SUPREME COURT.

Press, Volume LXIII, Issue 12975, 30 November 1907, Page 3

SUPREME COURT.

CIVIL SITTINGS. The civil sittings of the Supreme Court, was returned yesterday, before Mr Justice Ch.»'>imn. ALLEGED BREACH OF CONTRACT.

Joseph William Hands and others claimed from William Wood and Co. the sum of £11,850 damages for alleged breach of contract.

Mr Harper, with him Mr Raymond appeared for defendants.

Mr Gould, one of the plaintiffs, explained that Mr Baldwin, of Palmerston North, w]io had the conduct of plaintiff.*" case, had been unablo to attend, and tho Chnstchurch solicitor who had njireed to appeor was unfortunately unwell. He (..Mr Gould I was therefore compelled to appear, and asked that the evidence might he taken and the law points reserved till later. The facts of the- case vrorp. ho stated, that on Dei-oniber 9th, 1900, plaintiffs ente-red into an agreement -.vith the defcndints whereiinder, in consideration of an odvanco of £800 by defendants, the plaintiffs undertook to deliver, before tho end of the following March, 60 tons of "good fair" New Zealand hemp. Plaintiffs made breach of this condition, but in the meantime flax had increased Tα prico from £26 10s per ton (the price mentioned in {Tie- agreement) to £32 10s. Plaintiffs asktxl to bo allowed to sell in tho open market, and undertook to pay out of tho proceeds £300 of tho £SOO advanced, tho remainder to bo paid out of the future working of the mill. Defendants would not agree to this, but offered to make a further small advance to enable plaintiffs to get men to work the mill. and said they -would look to tho future working of the mill for the repayment of tho advance. On September 14th, 1806—about six months after plaintiffs' breach—they delivered 33 tons to defendants. As tho result of defendants' declining to pay wages and royalties, plaintiffs' license was cancelled, and they were practically ruined. They claimed damages representing the profit from the output for tho unexpired term of the license—threo years. Although not specifically mentioned in the agreement, it was understood that defendants would pay wages and royalties. The royalty was not payable until the flax was graded, whoa the cheque for the flax was paid. Tho partners in the original firm were Joseph William Hands and Charles Dixon Hawkins; he (Mr Gould) had joined the firm after they had entered into the agreement to lease the flazmill. Ho then gave evidence. Albert William Gould stated that ho was a member of the firm of Hands and Company, and was a barrister and solicitor of tho Supremo Court. Witn bis partners he had interviewed Mr Wood with a view to getting him to give them fin?incial assistance in carrying on flaxmilling operations at Cascade River, South Westland. Ultimately Mr Wood agreed to advance £800 to pay off the liabilities of plaintiffs, and this amount was received. Mr Wood read tho agreement between the plaintiffs and John Stevens, under ■which they held the flaxmilling area, and remarked on the fact that Stevens had the right to cancel tho license, and that it -would be risky unless ho (Mr Wood) paid tho royalties and wages, and "witness and his partners assented —it was so obvious that they could not carry on milling unless these were paid. That was tho reason why neither royalties nor wages were mentioned in the agreement. His Honour: Not a very good reason. '

Witness: I admit that, but it is one that men acting in good faith wero likely to make. Continuing, ho stated that he interviewed Mr Wood on Jnno 4th, 1006, and asked for £100 to pay the men'e wnges, but ho declined to pay until the hemp arrived. There were 26 tons of flax ready for shipment about this time* but the steamer Jane Douglas wae unable to enter tho river—her captain alleging that she could riot get in. Witness had to get a whaleboat from Bruco Bay for the purpose of taking the flax to Jackson's Bay for shipment. On June 13th he again saw Mr Wood and wanted an advance of £10 or £20 to pay his expenses to go South to endeavour to charter a stouiner, which Mr Wood declined to advance. On October 6th he again saw Mr Wood for the purpose of getting a settlement, but the mill-hands having had liens placed on tho mill, Mr Wood declined to do so until ho knew whero ho stood. Witness put in the correspondence which had passed between the firm and the defendant. To his Honour: Tho flax ou the area was the finest he knew in the colony. Tho damagfs wero baecd on tho estimated profits oil the flax that would have been produced during the unexpired portion of the lease. This with othor special damages totalled £ll,3oO: and they also claimed £600 special damages* He thought the claim was in excess of what he would have put it at. The damages wore calculated by plaintiffs' solicitor from witness's instructions, but ho assumed that those instructions had not- been properly undorSt< To Mr Harper: It was because of defendant's non-payment of £100 that all the damages neked for had arisen. It was probable that £013 was duo for wages when tho first lot of'hemp was delivered in September, IMG. If Mr Wood paid all the wages, would there have been anything left :•*— In tho ordinary course there would he, but wo had so much against us—it was tho worst season experienced on tno Coast for 30 years. But from a business point of view?— On strictly uusiness lines Mr \Vood was only justified in paying out of the balance of tho proceeds. He was to pay the creditors in tno list in the agreement?— Yes; but we had to alter that list in February, berauso we saw that there would not be the money in the hemp, as the hemp was coming out so slowly. This altered list, witness explained, included additional amounts not included in the list in tho agreement, Witness was cross-examined .it considerable length on the correspondence which passed between plaintiffs and defendants concerning the business. In the course of further cross-exami-nation, witness said that tho reason why he did not attempt to raise the. money to satisfy IMr Stevenss demands, -was that he considered it to be Mr Wood's duty to pay tho amount. He reckoned he could have borrowed the money; but in addition to expecting to sell the mill, he was expecting that every letter would bring the money from Mr Wood. He estimated that plaintiffs could have sold out to a radicate for £2500 or £3000. On October Bth, Mr Wood had written him suggesting several means whereby the mill could be kept going, but none ot these was adopted. Plaintiffs had assigned their interest in the mill and machinery, and so much of the proceeds of the present action necessary to pay 20s in the pound. Mr Wood appeared as a creditor to the extent ot £270. and the total due to creditors (aU incurred in carrying on the mill) was £2156. Hβ valued the plant at over £1000. Mr Stevens had sold his license of the area to Campbell Bros, for £400. If witness had drawn up the claim for damages he would have calculated on the amount that would have been produced if one stripper wae in use, and this would have reduced the estimated output by one half.

Charles Dixon Hawkins, another oi the plaintiffs, stated that he remembered, when the agreement with Mr Wood was qnder consideration, the question of freight, royalty, and wagec, was discussed, and Mr Wood had recognised tho importance of the royalty being paid. Witness estimated that with the plant at the Cascade mill, plaintiffs could have turned out.

if there were no delays in shipping, about 25 tons per month: the cost of production would be about £14 10s per ton. or. landed it Wellington, for £1B 10s per ton. On the average, he thought that £28 to £30 represented the market price. To Mr Raymond: The memo, (produced) Mas partly written by Mr Gouid, and indicated the amounts to be paid by Mr Wood out of the proceeds of the first shipment of flax to reduce the liabilities of plaintiffs. Mr Stevens was to be paid out of the proceeds of the second shipment. Messrs Murray, Roberts, and Co. had financed plaintiffs, but had been pressing for their money about the tinie the agreement was entered iuto with Mr Wood. To Mr Gould: He did not remember seeing tho notes on the memo, at the time it was submitted to Mr Mood, indicating out of what shipments certain liabilities should be paid. Joseph Hands, another of the plaintiffs, stated he was not present when the acreement with the defendants was made. He gave similar evidence to that of the previous witnesses. To Mr Harper: If they had got what was left of the amount received for the first shipment of flax after Mr Wood had deducted certain sums from it, they would have been able to carry on tho*mill. Tho amount not handed over was about £500Kobert Bryan, flaxmiller. stated that ho knew nlaintiffs' mill, and estimated that it cost to equip £1700 to £ISOO. This would include boats. Tho flax was some of tho finest he had seen, and a fair price for it would be between £2S and £30 . To Mr Harper: Ho (witness) had had flax-mills at the Haast and Okura, but had given thorn up owing to tho difficulty of shipping tho flax. Some timo before he gave up he had asked for an advance from Mr Wood, who had declined.

A. W. Gould (recalled by Mr Harper), stated that the surplus flax Mt [at the mill after the shipment of the J33 bales in September, 1906, was subI sequently shipped to Wellington and sold, the proceeds being devoted to paying tho two men left to look after the mill. This concluded the plaintiffs' case. Mr Raymond, in opening for the de- ; fence, said that on a variety of grounds the plaintiffs must be non-suited. Regarding the interpretation of tho con- ■ tract counsel submitted that the reI payment of defendant's advance of £800 was contemplated by the contract, and that there was nothing in the contract indicating the postponement of defendant's claim to that ot Mr Stevens. If the first shipment had been equal to £800, then defendant could have closed the transaction.' Defendant was in the position of a banker who advances against produce shipped to Britain, and could eithor demand repayment of his £800, or, in any circumstances, was entitled, unless stipulated to the contrary, to bo paid his advance out of the shipment. He contended that plaintiffs' letter ot February 21st, 1906, supported that view. In that letter plaintiffs wrote: "If yon can abstain from deducting anything but interest on your own account till the socond shipment reaches you, we will bo obliged." Any responsibility or obligation on the part of defendants did not exist till two shipments had been made. The shipment sent forward in September, 1906, coun&ol submitted, had no connection with tho two shipments referred to in the agreement which wero to be delivered by the end of March, 1906. In further argument counsel contended that another agreement had been substituted for the original one, and that this substituted agreement excluded any mention of payment to Stevens. His Honour did not think it would be convenient to deal with the caso as suggested by counsel. Even assuming that he was in favour of the viewadvanced by counsel, if ho were to decide erroneously off-hand, it might lead to complications. The Court then adjourned till H »•»• to-day.