LAND AGENTS' BONDS.

Star (Christchurch), Issue 12063, 19 July 1917, Page 6

LAND AGENTS' BONDS.

OF NO VALUE TO CREDITORS

CROWN SEIZES FIDELITY BONDS

An anomaly in the Land Agents Registration Act was pointed out to a reporter this morning by Mr T. L. Flaus, a Christcliuich builder, who complained that although tlie Government had fixed an annual license fee of £'2o, and provided for a fidelity bond of £SOO in case of default, the injured persons got, no share of the £SOO, which Went, entirely to the Crown. It seemed to biin. lie said, that the Act was merely a revenue producer. Mr Flaus said that yesterday morning be received word that he had no hope of getting anything out of a certain land agent's est ato in which he bad a claim- lie replied that he expected to get. satisfaction from the fidelity bond of £SOO, and he was very much astonished to learn that the money went, to the Crown. Me had taken the matter to bis solicitor, who had declared that the Act was the most ''confounded thing" he, had read in his life, offering no security to tha victims of a land agent's default. Clause 1 of the Act simply read: Every person übo desires to obtain a license shall lodge with the clerk of the local authority in the district wherein be resides an application in the form number in the .schedule hereto, togethc with a fidelity bond for £SOO from some approved insurance company.

This bond, Mr Fiaus said, was lodged with the local Court, and when a man went into default, the insurance company was called on to pay the money, which into the public revenue, and the victims got nothing. There was no security in tho Act for rents collected or deposits paid di property, and nothing by which the agent could ho punished. A .man called up in the ballot might leave piopertics to an agent for the collection of rent. There, was no security. In his own case a man who bad collected rents for liini had given him a, valueless cheque, and he had no redress. Jt was time the matter was seen to. There should be reimbursement from the bond for those who had lost by the failure. in this connection an interesting judgment is recalled in the. case of the King v. the New Zealand Insurance Company, heard at tlio Wanganni Supremo Court oil April 10, 191(5, before .Mr .fustico Edwards. T'hd case is reported ni tlie " Gazc.tte Law Reports," lrrj.f), page Hi t. The action was one to recover £;)00 under a. fidelity bond executed under tho Land Agents Act, and tb ( > facts were not in dispute. Tho Judge held that the bond could not be regarded as being taken to indemnity persons who suffered loss through the default of the land Ji-geiit. The object of the statute and of the bond appeare<T~to him to be to provide! some security that land agents would comply with the provision of the eighth section of tho *ct in tho interest of the public generally, ana not to provide a fund to indemnify individuals who might bo wronged by tho broach of these provisions. The bond apjMwed to be designed as a security for the good behaviour of tho land agent in the particulars to which it related, in exactly the same way as a recognisance for good hohn/viour and to keep the peace, and with the same legal results. In a. similar ease reported hi the

Gazette Law Reports," 101(i, papo 315. Mr Justice Sim, at Tnvercargill, eonourrell in the opinion of -Mr Justice, Edwards. In that case ha hold that tho (Irowii was under nn legal liability to rncognise any claim by persons defrauded by land agents.