THE ELL CASE.

Star (Christchurch), Issue 5041, 29 August 1894, Page 3

THE ELL CASE.

"• Judgment of tlie Supremo Court. This morning, his Honor Mr Ju-tice Denniston delivered the following judgment in the application for leave to issue execution in the case cf Ell, assignee in bankruptcy of the property of G» W, EU (plaintiff), and the Offioial Assignee in bankruptcy of Leonard Harper and J. W. Oveitonand G. J. Leech:— When once the facts of this case were before the Court, there could be no doubt as to the judgment. Looking, however, at the circumstances of this litigation, I think it advisable to put the grounds of my decision in writing. .The present application is for leave to enforce by execution against the executors of one of the defendants a iudgment obUined by the plaintiff, in 1886, in an action Ell v. Hanmer and Harper More than six years having elapsed since the judgment, it is necessary for the applicant (who is now the statutory assignee in bankruptcy of his own estate) to satisfy the Court that he -.entitled to issue exeoution. The history of this litigation can be found, in a great measure, in tho 3 udgments of this ' Court and the Court of Appeal. Tho '• present applicant commenced twowMon-—

one against L. Harper in 1883 and the other against the firm of Hanmer aud Harper in 1884. The actions were for accounts as to transactions between the parties, going back us far as 1870. Accounts were taken by the Registrar, and an accountant appointed by the Court, and in 1886 a certificate was made in each case. By such certificates it was found that in the aotion against Hanmer and Harper the sum of £2120 16s lOd was due by the defendants to the plaintiff, and in the action against Harper a sum of £2166 9s 7d was due by the plaintiff to the defendant. In each of these cases judgment was entered for the respective amounts so found due. In the case of Ell v. Hanmer < and Harper, an application was, on March 1 19, 1886, made to eet off the judgment in £11 v. Harper against the judgment in Ell y. Hanmer v. Harper. I may as well quote J in itß entirety the short judgment of Mr Justice Johnston, as report _d ia 4, N.Z.R., S.C., p. 307." In this case there are two certificates of the Registrar upon which certain proceedings have been taken. By one certificate a certain sum haß been found due from Hanmer and Harper to Ell, and by the other a larger sum was found due from £11 to Harper alone. Whether the amount of -he one can be set off against the other depends upon the facts of the case. Por many yeara £11 had large transactions with Harper alone, and subsequently with Hanmer and Harper. Prom affidavits made by two clerks in the firm it appears that arrangements were made for amalgamating the two accounts in the year 1875, and that this amalgamation took place. Even if Ell gave no personal undertaking to be bound by the amalgamation, yet his subsequent conduct Bhows that the original transactions were all brought into one account. Thus, in the contemplation of the parties, the inquiries before the Registrar were into one set and Beries of transactions; and the result is tbat, although in point of law, aB the parties were different, there was no strict set-off, yet in a Court of Equity, the defendants will be allowed to set-off the amount of one judgment against the other, according to the authority of the cases cited by Mr Martin." It will be seen tbat the learned Judge satisfied himself that the actions were practically as to continuous transactions, and that in equity the one judgment Bhould be set off against the other. The net result was a judgment in the transaction b for £45 12a 9d against Ell. The subsequent proceedings in the actions are stated in the report of EU v. Harper in the Court of Appeal (4 N.Z.R..C.A., 141). Appeals were brought b? Ell in each case against a refusal of the Supreme Court to vary the Registrar's certificate. The appeal in the action against Hanmer and Harper failed, as being too late; tbe appeal in the action against Harper (which was in time owing to the judgment having been entered lata) was allowed, on the the ground that no judgment should have been entered on the certificate in the form in which it came before the Court. The same grounds of objection applied to the certificate in the action against Hanmer and Harper, but, as I have said, on tho question of time, the judgment in that action stood. The result waß that the judgment of Judge Johnston allowing the set-off because inoperative in fact, the judgment in Ell v. Harper being set aside and the ceit : ficate sent baok for review. The Court added that meet of the items would no doubt be agreed to, and only a few of the matt.rs gone into again, and that the evidence already taken would be admitted to be sufficient. But the judgment of the Comt of Appeal did not reverse or touch on the actual decision that the case was one for equitable set-off. This judgment was delivered on June 3, no steps were taken to review the certificate in Ell v. Harper ; but on July 1 the plaintiff issued execution in the other action for the amount of the judgment. The defendants brought the amount fnto Court, and applied to the Court to set aside the execution. This application wa?, on July 9, granted by Mr Justice Johnston, not, as stated by Mr Ell in his affidavit, on the ground of irregularity, but (as Mr Ell properly admitted on the present hearing) on the ground that it was premature. There was nothing irregular in the form of the execution ; it was set aside en the ground that the two actions being virtually one it would be inequitable to allow a judgment to be entered in part until the actual liability between the parties had been determined. The effect of this decision was to re-affirm the principle of the judgment of Mr Justice Johnston, setting off one judgment against the other. It also stays proceedings in the action until further order. Blr Justice. Johnston expressly stated that nothing in the judgment of the .Court of Appeal controverted his judgment on this point. Tbat judgment remains a binding decision on this Court, and an answer, while the circumstances remain unaltered, to such an application as the present. Nothing is shown on the affidavits, and nothing hflßbeen suggested, to show any alteration in the position of matters. Apart from the legal bar of the previous decision it remains as inequitable now as it waa then to attempt to enforce the amount of the judgment in the one case until the whole accounts are settled. It is the amount of this judgment which Mr Ell bas persistently alleged to be an available aeßet in hiseßtate, which it was the duty of the Official Assignee to realise, and the non- realisation of which had been alleged as misconduct on the patt of the Assignee. It is obvious that in the face of the order of Mr _ Justice Johnston this alleged asset was not" available till the final certificate in £11 v. Harper had been given. Mr £11 has persistently asserted that a review of the Registrar's oertifioate would show that there was a balance in his favour. But on the faoe of the accounts in the two actions, as they found and certified by the Registrar and accountant. Ell was a debtor, and not a creditor, of Harper's, and the judgment of the Court of Appeal, as I have stated, assumed that only a few items would require re-iavestigatien. Under these circumstances it would have been most unreasonable to expect the Official Assignee to re-open and continue litigation, for the costs of which he would be personally responsible, without an indemnity. The creditors, includiag at least Borne who had shown themselves hostile to the Harpers' interests (see Nathan v. Ell, 4 N.Z.R. 316), declined to give any euch indemnity. It was, however, epen to Mr Ell, upon giving a satisfae'ery indemnity to the asßigneo, to obtain the use of the assignee's name to any proceedings. If such had been refused (which there is j nothing to BUggest) this Court would have ' compelled acquiescence. That is, he was, as any lawyer would have told him, at any : time since his bankruptcy, in precisely the position in which the Or. W, Ell Empowering Act, 1893, which his solicitor stated represented the goal of seven years' wrestling with the Legislature, has placed him. A very small fraction of the amount which he states he has Bpent in petitions, commissions, and voluminous ex parte statements of his accounts, would, if devoted to the proper investigation of these accounts in this "Court, have long since determind the very simple issue— is he a debtor or a creditor of the Harpers ? The present application ia dismissed with £5 5s coats. Mr von Haast, for Mr Yogel, appeared for the plaintiff, and Mr Stringer for the defendants.