THE MERIVALE ESTATE, SOUTHLAND.

Otago Witness, Issue 1892, 8 May 1890, Page 29

THE MERIVALE ESTATE, SOUTHLAND.

(Fbom Ouh Own Coebespondent.) London, March 22.

This splendid estate is now the subjtcb of serious litigation in London on the part of Mr J. C. Ellis, who is suing Mr Jnmes Ashbury, formerly M.P. for Brighton, on certain acceptances.

The story of the dispute appears to be somewhat as follows : — On the 30th J inuary 1885 an agent of Mr Ashbury's (from England) presented a report on Merivale, and the gist of it was that a revenue was then shown of over £8000 a year, ex interest on mortgages, and it stated the figures were given by Mr Ellis. In March 1885, on the faith of this rovenue being true, Mr Ashbury bought the estate for £120,000 (inclusive of mortgages), and stock, &c. at a valuation which came to over £17,000; and for these amounts, excluding the £81,000 mortgages, acceptances were given and many were paid In 1886 a company was formed in London to take over the property, but as the dividends were prospective the public only subscribed a small amount, and there was no issue. In 1887 another company was Formed retaining the mortgages, and the capital asked for was guaranteed by Mr Ashbury, 6 per cent, for seven years, before which time the estate would be developed with an expected income independent of the guarantee. Tbis company was also a fiasco, either because the Stock Exchange opposed it, no promotion money, or because the public were afraid of the prior mortgages. About this period, Mr Ashbury's suspicions having been verified by results that no revenue of £8000 a year ever existed, he refused to proceed, and allowed his bills to be protested.

In this condition of things Mr John Chute Ellis arrived in England in December 1887, and without prejudice to his rights again co-oper-ated ■with Mr Ashbury to form another company to take the property on the basis of Mr Ellis leasing the property at £8000 a year for the first five years and £9000 for the last two ; the rental to be guaranteed by an eminent London firm connected with the colonies. Tho total debenture issue was to be £140,000, and was to bo underwritten through Mr Ashbury 's medium. In the meantime, during 1888, Mr Ellis suel on a New Zealand judgment and a £5000 bill due iv London — in all, with expenses, about £6400,— and as the person doing the underwriting weekly expected to go to an issue, Mr Ashbury in the geuetal interest of the estate, to avoid publicity and thereby wreck the proposed company, permitted Mr Ellis to get judgment without any action or contest. Neither Mr Ellis nor Mr Ashbury could get any proofs as to the £140,000 having been underwritten, although paid for. It was arranged that proofs should be given to tho solicitors to the Southland Estate Company, the one to take Merivale, and h« wrote Mr, Ellis to the effect that he had

inspected the underwriting list, and was satisfied with the names and amounts, and the issue was to take place in January 1889 Whereupon Mr Ellis in September or October 1888 returned to New Zealand, all documents having been signed and sealed. A little later Mr Ashbury went to Mexico for an importaut syndicate, and considered all settled. Constant excuses were given why no public issue took place, and in Juno 1889 Mr Ashbury and Mr Ellis both arrived iv London, unknown to each other. The person doiug the underwriting said his friends objected to the board, and after trouble and delay another one was formed, but no underwriting list could be produced. It then transpired that the solicitor never took a copy of the list shown him in September or October, and never verified names or amounts. At this stage Mr Ellis gave formal notice on 14th July 1889 to withdraw from all agreements, and for the third time a company to buy Merivale was wrecked. Mr Ellis having been permitted to obtain judgment from a fear that litigation would prevent a company being formed, this judgment was registered, and to prevent bankruptcy Mr Ashbury paid the £6400 without proposing to reform the company. Mr Ellis at once sued on a £5300 bill. This was defended. Master Pollock, in chambers, gave unconditional leave to defend. Mr Ellis appealed to a judge in chambers (Mr Justice Field), who gave defendant leave to defend subject to the money being paid into court. The defendant appealed to the Divisional Court, before the Lord Chief Justice and Mr Justice Matthews, and Justice Field's order was revoked and Master Pollock's order confirmed. The plaintiff (Mr Ellis) gave notice of appeal, but did not do so. Defendant then required Mr Ellis to give au undertaking not to part with any acceptances pendiug the case going to tho jury on the main issue— viz , fraud and misrepresentation on the pnrfc of Mr Ellis when selling Merivale. This was refused. The defendant went before Mr Justice Lawrence for an injunction, but he referred it to a superior court, and on the 18th March 1890 tho case came on before the Lord Chief Justice (Lord Coleridge) and the Master of the Rolls (Lord Esher), and, after hearing counsel on both sides, declined to hear the reply of defendant's counsel, and at once gave an injunction against Mr Ellis' using or parting with any of the defendant's acceptances.

The case cannot be set down for trial for some time as the defendant intends sending a commissioner to New Zealand to examine witnesses on oath on matters relating to the sale of Merivale in March 1885. The defendant is suing for a rescision of all contracts and £200,000 damages (including tho £81,000 mortgages). It is expected the trial will come on in about two years.

From one of the defendant's affidavits it appears his connection with Merivale has cost him over £50,000, and he has never bad any interest on any portion.