[IN THE HOUSE OF LORDS.]

1892. June 20, 21,

23, 27.

HENRY WILLIAM HATTON

(appellant) 2. HUGH HARRIS (respondent).

Bond-Penal Sum to secure InterestJudgment on Bond-Amount of Debt and Interest exceeding Penal Sum Decree charging Land with Debt," with interest until paid "-Sale of Land under Incumbered Estates Court, Ireland - Clerical Mistake in Judgment-Correction of Error -Judicature (Ireland) Act, 1877, s. 25"Slip Order" (Ireland), Rules of the Supreme Court (Ireland), 1891, Order XXVIII. rule 11.

Where a judgment had been recovered on a bond for 1,000l., conditioned to secure 500l. and six per cent. interest, and a decree was made in 1853 that the debt, with interest "until paid," was a charge upon the debtor's lands, and the lands having been sold, GIBSON, J., sitting for the Land Judge of the Chancery Division in Ireland, ordered the debt to be paid, with interest, notwithstanding that the amount exceeded the penal sum mentioned in the bond it was Held, affirming the decision of the Irish Court of Appeal (reported 27 Law Rep. Ir. 512), that the lands ought not to have been extended beyond the penalty in the bond; that there was an obvious error in the decree of 1853; and that, under Order XXVIII. rule 11 of the Rules of the Supreme Court (Ireland), 1891, the decree should be corrected by inserting the words, "the principal sum and interest not to exceed the amount of the penalty on the bond."

This was an appeal from the Court of Appeal in Ireland, reported as In re Knipe's Estate (27 Law Rep. Ir. 512).

The appellant was the legal personal representative of Georgina Mary Benson, who, on the 7th of June, 1842, obtained judgment against George M. Knipe in the Irish Court of Common Pleas upon a bond in the penal sum of 1,000l. and costs, the bond being intended to secure a principal sum of 500l. and six per cent. interest. A bill was filed on the equity side of the Court of Exchequer by judgment creditors of Knipe, and in January, 1852, the usual decretal order was made for the

In the ac

Master to take an account. count so taken G. M. Benson was stated to be the seventh incumbrancer on the lands, tenements, rents, and hereditaments of Knipe on the foot of a judgment for 500l., with interest due from the 7th of December, 1847, to the 1st of April, 1853, 1597. 11s. 1d.; and in the report the Master gave the evidence on which it was founded, which was "an attested copy judgment obtained by Georgina Mary Benson against said George Marshall Knipe, in or as of Trinity Term, 1842, in

the Court of Common Pleas, for the penal sum of 1,000l." It thus appeared that the claim was in respect of a judgment obtained for the penal sum of 1,000l., for the purpose of securing 500l., with six per cent. interest. On the 9th of June, 1853, the Lord Chancellor made a decree declaring that "the several sums in said report found to be due to the plaintiff's and to the defendants" (other creditors), "with interest at the rate in said report mentioned upon the principal moneys reported to be due to the said plaintiff's and defendants and creditors respectively from the 1st day of April, 1853, until paid, are well charged upon the lands and premises in said report in that behalf respectively mentioned, and an incumbrance affecting the said lands and premises respectively." In 1856 the lands were sold, and these prior incumbrances were paid off. Nothing was done for many years, and there was no money to distribute for the benefit of G. M. Benson or her estate. But in 1890 the appellant discovered that there were certain sums standing to the credit of the cause of Hill v. Knipe, and, on his application, the Master of the Rolls ordered these sums to be transferred to the Land Judge's Court, Chancery Division. To that Court the appellant applied in 1891 to have paid out to him 1,7757. 158. 11d., which was the amount of 500l., and six per cent. interest to the date of the application. The respondent Harris was the next incumbrancer to G. M. Benson, and opposed the application. Gibson, J., sitting for the Land Judge of the Chancery Division, ordered that the appellant be entitled to the interest claimed, notwithstanding that the amount exceeded the penal sum of 1,000l. mentioned in the

Hatton v. Harris, H.L. judgment of the 7th of June, 1842. Harris insisted that no more than 1,000l. should be paid to the appellant, as no more was chargeable upon the lands, the sale moneys of which were represented by the sum in Court.

The Court of Appeal (O'Brien, C.J., FitzGibbon, L.J., and Barry, L.J.) reversed this decision, and made an order declaring that the appellant was entitled to interest on the 500l., with interest at six per cent., the said sum and interest not to exceed in the aggregate the penal sum of 1,000l.

D. H. Madden, Q.C. (Attorney-General for Ireland), and A. W. Samuels (of the Irish Bar) (J. Gordon M'Cullagh with them), for the appellant.-Sir Edward Sugden, when Lord Chancellor of Ireland, decided in Wilson v. Poe (1) that where a decree had been made making a sum a charge with interest on the land, the decree was conclusive, notwithstanding that the amount with interest might exceed the penal sum mentioned in the bond. The respondents ought to have appealed against the decree. Interest beyond the penalty was allowed in Cloughley v. Jame son (2). A subsequent creditor cannot affect the rights of a prior creditor, and the case cannot now be reheard.

[LORD MACNAGHTEN.-Was there not an error in the decree which might have been corrected?]

The Land Court had no jurisdiction to correct it. A bill of review must be brought within twenty years-Mitford's Pleading, 88-204, Lytton v. Lytton (3), and Perry v. Phelips (4). Miller v. Swire (5) is distinguishable.

[They also referred to Gaunt v. Taylor (6), Godfrey v. Watson (7), Hamilton v. Houghton (8), Davidson v. Sinclair (9), Hill v. The East and West India Dock

Company (10), Purcell v. Blennerhassett (11), Montefiore v. Browne (12), In re St. Nazaire Company (13), O'Connell v. Macnamara (14), In re Lananze (15), Clarke v. Seton (16), and Grant v. Grant (17).]

Crackanthorpe, Q.C., and Gaussen (of the Irish Bar), for the respondents.When there is a penal sum mentioned in a bond there can be no claim for interest beyond that sum-Hughes v. Wynne (18). The judgment is made a charge on the land by 3 & 4 Vict. c. 105. ss. 22 to 26. There was thus an error on the face of the judgment which can be corrected. There are no "special circumstances," and no such circumstances could avail to the detriment of subsequent creditors-Hyde v. Hart (19) and Garner v. Briggs (20). Wilson v. Poe (1) was a case simply of debtor and creditor, and not between prior and subsequent incumbrancers. Time is no bar to the correction of an accidental slip-Brandon v. Brandon (21)—and the error may be corrected under the Irish 'Slip Order," Order XXVIII. rule 11. This is a case in which leave to appeal would have been given to rectify the mistake-In re The Manchester Economic Building Society (22). The appeal might be adjourned for a formal application to be made to correct the error, but the costs would be thereby increased.

Madden, Q.C., in reply.

It was arranged between counsel that the question should be dealt with as if an application had been made in Hill v. Knipe to correct the decree of the 9th of June, 1853. The Irish "Slip Order" is as follows: "Clerical mistakes in judgments, or errors arising from any accidental slip or omission, may at any time be corrected by the Court or

(10) 53 Law J. Rep. Chanc. 842; Law Rep. 9 App. Cas. 448.

(11) 10 Ir. Eq. Rep. 470.

(12) 7 H.L. Cas. 242.

(13) Law Rep. 12 Ch. D. 88.

(14) 3 Dr. & War. 411.

(15) 11 Ir. Chanc. 19.

(16) 6 Ves. 411.

(17) 3 Sim. 14.

(18) 1 Myl. & K. 20.

(19) 1 Cooper, 193.

(20) 27 Law J. Rep. Chanc. 483.

(21) 7 De Gex, M. & G. 365.

(22) 53 Law J Rep. Chanc. 115; Law Rep. 24 Ch. D. 488.

E

Hatton v. Harris, H.L. been made should have an opportunity of reconsidering such decree, or reconsidering any finding or proof, to direct such person as the commissioners may think fit to apply to such Court in relation

thereto.'

Therefore, acting upon the decree, provided that there were no steps taken to set the decree right, even assuming it to be erroneous, would be the proper course. But that provision in the statute to which I have just referred indicates that, although the Land Court is bound by a decree as to the rights of incumbrancers pronounced in a suit pending in a Court of equity, yet, nevertheless, it is perfectly legitimate-indeed, it is more than that, it is the duty of the Land Court, if it thinks that there is some error which is capable of correction, and ought to be corrected, to adjourn the case in order that the proper steps may be taken for its correction.

Now, it seems to have been thought that Wilson v. Poe (1) had decided that even although the form of the judgment appeared to be what it was by reason of a slip in drawing it up, the error or the omission in that respect was incapable of correction. Now I do not so read Wilson v. Poe (1) at all. The Lord Chancellor, although, no doubt, he did not in that proceeding make any correction, but acted upon the judgment, yet himself pronounced that, in his belief, the judgment had the form it had by reason of a slip.

But it is necessary to call your Lordships' attention to the exact manner in which the case of Wilson v. Poe (1) arose. In Wilson v. Poe (1) the Master had made a report in which he had acted upon a decree such as your Lordships have to deal with in the present case, which did give a person who was an incumbrancer by reason of the judgment the principal sum and interest until paid. To that objection was taken that the judgment ought not to have given any right beyond the penal sum of the bond. The argument against that objection was that it went to the decree, upon the words of which the report was founded, and was, therefore, an attempt to vary a decree upon exceptions, which that Court could not do; that it was not competent

to that Court upon exceptions to make any order which was not consistent with the original decree. Now that was the argument relied on, and that was the argument to which the Master of the Rolls (Blackburne) yielded, and all that he held was that, the original decree standing in the form in which it was, you could not except to the Master's report, which was consistent with the decree, because you said that the decree was erroneous in form. That was the decree which came before the Lord Chancellor in the case of Wilson v. Poe (1), and he affirmed that decision. He said that he had no doubt as to the construction of the decree; that there was not an error on the face of the decree; and that, therefore, the decree standing as it did, the Master's report could not be said to be open to exception, because all he had done was to act upon a decree which erroneous upon the face of it.

was not

But there was at that time in force the 103rd General Order of 1843. It did not, of course, create rights, but it declared the practice and rule then prevailing in equity. It provided that "clerical mistakes in judgments or orders, or errors arising therein from any accidental slip or omission, might at any time be corrected by the Court or a Judge on motion or summons without an appeal." Now, this having been pronounced to be an accidental slip by the Lord Chancellor, and that General Order existing, of which he must have been aware, I am at a loss to see what ground there can be for regarding the judgment of Sir Edward Sugden in the case of Wilson v. Poe (1) as in any way determining that it was a matter which was incapable of correction. On the contrary, he said at the end of his judgment in that case: "I think there has been a slip in this case." If that was so, the case was within the very terms of the 103rd General Order of 1843; and therefore, although I am quite prepared to follow Wilson v. Poe (1) as regards what it determines, it does not, as it seems to me, in any way determine that this was a matter incapable of correction; I should draw the very contrary inference.

What, then, ought to be done in the

Hatton v. Harris, H.L.

present case? I think that if the strictly regular course had been pursued when the matter came before Mr. Justice Gibson, he should have adjourned the proceedings to give an opportunity of an application being made in the suit to have this error or omission corrected. The 103rd Order of 1843, of course, is not, as such, in force any longer; but the rule which has been made under the Judicature Act is in the same terms, and the case equally falls within it.

It was said, first of all, that this was not an error or omission within the meaning of this rule, because it was possible that the learned Lord Chancellor had intended to give these rights, even though he may have erred in point of law in giving them, because he may have thought that there were special circumstances which entitled the incumbrancer to a charge exceeding the penal sum in the bond. And cases were referred to in which it has been said that there may be circumstances under which more than the penal sum may be recovered by reason of the conduct of the debtor. Now I will not stop to enquire whether that could be so as regards the extent of the charge upon the land, or whether it is not merely a matter of personal obligation on the part of the debtor. But, however that may be, no case was cited to your Lordships in which it had ever been held that the conduct of the debtor could entitle one incumbrancer to an extended charge of this description to the prejudice of a subsequent incumbrancer; and, in the absence of authority, I am absolutely unable to conceive a case in which it could be right as between two incumbrancers, by reason of any conduct on the part of the debtor, to extend the charge of one incumbrancer beyond the penal sum in the bond, to the prejudice of a subsequent incumbrancer.

Therefore, having regard to the nature of this case, I am unable to see any ground upon which it can be said that this order, in the terms in which it was made, could have been intended to be made by the Lord Chancellor. I myself think that it was a mere accidental omission that the words were not inserted that in the case of a bond the amount should not exceed

the penalty; and if attention had been called to the fact that those words were not so inserted, and that one incumbrancer might thereby be prejudiced as against another in respect of the omission, I cannot doubt that the correction would at once have been made.

Now the terms of the General Order are clear, that such a correction may be made at any time. It is true that many years have elapsed since the date of this order; but, on the other hand, nothing has been done since the date of this order until recently, when, the money being found in Court, the matter was revived. I cannot see any difference, therefore, as regards the circumstances of this case, from what it would have been if the matter had arisen immediately after judgment was pronounced.

Under these circumstances it seems to me that, upon an application being made in the suit, the proper course would have been, and must have been, in accordance with the rule which I have read, to correct the decree pronounced in that suit, and then, of course, the rest would have followed; because, of course, if that decree had been corrected in the manner which I have mentioned, the rights of the parties would have been clearly defined.

Now there is one observation which I ought to make, and it is this: that there may possibly be cases in which an application to correct an error of this description would be too late. The rights of third parties may have intervened, based upon the existence of the decree, and in ignorance of any circumstances which would tend to shew that it was erroneous, such as to disentitle the parties to the suit, or those interested in it, to come at so late a period and ask for the correction to be made. There might be a ground of that description which would induce the tribunal to say, "No; although this is a slip, and one which would have been corrected at the time, you have delayed so long that you have allowed rights to grow up which it would now be unjust to prejudice, and it is impossible now to make the correction." But no facts were put before your Lordships in the present case which would justify the Court in so refusing to correct the error. It was put