CASE FOR THE DEFENCE

Poverty Bay Herald, Volume LIX, Issue 17955, 6 December 1932, Page 9

CASE FOR THE DEFENCE

CLAIM AGAINST BANK CONTROL OF AROWHANA CONDITIONS OF FINANCING (Special to the Herald.) WELLINGTON, this day. The defence of the National Bank of New Zealand was opened in the Supreme Court to-day in the case in which William Douglas Lysnar is,seeking to recover £50,919 from the bank for allegedly taking wrongful possession of the farm property, stock, horses, and stores at Arowhana station, and the National Bank’s counter-claim for £71,990, Mr. T. C. A. Hislop, in opening tho defence, said Lysnar had been a customer of tho bank for many years. The bank had advanced large sums to him. When ho got into this very serious difficulty, the bank was anxious to do all it could to help him. It had been compelled to go into possession, not with any desire to oppress the debtor It was clear that the bank was prepared to make very large reductions in the amount of the debt, to write off tens of thousands of pounds in order to give Lysnar a chance to remain on tho property he had worked for so many years. It was only because, after experience of his management over many years and the results of that management, because lie would not agree to reasonable control of that management, and because of the way he varied the arrangements which were made, that the bank’s efforts to sell became futile and other steps had to be taken.

He had to submit certain nonsuit points. There was no evidence of an enforceable contract and no evidence of consideration from Lysnar to the bank. Quo of the terms was that the Public Trustee was to make arrangements satisfactory to the haul;. The bank was to reduce its debt to £30,000 and accept a mortgage for five years for that amount. There was no evidence in writing that such an arrangement was made, and it was not made.

Lysnar 1 , said counsel, set up a contract in the letter of April 29, from the East Coast Commissioner and in the letter of Mr. Grose on May 1. The terms of the letter of May 1 were too vague to consist of a contract, which must create and define obligations. The letter of April 29 set out the limits to which the Commissioner was prepared to go, clause 9 of which was put in to define exactly the control and application of revenue, and was the final concession of -the Commissioner. Lysnar wanted unfettered discretion as to limv much of the station revenue was to be expended in its management. It was on tho letter of May 1 that Mr. J. T. Grose, general manager of the bank, made a marginal note: “Auy new expenditure is subject to the bank's approval.” To that, Lysnar agreed that the marginal note was a material variation of the commissioner's offer and controlled and limited the control of tho plaintiff, lie was not to .spend pm; penny of pew : money without tho bank’s consent. There at once arose a counter-offer. There was no evidence that the counteroffer was conveyed to the Commissioner to be accepted by him and that his acceptance was convoyed to the bank. Such an acceptance must be in writing. Counsel submitted that there was no contract at any time as set up by Lysnar, and that matters never went beyond negotiations; that there was no unqualified acceptance of the offer mado on April 29. P. R. McOae Hannah, inspector el the National Bank, was called to support counsel’s opening. Regarding the agreement as to management made In the plaintiff and the hank, the general manager, he said, insisted on Lysnar agreeing in writing to the hank’s paramount control over revenue. Before the London board was cabled for its approval to the proposed overdraft, a draft letter containing the proposals was submitted for Lysnar’s signature, but he demurred and witness remembered that Mr. Grose showed some heat in view of that attitude. However, Lysnar signed the letter. (Proceeding)