THE OATS WARRANTS CASES.

Otago Witness, Issue 2320, 18 August 1898, Page 24

THE OATS WARRANTS CASES.

In the Supreme Court yesterday, in Chambers, an application was made to Mr Justice Pennefathor, which may have the effect of expoditiug the liquidation of the Colonial Bank. This was a summons to dismiss the actions, tried some months ago, of John Connoll and Co. (Limited) y. the Colonial Bank of New Zealand in liquidation, and Brooks and Co. v. the Colonial Bank of Now Zealand in liquidation.

Mr IJosking (for Mr Brent) appeared on behalf of tho liquidators of the bank in support of the summons ; Mr Chapman for th 9 plaintiff, Brooks and Co. ; and Mr J. A. Cook ior tli9 plaintiffs, John Connell and Co.

Mr Hosking 1 said the liquidators felt that, as officers of the court, they were only acting as they ought in directing attention to tho strange delay which had been exhibited by the plaintiffs in drawing up the judgments in these cases. Why there should have been thij strange delay when apparently the judgments were in favour of the plaintiffs it was hard to say, unless it was with some remote object of prolonging the time within' which an appeal might be granted.

His Honor said it seemed to him that the Gist point would be to hear why in Oonnell's case tho judgment had not been drawn up. Mr Hosking said that judgment in tl)9 caaeb was delhered on the 25th March, so that it was nearly five months ago since the decision was pronounced which entitled the judgment to bo drawn up by the party with the carriage of the proceedings. On the 20ih April the solicitors of John Connell and Co. were addressed on the subject, and a coi-raspun denco followed; but tho other sido simply fenced the question of drawing up the judgment. Why the judgment had not been drawn up the defendants did not know. If the plaintiffs did not choose to draw up the judgment the defendants did not care, but they did want to know where they were to be in thai matter, as it was a material point, with them as to when tho winding up of their liquidation was to take place. Apparently the excuse which the other sido ha:l S9t up for not taking any f>_tep was that they wanted to rco tho accounts in order that they might see how they would be situated when the judgment was drawn up. The defendants applied to the liquidator of the J. G. Ward Farmers' Association to &cc the accounts, but he said he would rot consent to that without an order of th 9 court, and the defendants were not going to incur the expense of obtaining an order. To a&sume that bofore the other side exhibited any intention of acting on the judgment the defendants were to l>e put to the expense of taking an account in order that the plaintiffs might decido whether to adopt the judgment or not assumed a novelty in the way of the procedure of the court.

His Honor: I don't see how the judgment could depend on a question of accounts. Mr Hosking said thai the plaintiffs held that the fact that this decision had been given, which had never been delivered under the seal of the court, was quite sufficient to compel the defendants to render accounts. The defendants were entitled to come to the court and a>«k for its directions as to what was to bo done — whether Connell and Co.'s solicitors were right in insisting that the defendants were bound to furnish accounts before they (the plaintiffs) drew up their judgment. Learned counsel quoted rule 289 from the code, and said there were meansjpr expediting a proceeding, and that was what the defendants wanted to have done. They did not want tho court to dismiss these actions, and they did not suppose that the court would do that, but they asked that tho plaintiffs should take the next stop to have the proceeding completed. The other side must exhibit some intention of proceeding instead of lying by and doing nothing and keeping the liquidation of the Colonial Bank strung up in the way it was. His Honor : Do I underhand that after tho order is drawn up some inquiries will havo to be made?

Mr Hosking said the position was this: Connell and Co. and Brooks and Co. were two English houses that received consignments of produce from the colony for sale, and the Ward Farmers' Association had large transactions with them, shipping oats chiefly for sale in London. The ordinary arrangement in a case like that was that the person who shipped drew a bill against the bill of lading and discounted the bill with the bank which then forwarded it Home, where it was accepted and paid by the persons to whom the goods were consigned. _ There was the special arrangement in this caso that while goods were in the Ward Association's store awaiting shipment the association might draw against the goods on warrants, indicating that the goods were in store. Connell and Co. had accepted two or three bills and Brooks and Co. had accepted two or three bills, but while this was going on the Colonial Bank received warrants direct from the Ward Association for oats to cover advances made to the association. Thon the association went into liquidation, and the fact came out that owing to some confusion in the matter of the warrants there were not sufficient oats to cover all the warrants issued to Connell and Co. and Brooks and Co. Theso firms then brought an action to make the Colonial Bank liable on three grounds — first, that the bank did not tako proper documents as warrants; second, that the bank had represented that it held proper documents when it did not ; and third, failing all that, it was charged that the Colonial Bank, with the know led go that the oats were pledged to Connell and Co. and Brooks and Co., hod carried the proceeds of the sale to their own credit instead of placing them to the credit of Connell and Co. and Brooks and Co. Judgment was given in favour of tho bank on all points except the last. It appeared in the course of the evidence that the bank became awaro some nine months before the association went into liOMidatiou— that was, in August, 1695— that

the oatß wore insufficient. After that thei whole of the oats in the store v/ere sold and the proceeds were paid over to the bank, and Mr Justice Williams held that the bank wag bound to account for the proceeds of the oats paid into its account after August, 1895, when it became aware of the shortage, so that the judgment was not for specific sums, but for 1 an account to see what those sums of money wore.

Mr Chapman said one point which lug learned friend had not pointed out was that the two cases were not dependent upon each other, and although Mr Justice Williams delivered one judgment only, that was merely as a matter of convenience. Mr Justice Williams held that theso warrants took precedence according to their date, and as Connell and Co.'s warrants were all given in 1894 and a lot of others, including Brooks and Co.'s, were given in 1895, tho result was that tho judgment gave Connell and Co. priority over any other holder, Brooks and Co. and the bank included. A conflict arose between Brooks and Co. and Connell and Co., and thoro was some conflict between the bank and Connell and Co. His Honor: It is a question of time? Mr Hosking : They are not playing in the same backyard now, sir. — (Laughter.) Mr Chapman: Not in the same backyard, but in neighbouring backyards. — (Laughter.) Mr Hosking: It is the same game.— • (Laughter.)

His Honor: But, Mr — »apman, is that any reason why the judgment should not be drawn up?

Mr Chapman said thafc Connell and Coj asked for some account in order that they might see what their position was. It seemed to him that, ot any rate, some preliminary account might well be given by the bank, but apparently that did not suit it.

Mr Hosking

We cannot get it

Mr Chapman submitted that as far as Brooka and Co. were concerned the position oughb to be that an account ought to be first rendered to Connell and Co. and taken between the bank aad Connell and Co., for it was quitd evident that Connell and Co. recovered something, hoAvover little the bank might receive, but it waa not evident yet whether the bank was accountable to Brooks and Co. ; and the taking out of two sets of judgments and the taking of two sets of accounts would only be an advantage to professional men, whioh ought not to weigh in a case of that sort. Mr Hosking said if Brooks and Co. consented to attend an inquiry into accounts instituted by Connell and Co., and bo bound by it, subject to any right of appeal, he thought that vvjvs oil that was required. Mr Chapman said that Brooks and Co were to some extent antagonistic to both these parties. Very naturally Brooks and Co. 'a advisers did not push them ahead while they were told that some discussion was going on between Connell and Co. and the bank. Mr Cook said that as far as Connell and Co. were concerned they did not intend to oppose the application, and wero urOy too glad that it was brought on. His Honor: You do not oppose that the actions be dismissed? — (Laughter.)

Mr Chapman : That is scarcely seriously applied for. Mr Cook said his inlcilinn was not seriouly to dispute the right oi the court to inako an order expediting the action in any wpv, for it would be seen from the cormipoudenco that the object of Ills clients throughout had been to get tho case pushed on and see what they were entitled to, but their difficulty throughout had been this: that by having one judgment in the two cases their right of appeal might be affected if the orders were not. drawn up simultaneously. His Honor: Your case and Brooks's are different, though one judgment was given in both. You havo no right to demand that Brooks' s judgment shall be drawn up sooner or later. Mr Chapman: We will send a draft judgment to the bank's solicitors at any reasonable time. His Honor said he should have thought Hie solicitors for Council and Co. and Brooks and Co. could have arranged the matter long beMr Cook: Our interests are diametrically opposed now. . His Honor thought the defendants in the two actions had been unduly prejudiced. Mr Hosking said he asked for an order that tho next step be taken within a given time, otherwise that the actions bland dismissed. Mr Chapman: After what l>as been said, if a date in fixed, we wilJ comply with it. Mr Hosking said if both plaintiffs agreed to a date the summons might stand over Mr Cook: Let the summons stand over for a given timo and let the plaintiffs in the meantime draw up the judgment. This suggestion was adopted, the summons standing over for a week, and the plaintiffs undertaking in the meantime to deliver draft ■judgments.