anne, Stat. 2, c. 16, could not at the time of the passing of the Stat. 9 Geo. IV, c. 83, or at the time of passing the Local Act now under consideration, be applied within the Colony of New South Wales, and the preamble of the act states no such reason, and the object of it is to prevent the application of that Statute in the administration of Justice in this Colony."

The other judges disagreed and Governor Bourke was content to send the Act to London for royal approbation : see Historical Records of Australia, Series 1, vol. 17, pp 520-537 (and see Forbes Papers, Mitchell Library,  ML A 121 (reel CY 545), pp 849-852).  This was either audacious or merely consistent conduct by Burton: he was ignoring the majority view of the Supreme Court in Macdonald v. Levy.  He alone thought that the statute of Anne was in force in New South Wales.

Under 9 Geo. 4 c. 83, s. 22, new Acts of the colony's Legislative Council were submitted to the judges of the Supreme Court.  Any of them could declare the Act repugnant to English law, but if they did, the Legislative Council could stick to the legislation; then it went into effect until Royal pleasure could be notified, that is, until it received the approval of the British government.   After Burton J. raised his objections, the Legislative Council established a sub-committee to examine the Act, chaired by Forbes C.J.  It reported that the sub-committee was opposed to a penal usury law, and was divided as to the need of a limit at all: see Australian, 13 June 1834.

Lord Glenelg later told Governor Bourke that his view on both Acts agreed with that of Forbes C.J. and Dowling J., rather than Burton J.: Glenelg to Bourke, 5 September 1835, Historical Records of Australia, Series 1, Vol. 18, pp 94-95.

The newspapers were fascinated by the topic.  On 17 June 1834 for instance, the Australian gave an example from Ellison v. Kirk, decided on 14 June 1834, where a man borrowed at 75% plus an extra 25% for the attorney, and lost six times the debt through sale under execution and is now ruined.  (See also Ellison v. Kirk, 1834.)  For further newspaper commentary, see Australian, 6 and 10 June 1834, 25 and 29 July 1834, 26 August 1834.

For commentary on this case and the debate surrounding this statute, see C.H. Currey, Sir Francis Forbes: the First Chief Justice of the Supreme Court of New South Wales, Angus and Robertson, Sydney, 1968,  cc 40 and 41, noting at p. 425 that this was called Forbes' Act, and was described by one historian as the legislative basis of the pastoral industry.

The same split decision as evident in MacDonald v. Levy and the supposed repugnancy of the interest rates Act (Forbes C.J. and Dowling J. in majority, versus Burton J. in minority) was also evident in the question whether the Bushranging Act was repugnant to English law: see the notes to R. v. Elliot, 1834.  Once again, Burton J. was more attached to the strict rules of English law than his brother judges.

On the attitude of Burton J. towards the reception of English law, see also Martin v. Munn, 1833.

[2 ] The same issue of the Sydney Herald (11 March 1833) reported that Macdonald also recovered £24 on a bond, and £10 7s. 2d. on an account stated on the same day.

[3 ] This judgment was one of the few to be reported by Legge: see 1 Legge 39.  Legge said that he relied on the Sydney Gazette of 11, 13 and 15 June 1833 to compile his report.

The Australian commented on this decision on 14 June 1833.  It criticised the impracticality of the view of Burton J, "for every law which could by possibi[l]ity be acted on here, would have necessarily been in force, unless restrained by express enactment."  It also stated that the "cant about the sin of Usury we utterly despise, for money is as much an article of commerce as sugar, tea, or tobacco; but we are strongly impressed with the opinion, that limiting the rate of interest is a measure required for the welfare of the Colony."

On a postponement of judgment in this case, see Sydney Gazette, 4 June 1833; Australian, 7 June 1833; Sydney Herald, 6 June 1833.  See also Sydney Herald, 24 April 1834; Rapsey v. Riley, Australian, 3 June 1834.

In Scott v. Campbell, 7 September 1829 (Dowling, Proceedings of the Supreme Court, Vol. 23, State Records of New South Wales, 2/3206, p. 148), an attempt was made to prove that it was the custom of merchants that 25 per cent was the customary rate payable on bills of exchange returned dishonoured from England.  Justice Dowling recorded the following (at p. 156): "In this case I stated that the decision of the assessors would afford no general rule upon the meagre evidence produced.  No custom of usuage was proved.  The assessors were merely left to conjecture.  I remarked upon the total absence of any evidence of usage.  Only one instance of payment of 25/ per cent produced.  I told the assessors that the resolution entered into by the Chamber of Commerce could not affect their decision, that being a mere voluntary association, whose rules might be binding on themselves but not the public generally.  This a question of damages for the assessors."

On the reception of English usury law, see also Brownlow v. Graham, 1833; and on usury, see also  Hay v. Gordon, 1835.

On the debate which this decision aroused, see also Australian, 17 May, 7 June, 27 December 1833.

[4 ] Legge gave the reference to the English usury statute in footnote 2 at p. 39: ``12 Anne St. 2, cap 16, Ruff."  It is not clear where Legge intended this to apply, as the text does not contain the link to note 2.

[5 ] Legge corrected this passage in accordance with the correction published in the Sydney Gazette on 15 June 1833: see below.

[6 ] The Sydney Gazette published this memorandum on 15 June 1833: see below.

[7 ] This is the only surviving judge's notebook account of one of these judgments.  Legge says at p. 60 of 1 Legge, that he verified the Gazette version of the judgment of Dowling J. (which he relied on for his report) against this shorter notebook version.

In the same volume of Dowling's notebook at p. 68, there is a note saying that the three judges delivered their opinions on 8 June 1833, "For which see post printed matter at end of this Book."  This would refer to a newspaper account of any of the judgments, but there is no such clipping in the book, nor evidence that there ever was.

Published by the Division of Law, Macquarie University