TRUST OR SALE?

Evening Post, Volume CVIII, Issue 124, 21 November 1929, Page 7

TRUST OR SALE?

SETTLEMENT OP DEBTS

AMBiCUOUS AGREEMENT

' "Was it an assignment absolutely, or was it an assignment in trust?" That, said Mr. Alexander Dunn (solicitor for the plaintiff), was the crux of the ease of Lillian Marguerite Henderson, spinster, of Wellington, against Cyril Sidney Brice, merchant, of Wellington, heard before tlic Chief Justice (the Hon. M. Myers), at the Supreme Court, yesterday. "In short, was Mr. Briee a purchaser or a trustee 1! "We claim that he is a trustee, that he held the property in trust from the plaintiff, to realise it and pay her debts." The documents in the case, he'said, 'were subject to either interpretation.

. Mr. C. A. L. Treadwell appeared for the defendant. ■

The statement of claim set out that ■until July, 1926, the plaintiff was the owner of a freehold house and land in Orchard street, Wellington, and the furniture therein, and carried on business as a boardinghouse-keeper. In July, 1926, it -was agreed between the plaintiff and the defendant that the plaintiff should assign and transfer to the defendant all her estate in connection with the said business in trust; that the defendant should pay all her creditors, including himself, and should pay the plaintiff any surplus. An agreement dated 15th July, 1926, was drawn up and executed between the parties. All the assets in question had been transferred to the defendant, but the defendant contended that the assignment was to him beneficially, and that he was not required to account to the plaintiff- for any surplus; and lie had failed to furnish any accounts, although they had been repeatedly demanded. The defendant, out of the assets, settled with various creditors of the defendant at discounts on the amounts owing to them, and refused to account for such discounts or otherwise as to his administration of the trust. The plaintiff, therefore, sought (1) a decree that the assignments were to the defendant in trust, and not to him beneficially; (2) an order that the defendant should render accounts •in connection with the administration of the assets; (3) judgment for such amount as-should be found to be due; (4) the costs of this action; (5) such further. and such other relief as the Court, thought fit.

STATEMENT OP DEFENCE. The statement of defence admitted that the plaintiff had owned the land and house, but stated that the defendant was unaware that she owned the whole of the furniture, and therefore "put her to the proof thereof." The defendant denied that the agreement was an assignment in trust of the house and its contents, and stated that on 15th July, 1926, the plaintiff was indebted to the defendant for £930 and interest, insurance premiums, and costs aggregating £119; and by an agreement in writing, the plaintiff, in ■consideration of the defendant's paying certain debts due by the plaintiff, and releasing her from certain other obligations, agreed, inter alia, to transfer certain goods, chattels, and effects set out in the agreement. The real estate in question had been transferred to the defendant as part of the terms of the settlement between the plaintiff and the defendant. The defendant •admitted that the plaintiff assigned the assets to him in terms of the agree:ment, and he stated that he received them notas a trusted for the plaintiff, and that he owed no duty to account to the plaintiff in respect of the sale of the effects. He admitted that he paid some of the debts referred to at a aiscount, and he said that no right to demand an account of such transactions lay with the plaintiff.' "Do you suggest that Mr. Treadwell' tnew that this was a trust?" asked his Honour.

Mri.Dunn: "No; I take it that he thought that Mr. Briee went into this in order to secure himself in regard to the payment of the debts."

rBATJD NOT AIiLEGED,

"The main proof that it was an assignment in trust," added Mr. Dunn, "was that the same day Mr. Briee interviewed all the creditors of the- plaintiff, represented that he was acting,as agent for Miss Henderson, who was a poor, sick woman," and that it was doubtful if they would get anything, anS offered them 10s in the £1. One stood out, and got the full amount; but others took the 10s in the £l. Jt He contended that the defendant should have accounted to the plaintiff for the balance; but the defendant held that he was entitled to make the best settlement he could. "I am not alleging fraud," explained Mr. Dunn.

His Honour: "It is not necessary for you to allege fraud."

Mr. Dunn: "I do not- allege fraud. "It is claimed,"he added, "that Mr. Briee made a profit of £.900, taking the price that the plaintiff paid for the property; or a profit of £1400, taking the land at the values put on. it by Mr. Gellatley and Mr. Nathan. It is submitted that that is iniquitous and cause for the CouTt holding that this was an assignment in trust."

Mr. S: George Nathan and Mr. Gellatley gave evidence as to values, Mr. Ge-ttatley saying that the property was easily marketable at £4000.

Mr. Dunn stated that the debts owed by the plaintiff totalled £355, and that the defendant had also to pay off a third mortgage of £225. There was a first mortgage of £2250 on the property, and a second mortgage for £930 to the defendant.

Lillian Marguerite Henderson gave evidence in support of the statement of claim. The defendant, she stated, said when he was showing her out of the office, after signing the documents, that he would save what he could out of it for he-r. Her reason for the long delay 5n bringing the action to trial was that she had no money.

To Mr. Treadwell: She did not remember receiving a registered letter informing her that the- property was about to be sold by the mortgagee, the defendant (Signed receipt for letter produced.). She was very ill at the time. On 13 th July, 1926, Mr. Brice said he would have to sell her up if she did not pay his interest.

Mr. Treadwell: "If he had clone so, your creditors would have got nothing?"—" They would have got something."

Mr. Treadwell: '' How I!' '—'' Through the sale of the furniture. He took it upon himself to sell the furniture- as a trustee for me."

Mr. Treadwell: "What was he to get out of it?"—"I don't know." j Sir. Treadwell: "You had this action I repeatedly advertised in the papers as coming on. "Was not that to try and make Mr. Briee pay you something 1" —:"No; it was because I had not the money to go on with it." Other evidence having been given, Mr. Treadwell submitted that there was no case to answer. liis Honour said he- would prefer to hear the case for the defence. He thought that was desirable in the interests of both partits. Adrian Laurance Treadwell gave evidence on the lines of the statement of defencei.lt was, he said, never once suggested, before the writ in the action was issued, that Mr. Brice was to sell the furniture on Miss Henderson's behalf, pay her debts, and let her have the balance, if any. The first suggestion that Mr. Brice was selling as a trustee was when the writ was issued. The hearing was adjourned tin to2^&