AROWHANA STATION

Poverty Bay Herald, Volume LIX, Issue 17955, 6 December 1932, Page 5

AROWHANA STATION

DISPUTE OVER FINANCE LYSNAR V. NATIONAL BANK • SUM OP £120,000 INVOLVED (Special to the Herald.) WELLINGTON, this day. OqjSducting his awn (case, WilUa ,n Douglas Lysnar, ex-member for Gisborne commenced an action in " 1 Supreme Court, before Mr. Justice MacGregor, claiming £50,919 from The National Bank of New Zealand, Limited, while the National Bank counterclaimed for £71,990, plus interest and bank charges. , , The defendant bank was represented by Mr. T. C. A. Hislop and Mr. G. KThe action arose out of financial transitions in which the security was Mi. Lysnar’s Arowhana property. The plaintiff, in a lengthy statement of claim, set out that lie was the registered proprietor, up till March, 1931, of Arowhana station of 13,008 acres, described as the back portion, subject to a mortgage to the East Coast Commissioner for £21,700, and 7820 acres subject to a mortgage to the iublic Trustee for £39,082. On April 12, 1916, the plaintiff mortgaged all his equity in the land to the defendant bank, and in June, .19^ i, signed a further mortgage over 6 acres 2 roods of freehold land, and in September, 1923, gave security over live stock of 20,400 sheep and 1553 cattle. Owing to the stock market collapsing, the National Bank insisted on retaining all the available revenue from the estate. The plaintiff fell into arrear, and, in March, 1931, the back portion of the estate was sold, at the instance of the East Coast Commissioner, by the registrar of the Supreme Court, the property being bought in by the mortgagee at £13,608.

A COMPANY PROPOSED As the station could not be economically worked without this back portion, negotiations for a fresh tenure were opened. The East Coast Commissioner agreed to lease it for five years, with the right to purchase for £13,000, and the bank agreed to reduce the plaintiff’s liability to the defendant to £30,000, to be secured by a mortgage subject to the existing mortgage to the Public Trustee over the whole station, including sheep and cattle, for a period of five years at 5 per cent. In May, 1931, the statement continued, the bank desired to impose further conditions which had already Been lefused by the East Coast Commis'sioner. The plaintiff declined to accept, whereupon the bank purported to exercise jiowers conferred on it by the two mortgages and the instrument of security. The plaintiff contended that the defendant bank wrongfully entered into possession of the front portion of the station, the live stock on the whole station, 220 bales of wool, 939 carcases of frozen mutton and lamb, and 6283 pelts. He further claimed that he was at all times ready to complete his part of the contract, but was prevented by the bank refusing to perform its part of the contract. This had the result of preventing the plaintiff from forming a company to take over Arowhana station, and he had thus lost his equity. He alleged that the defendants wrongfully entered into possession of 115 acres of land adjoining Arowhana station over which they held no security. It also wrongfully took possession of stock and stores and 77 horses. Since the commencement of the action the defendants liad returned 55 horses and certain chattels.

. Under all headings, the plaintiff claimed from the National Bank a total of £50,919 9s.

DENIALS BY DEFENCE

The defendant bank denied the agreement, alleged by the plaintiff, entering into negotiations for a fresh tenure of the back portion of the station, and denied the allegations of wrongfully taking (possession. Its 'powers were exercised under the mortgage and instrument of security. The defendant bank, in its counterclaim, stated that the plaintiff, under the mortgage, was, on July 8, 1931, indebted to the bank for £73,819 14s Id, on which date a demand for payment was made, which Lysnar failed to meet. The bank claimed £71,990 os lOd, which was the amount owing on March 31, 1932, plus interest and bank charges to the date of judgment. The plaintiff, Lysnar, gave evidence supporting his statement of claim. Cross-examined by Mr. Hislop, Lysnar ngreed that the bank had accepted bis management subject to the control of the East Coast Commissioner. ‘'But that was the bone of contention,” lie added. He would admit that there was a definite arrangement that no new expenditure would lie undertaken without the bank’s approval.

Counsel asked how this was reconciled with his subsequent letter to the bank stating that be would carry out additional work at an extra wage cost of £3 10s a week. Ho replied that he would not regard repairs as now expenditure. There were 2500 acres of standing bush, and to fell this would be new expenditure, which he never suggested.

A WORDY AGREEMENT Mr Hislop: Can you suggest anything in the agreement which gives you free control of the station? Lysnar: You have in your hands the final agreement. Mr. Grose was always wanting to make provision that he should have control over the revenue. There was no question about that, but I objected. Mr. Hislop: But hero is a document setting out the conditions of your management. Counsel closely questioned the plaintiff as to his recollection of a marginal note made on this agreement by Mr. J. T. Grose, general manager of the National Bank. Mr. Lysnar contended that while lie was prepared to agree not to undertake new development work, what he had done was not in contravention of the agreement, which had 54 paragraphs. His Honor: Showing the danger of being too diffuse. Replying to counsel, the plaintiff admitted writing to the Public Trustee on June 27, 1931, saying that ho was unable to complete arrangements with the bank, adding the postscript: ‘I undertake not to allow myself* to take advantage of the provisions of the Mort gagors’ Relief Act, 1931.” On the following month he withdrew that undertaking. as the bank had gone to the Public Trustee to make terms regarding his property, while lie wa« negotiating to get money to pay the bank off. Lysnar, replying to further crossexamination, stated that an application for relief under the Mortgagors’ Relief Act was dismissed.

The further hearing was adjourned till to-day