PRIVY COUNCIL

Southland Times, Issue 22490, 26 January 1935, Page 5

PRIVY COUNCIL

LYSNAR v. NATIONAL BANK. DECISION IN FAVOUR OF APPELLANT. (United Press Assn.—Telegraph Copyright.) (Rec. 5.5 p.m.) London, January 24. In the Privy Council case, Lysnar versus the National Bank of New Zealand, the appeal was allowed, with costs. Mr William D. Lysnar appealed from a judgment dated June 15, 1933, of the Court of Appeal of New Zealand. Prior to March 14, 1931, the appellant was the proprietor of Arowhana Station, near Gisborne, consisting of 13,608 acres more or less, being part of Mangatu blocks 5 and 6, subject to a mortgage to the East Coast Commissioner securing with arrears ot interest approximately £21,700, and called “the back portion;” 7,820 acres more or less being part of Waipaoa and Mangatu blocks subject to a first mortgage to the public trustee securing with arrears of Interest £30,032, and called "the front portion. By a memorandum of mortgage dated April 12. 1916, appellant mortgaged all his equity in this land to thq National Bank of New Zealand. ... , Owing to a collapse of the ■wool and stock markets, and to the bank insisting on retaining all available revenue from the station, the appellant fell Into arrear with his Interest to the public trustee and the East Coast Commissioner, and the latter, on March 14. 1931. sold through the registrar of the Supreme Court that portion ot Arowhana Station called “the back Portion comprised in his mortgage, and bought it in himself for £13,608. . As Arowhana Station could not be advantageously worked without the back portion, the appellant, at the request of the general manager of the bank, entered into extensive negotiations with the East Coast Commissioner and the general manager to arrange some plan of wording the station to the advantage of all parties and to secure a fresh tenure of the back P° rt *onAs a result of these negotiations the appellant, the East Coast Commissioner and the general manager of the bank, on behalf of the appellant, entered into a contract whereby in consideration of the Bast Coast Commissioner agreeing to lease the back portion of Arowhana to the appellant for a period of five years, with a right to purchase for £13,000, the respondent agreed to reduce the appellant s liability to the respondent to the sum ot £30,000, to be secured by a mortgage subject to the existing mortgage to the Public Trustee over the front and back portions of Arowhana Station, including the sheep and cattle thereon, for a term of five years at 5 per cent. This contract is evidenced by an offer in writing made by the East Coast Commissioner, and dated April 29, 1931, and an acceptance by the appellant by a letter dated May 1, 1931. and by the respondent by an endorsement in writing thereon accepting the contract, dated May 1, 193'. Action of the Bank. On May 2, 1931, the bank attempted to vary the contract by Imposing additional conditions on appellant, and on the refusal of appellant to allow the Insertion of these conditions the respondent bank purported to revoke its acceptance of the offer of the East Coast Commissioner, and served upon the appellant a notice of its intention to exercise the powers conferred upon it as a guarantee or the chattels instrument, and on July 10, 1931, served a notice of its intention to exercise its powers as mprtgagee. In due course the bank entered into possession and still retains possession. Mr Lysnar computed his damages at £50.919, and claimed for that amount. Mr S. O. Henn Collins and Mr G. E. Timins (under instructions from Messrs Wray, Smith and Halford) appeared for appellant. Mr Gavin T. Simonds and Mr Cyril J. Parton (instructed by Messrs Maddison. Humm. and Willett) appeared for resp on dent. Appellant’s Case. Appellant, through his counsel, submitted that the order appealed from was erroneous and ought to be reserved, because, among Ot A er complete and binding contract was concluded between the appellant and respondent when the latter s general manager signed and handed to the appellant his letter of acceptance on May 1. IJ3I, because the contract operated as an accord and satisfaction of the prior Indebtedness of the appellant to the respondent. He also contended that the Court of Appeal was wrong in basing Its judgment on facts that were not pleaded or raised in respondent’s repudiation of ‘be alleged contract; in having misconstrued the evidence and In holding that the . commissioner s consent to the exception in respondent s letter of May 1, 1931. and the marginal note was essential; and in disregarding the evidence that such consent was in fact given-