CLAIM FOR £l,000

Greymouth Evening Star, 5 September 1934, Page 2

CLAIM FOR £l,000

McLEAN FAMILY DISPUTE ACTION IN SUPREME COURT

A claim for £lOOO, with costs was ] m ±> in Mr >nS ‘ Johnston, by Mrs Kate Learmont (Mr T W Hannan) against hei t brothers, Peter Joseph McLean and Oliver McLean (Mr W. J. bim. .01 Christchurch). ■ m The statement of claim set out. ( ) That the plaintiff and the defendants are three of the five children of Duncan McLean, late of Greymouth, merchant, deceased; (2) that the said Duncan McLean died at Greymou.th on m''about August 22, 1919 ; W said Duncan McLean died intestate, and that letters of administration ot his estate were granted to the defendant, Peter Joseph McLean, on September 1, 1919; (4) that on or about -May, 1920, the said five children mutually agreed that the estate be shared as follows:—One-third to Peter Joseph McLean, and one-sixth to each of the other four children, and that a private company to be called Duncan McLean, Ltd., be incorporated with a nominal capital of 25,000 shares of £1 each, for the purpose ot acquiring the assets of the'estate, and that each of the next-ot-kin should subscribe the memorandum of association, of the said company for such number of shares in the company as would bear the same proportion to the nominal captial of such company as the respective interests of each such next-of-kin in the said assets to be acquired by the company bore to the total value of such assets, and that such shares should be allotted to the respective next-of-kin as fully-paid shares, and be accepted by them in satisfaction, ot theii respective interests in the said assets to be transferred to the company; (5) that the number of shares for which the plaintiff was to subscribe the memorandum of association in accordance with the arrangement above referred to was 4167 shares, and that the plaintiff did on June 7, 1920, so subscribe the said memorandum of association; (6) that, prior to June 7, 1920, the defendants requested the plaintiff to sell to them her interest in the estate of the said Duncan McLean, for the sum of £4167, being the nominal value of the shares proposed

to be allotted to the plaintiff; (7) that tho plaintiff declined to sell for the price stated, but agreed to sell the shares for the sum. of £5167, which the defendants agreed to pay as follows: — £4167, the nominal value of the shares, by ten annual instalments, and the balance, £lOOO, as soon as the said payment could be conveniently arranged; (8) that on or about June 7, 1920, the defendants requested the plaintiff to execute two agreements for the sale respectively of 2778 shares to Peter Joseph McLean for £2778 and 1389 shares to Oliver McLean for £1389, such agreements providing that payment of the moneys respectively payable . thereunder be made by ten consecutive annual instalments, the first of such instalments to be paid at the expiration of one year from the incorporation of the company; (9) that when the defendants requested the plaintiff to execute the said agreements the defendants repeated their undertaking ito pay the plaintiff the additional sum of £ 1000 referred to in the preceding paragraph and relying on such undertaking, the plaintiff executed the agreements; (10) that the said company was incorporated on July 22, 1920; (11) that on or about August 11, 1920, the plaintiff, in pursuance of the agreements, transferred to Peter Joseph McLean 2778 shares, and to Oliver McLean 1389 shares, and the defendants delivered to the plaintiff a memorandum signed by the defendants, confirming the undertaking to pay the further .sum of £1000; (12) that during 1928, the company received £24,000 fire insurance moneys in respect of the destruction of. business premises and stock, and after paying off a bank overdraft, had a surplus in cash from the insurance moneys of £6OOO, and has never rebuilt the said premises nor purchased other premises; (13) that payment of all purchase money payable to the plaintiff under the agreements was completed on Octobei' 18, 1928, on which date the defendants; forwarded to the plaintiff a letter signed by Peter Joseph McLean, as follows: — “Dear Kit, —Herewith I beg to hand you cheque for £l2, being interest for three months on balance due to you for purchase of shares, plus £1 8/11, being interest at six per cent, cn £BOO for eleven days, and £BOO, being balance due to you as final payment on account of myself and Oily, which I am pleased to be able to forward you, owing to our not rebuilding at once, and having received our insurance money. This will complete cur legal agreement, but you will receive the amount of our private arrangement whenever we are able to dispose of sufficient of our properties, or can dispose of the farm. Kindly sign and return the attached receipts at your earliest convenience. Yours affectionately, Joseph McLean.’’ (14) that on October 18, 1928, the whole of the share capital of the company, with the exception of only two shares out of 25,000 shares, was and still is held by the defendants in approximately the proportions following: — Peter Joseph McLean two-thirds, and Oliver McLean one -third of the share capital; (15) that since its incorporation the company has received in cash for sales of land, being portion of the assets of the estate of Duncan McLean, sums totalling approximately £lO,OOO, of which over £4OOO has been received since October 18, 1928; (16) that the plaintiff has requested the defendants to pay to her the said sum of £lOOO, but that neither of the defendants has paid the same or any part thereof; (17) that each of the defendants is possessed of ample means, and is well able to pay the said sum, and that such payment could conveniently have been made at any time since October, 1928.

FOR THE DEFENCE. The clauses in the statement of claim, Nos. 1,2, 3,4, 5, 10, 13, and 14 were admitted by the defence. Clauses 6 to 9, inclusive, were denied. Claqse 11 was also denied, but the signing of the document was admitted. Defendants said that such document set out a voluntary arrangement, whereby they undertook to pay a further £lOOO to plaintiff, on certain conditions, which were discussed verbally and not very clearly defined, and any payment was to be made only when it could be “con-

veniently arranged” by the defendants. The latter also pleaded that the said arrangement was not a lega contract, being (a) uncertain in i terms, and (b) made without consideration, and the same contemplated only a gratuitous payment by the defendants, to be made either upon their decease, or in their lifetime when their circumstances pel mi ec them to make such payment conveniently; that, if any such contract were entered into, and the same is legally enforceable, that the payment of £ 1000, or any other sum, could not at present be arranged conveniently. Clauses 12, 15, 16, and 17 were denied. The defendants said that, since June 7, 1920, they had paid the full sums agreed upon by way of purchase money, namely, £4167 and £2778, respectively, together with interest, making in the case of Peter Joseph McLean over £7OOO. Plaintiff, it was stated, had also received out of the assets of the company £lBO5/13/4 by way of capital and interest for her share of the estate of Duncan McLean. It was also stated that the farm, which was formerly part of the estate assets, has not been sold, but, on the contrary, has been a source ot considerable expense during the recent depression. The total losses on tbo farm since 1928, including replacements and general maintenance, are £2SSI/19/1. The losses on rented properties sincp 1928 have been £585. The total realisations from land have been £3798, and debentures £250. The fire insurance payments were £19,194, not £24,000, as alleged in the statement of claim, and of this £17,965 was for stock which had to be replaced. The farm properties forming part of the estate, and now company assets, have of necessity been written down in value to the extent of £8226. The aforesaid items are not pleaded as an exhaustive enumeration of the reasons why it is not convenient for the defendants to meet the claim of £lOOO, but only as indicating some of the factors in the situation. The defendants plead_that the arrangement made between the parties contemplated that the defendants were to have the decision as to when the said voluntary payment was to be made, and it was never intended at any time that the plaintiff should have any right to examine the private affairs of the company or the defendants. On the application of Mr. Sim, witnesses were ordered out of Court.

JUDGE URGES SETTLEMENT In his opening review of the case, Mr. Hannan said that the facts were fairly fully set out in the statement of claim. Oliver McLean in no way came into the negotiations regarding the affairs of the estate, which were managed by Peter Joseph McLean. Any arrangement made was made by Peter Joseph McLean, as Oliver McLean’s agent. Plaintiff relied upon the verbal promise of her brothers, to pay the extra £l,OOO. In 1931, Peter Joseph McLean sold the property now known as Rugby Park, for £3,000. After a few months, plaintiff called upon Peter Joseph McLean at his office, but defendant refused to discuss the matter, any more than to say that he had left her the amount in his will. She replied that it did not appeal to her, to have to wait until he died, for her money, and that 'she would see her solicitor. She saw the speaker, and he interviewed Mr. McLean, but the latter simply questioned the legality of the agreement, and would not say whether he would admit or deny liability. Plaintiff had no option but to bring the matter to Court, to ascertain her position. His Honor: It is a very intimate family matter, is it not? Is the whole dispute going to turn on'the letters?

Mr. Sim replied that the question would be what was really the arrangement between the parties, and what agreement was behind the letters. His Honor: Is there any moral defence?

Mr. Sim said chat Mr. McLean agreed to make a gift, and not an enforceable legal contract. He intended to honour that gift. Unfortunately, family feeling had intervened, and the position was clouded at present. His Honor: Is it necessary to bring all this before the Court, if the obligations are to he honoured? Is the firm still in existence? Mr. Sim said that Mr. P. J. McLean had “made” the firm, and was the head of it.

His Honor: Is not that all the more reason why he should honour his obligations? The letters are evidence of some arrangement, although I have no doubt that a coach and horses could be driven through the agreement, in many ways. The payment is to be made “when convenient.” Surely the matter could be arranged? Mr. Sim repeated that family feeling had arisen, and clouded the issue. His friend and himself were in accord with His Honor, that it was regrettable that the affairs of such a prominent family should come before the Court.

His Honor: I am entirely unaware of the conditions of the family, but I have no doubt that you have done your best in the matter. If. as you say, Mr. McLean is going to honour his obligation to make a gift or to carry out the contract, which may turn out to be legal, surely you do not want this Court to decide it. Surely some arrangement should have been come to. Surely it is a matter in which Mr. McLean’s personal honour is concerned. However, if you have done all you can, we must go on.

Mr. Hannan proposed an adjournment for a few minutes. Mr. Sim said that Mr. 'McLean felt that he would vindicate his honour

by having a full hearing, and going into the witness-box. His Honor: Is it necessary to wash this—not necessarily, dirty linen,—-but to make public this contention? These letters require some answer. However, it is entirely in your-hands; .otherwise, I must go on, and I must know everything. Mr. Sim applied for an adjournment for ten minutes, to make some suggestion to the parties, and this was granted. | SETTLEMENT REACHED. When the Court resumed, after I negotiations occupying nearly an hour, Mi’ Sim stated that, following His Honor’s observations, the pait ties had conferred, and he was pleased to report that a fi lendly settlement had been arrived at, the terms being set out in writing. His Honor: The result of that will be that the action will be struck out? Both counsel expressed agreement. His Honor;. I am satisfied, in my . own mind, that you have adopted a i verv wise course, and that it is in the , bes f t interests of both parties. So . far as I can see, a very proper, and - in some ways generous, settlement l has been reached. It is very diffi- ■ cult, in these family matters, espec- , ially when varied interests under - wills have to be considered, and il when, after all, in many cases, to prei serve the estate, considerable bur- - dens and difficulties, and business ■ ability, have to be shown by certain 3 members of the family, the benefit of 1 which, unquestionably, other members 1 of the family receive, and without - which, in many cases, family estates ’• would depreciate. I think that the f settlement does credit to the head e and heart of the defendant, and the " discretion of the plaintiff. It is a " family matter, and I can only hope s that it will be the end of any irrita- ' tion and ill-feeling that might have ’• arisen. It is very difficult for coune sei, perhaps, to obtain a settlement in " matters which they think should be t settled without actually coming to * the Court. I have expressed my view, 0 and I hope it has been of some use a to the parties. 5 > The action was therefore struck ® out, and defendant and plaintiff shook y hands before leaving the Court.