REDWOOD FORESTS

New Zealand Herald, Volume LXXIII, Issue 22538, 1 October 1936, Page 16

REDWOOD FORESTS

DISPUTE]) MORTGAGE 1 11 * SUPREME COURT ACTION LEGAL ARGUMENT HEARD Legal argument was commenced in the Supreme Court yesterday in the action taken by the trustees for the debenture-holders of New Zealand RedWood Forests, Limited. The action was taken for the purpose of having declared invalid a mortgage of £7500 which was given in April. 1931, by New Zealand Redwood Forests, Limited, to Kotahi Lands, Limited, and on subsequent dates was transferred to various other companies. The case is being heard by Mr. Justice Fair. The plaintiffs are T. PI. Dawson and L. Knight as trustees for the debentureholders of New Zealand Redwood Forests, Limited, and T. E. Jones, ot Dargaville, one of the debentureholders, and they are represented by Mr. Barrowclough and Mr. Gray. The defendants are Sterling Investments Company (Now Zealand), Limited, in liquidation, and Wynwood Investments, Limited, both represented by Mr. J. 13. Johnston and Mr. Drummond, who appear on behalf of the Public Trustee as the liquidator of Sterling Investments and the receiver of Wynwood Investments. The remaining defendant is the National Investment Company of Queensland Proprietary, Limited, represented by Mr. Richmond and Mr. Wiseman. Questions at Issue By arrangement between Judge and counsel, the argument yesterday was confined to dealing with one of the many questions of law and fact that have arisen in the course of the proceedings. The argument related to questions arising out of an alleged deed of covenant of Juno 9, 1930, said to have been made between the Redwood Company and the Edgecumbe Company and certain Redwood debenture-holders. The document itself was not before the Court and had apparently been lost, but the defendants submitted a draft document which they contended was a true copy of the original. Jt was also alleged to have been executed by the Redwood and the Edgecumbe Companies and by at least one Redwood debenture-holder. The questions for the Court involved a decision whether the deed was executed as alleged, whether its terms were the same as the terms of the draft submitted, and whether such deed of covenant —if it was an effective document —created a prior equity in favour of the Edgecumbe Company and the companies who subsequently received from it the mortgage which is the subject of this action. Defendants' Submissions Mr. Johnston submitted that it had been proved that on June 9, 1930, the. RedAvood and Edgecumbe Companies executed a deed of covenant in terms of the draft put in evidence. Such a deed was actually stamped as shown on the requisition lodged in the stamp office and stamped on June 24, 1930. Such a xleed was recited in the memorandum of transfer from Kotahi to Redwood of' July 8, 1930; and it had also been established that this particular deed of covenant related to the 2000 acres of Matahina land. The evidence also established beyond doubt that the terms of the deed of covenant were those of the draft submitted to the Court. The deed created an equitable interest in the 2000 acres in favour of the Edgecumbe Company, and that interest was prior to any right that the plaintiffs could have acquired under the deed of trust. Mr. Richmond submitted there was a chain of evidence amounting to absolute proof of the execution of this deed : of covenant by "the Redwood Company prior to the transfer of the 2000 acres : to Redwood Forests. Mr. Barrowclough submitted that the deed of covenant was never executed bv either or both the Redwood and Edgecumbe Companies, and said this J was strongly supported by careful examination of the minutes. Further, there was no binding agreement in terms of tho draft. Even if the dce(l had been executed or the agrecmcut binding, the Edgecumbe Company was precluded from setting up the terms of the deed or agreement against the plaintiffs as constituting a prior equity. Argument will be continued to-day. I