APPEAL COURT

Evening Star, Issue 20132, 23 March 1929, Page 23

APPEAL COURT

GUARANTEE OF ACCOUNT (Peis United Press Assocjation.J WELLINGTON, March 22. Tho Appeal Cohrt to-day took the case of Harry Digby James, printer, of Grcymonth, against Edward Ernest Bayly Mabin, bank manager, formerly of Grcymonth and now of Nelson. Tho court, before proceeding with the case, heard a motion by Mr M. Myers, K.C., to have tho appeal set aside for want of due security. The court intimated that it was satisfied with the security lodged with tho registrar of the Supreme Court at Greymouth, which was the cause of the adjournment yesterday, and accordingly dismissed the motion. Tho hearing of the case was then proceeded with. Tho bench comprised Mr Justice Herdman, Mr Justice MacGregor, and Mr Justice Ostler. For tho appellant Air Alnrdoch and Mr Doogan appeared and for the respondent Air Myers and Mr Ward. The facts stated to tho court were that early last year James issued a writ against Alabin alleging that the latter, whilst branch manager of tho Bank of New South Wales at Greymouth, fraudulently induced James and others to guarantee the account at that bank of Alessrs E. J. Bundle and Co., Ltd., timber merchants, of. Greymouth, to the extent of £37,000 in all. representing that Alessrs Bundle and Co. was a sound and prosperous commercial firm when ho actually knew it to be in a very unfavourable financial position. In duo course Alessrs Bundle and Co. failed, and James was forced to pay £2,500 before he could obtain release from his portion of the guarantee. Alabin in turn, then filed a motion to set aside the statement of claim on the ground that it did not. disclose any legal cause of action. Mr Justice Adams held on tho motion that, as the representations complained of were not made in writing, as is required by Statute, they could not form tho subject of an action for damages for fraudulent misrepresentations; and, further, that there was no special relationship between the respondent and tho appellant which threw on Alabin the duty of care in making these representations. An appeal was now brought on this decision. Air Alnrdoch, for the appellant, said the judge in tho court below decided the case on tho provisions of the Statute of Frauds and amendments thereof, bub it was submitted that this Statute should not have been raised or considered in tho judgment, us it had not been pleaded in tho proceedings. The law was clear that any party, in order to receive the benefits of tho provisions of tho Statute of Frauds, must expressly set up tho Statute in his pleadings. In this case the respondent had filed his summons to have the question of law argued before the trial and before ho bad filed his statement of defence, and did not at any time during tho hearing raise the defence- of tho Statute. Coming to the second branch of tho argument, the statement of claim showed two causes of action—(l) fraudulent misrepresentation, and (2) the existence of a breach of duty to take reasonable care on tiro part of the respondent in advising the appellant. Tho provisions of the Statute of Frauds did not apply to actions for damages for negligence or a breach of duty. Assuming tho judgment of the court below to be correct so far as tho allegations of fraud were concerned, there still remained the second cause of action. If he was unable to prove that the misrepresentations were made .fraudulently, it was still ofren to prove that the respondent knowingly undertook tho duty of advising the appellant, and that ho was negligent in the performance of that duty. Where a banker advised a client or other person he was bound to exercise care and reasonable skill, and Alabin had failed to do so.

This closed the case for the appellant, and further argument was adjourned till Monday. DAMAGE TO NEWSPRINT In the appeal case, the Coastal Shipping v. the Wanganui ‘Herald’ Company, Mr J. B. Upham, for the respondent company, submitted that a ship was unseaworthy when it suffered from a defect which a prudent owner, had lie known it, would have required to be made good before sending his ship to sea. In such a case a ship was not seaworthy within the meaning of the owner’s undertaking, and ho must be responsible for all damage resulting. In New Zealand a warranty of seaworthiness was implied. Under this the ship owner contracted not merely that ho would do his best to make the ship reasonably fit, but that she should bo reasonably fit for the voyage. In other words, latent defects did not exempt the ship owner, and in this case the appellant was relying on a latent defect to relieve it of liability. Whore there was a, breach by the shin owner of the implied warranty to supply a seaworthy ship, the exceptions in the bill of lading on which appellant relied in this case did not apply. These exceptions, unless they expressly negatived the implied warranty, were conlined -solely to matters subsequent to the sailing of the ship_ with the goods on board. Again, this implied warranty could not be limited save by an express clause in the, bill of lading. Neither sections 2 nor 3 of the Boa Carriage of Goods Act, 1922, had the effect of reducing the implied warranty to.one merely that duo diligence had been or would bo exercised to make the ship lit. The appellant company having failed to comply with the implied warranty, could not rely on the bill of lading nor on the statutory provisions to relievo it of its liability. Lastly, the entrance of sea water into a ship through a leak caused by the corrosion of a plate in the hull could not possibly be called peril or accident of the sea. A peril of the sea must be something arising during the. voyage and not existing prior to sailing. Judgment was reserved.