HALL APPEAL CASE

Grey River Argus, 2 May 1942, Page 6

HALL APPEAL CASE

JUDGMENT GIVEN For the Demandants [Per Press Association.] P.A. WELLINGTON, May 1. The Court of Appeal to-day delivered its reserved judgment in the case Hall and others versus the Guardian Trust and Executors Coy., of New Zealand, Ltd., the 'Bank of New Zealand, the Union Bank of Australia Limited and others. This case led, last year, to far and away the longest hearing on record in the Appeal Court, lasting from September 18, for thirty-two land a-half Court days. Mr W. D. Lysnar, of Gisborne, presenting the appellant’s case, occupied 15 days. Mr A. H. J’ohnstone, K.C., for the Guardian Trust, addressed the Court for 7h days. For other respondents Mr D. R. Hoggard, on behalf of the Bank of New Zealand, occupied three days. Mr H. F. O’Leary, K.C., and Mr H. E. Evans, on behalf of the Union Bank, occupied three days. Mr Lysnar, in reply, addressed the Court for four days, following which decision was reserved. Mr Lysnar, in his reply, made submissions to the Court as follows: — (I 1 ) That the sales by the Guardian Trust, as administrator of all assets other than those under mortgage to : the banks or some other mortagee, were illegal, and that those sales should be set aside. In particular, he contended that this applied to the sales of the Regent Theatre, Gladstone, Ltd., and Willows Farm. (2) That, in any event, the Court should institute an inquiry into these sales as they had not been effected by public auction or . by public tender before sale, as, he submitted, was required by the Administration Act, 1908.

(3) That the two banks should be ordered to render full accounts to the Court on the basis of their being mortgagees in possession of the assets which they had taken over. (4) That judgment in a certain action by the administrator against F. T. Hall, one of the plaintiffs, given by the Supreme Court, and a settlement arrived at in another action against C. E. Hall, should be set aside and mortgages mven and transfers of properties made to the banks by these plaintiffs pursuant to that judgment and settlement should-also be set aside.

Substantially, the finding of the Court was that the appeal failed, except on one issue, namely, whether the Guardian Trust should be removed from its executorship. • The Court found that the Guardian Trust had been in a dual position from the date of the order to administer the estate under Part Four of the Administration Act; and that it should be removed, and the CjN-al-Assignee in bankruptcy, Gisborne, appointed in its place. On this point, Mr Justice Kennedy, in the course of his judgment said: “On the application for the order to administer, under Part Four, a full and complete disclosure of the proposed arrangements with the banks was not made. The Guardian Trust remained, for a time, in a dual position in which its duty and its interest might have been in conflict. It obviously did not have a proper sense of the obligations and duties which a trust company, acting for profit, should possess; and it acted, at times, I think, in ignorance, and was blinded as to its duty by too great a keenness foi' business and for profit.”

As against the Bank of New Zealand and the. Union Bank of Australia, the appeal was dismissed. Other questions dealt with by the Court were:—Whether the banks had agreed to accept a dividend of l/7d in the pound; and, on this question the Court found (Mr Justice Johnston dissenting), that the banks contrary to Mr Justice Callan’s finding in the lower Court, had not, in fact, made the alleged composition. The. Court found that further charges of fraud and conspiracy alleged by plaintiffs were not proved. On the question of costs, the Bank of New Zealand and the Union Sank were allowed these on the highest scale, as from a distance, with the fifty per cent, extra provided for in Rule Twenty-six, and with ten guineas per day for each of thirty days. An order for the costs, of the Guardian Trust, allowed for in the lower Court, was vacated l , and the

plaintiffs and the Guardian Trust were left to pay their own costs, no part of the. Guardian Trust’s cost being payable out of the estate.