SUPREME COURT.

Dominion, Volume 6, Issue 1622, 13 December 1912, Page 11

SUPREME COURT.

ARGUMENT ON SPECIAL CASE.; OIL-BORING RIGHTS. Certain legal phases of an action relating to oil-boring rights .were argued in the Supreme Court yesterday before the Chief Justice (Sir Robert. Stout). The actual business before'the Court was a special case stated to settle certain preliminary points arising in connection with a claim for specifio performance of an agreement, or, in the alternative, damages for alleged breach of contract. The plaintiff was Linda Elizabeth. Hadley, married woman, of Auckland, and the defendants were tho British Empire Petroleum Co., Ltd. '..."•'■".■ Mr. M...Myers appeared for Mrs. Hadley, whilo Sir .John l'indlay, IC.C, with Mr. D. M. Findlay, appeared for the British Empire Petroleum Co., Ltd. The main action had been set down for hearing'at, the present; sessions,, but is standing over pending decision in the special case argued yesterday. From the statement of facts it appeared that by deed of grant dated July 2, 1906, Mrs. Hadley obtained oil-boring rights over certain lands from Frank ■ Baker and others. This deed of grant was registered at New Plymouth, against such of tho lands as were under the Deeds Registration .Act, while a caveat was lodged against the title of such other lands concerned as were under the Land Transfer Act. In respect or some of the lands of both classes, tho owners had executed mortgages prior to July, 1906, and the mortgagees were not parties to the deed of grant, nor had they consented to it. Another point was this: Subsequent to the lodging of the caveat referred to, a lease of part of the lands was granted to Willin.ni Brock for a term of five years, from December 1, 1908. Tin's leaso was registered subject to tho rights protected by tho caveat.

"That was the position on April 18, 1912, when by memorandum of agreement Mrs. lladlcy agreed with Andrew Hnnna, solicitor (claiming to act as trustco. for the British Empiro Petroleum Co., Ltd.). to dispose of hor rights to the British Empiro Petroleum Co., Ltd. Four days later the company adopted this agreement by special deed. If then appeared that tho grantors of the. deed of 1!)0G had not consented to the agreement of April 18, 1912, nor .had they, 'undertaken to obtain disclmrgo of the 'mortirngks. The result was that the British Empiro Petroleum Co., Ltd., declined to perform their part of tho recent agreement, on tho ground that Mrs. 'Hadlay could not adduce ft

good title to (ho horing rights, They said she was not entitled to assign in terms of the'agreement of April 18,-1912, and as another ground they referred to the mortgages and the lease.. However, they had not requisitioned for tho discharge of tho mortgages or for the consent of the mortgagees. Hence several interesting questions- of law arose. Those questions were submitted to the Court in something like the following form Was tho British Empire Petroleum Co., Ltd., entitled to require the rights free from mortgages? Was Hrs. Hadley entitled to compel the grantors of the original dee<l to have the mortgages discharged in order that a mortgage-free title might bo given to tho British Empiro Petroleum Co., Ltd.? .Was tho British Empire Petroleum Co., Ltd., entitled to requiro from Mrs. . Hadley a transfer of the rights registerable in priority to the lease to William Brock? Was Mrs. -Hadley entitled to have tho . said lease removed from tho register ; in order that this might be effected ? Was Mrs. Hadley entitled to assign her rights without the consent of the grantors ? Was tho British Empire Petroleum Co.. Ltd., entitled to rescind its agreement without first asking for tho consent of the.mortgagees or the discharge of the mortgages ? Was the British Empire Petroleum Co., Ltd., entitled, to require, theso thinga if it were shown that the directors of the company and tho sdlicito'rs knew the state of the title prior to the execution of the agreement of 'April 22, 1912? Argument on these points occupied the Court from 10.30 a.m. until late in the afternoon. ' His Honour reserved decision