APPEAL COURT CASE.

Manawatu Standard, Volume LVII, Issue 160, 8 June 1937, Page 10

APPEAL COURT CASE.

THE YACHT MOREWA. JUDGMENT FOR COMPANY. Per Press Association. WELLINGTON, June 7. Judgments were delivered by the Court of Appeal in the appeal arising out of transactions concerning the disposal of the yacht Morewa, formerly owned by the respondent, in the Appeal Court case on March 15, Pacific Exploration Coy. and Sterling Investriiepts v. J. W. S. McArthur. The construction of the yacht ' was commenced by the Pacific Company, which had been formed in 1932 as a private company for exploration and development work in the Pacific, the. judgment set out. The Sterling Coy. advanced moneys without security to the Pacific Coy. for the construction and equipment of the vessel. The Sterling Coy. obtained the moneys direct from the Investment Executive Trust of New Zealand, Ltd., on the security of debentures, part of the moneys being used for the above purpose. McArthm" obtained possession: of. .the yacht in December, 1933, and had it registered in his name as owner;; In October, 1934. the yacht was mortgaged to secure an advance of. £6OOO, and in January, 1935, McArthur transferred it to the mortgagee in consideration of the discharge, of the mortgage. On a claim by the Public Trustee as statutory liquidator under the Companies (Special - Liquidation) Act, .1934-35, brought in the Supreme Court last September against McArthur, Mr Justice Johnston entered judgment in liis favour with co-sts.

Delivering Ills judgment in tlie Court of Appeal, the Chief Justice stated that, on its presentation before the Court of Appeal, the ease fell to be decided merely as a claim for the price of goods sold and delivered. In the view taken by His Honour,, the allegations of fraud, breach of trust, breach of duty and various other allegations in the statement of claim merely tended to confuse the issue. -That respondent, McArthur, had, become. possessed of a yaclit which had been the property of one or other of the appellant companies was clear and undisputed. As His Honour viewed the case, the sole

question was whether the yacht had been paid for or a valuable consideration given for it. The conclusion come to was that probably the true view of the transaction, regarding the yacht was that to be inferred from the books of the Pacific Coy.; viz., that the yacht was sold to the Pacific Coy. If that were so, then the yacht could only have been acquired from that company by respondent by purchase and, as it had not been shown that respondent had paid or given consideration for it, the Sterling Coy. was entitled to recover and judgment would be entered in its favour for the sum of £8931 9s.

Separate judgments coming to the same conclusion were delivered by Air Justice Ostler and Air Justice Smith. In a dissenting judgment, Air Justice Fair Held that, upon consideration of the whole case and the findings of the trial Judge, it appeared that the best that could be said for the Sterling Coy. was that the evidence on the question of whether the Pacific Coy.’s liability in respect of the yacht _ until the date when the yacht was alleged to have been, transferred to AloArthur and the question whether the. obligation to repay the £8931 9s advanced by the Sterling Coy. for the construction of the yacht had been discharged was as consistent with the liability having continued and the obligation having been discharged as with the contrary. In his opinion, the appeal should be, dismissed.

In accordance with the judgment of the majority, judgment was directed to be entered in the Supreme Court for the Sterling Coy. in the sum of £8931 9s, together with costs according to scale in that Court and with costs on the highest scale in the Court of Appeal. At the conclusion of the judgments Mr R. E. Tripe mentioned the possibility of an application being made for conditional leave to appeal to the Privy Council on behalf of the respondent.