APPEAL SUCCEEDS

Hokitika Guardian, 8 May 1929, Page 2

APPEAL SUCCEEDS

CLAIM AGAINST BANKER. FURTHER PARTICULARS. WELLINGTON, May G. In the appeal case of James v. Alabin, Ah’ Justice Herdman to-day delivered the judgment of the Appeal Court, which was that the appeal should be allowed. flis Honor said that in this action an order was made that the question of law “does the statement of claim disclose any legal cause of the action against the defendant companyP” ho argued before the trial. The learned judge in the Court below, aifter hearing argument, answered the question in the negative. He decided that the caso relied upon by the appellant consisted of a series of representations or assurances which came within the sixth section of the Statute of Frauds— Lord Tenterden’s Act—and that as, in Jiis opinion, these representations or assurances were made orally, no action based upon them could succeed.

“ Wiim the matter reached the stage of argument in this Court,” proceeded his Honor, “ counsel for the respondent did not seek to entrench himself behind that statute, or if he did so lie abstained from placing any serious dependence upon it. He preferred to submit that it was definitely established by the statement of claim as it stood that when the appellant launched his action he had no case for the following reasons: The action was one for fraud. In such an action the plaintiff must prove loss and can recover no more than his actual loss. In this case be claims £2500 for damages, this amount being represented by the payment which was made by appellant to the bank in December, 1927, to secure his release from liability under the guarantee, but it is argued that the appellant was aware of the respondent’s fraud when he made this payment. Counsel for the respondent submits that if the allegations contained in the sta foment of the claim were proved at tlm trial they would show that the appellant paid this money with a full knowledge of the lact that the guarantees under which it was claimed had been obtained by fraud, and tliat therefore the payment of £2500 was no more than a gratuitous contribution to an institution which, assuming the allegations in the statement of the claim to be true, was barred by fraud from recovering the money at law. In other words, lie argues that,if the appellant suffered any loss, he alone was responsible for it. As a specimen of legal draftsmanship the statement of claim is an embarrass, ing and confused production, but reading it through with great care we have been unable to discover any admission that when the sum mentioned was paid over the appellant was aware of the respondent’s fraud. For the purposes of the present appeal we must consider the case as if the appellant were able to give complete proof of the facts necessary to support his claim, including, in the absence of any admission to the contrary, the fact that he discovered, after he had parted with his money, that he had been defrauded. We can, however, find nothing in the statement of claim which is the equivalent of an admission that he was aware of the respondent’s fraud when he paid the bank £2500, nor can an inference that ho possessed such knowledge be drawn from the allegations contained in the claim. It Follows, therefore, that the point taken by counsel for the respondent hails. After dealing with the principles upon which the case should be decided, his Honor concluded“ Without expressing any opinion one way or another on the claim for relief, we leave that phase of the litigation and content ourselves by stating in conclusion that an examination of the statement of claim has failed to satisfy us thatany plain obvious reason exists for interfering with the litigation between the parties at this stage. The appeal is therefore allowed with costs on the highest scale as from a distance.” The facts stated to the Court were that early last year James issued a writ against Alabin alleging that the latter, whilst branch manager of the Hank of New South Wales at Grevmouth, fraudulently induced James and others to guarantee an account at that bank, of E. J. Bundle and Co., Ltd timber merchants, of Greymoutli, to the,extent of £37,000 in all, representing that Bundle and Co. was a sound and prosperous commercial firm, which he actually knew it to be in a very unfavourable financial position. In due course Bundle and Co. failed, and James was forced to pay £2500 before he could obtain release from Ins portion of the guarantee. Alabin, m turn, then filed a motion to set aside the statement of claim on the ground that it did nor disclose any legal cause of action. Mr Justice Adams held on the motion that as the representations complained o! were not made m writing, as is required by the statute, they could not form the subject on an action for damages for fraudulent misrepresentations, and further that there was no special relationship between the respondent and the appellant which threw on Alabin the duty of care in making these representations. The appeal was brought on this deoision.