BEFORE THE COURT.

Dominion, Volume 6, Issue 1691, 6 March 1913, Page 6

BEFORE THE COURT.

SOUTHLAND LEASE. PLAINTIFF'S CASE STATED. LEGISLATURES INTENTION. ATTORNEY-GENERAL'S REPLY. COMMENTS BY THE JUDGE. (By Telegraph— Press Association.) InvercargiM, March 5. The case G. Brighton' v. tho Commissioner of Crown Lands was taken at the Supreme Court this morning. ' This was an originating summons under the Declaratory Judgments Act by which it was sought to determine the meaning of the words in Subsection 1, Section 31, of the Land Amendment Act, 1012, namely: "The laud comprised in the lease." 31r. W. A. Stout appeared for plaintiff, and the Attorney-General (the Hon. A. V 'l,. Ilerdman) and, with 'him, Mr. W. 3f"acAlister .represented the Commissioner of Crown Lands and the Jliuisler for Lands. Mr. Stout's Address. 3lr. Stout, in opening,"said that plaintiff was the holder of a lease iu perpetuity under the Land Act. The lease purported to be issued under Section 121 of the Land Act of 1892, with an endorsement reserving the right of minerals. The plaintiff was the holder of the lease when the Land Act of 1012 was passed. Notice to purchase under (hat Act was given to the Commissioner of Lands. The next step was to assess tho price under Section 35, the* price having to be paid within three months from the time notice had boon given. The Commissioner did not assess the price, but an amount equal approximately to the purchase price was paid by plaintiff to tho receiver of land revenue. In the meantime the application came before the Land Board. It was lielil over till the following meeting. The plaintiffs solicitors hold that the application was not'a matl*;r for tho board, as the plaintiff was entitled to a Crown grant upon the com|dotion of the purchase. Eventually the Department replied to plaintiff's solicitors to the effect that- tho title would bo issued, giving Brighton all tiiat lie was entitled to under the Act, that was the surface of tho land. Then the present action was instituted." "From tho Centre of the Earth to the Heaven Above." The definition of "land" was well known. Judgment in tho case, Metropolitan District Rivlway Company v. Gash (13 Ch., Div. Gl2), defined land as being that in respect to which the owner had the right from the centre of the earth to the heaven above.'' By the Act tho lessee was to get the fee fimple of tho land. Stevens (Vol. 1, Chap. 3) defined fee simple as the most extensive inheritance and possession in land. Tho present case was covered by that of the Commissioner of Crown Lands v. Bonnie (28 L.R., 095), and 11 Gaz., L.R. 739. The only difference between Brighton's and Bonnie's leases was that the latter was granted subject to the Mining Act, _ 1908. Bonnie's lease was decided on the interpretation of the same words. The only other distinction in the framing of tho two leases was that the covenant reserving the minerals was comprised in the body of Bonnie's lease. In Brighton's it took the form of an endorsement. An-Interpretation. The interpretation of. the words "land comprised in tho lease" was given by Mr. Justice Chapman as "the land with what it contains physically, although the contents may not in law bs part of the subject matter of what is let." Beniiie's case was decided under Section 20 of thr* 1907 Act. This section became Section 177 of the Consolidated Act of 1908, which was identical in construction with Section 31 of tho 1912 Act, except that portion relating to the assessment of jirice. He contended, therefore, that the interpretation of 3lr. Justice Chapman on Section 20 of the .1907 Act held good for Section 31 of the 1912 Act.

His Honour: l)oes not it depend on the connection in which ■ Hie words, are used? They may have a.different meaning if the context shows a different meanin? was intended. Mr. Stout said there was 110 difference in tho context which was identical in each case. Tlis Court having placed an interpretation 011 the words of an almost identically-constructed section, that interpretation should hold good. Intention of the Legislature. Mr. Stout v;cnt on to say that they were not concerned with the intention of the Legislature. His Honour: Oh, .yes, wo are. If the result is an absurd one, how then? Mr. stout said that it was open to tho Legislature to have given the right to purchase at any price it thought ilis Honour: We have to look at tho intention of the Legislature as expressed in the Act. If there is a doubt' that would lead to an absurdity, of course wo must take the way that does not lead to an absurdity. His Honour asked if there were leases in perpetuity where the minerals were not reserved. 011 Mr. Stout replying in tho affirmative his Honour said that then there could be 110 doubt about tho matter. If the ifaso covered the minerals then the mlit of purchase would cover tho minerals also. If itwere otherwise, then the mli'o of purchase would not cover the minerals. Mr. Stout said that then the meaning of tho word "land" would bp different for different classes of leases. If it were construed as having two different meanings, surely that would lead to an absurdity. The Question. His Honour: Land means the land let. Tho r|iicstioii| is what was the land lei? Bcnnie's ease,is decided upon Section 177 of the 190S Act, which compares with the corresponding section of the 1907 Act. that compares with Section 31 of the 1912 Act, the words of which you contend have tho samo meaning. See your point? Mr. Stout submitted that the- Act of 1912 as well as that of 1907 was a concession to' the lessee. The provisions of those Acts should not bp construed as to be strictly in the benefit of tho Crown. On the oilier hand, the Court should construe them liberally.

Ifis Honour: Yoiir contention is that it-was the intention of these Acts to (rive the lessees something for nothing. That i* a somewhat superliberal construction. Vet you' ask me lo construe it liberally. llr. Slont said thai the objecls ami effects of the 1!>12 Act were pressed upon lessees by.the Department in the form of n circular which contained no hint that the price would be computed upon any basis other than that mentioned in the Act. The Legislature had several ways out of the difficulty. It might have permitted the lessee to obtain the'minerals as an extra and by extra payment, and it might have provided against the right of purchase applying to lenses of this' class. It, was not for the Court to sa.v that the Legislature had been too liberal. His Honour: You contend that the intention of Parliament is to be found by the construction of the language of the Act? Mr. Stout contended that it would have been a very easy matter for the Legislature to have inserted the reservation of minerals clause of the 1907 Act in the 1012 Act, but the policy of the Legislature 'was not to have valuation, otherwise what' was simpler than to have inserted this or a similar reserving clause? It could have been done so simply. It was not the duly of the Court to repair tin: mistakes of the Legislature. The Case for the Crown. The Attorney-General opened by slating (hat lie would be prepared to needle to the contention of Mr. Stout had the law not been altered, as otherwise his learned f'rend would be entitled to all he asked for. He hoped to be able to convince the Court (hat the intention uf Hit Legislature as expressed in the Laud Laws Amendment Act. 1912, was perfectly clear, and if ilie Court, were to adopt the con<■l ruction asked by Mr. Stout it would lead to an absurdity. The present controversy imd ni'i-ell lierlul'C of two reasons, th';iir»t beiuc thr failure to comprehend the true meaning and inteut of the Court

of Appeal in Bennk's case, and the second the failure of his learned friend and his client to realise tlm (rue effect and meaning of flip words "comprised in the lease." There could be no question about this that the Court of .Appeal decided Bennie's ease against the Commissioner of Crown Lands, because the Legislature had declared that tile owner of a lease in perpetuity was compelled to pay for the minerals. The Legislature had expressly declared (hat tlm holder of a lease in perpetuity was bound when paying the cupital value to include the minerals. Therefore the man was entitled to the minerals, having to pay for them. The whole thing had, however, been altered by the legislation of 191!!. Land Legislation. Counsel then traced the history of land legislation from the passing of the Act of ISM, and said it had l>:cn admitted by Mr.. Stout that the leases before the Court were issued under Section 121 of the Land Act, 1892. And _it was clear tho (.iovernor-m-Council might withdraw such lands from sale and deal with them by special legislation, limiting the rights to the surface of the soil, and authorising the issue of separate rights t6 the minerals, etc. When Air. Brighton got his lease the provisions of Section 121 made it perfectly clear that the minerals did not form part of the lands comprised in his lease, and it was also quite clear that tho minerals could be severed fl'om the land, and one man be entitled to the surface rights' and another to the minerals. It was clear Air. Brighton got his lease under that Section, which gave him the right to the surface only, the minerals being excepted both by the sjatuto and covenant in the lease. Passing from the Land Act, 1892, there was the Act of 1907, and the clause known as Air. Al'Nab's clause. Section 177, re-enacted in the Act of 1903. Section 20 provided that every owner of a lea£3-in-perpetuity had the right during the existence of the lease to purchase the fee simple at a price equal to the capital at the time of the purchase, the capital value to bo determined by valuation or arbitration, and to include all minerals other than coal and silver. That Section for the first tinio gave to the owner of a lease-in-perpetuity the right to acquire the freehold. The whole of Section 177 hail to ba taken into consideration, and it was clear that, though a man had a lease under that Section, it was a lease of the surface, with minerals excluded. With the Act of last, session the ciicumstanccs had altered. When tho Legislature passed tho Act of 1912 the sub-section was not ro-enacted. His friend had suggested to the Court that Section 31 was identical with Section 177 of Subsection 2, but the position was entirely different. Under tiie previous section a man was compelled to pay for the minerals, and under the Act of 1912 there was no reference to payment for minerals, the law going back to the position beforo Air. Al'iSab's Act of 1907 came into operation. The real position was that they lmd a man'holding a lease-in-pcrpetui'cy expressly excluding tlie minerals. Then they had an amendment of the Act in 1912 which gave that man permission to purchase the freehold, no reference being made to tho minerals.

"No Fundamental Difference," llr. Stout submitted .tlmt Mr. Brighton was eutitl«(l to purchase not only tlio land comprised in his lease, but tne land expressly excluded from his lease. There was 110 fundamental difference between the Act of 1912 and the law as it stood in the 1908 Act, though the conditions of purchasing the land were entirely different. The owner of a lease-ill-perpetuity under the Act of 1908 was entitled to purchase at a price equal to the capital value at the time of the purchase, and it was provided that, ill order to estimate what the lessee had to pay, a valuation should bo. made to include the minerals. In the Act of 1902 they found that the owner of a lease-in-pcrpetuity - had the right to purchase the fee simpte at a price ascertainable and determined, the priec to be the original capital value. The reason for the insertion of 4 and 5 per cent, was that there were two-kinds of titles—the optional right of purchase at 5 per cent, rental, or the original capital vuluc. 3'his was provided for in the Lmul Act. 1892. Capital Value. His Honour: What is the original capital value? The Attorney-General replied that it was the cash value that was provided for in the Land Act, 1892. Dealing with the question of cash prices, Section 112 of the Land Act, 1892, provided that rural lauds might bo classified by the hoard as first and secondclass. There was a fundamental difference between the rights conferred in the case 'of leases in perpetuity by tho Act of 1908 and by that of -1912, and it was obvious that when the cash, price was originally, fixed minerals were excluded. To his mind it was impossible to argue that when Mr. Brighton's lease was granted minerals were included. They wore excluded by statute and covenant in the lease, and did not form any part of the capital value on which the lessee bound himself' to pay his rental of four per cent. Now they came into Court and suggested that the Legislature intended to perpetuate an ultra-Radical doctrine that a man should not only be permitted to purchase the land comprised in his lease, but that lie should be made a liresent of something which was expressly excluded from the lease. liis Honour: These are lands not supposed to contain'minerals. iThe Attorney-General replied in the affirmative and referring to the Bonnie case said the whole of the judgment of his Honour Mr. Justice Chapman proceeded on the assumption that sub-section 2 of Section 177 was the basis on which a holder of a lease in perpetuity rested (lis claim, for not only the land, but the minerals included in its boundaries. He submitted that the Minister for Lands and Commissioner of Lands were en-, titled to judgment. The Crown Solicitor briefly addressed his Honour, and after Mr. Stout had replied his Honour said lie would give a written judgment.

t About Costs,

His Honour asked if the Crown intended to pay tho costs, whichever way the case went. The Attorney-General did not feci disposed to accept tins course, stating that the position they had taken up was that they had always been willing and ready to give Mr. Brighton what lie was entitled to under the Act of 1912.

His Honour asked if the judgment in this case would not affect other cases, and Mr. Stout replied that the present was in the nature of a' test case.

The Attorney-Geiierai: I will agree as to whatever your Honour thinks right. It is .a matter of considerable importance, and I do not Ihink (if the Crown is going to succeed) that I will ask Hie Court to require Mr. Brighton to pay tho costs,