EXCHANGE OF PROPERTIES.

Otago Daily Times, Issue 19836, 8 July 1926, Page 14

EXCHANGE OF PROPERTIES.

SUPREME COURT PROCEEDINGS LARGE SUMS INVOLVED. PROTRACTED EVIDENCE. The hearing of the exchange of properties caso in which Sidney Howard Shale, of Christchurch, claims recision of contract and damages against James Martin Samson, Dunedin, was continued before his Honor Mr Justice Sim all day yesterday. Mr F. B. Adams is appearing for the plaintiff and Mr A. T Donnelly (Christchurch) with Mr W. G. Hay, instructed by Messrs 'lrwin and Irwin, for defendant. Plaintiff had agreed in May. 1925, with defendant to exchange a Marlborough sheeprun called “Glenlee' for a farm at Norwood, near Christchurch and another at Awarua, near Invercargill. Plaintiff now claims that the Awarua property, instead of being worth the £14,733 10s mentioned in the contract is not worth more than £ISOO. He claimed recission of contract and £ISOO for fraudulent representations, or in the alternative £IO,OOO damages for fraudulent representation or £16,000 for breach of warranties. The defence counterclaims from the plaintiff £13,200 ns damages for alleged fraud and misrepresentation or in the alternative £13,200 as damages for breach of warranties. Mr Adams continued his examination of the plaintiff, Sidney Howard Shale. Witness said he made an arrangement with a man named Stevenson to represent him at Glenlee run. Under cross-examination by Mr A. T. Donnelly witness said ho had had soipo 20 years’ farming experience. He had not been in partnership with his brother Oliver at Berwick. He held a farm at Oamaru from 1906 to 1919, and had been interested in another small adjoining farm. He had had no interest in his brother’s farm at Milton. Ilia brothers Oliver and Charles were in partnership with him, but there was no arrangement in writing between them. His brothers bought Glonlee without his seeing it. Glenlee was originally bought in Oliver’s namo, but it 'was changed to witness’s name because of the treatment Oliver was getting from Cook and Bowron and Smith. Witness declined counsel’s suggestion that ho had changed the namo of the property so that Cook, Bowron and Smith could not get at his brother. Counsel further examined witness about the purchase of property at Fendalton for £3OOO by Oliver Shale. His brothers had a quarter each in Glenlee and he had a half, and they wore at present owing him £SOOO or £6OOO. Ho know that in exchange transactions values were sometimes put up a little. Ho inspected Norwood twice before the sale. Counsel examined ns to various property negotiations in which witness and his brothers had been concerned. Counsel; When did you first discover that Cook was not an honest agent? His Honor: Isn’t he an honest agent? Counsel: He may not be, your Honor. Witness: I think Mr Donnelly knows he is not an honest agent, too. Counsel: Did you have a suspicion that Cook was not an honest agent? Witness; Yes, I did. Counsel: When, . , Witness: When my brother first bought Glenlee from him. Counsel: After that deal you suspected Cook? , ~ Witness: Yes. Witness admitted that the Berwick property which was put in the exchange at £7600 might have been a little inflated, but it was certainly not inflated £3OOO. He did not know that thf Government valuation was £2550 in 1610. The property was worth more than that. His Honor: It was mortgaged at £4OOO Mr Donnelly: Yes, your Honor. I don’t know how that got there. Witness said he did not know much about the Berwick property at all. Ho liked the Glenlee property when he saw it in March, 1924. He would not say it was cold country, or that it was not good ewe country. He thought last year he got a little over 400 lambs of! the run. There was good ewe country on the down country, which was about 4000 acres. He had heard it said that sheep losses were high on Glenlee. Mustering was going on when he bought the place, and they had to take their chance of how many sheep were there. They mustered 1600 He had figures to show that Glenlee had cost his brothers and him £28,000. Counsel examined witness regarding various items in this total. He said they had “done up between 40 and 50 miles of fencing on Glenlee. Witness was unable to show where the expense of fencing appeared in the accounts. His Honor asked witness how he expected other people to understand the account when he did not understand it luniWitness said he and his brothers thought £I2OO was a fair payment tor their services for about 18 months. He had charged in the account all the working expenses of the place. He thought some little adjustment might be made in the account for £28,000, but it was hard to say what th adjustment was. When he and his brothers first got into touch with Samson he considered the property was worth £35,000, though they would have taken less on account of the trouble they had been put to. He did not instruct Cook to increase the price to £35,000 or to reduce the sheep to 6000. He had no doubt thov might have taken £30,000 cash for Glenlee. Witness complained of the hard treatment he had receipted in various dealings. . , , Counsel: I know we are in a hard school, but probably you know how to look after yourself. ..... Mr Adams: That is why he is here; Witness had told Cook and Samson that Glenlee was a good property if it was cleaned up. Ho never told them a word of a lie about it. If the place was put in order he told them it would have no trouble in carrying 8000 sheen. He never told Cook or Bainson that the place cost him £35,000 He thought Cpok was telling him the truth up to a certain point. ‘Ho has got that way about him/* continued witness. “He gets doctors, lawyers and hanbers/* lie would not say that by reason of his knowledge of Cook - ho did not rely on anything Cook told him. Witness told counsel he was trying to use Cook as a scapegoat for Samson’s sins. Witness wont on to describe his visit with Pilbrow to the property at Norwood. He thought the soil was good and might ho quite all right with proper working. His brother Charlie also thought the place might be all right. They did not come to any opinion as to what Norwood was worth. Ho knew now that in a dry season all the grass died off the property. His complaint was that it would not carry the sheep it was quoted to carry—-900 ewes and their lambs. His complaint about the Awarua property was its carrying capacity and the sale of sections. Witness gave evidence about his visits to Awarua and his examination of it before purchase. It did not appeal to him and he did not go much into it. It was not a fact that his first inspection of Awarua was before his purchase of Glenlee. Samson told him he had made the Awarua farm pay, and it never crossed his mind to wonder how, as he believed Samson. He saw Cook make the alterations now appearing in the agreement. After the agreement was signed he thought he had to deliver to Samson 5000 sheep less 567 and less another 500. lie signed* the agreement because he worked out the carrying capacity of Awarua at about 2000, and he was satisfied with the carrying capacity of Norwood also. He did not consider by any means that Glenlee was loaded He thought the values given him by Samson would bo somewhere about it. He instructed Harrington to fix up the fences on Awarua. Harrington told him it would take a year or two to got returns from it. Hie property was for a t ime in Cook s hands to deal with Fox. After October 13 last he knew that the Awarua property was bad. When he inspected the property in November he found it far worse than ever ho had thought. He did not know till a considerable time afterwards that the muster on Glenlee in November shoivcd only about 5600 sheep. Ho had no recollection of telling a man Dorman that ho was afraid there might be a shortage of sheep on Glenlee and that he would have to pay Samson something. He did not discuss with Dorman is-s.fing a unit for misrepresentation ! against fi'-m-on so aa to effect a compronnfe. sheep guarantee had nothing to do with his taking these proceedings He told Cook to tell Samson that if he liked to take t u ? sheep as they were without a muster he would make him an allowance of £l5O. Samson refused. Sleenson was to look after the sheep on Glenlee and report to witness. Samson would pay him on'v £2 a week and witness agreed to make it up to him to £' 10s or the man would not have stayed. Ho began to find out a day or two after the contract was signed that the people !m was dealing with were not what ho thought they were.

His Honor: To,whom do you refer? Witness: Mr Sarnsan and his manager, Mr Craigie. Counsel: Is it not a fact that you offered Steenson £IOO for a good count? Witness (warmly): I would not do such a thing if it cost me Glenlee. Counsel: But is it not a fact? Witness: No, it is not a fact. Counsel: Do you know that your brother Oliver wrote to Steenson offering him £IOO if he gave a good count? Witness: I think you are trying to twist that round to a bad meaning. Ro-oxamined by Mr Adams, witness said it required two or three men to count sheep. One man alone could not do it. Disputes over the deal began the day after the signing of the contract. For tho muster a man named Bert Smith was taken up to check the tallies on Glenlee. Samson would not allow Steenson to make the count. After the luncheon adjournment Mr Adams intimated that he intended to get an accountant to work on the figures given for the cost of Glenlee to see what he could make of the material available. Mr Adams re-examined witness regarding certain items in his passbook. Charles Lionel Shale, the next witness called, said he was a farmer at Norwood, and brother of the previous witness. Ho gave his brother Oliver a hand on a farm at Berwick for a time, but he did not put any of his own money into it. Oliver was the first to negotiate for the purchase of Glenlee. Cook quoted £17,000 for it. The exchange went through at £15,000. Bowron saying it would save stamp duty to i educe it by £2OOO. Witnes* said he had never done any of that sort of work before, but it was eventually agreed to do as Bowron proposed. There were 1300 acres in the Berwick farm, and he valued it at £6 an acre. He gave evidence as to visiting the Norwood farm, and also the Awarua farm. His brother Sidney and ho wont over part of the farm at Awarua with Samson, and Samson told thorn the rest of tho farm was lust tho same as what they had seen. Samson told witness that both the farms paid, and that a lot of money had been made out of Norwood. Samson said he was selling be cause it was difficult to get men to understand agricultural farming. Samson said he had sold two sections at Awarua and that there were other two sections that he could sell. Witness was influenced to sign the contract, by what Shmson had told him. Ha thought Norwood would carry 900 ewes and that Awarua would carry 2000 sheep if it was all the same, as he had soon. It was not true that Norwood had been neglected since ho got it In his experience 600 ewes was as much ns Norwood would carry in a normal summer He thought £7 or £7 10s an acre would be the value of tho property. Cross-examined by Mr Donnelly, witness said tie had had about 2.5 years’ experience of farming. He supposed tie owned a third of the Gtonlce Estate, and Ids brother Oliver had about the same, lint Sidney had more than either of them. There was no definite arrangement. He considered Berwick worth £6 an acre. Ho thought Glenlee was well worth the £17,000 paid for it Ho thought it should have been worth £20,000 at that time. He know Oliver had been talking to Cook about selling Glenlee in March, 1024, two months after they had bought it. He heard Cook say they should lii able to got £30,000 for it. Witness considered the property was now worth £35,000, and he was closely questioned by counsel ns to whore tho increase of £15,000 came in over the value when (hoy went to Glenlee. He accounted for £OOOO of it ns extra value of stock. He expected to find Samson’s properties worth their face value. Pressed closely, he admitted ho thought Samson’s properties would lie inflated slightly. He supposed ho went down to Awarua to satisfy himself about the carrying capacity of the farm (hero. Samson had said lie was too nervous to jump tho ditch they came to. Witness did not see damp or wet on (lie part of the property where they were. He did not know’ that that land when he saw it would not carry a sheep and a-half to the acre. He did not hear Samson say to Sidney that the price of Glenlee was too high, nor did he hear Sidney say that Glenlee had cost him £35,000. According to the sale note ho thought they had to give Samson practically 4000 sheep. If Samson had taken the sheep right away he would have got 0000. Last December he and his brothers were not frightened that they w’ould have to pay something to Samson under tho sheep guarantee. This ease was not, brought originally on account of the sheep guarantee. Mr Adams: What Is 25 per cent, of £0000? His Honor: Oh, ask him something easier! Mr Adams: What is 25 per cent.? Witness: Twenty-five out of ft hundred. The earlier and profounder question was left unanswered. Oliver Samuel Shale, farmer, living at Norw’ood, said he was a brother of the two previous witnesses. He went to a farm at Berwick In 1020 and left in 1924. It was his property, but hia brother Sidney had money in it. Witness improved it greatly. Glenlee was quoted to him at £25 000 In the first place. It was eventually put in at £17,000 for purposes of exchange with tho Berwick property, which he valued at £0 an acre. On Glenlee they mustered 1000 sheep, then 200 stragglers and 10S lambs. The run was in a very had condition when they took it over, and (here was not a fence on tho place that would stop n sheep. There were a little over 0000 sheep on the place when they sold to Samson. It would easily carry <OOO, il not more, nt that time. He detailed discussions that had taken place with Samson over tho Awarua property. Samson described it ns really dairying land, and said there were SO to 100 head of cattle on it There had been a lot of sheep on it grazing for another man. The Norwood property was also discussed, and Samson said there ivore 900 ewes and lambs, and also some wethers, on it. The feed nil wont off the Norwood farm about I’cbrunry. He estimated its carrying capacity now nt COO sheep. He would not care to give more than £7 an acre for it. Tho Court adjourned till 10 n.m. to-day.