Between: Cowell - Plaintiff, Appellant
And: The Rosehill Racecourse Company Limited - Defendant, Respondent

Judges: Latham CJ
Starke J
Dixon J
Evatt J

McTiernan J

Judgment date: 22 April 1937

Judgment by:
McTiernan J

To the appellant's action for assault the respondent pleaded that the appellant was a trespasser on its racecourse and justified the supposed assault as the lawful removal from its land of a trespasser who had had warning to go. The appellant replied on equitable grounds that the respondent for valuable consideration promised to permit him to enter and see all the races which it was conducting or about to conduct on the racecourse and gave him leave and licence to enter and remain there until the conclusion of the races, and promised that it would not before then revoke the licence, and that the respondent in breach of these promises had him removed from the racecourse.

There is no fusion of law and equity in New South Wales, but the Common Law Procedure Act 1899 provides for equitable pleadings in an action at law, (secs. 95 and 97). In its common law jurisdiction the Supreme Court of New South Wales is not empowered to mould its judgment as if it were a decree in equity, and a plea or replication on equitable grounds is followed by the ordinary common law judgment. "Accordingly, it is a settled rule, that an equitable pleading is only admissible 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, 6th ed. (1860), p. 197).

The appellant's replication is founded on the assumption that, because of the existence of the contract in the terms alleged, it is inequitable for the respondent to plead that the appellant was a trespasser, and that a court of equity would grant an absolute and unconditional injunction restraining the respondent from pleading this defence to the action. The respondent demurred to the replication. The demurrer challenges the correctness of the assumption on which the replication is based. Its correctness depends upon whether any right which is within the scope of the equitable remedies was violated by the revocation of the licence (Cf. Hyde v. Graham). ^[F144]

The appellant had become entitled to exercise on the respondent's land a contractual right to see all the races to be run at the race meeting, and to use the facilities, within the contemplation of the contract, which the respondent provided for its patrons. The licence to go and remain on the land was incident to and comprised in this contractual right. The alleged terms of the contract, relating to the giving of the licence and the promise not to revoke it, are pleaded as having been expressed in the contract, but the inclusion of these terms did no more than make explicit what would have been implied in the contract. Whether the appellant exercised this contractual right for profit or pleasure, the advantage which it gave him was not a right in rem or an interest in the land or in anything in or upon the land. If the appellant had an equity to enjoy the licence for the duration of the race meeting it was not because the licence was coupled with any interest of a proprietary nature.

The effect of the contract was to impose a personal obligation on the respondent not to revoke the licence until the conclusion of the meeting; accordingly, the revocation of the licence was a breach of contract, but it did not amount to the impairment of any proprietary interest of the appellant. The breach of contract gave rise to an action at common law for damages, but the plaintiff has instituted an action for assault.

The replication cannot be sustained as an answer on equitable grounds to the fundamental allegation in the plea, that the appellant was a trespasser, unless equity would by a decree for specific performance or by an injunction enforce the contractual right which the appellant had to go and remain on the racecourse until the conclusion of the meeting. The positive terms of the contract pleaded are not of the class of contractual promises of which a court of equity would decree the specific performance or which it would enforce indirectly by injunction.

The contract pleaded, however, purports to reinforce its positive stipulations by a stipulation in the negative form whereby, as this stipulation is pleaded, the respondent promised not to revoke the appellant's licence to go and remain on the racecourse until the conclusion of the meeting. Equity will in certain cases restrain the breach of a negative covenant and the foundation of the relief in such a case need not be the protection of property. It has been observed that in the replication the stipulation in the negative form is pleaded as an express term of the contract. But this stipulation does not add a new obligation to that contained in the two positive stipulations which are pleaded as preceding it. The obligation imposed by the negative stipulation is equivalent in substance to that expressed in the positive terms of the contract. The stipulation in the negative form does not impose any obligation that is accessory to the respondent's main obligation; it is only verbiage amplifying the expression of the contractual relationship between the parties. In Davis v. Foreman ^[F145] an application was refused for an injunction to restrain the breach of a negative clause in a contract providing that an employer would not, except in the case of misconduct or breach of the agreement, require the manager to leave his employ. Kekewich J. said that, to his mind, that clause was distinctly equivalent to a stipulation by the employer that he would retain the manager in his employ. He added:-

"It is only the form that is negative. If the court comes to the conclusion that that is really the substance of the agreement (which, being an agreement of service, cannot be specifically enforced), is it right, having regard to the line the authorities have taken, to say that merely because the agreement is negative in form an injunction ought to be granted? To my mind, I should be going distinctly against the last decision in the Court of Appeal if I were to apply the doctrine of Lumley v. Wagner1(1852) 1 DeG.M. & G. 604; 42 E.R. 687., which is not to be extended, to a case of this character".

The substance of the agreement pleaded is that the respondent for valuable consideration permitted the appellant to go upon its racecourse to see all the races to be run at the meeting and to remain there for that purpose until the conclusion of the meeting. That agreement is not of the class which equity will enforce. The stipulation which is in the negative form expressed substantially the same obligation and does not give the appellant any equity to the performance of the promise in specie. In my opinion the contract pleaded created no equity in the appellant which enabled him to say that, in the contemplation of a court of equity, he would not be a trespasser although the respondent assumed to revoke his licence to go on the land and see all the races.

For these reasons the matters pleaded in the replication disclose no ground for asserting that the respondent's plea that the appellant was a trespasser could only be sustained at the cost of violating a right in equity which the appellant had to remain on the racecourse at the time when he was removed.

This conclusion is opposed to the decision of the Court of Appeal in Hurst v. Picture Theatres Ltd. ^[F149] I share the difficulty of Jordan C.J. expressed in Naylor v. Canterbury Park Racecourse Co. Ltd., ^[F150] and of the majority of the members of this court in reconciling that case with principle and applying it to the present case. That decision seems either to have made the anomalous addition of a right arising from contract, but hardly recognizable as a proprietary interest, to the category of property, or to have made an anomalous extension of the relief which is granted by a court of equity for the enforcement of a contractual right.

The judgment of the Supreme Court was, in my opinion, right, and the appeal should be dismissed.

Appeal dismissed.