Cowell v The Rosehill Racecourse Company Ltd

(1937) 56 CLR 605
[1937] HCA 17
11 ALJ 32
[1937] ALR 273

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(Judgment by: Dixon J)

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

Court:

Judges: Latham CJ
Starke J

Dixon JEvatt J
McTiernan J

Judgment date: 22 April 1937

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Judgment by:
Dixon J

The defendant seeks to justify the assault of which the plaintiff complains, as a lawful exercise of force for the purpose of removing the plaintiff from the defendant's racecourse which he refused to leave upon request. The plaintiff alleges that for valuable consideration, viz., the price of admission, the defendant contracted to allow the plaintiff to enter the racecourse and remain and view the races and not to revoke his licence to do so. Do these facts deprive the defendant of its justification?

At common law they would have no effect upon the justification for the alleged tort. And, what is of much importance, they would not do so even if the contract were under seal and took the form of a grant of a right to enter and view the spectacle.

Such a right could not constitute an easement. The acts to which it relates do not form the subject of any class of easement hitherto recognized. But, apart from this consideration, the right is not appurtenant to any tenement. Strangely enough, Alderson B. in Wood v. Leadbitter ^[F71] appears to concede that such a right might exist as an easement in gross, a concession which has tended to confuse principle. But "it seems not improbable that in the middle of last century the doctrine that a dominant tenement is necessary to the existence of an easement was not so clearly held as it is at the present day" (Sir John Miles, Law Quarterly Review vol. 31, p. 217n; cf. Gapes v. Fish). ^[F72]

Such a right could not constitute a profit a prendre, because its subject is not the taking of something capable of ownership, of some material profit of the land (See Race v. Ward). ^[F73]

It could not constitute a licence coupled with a grant. For it does not purport to confer any interest in any corporeal thing. "A licence to enter a man's property is prima facie revocable, but it is irrevocable even at law if coupled with or granted in aid of a legal interest conferred on the purchaser, and the interest so conferred may be a purely chattel interest or an interest in realty. If A sells to B felled timber lying on A's land on the terms that B may enter and carry it away, the licence conferred is an irrevocable licence because it is coupled with and granted in aid of the legal property in the timber which the contract for sale confers on B (Wood v. Manley ^[F74] (1839) 11 A. & E. 34; 113 E.R. 325.") (per Parker J., James Jones & Sons Ltd. v. Tankerville (Earl)). ^[F75] The licence to go upon the land is incident to the grant and depends upon it. But the purpose must be to take away something which is upon the land or forms part of the soil or otherwise to deal with an ascertainable subject of property. For the licence is irrevocable because it is necessary to the enjoyment or effectuation of a right of property that has been conferred. Thus, if the attempt to confer the proprietary right or interest proves void, the licence subsists but is countermandable (Carrington v. Roots; ^[F76] Wood v. Leadbitter). ^[F77]

A licence which is not coupled with or granted in aid of an interest is revocable at law. It operates as a bare permission to do what would otherwise be an invasion of the licensor's rights. If the permission is terminated, further continuance of the acts it authorized becomes wrongful. A licensee does not become a trespasser until he has received notice that the licence is countermanded and until a reasonable time has elapsed in which he may withdraw from the land and remove whatever property he has brought in pursuance of the licence (Cornish v. Stubbs). ^[F78] But, if he then refuse to leave the premises, he cannot complain of his forcible removal.

"A licence under seal (provided it be a mere licence) is as revocable as a licence by parol" (per Alderson B., Wood v. Leadbitter). ^[F79] Further, a licence is revocable at law notwithstanding an express contract not to revoke it. By revoking it, the licensor commits a breach of contract exposing him to an action of damages ex contractu. But the licensee cannot further avail himself of the licence and the licensor is not precluded in an action of tort from relying upon the termination of the licence (Wood v. Leadbitter; ^[F80] Taplin v. Florence). ^[F81] This is in accordance with the general rule of the common law that a landowner's possessory rights cannot be renounced or altered by mere contract. The rights continue to subsist notwithstanding the contract, which operates only to impose obligations and not otherwise to prevent the exercise of rights arising from property.

In Hurst v. Picture Theatres Ltd. ^[F82] after describing how the plaintiff, who had been ejected from a picture theatre, had duly paid for his admission "to enjoy the sight of a particular spectacle" Buckley L.J. said:

"That which was granted to him was the right to enjoy looking at a spectacle, to attend a performance from its beginning to its end. That which was called the licence, the right to go upon the premises, was only something granted to him for the purpose of enabling him to have that which had been granted him, namely, the right to see. He could not see the performance unless he went into the building. His right to go into the building was something given to him in order to enable him to have the benefit of that which had been granted to him, namely, the right to hear the opera, or see the theatrical performance, or see the moving pictures as was the case here. So that here there was a licence coupled with a grant. If so, Wood v. Leadbitter does not stand in the way at all. A licence coupled with a grant is not revocable."

With all respect to his Lordship, this statement entirely misconceives what is meant by a licence coupled with a grant. The opportunity of witnessing a performance is not an interest in property; it is not a tangible thing to be taken away from the land or out of the soil. It is no more than a personal advantage arising from presence at the place where the licence, while unrevoked, authorized the plaintiff to go and remain.

There can, I think, be no doubt that at law the plaintiff could not recover in tort in respect of his forcible expulsion. His remedy in contract does not include damages for the assault. As it was the plaintiff's legal duty to leave the premises after notice that his licence to remain was withdrawn, and as the assault was the lawful consequence of his failure to do so, the assault could hardly be considered a reasonable and probable consequence of the defendant's breach of contract in withdrawing the licence. Perhaps it does not follow that in no circumstances can anything beyond repayment of the price of admission be recovered ex contractu. But if there be any cause for dissatisfaction with the common law rule, it arises less from the substance of the rule than from the measure of damages allowed in an action of contract (See Addis v. Gramophone Co. Ltd.). ^[F83] For the assault, the defendant is under no liability at common law.

Is there a liability in equity? Does any equity arise out of the plaintiff's situation entitling him to relief against the consequences of the defendant's reliance upon its legal rights? Would the Court of Chancery have granted an unconditional injunction restraining the defendant from justifying the assault complained of in the plaintiff's action on the ground that he was a trespasser? If so, in New South Wales the justification pleaded by the defendant is well answered by a replication on equitable grounds setting forth the facts which would entitle the plaintiff to such an injunction. Under the Judicature system the justification would be well answered by a reply setting out facts which formerly would have entitled the plaintiff to an injunction restraining the defendant from relying at law on such a justification, even if the injunction would have been conditional and not absolute.

But I am unable to believe that any equity exists as a result of which the plaintiff could meet the defendant's justification. This opinion I base upon the substantial ground that a patron of a public amusement who pays for admission obtains by the contract so formed and by acting on the licence it imports no equity against the subsequent revocation of the licence and the exercise by the proprietor of his common law right of expelling the patron. The rights conferred upon the plaintiff by the contract possess none of the characteristics which bring legal rights within the protection of equitable remedies, and the position of the plaintiff at law gives him no title under any recognizable equitable principle to relief against the exercise by the defendant of his legal rights. No right of a proprietary nature is given. The contract is not of a kind which courts of equity have ever enforced specifically. It is not an attempt to confer a right by parol agreement which at law might have been effectually granted by a deed. There is no clear negative stipulation the breach of which would be restrained by injunction.

On the other hand, there is a fugitive or ephemeral purpose of pleasure, mutual undertakings, mostly implied, affecting the behaviour of the parties, and a complete absence of material interest. The purpose is not to enjoy the amenities forming part of the land, but to witness the races and, perhaps, to use the facilities provided for adding to the pleasure and excitement of the spectacle.

Without entering upon an examination of the legal relations to their patrons of the proprietors of a racecourse, it may be assumed that the charge for admission involves some obligations on their part. The racegoer, on his side, is subject to an implied condition that he will behave in an orderly manner and do nothing to hinder or obstruct the proceedings. The implication that the licence to remain upon the course will not be revoked is subject to many conditions. If it is found necessary to suspend the proceeding owing to weather, to the disorderly conduct of a crowd, to some sudden public emergency, or to some other unforeseen event, the contractual right to remain upon the course will be brought to a premature end. If the individual racegoer behaves in a disorderly, insulting, or objectionable manner, he may be expelled notwithstanding that he has paid for his admission. The nature of such a contract takes it outside the scope of the equitable doctrines regulating the application of the remedies of specific performance or injunction. Except for Hurst v. Picture Theatres Ltd. ^[F84] no precedent or dictum has been found giving any countenance to the notion that a court of equity would intervene. The reason for this is not the shortness of time in which the licence operates. No doubt if an equitable interest or an equity were considered to arise out of a contract the performance of which was limited only to a few hours, it might be difficult to invoke the jurisdiction of a court of equity in time to secure its performance or prevent a specific breach. But on the hypothesis that the contract fell within the cognizance of equity, the parties would, after the event, be compellable so to deal with the rights and liabilities resulting at law from what had been done as to give effect to the equities. Thus, if it were true that the licence conferred an equitable interest or the contract gave rise to an equity against the revocation of the licence, then although practical considerations might prevent the Court of Chancery from giving effect antecedently to the rights with which its doctrines supposedly invested the licensee, yet ex post facto it would not permit the other party to assert at law any right inconsistent with the equitable position. On the hypothesis stated, there would be no difficulty in a court of equity restraining a licensor who had purported to revoke a licence revocable at law but irrevocable in equity from asserting in any legal proceeding, whether by way of defence or otherwise, that he had revoked the licence. Nor do I see why after the event any conditions should be attached to the injunction. In other words, if the hypothesis were sound, I do not see why in New South Wales by means of an equitable replication the same result would not be produced, as would, in that event, ensue under a Judicature system. At the same time, in considering the correctness of the hypothesis, it is impossible to disregard the transient nature of the contractual rights out of which the alleged equity or equitable interest is said to grow. Nor can the conditions attending the licence be ignored in dealing with the claim that the contract is, except for practical difficulties, susceptible of specific performance. But, in any case, the notion that equitable doctrine would give such a licence any special quality appears to me quite unwarranted. The hypothesis is false and it is for that reason that no precedent can be found for relief in equity in any such case. For that reason too neither under the Judicature system nor under the system prevailing in New South Wales can the defendant's common law justification for the assault be denied to it on equitable grounds.

Yet in Hurst v. Picture Theatres Ltd. ^[F85] the contrary view was adopted by Buckley and Kennedy L.JJ., Phillimore L.J. dissenting. The explanation lies in a misapprehension by their Lordships as to the effect at common law if the contract for admission had not been by parol but under seal. The use of a seal would in truth have made no difference at all at law. The licence was a bare licence and, therefore, revocable whether granted under seal or by parol. If the licence had been coupled with a grant, it would have been irrevocable at law, if the grant were valid. If the supposed grant had been of an interest in land, as for instance in a standing tree or building (Lavery v. Pursell), ^[F86] the grant would not have been valid unless under seal. Again, if a grant were made of a profit a prendre, it would include a right on the part of the grantee to enter for the purpose of taking the profit. But a profit a prendre is an incorporeal hereditament and a deed is necessary to grant it. If a grant of a profit a prendre or of a thing annexed to the land were attempted by parol, it would be regarded as a contract to make the grant by deed. If the contract were one enforceable by the remedy of specific performance, as it would be in the second case, and, according to circumstances, might be in the first, then in equity as between the parties the grant would be considered as made. The absence of a grant under seal would not in equity be allowed to affect their substantive rights. Both Buckley L.J. and Kennedy L.J. treated admission to a picture theatre as if these considerations applied to it. They based their judgment on the view that an agreement had been made for consideration for the acquisition of a right which at law could be conferred only by deed. Buckley L.J. cited Frogley v. Earl of Lovelace; ^[F87] James Jones & Sons Ltd. v. Tankerville (Earl), ^[F88] both of which related to profits a prendre. He and Kennedy L.J. were, I think, misled by the references by Alderson B. in Wood v. Leadbitter ^[F89] to the absence of a deed. They did not perceive that these references were based on the concession he made that the right to go upon the racecourse might have been the subject of an easement. This concession was, as we would now think, quite without foundation. But in it can be discerned the real source of a misunderstanding which operated through Frogley v. Earl of Lovelace ^[F90] to lead the Court of Appeal into the very remarkable confusion of principle which appears in Hurst v. Picture Theatres Ltd. ^[F91] In that case there was no contract to which the remedy of specific performance applied, there was no grant to which the licence was incident, no attempted grant of any interest in land requiring a seal and no profit a prendre. There was a bare licence revocable whether under seal or not. Yet it was held that there was a licence coupled with an interest and, in any case, that there was a contract for a licence which, if granted under seal, would be irrevocable. I think that we ought not to follow the decision. The errors upon which it is founded are fundamental and it is impossible to support it on any other grounds. To treat it as law, is to introduce into a coherent and well settled body of legal doctrine a source of confusion the consequences of which cannot be foreseen.

The decision has commended itself to some as substantially just in the result and to others as a development of a liberalizing kind. I think there is much to be said against the result in point of policy and, except that it may establish an otherwise unknown head of equity, I see nothing liberalizing in it. But it supplies an example of Bacon's observations upon innovations:

"It is true that what is settled by custom, though it be not good, yet at least it is fit; and those things which have long gone together, are as it were confederate within themselves; whereas new things piece not so well; but, though they help by their utility, yet they trouble by their inconformity."

It is because the decision tends to destroy the "confederacy" of principles and "corrupteth the fountain," not merely the stream, that I think that, although a decision of the Court of Appeal, we ought not to follow it. For the same reason it has provoked the criticism of many eminent writers.

The decision is condemned by Sir William Holdsworth, who says:

"Unfortunately a desire to do substantial justice has recently led the Court of Appeal to disregard the rule that a grant must be the grant of some ascertainable property, and, in consequence, both to make a wholly new extension of the equitable modification of the legal rule, and to cast unfortunate and undeserved doubts upon the principles laid down in Wood v. Leadbitter ^[F92] (1845) 13 M. & W. 838; 153 E.R. 351."

(Holdsworth's History of English Law, vol. vii., p. 328).

The editor of Ashburner's Equity, 2nd ed. (1933), p. 19, says that the decision "appears to give to a party in an action relief which he could not have obtained under the old dual procedure." This, of course, means that it depends upon a previously unknown equity. Mr. Hanbury, in his work, Modern Equity (1935), pp. 117, 118, gives it as an example of spurious equities and says that it "has been subjected to more criticism than has been the fate of any other decision of the present century." His discussion of the decision contains references to the chief writers who have condemned or commended it. He ends his examination of the decision with the statement:

"The decision is approved of in Allen v. King ^[F93] (1915) 2 I.R. 213; [1916] 2 A.C. 54 ., where it was not, however, strictly necessary to express an opinion upon it. But it cannot but have repercussions on other established legal and equitable doctrines which will lead to situations of extreme difficulty."

The decision is, indeed, approved in the case cited, but only in the Irish Court. In the House of Lords the argument of the appellant, which was based upon it, was rejected and, as it appears to me, in a manner consistent only with the view that a licence of a much more enduring nature than that to be present at a spectacle gave no interest legal or equitable in the land and did not bind those who took the land with notice. See the argument ^[F94] and the opinions of Lord Buckmaster ^[F95] and Lord Loreburn. ^[F96] The opinions contain no reference to Hurst v. Picture Theatres Ltd, ^[F97] which is perhaps significant in view of the judgments below and the argument. Dr. Cheshire considers that neither the reasoning nor the conclusion in Hurst v. Picture Theatres Ltd. can be supported (Cheshire's Modern Law of Real Property, 3rd ed. (1933), pp. 261, 301, 302). In a learned paper Sir John Miles gave convincing reasons against its soundness (Law Quarterly Review, vol. 31, p. 217).

In the United States the Supreme Court and most other courts have adhered steadily to the principle that a ticket of admission to a place of amusement does no more than confer a contractual right and imports a licence and gives no proprietary right, legal or equitable. For the amusement proprietor to require the ticket holder to leave without justification is a breach of contract for which he may recover damages. But the American doctrine is that of the English common law, namely, that, notwithstanding the contract, the licence remains revocable. In spite of the breach of contract involved, the licence is effectually revoked and the ticket holder cannot complain of assault if he refuses to leave and is forcibly removed, that is, if no undue violence is used. It does not appear to have occurred to any one in America that an equity might be discoverable entitling the ticket holder to an injunction against revocation of the licence and expulsion from the place of entertainment, or, if he brought an action for assault, to an injunction restraining the defendant from justifying on the ground that the ticket holder had become a trespasser because the licence was revoked. Perhaps the decision of the Supreme Court of Massachusetts in Burton v. Scherpf ^[F98] may be regarded as the leading authority. It was an action for assault and battery brought by a coloured man who, because of his colour, had been forcibly ejected from a public concert, although he had bought a ticket. Without contesting the general proposition that a licence to enter upon land may commonly be revoked at any time before the purpose for which it is given is accomplished, it was claimed on his behalf "that as the contract under which the licence was derived was either wholly or in part executed, and as he was in the actual enjoyment of the privilege conferred upon him at the time when the defendant undertook to revoke it, the right of revocation was lost, and could no longer be asserted". ^[F99] After distinguishing between bare licences which are revocable, and licences coupled with a grant or arising from a sale of property to be taken and carried from the land where it is situated, which are irrevocable, and referring to American and English cases, including Wood v. Leadbitter, ^[F100] the court concluded that the plaintiff had a mere licence which was revocable and revoked. "Upon his refusal to leave the hall to which his ticket gave him admittance, the defendant had a lawful right to remove him. For such removal, an action of trespass cannot, upon the facts reported, be maintained. He may have a remedy in another form of action for breach of the contract, but that cannot affect the decision of the present case". ^[F101]

When the Supreme Court of the United States gave its authority to the rule it spoke through Mr. Justice O. W. Holmes. He described the argument as hardly going "beyond an attempt to overthrow the rule commonly accepted in this country from the English cases, and adopted below, that such tickets do not create a right in rem." He said:-

"We see no reason for declining to follow the commonly accepted rule. The fact that the purchase of the ticket made a contract is not enough. A contract binds the person of the maker but does not create an interest in the property that it may concern, unless it also operates as a conveyance. The ticket was not a conveyance of an interest in the race track, not only because it was not under seal but because by common understanding it did not purport to have that effect. There would be obvious inconveniences if it were construed otherwise. But if it did not create such an interest, that is to say, a right in rem valid against the landowner and third persons, the holder had no right to enforce specific performance by self-help. His only right was to sue upon the contract for the breach. It is true that if the contract were incidental to a right of property either in the land or in goods upon the land, there might be an irrevocable right of entry, but when the contract stands by itself it must be either a conveyance or a licence subject to be revoked" (Marrone v. Washington Jockey Club).

^[F102] See further Meisner v. Detroit, Belle Isle and Windsor Ferry Co. ^[F103] where the distinction between the position of common carriers and amusement proprietors is discussed, and Johnson v. Wilkinson. ^[F104]

In my opinion the judgment of the Supreme Court delivered by Jordan C.J. in Naylor v. Canterbury Park Racecourse Co. Ltd. ^[F105] is right. I go further than he did, because he leaves open the question whether Hurst v. Picture Theatres Ltd. ^[F106] may find a justification under the Judicature system. I hold that it cannot.

The appeal should be dismissed with costs.