DEED OF PARTNERSHIP

New Zealand Herald, Volume LXXI, Issue 21764, 2 April 1934, Page 5

DEED OF PARTNERSHIP

EFFECT ON A DEBT COURT RESERVES DECISION [iJY TKLEGIIAI'II —PRESS ASSOCIATION] WELLINGTON, Saturday The Court of Appeal considered the appeal of Alec Leslie Harkncss, of Te Kanwhata, against the judgment of Mr. Jpstice Hcrdinan given in July, 1933, at Hamilton, in favour of Joseph William Nutt, of Christchurch. The facts were that in 1922 the appellant Ilarkness leased from the respondent Nutt a farm at To Kanwhata, and also purchased from hiiy certain stock and chattels for £6OO, and on the sum remaining unsecured he agreed to pay interest at 6 per cent. The rent payable under the lease and the rates fell into a near and a deed of partnership to carry on the far in together was entered into by the parties in September, 1927. When respondent subsequently brought an action for the recovery of the sum of £6OO and interest, appellant contended that ho had beer, released from his obligation at the time the partnership was entered into. Mr. Justice Herdman held, however, that appellant had failed to satislv him that lie had been so released, and gave judgment in the favour of respondent for £6OO. Opening the case for appellant, Mr. Cooke emphasised that respondent had not been released until four years after the partnership had been entered into. The suggestion had come like a bolt from the blue. Referring to the 'preliminary contract of June, 1927, which preceded the deed of partnership, and which the trial Judge held to be superseded by the deed, counsel made two submissions. He held, firstly, that notwithstanding the deed, the preliminary contract remained effective as to matters with which the deed did not deal, and, in particular, as to the release alleged by appellant to exist; and, secondly, that the preliminary contract operated as a release of debt. For the respondent, Mr. Gould submitted that the preliminary agreement was not in itself a binding contract, because it was conditional on the execution of the subsequent deed. If his submission was correct, then the preliminary agreement became merely part of evidence of negotiations preceding the partnership, and he contended that upon the wholo of the evidence, no release had been proved. The Court reserved decision.