YZ Finance Co Pty Ltd v. Cummings
109 CLR 395(Judgment by: Menzies J)
YZ Finance Co Pty Ltd v. Cummings
Court:
Judges:
McTiernan J
Kitto J
Taylor J
Menzies JWindeyer J
Subject References:
Banking and finance
Money lenders
Security
Promissory note
Inconsistency between State and Federal legislation
Legislative References: - Constitution (Cth), s 109; Bills of Exchange Act 1909 (Cth); Money-lenders and Infants Loans Act 1941 (NSW), s 24
Hearing date: 21 November 1963Judgment date: 25 February 1964
MELBOURNE
Judgment by:
Menzies J
Section 24 (1) of the Money-lenders and Infants Loans Act (N.S.W.) confines a money-lender who has taken security for money lent to proceedings for the enforcement of that security. By s. 24 (2) it is provided that in the section "security" includes what is thereafter enumerated. The enumeration does not cover a promissory note or, indeed, any negotiable instrument.
We are concerned here with proceedings instituted by a money-lender who, in addition to taking security in the shape of a bill of sale and a second mortgage, took from the borrower a promissory note upon which he subsequently sued the borrower. The plaintiff succeeded in the District Court but on appeal to the Full Court that judgment was reversed and judgment was entered for the defendant.
The principal question here is whether the money-lender's action upon the promissory note was to enforce his security. If not, it was prohibited by s. 24 (1) because, in taking the bill of sale and second mortgage, the money-lender certainly took security so that, independently altogether of the promissory note, s. 24 (1) applied.
There is no doubt that a promissory note given by a debtor to a creditor falls within the general conception of security. It is also clear that in some of the sections of the Act where the word "security" is used, it would comprehend a promissory note (e.g. s. 22) so it follows that in s. 24 (1) the word "security" would cover a promissory note unless the definition in sub-s. (2) excludes it. Sub-section (2) is in these terms: "In this section `security' includes bill of sale, mortgage, lien, and charge of any real or personal property, and any assignment, conveyance, transfer or dealing with any real or personal property to secure the repayment of any loan."
Now the word "includes" is not in its ordinary meaning a word of exclusion. It is, moreover, apparent that in other definition sections to be found in the Act the words "means" and "includes" have been used with some discrimination to express different meanings (e.g. ss. 3 and 52). Why, then, should the word "includes" in s. 24 (2) be read as meaning either "means" or "means and includes"?
The Full Court's decision that the word "includes" means "means and includes" rested upon the view that the word "includes" should not be given its ordinary meaning because in the enumeration there is not to be found anything not truly a security. Its reasoning was based upon the view that the word "includes" is a word of enlargement and that if in a particular provision it does not effect any enlargement, it cannot be given its ordinary meaning. It is, I think, true that everything enumerated is according to its true character a "security" and it is also true that sometimes in the Act the word "includes" is used as a word of enlargement (e.g. in the definition of "loan" in s. 3 or that of "cash order" in s. 52) but on the other hand sometimes it is not so used (e.g. in the definition of "company" in s. 3). It appears to me, therefore, that the word is sometimes used in the sense attributed to it by the Full Court but sometimes it is used with the recognition that the enumeration, by which it is followed, may not be exhaustive and because it was not desired to use a word of exclusion such as "means" which would make it exhaustive. The phrase "means and includes"-which I have not found anywhere in the Act-has commonly been used to convey both the idea of enlargement and exclusion, as Lord Watson puts in Dilworth v Commissioner of Stamps [F19] , at pp. 105, 106 in a passage cited by the Full Court. I find, however, no justification whatever of the Full Court's view that the word "includes" in s. 24 (2) is the equivalent of "means and includes", for that contradicts its own conclusion that the enumeration which follows it effects no enlargement. The alternatives, so it appears to me, are reading "includes" according to its ordinary meaning or as meaning "means".
Upon the whole I have found no compelling reason for substituting for the word Parliament has chosen to use another word or phrase. As I have said, everything mentioned in s. 24 (2) is according to its own nature a security but the enumeration is not an exhaustive statement of everything that could be a security and I am loath to limit sub-s. (2) as the Full Court has done because to do so would in turn limit the protection conferred by sub-s. (1) upon borrowers from money-lenders. As I have said, it is clear that there are securities outside the enumeration in sub-s. (2) and I find no justification for modifying the language that has been used by Parliament to exclude a money-lender who takes an unenumerated security from the restrictions imposed by sub-s. (1). I am also disposed to think that the result brought about by the Full Court's decision is highly artificial for in the instant case all that the money-lender would need to do to circumvent s. 24 (1)-as was pointed out in argument-would be to negotiate the promissory note to his bank, for it is only proceedings by a money-lender to which s. 24 applies.
Considering that to sue upon the promissory note is a proceeding for the enforcement of the security taken by the money-lender, I have reached the conclusion that the District Court judgment should be restored. I would therefore allow this appeal.