REFUND OF DEPOSIT CLAIMED

Chronicle (Levin), 16 December 1947, Page 7

REFUND OF DEPOSIT CLAIMED

LAND SALE WHICH WAS NOT COMPLETED Seeking a refund of the £25 they had placed as a deposit on a Levin property they had agreed to purchase, and alleging fraudulent misrepresentation, Howard Penhall and Paul Slater Yalden, students of Massey Agricultural College, Palmerston North, filed a claim against Kenneth Shaw, the owner of the property, in the Magistrate's Court, Levin, on Priday. Defendant was represented by Mr. N. M. Thomson, Levin, and claimants, by Mr. F. G. Opie, Palmerston North. The presiding magistrate was Mr. A. M. Goulding, S.M. His clients, both returned servicemen, had met at the college and had decided to go jointly into business as nurserymen, said Mr. Opie. Penhall had heard of a 20 acre sub-division at Levin and had instructed a Mr. L. Moffatt, land agent, to enquire into the property. ;on Friday, May 23, both plaintiffs,. 'in company with Mr. Moffatt, visited the property in Bartholomew Road and there they were joined by defendant. In reply to enquiries about the nature of the ground, an assurance had been forthcoming from both defendant and Mr. Moffatt that the ground was not stony. The grass was quite long and had cattle grazing on it. They had gone over the property and dug their heels into the earth in several places, and during further conversations with Moffatt he had reiterated that the ground was not stony. An agreement to purchase the property had befen made out in Mr. Moffatt's offfce on the Sunday morning, but a conversation with some people in the boarding house at which they were staying had led his clients to return to the property to again inspect it, continued Mr. Opie. They called at defendant's house, but found no one at home so borrowed a shovel and went systematically over the property. In their area of five acres, they found stones and boulders, and in at least half could not get the shovel in over four to five inches. Returning to Palmerston North, they hac later telegraphed the agent to stop all negotiations. Having talked the

matter over, his clients had decided _■! that rather than offend defendant ? by disbelieving his statements they ! would plead finance las the reason g for their withdrawal from their 5 contract.- 1 Called by Mr. Opie, Penhall said I that Shaw had stated that stone i formations lay in belts from east to j west, but that the land in question ■ I was between two belts £tnd that he J had had a crop from the ground | and had experienced no trouble. ! Replying to a question from the I magistrate, witness said he did not | pay the £25 deposit till the Tuesday * or Wednesday® after his return to j Palmerston North, and* the tele- | gram had been sent a week after ! 'the signing of the agreement. I Mr. Thomson: Do you consider 1 Mr. Moffatt and Mr. Shaw have | been dishonest?— They misinform- I ed us. I Mr. Thomson: Do you think they were dishonest? — No. Mr. Thomson: You wrote to Mr. Moffatt on June 8 pleading finance as the reason for your withdrawal 14 days after you-knew the property was stony. Why did you not j say then that it was unsuitable? — J We did not think it would be nec7 1 essary to mention it if we ap- j proached him in a decent manner. | Mr. Thomson: Why wait a fort- | night? — We are inexperienced in such matters. It took a lot of thinking over. Mr. Thomson:* You sent the £25 deposit five days after you decided i that the land was useless? — Yes. j The magistrate: The stony nature of the ground would only be ] obvious to - a person who had | cultivated the ground. Any other : person wouidn't know, would he? — 1 No.

The second plamtiff, Yalden, gave similar evidence, and Charles Evans, a retired nurseryman, of - Manakau, told the court how, at the invitation of plaintiffs he had inspected the property, which he considered unsuitable for a nursery business. DiSmissing the allegation of fraud, the magistrate said the plaintiffs themselves had discovered the nature of the land and had acquiesced by the payment of the deposit. Plaintiffs could not, therefore, succeed on this claim. It therefore remained to decide v/hether they were entitled at law to recover the deposit or withdraw from a contract under the provisions of the Land Saies Act. On this point alone he propoSed to continue the hearing. Mr. Opie submitted that quite apart from the suggestion of fraud the contract could not be enforced as the purchaser had withdrawn from it before the consent of the Land Saies Court had been given. He based his submissions, he said, on two previous judgments of the Magistrate's Court, o'ne given by Mr. Goulding himself and the other by Mr. McLauchlan. In reply, Mr. Thomson invited the magistrate to overrule the pr.evious decisions as. be.ing wrong in law. He pointed oiat „tha.t. otherwise there would be nothing to prevent any vendor or purchaser of land entering into a contract and then cancelling it at pleasure at any time prior to the final consent of the Land Saies Court. Business could not be eonducted that way. In this case a proper contract had been drawn up and executed. Subsequently the purchaser had purported to withdraw from it. Later the Land Saies Court had consented to the i'ull price. The law, counsel submitted, was that a conditional contract conferred a conditional validity on the transaction and created an inchoate right as a result of which neither party could withdraw without the consent of the other until the consent of the Land Saies Court was either refused or granted on terms acceptable to either party. Mr. Thomson went on to say that there was an analogy between the Land Saies Act and the Native Land Act. Under the Native Land laws any contract with a native was of no force or effect whatsoever, unless and until the consent or confirmation of the Native Land Court had been obtained. The wording in the Land Saies Act was almost idfentical. It had been held by the New Zealand Court of Appeal that a native lessor had no right of withdrawing from a lease prior to the application for consent being considered by the Native Land Court. Similarly with contracts for the sale of a lease subject to the consent of the lessor. Here it had been held by the highest courts that the parties could not withdraw7 until the consent had been refused. Counsel submitted that the • decisions in the previous cases in the' Magistrate's Court had been based on a misconception of" the law and should be expressly overruled. . Numerous authorities were quoted by counsel. The magistrate reserved his decision.