OIL CONCESSIONS.

Poverty Bay Herald, Volume XXXVIII, Issue 12408, 18 March 1911, Page 2

OIL CONCESSIONS.

DISPUTE AS TO SYNDICATE RIGHTS.

JUDGMENT RESERVED

At the Supreme Court yestei'day argument proceeded m the case of W. K. Chambers, of Oisborne, sheepfarmer, on. behalf of himself and all . other shaveholders m the East Coast Petroleum Co., Ltd., plaintiffs, v. William Lissant Clay ton, of Gisborne, land agent, and George Hutchison, of Wanganui, barrister, <md the East Ooast Petroleum Co., defendants. The plaintiffs asked for. a declaration (1): that Wiiliajn Lissant Clayton holds ;bl),000 shares m the New Zealand Oilfields, Ltd. ; (2) that he be declared a trustee for the. plaintiff company of the said 60,000 shares, etc. Continuing his argument, Mr Morison said that none of the documents showed that the directors' reserved to themselves the right . to compete with the company m obtaining concessions. There was nothing to show that Mr Chambers rescinded the original agreement and thus agreed to hand over his rights. It must be clear that, the . three minds were agreed. The Court niust be able to say there' was no doubt Mr Chambers was abandoning any of the, rights he had to Mr Clayton. Mr Rich's report aided Mr Clayton to get concessions, which was detrimental to the company. Mr Morison then referred to Mr Clayton's letter of April 22nd to Mr Chambers, which he claimed was a complete condemnation of Mr Clayton's evidence. In the face of that letter and the subsequent documents, counsel submitted that the defence had not established their argument that Mr Chambers Tiad surrendered his rights as a shareholder , "or director. < •' Mr Lusk submitted that the, passing of the resolutions of January 24th, 1907, must be taken as a rescission of the original contract. So soon 'a* it was deter mined to form a, company the terms of the agreement could not hold good. The agreement dealt only with the admission of the three, whilst the resolutions provided for the admission Ot others. There was nothing m ihe. agreement which could lead the Court to .say that V. its benefits , could bo passed on ,to a, company. The l evidence that had been given showed that the agreement was preliminary to the formation of <v Company, and the resolutions were simply : the carrying into effect of that Agreement. Unless it was found that the record of the proceedings on January 24 were false, then it must be deemed to be a rescission. It- was proper to consider the circumstances surrounding the preliminaries of forming the company. Mr Clayton had done practically,' the whole of the work for a syndicate of three. They were entitled to «ay .that Mr Chambers recollection of the meetings was extremely hazy, and not so reliable as the other evidence. The Weight of evidence went to show that there was an absolute admission that there had been a rescission. There, was no rule, of law to prevent the directors carying on a business similar to that carried on by the company for which they were directors. Nothing was to be found m Mr Rich's report that could assist Mr Clayton to get concessions. The same information Was open to all the directors., Counsel submitted that on June 24 there was\a specific rescission, of the contract. • Mr Hutchison asked his Honor' to consider the question that if the company had been registered oh JannaVy 31, 1907, the 25 concessions would have been transferred (< to the company. It was not until June 1 that the company was registered ; therefore, up, to that time there was nothing to prevent Mr Clayton obtinmns^ concessions on his own behalf, .even "If the. argument of counsel for the plaintiff held good. Mr Chambers' knowledge' that the 25 concessions were to be the property "of the company was supported by^Mr Chambers' own evidence. Further argument was adjourned until this morning. .After further far pument this morning, his Honor re/iarved judgment, intimating that it Would be some time before he could go into the matter. He suggested that the parties should Confer with a view to coming to a settlement. Mr Hutchison said he would be pleased to do so.