SUPREME COURT

Grey River Argus, Volume XIV, Issue 1800, 13 May 1874, Page 2

SUPREME COURT

IN BAN'OO.

(Before his Honor Mr Justica Richmond.) HOKITIKA AND GrEYMODTH TRAMWAY Company (Limited), Plaintiffs ; and. County Council and Inhabitants of the County of Westland, Defendants. The following is his Honor's judgment in the above-named case :^- This is a rule to arrest judgment in an action tried before me at the Circuit Court, held at Nelson, in January last, in which the plaintiffs obtdned a verdict for LI 5,347 damages. The defendents were incorporated by the County of Westland Act, 1868. That corporation has ceased to exist, but its liabilities have, or are supposed to have, devolved upon the newly-created Province of Westland. The plaintiffs are a corporation under the Joint Stock Companies Act, 1860. The declaration, after averring the incorporation of the plaintiffs under the Joint Stock Companies Act, 1860, goes On to state in the second paragraph, '"That, under and in pursuance of the Gold-fields Act, 1866, Conrad Hoos, as delegate of his Excellency the Governor of New Zealand for the time being, on or about the 6th of May, 1869, as he lawfully might and could, authorised the construction by the plaintiffs of a tramway forthe use and benefit of the public, extending from the town of Hokitika to the township of Stafford in the said County, and within the limits of the Westland Gold -fields duly proclaimed under the said Act ; and granted to the plaintiffs the right to occupy a site for the s ime, half a chain in widrh, extending from Hokitika aforesaid to Stafford aforesaid, with area 3 for station purposes at convenient places along the aaid site, for the period of ten years from the Ist of May, 1869 ; and further granted to the plaintiffs the right to levy tolls upon all persons except foot-passengers using the said tramway."

The declaration then sets out, in luxe verba, an instrument which is relied upon as creating the right before averred to have been granted to the plaintiff company. It has not been questioned^ and may therefore be assumed, that the effect of this instrument, read in connection with the resolutions of the County Council appended thereto, is correctly slated in that portion of the second paragraph which I have just quoted. Next comes the third paragraph, containing the materal allegation on which all the argument has turned. It is as follows : — " That, on or about the said 6th day of May, 1869, +he defendants entered into a contract with the plaintiffs, that, in iconsideration, that the plaintiffs, would construct and maintain the said tramway, for the use and benefit of the public, the defendants would, in the event of any Government road being opened that should compete with the said t r amway to its detriment, pay to the plaintiffs reasonable compensation for the loss thereby." The. present action is for recovery of compensation under the contract thus alleged. It may indeed be conjectured, that the allegation contained in paragraph 3 is merely an inference drawn by the plaintiffs' pleader from the terms of the March, 1869, being the resolutions of Council before refered to. But on the face of the record (and beyond this the Court cannot look), there .appears to have bi »n an agreement wholly independent of these regulations. The words "the said tramway " identify the- tramway mentioned in the agreement with that which the plaintiffs are authorised to construct. Beyond this there 1 is no connection between the alleged contract and the terms of the regulations. For some reason which I am quite unable to conjecture, the legal advisers of the defendants have passed over, without denial, this most important allegation of a contract independent of the regulations ; and the Court must now take it, as an admitted fact, that the agreement set forth in paragraph 3 wa3 actually made by or on behalf of the defendants. It remaius open," nevertheless, to the defendants to question the validity of this supposed cuntiact upon any ground apparent upon the face of the record ; or to show that the same does not support the present claim of the plaintiffs. This, accordingly, at a late stage of the proceedings, the defendants are now doing by the rule nisi, which I am asked to make absolute. It was obtained by the AttorneyGeneral immediately after the trial in January last (at which the only substan-. tial question was as to the amount of damages), and having been made returnable after the vacation at Hokitika, was there argued before me on the 28th and 30th days «£ March. The grounds for arresting judgment as stated in the rule are four. .

1. That the contract set out in the 3rd paragraph of the declaration is void for uncertainty. 2. That the said contract, if not void for uncertainty, was not to be completed/ within one year from the making thereof, and is not purported to be set out in the words and figures thereof, nor alleged to have been in writing $ and that the said declaration does not aver that* the requirements of the 73rd section of the Coun y of Wes.land Act 1868 have been complied with ; nor can it be interred that tl c same have been complied with. 3. That the said contract is ultra vires, of the defendant*, and therefore not binding upun them. 4. That the. maintenance of the tramway in the said deplaration mentioned was a condition precedent to the recovery of the compensation claimed by the plaintiffs ; and that the declaration does not allege any excuse for the nonmaintenance :of the said tramway during the residue of the period of ten years. ' . Passing over the fir3t three objections, I proceed to : the consideration of the fourth, which asserts non-fulfilment of a condition upon which compensation is payable. -On examining the terms qf 'he alleged agreement, as staged in paragraph 3, it appears to be unilateral. The contract in effect is that ii} case the plaintiffs construct and maintain the tramway, the defendants will indemnify them againqt loss occasioned by the opening of Government roads. There is no obligation on the part of the plaintiffs to do anything. But if they do the thing: indicated, if, that is, they construot and maintain the ! tramway, the obligation of the defendant , attaches. The case is not one of dependent or independent.; agreements entered into by each of two,, mutually contracting

parties, but falls within the principle cited by the defendant's counsel in Pordage v. Cole, 2 Williams and Saunders 320, that if there be no mutual remedy plaintiff ought to aver performance of his part. The principle was held inapplicable in the particular case, but that it is one. of common sense, is fully admitted^ by Mr Serjeant Williams in his well-Enowh note upon the case, and has been continually recognised. In Roberts v. Brett, 25, j Law Joupial, C.P., 281 ; a decisioirafeer- | wards confirmed in the Exchequer CKamber, Lord Chief Justice Jervis says, " Where it is clear that the intention was to rely on the performance of the condition and not on the remedy, the performance is a condition precedent." Here, there is no remedy on which the defendants could rely to secure the performance of that which is the consideration for their promise. On this ground I am of opinion that the maintenance of the tramway, during some period, must be considered as a condition precedent of the plaintiffs' 'right to sue for compensation. The declaration is framed conformably with this view of the nature of the contract ; for it avers, in paragraph 4, that the plaintiffs " constructed and maintained the said tramway; in accordance with the terms of the said agreement." The defendants have not traversed this averment ; nevertheless, they now contend that the condition precedent manifestly cannot have been performed, inasmuch as the agreement; is to be understood, as stipulating 'for the' maintenance of the tramway for the full' period of ten years; that is to say until the first May, 1879. And I think the plaintiffs are not debarred from taking up this position. The statement that the tramway has been maintained in accordance wi f h the agreement is, in part, matter of law. Admissions' in. pleading do not extend beyond matter of fact. The defendants, therefore, are not precluded from contending that according to! the true construction of the agreement, the - plaintiffs are bound to maintain the vtramway until the Ist of May, 1879. If. the defendants are right in this, their omission to traverse the averment of > due per- - formance does not estop <:them [from now insisting that the plaintiffs cannot possibly ■have performed tho condition on whichtheir right to compensation depends. The question therefore remains open between the parties, during what term the plaintiffs were bound, as a condition prececlent of their right to recover, to have maintain^ l the tramway. Only two constructioiH%t: the agreement appear possible. - :i One is, that on which the defendants rely k f The other is, that upon completion: and opening for traffic of a Government road for - the whole distance betweeri^Hokitika and >; Stafford Town, ' the term during' which the plaintiffs were under the necessity of maintaining the tramway came to an end, and they were entitled to demand immediate payment of the stipulated compensation, as having fully performed the con-?. ■, dition upon which it was made payable! In choosing ; between these constructions it must be borne,in mind, that, at whatever time compensation is payable, at that same time all obligation, on the; part of the plaintiffs to maintain the tramway ceases. This is a consequence, of. the one-sided character of . the " r agreement! After paying compensation the defendants have no right of action for enforcing the future maintenance of the tramway, and lose all hold upon the plaintiffs. The agreement, indeed, 'is at an end. Now although as regards the} - defendants undertaking, itjappearsto me! more easy, perhaps, and natural, to read . the agreement as fixing the time of; payment at the opening. of the new; road— as if the language had been that the defendants would thereupon pay. Yet on the other hand, I cannot, avoid feeling the force of the argument, that the condition imposed on the plaintiffs.rof maintaining ■M the said tramway"— i.e./ the tramway which they are authorised itb work for a term of ten years— meansj ?pnma facie, that they are to maintain it for that term.W The public interest, which was the motive to the agreement on the defendants' part, might well seem to require the maintenance of the tramway m addition to any ordinary roads which might be constructed; ' and the language rather points at a competition for traffic between the two dif-l ferent means of transit. The loss which' is to be compensated seems to be 4 , at lesu^to include actual loss to be. sustained iff continuing to work the line after the • opening of a road. The public would have the benefit of such a competition ; whilst the plaintiffs are to be indemnified agaiust any loss which it might occasion. On tho whole the defendants' construction appears to be the better. I consider the purpose of the defendants to have been to induce the plaintiffs, by the offer of this indemnity, or guarantee, not only to construct their tramway, but to maintain it; and to maintain it not merely until a Government road was opened between the termini, but during. the whole period of the concession to the plaintiffs. It is. maintenance during the entire term of ten years, therefore, which is made the condition of compensation.

Assuming the original condition to have • been that the line should be maintained during the full term of ten years, it has. ; been suggested that performance might be ! excused by proof of the entire mutility of the tramway to the public after the opening of macadamised roads. t No suoh^care, as this is made by the declaration^ as it • ! ought to have been had. such a, state of "''' things been relied upon by the plaintiffs : . but even if the declaration had contained such an averment it would have ibeen; incapable of proof. -Tbe desertion of -the •< line fop a time would not demonstrate -' that the tramway could noti during . then • whole term, become.or be made.of use. The defect in the plaintiffs case is not one which can be aided by, verdict. A verdict will aid the defective statement of I a cause of action,, not the statement of a defective cause of action. See Serjeant Williams's note to Stenwell v. Hogg, 1 Williams and Saunders, 228 n (m). , If j have rightly construed the agreement as ' importing that the plaintiffs, as a condition precedent, are to maintain the tramway until Ist May, 1879,, it is qf course obvious that n.o cause, of action is disclosed by the declaration. . I must express my regret that the de- ' fendauts' haye used the present, mqde of ; raising objections which might have been? * taken by demurrer. Had the lattetSoduwe been adopted, all the expenses of the trial would have been aaved. Under. R. G.» ■-, 363 these costs will properly fall upon the ' defendants , and I shall follow,. thepre- (- cedent of .Cornish v. Forman; MacisN.Z Reports, 396, by refusing to the'defendants the costs of the present rulev - -^.^ Rule absolute without oorrtii ->;■