AN OIL DEAL POVERTY BAY CASE. AGREEMENT NOT RESCINDED.

Evening Post, Volume LXXXIV, Issue 28, 1 August 1912, Page 4

AN OIL DEAL POVERTY BAY CASE. AGREEMENT NOT RESCINDED.

-The evolution of au oil company and iho complications that arose in connection thorewith -woro discussed by' the Appeal Court yesterday in tho reserved judgment on the case of Clayton v. Chambers, an appeal from the decision of Mr. Justice Chapman. N Tho parties were William Lissant Clayton. Jand agent, Gisboruo, appellant; and William Knox Chambers, sheepfarmer, Gieborne^ and George- Hutchison, barrister (aa liquidator for the East Coast Petroleum Co., Ltd.), respondents. In the action before the Supreme Court, Chambers, on behalf of himself and other gttareholders of the East Coast Petroleum Co./ proceeded against Clayton, asking for a declaration that a U'ust agreement made between Chambers, Clayton, Hutchison, and H. J. Finn (who had einue retired) had not bo6n rescinded. In 1906 the four persons mentioned formed a syndicate ;to acquire concessions and rifrhts to bore for oils and minerals, and _it was mutually agreed that any concessions acquired by any one pftrty should bo held in trust lot the four. About Ist June, 1907 '(after Finn's retirement) tho three remaining members formed the East Coast Petroleum Co., with a. capital of £20,000 in £1 shares. Hutchison acted as managing 1 director, and Clayton and Chamberß as directors. t In 1908 or 1909, it was alleged, Hutchison purported to give to Clayton an option to purchase the concessions and rights and other property of the company in consideration of tho transfer of one-fifth of the total aviv, lesb brokerage, which Clayton might receiva feir tho re-ealo tof those and other concessions and righte. Claytou entered into a contract for the sale of the oouceesionß and rights to certain persons in England, in consideration of the issue to him of £50,000 in 500,000 fully paid-up share? of the New Zealand Oilfields, Ltd., having a capital of £200,000, divided into 2,000,000 ordinary shares of 2s each. In April, 1910, Clayton cluimed that he v/im entitled to retain certain other concessions which had been obtained by him Bince the formation of the East Coast Company, and that the East Coast Company was entitled to only £9000 in tho shares of tho New Zealand Oilfields. ' Chambers alleged that the trust agreement of Juno, 1906, had never been, rescinded, and that Clayton Was liable to account for the East Coast Co.'s property. Chambers asked that it bo declared that Clayton held tho ( £50,000 in shares in trust for Chambors, Hutchison, and Clayton. Clayton contended that the trust agreement had lapsed in 1907, on the retirement of Finn. Clayton acquired concessions in his own name, and opened negotiations a company promoter who was to proceed to England with a view to floating a company to purchase these concessions. He' suggested to Hutchison that the occasion might prove opportune for the disposal of the company's concessions, and thereupon Hutchison gavo him tho option mentioned. Mr. Justice Chapman decided that the agreement wiu, never rescinded tfnd that Chambors must succeed. It was very probable that Clayton had done moro than his sharo of Iho work, and, if a suggestion were made by him that he should receive some remuneration, it might bo. cormderod. The judgment of tho Court of Appeal, delivered by the Chief Justice, was that the agreement could not bo regarded as rescinded. Tho appeal was dismissed with costs on the highest scalo us from a distance.