LAW REPORTS.

Dominion, Volume 5, Issue 1374, 27 February 1912, Page 3

LAW REPORTS.

SUPREME COURT. LAND SYNDICATE'S AFFAIRSFRAUD ALLEGED, SILVERSTREAM LAND CASE. Arising out of what was known as the Silverstream land case—heard in the Supremo Court at Wellington ill June last —allegations of fraudulent misrepresentation were made the basis of an aetion which was commenced at tho Supreme Court yesterday before Mr. Justice Sim. The action was between Frederick Henry Pitcher (builder), Mary Ann Fitchor, Mincito Wardrop, Anderson, and A. Gray (barrister and solicitor), plaintiffs, and . William Charles Alfred Dimock (baconcurer), Alexander John M'Tavish, and William Edwin Redstone (carrying on business as land agents, under the style of A. J. M'Tavish and Co.). It appeared from the proceedings that a partnership with respect to a land syndicate existed between the plaintiffs and the defendants and, 011 the grounds of certain alleged misrepresentation and concealment of fact, the plaintiffs now sought to have: (1) This partnership agreement rescinded; (2) an account taken of the partnership transactions; (3) a receiver appointed by thu Court to wind up the affairs of the partnership; (() the defendants severally and jointly to indemnify plaintiffs against ail claims with rospect to the partnership; (5) all sums contributed by tho plaintiffs to the partnership refunded, with C per cent interest added—plaintiffs to give credit for all sums received from tho partnership— or, alternatively,, plaintiffs to recover ,£3OO each as damages for loss claimed to have been sustained by them in respect of the alleged deceit and misrepresentations of the defendants; (G) defendants restrained from dealing With the assets of the partnership. Mr. C. 11. Morison appeared for the plaintiffs, and Sir John I'imllay, K.C., with him Mr, F. 1). Ward, lor the defendants,

Was there Double-dealina? Tho central allegation to bo proved, observed Mr. Morison in opening his case, was that the plaintiff's were kept in ignorance of certain facts which they, as members of tho syndicate of which Redstone was also a member, were entitled to know, viz., the lattcr's interests in the sate of the land which the syndicate was formed to purchase. In April, 1905, the defendants were interested in 250 acres of land at Trentham, and it was arranged that M'Tavish and Redstone should form a syndicate to purchase this land from (he nominal owner, one Chapman. Pitcher,'Anderson, and Gray were induced to coma into the syndicate by the promoters, tho proposition boing to purchase the land in question for U'oOOO. Redstone, alleged tho plaintiffs, represented that he and his firm were interested as intending purchasers with the other members of the syndicate, and not as vendors, whereas, iii fact, liedstone and M'Tavish were interested as vendors, or as persons entitled to a share in the purchase" monev to be paid by the syndicate for tho land, and were really ijromoting tho syndicate in the interests ot the defendants, not in the interests of tho plaintiffs, ns they had represented. It had bceu further represented to the plaintiffs that tho land at the price was a bargain, whereas bedstone was well aware that the prico was excessive. Also, it had been represented that M'Tavish and Bedstone wero undertaking a liability of one-eighth of the purchase money, and Dimock one-fourth, whereas the defendants were actually the vendors, and were not undertaking such liability; that M'Tavish and liedstone, as agents of Pitcher, Anderson, and Gray, had induced them (the nlaintifl's) to reposs trust and confidence in Redstone, whereas these men had in this transaction an unrevealcd interest dirfectly opposed to their interests.

After Six Years. Following upon the representations of the promoters, a contract was entered into, and in May, 1905, a transfer was duly executed by Chapman, under the direction of Dimock, to Redstone and Anderson, as trustees for tho syndicate. .£12") was paid by way of deposit, and a mortgage for .£3750 was executed by Redstone and Anderson, for the syndicate, to Dimock. It was not until June last (1911) that plaintiffs became aware of tho alleged irregularities which formed the basis for the present action. On Juno 9, the Silverstream Land Company was plaintiff by counter-claim in a Supreme Court action wherein Redstone was defendant, and during the hearing certain facts were disclosed which moved tho members of the syndicate who wore plaintiffs in the present action to ask for information and explanations, Anderson, meanwhile, had died (December,' IDOfi), and his interest in tho syndicate passed to Minette Wardrop, ono of the plaintiffs, while Pitcher in 1907 had assigned his interest 10: his wife, Mary Ann Pitcher. As the result of certain investigations which wore instituted after the Silverstream land case was heard, the plaintiffs had decided to take legal proceedings.

Statements in Defence, In his statement of defence, Dimock denied that M'Tavish and Redstone had acted as his agents in any way. There had bee-n no fraudulent misrepresentation, and eveu assuming that tlure had, the plaintiffs, with full knowledge of such misrepresentation, concealment, and inducements, affirmed the purchase, and had lost by acquiescence, delay, and so ou, the relief now sought; they had been actively concerned in the management of the syndicate's assets; Gray had bceu chairman of most of its meetings sinco May of 1905, while Duller aud Anderson had been the legal advisers of the concern. Further, notwithstanding the Silverstream land case, the plaintiffs induced him (Dimock), along with tho other defendants, to, become parties to tho settlement of that aetion, and to the agreement for tho rescission; he had entered into that agreement in .good faith, believing that tho plaintiffs were 'willing to sharo the obligations attached thereto, these last involving, inter alia, tho repayment of •C-iSOO to the Silverstream Land Company, with the prospect of giving a mortgage to secure that amount. M'Tavish and Redstouo, in their statement of defence, denied having concealed the fact of their interests in the salo of tho la,nd to tho syndicate. They invited ths plaintiffs and others to come in at XSOOO, as shareholders in a promising venture. The laud in question had been acquired by tho defendants for .£3500, and this was known' to tho plaintiffs. Their representation that they wero, with the other members of the syndicate, intending purchasers, was true, although they were ago.its for the vendors, not for tho plaintiffs, as tho latter had alleged. It was denied that Redstone know that tho prico was excessive, or that thcro hod been any fraud or misrepresentation. Evidence in support of the plaintiffs' case was called by Mr. Moriswi, and his examination was partly finished when tho Court adjourned. Tho heariug will bo resumed this morning.

BANKRUPTCY. A sitting of the Bankruptcy Court was held yesterday, Mr. Justico Sim presiding. Mr. C. H. Izard apnli«l for the disclittrgo of Guy llaveloclc Kingdon, sheepfarmer, near Otaki. Mr. A. Simpson, Official Assignee, said that ono creditor opiM-ed. The application was granted. Mr. C. AV. Nielson asked that Robert Yarrow Ik discharged. The amount: owing was JjSO. The matter was ordered to stand over pending the making of an offer. Justinian J. IC. Powell was adjudicated a bankrupt, on tho application of Mr. J. C. Peacock.