THE MOUTOA BLOCK.

New Zealand Mail, Issue 1682, 25 May 1904, Page 73 (Supplement)

THE MOUTOA BLOCK.

IMPORTANT MANAWATU TITLE

CASE.

Mr Justice Caoper gave judgment on tlie 17th in a Palmerston North action, in which John Stevens, Herbert

Austin and Frederick Spencer Easton sued William Bryant Yater Pearce for specific performance of an agreement dated August 13th, 1903, for the lease of certain land being part of the Moutoa estate, in the Manawatu county. By this agreement the plaintiffs agreed to grant and the defendant to accept a lease of about 2120 acres of the Mou toa block for a term of six years and five months, from September Ist, 1903. at a yearly rental stated in the agreement. The agreement gave the defendant flax rights and purchasing power in respect to the land in question. For the defence it was alleged (1) that the contract was induced by plaintiffs’ misrepresentations, (2) that the Statute of Frauds had not been complied with, and that the agreement was incomplete and uncertain in its terms, (3) that the plaintiffs’, title to the property was not such as the defendant was bound to accept,- and (4) that the plaintiffs had lost the right to specific performance by reason of their laches and delay. The case was at'• bearing three days at Palmerston North and one at Wellington, in the months of February, March and April last.

His Honor held that the defendant had failed to substantiate that part of bis case on which .'he sought to avoid the agreement on the ground of misrepresentation. With regard to the "other defences, the land was under the Land Transfer Act, 1885, and the registered proprietors' were the Assets Realisation Board. By agreement dated February 4th, 1903. the .Board agreed to sell to the plaintiffs, and the plaintiffs agreed to purchase the Moutoa block, of which the land in question forms part, for the sum of £08,975 8s sd. Upon the execution of the agreement the plaintiffs, paid 10 per cent, of the total purchase money, £6,697 10s IGd,. and agreed to pay the balance by yearly instalments. Full possession of the property was under the agreement given to the plaintiffs on March 31st, 1903. The term of the lease agreed to 'be given to the defendant was to commence on September Ist, ‘ 1903, and it did not appear that defendant had entered into possession, although there was some evidence that some of his stock had been depasturing on the property. On the question of laches the learned Judge pointed out that the delay of three months, that had taken, place was accounted for by the negotiations between the plaintiffs and the Assets Board in obtaining their consent to join - in the lease, and the suit having been commenced immediately afterwards, he was clearly of opinion that the plaintiffs had not lost their right to relief by their delay. That they did not in fact accpiiesce in the abandonment by the defendant of the contract was clearly shown by the correspondence, and the delay was not long enough to bar their right on the ground of implied acquiescence. The remaining question for ; consideration was that which" arose upon the title of the plaintiffs. The rule was well settled that where specific performance was sought, the validity of the contract having been first established, the Court might order specific performance of the contract, subject to a good title being made to the property contracted to be sold. In the present case the plaintiffs, although not registered proprietors of the land in question, had, prior to making the agreement sued upon, become the purchasers from the Assets Board under an agreement under which they were entitlted to obtain a transfer at any time, either by paying at once the full amount of purchase- ■ money or by executing a mortgage to the Assets Board to secure the balance; and they had already paid nearly £7OOO of the purchase-money, and were, in possession of the property. The case was, therefore, different from that class of case where the Court would' not force a buyer to take an estate from a vendor who was not, when the contract was made, either the owner himself or possessed of the necessary power to obtain the title. In the present case tlie defendant claimed to rescind solely on the ground of fraud. No question of title was raised until after the action was commenced. In the interval the plaintiffs obtained the consent of the Assets Board to join in the lease,.and as he (the learned Judge) had already held that the delay of three months in bringing the action did not bar -the plaintiffs’ right to relief, it followed that as they were now prepared to obtain the concurrence of the Assets Board, the incompleteness of their title in the interim had not prejudiced the defendant. In his opinion, therefore, the defendant in this case not having raised the question of title until after the action was commenced, and the ground on which he claimed to rescind the contract having been determined against him, the plaintiffs were entitled to a decree for specific performance, subject to a good title being made. There was, however, no necessity for a reference for further inquiry on the question of title, for the whole matter was before the Court. Objection was made to the title the plaintiffs now offered to give on two grounds: be a party to the lease, and that the defendant’s contract was with the plaintiffs only; and (2) that the undertaking on their Dart to join in the lease was

not under the seal of the Board. In his opinion, neither of these objections was tenable. The title to the land was under the Land Transfer Act, and tlie first was a matter of conveyance. The Assets Board, being the registered proprietors, must necessarily be made parties in order that the lease might be registered. The defendant s title under such a lease would not be subject to being affected by any default in performance of any of the conditions by the plaintiffs of their agreement with the Assets Board, while the defendant would have the full benefit of his contract with the plaintiffs and be liable to tlio performance of no other covenants and conditions than those stipulated in his agreement. As to the second objection, the letter of Mr Foster (general manager of the Assets Board), was written under direction by the Board, and was sufficient evidence that the plaintiffs were in a position to obtain the consent of the Board to the lease. He was, therefore, of opinion that the plaintiffs were entitled to judgment, and there

must be a decree against defendant for specific performance of the contract; the plaintiffs undertaking to procure the necessary concurrence and consent of the Assets Board to the lease in such form as to enable the lease to be registered under the Land Transfer Act. The plaintiffs must have their costs of this action on the higher scale for the statement of claim and preparing for trial, and under the provisions of rules 532 and 540 of the Code, he fixed the costs of the trial and of the argument in Wellington at the total sum of £SO. Court fees and witnesses’ expenses were also allowed. • . Mr 0. T. Treadwell appeared for the plaintiffs, and Mr D. M, Findlay (instructed by Mr E. P. Baldwin, Palmerston North) for the defendant.