THE WARD ASSOCIATION.

Evening Star, Issue 10243, 19 February 1897, Page 2

THE WARD ASSOCIATION.

„ 4t *he Ohajnbsr;, lining fcp'4*y the «ottlwg-of the J. G. Ward iFarmers' I Association W(|jt again brought before MjJufttPJt Williams by siunmonß callingfor prog{.!o| 9ttbH ; Mr Hosking, appearing on behalf of the liquidator, Baia that thens were v two claims which stood over. Oae was ,by Doaagby'a Rope and .Twine Company, for £4BB. In, that case the ; evidence had . been taken, and he (Mr Hosking) now had two or three objeotiona to raise. One of ~these objections arose out- of the evidence that had been taken. Mr Passmnre and; Mr Fisher stated that a contract had been entered intoforthe purpose of taking ,nyer twinei by• ; i M company r to v be- QAjled Donaghy's Rope and Twine Cpmpany. That suggested that tha company was not formed at the time. On search he (Mr Hosking) found that such was the case, and the other side would, he thought, admit it, He also raised the point that there was no oontraot within the meaning of the Statute of Frauds. It was unnecessary to argue this, though he thought it sound, hut it .was competent for him tourge that no damage had been shown. ' Mr Fraser, speaking on behalf of the claimants, said that the point as to noninoorporation had been taken by his friend after the last argument. He fully-appre-oiatod the hearing of the point; but as a matter of fact the cpmpany had withdrawn his (Mr Fraser'a) instructions, the manager (Mr A, Lee Smith) being in attendance personally to give any information the Court might desire. - Mr Hosking said he would object to Mr Lee Smith appearing. He (Mr Hosking) proposed to argue the law of the case. His Honor said that the company must appear by solicitor 5 there could not be an .appearance in person. He did not see how Mr Lee Smith could be heard. If it was a matter of private affairs, of course any person had a right to be heard, but this company, being incorporated, miiSt hfeoessarily be' represented by a solicitor. His Honor askecf Mr Fraser whether that was not so.

Mr Fraser said that of course Mr Lee Smith waa the managing direotor of the company. His Honor: There is no question of retainer, ia there ? Mr Fraser replied that there was not. Mr Hosking submitted that the course proposed was most irregular. On the evidence the case was a peculiar one, and therefore the liquidator was perfectly justified and was indeed bound by law to take every valid legal objection to the claim. His Honor: Yes, he must always take Buch an objection.

Mr Hosking said that there was something extremely peculiar about the claim. It was not as if the Association had had any ad vantage frpm the contract. }The contract was to supply twine, and if the company did not supply it they still had it. His Honor asked Mr Fraser whether there was any reason why he should not disclose what the case was. Mr Fraser replied that he* could not always control his clients. All he could say was that he believed the action, of Mr Lee Smith to be honorable, and that he desired i,o show that to the Court. Mr Hosking : And I object. Mr Fraser suggested that Mr Lee Smith might be examined. Mr Hosking objected to his being examined twice. Mr Fraser said that he could recill Mr Lee Smith to meet the new point, and probably that would be the better plan if the company would continue his instructions for that purpose. Mr Hosking said that he submitted the point to his learned friend as Boon as he discovered it, and told the liquidator about it, and the liquidator instructed him (Mr Hosking) to include it as one of the objections. His Honor remarked that Mr Lee Smith's action might be perfectly capable of explanation. It had not occurred to him (His Honor) that there was reason to suspect anything wrong. Mr Fraser again urged that he should be allowed to ask Mr Lee Smith to explain, but Mr Hosking objected, and proceeded to present to the Court the three reasons he had for protesting against the claim—first, that there was no contract under the Statute of Frauds; next, if there was a contract, no damage had been shown ; and then, if the Court was still against him, that there was no contract because the company was not incorporated when the contract was entered into. There was, however, a portion of the claim that the liquidator admitted—viz., £2B 13a 101 for goods delivered in March.

Application being pace more made to allow Mr Lee Smith to explain, His Honor said that possibly the explanation which Mr Lee Smith desired to make might have reference to what had been said outside the oourt—in the newspapers, per. haps—and he could now say whatever he wished.

Mr A. Lee Smith said that the reason why he had taken up what might seem to be the peculiar position of asking Mr Fraser, his counsel, to withdraw from the case was this:—He (Mr Lee Smith) had heard that the liquidator was disputing this claim on the ground that the goods had been sold by a company which at the time of the sale had not been registered. He had been told that a plea of that kind was only set up to withstand supposed fraud, or an attempt at fraud, as in the case of a bogus claim and so forth. Having been told that, he thought that the liquidator must suspect the company of fraud, and he thought the best thing he could do was to take Mr Fraser out of the case and go to the Court and a«k to be allowed personally to explain the matter and show that there had been no subterfuge on the part of the company. Being permitted to speak, he desired to state that there was no justification or warranty for the imputation that anything of the kind had been done. The position was thus:—When the goods of the old Southland Fibre Company were being taken over by the amalgamated company of Donaghy and Co., two of the valuers, Messrs Anderson and Passmore, came across some twine in large bales, and these goods were objected to on the ground that the twine was not good. Mr Fisher, who was not a valuer, but who occupied the position of representative of the company whose goods were being taken over, said he considered the twine good, and in support of that opinion he offered to take the goods over on behalf of the J. G. Ward Farmers' Association. The valuers then said that if Mr Fisher would give an order for the goods they would take them into stock on behalf of the new company. Mr Fisher gave the order, but when the time came for delivery, in consequence of the position of the Association, he could not cake the goods, but promised to do so later. There being no local facilities, owing to the lack of machinery, for using this twine, which was found to be in a worse condition than was expected, it had to be brought to Dunedin to be made the best of, and it took some time to sort and get it made up into rope, clothes-line, lashings, etc. It was no use for ordinary use. He (Mr Lee Smith) wished to state that the reason why the claim was not put in earlier was that the Ward Association did not go into liquidation until about the time that the twine was brought to Dunedin, and it was for the purpose of assessing the damage that the twine was so bronght to Dunedin. He had no more to say excepting this: that during the whole of his thirtyseven years' business experience he had never known of a plea of the sort now raised being put in as a defence unless fraud was alleged; and he ventured to say that if the case had been the other way—that was to say; if the twine had gone up in price, as it often had in the East, by £8 or £lO a ton—there would have eena howl of indignation if the company had attempted to get out of the sale on the ground now taken to get out of this purchase, for no business roan would do.anything of the kind, fie had to thank: His Honor for allowing him to explain nature of the transaction.

His Fi-ior: Tho explanation is perfectly reasonable.. Mr Hoaking: With ninnna to his'statement as to the character of tho defeD> e His Honor: That is a different m-it'cr. It was the personal explanation chat I meant was a reasonable one.

Mr Hosking: He assumes that the objection was taken because there was some suspicion of fraud. I will say candidly that

lhat was the reason. -So far aa v that is. qpPi s csrhed I «jcept*M* Smiths explanation#* satisfactory. , Bat I cannot, now withdraw the. legal objection, the Uqwdador having told me to take/it. \ ,i , , i, Mr Lee Smith : We are all prepared to be examined on the point.,,, ~ , : S His Honor : The liquidator is in the position of a frustee. „ »■. Mr Fraser: Well, not exactly. His Honor: I mean that he ia not acting' foivhlraself. . ....<,..,.■• Mr fjraqer : I admit that the money does not go .into ,hU own pocket. But a liquidator is supposed to be better than an ordinary fllr Hoßking repeated that it was the liquidator's duty .to bring any legal objection before the Court. Mr Eraser then proceeded to rrgue the points raised. He submitted that the contriiot Was good uuder the Statute of ¥t inds, ana that, the parties to the contract had practically adopted the contraot by their subsequent actions.'. This wa», to use an Americanism, ",» square deal." ,- H(s Honor disallowed .that portion of t'ae claim whioh.related to the twine sold by the company before incorporation, and said that he did not deem it necessary to decide any other question, though he. thought it possible that consideration of damages would have reduced the olaim. The question of coats being raised, ' Mr Hosking said that he did not ask for costs. He had not asked for any, unless where the whole of the claim had been disallowed. The other matter was a summons that the liquidator be ordered to pay Richard Powell Cooper (trading as William Cooper and Nephews) a share of moneys collected on aocount of sheep-dipping po<vder, etc. Mr Sim appeared in support of the summons, and Mr Hosking on behalf of the liquidator. —After argument of the law points iuvolved, His Honor intimated thalt he would reserve judgment. _. . .