LAW REPORTS.

Dominion, Volume 7, Issue 1883, 17 October 1913, Page 11

LAW REPORTS.

THE FULL COURT. RIGHT TO BE A BARRISTER. SOLICITOR'S SUIT.

IMPORTANT CASE TO LAWYERS. Matters of importance to members of the legal profession came before a Full Bench of the Supreme Court yesterday. Tho case rested, on an application by Arthur D. Lynch, solicitor, of Wairoa, for admission as a barrister. The Law Practitioners' Act. 1908, provides that a solicitor shall bo entitled to admission as a barrister if he has practised for five years as a solicitor. Tho chief point which the Court had to decide was whether these five years of practice should have been in the applicant's own account, or whother practice as an employeo of another legal firm entitled him to admission. On tho Bench wero the Chief Justice (Sir Robert Stout), and.Their Honours Sir Joshua Williams, Mr. Justice Denniston, Mr. Justice Edwards, Mr. Justice Cooper, Mr. s Justice Chapman, and Mr. Justice Sim.

The Solicitor's Affidavit. Mr. Lynoh's affidavit mentioned that ho had been admitted as a solicitor on March 16, 1906. Since then he had annually taken out a practising certificate. Until April, 1910, he had acted as common law clerk for the firm of Skerrett and Wylie, and of Chapman, Skerrett, Wylie, and Tripp, of Wellington. During his engagement with these firms ho regularly appeared, and practised as a solicitor in all Courts. He was also in chargo of Court of Appeal work, Supreme Court work generally, including divorce proceedings, and was engaged in tho preparation of briefs for counsel, and opinion work. Ho also had experience of conveyancing. Since August, 1910, he had been a partner in the firm of Messrs. Sandman and Lynch, solicitors, of Wairoa. For five years continuously next preceding the date of his application for admission as a barrister, he had been in active practice as a solicitor. Mr. 0. P. Skerrett, Iv.C., with him Mr. F. P. Kelly, appeared on behalf of Mr. Lynch. The Now Zealand Law Society, which opposed the granting of the application, was represented by Mr. A. Gray, K.C., with him Mr. D. R. Hoggard. Counsel for the Solicitor. Mr. Skerrett sa;id that the matter was one of interpretation of Clause 5 of tho Law Practitionors' Act, and ho described the features of that ■_ clauso. And then went on to say that his client had practised as a solicitor for tho last fivo years, and was entitled to adirlission, unless it wero essential that Buch practice should have been on his own account.

Tho Chief Justice: Your contention is that doing work as a solicitor for another firm is practising as a solicitor?; Mr. Skerrett: If the applicant has been doing work which only a solicitor could do. Ho went on to say that tho case was one which affected a very large nunlbor of practitioners and firms, (t would raise the question whether solicitors employed by the Crown Law Office, tho Public Trust Office, city and borough councils, and large companies, who were paid by salary, were "praotisiilg'as solicitors." It was clear law that in a party action costs were allowed to persons succeeding, oven if their solioitor be paid by annual salary. ' Mr. Justice Chapman: A solicitor who is himself a litigant can recover oosts — taxed costs.

Mr. Skerrett: The Court has often allowed costs to the Crown Law Office and the City Solicitor's office, although they have been represented by salaried solicitors. Mr. Justice Chapman: The Public Trustee has also been allowed costs. Some Cases In the Past. Mr. Skerrett went on to say that there woro on record only two cases of admission affecting tho question. Mr. M'Donald, tho present solicitor to the Publio Trust Office, had been admitted as a barrister, after practising for five years as a solicitor in the offico. For a good deal of that time ho was not chief solicitor, but acted as assistant to Mr. Wilson. Counsel could not say whether tho case hiid come before the Full Bench.

Mr. Justice Dennißton: Was tho point raised?

■ Mr. Skerrett: I cannot eav, Your Honour. If it was not definitely raised, I will not stress the point. The other case, 1 Mr. Skerrett continued, was the decision of Mr. Justice Cooper, in the case of Mr. Putnam's application for admission. Mr. Putnam had been for five years managing clerk to Mr. E. D. Bell, and had devoted his time to the management of the conveyancing department of Messrs. Bell, Gully, Bell, and Myers. When his application came before the Court in May, 1908, it was argued that there might be more, than one managing clerk in a. firm's employ, but His Honour had not agreed with this. A managing clerk, he said, must have the responsibility of the general management of the office, and there could be only one managing clerk. Ho therefore had no power to grant the application. There was nothing contrary to the present application in this judgment. Mr. Lynch rested his application on the first branch of the clause. His Honour had based his judgment on tho second branch. What Is "Active Praotloe?" The basis of the section, Mr. Skerrett went on to i say, was that a certain number of years' experience should ontitle an applicant to admission as a barrister. No attempt was made to discriminate as to the nature and quality of tho experience. The applicant may have been a solicitor with little or' no experience, or he may have been engaged in a large practice. Mr. Justice Denniston: But he must have done nothing elso. He could not put up what Americans call a "shield, and ongage in book-keeping, or some other calling. ■

Mr. Skerrett: The words "active practice" in the section, I submit, mean "actual practice." Mr. Justice Cooper: The solicitor may have had no clients at all.

Mr. Skerrett: That is so. He (counsel) submitted that it was clear that Mr. Lynch had practised as a solicitor in the ordinary sense, and had regularly taken out his practising certificate. The work which his client had done could not have been done otherwise. The Chief Justice :■ He could have done Chamber work. Mr. Skerrett: Yes, Your Honour, but merely as representing his principal. 110 would not be treated as a practitioner.

Mr. Justice Chapman: Managing clerks—and even articled clerks —oiten appear in Chambers in England. Mr. Skerrett: It lies with the discretion of the Judge whether the solicitor may bo represented by his clerk. The difficulty in this ease (lie continued) was that, if the Court were going to exclude Mr. Lynch from the benefits of tho statute, they would have to say ths»t Mr. Lynch and- many others like him wore not solicitors within the meaning of the statuto. Tlio acts done by Mr. Lynch were such as everyone but a solicitor was prevented by Section 2o of tho Act from doing. They wanted to establish, tiuit what Mr. Lynch liad

done camo within tile practice of a solicitor, under every clause of tho Act. He further stated that it was only because ho had failed to pass ill one nonlegal subject (Latin) that Mr. Lynch was debarred from making his application as a Batchelor of Laws. There was a hiatus disclosed in the affidavit, of some four months, between the date of Mr. Lynch'a leaving the firm of Chapman, Skcrrett, Wylie, and Tripp, and his entering into business in Wairoa. This had been caused by the necessity of Mr. Lynch going into the country for the benefit of his health. During that time he had not been engaged in any other occupation, and counsel submitted that it could not bo a bar to his admission as a barrister. Reply for the Law Socloty. _ Replying on behalf of tho Law Society, Mr. Gray said tliat ho had to mako two objections to the granting of the application—(l) that Mr. Lynch had not lieon in actual practice as a solicitor; and (2) that his practice, such as it was, liad not been continuous. For four months—between May and August, 1910—he had not been in praotice. His learned friend had explained that his hiatus occurred through illness, hut whatever the cause might be he must mako the objection. Mr. Justice Chapman: In the case of articles, the Court used to provide for such cases by allowing tho clerk to do extra work afterwards.

Mr. Skerrett: Mr. Lynch has more than complied with this.

Mr. Justice Edwards: Surely .there is an implied exception in cases of men absent through illness. Mr. Gray: His . engagement with Chapman, Skerrett, Wylie, and Tripp was terminated. ; *

Mr. Skcrrett: He may have been granted leave of absence.

Mr. Gray: That would make no difference. I am bound to point out that there was a break in the continuity which the law requires. Mr. Justice Denniston: You do not suggest that ho was engaged in other occupation? Mr. Gray: No. The Question of Employment. Mr. Gray further submitted that it was necessary for an applicant to.have been engaged in work for himself, and not for an employer. There were two classes of persons.who might bo_ admitted—(l) a person engaged in business on his own account as a solicitor in active practice; and (2) a man actively engaged as managing clerk to a solicitor for fivo years..

Mr. Justico Cooper: Then you go so far as to make this contention —if Mr. Lynch had served for four years as a managing clerk, and had then gone into business on his own account, those four years would not havo counted in his favouri

. Mr. Gray: I am bound to say that, your Honour. An applicant must have served five years continuously as one or the other. Mr. Lynch's practice in the Courts was not practice as a solicitor. Ho was employed by the solicitor of the party concerned. He could not sign Mis namo to a document as a solicitor, but must sign tho'name of his firm, "per A. D. Lynch"; and ho had no interest in costs. Although the practice had arisen in New Zealand for clerk-solicitors to appear in Court, it did not entitle them to the credit of practising as solicitors appearing to_ represent clients. Tho word " practice " _ denoted professional business. A solicitor wqs said to be "in practice" wlien ho was carrying oil a professional business on his own account. Mr. Lynch could not bo said to have any practice at all. Mr. Justico Cooper: Ho says that he was practising in tho Magistrate's Court for , some time.

Mr. Gray: He was appearing j we say he was not practising. _ Mr. Justice Edwards: If a man goes into a country village, and after five year's swears that he has been in prac-tice-for that period, the society could not object to his application, although ho has.done very little. He may have done all he could.

Mr. Gray: His practice may not have been big, but ho kept his offioe open continuously foT the transniction of business, and did all he could. Some presidents of tho Law Society, he said, had steadfastly set their faces against the practice of clerks in offices, who happened to bo solicitors, appearing in Court. One president at least had objected to a clerk being enrolled at all. Mr. Justico Edwards: What was his reason?

Mr. Gray: For one thing, your Honour, it miglit he subversive of discipline. It is not in accordance .with the dignity of 'a big law society that important Court work should be carried out by clerks.

"Mr. Skerrett quoted authorities to show that absence through. illneaß had been held not to oonstitute such a break in the continuity of practice as to prevent admission. , The Court reserved its decision. THE LANCASTER LAND CASE. JUDGMENT GIVEN. > In the Supreme Court His Honour Mr. Justice Chapman delivered reserved judgment in the recently-argued case of the Lancaster Land Co., Ltd., which is in liquidation. The case arose from a judgment summons issued by -tho liquidator, Mr. W. R. Beauchainp-Platts, who applied for an order determining the following questions in regard to those shareholders who had purchased land: — Whether the agreement between the oompany and tho shareholders was valid, and if so, to what extent was it valid and effective ? What wero tho rights and liabilities of the shareholders who were parties to the agreement (a) in respect to the agreement, and to the purchase moneys paid or payable thoreunder P (b) In respect of calls made upon

shares held by such shareholders? Were the shareholders, or any of them, parties, and, if so, which of them, properly placed upon tho list of

contributorics of the company in liquidation? What was the liability of tho board of directors in respect of the agreement? At the hearing Mr. D. M. Findlay represented Mr. Beauchamp-PJatts, the liquidator.. Mr. C. \V. Neilsen appeared for A. Williams, a director; Mr. R. M. Watson for J. W. Jack, director and shareholder; Mr. H. E. Anderson for W. G. Morpeth, shareholder; Mr. D. It. Hoggard for Diehard Woodman, H. V. Futtcr, and W. Jenson, shareholders; Mr: It. B. Williams for P. B. Thomson, shareholder: and Mr. P. H, Putnam for A.- J. Croll, shareholder.

His Honour's Review. In the course of Lis judgment His I Honour said that the case gave rise to several curious and interesting questions as to one of which counsel had been unablo to find any authority. The company was one of many incorporated land .speculating syndicates which were formed to deal in land a few years since. It was incorporated oil October 5. 1906, and its primary object was to purchase 150 acres of land at Karori, known as tho Lancaster Estate. It proceeded to prepare a scheme of subdivision under which streets .were laid out and over 450 sections of land were oilered for sale. The company had not completed its title to the land, but held it under an agreement with the idea no doubt of paying for it from time to time as it received instalments from purchasers on time payments. This agreement with four vendors was dated August '20, 1907. A certain amount of capita! was called up, but 7s. per sharo was uncalled at tho dato of the liquidation.

On February 10, 1909, a special resolution was passed at a shareholders' meeting, giving to shareholders the option of taking up land, tho property .at the eoagWkfet %

liabilities on shares held by them, and that all calls made upon shares hold by members oxeicising this option within olio month should bo applied in payment of land so purchased, and in reduction of their liability upon shares. Oil March 3, 1909, a deed was executed between the company and tho shareholders concomed in tho present action. It was not in terms a deed of sale, but professedly permitted tho shareholder to tako in part repayment of such sum in the company's capital as the shareholder may have subscribed for, any portion or section of the company's land. Tho deed appeared studiously to avoid referring to tho transaction as a sale. In reliance on this deed many of the shareholders accepted allotment of sections of the company's estate. These dealings may be referred to as constituting several classes—(l) Canes in which the shareholder completed paying up his uncalled liability and received and registered a transfer of tho laud; (2) cases of tho same kind in which tho shareholder has since mortgaged the-land; (3) cases where tho shareholder had paid or agreed to pay moro than his uncalled capital; and (4) cases in which tho matter is not coniploted by registered transfer, but rests in contract. The Court's Dcolslon. His Honour had come to the conclusion in the first place that tho deal of March 3, 1909, was void, and what was assumed to bo an equitable title to the land vanished. In the samo way tho clause under which instalments might become payable waß void, and nothing moro was recoverable under it. The liquidator's call, however, covered tho same money, and he could recover that call unembarrassed by tho terms of the void agreement. The most diffioult of the questions raised, His Honour'intimated, was that as to the land actually transferred to the shareholders. Ho thought that the proper course for the liquidator to tako was to ask these shareholders to restore to the company at their own cost what belongs to the company. It was stated that in some cases they have mortgaged the land. If any shareholder had 'so dealt with the property of tho company, that ho could not restore it, then tho acts of the parties to tho illegal transaction which placed it in his power to do so could only be, regarded as equivalent to his having elected to take over the property at the only price at' which he could then lawfully have selected it, namely, at the scheduled rate.

His Honour gave answers to tho questions raised by the summons as follow, but added that if any_ further questions appear to the liquidator to arise, he would be willing to anßwer them: —(I) The agreement is invalid, but part acts done under it, Buch aB a payment of calls, aro valid to the extent explained. (2) The rights and liabilities of the shareholders are (a) to claim that tho liability for calls is pro tanto satisfied and that proof may bo made for moneys paid beyond the call. .(3) The shareholders whoso calls aro thus satisfied aro not- properly placed on the list of contributories. (4) This Question in' terms relates to tho liability of .the board of directors. As a board there can be no liability. Each director is liable for his own defaults. Thoso defaults consist in parting with the property of the company. If that is restored, there remains no liability. If it is not restored, the assenting directors may bo liable with recourse to the shareholders, but only in the interest of creditors, as His Honour assumed that it could be_ shown that the!'shareholders had acquiesced.