1905.

Ex parte

power of appointment, the right to redeem. Here the fact that Bull is a party to the mortgage only makes the case stronger. Thirdly, the most pressing difficulty felt by the RegistrarBUILDING General is as to the operation of s. 62 (2). That section proINVESTMENT vides that foreclosure shall have the effect of vesting in the

THE NEWCASTLE

AND •

COMPANY. mortgagee all the estate and interest of the mortgagor in the

land, free from any right to redeem by the mortgagor or anyone claiming under him. But Mrs. Bull was not the owner of an estate in fee simple, nor did she purport to mortgage a fee simple, so that all that could vest in the mortgagees on foreclosure would be an estate for life, with a power of appointment over the fee in the hands of the mortgagor.

THE CHIEF JUSTICE. Does not the section mean that all the estate and interest which the mortgagor is entitled to mortgage becomes vested in the mortgagee?

Knox. If the Court holds that what passes is the whole of the estate in the land which the mortgagor intended to pass as security for the mortgage debt, that, no doubt, would relieve the Registrar-General of any embarrassment.

Cullen, K.C., and Harvey, for the applicants. It is not necessary that the donee of the power being a married woman should appoint to herself in fee before executing the mortgage. If, in the present case, she had done that, and the mortgage had been afterwards discharged, she would have lost her right of disposing of her property without the concurrence of her husband. The Act being one solely to facilitate conveyancing, the Court will not lean to a construction which will have the effect of cutting down rights which exist apart from the Act.

A power of appointment is an interest recognised by the Act (s. 99). The registered owner of any interest is entitled to mortgage it, and can claim all the protection accorded to the possessor of an estate in connection with dealings under the Real Property Act: Gibbs v. Messer ([1891] A.C. at 254). The mortgagor is estopped from saying that she did not make the lands available for the purposes of the mortgage. "Equity will interfere to prevent the machinery of an Act of Parliament being

used by a person to defeat equities which he has himself raised, and to get rid of a waiver created by his own acts": Wilson v. McIntosh ([1894] A.C. at 134).

1905.

Ex parte THE NEWCASTLE BUILDING

AND

COMPANY,

What Mrs. Bull has done here is to charge her power of appointment. I do not say that this document is a complete INVESTMENT execution of the power; all I say is that it operates, pro tanto, as a charge on her interest for the purpose of the mortgage. If the money is paid, it is as if the charge had never been made; if default is made, it is as if the power had been executed in favour of the mortgagee. She recites that she has a certain interest as holder of a power of appointment, and charges all the estate she possesses as such holder. The document is, for the purposes of the mortgage, an exercise of all the powers vested in the mortgagor, and gives rise to all the incidents of a mortgage, including foreclosure. He referred to Blake v. Marnell (2 B. & B. 38 n.); Wilson v. Piggott (2 Ves. Jr. 351); Irwin v. Farrer (19 Ves. Jr. 86); Re King (19 W.N. 185); Walker v. O'Brien (Canaway, R.P. Act, 89).

As to the question of notice, Bull is a party to the mortgage, and expressly covenants that the mortgagees may sell without notice. Apart from that a person entitled in default of appointment is not a proper party to a foreclosure suit. He has no right to redeem, nor could he have any interest in redeeming an estate which the mortgagor could at any moment destroy by exercising her power of appointment. The case is analogous to a mortgage by a tenant in tail, where the Court does not require the remainderman to be made a party in a suit for foreclosure

THE CHIEF JUSTICE. Two questions have been raised for our decision by the argument in this case. First, whether the memorandum of mortgage constitutes a due execution of the power of appointment vested in Mrs. Bull; and second, what estate would, by the operation of s. 62 (2), vest in the mortgagees upon foreclosure.

It appears that Mrs. Bull was the registered proprietor of an estate for life in certain lands, with a general power of appointment over the fee simple, exercisable by an instrument to be S.R., Vol. V.

Р

1905.

Ex parte THE NEWCASTLE

AND

registered under the Real Property Act, and her husband was entitled in remainder to the fee simple on failure of his wife to execute the said power to appoint. Accordingly Mrs. Bull and BUILDING her husband joined in the execution of a memorandum of mortINVESTMENT gage to the applicant Society in order to secure a sum of 175l. COMPANY. advanced by the Society to Bull. The mortgage commences by The C.J. reciting that Mrs. Bull is the registered holder of an estate for life, with power to appoint in fee, and the precise terms in which that estate was registered can be gathered from her certificate of title. (His Honour read the certificate as above set out.) The memorandum of mortgage goes on to state that in consideration of 175l. advanced to her husband "I do hereby appoint by this instrument by way of mortgage all my estate and interest as such registered holder of a power of appointment as aforesaid in all that piece of land," etc. And both she and her husband covenanted that he would repay the loan.

I apprehend that that would be held in Equity to be a good appointment under the power. We were referred by Dr. Cullen to Blake v. Marnell (2 B. & B. 38 n.), where Lord Redesdale says: "Where a person voluntarily executes an instrument which may have effect under a power to charge property, he must demonstrate that he meant to execute the power; but where a person acts for valuable consideration, he is understood in Equity to engage with the person whom he dealt with to make the instrument as effectual as he has power to make it, and whenever that is done, according to all the cases (upon which I see nothing to raise a doubt), it shall have effect so far as the person who is to execute it has power to give it effect. But where the nature of the instrument is not according to the power, but demonstrates an intent to execute it, it shall have the operation of charging in the form in which the power allows it to charge." In other words, the Court of Equity is guided not so much by the form of the document as by the intention of the party executing it. See also Wilson v. Piggott (2 Ves. Jur. 351). Both these cases are cited by Farwell

(2nd ed., at p. 199).

So here, I have no difficulty in coming to the conclusion that this memorandum of mortgage does sufficiently execute the power possessed by Mrs. Bull to mortgage this land to secure an advance of 1751.

1905.

Ex parte

THE

BUILDING
AND

COMPANY.

The C.J.

Then as to the second point. Under the Real Property Act a mortgage does not operate as a conveyance of the land charged, but takes effect as a security only (s. 57). In the present case NEWCASTLE it operates as giving complete security over the estate of which the female mortgagor had power to dispose, that is to say, INVESTMENT over the fee simple. Under s. 58 the mortgagee is given power upon default, after certain conditions have been complied with, to sell the land so mortgaged, and all the estate and interest therein of the mortgagor. Sect 61 provides that foreclosure orders may be made by the Registrar-General, and upon such orders being made, it is provided by s. 62 (2) that "Every such order for foreclosure shall have the effect of vesting in the mortgagee all the estate and interest of the mortgagor in the land mentioned in such order, free from all right and equity of redemption on the part of the mortgagor or of any person claiming through or under him." If, therefore, this memorandum is a good execution. of Mrs. Bull's power to appoint generally, so as to afford security over the land for the amount advanced, then, by taking the proceedings specified in the Act, the Registrar-General may make an order for foreclosure, and that order vests for the first time in the mortgagees all the estate and interest of the mortgagor in virtue of which the mortgage was made. A foreclosure order in the present case will, therefore, vest in the mortgagees the fee simple itself.

As to the costs, it appears to me that the Registrar-General was perfectly justified in taking steps to compel the applicants to bring the matter before the Court. We cannot certify "that there were no probable grounds" for his refusal to make the order of foreclosure.

COHEN and PRING, JJ,, concurred.

Order accordingly; costs to be paid
by the applicants.

Attorneys for the applicants: II. J. Brown and Mitchell (New

castle).

1905. May 16. Cohen J. Walker J. and Pring J.

COMMISSIONERS OF TAXATION v. MOONEY.

Land and Income Tax Assessment Act (59 Vic. No. 15), 88. 39, 44—Default assessment-Failure to appeal to Court of Review - Subsequent action to recover tax-Question of liability—Estoppel.

The defendant refused to send in a return of his income, contending that he had no taxable income. The Commissioners made a default assessment under s. 39, and sued to recover the tax. Held, that not having appealed from such assessment to the Court of Review upon the question of his liability to pay income tax, the defendant was precluded from disputing his liability in the action.

Land and Income Tax Assessment Act (59 Vic. No. 15), ss. 31 (3), 39, 57-Assessment book-Certified extract-Particulars of default assessment.

In the case of a default assessment under s. 39, the assessment book need only show the amount of income on which, in the Commissioners' judgment, tax ought to be charged and the amount of tax imposed.

Land and Income Tax Assessment Act (59 Vic. No. 15), s. 30 (4)—Failure to make

return-Default assessment.

On failure of any person to make a return, the Commissioners may either appoint a person to make a return under s. 30 (4), or they may themselves make a default assessment under s. 39.

Statute-Enforcement of statutory rights-Decision of special tribunal-Estoppel.

An Act imposed a tax and created a special tribunal to determine, on appeal, whether persons were or were not liable to the tax. Held, that a party who claimed to be exempt, but did not invoke the decision of the special tribunal, was precluded from afterwards raising the question of his liability as a defence in an action at law to recover the tax.

NEW TRIAL MOTION.

The plaintiffs sued to recover income tax alleged to be payable by the defendant for the year 1904, and fine for non-payment. The defendant pleaded (1) That he was not liable to pay income tax for 1904; (2) that he had no taxable income exceeding 2001; (3) that he was not duly assessed.

The action was tried by G. B. Simpson, J., without a jury. The defendant, who described himself as a miner or speculator