SUPREME COURT Defence Case In Suit Over Farm Purchase

Press, Volume CVI, Issue 31098, 29 June 1966, Page 9

SUPREME COURT Defence Case In Suit Over Farm Purchase

The defence case to a writ seeking the enforcement of a contract to buy a 50-acre farm at Dunsandel for £ll,OOO opened in the Supreme Court yesterday, the defence saying that there had been no justification for the plaintiff’s assuming an indefinite extension of time to settle it.

This submission w*as made by Mr J. G. Leggat on behalf of David Alister McLaughlin, owner of the Dunsandel property, who opposes the writ sought by Donal Roy Baker and his wife, Dianna Natalie Baker (Mr R. J. de Goldi) to enforce its sale to them.

Such enforcement, said Mr Leggat, would be unjust to McLaughlin, after all the disturbance caused him by the Bakers’ alleged failure to settle the contract in time, and his loss consequent on the sale of his contracting plant. “It would be quite unjust to decree specific performance of the contract against him, let alone damages,’’ said Mr Leggat. The Bakers, as well as seeking their writ, claim £914 damages for the loss of returns from expected farming operations—or failing a writ, £4OOO general damages. McLaughlin has counterclaimed £1339 15s damages for loss of income from contracting. Mr Justice Macarthur adjourned the hearing at 5 p.m. yesterday, with the crossexamination of the seventh and last witness still to be heard, until 2.15 p.m. today. Defence Case The plaintiffs had signed, on June 2,1965. a contract for the purchase of McLaughlin’s property, and subsequently asked for an extension of time of the settlement date of September 30—but Mr Leggat submitted yesterday that a letter from McLaughlin on October 22 made it crystal clear to them that time was to be the essence of such contract, and called on them to settle it by October 29.

This letter contained a reluctant concession to a request from a purchaser in difficulty rather than a mutual agreement for an indefinite extension of time, said Mr Leggat. But any doubts about such extension were clarified by later correspondence cancelling the contract. Of the letter of October 22, Mr Leggat submitted that no demur of any kind had been made as to its validity, meaning, or shortness of notice. “There was no justification for assuming an indefinite extension of time to settle this contract” said Mr Leggat. “If there were, that wholly ceased on receipt of that letter of October 22.” As to Baker’s cultivation and planting of part of McLaughlin's land, that was in performance of a right within the contract. “It does not give the plaintiff an equity, but a crop of potatoes,” said Mr Leggat. It was not a case of Baker creating assets on McLaughlin’s land. The potatoes were still there if Baker wanted to take them. (McLaughlin later gave evidence that he : had “never heard a word” from Baker about them. Solicitor's Evidence

Evidence yesterday morning was given by Ewel Malcolm Johnstone, a partner in the law firm of Purnell, Johnstone, and de Goldi, and solicitor for the Bakers, who said he had regarded McLaughlin’s letter of October 22 as being a notice that unless settlement of the contract was made on October 29 (and thus

too short a notice), McLaughlin reserved the right to claim damages for loss suffered through postponement of the settlement date. Johnstone said he had then telephoned Mr G. B. Good- ! enough, senior conveyancing clerk in Weston, Ward, and Lascelles, who were solicitors for McLaughlin, and said that the Bakers were doing everything they could to complete the sale of their own Kaiapoi property, and hoped to be able to settle the Dunsandel purchase “in the very near future.” The letter of November 19 cancelling this contract thus came as a surprise, said Johnstone, and he told Goodenough so, as well as questioning its validity. He also arranged with Goodenough for the Bakers to go down to Dunsandel to see McLaughlin, about November 23 or 24. In a long cross-examination, Johnstone said that the Bakers could have settled the purchase, at the time of this visit, because of temporary finance arranged with the National Bank—but no financial documents were, in fact, completed because of Mclaughlin's refusal to settle. Johnstone agreed that confirmation of the sale of the Bakers’ Kaiapoi property to a man Spiertz was given on November 8, but it could have been a week later that he was told of this, by Baker himself. Johnstone said he had not thought it necessary for the Bakers to approach the bank before November 23-24, because their Kaiapoi property was to be sold on December 1, and it was intended to settle the Dunsandel purchase then.

Mr Leggat: Did you think it worth writing of that to Mr McLaughlin’s solicitors? Johnstone: I did not, in fact, write. No. Mr Leggat. Raising Finance Johnstone agreed that he had, on November 3, written to Weston, Ward, and Lascelles, saying that “every endeavour would be made to raise finance.” Mr Leggat: Was it not open to you, at any time from November 8, to have done precisely what your clients did on November 23? Johnstone: My impression was that Mr McLaughlin would be entitled to interest on the unpaid purchase money, and although reflecting now I admit we could have approached the bank, we did not, in fact, do so. Mr Leggat suggested that on November 8 Johnstone’s clients, the Bakers, had been in default of a notice which, on the face of it, required them to settle the Dunsandel purchase by October 29, and that the consequence of default was known. Johnstone: If time is validly made the essence of the contract, yes.

“Do you seriously suggest,” said Mr Leggat, “that the words “we hereby give notice to your clients that time is the essence of the contract and call upon them to complete their purchase by October 29," admit of more than one meaning?” Johnstone: The English is quite clear, and the meaning quite clear. And from October 29, they have not complied with that demand for completion, have they?—That is correct. Johnstone agreed that from November 8, the Bakers could have complied with the demand, as Baker knew the sale of his Kaiapoi property was confirmed, and had ar-

ranged temporary finance to buy the Dunsandel property within a matter of hours on November 23-24. Mr Leggat: And the only thing that happened in the meantime was that the contract had been terminated? Johnstone: Purportedly, yes. Defendant’s Evidence McLaughlin, in evidence and a long cross-examination yesterday afternoon, said that he had contemplated the purchase of an economic farm unit in the Auckland district, and so placed his own Dunsandel property on the market for £12,000. But with delay by the Bakers in settling their purchase of it, his negotiations to buy two different farm properties near Auckland, at Onewhero and Paparata, had fallen through. McLaughlin said he had “lost his opportunity” to buy the latter property because he could not have signed to buy it “unless he had the cash.”

In cross-examination, it was first put to McLaughlin that he would have completed the sale of his farm on November 12, when Baker had gone down to plant potatoes. McLaughlin said: “Yes.”

Mr de Goldi: As at November 12, and moving into the immediate future, your then intentions were to settle? McLaughlin: Providing it was fairly soon.

Asked whether he had queried if Baker could complete settlement, McLaughlin said: “I left everything to the solicitors.” After an exhaustive crossexamination on details of the case, Mr de Goldi suggested that McLaughlin’s farm had not been sold because he had been too peremptory when the Bakers had approached him on November 23-24. McLaughlin said he had waited for the Bakers to buy it long enough —since the previous May, seven months.

Mr de Goldi: In effect, you were being offered the purchase price of £ll,OOO, but you wouldn’t take it? McLaughlin: It was too late.

It was too late because you had changed your niind about moving out of Dunsandel?— Because I had lost my opportunity at Auckland. Further Evidence

Further defence evidence was given by Gerald Belmont Goodenough, senior clerk in Weston, Ward, and Lascelles —who denied Johnstone’s complaint to him of surprise at, and invalidity of, the “letter of cancellation” of the contract on November 19 —Leslie James Pratt, accountant in Weston, Ward, and Lascelles, and Alfred George Barwell, a farm consultant, on agricultural matters connected with the claim and counter-claim for damages.