LAW REPORTS.

Dominion, Volume 5, Issue 1507, 1 August 1912, Page 2

LAW REPORTS.

COURT OF APPEALTHE NGAWAKAKUPE BLOCK LEASE. HELD TO BE VALIDNO EVIDENCE OF ANY FRAUD. OTHER IMPORTANT CASES. "Wo have considered the question of fraud at length because, if there M'tus fraud, there is 110 escaping the conclusion that tho firm of solicitors who conducted the application almost certainly were aware of it, and must havo been the principal actors in the fraud. It is fair to them to make it clear that there i.s no evidence of the existence of fraud on their part, if the respondent has been injuriously affected it is by reason only of tho decision of the Native Land Court. There is nothing in tho evidence to show that, the other parties did anything which they had not a le;al right to do." These remarks were made by Mr. Justico Williams yesterday on behalf of himFSlf, Mr. Justice Dcnniston, Mr. Justice Edwards, and Mr. Justico Chapman, in upholding the appeal of William Harris and Thomas Harris against a decision of the Chief Justice delivered in the Supreme Court in Wellington some months ago. The appellants wero -William Harris and Thomas Harris, sheep-farmers, of Martinborough, and the respondent was Martha M'Gregor (formerly Martha Mahupuku), wife of Georgo Stewart M'Gregor, sheep-farmer, of Greytown. The respondent recently attained the ago of 21 years. ' At tho hearing Mr. H. I). Bell, K.C., with him Mr. C. B. Morison, appeared fo." the • appellants (Harris), and Mr. C. P. Skerrett, IC.C., with him Mr. F. E. Ward, appeared for the respondent (Martha M'Gregor). Original Action. In the original action in the Supreme Court, Martha M'Gregor asked for a declaration that a certain lease (held by the defendants! Harris) and tho confirmation of it wero null and void and should therefore bo removed from the registry. The District. Land Ilegistrar, Wellington, who wis a party to the action, did .not appear, but submitted to the judgment, of ,tlio Court. The case was heard before tho Chief Justice (Sir Robert Stout) in April last. In the statement of claim it was (hen set out that, in August, 1901, a lease was executed by which Hamnera Tamahau Mahupuku and Horiana Nntanahira leased to tho defendants (Harris) for a term of 21 years to commence from April 1, 1914, G-IG9 acres of land, known as the Ngawakaluipe Block. The memorandum of lease was not only contrary to statute, but the lease was granted at a grossly inadequate rent. It was in fact granted by 'the two Natives to William and Thomas Harris (as t.ho nominees of Cbas. Harris) from feelings of friendship to the father, and out of gratitude- for financial assistance, which the latter had rendered to Mahupuku. In addition tho lease was to commence in futuro. When application was made to the Nativo Land Court (presided over by Judge Mackay) to confirm the memorandum of .lease, it was not granted, and, according to Martha M'Gregor, the negotiations wero then abandoned and not reopened until aftor Mahupulcu's death, which, occurred on January 1-1, 1904. Martha.; Maliupukn, .who was, then U years of age, was appointed his successor to tho block. H._ Stratton Izard, solicitor, being appointed her trustee. On August 3, 1904, William and Thomas Harris made another application for tho confirmation of the lease, this time to the Native Land Court (presided over by Judge Gilbert Mair) at Wellington. A valuation was ordered; and, though there was no record of such valuation, an or-, der (without authority of law and without further hearing) was issued by the Court on August 3, 1901, purporting to confirm the document, which purported to bo' a memorandum of lease." .Tins order (it was contended) was without jurisdiction, inasmuch as the order of Judge Mackay was final, and had not been set aside. Moreover, the Court had no jurisdiction to confirm the lease on account of tire fact that tho grantor was dead. In addition to this it was alleged that the arrangement between H. S. Izard 1 (Martin Mahupuku's trustee) and the defendants, Harris, t-> consent to tlio confirmation of the lease, and to the proceedings, which, resulted in the confirmation, was (to tho knowledge of Win. and Thos. Harris) a collusive arrangement, and a fraud on Martha Mahupuku's rights and interests, because that arrangement contemplated a lease at a grossly inaderjutc rental, and also a direct payment of t.o> Izard. This was in violation of the law, and both Izard and the defendants,.- Harris, know, or ought to Have known, that the interests of Martha Mahupuku '(then a minor) wero being sacrificed under tho arrangement. Decision Appealed From, By fray of defence, William and Thomas Harris said that a proper valuation was submitted before the.Court adjudicated. They denied that the lease was illegal or void, that, the rent was inadequate, and while they admitted thatit had been the duty of Izard to safeguard Martha Mahupuku's interests, they denied that there was any collusion or fraud in tho negotiations, which led to the obtaining of the lease, and also denied tlio statement that' the minor's interests were sacrificed. The Chief Justice, who hoard the case in the Supremo Court, dealt at length with the various phases of tho transaction on which,.the case hinged, and expressed the opinion that both tho confirmation and tho lease wero null and void. Ilis Honour also held that the defendants, in obtaining the lease, must have known that tliev were acting in a way that was morally wrong, and the case was, therefore, one in which the relief, asked for, should be granted. Judgment would, therefore be for plaintiff with costs, according to scale as if ..C-iOO had been claimed. Defendants appealed from this decision on the ground that it was erronoous in law and fact. Judge Mair Had Jurisdiction. Yesterday the Court upheld the appeal Mr. Justice, Williams, in giving tho judgment of the Court, said it was contended that Judg? Mair bad no jurisdiction to hear the application for two reasons. First, that there could be i» confirmation of the lease after.the death of Ihe lessor; and, secondly, that the. minute of Judge Mackay wa,s a final dismissal of the application. As to the first, contention, it was clear that the. effect of Section 4 of tho Native Land Laws Amendment Act of 1895, where the restrictien on alienation has been removed, was to give the alienee a statutory right ti go before the Native Land Board to havo the alienation confirmed, and that the death of the alienor cannot divest him of that right. As to the second contention the minute did not purport to be a final dismissal of the application. _ Moreover, as Rule 57 of the rules of the Native Land Court, published in the Gazette of March 7, 1595, had not been complied with, the solicitors of the applicants had n right to renew their application, and to the Judge of the Court to take a ifii.erent view from that taken by Judge Mackay. The Judge also was justified in treating the application as not having been finally disposed of. Niniwa Speaks Prophetically. Continuing, Mr. Justice Williams said: —"No doubt, Judge Mair might very well have refused to hear the application, and tu have treated it on account of the lap.-« of time.' as having been abandoned, lie hud, however, jurisdiction to continue tlio proceedings. Whether hc_ should treat them as pending or as having bcca

abandoned was a mailer for his discretion, nith winch tins Court cannot interfere. Judge -Mair then proceeded to hear the case. Mr. Trcadwcll iijijic-arotl for the applicants, and slated that Mr. Izard, trustee for Maatn. the present respondent, consented. The minutes of the Native* Ijaml Court show that. 011 June 17, 1901, Mr. Izard had applied 011 behalf of the respondent that she should he appointed successor (0 Mahupuku of this and other blocks, and that he should be appointed her trustee under the Maori Heal Estato Management Act, ISSS. It appears from the minutes that 110 had been trustee for the appellant of other land during the lifetime of Mahupuku. Objection was taken to his taiiig sole trustee by one Niniwa, who wished there should be a Maori also appointed as co-trustee. She said, prophetically, 'It was all very well for Mr. Izard to be sole trustee while Tamahau was alive, as lie could help to safeguard Maata's interests. But now lie is gone, I insist that tho father's Maori side. should be represented. Should trouble come upon Maata through tho European trustee, Tamahnu cannot rise from liis grave to protect her.' The minutes show that tho Court, stated it. would consider the question of appointing ft second trustee. Mr. Izard, however, was appointed on June 17 as trustee: by an order signed hy'.Tudge Mair. and 110 second trustee was appointed. There is 110 trace in tho minute-book or in tho evidence of Harris, the elder, or the appellants or their solicitors having had anything t(. dt> with the appointment of Mr. Izard as trustee. Tho great powers Kivcn to a trustee, under the Maori Iveal Estate Management Act would fully justify the Judge of the' Native Land Court, iu treating the infant as properly and suflirihntly represented by the trustee. The question of whether a party is properly represented is a question of practice to l>e determined bv the Court in which tho proceeding is taken. Mr. Izard was not in the position of a trustee who had some interest which might conflict with the interest of his cestui que trust. Nor was lie a '.rustee for persons who bad conflicting interests. 111 either of these cases it would be proper that the eestnis quo trustent should be independently represented. The question the Court had to decide wns whe'lier the transaction ns between Maliuptilni and the lessees was a fair transaction. The question was not as to whether tho successor should grant the lease, but whether the lease already in-anted I>> tin- ancestor should be confirmed by the Court. If the Court considered it fair (he Court could confirm it, notwithstanding that Mahnpuku's successor opposed the confirmation." "It Would be Monstrous " His Honour then referred to the caso us placed before Judgo Mair, and held that in making the order for confirmation the Judge hud not acted in excess of his jurisdiction, and the Court of Appeal had vm jurisdiction to review his decision. In regard to x the payment of .£SOO to Izard, His Honour taid:— "If thoi payment was intended as a bribo the solicitors who carried the transaction through must almost certainly have been parties to the corrupt, bargain. It would be monstrous to' suspect in advance that they would be parties to such a bargain or afterwards to conclude, unless upon the clearest evidence, that - there was such a bargain. In our opinion there was no evidence of a corrupt bargain. No one at the time suspected or could reasonably have suspected that a person in* tho position Mr. Izard then was would fraudulently appropriate to his own use the money "lie was receiving.'" .Finally, the Court, after a reference to the authorities, decided that the appeal must be upheld, with costs. Mr. Ward applied for leave to appeal lo the Privy Council, and askeil that the caveat that had already been lodged by tho respondent should be renewed in tho meantime. 1 Tho question was adjourned until Friday morning. MIRAMAR, LTD. GUAEANTOES' APPEAL FAILS. The affairs of Miramar; Ltd., and the Miramar Athletic Park and Wonderland Co., which , figured in an action ill the Supreme Court last year, and,which subsequently formed the subject of argument in the Court of Appeal, were brought 'up again yesterday 'in tho reserved decisions. The Court at the hearing comprised the Chief Justice (Sir Robert Stout), Mr. Jus-, tics Denuiston, Mr. Justice Cooper, and Mr. Justice Chapman. The parties were Hoathcote Beetham Williams, Dudley Bruce Hill, and Arthur Spry Gwavas Carlyon, all of Hawke's Bay, appellants, and Miramar, Ltd., of Wellington, respondent. Mr. C. P. Skerrett, IC.C., with him Mr. C. B. Jlorisun, appeared for tho appellants, and Mr. 11. D. Bell, K.C., with him Mr. C. H. Treadwell, for the respondents. Original Action. 111 the original action, heard last September, tho plaintiffs (Williams, Hill, and Carlyon) sued for specific relief, and claimed that, by a deed dated March i'< 1008 , (and executed in consideration of their guarantee to an overdraft of JMB3S nt tho Bank of New South Wales for tho Miramar Athletic Park and Wonderland Company), the defendant company (.Miramar, Ltd.) had agreed that, it the guarantee were not discharged, they would, on March 31, 100!), allow the guarantors to reinovo -tho buildings and fixtures (other than the fences) at Wonderland. In this event a certain, contract to purchase between Miramar, Ltd., and the Wonderland Company ,was to be terminated. Or, in the alternative, Miramar, Ltd., would pay to plaintiffs the sum of .£2351 55., and take over the lands and buildings, belonging to tho Wonderland Company, and terminate tho agreement. In addition to denying several matters, Miramar, Ltd., defended the action upon tho ground thut Williams, Hill, and Carlyon had lost their right under the guarantee, and, moreover, by certain conduct, had precluded themselves from making any further claim. . Supreme Court's Finding. Mr. Justice Edwards, who heard tho action in the Supreme Court, delivered his decision 011 October 17 last, and reviewed the facts at considerable length. His Honour held that, as a result of tho deed the plaintiffs (Williams, Ilill, and Carlyon) had at the end of March, MOD, three alternatives open to them:— First, they could abstain from declaring any election under the deed, ill which ease the Wonderland Company's rights under the agreement of purchase with tho defendant company would continue, subject to tho charges then existing thereon ill favour of the plaintiffs. This was tho only vested right which the plaintiffs or tho Wonderland Company had under tho contract of purchase. The second alternative was. that, by giving due notice of their election in that behalf, the plaintiffs could have acquired tho right tn remove the buildings, etc., upon the land affected by the agreement. The third alternative was that by giving .duo notice in that behalf they might hnvo acquired tho right to claim from tho defendant company the sum of. ,62351 ss. His Honour took it to be beyond all question that the time fixed for electing what alternative they availed themselves of, viz., March 31, IflO!), was the essence of tho contract. As the plaintiffs did not affect io exercise their right of election until November 23, 1910, they must fail, because on their own showing they failed to elect in time. Judgment was given for tho defendant company (Miramar, Ltd.) with costs amounting to ,£l2B 15s. fid. _ _ I'rom this decision the plaintiffs (Williams, Hill, and Carlyon) appealed 011 tho ground that it was erroneous in fact and law. Appeal Court's Decision. The Chief Justice expressed the opinion in his decision that the right of election .by the particular date had been suspended on account of the negotiations between the parties, and that the appeal should bs Upheld. Mr. Justice Chapman read a decision for himself and Mr. Justice Coopjl-.. Their Honours were of opinion- that there had been no suspension of the plaintiff's right of election, and that defendants (present respondents) had 'allowed the negotiations to extend over a long period in the hope of securing better terms for the plaintiffs (present appellants). The plaintiffs' decision to carry on the business of the company imported a decision lint to exercise the option of March :11. and on Hint account the appeal should bj dismissed. JJr. Justice Sim read Hi" decision of ilr. Justicu Deaiiiitoii, iu. which the

latter adnpted the view hold by Mr. .lustier' Cooper ami 111'. Justice Chapman. Tho appeal was dismissed willi cosU on the highest scali l . EAST COAST PETROLEUM CO. TRUST ACIBKKMEXT. A lengthy ease that, opciipicil tho attention of the Court of j\ppc-iil for several days at the hearing was decided yesterday. The parties were William Lissant Clayton, l<md agent. of Gisborne (appellant), and William Knox Chambers, slieepfarnior, of Gisborne, and Gon. Hutchison, barrister, of Wanganui, liquidator for the Fast Coast Petroleum Company, Ltd. (respondents). At the hearing Sir John Fimllay, K.C., with Mr. A. K. Meek, appeared for tli'o appoll.ant; Mr. C. P. Skerrott, K.C.. with Mr. C'. B. Morison, appeared for the re-spsndent-s; while Mr. Geo. Hutchison appeared in person, but did not take part 111 the argument. Original Action. In the original action, Clumbers, on behalf of himself and all other shareholders, proceeded against Clayton and Hutchison, asking the Court to declare thai a trust agreement made between Clayton, Clinmlx>rs, Hutchison, ami 11. J. Finn (who had since retired) had not been rescinded. The action was' heard in the Supreme Court at Gisborne before Mr. Justice Chapman. In the statement of claim it was set out that in 19UG, Chambers, Clayton, Hutchison, and Finn formed a syndicate to acquire certain concessions and rights to bore t'er petroleum oil and other minerals. On June 10, 190G, these four persons entered into an agreement by which it was mutually arranged 1 hilt all concessions, übtained in the name of any of tlieni, should be held jointly in trust for the four of them, and in proportion to tho funds respectively advanced: Finn withdrew from the syndicate on .Tanuarv 21, 19117, as lie did not wish to advance any money. About June 1, I'll)", the three remaining members of the syndicate formed tho Fast Coast Petroleum Company, with a capital of .£2(l, OHO, divided into 20,000 shares cf JH each. It was agreed that Hutchison should net as managing director of the company and Clayton and Chambers as directors, all being considered to have a certain number of fully paid-lip shares, whilo the balance were to be issued to tho public. In 190S or 11)1)!),. Hutchison (so the claim alleged) purported to give to Clayton an option to purchase the concessions uiid rights and other property of tho company in consideration of one onefifth of the consideration (less brokerage), which Clayton might receive upon the resale by him of these concessions and of other rights and properly. Tho option expired without having been accepted, and Hutchison purported to extend it.. Subsequently Clayton entered into a contract for tho sale «f the concessions, etc... to certain persons in England. As consideration he received some .£50,000, payable in 500,000 fully paid-up shares of the New Zealand Oilfields, Lid., which company has a capital of „C 200,000, divided into 2,000,000 ordinary shares of 2s. each, hi April, 1910, Clayton, claimed tint the trust agreement had been rescinded, and that, therefore, he had been entitled to acquire, and had acquired for his own use and benefit, certain concessions apart from those held by the Fast Coast Pet™ieum Company, and which he had. dis- ' posed of along with those of the company. He therefore declared that the company was onlv entitled to receive .£9OOO, or about 06,003 shares of the New Zealand Oilfields, Ltd. Chambers alleged that the trust agreement of .luiic, lilOG, had never bj'cn rescinded or determined, but always subsisted, and that Clayton had, in fraud of the Fast Coast Petroleum Company, and in brcich of his duly as director,; sold and transferred the property of the'company, and having, received consideration therefor, must account to the company fox tho proceeds. Chambers asked the Court to declare that Clayton held the '£50.000 in shares in trust for Chambers, ' Hutchison and Clayton, that ho must transfer to them, and that the partnership must bo wound up and accounts Clayton contended'that tho trust agreement had been determined upon tho withdrawal of F'inu- in January, 11107, and lie denied that lie had acted ill fraud of the company, or in breach of his duty as director. Mr. Justice Chapman, in the course, of his judgment, said the most important question was whether the agreement had been rescinded. He held that it had not been set aside, and must stand, and that the judgment • must follow in favour of Chambers. From tliis decision,, Clayton appealed, on the grounds that it was erroneous in law, and that the decision on the' facts was wrong, and against the weight of evidence. The Appeaj Proceedings, The Chief Justice (Sir Robert Stout), Mr. Justice Williams, and Mr. Justice Cooper, who heard the appeal, were unanimous in tho opinion tliat it should be dismissed. In delivering the judgment of the Court yesterday, .the .Chief J utfcice said: "Fvcn if the original agreement was merged when tho company was registered on June 1, 1907, still Clayton rcmainded in such a fiduciary position as would prevent him from getting concessions .on his own behalf, against the company's interests. Further, ho had obtained his information as to where concessions were to be .got through Rich's report, whicli was supplied cither to the founders or to the eompeny. . . . We do not consider that Chambers by agreeing to carry out tho bargain with the Fast Coast Petroleum Company approved of Clayton's holding these concessions for himself. He seems to have acted on tho assumption that ho could call Clayton to account for what ho , had done and obtain the benefit of these concessions, and we fail to see anything by which ho waived any rights ho may have had against Clayton, either by his conduct or by the resolutions in which he is raid to' have acquiesced. AVe. are therefore of opinion that the anpcol must be dismissed, with costs on tho highest scale as from a distance." TWO ORDINARY PUMPS. ,£IOOO DUTY TO BE PAID. ' A cose in which a question was raised affecting tho power of a Minister of the Crown was heard in tho Court of Apjieal recentlv !>efore the Chief Justice. (Sir Robert' Stout), Mr. Justice Edwards, and Mr. Justice Sim. It was decided yesterday in favour of the Minister. 'i'lio Minister for Customs was the plaintiff in tho case, and tho Waihi Goldniining Company, Ltd., was the defendant. ■ Evidence had been given before Mr. Justice Fdwards at Auckland, and the case was afterwards removed to tho Court of Appeal. : TKfo Solicitor-General (Mr. .T. W. Salmond) appeared for the Crown, and Mr. ' C. B. Morison for the company. On October 25, 1009, the company imported • (and on May 18, 1910, cleared ' through. tho Customs) packages described i as two "sinking pumps" for milling purposes, of the value of ,£5020, which were declared to be "sinking pumps," and i therefore free from duty. Subsequently i tho Collector of Customs at Auckland ' alleged that the packages were not "sinking pumps'" within the meaning of tho < schedule, and that they were two ordinary■ fixed pumps, which were liable to an ad valorem duty of 20 per cent. Duty was accordingly assessed on the packages at the sum of .£1067 12s. 10d., and a claim for that amount was made. Defendants disputed the claim, and refused to pay the duty. Application was thereupon made by the Collector of Customs to tho Minister, who, after hearing evidence at an inquiry, decided that, the pumps in question were not "sinking pumps" within the meaning of the schedule. The defendant, company still refused to pay the duty, which the Crown now claimed. At the hearing non-suit poinls were raised for the defendant, but yesterday the Court unaniiuouslv decided that these must be dismissed and gave judgment for the Minister for Custom* for the full amount claimed, with all eosfs. Mr. MoTison moved fov leave to appeal to the Privy Council. leave was granted, the security being-fixed at .£SOO.