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

Dent v. Lyons [1842] NSWSupC 11

nonsuit - Berkeley Estate - false advertising, land sales - misrepresentation - Gosford

Dowling C.J., Burton and Stephen JJ, January 1842

Source: Sydney Herald, 18 January 1842 [1]

This was a motion for a nonsuit. The case, tried last term, was an action brought by the plaintiff against the defendant, to recover money paid on the purchase of a portion of the Berkley Estate. At the trial Mr. Windeyer contended, that the plaintiff ought to have been nonsuited, as he had paid for his purchase after he had acquired full knowledge of the mis-description of which he complained. That he had done this in ignorance of the law, could be of no avail, on the principle that ignorance of the law could never be made the ground for avoiding a contract. His Honor the Chief Justice, at the trial, let the case go to the jury, reserving the point for the learned counsel, Mr. Windeyer, to move on, in the following Term.

After reading the evidence in the case, the Chief Justice purposed that its further hearing, should be postponed until this day, at 10 o'clock.

 

Dowling C.J., Burton and Stephen JJ, 18 January 1842

Source: Sydney Herald, 20 January 1842 [2]

Mr. Windeyer in this case moved for a non-suit or a new trial.

The motion arose out of one of the Berkley estate trials. The plaintiff had purchased allotments of the estate, and the evidence on the trial showed that after he had acquired full knowledge of the alleged misdescription, but whilst ignorant of the law of the transactions; he had paid the money, which by his action against the defendant he sought to recover back.

The learned gentleman quoted Beilby v. Lumley, and the East India Company v. Fritton, 3rd vol. of Barnwell and Cresswell's Reports, and other cases, establishing the legal position, that ignorance of the law would not enable a contracting party who has been deceived, to avoid his contract. If Dent, immediately after his return from Brisbane Water, had taken his stand, and on the ground of the misdescription had refused to fulfil his contract, it would not have been in the power of Mr. Lyons to compel him, Dent, to a fulfilment. But Dent, having paid his notes after his return from Brisbane Water, must be considered to have waived the fraud, and could not now with any effect allege he had done so in ignorance, that he might have been relieved from his contract by the law. Dent had had the means of acquiring full knowledge of all the ingredients of the deception, and whilst in possession of those means, and neglecting to avail himself of them, he proceeds with the contract, until he involves the interests of other and altogether independent parties, and then wishes, when too late, to rescind his contract.

The Chief Justice, - What means, before the trial, had the purchaser of acquiring any knowledge of the puffing, which was only discovered by the examination of some of the witnesses?

Mr. Windeyer resumed, and said, that having waived the misdescription the plaintiff could not subsequently take advantage of puffing, of which evidence was only elicited at the trial; the contract had been concluded by the plaintiff, and the conveyance was deposited with Mr. Chambers as a security for the payment of the purchase money to Mr. Lyons. The conveyance was delivered to Mr. Chambers, absolutely, by Mr. Peek, and from the time of such delivery Mr. Chambers held the deeds as the agent of Dent, and Mr. Peek ceased to have any thing more to do with the land. If after all this the case was to be entirely opened, and Mr. Lyons involved, there would never be any security for auctioneers or agents of any kind. If the plaintiff were to be allowed now to recover the purchase money from Mr. Lyons, he might never be able to recover more than a judgment from his principal, and thus he, an innocent party, would be made the victim of the laches of the plaintiff.

Mr. Broadhurst followed on the same side, and said that the verdict could not be held by the plaintiff, unless the principles upon which the action for money had and received were extended considerably beyond what the decided cases would warrant. No position was more clearly established than that an agent could not be liable where he had bonĂ¢ fide paid over the purchase money to his principal. The case of Saddler v. Evans in the 4th vol. Burrough's Reports, fully established that position. Another circumstance which must prevent the plaintiff succeeding in this action was, that there had been an absolute delivery of the conveyance to Mr. Chambers, and a consequent effectual transfer of the property purchased. Here was a fact which must effectually prevent the rescission of the contract, which could only be effected where it would be possible for the contracting parties to be restored to their original situation. If the money were recovered from Mr. Lyons, he would be entitled to a re-conveyance of the property, which being now out of the hands of his principal, Mr. Peek, the Court would not be able to decree.

The Chief Justice. - That would depend upon whether there was an absolute conveyance.

The learned counsel contended that the delivery to Mr. Chambers, without any condition or qualification that gentleman acting as the attorney for both parties, must be considered as an absolute delivery of the conveyance to the plaintiff himself. Upon these grounds the learned gentleman submitted that the verdict must be set aside, and judgment entered for the defendant.

The Solicitor-General for the plaintiff, said, that whatever might be the differences of opinion respecting the law of the case, there was no doubt the equity was with the plaintiff, and if the Court was called upon to extend the application of the Court for money had and received, it would be an equitable extension, and for the advancement of justice. Much stress had been laid by the other side, on the circumstance of Lyons, the defendant, being an auctioneer. There was no doubt that as an auctioneer, he was also a stake-holder, and was bound, when cognizant as he was of the deception, to have refrained from paying over the money to the other party until the dispute arising out of the deception was fully and satisfactorily settled. What was the meaning of the argument that Mr. Chambers held the conveyance as an attorney for Mr. Dent? The conveyance, according to that gentleman's evidence, was delivered to him to hold until the payment of the money, and that Mr. Chambers chose to call this an absolute, and Mr. Want the customary delivery, could not alter the real state of the facts. If Mr. Dent had called on Mr. Chambers to deliver to him (Dent) the conveyance. Would Chambers have delivered it according to Dent's request? This was the best mode of testing in what character Mr. Chambers received and held the conveyance. If Mr. Chambers held the conveyance as asserted, how could he refuse to deliver the deed on request to his principal? The very fact of the conveyance being delivered to Mr. Chambers until payment of the money, showed there was to be no absolute delivery to the purchaser until that money was paid. Then as to the argument insisted upon by the other side, that the plaintiff having waived the first item of fraud in a transaction is precluded from taking advantage of any other subsequent instance of fraud, however gross, is clearly inconsistent with sound reason, upon which all law is, or professes to be, founded; as, in such a case, a defendant who has committed a very elaborate and continued series of frauds would be in a better situation than one who had committed only one simple act of fraud, for which he may, unless waived, be always liable to make compensation to the party complaining of it.

Mr. Foster followed on the same side, and said there was no question as to the misrepresentation; and the puffing was fully established at the trial. The argument about payment after knowledge could not be sustained. The bills with which the purchase money had been paid had been given by the plaintiffs to Mr. Lyons, and were by him endorsed to third parties. How could the present plaintiffs resist the payment of these bills in the hands of those third parties by whom, it was to be presumed, a valuable consideration had been given for the bills? Was this to be called such a payment by the plaintiffs, after knowledge, as would prevent them from afterwards recovering back their money? Certainly not. Another point on which the counsel for the defendant seemed to place much reliance was, that the purchasers of the land had completed their contracts with full means of ascertaining all the ingredients of the fraud. If by this argument the other side intended it to be understood, that it was within possibility for the plaintiffs to proceed to the property and undeceive themselves, then no doubt the purchasers bought and paid for the property, with full means of knowledge; but fortunately for the plaintiffs and for justice, the law did not interpret the expression "means of knowledge" in that way. In the case of the Duke of Norfolk v. Worthy, where property in reality three miles from Horsham, had been described as being only one mile from that place, a contract had been set aside on the ground of the fraud. There, where the purchaser could have jumped on a coach, which perhaps ran by his door, and could have easily ascertained the truth or falsehood of the description, the law relieved the injured party from his contract, although the means of knowledge, as interpreted by the defendant's Counsel, were easy, and at the plaintiff's door. Then as to the assertion on the other side, that there had been an absolute delivery of the deed to Chambers, as the attorney of the purchaser what was there in that? Could Dent have claimed this deed from his so called attorney? And if he had done so, would this attorney have given it up to his so called principal? It was manifest that this attorney held only as the agent of Peek, and the deed was delivered to Chambers to hold for Peek, until the money was paid. The delivery that was talked about, meant only that the conveyance had been delivered as a deed and not as an escrew; and, whether delivered in that or any other way, it was clear there had been an acceptance by the plaintiff. The learned gentleman concluded his argument by quoting different authorities confirmatory of the positions he had taken in the course of his address.

Mr. Manning followed on the same side, and said, that the doctrine which had been laid down by Mr. Broadhurst, as to the limited application of the Court for money had and received, was erroneous, and that the Court was applicable in every case of fraud or otherwise, where money had been received by a defendant, belonging to a plaintiff, provided the principle of volunti non fit injuria, did not come in to prevent a plaintiff from availing himself of this remedy. The learned gentleman then went into a consideration of the alleged payments, and contended that they could not be considered as voluntary payments by the purchasers, as they could not resist payment of the bills in the hands of third parties, to whom Lyons had indorsed the bills. If Lyons was to be considered to be in a situation to resist the action against him, on the plea that he had paid the money over to his principal, it was very obvious, that Mr. Lyons might in every case, as in the present one, slip out of any responsibility, by making a particular arrangement with his principal as to the mode and time of payment to him. Immediately after the sale, and long before the bills became due, Lyons pays over his own bills to Peek, in anticipation of the purchasers bills being paid, and on the strength of this arrangement, endeavours to show that that was payment over to the principal, which by the authority of the cases in Sugden's Venders and Purchasers, was shown to be no payment at all.

Mr Windeyer replied at considerable length, and the Judges said they would take time to consider their judgment.

Notes

[1] See also Dent v. Lyons, 1841

[2]  See also Australian, 22 January 1842.

Published by the Division of Law, Macquarie University