CLAIM FOR £l30,000

New Zealand Herald, Volume LXXII, Issue 22205, 4 September 1935, Page 14

CLAIM FOR £130,000

EAST COAST SHEEP ffi BANK'S ENTRY ON BTAt'iqjj'| ,\L,LEGED BREACH OF GONTRAC| ! FURTHER LITIGATION BEGUjf-f [by telegraph —OWN GISBORXE, Tuesday ! Litigation in which widespread j teresfc has developed was conunaWp in the Supreme Court uo-day, the case of William Douglas LysriJrlf station owner, against the Natioajj | Bank of New Zealand, was called be. 1 fore Mr. Justice Blair., who over a special fixture o!: the Court j down for this case. It was stated tii|| the claim involved a total of owi £130,000. Lysnar is represented j 11. F. O'Leary, K.C., of and the bank by Mr. A. H. Johnstone, i K.C., of Auckland. In March, 1931, Lysnar was : ||j owiaer of two blocks of la nd known ju Arowhana Station, consisting of 13,608|| acres known as the back section and 78510 acres known as the front Section. The first of these blocks was subject to a mortgage to the East Coast Co®, miiisioner, and the second block, the s front section, was subject to a mork t jrage to the Public Trustee, both blockg j being subject to a second mortgage to | thes National Bank of New Zealand, J I which also held stock mortgages over; I all the stock on both blocks and varioiu I J other securities, securing a total in; ' 1 debtedness of considerably over £72,000. j Agreement With Bank ;|| The East Coast Commissioner sold back the section of 13,608 acres through' •the registrar of the Supreme Court on account of Lysnar's default unler the mortgage. Lysnar then entered into negotiations with the bank and the East Coast Commissioner in an endeavour to retain control over both blocks, and on May 1, 1931, the bank agreed to make very substantial con. cessions! to Lysnar by reducing his debt to the bank "to £30,000, the intention being that the -'East Coast Commis. nioner would then lease to Lysnar, with the right of purchase, the back block of 13.608 acres, which, it was conr>idered, was necessary to the successful working of the front, block, and which ■this Commissioner had just bought back •through the registrar of the Supreme Court. This arrangement was subject •to various conditions, and, contending that these conditions had not been ful. filled, the bank declined to proceed with the suggestions. v - • Plaintiff maintained that he he Id. a binding contract of May 1. 1931, requiring the bank to grant him concessions and enable him to obtain thd lease of the back section. In July,; 1931, the bank entered into possession of the front section of 7820 acres and of all stock upon the property, and haii isirice then farmed the land. This entry by the bank led to Lysnar commencing an action against the bank, claiming damages on account of the contract oil May 1, 1931, which he alleged tb<i bank had broken. Privy Council Decision The question, as to whether the arrangement of May 1 had constituted a binding contract was decided by thil Supreme Court and the Court of Appeal in the bank's favour, but on an appesl to the Privy Council these decision! were reversed, and the present position is that the arrangement of May 1; 1931, has been held to be a binding contract. Lysnar is now, therefore seeking damages from the bank o:i account of the* loss which he allege) he has suffered because the contract was not carried into effect. An intimation that the claims arising out of the bank's failure to comply with the terms of the contract and for alleged illegal -entry Into possession of Arowhana Station m the capacity of mortgagee would involve a total sum of over £130,000 was made in the earl? stages of the hearing. Mr. O'Lean mentioned that the claim was based partly upon the contention that tbi bank had agreed to wipe out Lysnar'i indebtedness oi? £73,000 and to substitute in the terms of the May, 1931, contract a new liability on his pari! of £30,000. Most of the day was occupied by Sir, O'Leary's opening address, the first wit-f :ness being called late in the afternoon