1905.

MALONE

v.

WILLIAMS.

The C.J.

case that he had applied for a re-appraisement. At the end then of 1901, when the plaintiff renewed his annual lease, he had a knowledge of this fact. The case of Newsome v. Graham is clearly distinguishable. The plaintiff in that action had paid rent for six years to persons he treated as lessors, he was then ejected and compelled to pay the mesne profits for the time prior to eviction. He had therefore to pay over again the rent he had already paid. There are no such facts in this case.

PRING, J. I also agree. The case is a very simple one so far as this action is concerned. The plaintiff could make out his claim in two ways, either by proving a total failure of consideration or that he entered into the lease and paid rent, being ignorant of the facts. The first clearly fails in as much as he was in possession and occupied the land for a period of 3 years, during part of which time he had stock upon it. He also sublet it. Then the question remains, did he enter into the lease being ignorant of the facts. That would be for the plaintiff to show, and the evidence here tends to show the opposite. There is no statement that the plaintiff was ignorant of any one of the facts. Had he been so it might easily have been stated. He might have been asked this very question. I agree that the verdict for the plaintiff should be set aside, and a verdict entered for the defendant.

Verdict for the plaintiff set aside, and verdict entered for defendant.

Attorneys for the plaintiff: Pigott & Stinson, agents for Alexander & Windeyer (Deniliquin).

Attorney for the defendant: The Crown Solicitor.

MOORE v. LEAN.

Mortgage--Mortgagee's right to interest and costs-How lost-Tender-Essentials of valid tender-Necessity of continued readiness to pay-Distinction between interest and costs in this regard.

Although it is necessary that a tender of the amount due should comply with all the conditions of a strict legal tender in order to prevent interest running on a mortgage debt, yet it is not necessary that the money should be kept idle after refusal in order to deprive the mortgagee of his right to the costs of a subsequent foreclosure action.

THIS was the further consideration of an Originating Summons for foreclosure.

On the 28th May, 1904, the plaintiff, the mortgagee, filed an Originating Summons for accounts and foreclosure. On the 18th June, 1904, the defendant's solicitor tendered six hundred sovereigns in full satisfaction of the amount due for principal, interest and costs. The sum so offered was not accepted. On the 14th October, 1904, the Summons came on for hearing, and the Master was directed to take the accounts. The Master certified that on the 18th June, 1904, there was due and owing the sum of 5391. 98. 6d. The 600l. had not been kept idle by the mortgagor, after the refusal of the mortgagee to accept that amount. The material facts are fully stated in the judgment.

Gordon, K.C., and Harvey, for the plaintiff, the mortgagee. There was no sufficient tender either to stop interest running or to bar the plaintiff's right to costs. A mortgagee's right to interest and costs can only be defeated by a good and effectual tender: Garforth v. Bradley (2 Ves. 675). To constitute a good tender the offer must be unconditional, the money must be appropriated and kept idle, and there must be either a continued readiness to pay or payment into Court: Seton's Decrees, 5th ed. 1614; Gammon v. Stone (1 Ves. 339); Kinnaird v. Trollope (42 Ch. D. 610); Gyles v. Hall (2 P. Wms. 378). Harmer v. Priestly (16 Beav. 569) and Roberts v. Williams (4 Ha. 129) are reconcilable with the above cases, because in those

1905. October 20, November 6.

C.J. in Eq.

1905. MOORE

v.

LEAN.

cases one must assume that the moneys were lying idle and that there was a continued readiness and willingness to pay. The tender in this case was not unconditional, being accompanied by the condition that it must be accepted in full discharge of all claims under the mortgage; this makes this tender conditional, and, therefore, bad: Brennan v. Pitt, Son & Badgery, Ltd (1 S.R. Eq. 92); Bowen v. Owen (11 Q.B. 130).

The right of a mortgagee to interest and costs arises ex contractu Cotterell v. Stratton (L. R. 8 Ch. 295). The Court of Equity should, therefore, apply the same rules as the Courts of Law. In an action at law there can be no plea of tender after action brought, the only way a defendant can escape further liability is by payment into Court. By parity of reasoning no offer to pay in a mortgagee's suit can be sufficient, unless accompanied by appropriation, together with a continuing readiness to pay.

Knox (with him Cowan), for the defendant.

A mortgagor contracts to pay interest until date of payment of principal, but to pay such costs only as are properly incurred; where costs are unnecessarily or improperly incurred, as in the present case, the mortgagee will be compelled to pay such costs: Squire v. Pardoe (66 L.T. 243) The Court has no discretion as to interest, but it has a discretion as to costs. Where costs have been occasioned by the oppressive conduct of the mortgagee in refusing a sum which was in excess of the amount actually due, he should be ordered to pay them: Remnant v. Hood (27 Beav. 74). This. litigation was unnecessary within the meaning of Harmer v. Priestly (16 Beav. 569). A mere expression by the mortgagor of his willingness to pay was held sufficient to deprive the mortgagee of his right to subsequent costs in Smith v. Green (1 Coll. 555) and Sentance v. Porter (7 Ha. 426). A distinction between the rule as to interest and costs is drawn by the Privy Council in Bank of New South Wales v. O'Connor (14 A.C. 273, 283). The tender was unconditional and clearly valid on the occasion when made. This Court will not lay down the rule that a mortgagee can be deprived of his costs by nothing less than what would support a plea of tender at law, such a principle would be in conflict with Squire v. Pardoe (supra) and

Greenwood v. Sutcliffe ([1892] 1 Ch. 1). The subsequent offer to accept the 6001. offered was equivocal and disingenuous; it did not state that credit would be given for the amount received since the first refusal.

Gordon, K.C., in reply.

Greenwood v. Sutcliffe (supra) is an authority in my favour. Where the word "tender" is used it has its ordinary and strict signification. The necessity for the continued readiness is that the mortgagee may take his money at any time and so cause it to earn interest for his benefit. There is no difference between costs and interest in respect to that requisite.

Cur. adv. vult.

1905.

MOORE

v.

LEAN.

On the 6th November the following written judgment was November 6. delivered by

A. H. SIMPSON, C.J. in Eq.

The general rule as to mortgagee's costs was laid down in Cotterell v. Stratton (L.R. 8 Ch. 295, at 302) by Lord Selborne, L.C., as follows:-"The right of a mortgagee in a suit for redemption or foreclosure to his general costs of suit, unless he has forfeited them by some improper defence or other misconduct, is well established, and does not rest upon the exercise of that discretion of the Court, which, in litigious causes, is generally not subject to review. The contract between mortgagor and mortgagee, as it is understood in this Court, makes the mortgage a security, not only for principal and interest and such ordinary charges and expenses as are usually provided for by the instrument creating the security, but also for the costs properly incident to a suit for foreclosure or redemption. In like manner, the contract between the author of a trust and his trustees entitles the trustees, as between themselves and their cestuis que trust, to receive out of the trust estate all their proper costs incident to the execution of the trust. These rights, resting substantially upon contract, can only be lost or curtailed by such inequitable conduct on the part of a mortgagee or trustee as may amount to a violation or culpable neglect of his duty under the contract."

1905.

MOORE

V.

LEAN.

The words "inequitable conduct " in this rule do not necessarily imply conduct that is morally blameworthy, for if the mortgagee disputes the mortgagor's right to redeem, and fails, C.J. in Eq. he may have to pay the costs. Squire v. Pardoe (66 L.T. 243) is an instance of this, where the suit was caused by the mortgagee's claim to consolidate two securities, which the Court held was untenable.

In order to stop interest running a tender must be made of the amount due, and the tender must comply with all the legal formalities which the law attaches to a tender. One of these conditions is that the mortgagor must be continuously ready to pay (uncore prist): Gyles v. Hall (2 P. Wms. 378); Kinnaird v. Trollope (42 Ch. D. 610); 3 Seton's Decrees, 6th ed. 1950. Whether the same strict rule applies in considering the question of costs is another matter. If the mortgagor does not keep the money lying idle, presumably he makes interest on it, and if he keeps that interest, it is only fair that the mortgagee should have his interest. This reasoning does not apply to costs. In Roberts v. Williams (4 Ha. 129) the mortgagor who had tendered more than was due was held entitled to his costs. Nothing appears in the report as to whether the money tendered was kept lying idle. This seems to me equivalent to saying it was not kept idle, for if the mortgagor had been bound to show this, the fact would certainly have been mentioned in the report. In Harmer v. Priestly (16 Beav. 569; 1 W.R. 343) a mortgagee who had refused a tender was ordered to pay costs. It does not appear from the report in Beavan whether or not the money had been kept idle, but from the report in The Weekly Reporter it seems the money had not been kept idle. I am justified, therefore, in holding that money tendered to a mortgagee, and refused, need not be kept idle in order to prevent the mortgagee claiming costs.

The material facts are as follows:-An Originating Summons for accounts and foreclosure was taken out by the plaintiff (the mortgagee) on the 28th May, 1904. On the 18th June, 1904, the defendant made a tender to the plaintiff of six hundred sovereigns, which the plaintiff refused.