SUPREME COURT.

Globe, Volume I, Issue 42, 18 July 1874, Page 3

SUPREME COURT.

SITTINGS IN CHAMBERS. Friday, July 17. [Before His Honor Mr Justice GressonJ His Honor sat in the Court Chambers at 11 a.in. UNION BANK OF AUSTRALIA V. SMITH. His Honor gave judgment in this case as follows : This was a motion to dissolve a provisional injunction, obtained by the plaintiff upon an cx parte application, to restrain the Manager of the Christchurch branch of the Union Bank of Australia from enforcing the demand of the bank for the balance of the plaintiff’s overdrawn account, and from entering into, seizing, or selling all or any of the plaintiff’s personal estate or lands included in the bill of sale, or other securities mentioned in the declaration ; and from commencing or prosecuting any action against the plaintiff for the recovery of the balance owing by the plaintiff to the bank upon his said account. The facts upon which plaintiff founded his equity, may be shortly stated thus: The plaintiff, who for a long time previously had kept his account with the said bank, about the Ist of February 1874, had overdrawn his account to the amount of about £6OO ; and the bank then agreed to make further advances, and to allow him to overdraw to the amount of £llOO for a period of 12 months, in consideration of his executing to the manager of the bank, a bill of sale over certain live stock and chattels, and also executing certain mortgages of freehold lands, for securing the payment of such balance as might be due by him. In pursuance of such agreement, on the 10th Feb. 1874, he executed the said securities to the defendant, the bank manager, as mortgagee, to secure the repayment of his overdraft (then amounting to £1196 12s 9d), and of all such sums of money as should at any time thereafter become due to the bank. By the bill of sale which is set out, the plaintiff as mortgagor, covenanted with the defendant as mortgagee, that he would immediately upon demand made either verbally, or upon notice in writing under the hand of the said manager or his successors, pay the balance, which 0 , on the account current of the said mortgagor, should for the time being be due for the said sum of £1196 12s 9d, and other loans, credits, or advances made to or for the accommodation or at the request of the mortgagor, together with interest and other lawful charges ; and further transferred to the mortgagee certain live stock, goods and chattels mentioned in the schedule thereto, to hold, subject to redemption on payment by the mortgagor on demand of such balance as aforesaid, with power of entry and sale in the usual terms in case of default in payment, after demand. The plaintiff also executed to the defendant a deed of even date with the said bill of sale, whereby he conveyed to the defendant, as manager, certain parcels of land therein described, as collateral security, and also executed a certain memorandum of mortgage under the Land Transfer Act, whereby he charged certain freehold lands as collateral security for the payment of the moneys secured by the said bill of sale. The declaration further states that all the said securities were prepared by the solicitors of the Bank, and that none of them, or any draft, copy or engrossment, was either perused by the plaintiff or by any solicitor or other adviser on his behalf, nor was the purport or effect thereof stated to him j but that ho executed the same believing that they were made to secure the repayment by him of the amount in which he might be indebted to the Bank on his account at any time upon demand after the expiry of the said period of twelve months, but not on demand at any time before the expiry of the said period of twelve months, as in the said securities is mentioned ; and that, consequently, they do not express the agreement really made between the plaintiff and the Bank, or carry into effect the real intentions of the contracting parties. That, contrary to the agreement really made between the parties, the defendant, on or about 18th June, 1874, demanded from the plaintiff the sum of £1619 12s lid, as the balance then owing by him to the Bank, while in fact he was at the time of such demand and of filing his declaration indebted to the Bank on his overdrawn account in an amount less than the said sum of £llOO, viz., in the sum of £IOOS 11s, and no more. That he only very recently discovered the real purport of the said bill of sale and other securities, and since such discovery had applied to the defendant to have them altered, so as to carry into effect the agreement between the parties ; but the Bank had refused to comply with such application. That none o f the events (other than the plaintiffs’ refusal to comply with the Bank’s demand), upon which the powers contained in the said bill of sale and other securities were made exercisable had happened. The declaration prays that the bill of sale and other securities may be decreed to be delivered up and cancelled, or modified so as to express the true intent and meaning of the parties, and that the defendant and other officers and servants of the Bank may be restrained by injunction, &c. The plaintiff verifies by affidavit the statements in the declaration, and further states that about _ a fortnight before swearing his affidavit (viz, about the 10th of June) having been requested to go to the office of Messrs Hanmer and Harper, the solicitors of the Bank, he went and saw their managing clerk, Mr Papprill, who informed him that some of the machinery in his mill had been omitted in the schedule to the bill of sale given by him to the Bank ; and he presented to him and requested him to execute another bill of sale to the defendant, which he, the plaintiff, understood was for the purpose of giving to the Bank security over such machinery. That upon his hesitating to do so, the said clerk informed him that unless he executed such fresh security the Bank would immediately demand the monies owing to them by him, and would exercise the powers conferred upon them by the said securities. That ho then made enquiry and ascertained that the said bill of sale and securities were so framed as to make the balance for the time being, owing by him to the Bank, payable at any time upon demand, and that until that conversation he was wholly unaware that the said bill of sale and securities did not carry out and express the agreement made between him and the said Bank that he should be allowed to overdraw his account to the extent of £llOO for a period of twelve months. That after some conversation he offered to execute the said bill of sale, provided it was made to express that the demand should not be made for twelve months, or

provided a letter was given him to that effect. That the matter was referred to Mr Melville, the acting manager of the Bank at Christchurch, who would not give the letter, as requested, and plaintiff refused to sign the further bill of sale, unless altered so as to make the moneys not repayable before twelve months. That, being obliged to leave Christchurch, he returned home, and the next communication he had was a letter, received some days afterwards, viz,, on the 15th June, advising him that as he had declined to execute the securities agreed upon at the time the advances were made to him, the Bank would not be justified in making any further advances on his account until such securities were completed ; and at the same time he received an intimation that one of his cheques had been dishonoured. That, he then returned to Christchurch, and had an interview with the manager with reference to the dishonour of his cheques, who told him that it was in consequence of his refusal to execute the further bill of sale, which he agreed to do, provided the agreement fo the overdraft for twelve months was reduced to writing. That the manager said if plaintiff signed the deed the arrangement would be carried out, but that he must trust to the bank, or words to that effect. That, having declined to give the further security without getting a substantial assurance from the Bank that they would not for a period of twelve months make demand of the overdraft up to the said amount of £llOO, Plaintiff was served next day with a formal demand, as stated in the declaration, of £1619 12s lid, as the balance then owing upon his account current. That thereupon he went to the manager with his solicitor, who, after some conversation not material, offered on plaintiff’s behalf to execute the further security, provided the Bank would reduce the agreement to writing for the continuance of the overdraft for twelve months, either by letter or by expressing the same in the deed ; but the manager said “ there was no agreement, it was only an understanding that it should be continued for twelve months.” That the amount owing by the plaintiff upon his said banking account was at the time of the demand being more, and of swearing his said affidavit, £IOOS 11s, and interest thereon for a few days. The application for the injunction was supported by an affidavit of the plaintiff’s solicitor detailing the result of the interview with the Bank manager and Bank Solicitor, and also setting forth his correspondence with the latter; the effect of the whole being to corroborate the plaintiff’s statement that he agreed to give the further security required, if the Bank would give an undertaking in writing, to allow the overdraft to the amount of £llOO for twelve months, and that the manager impliedly admitted that the agreement had been as contended for by the plaintiff, by replying that there was no agreement to the effect s ( ated, but that it was only an understanding. Upon the forgoing statement of facts, counsel, on behalf of the defendant, moved to dissolve the injunction on the ground (1), of improper concealment and mis-state-ment of facts ; (2), omission to set out material documents; and (3), failure to comply with the rule of the Court, which requires that in applications for ex parte injunctions of this nature, the affidavit should set forth concisely the grounds upon which it is believed the defendant justifies his acts. The question whether or not there was want of equity in the declaration was not argued, and was understood to be waived. It was admitted by plaintiff’s counsel that the Court deals with groat strictness and severity with persons who apply for ex parte injunctions, and that the plaintiff applying ex parte comes under a contract with the Court that he will state the whole case fully and fairly, and if he fail to do so, and the Court finds when the other party applies to dissolve the injunction that any material fact has been suppressed or not properly brought for ward, it will dissolve the injunction without deciding on the merits. McClaren v Stainton, 16 Beav, p 290 ; Castelli v Cook, 7 Hare, p 94. The rule which is to govern the Court in the application of these principles to the case before it, seems to be whether the suppression or misstatement was such as to lead the Court to grant the injunction. Brown v Newall, 2 Myl. and Craig, p 571 ; and I agree with Mr Justice Chapman, that in determining this question, the Court must draw its conclusion from facts or documents, which are admitted or incontrovertible, and that it ought not to take upon itself to decide doubtful questions of fact, which, according to our practice, are to be submitted to a jury. Masonic Hall Co v Hardwicke, N. Z. Jurist, p 93. The question, therefore, which I have to determine upon this motion is whether the plaintiff, in applying for his injunction, has stated his case fully and fairly, or whether be has suppressed or omitted any fact or document, which, upon the affidavits now before the Court, must be admitted to be true, and which would have induced the Court to refuse to grant the injunction ex parte. I think that this question must be answered in the affirmative, both as regards the omission to state facts and documents. It now here appears, from the declaration or affidavits before the Court on the application for the injunction, that the Bank contended that any condition was annexed to the allowance of the overdraft for twelve months to the amount of £llOO. On the contrary, the case put forward by the plaintiff and the demands represented to have been made on the part of the Bank naturally lead to the conclusion, that the manager admitted that there was an understanding between the parties, that the plaintiff was to be absolutely entitled to an overdraft for the period of twelve months, to the amount of £llOO ; and, that therefore, the Bank was oppressively taking advantage of the omission to commit to writing what it admitted to be the spirit and true intent of the agreement between the parties. Such is the inference that I think would naturally be drawn from the statement of the manager, that “therehad been no agreement, but only an understanding”—But the affidavit of the manager gives a wholly different version of the transaction, and one that appears to me consistent with the letters get forth by him, and with the affidavit of his solicitor, that the conditions were referred to upon the interview between the respective solicitors. He states that the original overdraft to be allowed by the Bank, as that which was to be secured by a bill of sale, was for £BOO, and that the plaintiff was informed that the securities would not be enforced before the expiration of a year from the time of their being given, if the said overdraft was gradually reduced to the satisfaction of the Bank I'roin time to time during the year ; and that before the comple-

tion of the securities for that overdraft, the plaintiff had overdrawn to the extent of £1196 12s 9d, which increased amount was mentioned in the securities of 10th February, 1874, as being the amount then owing to the Bank, and secured by the said securities, and was to be subject to the same conditions as the overdraft of £BOO referred to in a letter of the 4th December, 1873, which is sot out. In confirmation of his statement that the overdraft was to be subject to reduction, he sets out a farther letter of the sth May, 1874, in which he informed the plaintiff that his account then stood over £llOO, the limit agreed upon, and that it was understood that a gradual reduction should take place, instead of which, the account had been going up, and that any further requirements the plaintiff must provide for, to prevent the necessity of the manager referring his cheques to him. He further states that when the plaintiff called upon him in the early part of June last, with reference to the state of his banking account, he informed him that he must reduce the overdraft according to the conditions .’aforesaid, and that he stated bethought he should be able to reduce the said overdraft to the extent of £2OO in August next, and saw no difficulty after that time in working down his account as previously arranged. This conversation the plaintiff does not deny, although he denies that he consented to alter his alleged arrangement for an overdraft. Indeed it is difficult to reconcile the plaintiff’s version with the fact admitted by him, that at the very time of the execution of the securities of the 10th Feb ; the limit of-the overdraft of £llOO was exceeded by nearly £IOO, so that upon his own shewing, it was competent for the Bank Manager on the very day after the execution of the securities, to demand payment, and in default thereof, to proceed to enforce it by exercising his powers of entry and sale. I am clearly of opinion, however, that the Bank Manager’s version of the transaction, whether or not it should turn out ultimately to bewell founded, ought to have been submitted to the Court upon the motion for the injunction, and that the plaintiff or his solicitor could not be ignorant that it was contended oh the part of the Bank, that the allowance of the overdraft for 12 months was to be subject to conditions. Indeed, it appears from Mr Haumer’s affidavit, as already mentioned, that he expressly referred the plaintiff’s solicitor to the plaintiff himself for { an explanation of those conditions. I think, had the alleged conditions and the letter of the sth May, 1874, been before the Court upon the motion for injunction, the case would have assumed a very different complexion. Moreover, there is a direct misstatement in the plaintiffs’ first affidavit, as he states that the letters received by him on the 15th June, 1874, were the first intimation he had from the Bank of the intention to dishonor his cheques, whereas the letter of the sth of May, 1874, distinctly informed him that thereafter he must provide for his cheques himself—an intimation of which, although made five or six weeks before, he seems to have taken no notice; and although he states in his subsequent affidavit that this letter had escaped his memory, such an excuse for failing to communicate a material fact is one that cannot be recognised by the Court. Clifton v Robinson, 16 Beav, 355. I think that there has also been a failure to comply with the spirit of the 444th rule, for although the plaintiff expresses his belief that the defence which would bo set up would be estopped, he must have known that the Bank did not intend to rest its defence upon mere matter of law, apart from the conditions insisted on by the Bank manager. Upon the whole I think that had the case been fully and fairly before the Court upon the application for the injunction, the result would have been different, and that therefore the injunction must be dissolved with costs. Mr Garrick obtained leave to appeal. RE CHARLES EDWARD DUDLEY. Mr G. Harper applied for an order confirming choice of trustee. His Honor made the order. RE RICHARD MILLER. The bankrupt in person applied for an order fixing date of last examination. His Honor made the order, fixing Thursday, 13th August. LUNACY ACT 1865, AND RE HUGH WRIGHT, A LUNATIC. Mr Williams applied for an order confirming the report of the registrar in this matter. His Honor made the order as prayed The Court then rose.