THE SECRET CASE.

Dominion, Volume 4, Issue 1095, 6 April 1911, Page 6

THE SECRET CASE.

ARGUMENT CONCLUDED, : QUESTIONS BY BENCH:-REPLIES . BY BAR. INTERESTING POINTS, Tho appeal case Thomas Kennedy Macdonald, appellant, and Mary Rose, Janet Maekay Rose, Ellen Roberta Greenfield, and John Greenfield, respondents, was continued in the Court of Appeal yesterday, before Mr. Justice Williams (presiding), Mr. Justice Denniston, Mr. Justice Edwards, and Mr. Justice Cooper. The appeal is against the judgment of Sir Robert Stout (Chief Justice) and Mr. Justice Chapman on February 10 last. That judgment gave leave to respondents to issue a writ, of attachment against tho appellant (then defendant) for failing to comply with an order of tho Court of Decomber 22, 1910, for the payment of a sum of over .£3501. The case is that known as the "Secret Case." .Mr. Blair appeared for the respondents (tho plaintiffs in the original action), and Mr. Treadwell for the appellant (the original defendant).

Mr. Treadwell Continues. Continuing his argument, Mr. Treadwell said that tho secoud count of the action was, shortly stated, thus: That the order for the payment into Court was not a judgment of the Court. Inasmuch, as the Jurisdiction in attachment was applicable only to a judgment, the order of attachment in this caso should not have Ijeen given. It would be seen, on reference to Rule 392, that the,rule involved the existence of a'judgment. There had'been no final judgment in this action: tliero had been only an order to pay the money into the Court, It was true that under 'Rule 318 the order of the Court may be enforced in the samtt manner as a judgment of the same elTect would be; but the enactment of that provision did riot make ■the order a judgment. Indeed there was a decision of tho Court of.Appeal in England, on a similar rule to our Rule 392, ivith reference to the attachment of debts, that an order is not a judgment. He proceeded to qnote cases. Mr. Justice Denniston (referring to one case cited and to a remark of counsel): "Doesn't it seem to discount the value of a judgment, if a learned judge says he does not understand it?" Mr.. Treadwell continued, and Mr. Justice Williams said it was necessary to look'at our rules and not at the English rules. He referred counsel to Rules 336 and 348 on tho matter of the enforcement of judgments. ' Mr. Justice- Denniston:' "Your point, Mr. Treadwell, is that it is not a .judgment. But it is not required to be a judgment, for an order of the Court may be enforced as a judgment." Mr. Treadwell: "Rule 392 attaches tho liability of a writ of attachment to cases where there is a judgment." He proceeded to quote an analogous case of Cremitti and Crow, and to argue further on the legal aspect of Clause 392.. He contended'there "must bo a judgment for the recovery of' the- money before an , attachment could issue. , Mr. Justice Cooncr: "Is that so?" The ■Rule 392 imposed an order -to bring a fum of money into Court.

The Word "Judgment." Mr. Treadwell said the word "judgment" in. the rule was essential to tho jurisdiction of the Court. The mere fact thnt.on order may be enforced as a judcment did not make the same thing. Mr. Justice Edwards: "You are reading tho wrong meaning into the word 'judgment.' " Mr. Justice.Cooper: "Is it not a judgment, directing him to bring money into Court?"' '~„ .! Mr.Treadwell: "That may be, but !'* Mr. Justice Cooper: "This order is a'n order to do something, and it is not an order! And the act is not tho payment of the sum of money!" Mr. Treadwell: "It is the payment of a sum of money into the Court." Mr. Justice Cooper: "Upon the order made in 1010: if tho defendant had brought tho money into Court, tlio plaintiff could not have taken it up without an order. Therefore, it was an order to pay money into the Court. Ho was ordered to do something not being tho payment of a sum o£ money recoverable iu an action." Mr. Treadwell: "That does not seem to be recognising a differenco between a judgment and an order." Mr. Justice Edwards:' "Tho word 'judgment' is not used in the limited sense in which you .seek to show it." Mr. Treadwell: "I am supported in the analogous case of Crcnietti and Crow. Mr. Justice Edwards: "It is a mere question of the sense of the word, used." | Mr. Justice Cooper: "May not this be j the solution of it: Where there is a , definite judgment for money, the remedy ;is solely against the property and not * against the person unless there is a .judgment summons. When .the judgment is to bring money into tho Court the > only .remedy is to attach tho person to , bring it in—if the Court can do it." , Justico Donniston: "This is an order telling a man to do something. It is not a matter of money recovered in an action for debt or damages, but simply an order to do something, and if ho does not do it, some consequences are to follow." Mr. Treadwell: "The question is whe■■ther this order for payment into Court is a, judgment." Justico Edwards: "How. is the order to be enforced; not this particular order, but any order?" Justice Cooper: "Is it not so that unJcss there is authority to issue execution by writ of attachment an order could not be enforced?" •

"Reductio At! Absurdtim," Justice Denniston: "What can you do to enforce this order, an order to do something, to do an act? Your contention is • that tho order cannot be enforced. Is sot that a reductio ad obsnrdum?" Mr. Treadwell: "I should lvesitate to apply that term to the decision of the learned Judges I havo quoted, your Honour." Justice Denniston: "You are begging the question. If you urge anything, you are driven to contend that by Rule 392, although it expressly provides means for enforcing an order of attachment, an order cannot bo enforced. You say the effect of the rule is to make it impossible for tho Court to enforco it." _ Mr. Treadwell said it was curious that ,in a British case taken under an Act which contained similar provisions exactly to the rule 31S of the New Zealand (code, by which an order mav bo enj forced as a judgment, the decision of the 'Court wen,, in the same way as it did in' the case of Crometti and Crow.

A Test. After citing further authorities in sup. port of his contention, Mr. Treadwell adduced as a test that on this order no writ of sale could havo issued. It would nave been impossiblo to direct the sheriff to make a return of tho goods under the terms of the order to make a payment into Court. "There is no express rule in our code," continued Mr Ireadwoll, 'that-authorises the Court to mako an order to pay'money into Court." Justice -Williams: "Do you suggest that the Court has no such power?" Mr. Treadwell: "There is an express rule in tho English code, whereas there is none here. The English practico is that the order to pay money in must i grounded on an admission. Jusfico Cooper: "This order was grounded on an admission." Mr. Treadwell: "It is not, perhaps, material to my case, but proof apparently is not the essential. It is a question of admission." _ Justice Cooper: "This particular order is expressly made upon an admission." Concluding his argument on this point, Mr. Treadwell referred their Honours tn a lengthy judgment by Mr. Justice Chitty, which, he stated, dealt with the special set of rules in the English code seriatim and in detail,

The Question of Commission. Turning to the other branch of the argument with reference to the writ, Mr. Treadwell said this aspect of tho case introduced two points, tho inclusion nf interest in the amount ordjred .to be

into Court, and the inclusion in that amount of a further sum of money which tho defendant collected as division of a commission with another commission agent. . Mr. Treadwell quoted extracts from the l report of tho Registrar and 'accountant upon these points, which havo already been published. Citing English authorities, counsel contended that, inasmuch as this interest was not distinguished in the order, judgment could not go in respect of it. i''rom the decision in an. analogous case'it appeared, that. if the order which directed payment into Court did not distinguish the parts of the sum which represented interest from the parts which represented capital, no motion could issue. It had apparently been considered necessary in English practice to alter the form ot tho order which had l«en in force previously, so as to make it clear what was interest and what principal. This was not tho case here. Mr. Justice Denniston: "This order includes not only the =£210, but tho interest on tho .£240/' Mr. lilnir: "No, your Honour." Mr. Trcadwell: "We have been charged with interest en that amount right through tho action." Mr. Justice, Denniston: "That has been abandoned." Mr. Treadwell: "No, sir. It has been abandoned for the purpose of getting an order, but not- for the settlement of the account."

Mr, Blair Explains, Mr. Blair said the position was a little difficult to understand. There were, as far as tho original account was concerned, surcharges amounting to .61230 allowed as against the defendant. Included in that sum was this sum of .£2lO. The Registrar's report allowed interest on it at six per cent. AVhen they computed tho amount payable by defendant in accordance with the first report, they charged up interest at six per cent. But subsequently the' defendant applied to the Court claiming that he had from time to time made advances out of his pocket, and balances were then struck throughout the accounts from the beginning. Mr. Justice Cooper: "How much interest did you get on the ,£240?" Mr. Blair: "We never ascertained. As a matter of fact tho interest on the supplementary accounts was never taken into account." Mr. Justice Denniston: "Still, it was dealt with as an interest-earning sum on the account." Mr. Justice Williams: "Theattachment order was issued because he did not pay the. .£350-1." . Mr. Blair: "Yes." Mr. Justice Williams: "The amount on which he was attached for not paying did not include any interest at all." Mr. Blair: "Not a bit. Not a penny of interest was included in the J.'350-l." Mr. Treadwell, in conclusion, submitted that the money was Mr. Macdonald's until the plaintiffs had established a right to it. They had not at the time of the attachment order established any right to it by judgment, and it could not at. that time or subsequently be'said to be in his possession or control within the meaning of the sub-section. This would close the legal argument on tho question of law.

A Special Matter. There was a matter, however, he asked leave to mention owing to the publicity given to it. In the affidavit tiled by Messrs. Muir and ITinlay, they made certain statements as to' Macdonald not having been instrumental in postponing the sale of one of the assets in tho estate. He had satisfied his friend that these statements were incorrect. Mr. Blair said he could not accept tho statement in that form. Mr. Treadwell replied that ho had a document signed by those gentlemen showing, that his statements were correct. Mr. Blair thereupon traversed tho statements of both Macdonald, and Muir and Pinlay in their affidavits. In his affidavit Mr. Macdonald said that one of tho difficulties he had to contend with was tln.t tho owners of the Waipaoa estate wished to sell at a price ho thought inadequate. To that Messrs. Muir and Finlay in their affidavit said the suggested sale referred only to tho 1009 acres/ and that tho only suggested sale and subdivision of the property in the early years was made by defendant. That statement, counsel thought; rwas'in'tho main correct, but it had to bo .remembered they were speaking of tho early years of. the proprietary. In the year 1903 it was a fact that they had agreed to sell at i£70,000, so that during tho last three years of the proprietary they were agreeable to tho sale. Three years later it brought .£135,000. Throughout the proceedings he had been 1 absolutely fair to the defendant. Mr. Treadwell had . wished him to make this statement, and he had done so.

CASE FOR THE RESPONDENTS. On Mr. Blair rising to state the case for the respondents, Jlr. Justice Williams, after a brief.consultation with his fellow Judges, said they did not desire to hear argument on the first point as to 'the jurisdiction of the Court to issue a writ of attachment; but they were prepared to hear argument on the two questions: as to the interest, and as to. the =£210. Mr. Blair said his friend's point would be good in regard to tho sum of ,£240, if that money was not in defendant's possession and control. Justice Cooper: "If ho is not in possession of that ,£2io,. must not the writ be discharged because that amount is included in the order?" Mr. Blair: "No, your Honour, the writ has not been actually issued." Counsel added that a decision of the Court of Appeal in L'ngland had established that the Court, if necessary, could amend the amount of Hie order. Leave in this case had been given to issue the writ of attachment, but it had not been issued because defendant, by proceedings and possibly by concessions granted, had been able to delay the event. The reason was that tho form of tho rulos provided for the Registrar to bring defendant before the Court on a certain day. Being a matter affecting liberty, it would be inconvenieut if tho defendant were brought up on one particular day and the Court should be unable to deal with the case on that day. Tho present respondents .had been actuated by a desire to be as considerate as they could be towards tho feelings of tho defendant. Justice. Edwards: "You say that if a sum has been -wrongly included in the order we can amend the order?" Mr. Blair: "That is so, if it bo a fact (that any sum has been wrongly included), but we submit that it is not." In the case of Middlcton and Chichester, quoted by his friend, counsel continued, it was impossible to distinguish what was and what was not money in the possession of tho person against whom the order was .sought. The Court in tho case mentioned based its judgment on the particular that if it had issued a judgment the defendant would have been unable to ascertain how much he was imprisoned for. If the defendant desired to purge his contempt, he would not know tho extent of his liability. Justice Denniston: "Do you suggest that there is enough in the order to carry it without interest, and that the order could be supported,without interest?" Mr. Blair said it was not desired to get an order en that basis but in the judgment of the Lower Court consider: ablo weight was given to the fact that the order of December 22 was for a limited sum, no mention being made of interest. Further Questions. Justice Williams: "Does not., the writ of attachment go because he /.(appellant) disputed an order which had- never been made? The order was that he should nay JJ3GS7 3s. 3d. into Court." Mr. Blair: "It is a fact that the attachment has never been ordered with respect to disobedience of the whole order, covering this j;.3(i00 odd. We have never asked for attachment with regard to the whole of the order and the attachment has never been issued." Justice Williams: "Is it not possible— I admit that, looking at the circumstances it is not likely—but is it not possible that if he had been ordered to pay t C3SJI ss. 9d. (with interest deducted), instead of .£,'1617 3s. 3d., ho would have paid the amount into Court?" Mr. Blair: "Answering that, I should say that it has frequently happened in England that the Court has refused to make an order for the whole amount in the original order, and has granted an attachment with regard to a part." His friend could not rely on a contention that, because the original order included a sum other than that which the attachment was allowed to be issued for, that vitiated the whole of the attachment. In an English case quoted, whero a writ of attachment had been refused, it would have been impossible to-state the amount for which the attachment had been issued,"

Juslice .Denniston said ho took it tlie point raised by .Mr. Justice Williams was as to whelher, if any part of an order given was wrong, it could be amended by throwing out that part in the order for attachment. -Mr. Blair said he proposed to submit an authority which he hoped would satisfy the Court that Ihe point raised by Mr. Justice Williams was of no avail. The order was not bad, counsel added. It was only as to methods of enforcing it that dilference could arise. Justice IJenuistou: "There is an order to pay, disobeyed on tho ground that it directs him (appellant) to pay something that he cannot be attached for not paving." -Mr. Blair: "It is contended that the order must be confined to moneys absolutely in the possession or under the control of (he defendant. AVe submit that authorities do not support that contention." Continuing his argument, counsel said there was no reason, in principle, why, when a person was ordered to pay a limited sum of money and had pari of that money in his possession as a trustee, it should not be made the subject of an application io have that part payment enforced in a particular way. Mr.'Justice Williams had suggested that if a man was asked to pay, say, J137C0, he might refuse, although, if he had been asked to nay .£"500, he might have dona it. But, as "their Honours would see, the application for attachment must proceed first of all. You could not get leave to apply for a writ of attachment until the person concerned had been apprised. He, therefore, had an, opportunity then of opposing the application. He was entitled to be heard then, and he was entitled to be heard again when he was brought up on attachment. "It is submitted," said counsel, "that a very great inconvenience would arise if wc had to wait until we had ascertained that the money had been spent, and then inquire -how much is or is not enforceable under a judgment, and then go to the trouble of getting a further order. It is submitted that it would be a very great inconvenience indeed if, in framing these orders, we always had first of all to limit them to moneys which may or may not be a subject of discretion' (on the part of the trustee), may or may not be moneys in his possession or control."

The Matter of the £210. Mr. Blair referred next to "the interest or commission of ,C 210" paid by Leary. Mr. Justice Denniston: "That is commission." After citing further cases, Mr. Blair contended that what lie had argued should stand in regard to a'distinction to exclude that part of the order which was not money in (ho possession or control of the trustee. Referring to the branch of the argument in which commission was paid by Leary to Macdonald, the facts were not exactly as he understood Mr. Treadwell to say. What really happened was shown in the affidavit.

Mr. Justice Cooper: "The report showed that -£210 was a' 'sum which Macdonnld claimed from Leary for obtaining the consent of Macdonald as trustee oi' the Greenfield Estate to the purchase by the estate of the share of Lockio in ' tho Waipaoa Estate.' ..."

Mr. Blair: Mr. Macdonald had made it a. condition of the sale, that he should get half the commission. It was received when he was acting as a truster in tho Greenfield Estate." He contended Macdonald had got a commission which should have gone to the estate. lir concluding, he contended the order made hy tho Court should stand, and that his clients were entitled to attachment. Tho order had not been attacked on meritorious grounds; the objection had been.purely a technical one. The reasons given in the Court below were sound, and the judgment a proper one.

MR.. TREADWELL REPLIES. Mr. 'f read well said there had been nothing in the order by which the interest was distinguished from the general fund. It was, he held, essential that there should be this differentiation ,on (he question of interest. He relied upon the cases he had quoted for this contention. The legislative commentary on tlie matter when the rule was altered seemed to make it clear that, when the order was made there should be a differentiation between, the interest and principal—it seemed to suggest that all detail should be set out when an order was made. He asked that the apoeal be allowed, and the order discharged. DECISION RESERVED. Mr. Justice Williams: "Tho Court will take time to consider." Mr. Treadwell asked for a stay of the writ. The Chief Justice had granted a stay, until, the end of the first week of the sittings of the Appeal Court. Tic asked for a stay until tho judgment iwas given. ' Mr. Justice Williams: "There will be no objection to a stay until the judgment of the Court is given." Mr. Blair was quite agreeable to this.