SUPREME COURT, LAWRENCE.

Tuapeka Times, Volume VI, Issue 265, 27 February 1873, Page 6

SUPREME COURT, LAWRENCE.

(Before His Honor Mr. Justice Chapman * -•' Jo ' and a special jury.) Wednesday, February. 19. Clayton and Others v. Morrison and Others. Mr. Macassey and Mr. Mouat for plaintiffs ; Mr. Barton and Mr. Chapman for defendants. Mr. Barton stated the following non-suit points: Ist. That the evidence had not shown a case for an injunction ; 2nd. That the plaintiffs had not shown that they were lessees of the ground ; 3rd. That the lease is unlawful, being contrary to the Q-old-iields Act; 4th. That the land in dispute is not on plaintiffs' lease ; oth. That the plaintiffs have not proved that they are within the special class of persons entitled to hold $ lease under the G-oldfields Act, viz., that they are miners ; 6th. The conditions of the lease are not shown to have been complied with ; 7.th. That the evidence jias" failed to prove the injuries complained of. The question of mutual Support, Mr. Barton said, was to remain for the arguments of both sides. '" Mr. Barton, in opening his case, said that the declarations and issues put it that claims were entitled to mutual support. He intended to show that such an exposition of the law was fallacious. It was not the law of England; and even if were, such a law could not apply to mining of the description carried on upon \he Blue J§pur. It would be ridiculous to suppose that a miiier on the Blue Spur should leave his claim un worked till a neighbor bad worked out his ground. &uch V law, if it existed, would prevent the development of all mines similar to those on the Blue Spur, lie quoted the Goldfields Act of 1862 where it referred to mining. Mr]jrlacassey had alluded to the case of Hales and the Great Extended, in which judgment had been delivered. That judgment did not apply to the present case on two or three points. The difference between a motion for an interim iuj unction and a ease like the present wasexplainedbytbelearnedeousel. jury in that case, he continued, tad never come to a filial agreement, and no case in point had been decided £[ew Zealand. The doctrjne mentioned iv the Hales and Great Expended case, as dravyn from the law of England, ' clearly would not apply to gold mining in this country, and was not even the common law of ' England. The dicta of the judge in that case, however applicable \o land in its natural state, had no force id the present case. If a miner choose to reduce his ground to pulp, he could not compel claimholders surrounding Sim to 'maintain their ground solid in order <;hat he inighfc work out his claim. Jle '"'would quote a case bearing close analogy to the one now before the Court, but would first explain the difference heiween a freeholder and a miner. The freeholder was expected to keep the surface of his ground solid, ■whereas, a miner obtained his ground for the purpose of mining upon, according to the words of the Goldfields Act. ' The law was as broad as breadth "could make it. The freeholder is entitled to the subserviency of his neigh - bois to prop up his lnnd in its natural state. The learned counsel here explained to the jury the meaning of the terms subserviency and mutual rights. He called attention particularly to the Question of leaving land n its natural state. " Ii a man dug a pit, and subsequently another 'man built a house on the adjacent ground, if the ground on which the house was built fell in consequence of the pit, the owner was not entitled to damages, because his ground was] noi^ i n &s natural state — a greater burden than nature intended had been put on it. " A case singularly analagous to the present, had occurred in England." A, coal mine was abandoned and was "filled with' water.' Many years after ward's, the heir to the progerty built a number, of houses on the ifop of this abandoned and water filled coal mine. Subsequently' a neighbour opened a coal mine on his property, and %roke into this abandoned iniue, letting out all the \vater, in . consequence of which the land subsided, bringing down $c houses, built on %he surface. The case. was. brp ugn tin to* Cou rt. Th eju ry that i^e neighbor should have Ijeft Vufapient wAX to. act as a clam. The Court, however, afterwards decided that the neighbor, was bound only to. support dje ground in its natural state, that he W.HS entitled to mine up to his boundaries/ and was not bound to leave a wall as a cUrri— reversing the finding of the If row this it would be seen that absurd though it might be, if plaintiffs wished to take advantage of English law, they must leave their land solid, and not interfere with it in any way. T^ie declaration averred- that plaintiffs were in possession if- a claim described, as.inDijummond's plan, but by " a n\ore recent and accurate survey " made years after the original purvey,,, 24 poles were added to its area. By that, survey, all tnts boundary 1 lines, had oeen changed, and the of. --the whole altered. By what extraordinary right Mr. Adams

i had presumed to do this, he was at a loss to ' know. A case was recently \ heard in Dunedin between two Taieri fanners^ iv which a similar complication bad arisen— where the pegs differed from the deed. It was then held that the deed must be adherod to. They were here asked to do just the converse. Was there to be one law for the miners, and another for the Taieri farmers ? Mr. B/arton hero mentioned that the lease placed plaintiffs' claim in Mipros Gully, and alluded to two different classes of surveys, which were liable to inaccuracy from the commencement. By Drummond's survey all the claims fitted. It y/as impossible for a surveyor to make such serious mistakes as bad been imputed to Drummond. That surveyor repeatedly but vainly asked the Government to have the Blue Spur connected with some fixed point, as he foresaw the' difficulties like.ly to arise in the future. He (Mr. Barton) intended to produce evidence to show that Mr. Adams had altered the, position of every claim on the Spur. Adams bad no right to do this,- and, his doing so was the cause of all the litigation that had occurred. He foresaw any amouut of litigation in consequence of Adams' acts, which, in fact, made the lawyers non-working shareholders without liability in the Blue Spur. The learned gentleman said he found the' most; extraordinary difficulty iv obtaining plans from Mi*. Adams, and that while that gentleman was absent at Tapanui, Mr. Pyke, R.M., had the door of the survey office opened, which caused a quarrel between him (Mr. Pyke) and Mr. Adams. By the plans he (Mr. Barton) had obtained, he found that the plaintiffs' lease gave them 4 acres, 3 roods, 4 poles, and that Adams had given 4 acres, 3 roods, 27 poles. Pegs 53 and 16 fitted iv all the plans. Peg 5.3 was evidently the exact starting point of Mr. Adams, and 16 was also in the ground. Why then did Mr. Adams alter the bearings 10 degrees ? He quoted the words used by Mr. Adams in his evidence regarding the alteration of a survey. Mr. Adams had been the autocrat of the Blue Spur, but hia reign would cease from that day. Never again would he alter herrings. Adams' action, as he had previously slated, had cauLed all this litigation, which bade fair to rival the Tichborne case. Mr. Barton poiuted out, on a topographical sketch, g the ground purchased by Speirs, and commented on the evidence plaintiffs had given upon it. The Court at one o'clock adjourned for an hour, ou resuming Mr. Barton continued his address. With the photographs, plan, and topographical sketoh,, ne pointed out the ground exchanged by the plaintiffs and defendants, and expressed Ids intention of calling ample testimony at prove .that an exchange did actually take place. The ground which defendauts had been charged with bringing down, lie sa(d, had been constantly moving long before the defendants' blast of 1871, and its failing was iv no way attributable to that blast. Plaintiffs' blast of 1868 was, he would be able to show, the cause of the motion. That blast brought down plaintiffs' dam, and also the races, which plaintiffs had re-erected at their own cost, on ground, purchased from the Great Extended Co. for that purpose. Hutchison's evidence, taken under commission irTYictoria, would sbow this. The 1868 blast was stupidly put in, and had shaken the whole hill. It had compelled plaintiffs to purchase Keppel's claim, and they bad not been able to use powder since. The loosened ground naturally fell into defendans' claim. At present they were to be mulcted only in £6000, but there was no knowing whers this would stop. As the stuff came down they were to be further mulcted. As to the various estimates of the quantity of stuff run off and its value, they was utterly aud thoroughly unreliable. Some of the testimony was astounding. According -to it there was no ground like that in the Perseverance claim in New Zealand, A ustralia, or California, or had ever been beard of. Clayton's esti- ' mate of the stuff belonging to plaintiffs washed by defendants was 450 yards per day, aud- the value of it was ss. per yard. That rate of running for fourteen mouths pave a yield of £-11,175. The grots amouut Clayton showed by the books the Perseverance Company had actually obtained during a sinjjlar period was £5018 9s. Deducting from this the expenses stated by Clayton — 6d. per yard for labor, water, &i\, and 5 per cent, allowed for stones — plaintiffs would have, for fourteen months' work, the handsome sum of £443 to divide •amongst them. By Evans'* estimate the amount of gold the plaintiffs lost .was £45,550*— two-seventh shares in ',which could be obtained by t.!ie investment of a paltry £1000. Mr. Adams •had calculated that between July 9th and September 2fld, 9032 yards of stuf£ had been run off, and from actual measurement 148 jards a day. Talcing the former as the average for fourteen months, if; sjives a yield for that period of £64,590 ! Yet the plaintiffs claimed only a modest £600Q ! If defendants bad been working such stuff- they would have taken all they could get, and have put. on more men and water tovyash it. Supposing he stopped his case at this stage, and, refused to call, any witnesses, he would demand a verdict in his^ favor from the jury.

They were bound upon tbe evidence given by plaintiffs themselves to find such a verdict. In conclusion, he put it to them, after what they had heard Adams say, they believe a word of bis evidence ? He felt assured they could not!. Tbe court, at a quarter past four, adjourned to 10 a.m. on Saturday. Saturday, February 22. His Honor took his seat at 10 a.m. Mr. Barton objected to plaiiitinY lease being put in as evidence. , ' The following evidence was. given :—: — J. M'Leod Nicholson, examined by Mr. Chapman :— [ am a draughtsman, in the Survey Department, residing at Dunedin. I produce a field sketch, working plan, and record map of part of block 18. ' By Mr. Macassey— These maps were not prepared by me. Mr. Macassey objected to the witness stating what the documents put in were. Examination cqntinued : There is in the Survey Department, a record map without bearings - and distances. I knew Mr. Drummond, the former district surveyor. I was in the Survey Department at the time he resigned. I remember Mr. " Adams succeeding Mr. Drummond. I remember his making a survey shortly after hia appointment. This was the first survey he made on the Blue Spur. When he came down in the evening, he said — "Mr. Macasjey objected to this evidence. His Honor made a note of the objection.. Examination continued : Adams said, " I find all these surveys of Drummond's in a perfect n\ull." I said, ',' l'm not surprised at that, for Mr. Drummond told Air: M'Kerrow, hi my presence, that they are not correct. There is a letter in the letter book to that effect." I then said, " What do you intend doing. Do you intend to stick to Mr. Dxuniihoud's pegs." He said, "I can't do that, because the measurement is not there." I "said "If you don't do that it will lea,d to any amount of confusion." He said " I can't help that ; T have got the measurements put into my hands. lam only a servant, and can't alter anything." The measurements mentioned were those of a lease which had expired, and the owners of which had applied for a renewal under the new Act. A re-survey was necessary upon the renewal of a lease. I said " You had better represent the matter to the Government. Write down to Mr. Thomson and take the responsibility off yourself." He said " Well, I've got the measurements, and I canJt alter them.' 1 Nothing further was said about the matter. In suggesting to Adams to refer the responsibility to the Government, the responsibility I alluded to was that of marking out an area that did not exist on the ground. This would have been no consequence if it had been Crown lands, but as all the adjacent lands were held under lease, it involved serious consequences. In the re-survey of M'Xab's lease, Mr. Adams followed the measurements on the lease. He started from a peg agreed upon by all parties f and made his survey take in Hales' tail race. Mr. Macassey objected to this line of examination. His Honor said the evidence did not seem admissible until the documents on which the witness was speaking were produced. Mr. Barton complained that he could get no information or plans from Mr. Adams, and he applied for an adjournment till he got the documents he wanted. Mr. Adams said he had given every facility to Mr. Barton, and given him all information in his power. Sometimes he had opened his office after Jhours in order to oblige that gentleman, Hisllonor — What documents do you want, Mr. Barton 1 Mr. Barton — I don't know. After a few further remarks, His Honor instructed Mr. Adams to produce all the plans of the Blue Spur in his possession, which Mr. Adams immediately did. Examination continued by Mr. Barton — The plan showing the alteration I refer to is in the survey office, Lawrence. There was a warden's case over the matter, which resulted in the peg being shifted back to its original position, thus altering the'measurements on the lease. Mr. Macassey wished His Honor to understand that he objected to all this evidence. Mr. Barton said, if His Honor would erase from his notes all the evidencs Mr. Adams gave, with the exception of that referring to the particular claims in dispute, he would not pursue this examination further. His Honor — Very probably I shall. Examination continued — 1 believe M'Nab's case and another were the cause of Mr. Adams being instructed to pick up Mr. Drummond's pegs and correct them. [The witness searched through a number of plans, but was unable to find the one he referred to.] Examination continued — The torn plan produced appears to be Drummond's. The bearings and distances are in his handwriting. This was the only plan Drummond made with, bearings and distances. Drummond made a large map, but without bearings and distances. I and Adams used to pencil the bearings and distances from the descriptions in the leases. I have a large plan executed by myself in the Lawrence office ('plan produced). On it is shown the alteration in M'Nab's claim. It-is niade from Adams' survey. Mr. Barton proposed to put in the torn plan with the bearings and distances in Drummond's handwriting, and Drummond's working plan. Mr. Macassey objected, on the ground that the plans being Drummond's must "be proved- before being admitted. Mr. Barton said in spite of his objections, a great deal of evidence was given .by^Mr. Adams as to the inaccuracy of Drummond's plans. He now pr.oduf.ed those plans, Mr. Macassey would be content if Hia Honor took a note of his objection. Mr. Barton also put in the ends of the plan out off by Adams. The plans drawn by Mr. Trvine, referred* to. by Mr. Barton^ in his opening address, were put into witness' hands. Mr. Macassey asked the witness if he considered the plans the workmanship of a skilled and professional surveyor. Mr.. Barton objected, and Honor would

not allow the question to be put. The topographical sketch constructed by Mr. Irvine was put into witness' hands, and identified as a rough topographical sketch. Cross- examination continued — The letter in the letter-book produced is the one to which I referred. (Letter read). The large plan constructed by me" represents a condensed working plan of all the claims on the' Blue Spur that had been surveyed by Mr. Adams. 1 left Lawrence in January, 1871. The map is added to as fresh surveys are made. I made the plan about April 12th, 1867. It was kept in the office, and always on view. It was my plotting, from Adams' fieldbook. I know ne'ifly all tne defendants. During the 4 years I was in Lawrence, some of them frequently referred to the plan. Mr. Barton objected to this evidence. Mr. Macassey said he considered the evidence of the highest moment, and would press it. Mr. Barton to save time withdrew his objection. Cross-examination continued — I gave Mr. Cormack a 'tracing of the plan while I was in the Lawrence office. (Tracing produced and identified.) I' gave Cormack the tracing privately as a friend, not officially. Morrison frequently saw the plan. I cannot speak definitely as to the observations made by Morrison or Cnrmack. I will not swear that anyone said it was right or wrong. When men were transferring shares, they were in the habit of coming to the survey office to look at the plan— generally accompanied by a " bush lawyer." Drummond's plan was in the office at the time I allude to. Miners were in the habit of also referring to Drummond's old plan, principally because it showed the water races, which Adams' plan did not show. N By Mr. Barton — Drnmmond's plan was also referred to for the purpose of ascertaining whether Adams' survey agreed with Drummond's. A good many men took exception to the position of the pegs as laid down by Adams. On the tracing given by me to Cormack, there are no figures showing the length of the north-western boundary of Clayton's claim. On Mr. Adams' plan the' length of that line is marked 1124 links, and it is similarly marked on the record map. On Druramond's original plan the length of that line is marked 1062 links. In the tracing I gave to Cormack, Morrison & Co.'s claim does not appear, because it had not then been re-surveyed. There was no application for a re-survey of Morrison & Co.'s claim up to the time I left Lawrence. I believe every figure on the plan is mine except those in pencil. The plan is my plotting from Adams' traverse tables. The plans would not be-accepted unless accompanied by the traverse tables. When a surveyor makes a survey, he forwards a copy of the plan to the Dunedin office, accompanied by ..traverse tables, and a copy of the plan to the district office, also accompanied by the traverse tables. The regulation requiring traverse tables only came into operation a short time before I left the Lawrence office. I never saw the field book produced befoie.' Field books are placed among the records of the survey office, when filled up. I made my plan from a working plau constructed by Adams. I can plot from a fijeldbook, and check the accuracy of a survey. John Francis Herbert, merchant, Lawrence, examined by Mr. Chapmau. — I am the person named in the power of attorney, now produced, from Alexander M'lntosh, dated 9th April, 1869. I rt« collect signing the lease produced, but I cannot recollect the time. I signed it after obtaining the power of attorney. Mr. Simpson was warden of the district, and attested my signature . Cross-examined by Mr. Macassey — Herbert and' Co. held three shares in the Perseverance claim, which were sold to Mr. William Evans. About the time the sale was concluded, I visited both the warden's and survey offices. I did not mention anything to Evanß at the time of sale about an exchange between the Perseverance Co, and Morrison and Co., or a sale to Speirs and Co. of part of the Perseverance claim. Mr. M'Kmlay, my partner, transacted our business at the Spur, and I knew very little about it. Francis Nicoll r examined by Mr. Barton—l am a miner, resident at the Blue Spur, and one of the defendants in this action. I have resided at the Blue Spur since August, 1871, with the exception of about twelve months' absence at different times. I have had experience in mining since then. I was one of the party that took up the Perseverance claim and Morrison and Co.'s claim originally. I assisted to peg out both claims. Clayton, Fenton, Morrison, and myself took up the two claims. This was in 1864. These were all the names that appeared in the application. We gave M'Kenzie a share after the application was put in. We sold plaintiffs' claim to Clayton and M'Kenzie. When Drummond came up, we chained off the line from peg 77 to 78, shown on Adams' map. Then we clamed from 78 to 85. The 85 I mean is not the one placed by Adams, but the true peg 85. We then chained from 85 to about two chains beyond peg 16. Mr. Drummond made notes of these chainings, and was very particular. He had a theodolite with him. 1 understood the chaining business, as previous to the time I helped to chain ofl[the claim, I had been two or three months chaining in a survey party. We chained three lines, but no further. Four acres were applied for, and Mr. Drummond surveyed that area as near as possible. The date of that survey was in February or March, 1864. Afterwards plaintiffs took in mor,e ground, but I do not know the particulars. According to the first survey of the Perseverance claim, there was no. peg at 16. I wa3 present when the first survey pegs were put in. The date of the application for a lease' of Morrison and Co.'s claim was the 13.th June, 1864. A short time afterwai'ds, Drummond crone up, and we chained from 85a to 85-; from 85 to 12-; from 12 to 10 ;. from 10 to 98 ; from 98 to 99. We put in pegs as we went along. Speirs applied for some ground about the same time, and objected to the granting of Morrison and Co.'s application. In consequence of Speirs' > objection, Morrison and Co, agreed to give up 24. feet of their claim for a tailrace. Speirs, put a tailrace in that piece of land. The tailrace went about. 6o feet beyond 85 into Speirs' claim. At the place it passed 85 it was 24 feet to the north. Speirs and Co. worked their ground from that tailrace. They took peg 85 down at the end of

1864 or commencement of 1865. They worked up to 1866, when I bought the claim on behalf of Morrison- and Co. It has been in Morrison and Co.'s possession ever since. The Court adjourned till two o'clock, and on resuming, Mr. Barton said he would not be bound by the plaintiffs' list .of exhibits. Mr. Macassey suggested that at the close.of the case he should confer with Mr. Barton, and settle as to the documents put in. This course was agreed to. * Examination of Francis Nicoll contimied — There was no peg put in where Adams afterwards put in peg 16. I know nothing of peg 53. I do not remember, when chaining off with Drummond, that peg being put in ; only pegs 77 and 78 were put in at that time. None of the pegs put in by Drummond originally now remain. Npne of the pegs on the upper line have been replaced in their original position. Ido not know whether 77 or 78 have been renewed in their original pegs. Not one of the original pegs indicating the position of Morrison and! Co.'s claim now remain. Ido not know of my own knowledge anything of the purchase from plaintiffs by Speirs. Some of th.c plaintiffs' predecessors told me of the purchase from them by Speirs. The lease produced is that of Speirs' claim, in favor of plaintiffs, and the sale note produced refers to Speirs' claim. The lease is dated 27th. January, 1866. The sale note is dated 31st January, 1865. Mr. Macassey objected to any evidence of the sale on the following grounds — Ist. That the transaction occurred before the date of plaintiffs' lease, and the lease has, not been corrected ; 2nd, the memorandum ' ill writing is ' uncertain and void, being simply "for a piece' of ground;" 3rd, although defendants are possessed of Speirs' lease, there is no evidence that they are the assignees of the agreement between Speirs and the plaintiffs' predecessor, M'lntosh ; 4th, the present plaintiffs, or some of them, are assignees of the lease originally issued without notice of the agreement with Speirs. He would further object to the alleged exchange, on the ground that there is nothing in writing about it. Mr. Barton said when his Honor addressed the jury he would contend that the plaiutiffs had no lease of the ground they claimed, as it was clear from their own evidence that their lease described a piece of ground in Munros Gully. Mr. Barton put in a letter from William Evans to Robert M'Clintock. Examination of Nicoll continued — Defendants have been in possession of the piece of ground purchased from plaintiffs by Speirs ever since they purchased Speirs' ground. In February, 1865, I fir&t conversed about the exchange. T forget whether it was Morrison or Clayton, but one of them asked me if I would agree to an exchange with the Perseverance Co. Clayton was manager of Morrison & Co.'s claim then. Some time after the exchange was made, Clayton asked me to eomfe and look at the ground Morrison and Co. were giving, and that which they were getting in return. Clayton showed me a cutting on our ground, and said that that cutting was to be curried up to Speirs' boundary, and was to be the line of exchange. The cutting would strike Speirs' boundary 104 feet from Adams' peg 85. From the true positiou of peg 85, it would be about 70 or 80 feet. I know the true position of peg 85, because Speirs' tail race was 24 feet inside of Morrison and Co.'s ground north of it. Adams put in his peg 85, 6 or 8 feet still further north of Speirs' tailrace — that is 30 or 40 feet further north than its true position. The line of exchange was straight. The other end of it struck Morrison and Co.'s tailrace near the boundary is about 20 or 30 feet to the west of the point marked on plan " end of boxes." Taking the piece Speirs had got of the ground, the Perseverance Co. gave a little more than they got. We had not purchased Speirs' claim then. The exchange was for the convenience of the Perseverance Co. It was no advantage whatever to Morrison and Co. at that time. Clayton asked me at the time if I was satisfied. I replied to the effect that I was. The Perseverrance took up a cutting and sluiced the ground Morrison and Co. gave. I saw M'lntosh, M'Laren, M'Clintock, and I think M'Kenzie, working that ground. They worked in that cutting about 12 months from the time the exchange was made. M'Laren was a wages-man ; the other three were shareholders in the Perseverance Co. I could not say whether I saw any of the Perseverance Co. working the exchange ground after the date of their lease in Jan., 1866. They worked it to a depth of 15 or 16 feet. 1 took steps recently to test the original shape of the ground. I know the original shape of the ground, being on it, before it was broken up. The topographical sketch produced, represents fairly the condition of the ground before it was broken. I saw the sketch being made. If the exchange had not been made, the Perseverance Co. could not have worked their claim, so as to make it pay up to the present day. They got an opening into their ground, enabling them to work it up to Speirs'- boundary. This ground inclined to Gabriels Gully. The Perseverance Co. ran their tailrace up the line of exchange. The cutting I previously spoke of and the tailrace were the same. The Perseverance only worked a part of the ground they obtained by the exchange from Morrison and Co. The- line of exchange is shown on photograph 8 taken before the landslip. (Pointed it to jury.) On photograph No. 1, the cutting or line of exchange appears on the left hand corner. (Pointed out Speirs' tailrace on photograph). The heap of stones shown on photograph was heaped up by Speirs on the ground purchased by his party from the Perseverance Company". I know the true positions of peg 85, and peg 85a. The piece of tail race to the right of* the mound, shown on photograph 4, is part of the Perseverance Co .'s old tail- race. Our party put in signal pegs along the position of the exiShauge line. They were correctly placed, and are correctly shown, on photographs produced. The precipitous face is correctly shown on photograph., 2. The loose stuff shown thereon has fallen from above, some of it from Morrison Co.'s ground from point s;on photograph, peg 16, according to Adams. Stuff has also fallen from the Great Extended Co. The data which T gave Adams, and on which he based his calculations, were correct. The original surface of Speirs' old s claim was rather higher than 5. I gave

Adams the correct position regarding points 13, 14, 15 and 16. I gave him a point on each side. 13 is in its original position, and 'Adams could see for himself the subsidence that had taken place. The top of precipitous face is close to point 5. It is not 50 feet from point 5. At that point, -the ground is slipping into the Perseverance Oo's claim Photograph No. 2, shows were the ground is slipping in that manner. Photographs numbered ivojax 1 to 8 were put in by Mr. Barton. Examination of Nicolj. continued— l never in 1867, pointed out to Adams the pegs on either plaintiffs' or defendants' claims, nor was I present when anybody else did so. In April 1868, when Adams came, in company with Evans and Thomp-: son, to make a survey, I and Morrison objected to the position he assigned to peg 85. I told him that it was not the true position. He was putting in' a flax stick. Mr. Morrison pointed out the the position of peg 85. I don't recollect what Adams said, but he did not change the position of the peg. The position of the peg has, I believe, been changed since then further into Morrison and Co.'s claim. I remember also Speirs telling Adams the true position of peg 85 at the time. Grieve was not present. Grieve was manager of the Perseverance Co. I don't recollect him putting menjto work in the exchanged ground. It is part of the business of a manager to see that his men do not work beyond the boundary of a claim. In June, 1872, I had a conversation with Margetts. I told him. then that the boundary line was too far on our claim. In 1868, when Morrison pointed out to Adams the true position of peg 85, Evans waa present. I then told him about the exchange, andhesaidhe never heard of it before, and treate.d the matter with indifference. Evans had been about twomonthsin the company then. Morrison and Co. J s lease is dated about the same time as the Perseverance Co.'s. We received it before I saw Evans in 1868. In September, 3872, there was a consultation about the boundaries in Evans' house. I told Margetts about the exchange, and the error in Mr. Adams' survey. Plaintiffs seemed not to dispute the exchange, and the matter was adjourned till the following day, on the ground, where and when Evans and Margetts met Morrison and myself. Cormack joined us afterwards. Margetts took a tape line out of his pocket, and measured from Drummond's position 85a, to Adams' peg 85a. The distance was found to be 23£ feet. The ground about 85a was very little disturbed. We referred Evans and Margetts on the subject of boundaries to Docherty, Speirs, Grieve, and Clayton. Clayton was then manager of the Perseverance Co. He was not preseut at any of the interviews I have mentioned. 1 was present at a conversation which took place at Docherty's on the 2nd of October, 3872. Messrs. Docherty, Speirs, Evans, and Margetts were present. Evans said, "We might as well ask Docherty what he knows about this matter, while you are present." Docherty said, " Why come and ask me ;. why not ask Speirs or Clayton. They know all about it." Mr. Margetts turned to Speirs and said, " What do you know about it." Speirs replied, " I know all about it." Speirs said he had got 24 feet from from Morrison and Company, and had bought 50 feet from the Perseverance Company along the western line. Margetts interrupted him, saying " Oh that's Morrison's story over again." What 1 say now is what took place in Docherty's house. I don't remember, whether there was a map produced at that interview. Speirs said he thought the tailrace was about 80 feet from his cutting, on the line of exchange, and the cutting was about 30 feet from his workings. That would indicate to Margetts and Evans the distance of the line of ex-, change from Speirs' boundary. They seemed to understand it. At the interview at Evans' house a map was produced, on which Morrison drew the line of exchange. Peg 19 now stands, I believe, in its original position. The ground has settled down, but the peg has been replaced by Mr. Adams. Alexander M'lntosh was manager of plaintiffs claim at the time of the exchange, and Clayton was manager of Morrison and Co.'s claim. If there was any writing about the exchange Clayton would have charge of it. I don't know if when Clayton retired from Morrison and Co.'s claim he gave up all documents relating to it in his possession. "Morrison succeeded Clayton as manager of the claim. Morrison and Co. introduced the use of large blasts of powder on the. Blue Spur. \bout the middle of 1868, plaintiffs fired a large blast, which took down a large quantity of stuff. They, had a dam on their claim at the time. The position of the dam on Drnmmond's map is approximately correct ; but part of it ought to be marked on the Great Extended Co.'s ground. The dam was on the highest part o f plaintiffs claim . There that was no part of their clai m that I recollect was higher. The dam was higher than any ground shown on photograph 2. The dam was broken down by the workings below and the water. There have been no large shots fired by plaintiffs sincelß6B, onthatsideof the hill. The blast of 1868 shook all the centre of the hill. (Indicated on map distance plaintiffs were in at the time, and the distance bick the shot had effect). Tt shook the hill further back than the dam. The dam came down shortly after the shot. In a horizontal direction, the dam would be 100 yards back from plaintiffs' workings. I am experienced as to the effect of blasts. (Marked front of face where plaintiffs' I blast of 1868. was fired in the shape of segment of circle). The Height of the face was.about tOO feet above the bottom of the plaintiffs claim. The., dam was 200 feet above the bottom of their workings. The ground above was loose and slipping before the blast. It was loose and full of cracks, the first, time I saw it at the end of 1863 or beginning 0f '3864. Landslips had occurred on it in 1868. Plaintiffs had to bring water over it, to wash out the cutting, and they took water over it after the blast of 1868. I think I was storekeeping on the hill at the time the blast was fired. I remember a man named Barclay living on the hill close to peg 16. The ground cracked after the shot w,as fired, and he had to shift it. Barclay's house was on the north side of the claim. The plaintiffs, after the dam came down, ran a lot of surface off. I came back to Morrison and Co.'s claim at the end of 1870 or beginning of 1871. At that time the water used by plaintiffs was coming down defendants' tailrace. I

knew it was plaintiffs' water, .because when they stopped the flow of water intq Morrison and Co.'s tailrace shortly afterwards ceased. The ground watf cracked and loose, and the water came through the cracks down to the seam, over which it flowed into Morrison and Co.'s claim. The cracks in the hill were caused by plaintiffs' operations— ~ washing and blasting. The seams I mention meant the strata composed of hard sandstone, on which are softer strata, all dipping into Qabriels Gully. Wheri water gets down to the sandstone, it forces the softer stuff forward. T am a member of the Great Extended Company. The plaintiffs entered into the agreement with the Great Extended Company for the purchase of a piece of land tq put the races after the great blast of 1868. Plaintiffs' ground was cracked. Keppel'B and M'Nab's races were on the Perseverance Co.'s ground, and were bringing down that Company's ground. Keppel's race was never put into the cut on the Great Extended Go's ground. Keppel's ground was moving in 1868. I never saw it move before plaintiffs'- great blast. I believe plaintiffs' blast affected the boundary of Morrison and Co.'s claim. Before Morrison and Co.'s blast of 1871, the ground in the triangle was slipping. It has been slipping ever since I knew it. Plaintiffs' precipitous face is about 3 chains from Morrison and Oo.'s boundary. I cannot say that the taking away of that support had any effect on the slip. The blast of 1868 had effect upon it — it shook the whole ground. The blast must have affected it, because plaintiffs carried in a tailrace and oommenced to sluice behind the precipitous face. After the blast they turned on the water from peg 16 to 85a. The water ran along Morrison and Co.'s boundary from, 15 to 16, coming out at 85a. The ground was shaken up to peg 15 down to peg 85a. Plaintiffs kept their water in that locality up to the slip of 1871, or o,bout that time. They took down a good deal of; stuff with that water. They used a hose to carry the water over that ground, in order to prevent it coming away too fast. The hose was about afoot in diameter. Plaintiffs were using 40U inches of water. They had no right to run more than 40 inches. The Court adjourned till Monday. Monday, February 24. His Honor took his seat at 10 a.m-. Nicoll's examination continued — I think they were using 40.G inches of water, and they are only entitled to use 40 inches! (objection). Mr. Barton said plaintiffs were only entitled to one sluice head, and he (Mr. Barton) would contend that no further water ri^ht existed as against defendants, unless the proper steps had been taken and compensation made. Mr. Barton read Rule 25, par&*4 of Regulations of 1864. Mr. Macassey said he would argue that th.3 injuries 'plaintiffs coxnplained of were, due to the great blast. Witness — I do not think the ground would have cpnie down but for blasting,* and the action of wajber. My company, never turned water on the slipping ground, that is the disputed ground. There has been an injunction on us for, about five months, during which time, work has been altogether suspended in, our claim, near the workings. No water was turned on that would take any of the. slipping ground. Our tailrace has not been filled with any of the disputed soil since the injunction. I had nothing to, do with the experiments for testing the quantity or value of the stuff. The water in the tailrace would wash some ground away at the foot of the ground, but not in such quantities as if we had been putting water on with a view of working. The water of the plaintiffs' was coming on, the disputed soil, which would be sufficient to bring it down into our tailrace. Clayton asked me to put water over the stuff to wash it away. This was about June, 1871. I was then manager. To " ease " his ground is to take the. weight off the ground. He wanted us to/^ take away our ground at the back, * thinking that in that event his would; stand. This ground was at peg 16. I told him he could put water over his own stuff, but if I put water over, our stuff, it would make it a regular mess, of sludge, which I would have no control over. (Explained his meaning on photo? graph 2) I have never sent down more stuffthan the tail race could carry away. Ido not recollect the conversation of the 4th March, 1871, mentioned by Clayton in his evidence, referring to washing-up defend-, ants' tail race. About the 10th or 20th April, I had a conversation wifch Clayton. I told him he could have our tail race to., run off the sidling, if he gave us the average for the previous sixteen weeks for the. gold that w.as then in the tail race — about three weeks running. He said if we. shifted out the tail race it would be all. right ; what was down w,as not worth, talking about, although his mates were, complaining. I shifted the race as Clayton asked. A short time afterwards, he. came up and- complained again, and I said rather than have any bother we would buy the corner from him. This was about the Ist Juno. The corner referred to. extended between part marked " box-. es " on plan, to 16, and as far north as Speirs' boundary, (pointed out on photo 7 graph proposed line of exchange). Clayton when he wanted, to put water over the. faces, said he was afraid of bringing the" races down. That piece of ground must inevitably iall into the defendants' ground if they continue working. Clayton said;, - when I wanted to bay the corner of land, " Money will not buy it." Ido not recollect the conversation, spoken of by Clayton as having taken place on the 13th March. I do not believe a row took "place. I was in Dunedin at the time, and remained for about a week. Ido not recollect the conversation Clayton said took place, in. which he threatened to put -an injunction on plaintiffs' claim. I don't recollect any remark made about an injunction hi my presence. Had these conversations taken jalace, I would have re-, membered something about them. My conversation with Clayton about shifting our tail race, and giving them the old. one, occurred at. the time I was shifting our tail race, as I have previously stated. Clayton never expressed any dissatisfaction at the manner w,e shifted our tail* race or the new position we gave it. I da. not recollect the conversation between^ Clayton and myself, stated by Clayton to ¥ have occurred iv June 1872. 1 recollect when Evans, was in Victoria, at the e^ujj

of 1871, or commencement of 1872, Clayton saying he wished the question about thegroundcouldbesettledbeforehe(Evans) came back, for he was a t'roublesonie customer. I asked him what ground he meant. He replied the exchange ground. 1 said that for the exchange ground, we would not, as we considered it ours, pay a shilling, but if we worked any ground belonging to the Perseverance Co., we would pay for it. Certain ground of the Perseverance Co. ninst inevitably fall into defendants' claim if they worked. Between June 1871, and Feb. 1872, the ground was not being washed away systematically, as stated by Clayton, and Clayton never spoke to me of such being the case. During the time I was manager, I never tried to bring it down — rather to keep it up. I believe the ground is not payable. Defendants lost £2000 in working the ground adjacent. We worked that ground to get into Speirs' ground. I remember about the Ist June, 1872, Clayton came to me and asked if we could make an exchange. He offered the corner for a piece of Speirs' claim. I v told him that ground in Speirs' claim would be no good to him ; but I would try to get a piece of ground from the Extended Co. for him. The piece of ground belonging to the Extended Co. I intended to get is bound to fall into the plaintiffs' workings. I never told Clayton that the Great Extended would not give any of their ground. lam a shareholder in the Great Extended Co., and I had made arrangements for the piece of ground I proposed to give Clayton. There were no water races on the piece of ground I proposed to give. The ground in question was between Speirs' claim and the figures 36.30, and would go up to peg 15. It is - larger than described by Clayton. Mor/W>- rison and I went to point out to Clayton Jl the ground. Morrison and Clayton were quarrelling. Clayton said Morrison had better sell out. Morrison said he would if' Clayton would give a fair price. This was on the 6th June. Clayton told me that his party would not take less than twice what they gave. 1 told him I was glad he did not accept our offer, as some of toy mates objected to it. I remember Morrison saying to Clayton "Oh! you want to make a rise out of us to make up the exchange." I do not recollect hearing a conversation between Morrison and Clayton in which it was stated that defendants had no other way of working. I do not recollect that afterwards Clayton threatened an injunction. The tailraces are about correctly marked on the map produced. I think Morrison's tailrace ought to be a little more to the right. (Marked correct position, and pointed out situation of the blast of 1871.) In that blast 68 2olb kegs weie put in the lower and 54 kegsiu the upper drive — Jl3 in all. There was not a great height immediately over the blast. (Pointed out on photograph No. 1 position of blast and place where pcnviW escaped ) The nearest point of plaintiffs' claim, to tlublast. was distant 60 feet. Ido no T know if any bearings were taken of the tunnel. Morrison superintended its construction "I had several conversations with Jenkin Evans, and cautioned him Beveral times about the manner he w.is allowing the water to escape from the flumes. That water went over the broken ground, forcing it down. On one occasion I refused to allow Evans and the manager of the Waipori Co. to run w.ater across until they, had repaired the flumes. The conversation repeated by Jenkin Evans in his evidence took place between Clayton and myself. When I was putting in the boxes, I don't think Jenkin Evans was present. We never ran water at point 3on photograph. If ground fell at that point, it was not through defendants. The conversations reported by Evans as having taken place at the interview on the claim are mostly _corrt«t. In the interview at Doeherty's, Mr. Evans' version of what took plac& was correct, with the exception that Speirs said 110 feet of ground instead of 80 feet. The height of the face in Speirs' claim affected the stability of the ground. Speirs' face was 50 or 60Tfeet in height. The face struck the boundary of the Perseverance Company 30 feet from, the line' of exTrerise's statement of the direction of the blast is incorrect. I never said to Trerise that I could not put a shot 20 feet to the left of the tunnel because the ground there belonged to Clayton. I remember being on the ground where the races are, in June, 1872, after a severe snowstorm. I noticed that' plaintiffs' was leaking in a dangerous manner, and there was a water hole on the top of the loose stuff. The ground has been constantly forced forward from these causes. I complained to-.Jenkin Evans about the dangerous state of his party v s race. The support of the races, including plaintiffs', -were gone for a length of 24 feet.. The water used by Morrison and Co. did not pass over the place where the pool was. I cannot specify the races which were leaking. The supports of plaintiffs' race had gone then. I would not allow, them to put more water through until they replaced the supports. I remember conversing with Adams on the subject of the quantity of ground slipped from plaintiffs' ground. Adams said Evans and Margetts had said that 10 feet had gone at peg 5, and 25 feet , at peg 85, and that as far as peg 5 was concerned he knew they must be wrong. Adams also said he found the ground higher outside the- line of exchange than on his previous visit. He was then speaking of the ground between peg 5 and the line of exchange. He said there was more stuff on their ground. lam certain he said so. Thsre were two or three others present. From my observation I know the ground in question is as high, if not higher, than ip 1868 i The ground from Speirs' slipped down there, and also into, plaintiffs' claim. Tha ground slipping into our tailrace is made up for by the ground slipping into plaintiffs' from, Speirs' olaim. - It is impossible to prevent ihe ground in Speirs' claim from slipping into plaintiffs' ground. Since this action in November, 1 saw Adams, who 3tated that he for a lor.g time, wanted to survey a line from trig station D to the Blue Spur, but had hean waiting for some one to pay for it, ai-d he was glad we had done it. Defendants employed Adams to make certain calculations of stuff that had gone away. The data given to Adams were correct. Adams' calculation is that 81,701 cubic yards of stuff "have been run away by Morrison a%d Co. during 20 jnpni;hs t That is, ground from our own and Speirs' claim, exclusive of any that |q]U from, the disputed ground, (Adams*

calculation read.) The value of the gold we got f rom that 81,000 yards, is £9292 2s. 4d. Deducting the amount claimed by plaintiffs as the value of the dirt belonging -to them, we have sluiced the 81,000 yards for a yield of £292. Our ground is richer than any in the Perseverance claim, or on that side of the hill. We are working on the bedrock, where the richest ground is. I never heard of stuff on the Spur worth 5s 6d per yard. Morrison and Co. employed 9 men during the 20 months mentioned, and Clayton and Co. 5 men. Morrison and Co. used 450 inches of water. ~" The value of the dirt is about 2s 3d per yard. The expenses of our claim during the 20 months were £1658 19s for water ; £2702 18s B£d for wages ; £1210 14s lid for powder," timber, and tools ; total, £5572 12s 7^d. Adams has left out in his calculation the stuff that came frombetween peg 58 and ourtailrace. 1 believe during the 20 months, including the piece omitted, a total of 100,000 yards has been sluiced away. Margetts spoke to me before the action commenced in .reference to the ground coming in. I told him that no ground had fa.llen for 4 or 5 months previously. He did not appear to believe me. I told him I knew it, because if any ground had fallen into our tailrace I would have seen it. The water is not run during the night. I have never observed in the morning that stuff had fallen into the tailrace during the night. The tailrace is clear now, after standing for five months. If the ground was constantly moving, as alleged by plaintiffs, the tailrace would have been filled up. The Court adjourned, and on resuming at 2 o'clock, Francis Nicoll stated that he was Jiot in Dunedin on the 14th March, That day was wet, and he was very unwell. He left for Dunedin on the 15th March. He produced his 'miners' rights from 19th February, 1868, to 17.th February, 1874. He had miners' rights from 1802 or 1 863 to 1868, but had lost them. Cross-examined by Mr. Macassey — I was connected with Morrison and Co. from the beginning. Fenton, Morrison, and myself are the only original applicants now remaining. The other defendants came in afterwards. I will be able to tell when they came in from the books. I have been manager since 1871. FromlßG9 T was for two years storekeeping on the Spur, and did not take much interest in the claim. In 1868 I went into the claim as working manager. Previous to that I was manager of the Tuapeka Water Race. . I last saw plaintiffs working in the portion of their claim nearest Morrison's, in 1808, but I cannot say how long they continued to work) there. Their blast was fired in June, 1868. I saw water running there in 1869, but I did not see them work. They might have been working there two ypnrs before the blast of JS7I. Since that date the portion of the Perseverance claim nearest Morrison had slipped some. If it had not been for the Perseverance Co.'s blast o£ IS6B and the drippinoj of the water races the ground would not have slipped. T will not awear that our blast of 1871 had nothing to do with the slipping. After our blast Morrison never expressed to me fear that we would be made answerabte for damages on account of that blast. I do not know what evidence Morrison gave in the case, of Thomson v. Hales. The races came down after aur blast. Some of them were restored by us. We re-erected the plaintifi% race. They assisted us to re-erect their race. They placed some boxes. The reason why we re-erected the race was to get them further back out of our way, and to prevent law and trouble. We did not restore the races on account of the. blast of 1871, but simply to get rid of them. It cost us £500 to restore the races. The Waipori Water Company put through their race at their own expense. (Pointed out on photograph No. 1 the place where the tunnel for the blast was put in. ) The face that was standing opposite the tunnel to the left, came down from the effect of the blast. The night the shot was fired, the ground cracked back to Speirs' boundary. I will not swear that no. part of plaintiffs' ground has slipped into Morrison and Co-s claim. I believe a part of the ground purchased by Speirs from the plaintiffs came down, but I do not know how much. Ido not know how much has fallen from the alleged exchange ground. It is impossible to form any idea of the quantity that has been washed away from Speirs' purchase, or the alleged exchange, but what came from plaintiffs' claim can be measured, I complained to Jenkin. Evans of the water which I said came down in the end of 1870, or commencement of 1871. (Marked on plan, approximate place where plaiuiftV blast of 1868 was fired). We had some blasts — two or three— in one claim in 1871, after 1868. (Marked approximate position of a blast 6red in Sep. 3870). 40 kegs of powder, or 8 cwt. was fired on that occasion. I did not, till plaintiffs complained of the blast of 1871, complain of the water they were using. (Pointed out on No. 3 photograph, defendants' tailrace). If the ground was sound, the effect of our working would not be to bring the ground in plaintiffs* claim down. If the stuff was loose, the necessary effect of our workings would' be to bring plaintiffs' ground down.' The water in our tail race, would not of itself, bring away the loose stuff on the disDuted ground, and since the injunction,' loose stuff has not slipped, and did not do so for months previously. A quantity of ground has slipped down since we knocked off work, and into the tail race, but I do not know the quantity. This slipping is caused from the leakage from the race. The ground is not apparently slipping now, but it might be. Between 200 and 300 yards per day is a fair quantity for us to run off. We were working constantly j before the injunction. We worked- 19 months after Clayton complained, and I shifted the tailrace. The next complaint took place six weeks afberwards. We buy water from the Tuapeka Race Co. M}»self , Morrison, and Cormack are shareholders in that race. We use 450 inches. We mostly always divide the stream. I don't think the stuff washed from the Perseverance is worth much. For our own stuff I would think 2s. a yard all round a fair price. Clayton proposed that we should wash Speirs' ground to case the Perseverance ground. I offered Clayton our tailrace and to construct another for our own use. This proposal was made -on the 10th or 20th April. Qlayton refused the offer, and asked me-

to shift back our tailrace. By taking the water in at peg 16 and out at 85a, Clayton could work his claim with our tailrace. His water would have to come over a portion of our exchange ground, but it would not have hurt it. The reason he wanted us to shift our tailrace was to prevent it taking away the base of the Perseverance ground. I concluded the purchase of Speirs' claim on behalf of Morrison and Co. The memorandum of sale I first saw at the time of sale^ and it has been in Morrison and Co/s possession ever since, I know only what I have been told about the exchange. I never saw or heard of any writing about it. 60 or 60 of feet of the cutting shown me by Clayton as the exchange line remained till 1871. That portion was near Speirs' boundary. The cutting was the only boundary mark of the exchange. It was made the whole length of the line. The tailrace commenced below our boundary. It was made large to allow Speirs getting a good face. The whole extent of my experience in chaining was two or three months previous to assisting Drummond to chain off the claims. Speirs' land was surveyed some time after the tinie Drummond and myself pegged off the Perseverance claim. N o peg was put in at 19 . We did not chain from the point of termination to the point of commencement. Druminond came again shortly afterwards. Ido not know what he did. I was not a shareholder in the Perseverance Co. at that time. Drummond left the south east boundary ofj Morrison and Co-s claim incomplete on the occasion of his first visit, Drummond never chained off, to my knowledge, this south eastern boundary. The original peg 85 disappeared about 6 mnoths after it was put in. None of the pegs were in their original positions when Adams arrived. I knew when Adams came to the Spur the object of his visit. I and Morrison were present when he made his survey. I knew Adams wrongly placed peg 85 at the time. I never went to the survey office to look at Adams' plan. I have have seen Cormack's tracings, but there are no distances on it. We never complained to the warden about the shifting of the pegs. I considered that our ground extended up to the cutting, and that the cutting sufficiently defined the boundary. No one has bought into Morrison and Co.'s claim, since Adams made his survey. I knew nothing of the alteration of the boundaries made by Adams until the time the writ of injunction was served. I am a member of ' the Extended Co. Adams was employed as a surveyor in the case brought by that company against Hales. Adams in his survey cut off a piece of Stove's ground and gave it to. the Great Extended Co. I was a shareholder in Stove's ground, and complained to Adams, but it was of no use. The position assigned to peg 85 is all that was complained of by us. Adams completed his survey of Morrison and Co.'s claim after the present action commenced, lie furnished me with a tracing according to his own ideas. Mi*. Bartun objected to this examination. Cross-examination continued — Adams promised to furnish a map according to our showing, but did not do so. Adams lias surveyed Speirs claim. There is a great difference between Adan\s' and Drummond's survey. Ido not know whether Adams surveyed nearly the whole of Speirs' claim at his visit of 1868. We have employed Adams in this action — .having no choice. We knew that Adams made an affidavit in support of the injunction,, and have employed him since. The flumes carrying the water to the claims are together in three rows. In stating that plaintifiV race wanted support, I meant that it common with others required support. I believe the- Tuapeka Race assisted plaintiffs to. place support for the races. Speirs conlcl not possibly have got into his olaim without taking down peg 85. I did not say recently to Speira that if I had 18 months running where we were, 1 would not care for anybody, as I would be independent. T never made the statement Tr.erise imputed to me regarding the small blast to ease off the abutment. I never told Clayton that the run of gold ran through the corner, and that he was too far out. I never found a, peg in M'Cliutock's garden. I have searched for one. Three of the plaintiffs, Evan Evans, William Evans and Jenkin Evans, were searching there at the same time. I do not recollect finding a peg on that occasion. Ido not remember 'having found the peg produced then. I remember seeing the peg. I don't recollect saying " Oh, that's a peg from the fence," or anything in connexion with it. I know it is not - a peg in connexion with Morrison and Co.'s claim. M'Cliutock's garden is near peg 98. I do not recollect taking a pick in my hard and saying " there ought to be a peg hereabouts." Ido not recollect picking up that peg. I will not swear that I did not find this identical psg in M'Clintock's garden, pick it up, and throw it away. Re-examined by Mr., Barton — The pegs put in by Drummond in 1864 were manuka. Baltic timber was too expensive then to use for pegs. The Evans's were digging in Mrolintock'sM r olintock's garden first, and I went up to see what they were about, ft is usual when a miner takes up a piece of' Aground to peg it out. I can say that the peg produced is not one of Morrison's original pegs. The original peg 98 was situated in a place . where there was a d<epth to the bedrock of 18 feet of cement. There was a shaft alongside the peg 18, feet deep. Where Adams wishes to, place that peg the s\irface is not more than two feet from, the rock. Plaintiffs' wajter race is in connexion with their claitn.^ I don't know whether Adams was employed to make plaus by your direction. We employed Adams to, make a plan according to our showing. 1 was with Morrison when Adams, was pointed oitjb the positions of the pegs. Adams surveyed some of them a.", that time. (Some conversation, about plans). I made some effort to get the plan from Adams before the commencement of the lease, but I did not" succeed. The first I saw of it was in court. When I chained off the ground, I could not see from peg 77 to p&g"TB. (Showed on topographical sketch position of pegs 77 and 78, and where a ranging peg was required). I have no recollection of peg 53. (Explained on plan the mode plaintiffs could work their ground by the tail race defendants offered). The bottom stuff is the moat valuable. The stuff coining down from

plaintiffs' claim is top stuff. The tail race shown on photograph, is cut into the solid rock, and built up with stones on each side. 2000 inches of water would not cause it to overflow. The race is in the same condition as it was before the injunction. The stuff alongside of it is j very hard. If the tail race did overflow, it would not affect that stuff. It has not oome down, and is at present as hard as rock. The reason we re-erected and shifted the races back, was to get rid of of them, as they were too near our face. The races would not have come down if it | had not been for the leakage from themselves. By His Honor — The races had softened the ground before the blast. Donald M'Kenzie, farmer. North Harbor — I was a shareholder in Morrison and Co.'s claim, and afterwards in the. Perseverance Company. Ido not recollect the dates. I remember speaking to Clayton about opening a tailrace through Morrison and Co.'s claim. . I had very little conversation with Clayton. Alexander M'lntosh was manager of the Perseverance claim. I know Alexander M'lntosh's writing. The signature produced is his. (The writing, with signature affixed, was put in . It was the memorandum of the purchase by Speirs of a piece of ground from the Perseverance Company.) I recolleot M'lntosh and myself conversing about the exchange. Mr. Macassey objeoted, and his Honor noted it. Examination continued — M'lntosh said he would have to get an exchange of ground to make an opening for a tailrace ' into his ground. M'lntosh afterwards cut a tailrace through Morrison's ground, by means of which the Perseverance Co. got a face on their ground. 1 never said anything of the matter to Morrison, as M'lntosh used to transact the business. M'lntosh told me that he had marked tip a line ; that Morrison was to get what was on the right for what he got from Morrison. The ground was the shape of a jib sail — narrow at one end and broad at the other. At Speirs' claim, from the look of it, it would be about a chain. There were oiily three corner-pegs that I knew. The other one was shifted by some one. The shifted peg- was at the boundary of what is now %he Great Extended claim. It was north of the blacksmith's shop. I recollect the dam erected on the Perseverance ground. There was a corner of the dam in Speirs' ground. We cut into Speirs' ground to get a fall for our water. The peg was near the dam. It was uot moved during the construction of dam. The dam had not sunk when I left the Spur. The dam extended beyond the peg, about 5 or 6 feet feet on Speirs ground. In the exchange the Perseverance gave more ground than they got. We set no value on what we gave. I have no connexion with either of the companies now. I ceased to have connexion 6 years ago. I recollect a tailrace Speirs used before he sold out. It ran through Morrison's ground. It is to the north of Spars' claim. After the exchange, I worked at the march. The trench was cut five feet deep, in some places deeper. I know John M'Laren. He wrought with a man named Lawrence, and with Grieve in that cutting. The ground in the cutting was very poor. T visited the ground a fortnight ago. The ground is very much changed, but I could recognize the marches., 1 made out where Cumming's house was, and the situation of the dam. I had- a mark on the side of the hill, which has not changed, by which I identified those positions. From the position of the three tailraces I could make out the straight. I cannot see that plaintiffs have lost any ground. If any has been lost it is from Speirs' ground. The plaintifls' ground- was lower than Speirs*. From the way Speirs' ground was worked, any ground lost must have fallen, on the Perseverance ground. There was a row between Morrison and Co. myself and Clayton. Clayton told me my name was not in the list of applicants for the Perseverance Company. Clayton told me that he had told Speirs that there was a piece of ground not taken up. I gave £10 to Speirs tacomo to the Camp, in order to object to Morrison and Co. 'a application and the Perseverance Co.'s. Clayton did not say much to me about Murray's claim. He told me there was some ground below, and I told Murray, who took it up. I said nothing to Clayton afterwards. Cross-examined by Mr. Mouat—Moi*rison sold me his share for a shilling, in consequence of a quarrel. Nicoll also sold out. There was constant strife between Morrison and Nicoll, and Clayton and myself. Fenton pegged our Morrison's claim and applied for a leas.?. This caused the strife. The Istuff in the cutting would not pay for the water. Our object in working it was to get to ground between it and the dam. While I was in claim much better ground was never worked. I remember the sale of a piece of ground to Speirs. Alexander M'lnntosh sold it He was in the habit of ' transacting all the business of the company. The purchase money went into. :the funds of the company. I believe the ground sold to Speirs, was fifty or sixty feet ; I never measured it or went to see it. I may have said; to. William Evans, in November- last, that I know nothing about the sale, but on referring to some account books, I found that that sale had taken place. Re-examined — I was told that Morrison, Fenton, Nicoll and Clayton objected to my name 'being put on the Perseverance Co.'s- grounl^ but I was afterwards informed it was Clayton that objected. The Court adjourned till 10 a.m. on Tuesday.