PROPERTY EXCHANGE

New Zealand Herald, Volume LXIX, Issue 21293, 21 September 1932, Page 12

PROPERTY EXCHANGE

DISPUTED AGREEMENT CLAIM FOR ENFORCEMENT DEFENCE CONTENDS FRAUD A claim specific performance of a contract for exchange of properties was contested before Mr. Justice Smith in the Supremo Couit yesterday. The exchange was <o have been made botween the plaintiff, Bold Marchant, of Onewliero, Auckland, farmer, and the defendant, James Howard Arnett, of Portland Road, Remuera, traveller. The parties entered into an agreement on April 5, 1932, to exchange Marchant's farm of 225 acres at Kauri Road, Onewliero, for Arnett's town property in Portland Road, Remuera, but on April 12 Arnett wrote declining to proceed further with the agreement. Plaintiff asked for au order for specific performance of the transfer agreement and for £l5O damages for its breach.

Defendant asserted that the agreement had been signed to be held in escrow, and not to take effect until he had satisfied himself, about the property by a thorough inspection. Defendant was induced to sign it by various false and fraudulent representations regarding the farm. He asked for a declaration either that the agreement was held in escrow or that it was void.

Plaintiff gave evidence of the signing of the contract, and said he was in a position to fulfil its terms. In cross-ex-amination, he said he had 60 head of cattle on the farm now and had recently sold 28.

Counsel for the dcfonce then proceeded with his affirmative defence. He said that defendant was brought up in the industrial districts of England, and had no knowledge of farming or of cattle. Defendant had told the land agent that he must rely absolutely upon him. The first day on which Arnett visited Marchanfc's property it was so wet and foggy that it was impossible for them to inspect it or even to see the whole of it. Nevertheless Arnett was induced to sign the agreement that day under the impression that it was a preliminary document subject to a further inspection. He did not read the document until weeks afterward. His Honor remarked that the document as it stood was a complete bar to any refusal of specific performance, but it was open to take steps to have it set aside. Counsel for the defence said it could be set aside if fraud could be shown. On a second visit, when Arnett had a proper chance of looking at the farm, he was absolutely disgusted with it. He had paid £2OOO Lfi 1926 for his unencumbered home, whereas Marchant had given £1231 for the farm last year and there were mortgages of £931 on it.

Details of the negotiations leading up to the agreement wero given by Catherine Arnett, wife of defendant. She said the agent had told them that if they did not "snap" with this place, he would consider it useless to look for anything else for them. She never imagined that the agreement her husband signed was a binding one.

The hearing will be continued this morning.