SUPREME COURT JUDGMENT

Otago Witness, Issue 3327, 19 December 1917, Page 25

SUPREME COURT JUDGMENT

SHARP v. CROMWELL DEVELOPMENT COMPANY.

His Honour Mr Justice Sim on the 13th inst. delivered judgment in the case of Robert Peter Snaxp v. the Cromwell Development Company. Thq following ia a summary:— s On September 8, 1915, the plaintiff agreed to purchase from the defendant a fruit farm near Cromwell, known as section 10, Ripponvale, containing about 13 acres, with the fruit trees and other improvements thereon. He alleges that at the same time the defendant agreed to supply for the same farm a continuous supply of water for the purposes of irrigation from September 1 in each year until March 31 in the following year, and also to supply during the remainder of the year a sufficient supply of water for domestic purposes The agreement for the sale of the farm was made on behalf of the defendant by Mr Moritzson, who is one of the directors of the defend ant, and who was acting as its selling agent There is a conflict of evidence between the plaintiff and Mr Moritzson as to what took place between them at their interviews. Each endeavoured, I think, to give what he believed to bo a truthful account of these interviews, but the plaintiff is more likely than Mr Moritzson to have an accurate recollection of what took place. The transaction was of more importance to him than it was to Mr Moritzson. It was the one transaction-of the kind in which he was concerned, while, on the other hand, Mr Moritzson must have had interviews from time to time' with many other. intending buyers, and would not be likely to retain a clear recollection of what he said to each of them. The plaintiff was justified, I think, in believing, from what passed between himself and Mr Moritzson, that they had made an agreement with regard to the supply- of water both for irrigation and domestic purposes. Before, however, the defendant can be bound by any such agreement, it must be proved that Mr Moritzson had been authorised by the defendant to bind it in that way. That has not been proved. Tho truth is, I think, that Mr Moritzson did not intend to make' any agreement on behalf of the defendant with regard to the supply of water. Ho was concerned only with the sale of a fruit farm to the plaintiff, and what ho said about water supply during the negotiations was said merely for the purpose of inducing the plaintiff to buy the farm, and without any idea or intention of binding the defendant as to the terms on which water was to be supplied. It was common ground that the defendant would supply water for the purpose of irrigating the fruit farm, but the terms on which it was to be supplied had not been all settled by the-defendant at this time. That Mr Moritzson did not intend to bind the defendant on tho subject is clear, I think, from what he said when asked by the plaintiff to write out a sale note embodying the conditions. His reply was that he was" not allowed to write out anything but a receipt, and that the company's solicitor would write ■ out the sale note. Ho accordingly gave a receipt for the £3OO paid by tho plaintiff simply as*a deposit on the sale of the land, without referring in any way to tho water supply, and m the letter to the plaintiff confirming the sale no reference was made to the water supply. The preparation of the sale note is thus referred to in the letter: "Messrs Duncan and MacGregor will prepare the sale note, and write you when ready for signature by you. I think, therefore, that, if the objection were insisted on by the defendant, I should be compelled to hold that- the plaintiff had not proved any definite and concluded agreement binding the defendant to provide-a water supply of any kind. The defendant, however, does not wish to raise this question, and is willing to treat himself as bound to provide a water supply during the water season, and to leave the court to say what otight to be deemed to be the terms of the contract between the parties. It was admitted that the position taken up by the secretary of the defendant company in his letter to the plaint.ff's solicitors of April 3, 1917, that the plaintiff must sign tho defendant's water incumbrance before he could get a title, to his land, was not justified. In the circumstances the agreement ought to be treated, I think, as for a supply of water on the terms set out in the memorandum of incumbrance; the rent to be paid on the number of acres for the time being planted with fruit trees, and to be at the following rates-.—For the first season, from September, 1917, at the rate of 25s pei* acre; for the next season, 30s per acre; and thereafter at the rate, not exceeding 35s per acre, charged by the defendant to tho other consumers; the rent to bo paid one-half on December 15 and the other half on March 15. The plaintiff is entitled, therefore, to a judgment directing the defendant to transfer to the plaintiff an estate in fee simple, free from encumbrances, in section 10, Ripponvale. The defendant is not entitled to any reservation of an easement over'the land for the purpose of constructing a water race. There was no express agreement for such an casement, and one cannot be implied from tho fact that on the plan shown to the plaintiff the course of the intended water race passes through section 10. The judgment will also direct the parties to execute an agreement for the supply of water on the terms already mentioned. The defendant ought, I think, to pay tho costs of the action. The whole trouble has arisen from the unbusinesslike course adopted by the defendant of allowing a "fruit farm to bo sold before tho terms on which water was to be supplied had been settled and reduced to writing, so that intending purchasers might know exactly what their position would bo with regard to water. When a dispute arose between tho parties the defendant took up an untenable position in connection with tho execution of tho water incumbrance, and did not abandon that until the hearimj. Costs arc allowed to the plaintiff on tho middle scale, as on a claim for £3OO. with disbursements and witnesses' expenses to be fixed by the registrar. If the parties are unable to agree on the exact

terms of the judgment, they can be settled in Chambers.