LAW REPORTS COURT OF APPEAL

Dominion, Volume 8, Issue 2294, 30 October 1914, Page 3

LAW REPORTS

COURT OF APPEAL

TIMBER-MILLING CASE ' VALIDITY OF AN AGREEMENT — I —' The care of the Onehunga Sawmilling Co., Ltd., v. the Offioial Assignee in bankruptcy of the property of Michael Horsey King, sawmiller, of Rauriinu, came before the Court of Appeal yesterday, when tho Bench was occupied by Their Honours the Chief Justice (Sir Robert Stout), Mr. Justice Denniston, Mr. Justice Sim, and Mr. Justice Hosting. In May, 1913, Michael Hersey King started business as a sawmiller at Raurimu, and about the same time be entered into an agreement with the Onehunga Sawmilling Co., Ltd., to supply the company with the whole,of the milled timber from the area comprised in a license to cut timber near Raurimu. In addition, King executed in favour of the same company an instrument by way of security over his plant, etc., aud a mortgage of his lease and license. King was adjudicated bankrupt in November, 1913, and it was then contended that it was not possible to carry out the agreement with tho Onehunga Sawmilling Co., except at a. loss of 2s. per 100 ft. In dealing with the estate, the Deputy Official Assignee questioned the validity of tho agreement above referred to, and the result was that the matter was submitted to the Supreme Court. The Deputy Official Assignee then moved for an order under the Bankruptcy Act, 1908, to the effect that he was entitled to disclaim the agreement without also disclaiming the timber-cutting license. The grounds of the motion wpre: (1) That- tho terms of the agreement were unfair and unconscionable, and (2) that the terms of the agreement were inconsistent with or repugnant to the contractual and equitable right to redeem, and were a clog upon the equity of redemption. > His Honour Mr. Justice Edwards, in granting the order moved for, remarked that ; "nothing could be more unfair and unconscionable than a transaction, which must necessarily involve one party who is simple enough to enter into it, in a heavy loss for the benefit of the_ other party, who is astute enough to' induce him to do' so, and which will probably result, as it has resulted, in the present case,: in his bankruptcy." l'ho Onehunga Sawmilling Co. now appealed against His Honour's judgment on the ground that it was erroneous in point,of law. Mr. C. P. Skerrett, K.C., with him Mr. D. S. Smith, appeared for the appellants, while Mr. M. Myers, with him Mr. H. R. Cooper, of Palmerston North, appeared for the respondent. Legal argument, had not concluded yesterday evening when the Court adjourned until this morning.

GUNN TRUSTEES V. MILLER. Decision was reserved by the Court of Appeal yesterday in tie case of Sir George M'Lean-'and George Milne MacLean t(he Gunn Trustees) v. Charles Haughton Miller. A reference to the facts before the Court was made in yesterday's issue.