SUPREME COURT—IN BANK RUPTCY.

Otago Daily Times, Issue 3283, 14 August 1872, Page 3

SUPREME COURT—IN BANK RUPTCY.

MoNHAY, 12th Avfivttt. (Before His Honour Mr Justice Chapman.} EXAMINATION* OK WITXRiSEft. John Maclean.—We continue our report of the evidence of witueKseM summoned under the 287 th section of the Bankruptcy Act. Mr Barton, instructed by Mr Harris, appeared for Mr John Maclean; and Mr •fames Smith represented the Bank of New South Wales, creditors, at whose instance the summons was obtained. * Questions were submitted by Mr Smith, and answered by Mr Watsou Shaman as follows :— Had John Maclean an interest in the Puketai Station ? Yes, he had, at oiixj time, a one-third partnership with myself. He sold it to me. Do you recollect his bringing an action, in which iic claimed to be entitled to that share in virtue of a letter you had given to him, promising to re-sell it at the same price that you had given him for it? Yes, he entered an action, That action was discontinued ? Yes. When ? I cannot say. I have no memcrandum of it. Koine time this year? Yes. ■ How came that action to b»i discontinued t I made Maclean an offer to pay his expenses if he would discontinue tTie action. That was to save litigation. • < To him, personally,? So. What was the result of that offer ? It was Accepted. Übo accepted it ? His solicitor, I suppose. I may utate that I did not make the offer myse'f, Who did? I think Mr Driver did. On your behalf ? Yes. -. ■ Don't you know for certain that he made it mi your, behalf ? It was Mr Driv. r. This transaction took place in last April, did it not 1 I suppose it would be. I have no note of the date. I could not speak from memory. Then you arc certain it was Mr Driver whom you authorised to make that offer on your-bchnJf.T Yes. That the action should be discontinued on payment of expenses ? * His Honour : On the payment of a sum of i money, I supjwse.? : Witness : In the shape of law expenses. I Mr Smith continued : Was no sum of money mentioned ? £100. What for ; law expenses ? Yes, £100. Who was acting as your solicitor ? Mr Cook. And was Mr Driver acting aa your agent at the same time? Mr Driver was authorised to make this offer. Did Mr Cook know anything about it ? Mr Cook did not. To whom was' Driver authorised to make the offer? To Mr Harris. j Can you explain what took place afterwards ? The offer was accepted. How do yon know 1 Driver told me so. j The money was paid. Were you present when it was paid? Well, I paid the money to Mr Cook, and he paid it afterwards. Is that all you know of the transaction in regard to the discontinuance of the action which Maclean brought against you and others ? That is all. Mr Cook arranged the settlement, 1 supjioße. His Honour : And that implies that there was something else arranged by somebody else-.' ■ ' '■'■■■■'■''■'.:■ ■ '' : ■-.■■• '•' ■i' '; i f Witness : Well, there was a sum of money paid to Mr Macassey. I did not pay it, but it was paid with my authority. His Honour: For whom was it paid to Mr Macassey? Witness : On acrount of Mrs Maclean. Mr Smith : How came you to authorise the payment of that money ? Witness : It was a sum of money I wished Mrs Maclean to get; but neither Mr Larnach nor myself .recognised Maclean's claim. His Honour : Do you wish us to believe that.it was a sum of money you wished to (five to Mrs Maclean from motives of benevolence ? > - :. ■ Witness : Yes. Mr Smith continued his examination of the : witness :— •;■ <- .■,-•; * : ; How; came the sum of £1000 to be first proposed ? I wished to have the action withdrawn. Mr Larnach would not consent to pay anything except the £100, unless it was settled on Mrs Afaclean. You, on the other hand, were willing to pay something more,'l''understand? 1 was not willing to pay any more. But I wish to make an explanation. Larnach agreed to pay the £1000, provided it was paid to Mjth Maclean. * Out of his own pocket ? No. Whose money was the £1000 ? It belonged to the station. ? ; Was it out of the partnership ?, Yes. , With whom did he make this agreement ? With me. Was that the first occasion on which the payment of £1000 was mentioned to you? No. Wfell, how did the idea to make the payment for the benefit of Mr Maclean's wife and children first originate, no far as you know ? Lnrnach would not consent to pay it to anybody except Mrs Maclean. ■ ! His Honour: But if he would not do so, it shows that something had been said about paying £1000 to Mrs Maclean before _ that. There must have been some proposition to which liewouldiibt conßCtit.' ' Witness : I was willing to pay £1000 previously myself ; that offer'woe not accepted. Mr {Smith continued : Did you make ifc ? It was made. ' £. By whom? By tne. r To whom? His Honour : You were willing to pay £1000, and that its what Larnach would not agree to ? Witness : He would not assist me in paying that. His Honour : Unless it were paid to Mrs Maclean ? Witness : Unless it were paid to Mrs Maclean. Mr Smith continued :'. But; you . have stated that before the conversation referred to between you and Larnach, aa to his unwillingness to pay the money unless it went to Mrs Maclean, you had-'offered to pay the £1000? Yes. To whom?! To. Mr Stew/art, of Messrs Driver and Stewart. I mentioned the matter to Mr Harris as well. Stewart made Han-is a formal offer on my behalf. Did you speak to John Maclean on the subject ? Never at any time. What was the result of that" offer ? Tfc was neither refused nor accepted. Did Stewart get no answer ? He got' none to my knowledge. DM yon get any aits v'er ? None whatever. Now, is uot this the case, that Harris, on behalf of his client, Johu Maclean, said he would not take £ 1000? I never got that reply. Were you not informed that Harris, on.behalf of John Maclean, wanted more i No, I was not. . I daresay they would have, demanded more if they could have got it. I was merely answered that the matter was ! under consideration. -■ Well, when did you next hear anything i about it, and from whom ? The next offer was made immediately afterwards; an offer to pay Mrs Maclean*£looo. We agreed to pay that money, provided it went to Mrs Maclean. But you talk of an offer and an agreement lin one breath. Who mado the offer? Driver. You have said that you made a proposition -to Stewart or Harris to Avhich. you got no definite reply—merely that the offer was under their consideration ? Yes. ■ - • Why did you not wait until yon got an answer '! Was there any hurry ? There was a hurry, certainly. Stewart told me ho was afraid the offer would not be accepted ; that is all I know of it. - ' .-•--. What did you do next? I consulted Larnach, who agreed that £100 should' bo paid oh expenses, and that £1000 should be paid to Mrs Maclean. : ' -<.-..■ The proposal for settlement assumed' that shape—£loo for costs, and £1000 for Mrs Maclean ? Yes.

To whom, did,1 you communicate those terms, and through when* ? Driver. Then that was a portion of the communication with which. Driver was charged on your

behalf, to offer to pay £ 100 for costs and £ 1000 for the benefit of M>» Maclean ? That was the offer you transmitted through Driver, was it not? Ye« ; but with this understanding, that he did not recognise Maclean's chum to anything. Before that offer wa» transmitted, had not you been informed by Cook that Harris had positively declined to receive £1000 iv settlement of the action ? No ; all information was from Stewart. Did Harris accept this offer from Driver ? Yes. And yon know that £1000 was paid to Macassey to carry out the arrangement? Yes. During the time that these negotiations were going forward, you were aware that Maclean had recently passed through the Bankruptcy Court ? I was. Were you also aware that the Bank of New South Wales had threatened to claim anything he might receive, either by way of compromise or otherwise, in the action which was brought against you and others ? I got notice from Smith and Anderson afterwards to that effect. His Honour: After the action was commenced? Witness : After tlie agreement was made. Mr Smith : You were also aware that Maclean was liable to be called upon, tinder the Bankruptcy Act, to pay to the extent of IDs in the £of his debts ? I did not know that, Hugh John Maclean, brother to John Maclean ? was the next witness called. I Examined by Mr Smith : Has the sum of £1000 been received by you and your brother as trustees on behalf of Mrs John Maclean* Yes. From whom did you receive it ? I got the money from, the Bank of New Zealand. Don't you know who was the donor ? His Honour : Did you get a cheque? Witness ; No, I afterwards drew a cheque on the Bank of New Zealand. The amount was merely left with Mr Beal, and not deposited until we went there. Mr Smith continued :— Who left it ? Either Macassey or Harris. Don't you know it for a fact ? No. Has not either of them told you whether he left it ? No. What reason then have you for believing it was placed in Beal's hands by cither of those gentlemen ? I w.i» told by either Harris or Macassey that the money had been ! placed there. You learned from Harris or Macausoy that they had placed the money there? That they had placed the money in Beat's hands. Did they say why they did so ? That it was to be settled on Mm Maclean. Did they not give you any further account as to whence it came ? Had- you reason to believe that the money dropped from the skies ? No. i Very well, state the source whence you understood this money had come ? Mr Lnr- ■ noch. i A gift by him ? Ye 3. You swear you understood from Macas- - soy or Harris, that-this-was a voluntary gift from Larnach 1 I don't think cither of them stated that fact. Well, what did you learn from either Macajsey or Harris? I cannot say that I learned anything more than that the money was there, and that when we presented a fjropcr deed of settlement the money would )e handed over to us. I cannot swear that either one or the other ever said where the money came from. Do you know where it came from ? No ; nofc on my own positive knowledge. Not from your brother John Maclean ? Do you not know from information you obtained from him what was the source from which the £1000 camo? I know since well enough. Did you know when you were requested to go to the Bank of New Zealand and apply for it ? I knew it had come from Larnach. From hia Bank ? No, I believe I was told by Harris or Macassey that it came from Larnach. Ab a voluntary gift 1 Yes. Further than that you did not know or enquire ? No. James Macassey stated that on the Oth April Mr Laruach, one of tho defendants in the action Maclean ». Shennan and Others, called upon him, and stated that he would be glad if he (Mr Macassey), as a mutual acquaintance of Maclean,: and himself, would endeavour to bring about some understanding in connection with i the threatened proceedings against him- i self and Shenuan. He (Mr Macassey) ■ could only give the substance of what after- j wards took place, but substantially it, amounted to this: Larnacb. asserted, he | thought,.that he had been, ignorant of the ' arrangement made between' Shennan aud Maclean for the repurchase by Maclean of a share in the station, and that therefore he was not bound by it. He also stated that he had been advised by his .solicitors : that Maclean, had no possible claim, because Maclean having become bankrupt, the agreement to repurchase his share in the station, had been dissolved. Xarnach.put it as a preliminary ground that there, was no legal or equitable claim upon him. He, 'how*: ever/also'said that it was a very unpleasant busmusfi; that ho might bo'ibraggedj through the niire, seeing that a number of imputations had been bandied about, and that he would rather not have his name mixed Up in the action. He (Mr Macassoy) forgot whether \ anything in the shape of a distinct offer tfas made,, but some reference, was iniide to tye amount, and he told Larnach that if he (Mr Macassey) could make art arrangement between Maclean and himself he would be glad j to place; himself at his disposal. That; iuseir : view resulted in Laruach requesting hirii; to ! see Mr Harris, Maclean's solicitor. He (Mr > Macassey) saw Harris, and explained what ( had taken place, and also stated that if he (Harris), on behalf of Maclean, desired a personal interview, he would be glad to bring it j about. The result was that Harris and Lar? nacU IDCt fit bis (Mr Macossey's) office a few days later, wlu-n Lrunach rqxrated substantially what he had previously said ; that Maclean" had no cla-:n upon him ; that lie did not hold himself bound by the agreement made by Shennan ; that he had been advised Maclean had no claim ; but that rather than have the matter' brought before the Co art, he would l>e wilb'ng to endeavour to make some arrangement. •-. . Mr .Smith : Did Mr Harris acquiesce in that view of the law 'I Mr Macassey could not say. No dou'-t they were able to take care of themselves. LaruacU was evidently speaking under legal advice, and he dared say that Harris combatted everything necessary. However, Larnach repeated biibstantially what he had previously said to him (Mr Macassey), aud dually: stated that in order to prevent the matter coining before the Court, or his name being mixed np with it, he might I*; pre^ pared, as an act of grace, to recommend that something should be paid, but that twothirds would have to be paid by Shennnn, because he had acted without authority in the matter. The result of this interview was that Harris agreed to telegraph to Maclean to bring him to town, and effect an interview with him. - Maclean came to town a few days later, and ho and Harris met at his (Mr Macassey's) office. The whole matter was discussed, and Maclean declined to entertain the suggestion made. He (Mr Macaasey), however, should have stated that at the last interview, when Laruach. was pre^eut, £1000 was proposed. It arose in this way. Larnach had mentioned!*£soo, &GoO^and ultimately, he thought, £750, as the maximum ' amount he would pay. Harris said that tbat, was-altogether out of the question, but that if Larnach or Shennau would speak of £1000 and costs, he would be prepared to use :whafr iniluenctf "he had to-'procure its acceptance. Ultimately, Maclean declared that he would- riot' accept any such proposal,' but that >f Larnach and .Shennan would open their.mouths to the extent 0f.£3000 or-£4OOO, he would be prepared to talk to them. At any rate, Maclean's idea of what ought to be done differed so materiaUyiromthftppiniouof Larnach, that it appeared the matter would fall * through. Ho (Mr M-Acassey) pressed the matter , strongly upon Maclean that to him. it

seemed it would bo uselewj for Maclean to contest the matter with I-araach and ,Shchnan ; that it was doubtful, m the first instance, whether he would succeed ; and that assuming; ho gained all he wished, the probability was that the Bank of .New South Wales would come down upon him under the ten shilling clause in the Bankruptcy Act, and make him hand over what he received. Maclean, however, was apparently not influenced by what he (Mr Macaasey) said, and the interview- closed. A few days later. Macleau called again, atoue, bethought, regarding some otlier business, and then referred to this matter, and it was arranged that hcshould wait upon If arris. Atthisßubsequent interview, Harris urged upon Maclean what he (Mr Macagsey) had previously done, that supposing he was right, according to his own opinion, he would Ins simply fighting the battle of the Bank of New South Wales. That interview ended in his (Mr Maca/iscy's) being instructed by Maclean, in the presence of Harris, to me I^arnach, and conclude whatever arrangement he thought right— Maclean and Harris agreeing to be bound by whatever he might do.' He ought also to have said that Lornnch, on the first occasion of his visit to his (Mr Macas*ey'a) office, used similar language,—namely, that he would abide by whatever he (Mr Macassey) thought was fair between himself on the one hand, and Shennan and Maclean on the other. He saw Larnach a few days later, when he agreed to pay the sum of £1600, but stipulated, that the sum should Ihj paid to Mra Maclean. Lamach absolutely declined to recognise any claim on the part of Maclean. Ultimately, Laruach paid him (Mr Macaasey) £|(KJO in Bank notes, on the unttaretanding that it should bo deposited in the Bank of New Zealand in his (Mr Macassey's) name, as repreaenHug himself, and in Harris's name as representing Mrs Maclean. He also stipulated that it should not be handed over until it had been properly 1 vested. The drafc of. a deed of settlement was drawn up by Harris, ami it was submitted to .Wnach, but ho decline*l to beany party to it, thinking there was no occasion for him to be a party, and that perhaps the matter might eventuate in some proceedings hereafter. The Hank of New Zealand were afterwards authorised to hand over the money on the production of a proper trust deed, ,

Questions were then asked by Mr Smith, and answered by Mr Macassey, as follows:— After arranging that the money should be paid on behalf of Mrs Maclean, did you see John Maclenn 1 No, 1 ani certain timt I did not see him on the subject after the interview with him and Harris until long afterwards.

Had you an/ conversation with John Maclean after you had laid the money in the Bank ? I think not. To speak plainly, I was particularly careful in the matter. I foresaw the difficulty which has now arisen, and, acting as I was, between both of them, I wished to be vary careful. According to your arrangement with Larnach, the £1000 was to be vested for the benefit of Mrs Maclean. Was not it paid by him in settlement of the action ? 1 have no doubt it would not have been paid but for the withdrawal of the action.

It was part of the consideration ? Yon may put that as you plenne. I took it as a matter of common sense that the money would not have been paid except for the withdrawal of the action. However, Larwas particular in insisting that there was no legal nor equitable claim, and that he paid the money to avoid being mixed up in legal proceedings affecting him personally.

And the arrangement you made was in pursuance of the authority given you by John Maclean ? Precisely ; Maclean and Harris.

Ho having left the matter to your discretion ? Both Larnach and Maclean agreed to do what I might think fair ljetwecn them. Mi* Smith : That its all the evidcuce I have to offer, your Honour.

[We hold over the remainder of ourreport.]