Cowell v The Rosehill Racecourse Company Ltd
(1937) 56 CLR 605[1937] HCA 17
11 ALJ 32
[1937] ALR 273
(Judgment by: Latham CJ)
Between: Cowell - Plaintiff, Appellant
And: The Rosehill Racecourse Company Limited - Defendant, Respondent
Judges:
Latham CJStarke J
Dixon J
Evatt J
McTiernan J
Judgment date: 22 April 1937
Judgment by:
Latham CJ
The plaintiff appellant sued the defendant respondent for damages for assault. The defence was that the plaintiff was trespassing on the defendant's land and that the defendant's servants and agents requested him to leave the land, which he refused to do, and the defendant's servants and agents thereupon removed him, using no more force than was necessary for that purpose, and that the said removal of the plaintiff was the alleged assault. The plaintiff, for reply on equitable grounds, said that the defendant was conducting a race meeting on the said land and that in consideration of the plaintiff paying four shillings the defendant promised to allow him to remain on the racecourse and view the races, gave him leave and licence to enter and remain on the racecourse for that purpose and promised not to revoke the licence; that the plaintiff paid four shillings, but the defendant, in breach of the promise alleged, revoked the leave and licence and assaulted the plaintiff in ejecting him from the racecourse. The defendant demurred to this pleading and the Full Court of the Supreme Court of New South Wales upheld the demurrer, following Naylor v. Canterbury Park Racecourse Co. Ltd., [F1] and ordered that judgment be entered for the defendant. The plaintiff has appealed to this court.
The question which arises in the appeal is whether this court should follow the decision in Hurst v. Picture Theatres Ltd. [F2] The Full Court of the Supreme Court of New South Wales in Naylor's Case [F3] refused to apply Hurst's Case [F4] in New South Wales. The facts pleaded in this case are indistinguishable from those in Hurst's Case.
In Hurst's Case it was held that Wood v. Leadbitter, [F5] even if originally rightly decided, was no longer good law. In Wood v. Leadbitter it was decided that a mere licence, that is, a permission to do something which without permission would be unlawful, was revocable, whether it was under seal or not, but that a licence coupled with an interest was not revocable. Kerrison v. Smith [F6] shows that where a licence is revoked the actual revocation may (if there be a contract) be a breach of contract for which damages are recoverable. Thus a person ejected from a place of entertainment could in such a case at least get back the price of admission which he had paid. It was not suggested in Wood v. Leadbitter that the existence of a contract not to revoke the licence made the licence irrevocable in the sense that it could not be effectually (though possibly wrongfully) revoked.
The doctrine of Wood v. Leadbitter is clear and coherent. If a man creates a proprietary right in another and gives him a licence to go upon certain land in order that he may use or enjoy that right, the grantor cannot divest the grantee of his proprietary right and revest it in the grantor, or simply determine it, by breaking the agreement under which the licence was given. The grantee owns the property to which the licence is incident, and this ownership, with its incidental licence, is unaffected by what purports to be a revocation of the licence. The revocation of the licence is ineffectual. Easements and profits a prendre supply examples of interests to which licences to enter and remain upon land may be incidental.
The majority judgment in Hurst's Case modified, if it did not reject, the law of Wood v. Leadbitter by holding that a "right to see" a spectacle was an interest which could be granted so that a licence to go into a theatre or a racecourse to see a play or to witness races was, when given for value, irrevocable because it was a licence coupled with an interest. Further, the majority judgment held that, in so far as Wood v. Leadbitter [F7] rested upon the rule that no incorporeal hereditament affecting land can be created or transferred otherwise than by deed, the Judicature Act had radically changed the position. The court was now bound to give effect to equitable doctrines and would therefore ignore the absence of a seal and would (as in Frogley v. Earl of Lovelace) [F8] grant an injunction to protect the right granted.
The first ground of the decision, in my opinion, ignores the distinction between a proprietary right and a contractual right. In Wood v. Leadbitter there was obviously a contractual "interest." The plaintiff had bought and paid for a contractual right to go upon land for the purpose of witnessing a spectacle. But this fact, which was treated as irrelevant in Wood v. Leadbitter, is made the foundation of the first ground of the judgment in Hurst's Case. [F9] In that case Buckley L.J. [F10] interpreted "interest" in a sense quite different from that in which the word was used in Wood v. Leadbitter. The learned judge said that there was a grant of a right to come to see a spectacle. The licence is described as "only something granted to him for the purpose of enabling him to have that which had been granted to him, namely, the right to see." The "right to see" is treated as the "interest" which has been "granted."
It is clear that the learned judge used the word "grant" in a sense very different from that in which it was used in Wood v. Leadbitter. It was there used in relation to interests in land which were, if they existed at all, clearly proprietary interests. The right to see a spectacle cannot, in the ordinary sense of legal language, be regarded as a proprietary interest. Fifty thousand people who pay to see a football match do not obtain fifty thousand interests in the football ground. A contrary view produces results which may fairly be described as remarkable. The Statute of Frauds would be applicable. A person who bought a reserved seat might be held to have what could be called "a term of hours" in the seat. The "interest" of persons without reserved seats would, if regarded as proprietary interests, be more than difficult to describe. If the interests were held to be incorporeal hereditaments they would be quite new to the law-notwithstanding the strongly established principle of Keppell v. Bailey. [F11] The feat would have been achieved of creating an easement in gross-an easement with a servient tenement, but without any dominant tenement. There is nothing in the majority judgments in Hurst's Case [F12] to show that these consequences were appreciated when the case was decided. For the reasons mentioned, I cannot regard the transaction of buying a ticket for an entertainment as creating anything more than a contractual right in the buyer against the seller-a right to have the contract performed. For the breach of such a right there is a remedy in damages, but the remedies applicable to the protection of proprietary rights are not legally (or equitably) appropriate in such a case. There is, strictly, no grant of any interest. What is created is something quite different, namely, contractual rights and obligations. In Wells v. Kingston-upon-Hull [F13] Lord Coleridge C.J. pointed out the difference between the creation of a proprietary interest in land by a contract relating to the possession or enjoyment of land and the creation of a contractual right to use land under conditions, the owner of land retaining possession and all rights over it. In that case a dock was "let" to a ship-owner for the purpose of repairing a ship, but it was held that no interest in land was created (See also Frank Warr & Co. Ltd. v. London County Council; [F14] J. C. Williamson Ltd. v. Lukey and Mulholland; [F15] Commissioner of Stamp Duties (N.S.W.) v. Yeend [F16] -cases of rights to sell refreshments in a theatre or on a racecourse).
In my opinion, the first ground upon which Hurst's Case was decided (that there was in that case a licence coupled with an interest) cannot be supported.
The second ground of the decision in Hurst's Case is based upon the opinion that the plaintiff in Wood v. Leadbitter [F17] failed because he did not have a grant under seal of the right which he claimed. It is true that the absence of a seal was a complete reply, in an action at law, to the contention of the plaintiff that he had an interest in the land upon which a race meeting was being held. But in fact the presence of a seal would not have assisted the plaintiff to establish the impossible proposition that he had an easement in gross. It is true that, as the majority judgments in Hurst's Case [F18] state, a grant of an interest in land need not, in order to be effective in a court of equity, be made by deed, and that, since the Judicature Act, this rule is enforced in all divisions of the High Court in England (Walsh v. Lonsdale). [F19] But this proposition does not justify the assertion that interests in land can, since the Judicature Act, be created by simple contract even though, before that Act, they were of such a character that they could not be created by deed as interests in land. Buckley L.J. applies to the facts of Hurst's Case the statement of Parker J. in James Jones & Sons Ltd. v. Tankerville (Earl) [F20] that an injunction restraining the revocation of a licence "merely prevents" the defendant "from breaking his contract, and protects a right in equity which but for the absence of a seal would be a right at law, and since the Judicature Act it may well be doubted whether the absence of a seal in such a case can be relied on in any court." This statement was made with respect to a proprietary right (a profit a prendre) and it is a begging of the question to apply it to a case in which the matter in dispute is whether the alleged interest is such that it can be an interest in land, whether created by deed or not. Frogley v. Earl of Lovelace, [F21] which is relied upon in Hurst's Case, was a case of an agreement for a profit a prendre, an incorporeal hereditament. Thus the second ground for the majority judgments in Hurst's Case cannot, in my opinion, be supported. I regard the dissenting judgment of Phillimore L.J. as a convincing statement of the true position both at law and in equity.
In New South Wales the Judicature Act is not in force, but the Common Law Procedure Act 1899, sec. 97, provides that "the plaintiff may, in answer to any plea, reply facts avoiding such plea upon equitable grounds."
In this case the plaintiff relies upon an equitable replication containing an allegation that the defendant for consideration agreed not to revoke the licence to enter and remain upon the racecourse. Whether this replication is good or not depends upon whether such an agreement, if proved, prevents in equity the revocation of the licence in such a sense as to make entirely ineffectual anything purporting to be a revocation of the licence. Except in Hurst's Case [F22] there is no authority for the proposition that such a licence cannot be revoked at law in cases where no proprietary interest has been granted. The question is whether there is any principle of equity which prevents the effectual revocation of such a licence even though the revocation be a breach of contract. No authority apart from Hurst's Case has been cited to show that this is a principle of equity. Whether the replication is good or bad depends, not upon rules of pleading, but upon whether the facts alleged constitute a good answer in equity to the plea raised by the defendant that the plaintiff was a trespasser. If his licence was effectually revoked, though wrongfully, he was a trespasser, and the removal of him from the racecourse without the use of undue force did not constitute an assault. The plaintiff can escape from the position of being a trespasser only by showing that the licence was not effectually revoked. The only argument to support this proposition is to be found in the contention that the defendant cannot be heard to rely upon his own wrongful act in revoking the licence which he had agreed not to revoke. If the principle to be applied is a principle that the defendant cannot rely upon his own breach of contract, then that principle would surely have been mentioned in the reports of decided cases. No reference, however, has been made to any cases decided upon the basis of this principle.
It is common ground that an equitable replication under the Common Law Procedure Act 1899, sec. 97, can be sustained only where the facts pleaded are such that a court of equity would upon the basis of those facts have granted an absolute unconditional and perpetual injunction (See Stephen's Principles of Pleading, 7th ed. (1866), at p. 210; Gee v. Smart). [F23]
It is clear that equity would never have decreed the specific performance of a contract to provide an entertainment. Equity would never have granted an unconditional injunction restraining the proprietor of a place of entertainment from excluding from that place a person who had bought a ticket of admission. Any injunction granted would necessarily have been subject at least to the condition that the plaintiff coming into equity should behave himself with due propriety during the entertainment.
But it is urged that equity would have granted an unconditional and perpetual injunction restraining the defendant from setting up an unconscientious plea, namely, a plea based upon his own wrongful withdrawal of a licence. This argument is suggested in a note to the article of Sir John Miles criticizing Hurst's Case [F24] in the Law Quarterly Review, vol. 31, p. 217. In the first place there is no authority to support the contention in such a case as the present case. The real rule is that an equitable defence to a common law action is admissible under the Common Law Procedure Act only "where it discloses facts which would entitle the party pleading it to an absolute and unconditional injunction in a court of equity against the judgment which the opposite party might otherwise have obtained at law" (Stephen's Principles of Pleading, 7th ed. (1866), at p. 210). If the suggested principle were sound, it is remarkable that it was never advanced as a practical means of avoiding the law as laid down in Wood v. Leadbitter. [F25] Secondly, the contention appears to me to be based upon an idea that equity will always do whatever it can to bring about the specific performance of any contract according to its terms. The argument rests upon a vague assumption that equity would, by limiting the pleading in a common law action of a party who had broken a contract, seek to prevent him from merely paying damages for his breach if an injunction against his pleading would prevent him from gaining some "unconscientious" advantage by his breach. There is no such general equitable principle (see per Pollock C.B., Hyde v. Graham). [F26] In cases of wrongful dismissal, for example, the only remedy for the breach of contract is to be found in damages. Even though the employer admits the wrongful dismissal, he cannot be ordered to re-employ his former servant. If the servant under an ordinary contract of service sues for wages in respect of a period after dismissal, the employer would never have been restrained from pleading that he had dismissed him, though wrongfully. In such cases-and there are many others, for example, sale of goods and commercial contracts generally-equity left the parties to their remedies at law. The equitable remedies of injunction and specific performance were never applied merely or generally on grounds of unconscientiousness. They would be used to protect proprietary rights, to enforce negative agreements, and, in special cases only, to enforce affirmative agreements (Doherty v. Allman). [F27] These agreements never included contracts to provide an entertainment in a particular place in return for payment. Thus I am unable to accept the contention that equity would at any time have restrained the defendant from pleading the replication in question.
This aspect of the case should be considered in relation to established principles of equity and not in relation to the arguments ab inconvenienti which are so prominent in the majority judgments in Hurst's Case. [F28] There are arguments from inconvenience on both sides. The right to see an entertainment is doubtless a valuable right. It is a right for which people are prepared to pay and which they esteem. There are other rights, the exercise of which involves entry upon land, which are still more valuable from a practical point of view. Consider, for example, the case of a servant who is employed for a term to do work upon certain premises. He is wrongfully dismissed. He is then excluded from the premises. His right to earn a living in accordance with a lawful contract is a right at least as important as a right to witness an entertainment. The principle approved in Hurst's Case would entitle him to go into and remain upon the premises, although he had been dismissed from his employment, and to obtain damages for assault if he were forcibly removed. Similarly an ordinary building contract enables the building contractor to go upon land for the purpose of conducting building operations so that he can perform his contract and earn his expected profit. This right continues to exist even if the building owner wrongfully repudiates the contract. But the only remedy of the building contractor for an infringement of the right is in damages. If he goes on the land against the will of the owner he may be treated as a trespasser. The adoption of the principle involved in Hurst's Case would alter these established rules. Consider further a case where a building devoted to entertainment becomes overcrowded by persons who have bought tickets. This may happen without any default on the part of the person in control of the building. If, however, the legal position is as stated in Hurst's Case, [F29] it is impossible for anyone (except possibly a constable) to remove any of the persons, either for the safety of the audience as a whole or in order to secure the observance of the law, without subjecting himself to the possibility of numerous actions for assault. It is doubtful whether such consequences were realized in Hurst's Case.
On the other hand it might be said that there is an implied condition that the licence to each member of the audience might be revoked in the interests of the safety of the audience or in order to secure the due observance of the law or for some other lawful reason. Such a view really constructs or invents a complicated contract between the parties and it would raise new and rather difficult questions. Why, for example, should A be asked to leave the building rather than B? Would it be left to the judgment of the controller of the building to determine how many persons should be asked to leave? In other cases it might be sought to avoid what would be described as an unreasonable extension of Hurst's Case by saying that the facts show that the parties intended that the licence should be revocable in certain conditions. I refer again to the case of a dismissed servant. Here, it appears to me, it is difficult to suggest in explicit terms an appropriate condition. It would be necessary to attach to the contract an implied condition that the employer might revoke the implied licence to come upon his premises if at any time he should determine the contract of employment even though he did so wrongfully. Such a view appears to me to be an unreal method of dealing with the position. A much more realistic approach is provided by the application of the simple principle of Wood v. Leadbitter, [F30] namely, that no "grant" of any proprietary right, that is, of any jus in rem, has been made to the plaintiff. He has simply obtained a contractual right which is enforceable in personam by an action for damages.
The denial of this principle will create more difficulties than are thought to be involved in its continued assertion. I agree with what Jordan C.J. says as to "common sense and practical convenience" in Naylor's Case. [F31]
Hurst's Case [F32] has been criticized again and again by learned writers, although it has necessarily been accepted as an authority in Great Britain by subordinate courts (See references given in Hanbury's Modern Equity (1935), p. 118). The question, therefore, as it presents itself to me, is whether this court should hold itself bound by Hurst's Case for the simple and single reason that it is a decision of the Court of Appeal in England.
In matters affecting title to property, where rights have been paid for and where persons have acted upon the faith of established decisions, it is very desirable that those decisions should be followed, if possible, even though a court not strictly bound by a particular decision should be of opinion that it was wrong. So also in cases affecting mercantile practice. See Sexton v. Horton [F33] where it was also said by Knox C.J. and Starke J. that unless a decision of the Court of Appeal was manifestly wrong it should be followed. In Smith v. Australian Woollen Mills Ltd. [F34] a decision of the Court of Appeal was not followed because it was held to be inconsistent with established principles. I am of opinion, for the reasons which I have stated, that Hurst's Case is manifestly wrong, and that it is not possible to extract from it any general principle which is consistent with well-recognized principles of law. Hard cases may be put on both sides. One cannot but sympathize with the position of a person who is asked to leave a place of entertainment without just cause. On the other hand, there are grave inconveniences involved in the adoption of Hurst's Case as sound law, and it may be added that, if the law is not correctly stated in Hurst's Case, such a person may successfully avoid indignity by recognizing the law and going quietly.
The decision in Hurst's Case has never been considered by the Privy Council or the House of Lords, and in view of my clear opinion that it is a wrong decision I think that it is proper so to hold and to refuse to follow it in this court. In my opinion Naylor's Case [F35] was rightly decided, and the Full Court was right in this case in upholding the demurrer. The appeal should be dismissed.