SUPREME COURT.

Otago Witness, Issue 2921, 9 March 1910, Page 11

SUPREME COURT.

CIVIL SITTING. Tuesday, Mahch 1. (Before his Honor Mr Justice Sim.) JJEW ZEALAND THU3T AND LOAN COMPANY V. EDWABD COE. Action for specific performance of an agreement. Mr J. H. Hosking, K.C., and Mr. W. D. Stewart appeared for plaintiffs, and MiAlexander S. Adams and Mr i). Reid for defendant. The statement of claim set out that on tht 9th March, 1907, plaintiff sold to defendant part of the Roxburgh Estate, forming part of the block known as " The Tongue," containing by estimation about VOO acres, at the price of £2 10s per acre, estimated to amount to £1750. There was a provision in the agreement for sale that an accurate survey should be made, following as closely as possible the boundaries shown on the lithograph plan, and that the area shown by such survey should be final and binding upon both parties, and the purchase money adjusted accordingly. That survey was made, and it turned out that the area was 900 acres, which made the purchase money £2252 3s 9d. Defendant entered into possession of the property, and worked it, but when he was called upon to complete his title he alleged that he had been misled by misrepresentation of plaintiff to the effect that the area was only about 700 acres, whereas it turned out to be about 900, and that as a result the portion of unploughable land had been materially increased. In the original 700 iacres_ there was 162 acres unploughable, but in the 900 acres it was alleged there was 360 acres unploughable. Defendant offered still to take the 700 acres or thereabouts at £2 10s per acre; or the additional 200' acres at 10s per acre; or to cancel the agreement on receiving back all the moneys expended by him. Mr Hosking said this was an action for specific performance of an agreement. He submitted that it was not for him to call evidence, but that it was really for the other side to establish its case. Taking the statement of claim and the statement of defence there was nothing for plaintiffs to answer, seeing that defendant had always been, and was, willing to perform the agreement set out in the statement of claim. There had been a defence filed, but the previous day an amended defence had been put in, and this amended statement had somewhat disconcerted them, because they had not subpoenaed a witness who might now' be required. He might, however, be present. Counsel then referred at length to the statement of claim and the statement of defence. The whole point was what .did the defendant want out of the plaintiffs if ho performed the agreement. There was no doubt that "he wanted to get something out of the plaintiffs if he did perform it. There was this other point: Was there misrepresentation, and, if so, whether upon the terms of the contract the defendant was entitled to claim any benefit from the misrepresentation in the way of reduction of the purchase money. Mr Hosking then called James Adam, surveyor, of Milton. Mr Reid said defendant resisted specific performance on the ground that the contract was a substituted contract. The contract the other side wished them to now accept was very materially different to the one Mr Coe agreed to accept. It was guaranteed there would not be 50 acres more or less than 700 acres. The misrepresentation regarding the area was made by Mr Duthie, the auctioneer, but he (Mr Reid) admitted that it was bona fide made. It was not until January, 1909, that the defendant knew the area was 900 acres, and in the meantime he had spent over £SOO on permanent improvements. After these improvements were made he was told he would have to pay £2250, when 2»n nf* m, d *° believe th at he had to pay 7 onn y were askin £ him to pay £SOO lor 200 acres which were not worth £IOO Evidence was given by Edward Coe, the defendant (who said that had he known there were 900 acres in the area he would ihave had nothing- to do with the property) J. R. Copland (farmer), Robert Stiel (farmer, and William J. Shea (farmer), after which Mr Hosking and Mr Adams addressed the court at length, and his Honor reserved his decision.

THE COURT'S JUDGMENT. His Honor Mr Justice Sim on the 3rd delivered judgment in the case of the New Zealand Trust and Loan Company v. Edward Coe heard on Tuesday. His Honor's judgment was as follows: The first question to be determined in this case is the construction of the written agreement of the 9th of March. 1907. The defendant claims that it should be construed as a contract for the sale of 700 acres out of lot 3 on the plan of the .Roxburgh Estate. It seems to me that it cannot be construed in this way, and that it must be treated as a contract for the sale of the whole of lot 3 except the northern portion thereof, which had been sold to Messrs Gray Bros. The area agreed to be sold is described as " the portion of the subdivision of lot 3 on the lithograph plan of the subdivision of the said estate lying below the portion of the said subdivision or Jot lately sold to Messrs Gray Bros." 'The agreement stipulates that the vendors are to provide an accurate survey of the property, and that the purchase money is to be computed on the" acreage shown by cuch survey.' These terms of the contract make it clear, I think, that the defendant agreed to buy the whole of the unsold portion of Jot 3, and not any definite area out of that portion. The next question to be considered is the objection raised by the •defendant in connection with the survey. The agreement provides that the survey to be made of the area sold shall follow as closely as possible the boundaries shown' on the lithograph plan, the fence dividing lot 3 being treated as the boundary between the portion sold to Gray Bros, and the portion sold to the defendant. The lithograph plan shows two branches of a creek as the eastern and western boundaries of lot 3. The surveyor did not, however, follow the course of these exactly, but treated the fence which surrounds lot 3 as marking the boundary line, yhie fence follows pretty closely the course 0 f the oreek along the eastern and western boundaries, and it Wouid have made very little difference in the ar*a if the creek kad boon treated is the boundary, 'l land is. for the most part, very rough on the ©Mtern and western boundaries, and is in sons>e. places prc-eipitous. It would not bo reasonabii? in these circumstances to fix A boundary line without regard to the

contour of the country and ihe facilities for erecting- a fence on the line selected. A reasonable meaning should be given to the provision of the agreement with regard to the survey, and I think that in making the survey as he did Mr Adam followed as closely* as was reasonably possible the boundaries shown on the lithograph plan. The defendant has been in possession since December, 1906, of the land enclosed by the fences. He has thus treated the area, included in the survev as the area which he agreed to buy, and no question as to the survey was raised until an amended statement of defence was filed the day before the hearing. I think, therefore, that the objection raised by the defendant on this crround cannot prevail. The next que&uon to be considered is the alleged misrepresentation on which the defendant relies. The area sold is described in the agreement as "containing by estimation 700 acres or thereabouts. The lithograph plan states the total area of lot 3 as being 1100 acres. The northern portion sold to Gray Bros, contained 400 acres, thus leaving "700 acres as the area to be sold to the defendant. During the negotiations before the sale Mr Duthie, who acted as the plaintiff s agent in the transaction, stated to the defendant that the portion to be sold contained 700 acre's, and that the difference one way or the other would not exceed 50 acres. When the survey was made the area was found to be 900 acres 3 roods and 20 poles. The defendant, before he agreed to buv, visited the land on two occasions. On one of these occasions he was shown by Mr Ward, the manager of the estate, a plan prepared by Mr Grigor, a surveyor, showing the land in Lot 3, which had been ploughed in the year 1889. The area of the ploughed land which, according to this plan, is included in the portion sold to the defendant, is 537 acres. Taking the total area to be sold as about 700 acres, it would fellow from this that the area of rough nonploughable land would run from 160 to 200 acres. The area of such land must, hoiyever, be between 300 and 400 acres. It is not suggested that the misrepresentation of the area was other than an innocent misrepresentation, and the question is: What are the rights of the parties in the circumstances. The defendant has never sought to resciind the • contract on the ground of this misrepresentation, and it is clear that by his conduct he has elected to waive any right he may have had to rescind the contract on that ground, and has elected to affirm it. He knew in January, 1909, that, according to the survey, the land he was in possession of under the contract contained 900 acres. Notwithstanding this knowledge, he has continued in possession of the land, and has grazed stock thereon and taken crops off it. But although the defendant has lost his right to rescind the contract, be is none the lews entitled to set up the misrepresentation as an answer to the plaintiff's claim ■ for specific performance. The court will net decree specific performance at the instance of a vendor if he has materially misled the purchaser, and a less serious misleading is sufficient to enable the purchaser to_ resist specific performance than is required to enable him to rescind: In re Terry and White's contract, 32 ch. D. 14, 29. Inthe present case the defendant was materially misled by the plaintiff as to what he was purchasing. He understood that he was purchasing upwards of 500 acres of plough - able land, and from 160 to 200 acres of rough land. The result of the survey is to show that the area of rough land must be between 300 and 400 acres, so that the purchaser will have to pay for nearly twice as much rough land as was originally contemplated. I think, therefore, that the case is one in which, if specific performance were resisted by the purchaser, the court would be entitled to refuse a decree. The defendant does not, however, resist specific performance. He alleges that he has always been, and is now, ready and to specificially perform the agreement recited in the statement of claim. He claims, however, that he should noi\ be compelled to pay for more than about 700 acres at the price fixed bv the contract. He offers to take up to 750 acres at that price, or to take 700 acres at that price and the balance at the price of 10s per acre. To grant either of these claims would be, not to enforce the contract made by the parties, but to make a new contract for them. Thet the court is not entitled to do. I think, however, that the plaintiff should obtain a decree for specific performance of the contract only on the terms of making compensation to the defendant for the loss he will sustain by reason of the area of roujrh non-ploughable land being greater than he was led to suppose it to be by the representation that the total area sold was only 700 acres or thereabouts. There will, therefore, be a decree for specific performance of the agreement, but subject to an inquiry as to what abatement should be allowed to the defendant in the purchase-money in respect of the loss referred to. The further, consideration of the action is adjourned, and the question of costs is reserved.