DISHONEST LAND DEAL.

New Zealand Herald, Volume LXII, Issue 19149, 15 October 1925, Page 15

DISHONEST LAND DEAL.

WAIOPEHU MORTGAGE CASE. finding for the patersons. DAMAGES OF £5241 AWARDED. A complicated case arising out of a scries of exchanges of property, the investigation of which occupied three days at the recent Hamilton sittings of the Supreme Court, was brought to a conclusion by a judgment filed yesterday by Mr. Justice Her dm an. The plaintiffs in the action were William Allen Paterson and his sister. Miss Jane Paterson (Messrs. A. Blair and Adams), described by His Honor as "elderly unsophisticated people who occupied a humble position in "life, managing to eke out an existence upon small means," and the defendant was Frederick Charles Hand .(Mr. Finlav) a land agent at Hamilton, carrying on business in conjunction with one Whittaker, under the name of the Farmers' Land Agency Company. The action, said His Honor, owed its origin to "one of those ill-famed and unsatisfactory transactions in respect of land known as exchanges." The plaintiffs alleged that in his dealings with them the defendant had been guilty of fraud, or, in the alternative, that as their agent he had been guilty of a breach of duty. They also claimed £6OO for breach of an agreement which defendant made with them to postpone exercising the power of sale conferred upon the mortgagee by a certain security given over plaintiffs' property. In all, the plaintiffs claimed to recover from defendant £15,150 damages. Mortgage and Sub-Mortgage. The facts and evidence were fully reported at the time of the hearing. They concerned the representations made to Mr. and Miss Paterson by which they were led to exchange their farm and stock at Te Foi, near Matamata, for a mortgage over a property in the ranges east of Manakau, in the Manawatu district, which had belonged (o a Wellington concern known as the Waiopshu Land Company. After certain negotiations this j mortgage of £17,650, burdened with a submortgage for £6OOO to Mr. Andrew Hanna, of Auckland, became the property of the Patersons. Afterwards difficulties multiplied upon them, and finally the Manakau land was sold by the registrar of the Supreme Court, and bought in by defendant for £s4oo—land which, the Judge observed. Hand had said three years previously he would not sell for less than £40,000. When Mr. Paterson visited the office of the defendant in January, 1921, said His Honor, it was an unfortunate day for him and for his sister. The net result to them of their association with the transaction was that the value of their stock had been lost, the interest which they had in the Te Poi farm had disappeared, the mortgage over the Manakau land which they got in exchange for their equity in the Te Poi farm had vanished, and the cash which they got from Slater and Sir. H. T. Gillies had., with other moneys, _ been swallowed up in paying for commission, interest, law costs and miscellaneous expenses. All this had happened to the plaintiffs after they entrusted their business to the defendant. A Client's Vanished Wealth. The Patersons' complaint was, proceeds the judgment, that defendant Hand represented that he was acting in connection with the sale of the mortgage for a very wealthy man, that he had put through £200,000 worth of sales for him, that he had sold this property containing 10,000 acres for his client for £40.000, and that the mortgage of £17,650 represented the balance of the purchase money. The wealthy man must have been Slater, who, at one stage in his evidence, said that he was worth £60,000 in December, 1920, and later on computed his wealth at that time to be £35.000, but who, notwithstanding his riches, very soon got into difficulties over interest with the Te Poi mortgagee, and who, with a haste which one might describe as indecent, sought to quit the mortgage of £17,650 at its face value, apparently quite prepared to sacrifice commission that he was liable for, and the stamp duty anil lav? costs incurred in connection with the exchange transaction with the Waiopehu Company. Slater's descent from affluence to financial embarrassment must have been speedy, for when Mr. Hanna gave up the submortgage of £6OOO, Slater gave him an unregistered security over the Te Poi stock to secure. £IOOO which he owed to Mr. Hanna. The case should be decided upon the alleged misrepresentations by Hand, for it was the statement that the land had been sold for £40,000. and that £IB,OOO represented the balance of purchase money, that influenced Paterson and his sister. Dishonest Kepresentation. There was no doubt that the representation was made by Hand to Paterson, and that he made it without any honest belief in its truth. It was undoubtedly plain that the statement that he had sold this property of 10,000 acras for his client, for £40,000, was contrary to the truth. He had arranged exchanges, but not a sale in the sense in which that expression is generally understood.. The factor which finally made the Patersons decide to take over the mortgage was the alluring but inaccurate description which Hand gave of the security he brought to the Paterson's notice. That this representation had induced the plaintiffs to enter into tne contract of exchange and to act to their detriment, is certain, for no sooner did they get the mortgage than trouble commenced. Fraudulent misrepresentation having been proved, the defendant must, if it had been proved that the plaintiffs had sufloss, pay damages. After reviewing in detail the various transactions and their effect upon the Patersons' finances, His Honor gave judgment for the plaintiffs for £5241 with costs.