COMMISSION ON LEASE

Taranaki Daily News, 11 April 1935, Page 16

COMMISSION ON LEASE

HAWERA PROPERTY DEAL INVOLVED CASE BEFORE COURT. LONG LEGAL ARGUMENT HEARD. Dealings between the firm of Newton King Ltd. and C. Hollister Jones, formerly of Normanby, were at issue in a case heard at the Hawera Magistrate s Court yesterday. Mr. W. H. Woodward, S.M., was on the bench, and a long and involved hearing occupied all day, the magistrate reserving his decision. Mr. J. Houston appeared for Newton King Ltd. and Mr. L. A. Taylor for Jones. Allegation of fraud particularly concerned commission secured by the company on the transaction between Jones and J. R. Bublitz, from whom'he leased a property. It was represented that the company secured a double commission by receiving money from both parties to the transaction. The reply was that the total commission due was £3O, and in securing £lO from Bublitz, leaving £2O to be paid by Jones, it was watching the best interests of its client, Jones.

Newton King Ltd. claimed £lOO 12s 6d, plus interest, the balance owing under a bill of sale. Their claim was admitted by Jones, who in turn claimed set-offs and made counter-claims. The set-offs claimed were: (1) £2O commission charged; (2) £4B 2s 6d rent on land (due and payable on April 1, 1934, to Mr. Dixon, to the first mortgagee) leased by Jones and paid by Newton King against his instructions; (3) about £2B in rates paid by Newton King Ltd. for the period ending March 31, 1934, which they were not liable or bound to pay; (4) interest on the amounts. In the counter-claims Jones claimed £lO, the amount paid by Bublitz to King’s as commission, and £23, the difference between the amount at which King’s sold 220 shares in the Normanby Dah-y Co. belonging to Jones and the marketable price. Interest on these amounts was also claimed.

TWO-HOUR OPENING ADDRESS. Technical legal argument was advanced by counsel in their addresses. Mr. Taylor, citing many authorities, made a twohour opening address. There were sharp exchanges between counsel. Criticism of Mr. Taylor’s allegation of fraud was made by Mr. Houston, and the magistrate at one period also expressed the opinion that what had been put forward was entirely unnecessary. Mr. Houston claimed that too many allegations of fraud were lightly made at the present time and in those cases where it was not proved up to the hilt the court should strongly condemn those making such allegations. The case dates back some years. In 1931 Jones’ lease of a farm at Oeo was running to a close, in looking for another he leased a farm belonging to Bublitz on Whenuku Road, Normanby. Owing to the high price of the lease he was given financial assistance by Newton King Ltd., which took a bill of sale over the stock and chattels. In June last year the bill was operated on and Jones’ property was sold, leaving some money still owing by Jones to the firm. In evidence Jones said Whyte, an employee of Newton King, told him the farm was for lease at £3OO, a price the agent considered too high. According to Whyte, the owner had no money to pay commission. After consultation with his wife Jones agreed to lease the farm for a term. Later he saw, Whyte at Hawera and was introduces to a man named Bublitz, the owner of the proprety, and an agreement was signed in the office of McWilliam, the manager. No mention was made of commission, although Jones did not expect to pay it, knowing that to be the seller’s prerogative. COMMISSION SUGGESTED. Immediately after signing Bublitz left the room, Whyte and McWilliam remaining with Jones. Whyte then said the firm was receiving no commission on the transaction, and suggested that Jones should compensate the firm for its trouble. Whyte suggested Jones, should pay £2O commission, treating the matter in confidence, so that Whyte, as vicechairman of the Land Agents’ Association, would not get into trouble. McWilliam knew Jones would require more stock for Bublitz’s farm. Jones said he did not sign documents concerning the £2O commission. After a year on the farm Jones saw that he could not make ends meet and in an interview with Bublitz, the owner of the property, .the latter said, “Look at the commission I had to pay to let you in.” When he could not pay the rent Jones sought relief, and Bublitz at the same time sought relief from the first mortgagee. Jones knew that Dixon, the first mortgagee, had arranged to lease the farm when Jones’ lease ran out. In financial difficulties, Jones told Newton King’s manager that he could not authorise the payment of the last quarter’s rent. McWilliam agreed and Jones left the office with definite instructions not to pay the rent. Later McWilliam told Jones the rent had been paid to Dixon owing to a demand having been received from Messrs. Horner and North. Jones doubted the wisdom of the payment and after telling McWilliam so received the reply, “I doubt it.” Subsequently, said Jones, he and his wife took a native lease at Normanby, where the stock was financed by the Farmers’ Co-operative. Mrs. Jones paid the rent from her own money. New-

ton. King’s offer to finance the stock was refused. The offer was made conditional on certain payments by Mrs. Jones. Jones said he became a supplier of the Normanby Dairy Company, receiving 220 shares by payment based on a deduction of %d a lb butter-fat. The company had not agreed to reduce the monthly deductions when Jones made application, but agreed to buy the shares at 10s in the £1 on the amount paid up. When sold under the bill of sale the shares were sold for £lO, despite the fact that Jones had told McWilliam the shares were worth 10s in the £l. McWilliam replied that as the shares were included in the bill of sale, they would have to be sold. At the auction only one bid was received, and after consultation the shares were sold.

DEALINGS WITH FIRM. In cross-examination by Mr. Houston, Jones said he began dealing with Newton King’s in January, 1928. The firm had an order on his milk cheque and had supplied monthly statements. Whyte told Jones, in conversation on the Bublitz farm, that he did not think the farm would suit, as the rent was too high. On the day the lease was signed he had a discussion with McWilliam regarding finance for additional stock, and the firm agreed to finance Jones by taking a bill of sale over the stock and chattels, repayment to be made by a 100 per cent, order on the milk cheque. Although advising him not to take the farm owing to a too high rental, the firm completed the deal. He did not consider himself liable for costs involved. He was allowed £l5 a month. Mr. Houston: I put it to you that it was explained while Bublitz was in the room that your share on a lease of £3OO of the £3O commission was £2O. Jones: Certainly not. They told me they were doing me an excepitonal favour by letting me off with £2O. When Mr. Houston produced signed statements Mr. Taylor protested that the witness was being confused. Jones claimed that rent amounting to £4B 2s 6d was paid by Newton King’s contrary to his instructions. He had known in 1933 of Newton King’s intention to sell his property under- the bill of sale. He had. helped all he could to make the sale in June, 1934, successful. When the shares were sold for £lO, Jones said, he raised no protest. It was not until the counter-claim was filed that Newton King’s had any knowledge that Jones was dissatisfied.

Re-examined by Mr. Taylor, Jones said he had been served with a legal notice after refusing to sign a document' agreeing to the bill of sale. Newton King had paid the rent to Dixon to keep in good grace, Jones told the magistrate. EVIDENCE OF OWNER. . James Robert Bublitz, owner of the farm leased to Jones, said Whyte endeavoured unsuccessfully to induce him to accept lower than £3OO. Bublitz said he refused to pay commission, but after consultation with Whyte, he agreed to pay £lO of the commission. He signed no document in connection with the commission. He asked Whyte whether Jones was a sound man able to pay £3OO a year, and was told he was.

•* In answer to several questions by Mr. Taylor, Bublitz said on the day the lease was signed he was certain Jones had not come out of the office at the same time as himself. When the rent was not paid, Bublitz said he went to Newton King’s office and saw Jones twice. He could not recall mentioning to Jones that he was paying £lO of the £3O commission.

Alfred Thrush, chairman of directors of the Normanby Dairy Company, said the company had bought shares from farmers going out at 10s in the £1 paid up. Jones had approached Mortlock, a fellow director, and himself, on the question and on his suggestion it had been agreed to buy the shares on that basis. When the shares were sold Thrush had made no move, knowing them to be coming into the company by another shareholder.

The evidence of Bublitz clearly demonstrated that Newton King’s were not the agents of Bublitz, said Mr. Houston in his address. On the case as it now stood the allegation of fraud had been lightly made. Mr. Woodward: It did not appear to be necessary.

Mr. Houston: It should never have been made. Mr. Taylor: We can recover on two grounds. Mr. Houston said the failure of an allegation of fraud deserved the condemnation of the couid. There was too much of that sort of thing being done. Whyte, Newton King’s salesman, in the interests of Jones had endeavoured to reduce the charges as much as possible by securing from Bublitz a payment of commission. Jones had admitted approving the payment of £2O commission. Often common-sense was pretty good law. Newton King acted as Jones’ bankers throughout the terms of the lease. Jones admitted the rent debt, but by some form of specious reasoning, seemed to think he had been absolved from the payment. Similarly, there was the same reasoning in regard to the rates, and such an attitude of mind was questionable in honesty. The sale of the shares was a bona-fide sale at a public auction. PRICE OF PROPERTY. Stanley William Whyte, Farmers’ Cooperative land salesman residing at Stratford and formerly at Hawera, said he told Jones he knew of only one farm, Bublitz’s, that was suitable, but Whyte told Jones the property was too dear and at a subsequent meeting at Hawera both again agreed the price was too high. About a week later Jones told him that after inspecting the property and discussing the position with his wife he had decided to take the farm. Bublitz refused to pay commission but later decided to contribute £lO, Whyte saying he thought it was* in Jones’ interests that Bublitz should pay some of the commission. - Sharing of the commission payment by both parties was fairly common.

To Mr. Taylor Whyte said he knew Jones’ lease was expiring. Jones had told him so. Closely questioned on the position of Jones being under a bill of sale in 1931, Whyte said he could not remember the position. Whyte neither admitted nor denied that he had taken Jones to Bublitz’s farm the first day, saying he could not remember. The vendor usually paid the commission, unless some other arrangement was made. When there was no authority, arrangements had to be made to secure commission. He had secured £lO from Bublitz to save Jones extra payment. He had not told Jones about it, but he denied it was an artificial pretext.

Hugh Stanley McWilliam, manager of the Hawera branch of Newton King Ltd., said he fully discussed the lease with Jones. He arranged to finance Jones on condition of taking a bill of sale over the stock and chattels, of taking over the full milk order and giving an allowance of £l5 a month. He told Jones what he would have to do and subsequently recorded an outline of the conversation in the form of an office memo. At the conference in his Office, Jones was so keen to obtain the property that he offered to pay £2O commission and Whyte said he could arrange for the balance to be paid. The firm, said McWilliam, was Jones’ financial agent and when a demand for rent was received from Horner and North for rent due on April 1, 1934, McWilliam was forced to pay it, despite .Jones’ instructions to the contrary. McWilliam said he thought it advisable to bring about a peaceful conclusion to the whole affair and for that reason the rent had been paid. On May 31 last year, McWilliam said he had a conversation with

Jones relative to certain moneys Mrs. Joiies was alleged to have received from Wales. Knowing that Jones had another property in mind, McWilliam said he put a proposition to Jones, offering to make out a new bill of sale cutting down the firm’s share of the milk order by 75 per cent. Through his solicitor, Jones refused and the firm operated on a bill of sale of the stock and chattels. The sale had been properly advertised and had been entirely without reserve. Regarding the rates, McWilliam said he asked Horner and North to secure payment if possible from Jones, bqt failing that, he gave a promise to pay and the rates were paid on December 17, 1934.