SUPREME COURT.

Gisborne Times, Volume XXVI, Issue 2138, 13 March 1908, Page 1

SUPREME COURT.

HALF-YEARLY SITTING. CLAIM FOR DECREE. The half-yearly silting of the Supremo Court was continued yesterday before Mr Justice Chapman. Wetini Rikirnngi and others v. James Wrev Nolan: claim for decree Mr. G. Hutchison appeared tor plaintiffs, and Mr. H. D. Bell, R. 0., with Mr. C. A. DeLautour, tor defendant. STATEMENT OF CLAIM.

The statement of claim, in which slight amendments wero made, set out (1) That the plaintiffs, 163 ill number, wero beneficiaries of the land known as Mhraetahn No. 2A, sections 2 and 3, containing 5082 acres 2 roods and 20 • perches. (2) That by order in Council dated March 19, 1903, Janies Macfarlane, John Alfred Harding, and Walter Shrimp ton wero appointed a Board under the East Coast Native Trust. Lands Act, and under the Native and Maori Land Laws Amendment Act, ' 1903, wero constituted a .body corporate under the name of the East Coast Native Trust Lands® Board with perpetual succession arid common seal. (3) That’ by operation of tlio Act of 1902 the land became vested in the Board. (4) Thaf.tlie'daH'd was not subject-to; any mortgage to the Bank as referred to‘in the Act of 1902. (5) That on August 10, 1904, the Board transferred'’ tlio -land to the defendant as purchaser, free from encumbrance, ; for' '£4066.25. (6) ' That tlio true , value of such land on that date was about £7860, and is now much' greaer. (7) That by reason of defendant: having beon'solicitor to the Board prior and subsequent to August 10, 1904, the' plaintiffs say that ho occupied a fiduciary .relationship through tlio Board to tlio plaintiffs as tlio cestuis quo trust of the land. The plaintiffs claimed a decree that defendant holds Maraetahh 2A, . sections 2 and 3 ns trustees for the plaintiffs, subject to such payment as shall on taking aeco'unts be found payable. STATEMENT FOR THE DEFENCE. The defence, admitted the beneficial ownership of the plaintiffs, but alleged that the-sale was conducted properly. Tlio dcience iurtlior sot out that the Board advertised for tenders for the purchase of the said land, and that only one tender was received, • from Thomas Byrne," which was declined by the Board. Subsequently Frederick Hall offered to purchase the section at 16s per acre, which offer the Board accepted in the month of July, 1904. and thereupon Frederick- Hall became the owner in equity,' the sale being made without any connection with the defendant, but on the sole account of the said Frederick Hall. That shortly afterwards Hall offered defendant a share in his purchase of the land and the defendant and another person agreed to become subpurchasers from Hall" of one half the land. That it was then arranged that the transfer should be taken in the name of defendant alone. That.the defendant had no association direct or indirect with .the original purchase by Hall. ‘

On tlie'pleadings as thus revised, Air. Bell claimed that the onus was oil him, and that the defendant’s case, should first be heard. This was assented to. ' ,

AIR BELL’S ADDRESS

Addressing the Court, Air. Bell said that public tenders had been called for by the Board in June, 1904, and a form of contract intended t 0 be used had been prepared by Air Nolan. ,It was admitted that Air Nolan held a fiduciary relationship to. the Board, and they made no quibble’ whatever on that point, for this was a matter affecting def aidants’ credit. The tender received was for 11s per acre, which the Board refused to accept, The Board consisted of Alessrs Alacfarlane, Shrimpton and Harding, and Air Coleman was secretary. In July, shortly after the rejection of the tender, Air Harding received an offer of 16s from Air Hall. That was communicated to tlio other members of the Board by telegraph, and brought formally before the Board on July 14- In tlie meantime Haft signed a contract, and P a id a deposit, and on August 10, 1904, the Board conveyed to Air. Nolan. It was very natural for a suspicious person to assume that Mr. Nolan must be acting for Air. Hall, but that view was not justified, although it might also have been suggested by the fact that Air. Hall was a regular client of Air. No)an’s. Air. Hall was a man of considerable means and a considerable investor. Air. Clark, tcro;e .leaving for England, had asked Mr. Hall to give him a share, and had authorised Air. Hall to purchase also on his behalf. Mr. Harding was dead, but Air. Coleman would detail the circumstances. They would call evidence that there was no connection wliateyer between Hall and Nolan in tlie original purchase, Hall acting quite independently. Mlien Hall went to Nolan as his solicitor lie mentioned the indefinite arrangement lie had with Clark. Nolan said he would not mind a share, to which Hall assented, (dark being still .m England it was agreed to put the Land in Nolan’s name; Hall held a half share.and Clark and Nolan each a quarter. It .could not be suggested that Nolan had no right to deal with Hall, who had signed a contract cliffy affirmed, and the market could not be shut against him, EVIDENCE FOR THE DEFENCE. The following evidence was then taken for the defence : _ . AVm. Johnstone, Assistant Registrar of the District Land office pro-, duccd a transfer from, the East Coast Trust Board to Nolan wlncli was endorsed by Hall, Air. Hutchison contended that tlie form should not have been varied in 31 Thomas Alexander Coleman, East Coast Commissioner, stated that, while the Board was in existence lie had been secretary. He remembered the. calling for tenders for the block in question which was advertised from May U tp 29. Tenders closed on June 29. One tendin' only was received the amount being II s per acre. The tender was not accepted On July. Air Harding told him that Hall had made gn offer of lbs loi the block. Hall’s offer was communicated to Mr Alacfarlane by wire. A\ itncss believed he wrote the telegram ami Air Ha rd mg signed it. Called on Air Hall at his office to see him on the matter, as lie Wanted to get £1 per acre if possible, Hull uould not entertain the idea and after seeing him once or twice, witness received instructions from the Chairman to accept 18s. This Hall refused to give and finally finding that the Board could get no more from Hall or from anyone else, witness informed him. that the Board had decided to accept the offer. There had been communications on the mat.er between Alessrs Alacfarlane and Harding.- Witness then informed Hall that he had better go to Nolans office, and sign the contract note This was done and a deposit oi £Bio was paid. Was constantly m communication .with Air Nolan as solicitor and never heard any suggestion that anyone hut Hall was .the purchaser. ‘The Board next met oil July 14, all members being present. Mr Harding’s action was Approved and the sale confirmed. At a meetin./ on August 10 an application for a transfer from the. Board of portion of the block to Jas. Wrey Nolan was received. It was decided to sanction this subject to t-lie, consent of the purchaser. Air Hall, being endorsed on the transfer. Witness first heaid of Air Nolan in the matter ot transfer on the .afternoon of August 9. Heard from Air Nolan’s managing clerk, Mr Staff, when -lie brought tlio transier with others to witness.

By ,Air. Hutchison: Had a. good many applications for information when tenders were being invited. Some discussed the question as to whether part of the block could not b'o offered. Had no offer in writing for the whole block or part of it from Mr Flood or any person other than Byrne. Did have a verbal offer from Flood for part of the block; believed it was part of section 3. It was an offer to take an area of bush land, which lie (Flood) indicated, probably about 1500 .acres for which ho offered about £1 11s. A few days afterwards Flood called in and asked witness to communicate with the Chairman that ho suggested the block being sub-divided into 3 sections, two of thorn good biisli country and each supposed to contain .about JSOO acres. For eithor of those lie would lie willing to pay from 30s to 35s per acre according to-the way it was cut out. The balance of 2000 acres or there-’ nbouts was, ho said, open country of poorer quality than the hush and ho "would value it at 12s per acre. Flood called in to see witness to learn the result of his application and witness informed him that the Board declined to face the cost of a sub-divis-ionnl survey and of the roading. About the 'day tenders were to be qlosed Air. Flood made a definite offer to take about 2000 acres in the bush part at 27s per acre. There had ■ been no meeting of-the Board to discuss .whether the block should be cut up, but" witness, Lad .'.communicated wath indivulual members of tlio Board. This was •chiefly:* with tlio CKnirmn.ii and also with Air Harding, whom wit- - .ness saw- almost daily, the position was placed before the Board at its meeting on June 29th. Flood’s offer was not mentioned in the minutes, it being treated as an informal offer. .Witness 'continuing said that tne first intimation he had of Mr Nolan having anything to do with the property was when lie found .a transfer making the block over from the Board to him. That was about August 9th. He had nothing iii writing that explained the existence of the transfer. Up to'that time the sale had been made bv Mr Harding to Mr M ill lor I 16s nor acre. This sale had been no- I tified by the Board. He had no record of a tender from Air. Flood. If Air. Flood said he made an offer in writing lor. any part of the block he (witness) would say lie never received it. - To Air Bell: The Board was without funds when it came into existence, and the subdivision of blocks would necessitate, the formation of roads, tlie cost of which would have mu the Board temporarily into debt. Roads were only constructed in some instances. With tlio blocks in question the suggestion of subdivision was considered very seriously, os also tlio cost of survey and roading involved in Flood’s offer, and it was resolved not to subdivide. No instructions -wore given r o the surveyor to make alterations in the blocks. The transfer to Air Hal! (prepared by Air Nolan) was approved by Air Cornford, solicitor of.Neper. Ho (witness) took tlie document to Mr Cornford in person. The deed did not then either Air Hall’s or witness’ signature. Flood did not offer 26s per acre, or 30s per acre if native duty was paid by the Board. Frederick Hall, farmer of Gisborne, said' that he was aware the blocks in question wero open for tender. Ho did not tender, but after the time for tenders had expired he know there were lio tenders and he took the matter into' consideration. Ho had discussed the question of the purchase of some Lind with Mr . Clark of Tc Aral, and in consequence was prepared to consider the blocks offered by the. Board. He knew tlie iland was worth more than 11s per acre and lie told Mr Harding he would give 16s pferpacro cash. Air Coleman,, oil be~ hali-of the Board, asked witness if he Was prepared to pay a deposit to complete the purchase. Witness paid £BOO and the agreement was signed in Air Nolan’s office. He asked Mr Nolan | if lie had power to act for Air Clark, and Air Nolan said he had no such power, Witness explained to Air Nolan that lie wished All* Clark to “stand in” in the purchase of the property. Air Nolan offered to take a share and divide it up with Air Clark or make aqy other arrangements when Air Clark came back from, Auckland. Air Nolan then took onethird of the property and witness held two-thirds. The transfer was made out in Air Nolan’s name. AVitness give Mr Nolan a cheque for his proportion of the deposit and Mr Nolan paid the balance. On Air Clark’s return the question was reopened. He (witness) was willing tg take one half of tlie block and the other half was to be split up between Air Nolan and Air Clark. He had held the property in those shares since 1905 and the land had been vastly improved at a great deal of outlay. Air Nolan had no part whatever in the original purchase. AVitness knew Air. Nolan was solicitor for Mr Clark as well as himself. AVitness said lie had spoken to other persons about coming into the speculation with him. He offered a share to Air C. Parker before lie spoke to Air Nolan. To ‘ AH. Hutcldson ; He, had been interested with the late Air Harding in certain lands. Ho had, at present, an interest in certain lands, in which' tlie estate of the late Air. Harding, of which he (witness) was now executor, was also interested. The land was close to the block in question. Ho could not say if he was interested in the block marked Alaungapoiki A on the plan; but was interested in a block leased by Mr Clark under that name. ' He also had interest's in freeholds lield in the name of John Pjii'kpr, in which ailso Harding’s estate was interested. There were no documents defining the several interests as between himself and the late Air Harding, Those .interests were dependent on verbal arrangements made between himself and the deceased. AH’ Bell objected to tlio line of cross-exffininatiqn adopted by Air Hutchison, and fiis Honor asked the motive for the questions. Air. Hutchison said he was merely testing the veracity'of the witnesses. Continuing ' witness admitted he lent tlio Board £SOOO shortly after the Board was formed. The amount had been re-paid about- a. month ago. Mr Hutchinson wished to ask witness how ho proposed, as executor in Air Harding's estate, to define Ins personal interests from the interests of the-estate. Air Bell obiected to, and His Honor disallowed, the question. . His Honor said that if Air. Hutchison wished to discredit the witness, he must ask specific questions. In further cross-examination by Mr. Hutchison, tlie witness stated that those lands in which the estate of the late Mr. Harding was interested under such verbal agreements did not •include any of the lands which had been sold ‘ or leased by the Trust Board. . , John Clarke, slieepfarmer of Gisborne, said that in Alarch, 1904, he went for a visit to England. Before he went he had a talk with Air Hall in reference to speculating in trust lands. He told Air Hall tlmt if he saw anything to buy it for him, or take him in as a partner. He trusted on Air. Hall’s judgment in such matters. Air Nolan acted as his (witnesse’s) sloicitor, but had not liis power of attorney. AVheu ho returned lie heard of the blocks of land in quesa half share, while one quarter each tiou. He was told that Air Hall had paid Air Nolan a cheque for his share. To Mr. Hutchison: He first heard that lie had become interested in Alaraetaha while lie was ill London. He heard in October that lie had, through Air Hall, acquired an interest in tliis block. He remembered meeting Air Sinclair of Tologa Bay in London. He only met Idm in a very casual -way ,and was certain he did not. tell him that he (witness) and Air. Hull had arranged to got Alarae-

tuba, or that they had acquired that block- lie was not in the habit of tolling Mr Sinclair his business. Ho could not lnivo told him about tlio land because he had: not then heard. As a matter of fact ho had not told Air. Sinclair that ho with Hull had acquired an interest in the block. t .lames AVrqy Nolan, barrister and solicitor of Gisborne, said he was the solicitor to the East, Coast Trust Board and ho also acted for Alessrs Hull and Clarke. Ho did not know of any negotiations between Air Hajl and tlio late Air Harding, a member of the Board, in regard to tlio Muraetalia blocks. Ho had not up to that timo, any joint speculations with Mr Hall. lio first heard of the contract between Mr Hall and the Board when Mr Coleman came'Lin to - , the office to sign the agreement. Am. Hall naiil a cheque ns deposit. Ho did not know any more of the matter until ho received instructions to draw _up a transfer giving Mr Clarke an interest in tho blocks. Mr. Hall was under tlio impression that ho (witness) had power of attorney from Air Clarke. AVitness told Hall that he did not hold power of attorney, but that he would lake a third interest himself, And when Mr Clarke came back the riiatter could be re-adjusted. This was tho first occasion upon which there was any suggestion that ho should share in. the transaction. Air Hall-agreed to this proposal, and the transfer was drawn up in his (Mr. Nolan’s) name. Air Hall paid for a two-thirds interest and lie (Mr Nolan) paid for the half imeo. After his return, Air Clarke and himself- each took one-fourth and Air Hall the balance. A large sum of money had since been spent in improving the property. Mr Hall had no authority from! ’witness to make any purchase on his behalf. The transfer was afterwards perused by Mr Cornford, of Napier. To Air Hutchinson: He drew up the transfer deed for the blocks. Air Coleman informed linn that Air Hall had bought the blocks, but ho had no instructions from the Board to prepare the transfer. He had subsequently become interested with Air Hall in other land. He had become interested in part of Afangapoike under a lease from the Trust Board to Mr. Clark.

This closed the evidence for the defence. Air. Hutchison then desired to call evidence that tlio natives protested ' against the Board selling the land to anyone. The land was not mortgaged and the Board had no power to sell. The title did not give tlie Board the right to sell. His Honor :The natives did not protest ,either to Hall or Nolan, and their rights do not depend upon the protest. There is no need to hear tho evidence. I will not hear the evidence, but will take a note of the statements they would be likely to make, so that if 1 am wrong their statements will be accepted as if given in evidence.

Air. Hutchison then proceeded to address the Court on the whole case. The first aspect of the plaintiff’s statement of claim was, he submitted, that the Trust Board was not- entitled to sell, and that consequently the defendant took'nothing by the transfer of the title, as lie thereby merely stood in tho shoes of the Board, and was a trustee for the beneficial owners—tho plaintiffs. Air. Bell objected to this view of tho matter. Ho contended that the case, as disclosed by the plaintiffs’ statement of claim, was restricted to that.which referred to the fiduciary relationship of the defendant to tho beneficiaries, arising from his position as the solicitor of tlie Trust Board, in which the lands were vested. •Air. Hutchison said that the fiduciary relationship was the second aspect of the plaintiffs’ case, and did not exclude the other aspect, namely, that of the Board having no power to sell. liis Honor did not consider that tlio objection as to the power of tlio Board to sell was open on the statement of claim. He was unable to see it. Air. Hutchison observed that it was unfortunate his Honor did not see it, but, with the utmost respect to his Honor, he (Mr. Hutchison) contended that the aspect he urged was open on the statement of claim. He relied oil paragraphs 3 and 4, which alleged the vesting under t-lie East Coast Native Trust Lands Act, 1902, of the land in the Board as subject to the trusts affecting the same, and lie submi that this allegation imported a consideration of tho whole of’ the powers of the Board under the Act. He would contend that under the Act the Board could not sell lljind which was not subject to any mortgage to the bank—a fact wliicli was alleged', and which was admitted by the defendant’s statement of defence. His Honor could not concur. Air. Hutchison then.asked, without admitting tlie necessity for any amendment, that the statement of claim might be amended by alleging, in so many words, that the Board had no right to sell, and that- consequently the defendant could acquire no interest except-as trustee. His Honor considered that such an amendment would introduce 'a practically new case, which- might-involve new parties. It- might be that in such a case, the Commissioner, as the successor of the Board, might have to be a, party. Air. Hutchison contended that such an 'amendment would not necessitate any additional party. Tlie-iland would not re-vest in tho Board, or its successor the Commissioner. The defendant was decreed to be trustee for the plaintiffs, not for aiqyone else. Tlie legal ' estate under the Land Transfer Act was by the registration of the transfer from tlio Board to him constituted the proprietor of the land, subject to a trust in favor of tho plaintiffs. His Honor remarked that the defendant would not be bound to remain a trustee. , , Air. Hutchison replied that the plaintiffs would not desire that the should remain a trustee. I They would probably efi-’iit trustees (from among themselves, . \ Considerable argument ensued, lus 'Honor iu the end refusing the amendment, , • , , ~. ..... ■ Air, Hutchison asked that lus Honor would note that lie (Air. Hutchison) contended that up amendment was necessary, but that, if any amendment were necessary to raise the point as to the Board being entitled to -sell, s?ucli amendment was applied for.

This being done, Air. Hutchison then addressed the Court as to the evidence given m support of'tlie sale to Hull, observing that the defendant having been solicitor not only of the Board but of Hat!, tlie latter must be tiken to have hud notice of the position of the defendant as being in a fiduciary relationship to the plaintiffs. Air. Bell then addressed the Court. He submitted that the uiirontradirted testimony of Hall made it clear that the sale by the Board was to Hall,

'without tho intervention of the defendant, and that the 1 utter came into the purchase later on as an independent party, the fact of the transfer being taken from the Board in liis own name not affecting the position, but testifying rather to the bona'Jides of the transaction. His Honor said that the ease was a plain one, both in fact and law. The position was, that the plaintiffs make the important; allegation that the defendant (Mr. Nolan) was, as solicitor to the Board, in peculiar relationship,- and was debarred from taking a transfer of land from the Board. The defendant had shown that he had honestly discharged his duties as solicitor to the Board. Mr Hall had given evidence with absolute candour, which showed.Mr Nolan’s position in the transaction lu\d been independent of any connection with the sale of the land by the Board. The plain,tiffshud • practically withdrawn from the objection .as to the sale having been made by the Board to Mr. Nolan, and wished to rely oir the fact of tho transfer as evidencing a purchase from the Board by Mr. Nolan, but this could not displace the fact that Mr. Nolan hail had part in the sale by the Board, which had been to Mr. Hall. „Tliero could not he any possible ground for presuming that if Mr. Hall had sued the Board for specific performance of the agreement fie had made with ifg—tlie Board—there could have been any answer to tho action. Mr Nolan was not a purchaser of the •land, - hut of an interest in the land, from (Mr. Hall; the real purchaser. Any sale to Mr. Nolan by the Board was absolutely disproved by the evidence, -and Mr Hall was absolutely free to sell to wliom he pleased. Mr. Hall’s title was unimpeachable, ami consequently Mr Nolan’s position in the title could not be assailed. There was no evidence that there was anything behind the transaction, and the Court- was quite satisfied with Mr Hall’s evidence.

Judgment would he for, defendant Nolan, with costs 'upon a claim of £3,000. Air Hutchinson asked for a stay of execution so as to allow time to appeal. His Honor allowed the application.