PARTY TO DECEIT

Dominion, Volume 25, Issue 169, 13 April 1932, Page 5

PARTY TO DECEIT

Architect and Engineer SALE OF STEEL BARS Appeal Court Decision In a reserved judgment delivered yesterday, the Court of Appeal reversed a decision given by Mr. Justice Blair in the Supreme Court m September last, in which Alexandei Stewart Mitchell, of Wellington, architect, was awarded £323/3/- damages with costs as the result of an alleged misrepresentation by Samuel F. Silver, of Wellington, structual engineer, in regard to the price of steel bars for the construction of a cool store for the New Zealand Trawling, and Fish Supply Co., Ltd., in Wellington in 1927. Separate judgments were given by the Chief Justice (Sir Michael Myers), Mr. Justice Herdman and Mr. Justice MacGregor. The Chief Justice intimated that Mr. Justice Kennedy also concurred that the appeal should be allowed. Allegation of Fraud. The original hearing before the Supreme Court arose out of an allegedly fraudulent and illegal agreement between Mitchell and Silver in regard to the supplying of steel bars for construction of a cool store. The New Zealand Trawling and Fish Supply Co., Ltd., brought action against Mitchell, to which he confessed judgment for £526/1/8, and subsequently Mitchell brought action against Silver for special damages £526/1/8 and general damages £250. Mr. Justice Blair gave judgment in favour of Mitchell for £323/3/- with costs, and it was against this judgment that Silver appealed, on the ground that it was erroneous in fact and law. The Chief Justice said that in his opinion the judgment of the court below could not stand. The parties had chosen to enter into an illegal agreement to defraud the company, and it seemed to him that they were both to blame; that being so, the authorities showed that the court should not and would not lend its aid to either party to recover from the other. “Illegal Transaction.” Stating that he found himself unable to adopt the view taken by the judge in the court below, Mr. Justice Herdman said that in his opinion the evidence proved that one was as bad as the other. The essence of the matter was deceit practised upon the trawling company by both. Silver might have originated the scheme, but Mitchell was certainly a party to putting it into operation. Silver's misrepresentation was acquiesced in by Mitchell, and it was his acquiescence and participation in the plot which compelled him in the end to confess a judgment, part of which' he now sought to recover from his partner, in dishonesty. “There is no claim which can .be divorced from the illegal transaction, and the evidence proves that that transaction was completed. Mitchell comes into court with unclean hands and he is not entitled to succeed. The appeal should be allowed,” his Honour said.

Mr. Justice MacGregor said: “From the evidence it clearly appears that both plaintiff and defendant were jointly concerned in a more or less successful scheme to defraud the New Zealand Trawling and Fish Supply Company Limited. Now It is a general rule that a court of justice will not interpose actively in favour of a man who is ‘particeps criminis’ in an illegal or fraudulent transaction. The court will, as in this case, take the objection regarding the fraudulent nature of the transaction, even although the defendant himself does not. This objection, having now been taken, is, in my opinion, fatal to the case made by the plaintiff In this action, which accordingly must fail, with the usual consequences.”