THE RIGHT OF PURCHASE.

Taranaki Daily News, Volume LII, Issue 51, 25 March 1909, Page 3

THE RIGHT OF PURCHASE.

AX INTERESTING CASE. A ease of considerable importance to those holding leases in perpetuity at OJiura was hoard by bis Honour, Mr. Justice Chapman on Mr. T. S. Weston (Crown Solicitor) appeared for the Commissioner of Crown Lands, Taranaki, and Mr. MeYeagn, ot JMUiam, appeared for Mr John Blackball Bennii. the assiguve of a lease granted to .Mr. Bush. The ease was brought under The Declaratory Judgments Aet, 11)08, with a view to obtaining his Honor's interpretation of section 121 of the Land Act," 181)2, and section 20 of the Land Act, li/07 {now sections 133 and 177 of the Consolidated Laud Act of 1908). it: seenu-d that the land (244 acres) included in the lease, and the land comprised in other leases at Ohurn, hadi been withdrawn from sale by proclamation of His Excellency the Governor, there being large deposits of coal thevein. The Act of 1892, however, authorised the granting of leases of the surface only of the land so withdrawn from sale. The leases provided that the lessee should have no right or claim to any of the minerals, metals, or valuable atone under the surface of the land, and that the lessees' rights were limited to the surface of the*land so comprised in the lease.

Mr. Bennie, under the 20th section of the Land Act, 1007 (now 177 of the 1/and Act of 1908), a few months ago claimed the right to purchase tUc fee simple in the land, which, as counsel for the Crown contended, would comprise not only the surface, but all' under it (gold and silver, royal metals, excepted), and in the alternative Mr. Bennie claimed the right to buy the surface of the land merely. Sub-sections 1 and 2 of section 177 of the Act of 1908, before referred to, upon which Mr. Bennie asserted his right, road as follows:

(1) The owner of a lease in perpetuity shall have a right at any time hereafter during the existence of the lease to purchase the fee simple of the land comprised in the lease at a price equal to the capital value of the said land at the time of the purchase thereof. (2) The said capital value shall be determined by valuation or arbitration in the manner provlaeu m this section, and shall include the value of all minerals other than gold and silver, but shall not in- 1 dude the value of any improvements placed on the land during

the continuance of the lease. Mr. Weston proceeded to-say that as there was a difference of opinion between the law offices of the Crown and Mr. McVeagli as to the interpretation to be placed upon the two sections in the Acts of 1892 and 1907 (now sections 135 and 177 in the Act of 1908) the Attorney-General, with a view to doing ample justice to the lessees of tile surface land, decided to obtain a ruling of the Supreme Court thereon, the Crown defraying its own costs and those of Mr. Bennie irrespective of the finding of his Honor. The Crown Solicitor contended'that the Legislature, when considering section 20 of the Act of 1907 (now *77 of the Act of 1908), overlooked or intentionally ignored these special leases, and in effect confined the right of purchasing tlie freehold to the ordinary lease in perpetuity, the form of which contained no reservation as to minerals, etc. He argued that the fee simple must embrace the surface and everything under it (gold and silver excepted), and as under the Act of 1892 minerals were reserved for the benefit of the people, it would be difficult to suppose the Legislature in 1907 intended that the Crown should part with them. He contended further that the sections referred to of tie Acts of 1892 and 1907 (now sections 135 and 177 of the Act of 1908), when read together, would,.at anyrate, confine the lessees' ri'ght to purchase the surface; but seeing that there would be required two titles, one to the purchaser of the surface and the other to the Crown for the land under the surface, and seeing also that special provisions in the Crown grant for the surface merely would necessitate the prescribing a method fo" the removal by the Crown of the minerals, and giving the Crown the right of ingress and egress over the surface, a sale of the surface only would be impossible. Again, it would be unreasonable that a purchaser of the surface merely should in terms of sub-section 2 of the Act of 1908, before referred to, be compelled to jtay for the minerals which, as owner of the surface only, did not pass to him. He further argued that as the title must be taken under the Land Transfer Act, the Registrar-General might in the circumstances stated refuse to register a grant of the surface merely. llieve was nothing in the Land Act commanding the Land Registrar to register a title or that would enf power him to respect a trasfor of the surface only. Mr. McVeigh, in a forcible argument, contended that as section 20 of the Ant of 1907 (177 of the Act of 190!!) enabled tlie lessee to purchase the fee simple of the land comprised in the restricted lease, as the language of the sections was clear and unqualified, and as in fixing tlie price of tlie freehold or fee simple tenure all minerals ill the land other than gold and silver were to be taken into account, the Legislature evidently intended to include amongst those entitled to purchase lessees of land holding as Mr. Bennie is. Mr. McVeagli argued that should the Court hold the right of a lessee to purchase the fee •imple of the laud held under a lease of the surface merely was not contemplated and given by the Legislature, it would be possible for the authorities to sell merely the surface; that the right of ingress and egress over the whole or part of the property could be in the Crown grant reserved to the Crown ' n general terms, and that, following the principle laid down by the Courts in an action for specific perf l-mance of a-con-tract for the sr.l.- oi land, the vendor when unable to give all that he agreed to sell must convey so much as he is able to. Mr. McVea'gh cited several authorities in support of this argument.

After some discussion between his Honor and counsel, judgment was reserved.