SUPREME COURT.

Poverty Bay Herald, Volume XL, Issue 13171, 3 September 1913, Page 3

SUPREME COURT.

(Before His Honor Mr Justice Cooper.)

TO-DAY'S PROCEEDINGS

V The Supreme Court, which adjourned at 2.30 p.m. yesterday, resumed again at 10 a.m. to-day. A TRUSTEESHIP.

' Jesßie Ada Pyke, of Te Aral Valley, widow IMr C P. Skerrett, K.C., with Mr. L. T. Burnard), proceeded against James Russell, of Matawhero, sheepfarmer (Mr F. W. Nolan), on a petition for ihe romoval of trustee m the estate 'of? Charles Surtees Pyke (deceased), and trfe appointment of a new trustee and originating summons to admit the life tenant m possession. Yin. her petition the petitioner alleged that the affairs of the estate, which consists of a sheep station (together with the. stock and other assets), known as Jl&hginui Nos. 3a, parts of Ranginui ftos. la, 2, Tairoatane No. 3a, and Rangaiohinetau No. 2, were m an extremely uhsatisfactory condition, and she prayed : (1) That an order be made discharging or removing the said James Russell from the' office of executor and trustee df the \vill of the said Charles Surtees Pyke (deceased) and of the said trust estate upon such terms and conditions as to the Court may seem just; (2) that some suitable person be appointed executor ahd trustee of the -said will and of the said trust estate m place of the said James Russell; (3) that the said James Russell be ordered to pay all, costs of • ahd incidental to this petition ; (4) that tffre Court may make such order m the 'premises as may seem right. yy-The originating summons was for an order : (a) Admitting the petitioner into possession of the real and personal property of which she is the life tenant unpifer the will; (b) declaring that the petitioner is entitled to the possession of the " 'a&tled lands under the will} and of the ' Jftock belonging to the estate, and that irti6 ii entitled to manage the trust proS'erty, and directing the respondent to p all acts and things and execute all assurances necessary to place the petitioner into possession of the said lands _)»d stock, and to vest m her the management of the said trust property ; (c) for aufch further or other relief as. m the circumstances may be just. „Jh opening, Mr Skerrett said he wished, to say at the outset that neither nis 'Client nor himself desired to make. any charge of misconduct against the trustee, biH they said the trustee was so tactless j&d. actuated by pique that he was not suitable to hold the position of trusteeship. The trustee should have resigned tne, trusteeship when he saw how matters Were. Counsel quoted authorities on the point of the removal of a trustee, when it appeared that through no fault of his own ne should not hold the position. He said the principle laid down was that ivhere it was found that the trustee and the beneficiary could not agree the trustee should be removed. Continuing, Mr Skerrett said the testator had an estate Comprising 1620 acres, all improved, and all hill country. It was purely a. pastoral farm, and easily worked. It ran about 200 head of cattle and 4000 sheep. There Were .five children.

_tis Honor: Was there any other property beside the pasture land? .'. Mx Skerrett: Practically no other property excepting the stock. He said trie ages of the children ranged from six years to 20 years. It would be 14 or 15 Years before the youngest son attained the age of 21 years. Counsel referred to the will, whicat he said showed that the petitioner was the life tenant. The will slab showed that 1 until the .termination of the life interest of the petitioner ov death or second marriage, or until the youngest son attained the age of 21 years tKe. trustee should manage the estate. His Honor remarked that the clause was a little ambiguous. Mr Skerrett said m the first part of th 6 will the life tenancy of the 'wife

was absolute, and the clause referred to stipulated the carrying on of the business by the trustee until the happening of the last, of the three events— death or- marriage of the wife, or until the yojingest child is 21 years old. His Honor: What is meant by the last; event? V Mr Skerrett said he took it to mean

whichever event was last m point of time. Counsel proceeded to traverse other clauses m the will, showing the bioWers of the trustee. Mrs Pyke clearly had a life estate m the property, which was determinable only by her death or second marriage. He wished to sweep away, any legal matter m the will, and ask .His, Honor to decide what was m the tttind of tbe testator. It was clearly i\jAh, that the estate should be a home for his wife and children^ and that his boys should be brought up on the farm, ahd .should eventually wbrk it, and the position of the trustee was purely one ef an- advisor. Passing on to causes leading up to the action, counsel said from IM.O t0 '1912 the trustee allowed Mrs Iraks'to carry on the estate under his direction, and there was nothing m JVlrs Pyke's conduct to justify a reasonable man taking away that limited, conijtyl. Mrs Pyke had taken a great interest -.m the farm — having helped her husband, kept the books, and taken &reat interest' otherwise. Mr Russell insisted that Mrs Pyke should pay the whole ..of the death duty, about £600, and that the estate should pay the overdraft, amounting to £2000. Such questions should never have been raised. But this was not the cause of the trpUble. The real cause was a dispute as to commission. Mr Russell was no doubt, entitled to his commission os trustee, and £50 was suggested as a feoj.'nnble sum. At first Mr Russell whs inclined to accept, but later he appeared <to take umbrage, and seemed to thirik he was being had. The dispute that arose over some returns which the' trilsteb said were forced, was almost too contemptible for words. Counsel read correspondence between the parties, Mr Iluteell stating m one letter,, "I am the trustee, and I am going to act as such. ' lie meant by that, said counsel, that he wis going to make things as unpleasant ag lie could for Mrs Pyke. Three days later he put a notice m the paper, stating he would not be responsible for dehts incurred m the estate without his Written authority, and signed himself *'iAle -trustee. '•' "There was no warranty fofrY thiß advertisement," said counsel, r-hVLi the petty quarrel over the commission." Further, Mr Russell wrote a curt letter on the same date, stating, *'I beg to inform you that Mr Bailey &*'> m sole charge here." That meant rs Pyke was to be deprived of any authority and take her orders from BaUey. The consequence of this conduct Wis quite plain. Life had become m tolerable for the family. The boy, who it Was intended should work the farm, would not work under Bailey, and Mrs Pyke would not cook for him, and extra expense was being incurred. There would always be friction unless the trustee ywas removed. Mr Russell was also man unfortunate position. By occupation he was a buyer for a freezing comjo_ny,.and he had to sell, from himself to himself as buyer. There was,, however, absolutely no suggestion that the estate had suffered m any wiy because of that. Counsel said there could be no difficulty m an ' honorable adjustment of the matter. He did not Caw. &hy reflection upon Mr Russell, excepting that he was wanting m tact, .and ai it took two to make a quarrel lie did , not say that Mrs Pyke was not free' from blame; but she was the life tenant.

His Honor said it was a question as to. ywheiher the life tenant could close down the estate. ,Mr Skerrett contended that the life terflMit could do so. . Under the Lands Settlement Act a tenant for life could apply to the Court for leave to sell. Having regard to these facts and the powers of the tenant for life,' it was ftUbniitted, without any reflection upon Mt that they were entitled to have the trustee removed and another trustee appointed. Mr Skerrett said the riext point was to have the life tenant left, m possession. ' ..His Honor said it was not wise to put the .beneficiary m the place of trustee. MrvSkerrett'said he did not ask for that.. Ho asked that she be put m possession as' life tenant. ' His Honor said the position of the Trustee Act was for the appointment of another m place of Mr Russell. Mr Skerrett : That is so. He .said the business m question was different to the ordinary. The only loss to the estate! .otild bo m the stock. ',

His Honor said it appeared that tlie testator intended that the estate should be kept intact, and worked together by the sons.

His Honor referred to a codicil m which the testator gave power m the event of certain happenings m respect of noxious weeds and other troubles m i tlie land. 1 Mr Nolan said he was given to understand that the fear m the testator's mind was that rabbits should come through. Mr Skerrett said the value of the stock was £4717, and wliat they proposed to do, if let into possession, was to find a security of £2000, and m another year to find a. further security ol £1000. Tliat should be sufficient to secure the estate and the possibility vi loss to the children would be overcome. His Honor said there appeared to be an express provision dealing with the power to sell. Mr Skerrett submitted that that could only come about upon the termination of the life estate. His Honor said it appeared that tlie testator intended that the estate should be kept intact, and worked together by the sons. Mir Skerrett : Tliat is exactly what Mrs Pyke says, and that is the object oi" these proceedings. Petitioner giving evidence, said Mr Pyke died on January 19, 1910. Their children were: Isabel Jessie, 20 years J old ; James William, 18 years ; Alice I Addie, 10 years ; Nancy Evelyn, 8 years ; and Charles Robert, 6 years. Witness described the. property, and- said she valued her personal property at about £1600 or £1700. The property was worth £14 per acre. There was amort- ; gage of £3000, but she had reduced tliat to £1000, which she intended to pay off ' next year. No ploughing was done on 1 the property. A permanent staff of two was required to work the property. 1 During her husband's lifetime witness 1 kept tho books. Mr -Skerrett : And you kept the cash ? —Yes. Mr Skerrett: A chancellor of cx- ' chequer. ! Witness said there was a comfortable ; homestead on the property. Between ■ January, 1910, and November, 1912, wit- > ness paid all the men and accounts, and 1 operated on the banking account, which " was m the name of "The Estate of 3 Charles Surtees Pyke, deceased; James " Russell, trustee." p His Honor: Who signed the cheques? 3 —I did.

,' To Mr Skerrett: Mr Russell did the buying and selling, and gave witness any advice she wanted m the running of the place. It was never suggested, dining this period 1 , that there was any misconduct m her management. She had asked Mr Russell if he was satis-

fied, and lie said he was. He never made any complaint. In tlie matter of ths overdraft witness took out the originating summons and judgment was given for her. This did not create any iriction, at any rate on her side. T'he first trouble arose over tlie sale of some cattle. Mr Bennett, of Messrs Bennett and Sherratt, asked her if she- had any fat cattle for sale, and she said she had*. He asked her if they could buy them. Before she could 4A so she received a letter from Mr Riipfell, saying that he had booked the cattle with Nelson Bros, for £1 per lOOlbs cold weight. They could not take them then and no time was fixed for delivery. Witness then told Mr Russell that Mr Bennett liad

asked her for the cattle. He said, "Understand tliat I do the buying and selling." Witness showed the letter to Mr Symes, manager of the Bank of Australasia. Witness had to wait until the

cattle were taken away. She told Mr Russell a date should have been fixed.

Mr Skerrett: Was he angry?— He did not l'ke it.

Witness said that six weeks later, as tho cattle had not befen taken,' she asked tliat Nelson Bros.' deal be cancelled,

a_ prices were better

Mr Russell said

hs was not going to be dictated to. He was annoyed, and asked her to go along to Nolaai and Skeets. She did so, and Mr Russell asked what his position was. 3li* Nolan drew up a letter, of which N witness received a copy. Matters were then smoothed ovor. M_ Russell was buyer for Nelson Bros.' This was not the immediate cause of friction. This occurred m February, 1910./ The real friction arose out of Mr Russell's claim for commission as trustee. He informed her he only wanted £10 or £20 for commission. His Honor: When 'was that? — I can't remember, but it was earlier than November.

Witness said why not take it instead of going to Court. He said, "No, it will have to go to Court." On November 16,^witne&s, as she was asked to do, saw MWteussell, and asked him if he could not settle about the commission.

Hj said he thought the commission had been settled. She said "No." He said. "What I was going to do, was this : let the Court fix the amount, then come to you and ask you what you would give me." Witness said, "When that has been done I have no power." He asked what difference it would make to her, and she replied she thought whatever tha .Court fixed would be final.? Witness said she also thought if he did not take the full commission granted him th-ct lie could come on the estate for any money ho was short paid, and that she* thought any subsequent trustee should do the same. Mr Russell said, "H that is the case, let us settle it ; what will you give me?" Witness said, "£SO a year." He said, "No, that's too much ; it's not worth it." Witness considered it was, and Mr Russell invited her to go to-the-lawyers and settle it. She concluded he liad accepted tho £50. They went to tho lawyers, and found n their office was closed, and it was arranged' they should meet at the lawyers the following Tuesday.

Mr Skerrett : Had you any angry words with Mr Russell up to this stage? —None whatever; we parted quite friendly.

Witness said she rang him up on Monday night, and he said he could not come to town next day. On the Wednesday morning Mr Russell rang her up rind informed her that she oouM not sign any more cheques, as he had stopped her signature at the bank. Witness rang up and asked if he would be m, and Mr Russell said he was going away and did not. wish to see her. On the following Monday, November 25, 1910, he came to the station to pick; fat sheep. He was shown into the dining-room, and when witness went m he said, "What ars you scheming against me; you _re acting dishonorably} defrauding and trapping me." Witness said she aid not understand him,, and asked ' for an explanation. He "said, "Wliat do you mean by offering me £50? Don't you know it was worth £80 to £100 to me. Kirk put you up to this. What made you offer me £50?" Witness said because sh; thought Mr Pyke would consider that ample reniune?*ation. He asked for ii balance-sheet, and . witness said she had nothing 'to do with it. Mr Russell then accused her of making false statements, whioh she denied. After further conversation about the balance-sheet, witness told him he had better see her at Mr Piesse's office. She got up to leave the room-.' He said, "You needn't get up and go out of the room m a temper." She said she was not going to be insulted. Mr Russell had said, "I have acted fair and square to you, and you hovp not done so with me. J will now go to the opposite extreme, and do my worst." The material for a bal-ance-sheet had been m Mr Piesse's hands since October. When Mr Russell said something about misrepresentation she thought, he referred to some cattle mentioned m the balance-sheet, but the information was not supplied by her. There -was a credit balance of .some £1600 m that year m her favor. On the night of November 25, 1912, she received a letter from Mr Russell. Mir Skerrett ; Was any reason given to you for this change? — None whatever. Witpes_ said on November 28 she saw the, advertisement put m the paper by Mr Russell regarding debts. He did not communicate with her before putting the notice m the paper. Mr Skerrett : And you did not like it, of course ?—- Naturally I wouldn't. Witness 'said up to this time Bailey had been under her control, and she gave him his orders. He was engaged by her m May, 1911, as general station hand. After November 25, 1912, witness did not give Bailey any orders, seeing the management was 'taken out of her hands. Up to that time Mr Russell \;isited the estate three or four days a year, when he went to lock at fat sheep and cattle. Referring to the codicil regarding the invasion, of rabbits, witness said there was no fear of rabbits now, and never was. After November 25

itus3cll and Bailey ran tlie business, and 3 vitncss was never consulted. Mr Russell t levor spoke to her ior inout-hs, and i lapsed her m the street. There was t lothing to justify Mr Russell taking tlie 1 ittitude he did. Mr Russell disposed ot' r J ill the fat stock and controlled the bank- g ng account. t Mr Skerrett : So you and your family c ire practically lodgers on the station? — 1 Practically so. t Witness said her son James had left j school, and was desirous of working 1 the farm. He would not work under r Bailey. The friction also caused extra- T expense m the cooking arrangements. ; She refused to cook foi- the men, because i she was told the mutton did not belong i to her, but the estate. Meat was then taken out of her private safe, which she . objected to. To his Honor : The men had their meals m the house. Bailey lived m a i tent. To Mr Skerrett : Bailey was not competent to run the business. She had given him £2 a week, an ordinary farm laborer's wages. She thought he was now getting £2, and an extra £1 for keeping himself. He had been five years m New Zealand. The fences had been, allowed to get into disrepair. Other matters about the farm had been neglected Bailey had caused a disagreement m tho family. He became engaged to her daughter, and a. disagreement had been caused between witness and her daughter owing to witness' objection. Witness found she was practically ignored on tho station, and it had upset bor. Witness said she was prepared to find £3000. security against any loss the estate may suffer. Mr Skerrett : Mr Russell says it was your bad temper that has caused the trouble? — I'm sure it wasn't. I may liave been partly to blame. It was Mr Russell's want of tact that caused the trouble. Witness said she did not cliarge Mr Russell with any misconduct, and certainly not with dishonesty, .but she thought he had acted as he had done from pique. To Mr Nolan : During an early discussion witness told Mr Russell she had taken legal advice, and found she could remove him as trustee. This might not have been long after probate was granted Mr Russell did not say it was a pity he had taken probate out, but said he wished he could be removed, j Witness never suggested that he should resign. She never said Mr Shanks could come m as trustee, and could do what she wanted. An arrangement was cometo whereby witness was to manage ,the estate. Witness did not know of any arrangement between Mr Pyke and Mr Russell about gelling fat stock to Nelson Bros. She did not remember having a conversation with Mrs Livingstone about a disagreement with Mr Russell. No arrangement liad been made tliat as soon as cattle reached £1 per lOOlbs they should be sold. The price had been ltts. Witness did not tell Mr Russell she had sold the cattle. She would not have thought of selling anything without speaking to him first. Witness protested against the cattle being booked to Nelson Bros, indefinitely. She considered cattle were kept too" long on. the place. Others could have been bought cheaper to fill their place.. Mr Nolan: Is it not a fact tliat Mr Russell has got* more than the market price for tho cattle? — He got the best price he could. He has always sold them well. *

Witness said she had congratulated Mr Russell upon the prices he had obtained, and sne had been pleased, as regards the sales. Mr Russell had asked her for tjhe books, as he wanted to make out his " commission. She was m the hospital at the time, / and she could not givo .them to him. He did not wait until she wa* better, but asked for the books the following 'week when he got home, and she said she was not able to make them up. He objected, but did not suggest they should be sent into town to be made up. Witness brought them mof her own freewill. She did not recollect telling Mr Russell he would have to apply to her solicitors if he wanted the books. She told him she had taken them to the accountant m September, 1911. The balance-sheet for tliat year came out some time before September, 1912. At Mr Piesse's office Mr Russell asked her about the shortage of cattle shown m a previous balancesheet. She told him the figures were slightly wrong, and by an oversight no horses or ranis were included. Had these been included it would have made a better balance-sheet.

I His Honor: That would have prejudiced the interest of the life tenant.

Mr Nolan : Yes, but it would be m favor of ithe trustees's application for commission.

His Honor asked if an order had been made as to the commission-.

Mr Nolan said the- matter was to be dealt with by the Registrar. Mr Skerrett: We don't intend that these proceedings should prejudice that application. To Mr Nolan : Witness, when the question of the commission was being talked about, did not say if an order was made for £50 it would be binding on his heirs. Mr Russell did not ask her if she was afraid of his family stepping m, but he did say they would settle it. He never mentioned any sum that Mr Pyke had agreed upon. Mr Russell asked for the balance-sheet, not the stook sheet, at the interview m the dining-room.' Sho ,never told Mr Russell she only had 'his word for it when he mentioned about the false information. She was not angry, and she did not say that Mr Pykte had mentioned any sum at all Mr Russell was m such a temper that witness thought he had forgotten what he said on that occasion. Bailey had satisfied witness sometimes while witness was m control. She did not complain about his inability, but she complained about some things not bein-j done. He satisfied her pretty well. He was the first man she bad retained for 18 months sinco she took over the management. Mr Nolan : You had rather frequent changes before that, did you not? — 1 don't think I did.

Mr Nolan was asking about 15 chances m servants during that period, when his Honor interposed that a trustee had no control over domestic servants.

Mr Nolan said the inference wae that Mrs Pyke was difficult to get on with. To Mir Nolan : Witness had raised no objection to her darghter's engagement to Bailey at the time. His Honor, referring to Mr Russell's letter, said the inference was that Bailey was placed m a superior position to the family, without any explanation. Mr Nolan said they claimed his duties were not changed. His Honor : Well, what does this letter mean? He said the position appeared to be that Mrs Pyke was m control, when suddenly she was displaced by Bailey. There' might not have been a change m Bailey's position, but there was m "Mrs Pyke's. Mr Nolan : That is so. It is inferred against the trustee that tho appointment of Bailey was done for the purpose of aijnoyanoe. His Honor said Bailey could not have taken Mrs Pyke's place m signing cheques. To Mir Nolan : Witness could not say what Bailey did after he was placed m charge. Tt was not m consequence of Bailey being appointed manager that her feelings towards him changed. His manner caused her to change. -,He did things no manager would do without her consent. He went to the safe and too'? meat out for ihe Maoris, and said the mutton belonged to the estate. "I have gathered this much," said his Honor, "that the feeling between the trustees and the life tenant is such that it was not likely that they would eve r agree. At' any rate, that is what I have gathered from my knowledge of human nature." (Laughter;)

A COMPROMISE. When the Court resumed Mr Nolan said he ahd Mr Skerrett had conferred, and the upshot of tho conference had been that Mr Russell was prepared to resign his position as trustee. Mr Skerrett had agreed to publicly withdraw any imputation as to the integrity and honesty of Mr Russell. It was admitted there wero faults on both sides. The reason of Mr Russell's resignation was the realisation that there could not t c any friendship between the parties, and he d'd not wish to cling to the trusteeship. Upon the public withdrawal of imputations Mr Russell would resign, j j Mr. Skerrett said he concurred with

Mr Nolan's statement except m regard to tho withdrawal of tlie. imputations. At the outset ho hud plainly stated that there was no charge against Mr | Russell as to misconduct or dishonesty. Thero was no suggestion of such. Coun sel said he would ask the Court to rofer to tho registrav the nomination of another trustee. He proposed lo proceed with the application that Mrs Pyke should be permitted to enter into the possession of the property as life tenant. It would involve no further eviderce. [Tho terms for entering into possession would be the finding, of security for £2000 immediately and £1000 m twelve months. Also that a duly audited account- would be submitted to tho trustee. His Honor thought the arrangement come to was a very proper one, There was no suggestion that there had been impropriety m the conduct of Mr Russell m tlie management of the trust that would affect his personal character m any way. His Honor said he thought Mr Russell had acted very properly m seeking a discharge from the trust under the circumstances, for there was no likelihood that tho parties could get on together. He though this was a case m which the Court should use its discretion and allow tho trustee his costs, which would come out of the estate.* Mr Skerrett said he would ask for an order calling on Mr Russell to pass the accounts as executor and to proceed with his application for commission. Then, upon Mrs Pyko being satisfied with the certificate, for Mr Russell to resign and a new trustee appointed. His Honor said tho trustee's application for commission had to be protected. He could not be asked to resign hurriedly, for upon being relieved of the trusteeship he would have no more claim. Mr Skerrett said he realised that, and they did not wish to prejudice Mr Russell s claim for commission. Mr Skerrett said he would prepare a minute of the compromise, submit it to his friend, and hand it into the Court. His Honor said he would make a note that Mr Rusell agrees to retire from the trust upon the necessary provision being made, passing of accounts, securing his commission ; the tenant for life ■ will ask the Court to nominate another trustee, the name of the trustee to be submitted to the Court, with a report ■ from the -registrar as to his fitness. His Honor said he would order the costs of the parties as between solicitor and client to be taxed by the registrar ' and paid out of the estate. ' ' Mr Skerrett then proceeded to cite 1 authorities m support of his application for the life tenant to bo admitted into possession of the property. 1 After the matter had been discussed v between His Honor and Mr Skerrett it 1 was arranged that Mr Skerrett should • submit an order of what was desired. 1 Mr Skerrett said he would like the ' order heard at Auckland, to which His • Honor agreed. 1 His Honor said m the meantime he ■ would reserve his decision on the matter t "I think," added His Honqr, "that 1 it is a very satisfactory termination of ' the whole proceedings for all the par- ' ties." ■