LAW REPORTS.

Dominion, Volume 6, Issue 1793, 4 July 1913, Page 5

LAW REPORTS.

COURT OF APPEAL. SOUTHLAND LEASE CASE. FURTHER STEP. LESSEE & COAL DEPOSITS. The action which is popularly knou'ji is "The Southland Leaso Case" is onco taora in Court. It will be remembered that in February Inst, at Invcrcnrgill, lia Honour Sir Joshua Williams heard argument oil an originating. summons, under tho Declaratory Judgments Act, .which sought for an order interpreting (certain sections of the Land Laws Amendment Act, 1912, and defining tho rights 3>f the plaintiff (Gavin Brighton) in tho jiction in respect to tho property concerned. The two questions for his HonWur were:—

; Jf plaintiff, being the holder of a lease in perpetuity under Section 121 and Part 3 of the Land Act, 1802, has exorcised tho option' given to him by Section 31of the Land Laws Amendment Act, 1912, what meaning is to bo attributed to certain .-wortls in Section 31, Sub-section 1, of the Land Laws Amendment Act, 1912? Theso ■words are: "The land comprised in Wthe lease." ler the circumstances mentioned in tho preceding paragraph, is the plaintiff, on the Land Board's certifying that he has completed his purchase, entitled to a Crown grant of the land mentioned in the notico to purchase free from all restrictions or reservations other than those named in Section 37 of the Land Laws Amendment Act, 1912?

'As indicated, the plaintiff in that action was Gavin Brighton, the lessee of the land in question, and the other party to the case was the Crown Lands Department. ' The land leased is 310 acres and 21 perches in extent. It is situated in the land district of Southland. The annual Tent was .£3 2s. The lease was to be Tegarded as a lease in perpetuity, under Part. 3 of tho Land Act, 1892, Section 121 of which states"The lessee shall have no right to any mineral, mineral oil, gas, metal, coal, or valuable stone' .under the surface soil of the land hereby demised,' the surface soil only being, demised and Teased to the lessee, and a right of ingress, egress, and • regress -to' all persona lawfully engaged in working any such minerals, mineral oils, gases, metals. Coal, or stone is hereby reserved." Sir Joshua Williams's Judgment. ; In the course of his judgment, his Honour Sir Joshua Williams said that tho lease was granted under Section 121 of the Act of 1892, and must bo construed in conformity with .that section. It was, therefore, a lease of the surface only. The lessee had no right to any minerals, and they were expressly excepted from tho demise. The right of .purchase given to the lessee, was the fee-simple of tho land comprised in the lease. The price to be paid was based on the capital value on which the rent was assessed,., that was the capital value of the land, with minerals excepted. If the purchaser was entitled to a conveyance of the whole fecBimple of the land, including the minerals; he would be entitled to something .which was not included in his lease, and which he had not paid for. Section 31 of the. Act of 1912 did not appear- 'to liis Honour to give the lessee the right to purchase more than the fee-simple of the land (demised,' that was 1 the land' withoufc'the minerals, and the fee-simple .of the minerals would Temain 'in the Crown.: Continuing, his Honour said: ''It was extended that the right to purchase given by a. statute should bo construed liberally in favour of the lessee. I think that the rule or construction is the other way. 'I'he right was 'im act of grace oh the part of_ tns Legislature and by the Crown, as forming, part of tho 1 Legislature. In such a ease the rule of construction of Crown grants would, in my opinion, apply; that is, that they are construed most favourably • for the Crown. ' The Crown would not. be held to have granted anything more than, the express words of the grant cover, and in the event of a doubtful construction the Crown > would iavo the benefit of the doubt. I <U> not think, however, that it is necessary to invoke this principle in the.present case. "The answer, therefore, to the first question -in the summons," said liis Honour, "is that the words 'the land comprised in the lease' mean the land demised by the lease, that is tie land without .the minerals. The answer to the second' question is that the plaintiff is entitled to a Crown grant of the land,,exclusive of the minerals."

The Appeal Begins. Against this decision of Sir Joshua Williams .the plaintiff Brighton appealed, and the hearing of the action on appeal was commenced -yesterday morning. There were on the bench his Honour the Chief Justice . (Sir Robert Stout), his Honour Mr. Justice Denniston, his Honour Mr. Justice Cooper, and liis 1 Honour Mr. Justice Chapman. Sir John Findlay, K.C., and Mr. W."A. Stout, of Invercargill, appeared for ithe appellant Brighton. The Attorney-General (Hon. A. L. Herdman) and Mr. H. H. Ostler represented the respondent Minister for Lands.' Sir John Findlay, in opening the case for the appellant, observed that the lease was taken in 1805,' a couple of years before the passing of the Land Laws Amendment Act of 1907, Section 20 of which said, "Every' owner of a lease in perpetuity shall have a right at any time hereafter during the existence of the lease to purchase the fee-simple of the land comprised in the said lease at a price equal to the capital value of the said land at the time of the purchase thoreof." Section 20 of thp 1907 Act was Tepealed, and substitute ed by, Sfction 31 of the Act of 1912, which read: "The owner of a lease in perpetuity shall have a' right to purchase the feesimple of the land comprised in the lease." Sfction 20 of the Act of 1907 and Section 31 of the Act of 1912 both intended that lessees should have a rigtit to purchase the land comprised in the lease. The question was: "Doe 9 the right under the Act of 1912 include or not include minerals?" Counsel contended that the onus was on the other side to show that the lease did not includo minerals. Not only was the word "land" used, but the "feesimple of the land." Brighton had an option to purchase the freehold, including the minerals. The leas? limited the right of the lessee to the surface soil, but the statute gave a right to the "fee-simple of the land comprised in the lease"—not merely fhe fee-simple to the surface. They should be told why, inferential!}-, the policy in the land laws of Now Zealand had been altered in regard lo the reservation of minerals. On the true construction of Section 31, the Court was not entitled to assume that it was not intended that the minerals should not be included in the one per cent, which was added to the purchase money. Counsel contended, also, that the intention of the Legislature was ,to placo l.i.p. tenants on the same terms in regard, to purchase as o.r.p. t?nonts. After Mr. W. A. Stout addressed the Court, the hearing was adjourned till 10.30 o'clock this morning. TAR/WAKI CASE. The Court of Appeal continued the hearing of counsel's argument on certain nonsuit points in the I'aranaki case of Arthur Howard Fla.vle, share milker, near Manaia, v. the Riverdale Co-operative Dairy Factory Company, Ltd. trie case involyed a claim for damages for alleged The Bench consisted of his Honour the Chief Justice (Sir Kobsrt Stou,t), his Honour Sir Joshua Williams, his Honour Mr. Justice Cooper, his Honour Mr. Justico Chapman, and his Honour Mr. Justice Sim. Mt. M. Myers, with whom was Mr. £>. G. Smart, of Uawera, appeared for the plaintiff. Mr. C. B. Morison, K.C., with tim Mr. P. O'Dea, of Hawera, represented the defendant company. Decision was reserved,