ALLEGED BREACH OF CONTRACT

Otago Daily Times, Issue 22631, 24 July 1935, Page 5

ALLEGED BREACH OF CONTRACT

CLAIM BY GOLD MINING COMPANY ADEQUACY OF MACHINERY A case with an important bearing on the gold mining industry was partly heard before the Warden’s Court at Lawrence on Tuesday and Wednesday of last week, when Fifty-five Goldmine, Ltd., proceeded against Joseph Johnston (Invercargill) on what was, virtually, a claim in respect to an alleged breacli of contract in connection with the erection of a mining plant at Tuapeka Mouth, and its inefficiency. Mr C. L. Calvert (Dunedin) ap peared for the complainant and Mr KB. Bannerman (Gore) for the defendant. The plaintiff claimed; (a) The sum of £IOOO special damages, being the amount paid or credited by the plaintiff to the defendant. (b) The sum of £2s° by-way of special damages. (c) A declaration that the instrument by way of security, therein referred to, is void and that no moneys are due thereunder or will at any time become due thereunder. (d) That defendant be ordered to execute and file a memorandum of satisfaction of the said instrument by way of security. (e) An order that the said agreement, dated June 27, 1934, be cancelled, and that all rights and liabilities thereunder be extinguished. (f) The costs of this action. (g) Such further or other relief in the premises as to the court seems just. ' . ~ Mr Calvert, in opening his case, said that there had been an agreement that the defendant should put on the claim sufficient proper machinery to work the claim. The defendant was to get 1000 shares in the company and to receive back out of the gold won the money spent by him in erecting the plant. The defendant set about erecting the machinery by installing two 70 h.p. engufes, driven by suction gas, and a sluicing pump. The machinery, however, did not work satisfactorily, although the defendant spent some months experimenting. The trouble seemed to be in the suction gas generator, which failed to deliver an even flow of gas, so that continuous running was impossible. A further term of the agreement was that the defendant should provide the money required by the company up to the time of the first wash-up, and also to provide up to £2OO towards the erection of an elevator. Since October of last year the defendant had refused to supply the money necessary to carry on th e operations, as he claimed that there had been several wash-ups and his liability to provide money was at an end. He also refused to find the £2OO for the elevator. The company was, therefore, left with the plant, which would not work, and without money to pay wages and ordinary working expenses. No elevator had been erected or any provision made. The company's claim was that the defendant had failed in all material respects to carry out his part of the agreement, and the company was therefore entitled to have the agreement cancelled and to be repaid the £IOOO paid to the defendant. Evidence was given by two directors of the company, Messrs M. M'lvor and K. M. Walker, as to th e defendant’s efforts to get the plant to work, and by the mine manager, John Christie. Technical evidence was also called to show that the machinery .was inadequate. For the defence evidence was called to give the definition of a wash-up. . The court then adjourned until Tuesday next, when several witnesses with an expert knowledge of machinery will be heard.

On Thursday morning the warden (Mr H. J. Dixon, S.M.) paid a visit to the claim at Tuapeka Mouth and inspected the plant.