MINING RIGHT DISPUTED

Greymouth Evening Star, 10 December 1940, Page 2

MINING RIGHT DISPUTED

COLLUSION AS DEFENCE The unusual defence that there had been a collusive arrangements between the parties, contrary to the mining law of New Zealand ana against public policy, thus rendering the. contract on which plaintiff based his claim void, was raised during the hearing of a mining suit in the Warden’s Court at Greymouth, to-day, before Mr. G. G. Chisholm, S.M. The case was that in which Daniel Dennehy of Barrytown, (Mr. W. D. Taylor) proceeded against John Morressey, of Wataroa (Mr. J. W. Hannan) seeking (1) a declaration that defendant holds special dredging claim license No. 6029 in trust for plaintiff; (2) an order that the license No. 6029 be transferred to the plaintiff; (3) an order that the license No. 6029 be delivered to the plaintiff forthwith and (4) costs of the action. Mr. Taylor said that about' 1934 plaintiff pegged out an area of 198 acres near Hari Hari and later applied for and obtained a special dredging claim license, in August He paid compensation to a landholder but owing to various reasons no work was done on the claim. In 1939 defendant filed a suit for a certificate of abandonment and applied for the area in his own name. Plaintiff entered an objection but after some negotiations agreed to withdraw the objection and to allow Morressey to get the claim in his own right on certain conditions, i.e. that Morressey paid him £lOO plus half the past year’s rent, within two months of the grant of the license to Morressey. These conditions were set out in a letter between the parties dated August 28, 1939 (produced). The case was heard on the following day when plaintiff withdrew his objection, and the certificate of abandonment was granted and Morressey’s own application for the license was recommended. On August 30, Messrs Joyce and Taylor wrote to Messrs Hannan and Seddon confirming the arrangement set out in the letter of August 28, The abandonment became effective on April 19, 1939 and the date of the final grant to Morressey was May 29, 1940, but the sum of £lOO, plus the half year’s rent was never paid. After the expiry of the two months, an application was made to Morressey, through Hannan and Seddon, for the transfer of the area, in accordance with the agreement, but it had never been transferred. On November 29, when served with present proceedings, Morressey said that he had given an option over the area to White’s Electric Co. and that if they took it up plaintiff would get his £lOO, otherwise, he could have the area back. The option had been granted without plaintiff being consulted. He (Mr. Taylor) submitted that the two letters formed a contract between the parties, and defendant not having paid the £lOO in accordance with the contract, the declaration and transfer were sought. Plaintiff, in evidence, outlined his early association with the property, which he said was at Saltwater Beach, down the Little Wanganui River. He had carried out prospecting work and opened negotiations to develop the area. Then he fell ill for two years and was unable to do any work/The letters produced by Mr. Taylor embodied the correct arrangement between him and defendant relative to the withdrawing of his objection to defendant’s suit for a certificate of ; abandonment and application for a license. The £lOO named or the £34 rent had never been paid. To Mr. Hannan: He had carried out prospecting while he held the area under prospecting licenses, mostly with shafts. Since the date of the grant of the license to him, there had been no work done, apart from two inspections. Nothing was done regarding the provision of a dredge until just before Morressey’s suit. He had put a good deal of money into the property and proposed to put more, but he could not provide a dredge himself.

To Mr. Taylor: He had explained the position to the Minister of Mines just before Morressey’s action. • The Minister had told him that his position was rathei’ precarious, as he had not complied with the conditions of the license and suggested that he (plaintiff) should peg the area out again and re-apply for the grant. Gerald Thomas Joyce, law clerk, of Greymouth, gave formal evidence of the dates of the various licenses concerned. He said that he served notice of the proceedings on defendant on November 19 last. He (defendant) said that plaintiff need not be in a hurry. He also stated that he had given an option and was waiting to see whether it would be exercised. If it was, he said, he would pay plaintiff the £lOO, but if it was turned down, he would hand the property over to plaintiff. He (witness) had communicated with defendant’s solicitor on a number of occasions, with the idea of having the matter finalised, but without result.

To Mr. Hannan: I never actually asked for a transfer to be signed, but on November 4, I wrote to you stating that unless finality was reached, we had been instructed to commence proceedings for a transfer.

■ EVIDENCE FOR DEFENCE. * Mr. Hannan said that he did not propose to call evidence, but proposed to rely on the legal defence. Plaintiff’s case relied on the contract set out in the letters between the parties, which showed that there was a collusive arrangement between plaintiff and defendant against the mining laws of New Zealand, and against public policy, and therefore the contract was void. The facts showed that plaintiff held the claim for some five years, during which time no work was done on it, in complete disregard of the terms of the license under the Mining Act. The evidence also showed that prior to the certificate of abandonment being issued, the parties entered into an arrangement, set out in the letters, with the effect that the new license was held by Morressey as trustee for Dennehy, which was contrary to the policy of the Mining Act. If the circumstances had been known to the Court at the time of Morressey’s action, the Court would have been bound to refuse the application. Mr. Hannan then quoted authorities referring to the legal definition of collusion, contracts against public policy being void and the policy of the New Zealand mining acts. He said that the general principle of the cases quoted was that although both parties might be guilty, the Court would not help either, party, and therefore plaintiff must fail. Mr. Taylor said that the compromise of an action had always been

held to be good consideration for a contract in law, and the consideration in this case was the abandonment of legal right, and he quoted authorities in support of this submission. He submitted that a valid consideration had been made, not in any sense opposed to public policy. There was no evidence that plaintiff’s title would have been forfeited if he had maintained his objection, as the Warden may have inflicted a fine. He (Mr. Taylor) submitted that there must have been a doubt whether Morressey could have succeeded, otherwise his counsel would not have advised him to pay £134 as a compromise. He (Mr. Taylor) submitted that there could be no question of the exclusion of the public. The Warden said that if Morressey had proceeded with his application and Dennehy had not abandoned his objection, the result would have been that one of them must have held the area under valid title, and he (the Warden) did not see how the public came into it. Mr. Taylor submitted that the bona fide compromise for the return of the area within a certain period could not be unlawful, and that before the cases cited by Mr. Hannan could apply, there must be something unlawful or underhand in the actions of the parties. There was no Question of deceiving the Court in the matter, and there would have been nothing to prohibit the Court from imposing in Morressey’s license the terms of the contract between the parties. Therefore, the contract could not be illegal and was perfectly* valid. If Mr. Hannan's arguments were right, then it would be unsafe to compromise in any Warden s Court suit. ... , ■ Mr. Hannan said he maintained that the interests of the public were affected.' Dennehy had the license held for five years, three years after he should have commenced dredging. The new license continued to be held in trust for him, in accordance with the contract, which made it unassailable for another two years, un Dennehy’s interests, and against the interest of the public. The Warden said that if there had not been any compromise and a certificate of abandonment had been granted, Morressey would still nave held the area up from the public, and he at the moment, did not see how the public were affected. However, he would take time to look into the matter, although, on the face of it, he did not see how public interest was prejudiced. Decision was reserved. >