PRIVY COUNCIL CASE

Taranaki Daily News, 21 January 1935, Page 14

PRIVY COUNCIL CASE

MR. LYSNAR’S SHEEP STATION. JUDGMENT RESERVED. London, December 22. An appeal case having a New Zealand interest has been heard by the Judicial Committee of the Privy Council and judgment reserved. The appellant was Mr. William D. Lysnar, of Gisborne; the respondent the National Bank of New Zealand. Mr. Lysnar appealed from a judgment dated June 15, 1933, of the Court of Appeal of New Zealand. Prior to March 14, 1934, 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 of interest approximately a first mortgage to the Public Trustee £21,700, and called “the back portion”; 7820 acres more or less being part of Waipaoa and Mangatu blocks subject to securing with arrears of interest £30,082, and called “the front portion.”

By a memorandum of mortgage dated April 12, 1916, appellant mortgaged all his equity in this land to the National Bank of New Zealand.

Owing to the 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 of Arowhana Station called “the back portion” comprised in his mortgage, and bought it in himself for £13,608. A LEASE ARRANGED. 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 working the station to the advantage of all parties, and to secure a fresh tenure of the back portion. As 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 East Coast Commissioner agreeing to lease the back portion of Arowhana to the appellant for a period, of five years with a right of purchase for £13,-. 000, the respondent agreed to reduce the appellant’s liability to the respondent to the sum of '£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 yea: t 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, 1931. 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 grantee of the chattels instrument, and on July 10, 1931, served a notice of its intention to exercise its powers as mortgagee. In due course the bank entered into possession grid st ill retains possession. Mr. Lysnar computed his damages at £50,919, gnd 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 respondent. THE APPELLANT’S CASE. Appellant, through his counsel, submitted that the order appealed from was erroneous and ought to be reversed, because, among other reasons a complete and binding contract was concluded between the appellant and respondent when the latter’s general manager signed art! handed to the appellant his letter of acceptance on May 1, 1931; 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 the 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.