APPEAL ALLOWED

New Zealand Herald, Volume LXXII, Issue 22018, 26 January 1935, Page 11

APPEAL ALLOWED

CLAIM AGAINST BANK PRIVY COUNCIL DECISION MR. W. D. LYSNAR'S ACTION LARGE AMOUNT INVOLVED By Telegraph—Press Association— Copyright LONDON, Jan. 24 The appeal of Mr. W. D. Lysnar, of Gisborne, against the decision of the New Zealand Court of Appeal in his action against the National Bank of New Zealand, has been allowed with costs, by the Privy Council.

The history of Mr. W. D. Lysnar's litigation with the National Bank of New Zealand dates back two and a-half years, for it was in August, 1932, that he issued a writ against it claiming over £50,000 for alleged breach of contract. After a lengthy hearing the late Mr. Justice MacGregor gave judgment against him, allowing £250 by way of costs. His Honor held that the contract had not been proved. The action was carried to the Court of Appeal, which delivered judgment on June 15, 1933, in favour of defendants. Judgment was by a majority decision, Mr. Justice Ostler differing from Justices Smith and Reed. Leave to appeal to the Privy Council was granted on July 10.

Mr. Lysnar appealed to the Privy Council from this judgment. Prior to March 14, 1931, appellant was the proprietor of Arowhana Station, near Gisborne, consisting of about 13,608 acres, in Mangatu blocks, subject to a mortgage to the East Coast Commissioner securing with arrears of interest approximately £21,700, and called "the back portion": 7820 acres more or less being" part or Waipaoa and Mangatu blocks subject to a first mortgage to the Public Trustee securing with arrears of interest £30,082, and called "the front portion." By a memorandum of mortgage dated April 12, 1916, appellant mortgaged all his equity in this land to the National Bank of New Zealand. Owing to the collapse of the wool and stock markets, and to the bank insisting on retaining all available revenue from the station, appellant fell into arrears with his interest to the Public Trustee and the East Coast Commissioner, and the latter on March 14, 1931, sold the Registrar of the Supreme Court that portion of Arowhana Station called "the back portion" comprised in his mortgage, and bought it in himself for £13,608. As Arowhana Station could not be advantageously worked without the back portion, the appellant, at the request of the general manager of the bank, entered into extensive negotiations with the East Coast Commissioner and the general manager to arrange some plan of working the station to the advantage of all parties, and to secure a fresh tenure of the back portion. As a result of these negotiations appellant, the East Coast Commissioner, and the general manager of the bank, on behalf of appellant, entered into a contract whereby in consideration of the East Coast Commissioner agreeing to lease the back portion of Arowhana to the appellant for a period of five years with a right of purchase for £13,000, respondent agreed to reduce appellant's liability to respondent to the sum of £30,000, to be secured by a mortgage subject to the existing mortgage to the Public Trustee over the front and back portions of Arowhana Station, including the sheep and cattle thereon, for a term of five years at 5 per, cent. This contract was evidenced by an offer in writing made by the East Coast Commissioner and dated April 29, 1931, and an acceptance by appellant by a letter dated May I, 1931, and by respondent by an endorsement in writing thereon accepting the contract, dated May 1, 1931. In May, 1931, the bank attempted to vary the contract by imposing additional conditions on appellant, and on the refusal of appellant to allow the insertion of these conditions respon-, dent bank purported to revoke its acceptance of the offer of the East Coast Commissioner and served upon appellant a notice of its intention to exercise the powers conferred upon it as a guarantee of the chattels instrument, and on July 10, 1931, served a notice of its intention to exercise its powers as mortgagee. In due course the bank entered into _ possession. Mr. Lysnar computed his damages at £50,919, and claimed for that amount.