ALLEGED LAND FRAUD.

New Zealand Herald, Volume LXII, Issue 19124, 16 September 1925, Page 15

ALLEGED LAND FRAUD.

£15,150 DAMAGES CLAIMED. ACTION AGAINST AGENT. CHARGE OF MISREPRESENTATION MANGAHAO BLOCK MORTGAGE. [BY TELEGRAPH. —OWN CORRESPONDENT.] HAMILTON. Tuesday. Serious allegations of misrepresentation arising out of a series of involved land transactions were preferred against a land agent, Frederick Charles Hand, of Hamilton (Mr. Ifinlay)' before Mr. Justice Herdman. in the Hamilton Supreme Court to-day by William Allen Paterson, farmer, To Rapa, and his sister, Jane Paterson (Mr. Blair and Mr. Adams), who claimed' £15,150 damages from Hand. In opening, Mr. Blair said the case was one against a land agent who was charged by the plaintiff with fraud, a wicked and cruel fraud. An alternative claim was that defendant had been guilty of a breach of duty as plaintiff's land agent. The circumstances, said Mr. Blair, were that the Waiop:hu-Levin Land Company owned a block of precipitous rocky country at Mangahao, r.ear Levin, comprising some 10,000 acres, which was represented to be good timber country. As n matter of fact, it was sparsely timbered, and th- "timber was unworkable. Some of tho land was 4000 ft. high. The Land Company exchanged its interest in the block to a Hamilton solicitor for certain Waikato lands. The value of the mortgage nn the Mangshao property was £17,645. Tho Hamilton solicitor saw that he had been "stung" by the transaction and the mortgage was given to Hand to sell. A Mr. Griffin becanu interested in the property but ho was warned to be scrupulously careful before buying, Ho and A, E. Whittaker, Hand's manager or partner, saw people named Bird Brothers, who knew the Mangahao block well. Tho Birds described the property accurately and stated that it was absolutely worthless. There was a certain amount of timber on it, they said, but it could not be worked. Whittaker stated that, in view of what Bird Brothers said, he would not touch the place. Griffin did not take any further action. The Mortgage Advertised. A. man named Slater then became interested, said counsel, and was induced to part with some Hutt properties in exchange for the mortgage. Slater soon .realised tho value of the mortgage and placed it with Hand for sale. An advertisement offering an £IB,OOO first mortgage as a deposit on good sheep country or a block of dairying land was published by the Farmers' Land Agency Company, •which was Hand. Whittaker's name was inserted in the advertisement as manager. The plaintiff, W, A. Paterson. who owned a farm of 1300 acres at Te Poi. saw the advertisement and called to sea Whittaker. Whittaker wa3 out and Hand interviewed Paterson. Hand stated that his client was a wealthy man for whom he had done business aggregating £200,000. Hand also represented to ' Paterson that the £IB,OOO mortgage was • the balance of the purchase money on tho Mangahao property which, he said, had ' been bought for £40,000. He said that as , far as Paterson was concerned, this represented as perfect a security as coiild ' be obtained, for there appeared to bo . £22,000 in hard cash behind it. Relying on the representations by Hand 'Paterson concluded the exchange, said counsel, and transferred his Te Poi property and stock, valued at £12,150, to Slater. He received! from Slater the transfer oi the mortgage on the Mangahao property. 81ater paid him £-500 and he executed a sub-mortgage in favour of Slater for £6OOO, being the difference between the represented ialues of the two properties exchanged. Compelled to Take Over. Continuing! Mr. Blair said Slater was able to pay interest on the property he had taken over from Paterson for a few months only, and ha then defaulted. Patersons were pressed, and were then compelled to take over the Mangahao block. Hand had aires dy received £225 ' in commission and he refused to allow the transfer of the property to Paterson to go through unless he was paid a further £250. Slater hypothecated the mortgage of £6OOO he held to Hand, who exercised pressure on Paterson for the interest due. Paterson borrowed money from relatives to satisfy the demands. . Hand then threatened to exercise his power of sale, said counsel, and only agreed to postpone the sale for two months on Paterson paying him £6OO, and in the event of the sale going on the estimated value cf the sub-mortgage was to be £5400. Paterson paid the £6oo s bull when five weeks had elapsed ; Hand (advertised the sale, the date of which was ' to be just after the two months had passed. That advertisement nullified all efforts Paterson mado to sell the place privately. Client Left With Nothing. The upshot of the whole business, Mr. Blair said, was that Paterson had lost his Te Poi farm, had paid Hand £475 commission and £6OO, and had paid out £7OO in other expenses, and now had taken over the Mangahao block and had left his client with nothing. Counsel proceeded to calf evidence. Walter Bird, farmer, Matangi, said he was interviewed by Whittaker and Grifi fin, who asked for an opinion Of the value of the Mangahao block. Witness had 1 lived near the block nearly all his life, and , knew it well. He said the land was useless, and he would not invest a shilling ! &'a acre in it. Owing to the way tho j streams ran and the precipitous nature of the hills, it would bo impossible to work I the timber. Witness told Whittaker tho land would not pay rates, and Whittaker I remarked that it would only be a mill- ! stone round a purchaser's "neck. A Taupiri farmer, Edward Griffin, said Whittaker offered iiim tho Mangahao I place, which was described as first-class CL-,:ntry. Witness and Whittaker ques--1 tioned the Birds and they stated that the , timber was scanty and was very difficult to get out. An area had been cleared I and grassed, but the grassed area had ' gone back to fern. Witness consulted his ' Dank manager and finally told Whittaker i that the proposition was no use to him. 1 At the convention with the Birds, Whit- | taker said he was glad to get the de- | scription of the block as he did not want to bo hawking a poor proposition. Poor and Scanty Timber. 'Arthur Faulkner, sawmiller, of Kopaki, I described the Mangahao block as being ex- ' traordinarily rough. The timber was very I scanty and of very poor quality. If the , timber on the land was given to him, it would not pay him to take it out. Plaintiff said he was 61 years of age He and his sister had had a farm ot 1589 ! acres at Te Poi. Owing to his own illi health and one of his sons leaving home, ho decided to sell tho place. He was at- ! tractcd by Hand's advertisement and nogotiated with him for the purchase trie 1 mortgage on the Mangahao block. Hand I stated that the vendor of the mortgage was a very wealthy mar. and that he nad 1 put through about £200,000 worth of proi perty sales for him. Hand said he Jiad i-old the Mangahao property for a cnent 1 for £40,000, and that the mortgage of , £17,650 was the balance of the amount that had been paid. . Witness said no concluded that the investment would be an exceedingly good one. He sent particulars of his property to Hand and Whittaker came cut with Slater, Hand's client, and inspected the Te Poi farm. Whittaker quoted a Hamilton solicitor's opinion that tho mortgage on tho Mangahao property was as good as gold," and that Judge Cooper had considered taking it. A price for witr aess' farm and stock was agreed to at

£12,150, and the exchange was arranged on the basis that witness should transfer his farm and stock for the mortgage on the Mangahao block subject to a sub-mort-gage of £6OOO. Slater paid witness £SOO, £250 of which went to Hand on account of commission, and most of the balanco was used in expenses incidental to the transaction. A year and a-half passed, said witness, before he got any interest out of the mortgage he had taken over. He then received £llOO after a compromise had been effected, and witness had to take tho Mangahao block over. He had given Slater a first mortgage for £6OOO, Whittaker had stated that he and Hand would not press witness for the balance of the commission, but Hand said ho would not abide by any arrangement made by Whittaker. He opposed the transaction between Slater and witness until £250 was paid. Slater had taken possession of the To Poi farm but had defaulted in his interest payment and witness had to find the interest duo to Slater's mortgagee. In the meantime, said witness, he was making strenuous efforts to get off the Manganao block. He learned that, Hand had acquired Slater's mortgage in this property, and Hand told him that Slater had not paid interest and that ho looked to witness for the amount due. Steps were taken by Hand to forco the sale of the Mangahao block. Witness was then penniless, but his sister found £l5O, which was offered to Hand. He refused tho money and as Miss Paterson was negotiating for the sale o£ the block at a sacrifice, witness was anxious to get a delay of the sale. He asked Hand tor terms and Hand agreed that on payment of £6OO ho would delay the sale for two months. The amount was paid, but five weeks later Hand advertised the property for sale. The net results of the whole transaction, said witness, was that he had lost his equity in his farm and stock at Te Poi valued at £12,150; Hand had bought in the Mangahao property at a forced sale at £5400, and witness had paid Hand £475 in commission and £6OO to delay the sale, which had not been done. He had also paid two lots of interest of £3OO and had lost interest on £12,000, tho amount he believed would be his equity in Mangahao for years. It was on these losses that he based his claim in the action. In answer to Mr. Findlay as to the value of the Mangahao property, witness said the Hamilton solicitor who first held tho mortgage, had valued tho block at £.40,000, and had tried to sell it to the Government for £IOO,OOO. Counsel: He was optimistic. His Honor: Another soldier's farm. (Laughter.) Witness denied that ho would have had to walk off his Te Poi property if he had not quitted it. It was a good farm. After witness had been cross-examined at length the case Avas adjourned until to-morrow.