ANOTHER PHASE OF WELL-KNOWN COURT ACTION.

Star (Christchurch), Issue 18332, 8 December 1927, Page 5

ANOTHER PHASE OF WELL-KNOWN COURT ACTION.

FURTHER LITIGATION IN MORGAN-WRIGHT CASE COMES BEFORE SUPREME COURT.

A further phase of what has. become commonly known as the MorganWright case came before his. Honor Mr Justice Adams in the Supreme Court to-day.

The plaintiff, was Eva .Ethel Roberts, wife of Charles Clarendon Roberts, farmer, of Ashburton; and the defendants, were the Bank of N’ew Zealand, ■Harriet Myra "Wright, Of Windemere, widow, the. Hon William NOsworthy, of Ashburton, farmer, Florence Jenny Myra Morgan, wife of William Arthur Morgan, of Mount Somers, farmer, Florence Barbara Morgan and Harry Wright Morgan, infant children of Florence .Jenny'Myra Morgan, and Lilian Kate Nosworthy, wife °£ the Hon W. Nosworthy. Mr Upham, with him •Mr E. W. White, appeared for the plaintiff: Sir John Findlay, K.C., with him Mr Wright, for the Bank of New Zealand: Mr Donnelly, with him Mr Brassington, for Mrs Morgan and Percy Norman Quartermain, guardian ad litem of her infant children; Mr Weston for Douglas George - Wright; and Mr Cotterell for the trustees, the Hon W. Nosworthy and Mrs H. M. Wright, and Lilian Kate Nosworthy.

The Claim. The plaintiff claimed judgment as against all the defendants: — (a) A declaratipn that the plaintiff was not bound by a deed of compromise, deed of confirmation or memorandumt of mortgage, and that the defendant bank held the proceeds of the sale of Surrey Hills farm as trustee upon the tfusts of the will of Edward George Wright subject only to the debts secured by the mortgages executed prior to the date of the judgment of the Court of Appeal. As against the defendants Harriet Myra Wright and William Nosworthy, in addition to (a) :-r—----(b} Administration of the estate of the late Edward George Wright. (c) An inquiry as to the amount of income from the estate of the late Edward George Wright to which the plaintiff was entitled and which had not been paid to her. As against the bank and the defendant Douglas George Wright, in addition to (a) : (d) An order that the * securities held by the bank be so marshalled that the securities other than, those held by the bank over Surrey Hills be first exhausted in satisfying the debt owing to the bank by Douglas George Wright at the date of the judgment of the Court of Appeal before resorting to the proceeds of the sale of Surrey Hills. As against the defendant Douglas George Wright, in addition to (a) and (d) : (e) An order that in the administration of the estate of the late Edward George Wright the five-eighths share owned by Douglas George Wright be impounded insofar as it is necessary to satisfy the several amounts which Douglas George Wright should make 'good to the estate.

The Bank of New Zealand, in its statement of defence, denied that it obtained authority to use the name of the defendant Harriet Myra Wright in cabling the plaintiff to send out a power of attorney. The defendant 11. M. Wright for her own convenience appointed as her agent Douglas Standage, an officer of the bank, to send the cable on her behalf and to sign her name to it. The bank denied that the plaintiff was in complete ignorance or had inadequate knowledge of the state of affairs, but, on the contrary, was in constant communication with her mother. The statement of claim set out that the Bank of New Zealand with a view to validating the securities which it held for the account of the defendant Douglas George Wright over Surrey Hills and the stock thereon, commenced an action for a declaration that its securities were valid. At this time , the plaintiff was absent in England. As a result of negotiations a deed of compromise was made between the bank of the first part, the defendants Har- ■ riet Myra Wright and William Nos- . worthy of the second part, the defen- ■ dants Florence Jenny Myra Morgan and her two infant children of the third 1 part, and the defendant Douglas , George Wright of the fourth part, whereby it was declared that the indebtedness of Douglas George Wright to the bank was £48,138 17s 7d, and that: (a) The bank’s! securities over the trust properties were validated, (b) the ban agreed to advance to Douglas George Wright £IOOO towards defraying his costs of litigation and a further £SOO for his personal expenses, (c) the bank agreed to pay to Florence Jenny Myra Morgan and her two infant children £3OOO and agreed to pay after the ultimate judgment in the litigation to Florence Jenny Myra Mqrgan, Florence Barbara Morgan and Harry Wright Morgan a further sum not exceeding £3OOO. The bank obtained authority from the defendant Harriet Myra Wright to use her name in cabling to the plaintiff to send out a power of attorney to her. mother. Plaintiff in complete ignorance of the state of affairs in Christchurch and assuming that it would be necessary to appoint an attorney for the purpose of retaining and instructing a solicitor to act for her in the litigation mentioned in the cablegram, posted a power of attorney to her mother. Upon receipt of the power of attorney the ban called upon Harriet Myra Wright to execute in the name of the plaintiff a deed of confirmation of the deed of compromise. The plaintiff alleged that the bank procured the defendant Harriet Myra Wright to execute the deed of confirmation by threatening to close down on the defendant Douglas George Wright. She said the power of attorney had been procured by means of a misleading cable to the plaintiff, and that the power of attorney was not sent for the purpose of executing the deed of compromise. In acting under the power of attorney Harriet Myra Wright did not in any way represent to the bank that she was acting in the interests of the plaintiff, but made known to the bank that she was solely guided by her desire to serve the interests of her son, Douglas George Wright. Plaintiff said that the deed of compromise was contrary to her interests and the interests of the defendant Lilian Kate Nosworthy, and that the further postponement of the sale of Surrey Hills was not only contrary to the trusts declared by the will but the further farming of Surrey Hills by the defendant Douglas George Wright or by the bank on his behalf, and the making of Surrey Hills security for advances made by the bank, were breaches of the trusts of the will. Mr Upham, in opening the case for the plaintiff, said that the action was brought by Mrs Roberts, who was one of the three daughters of Mr E. G. Wright, who died in 1902. The bulk pi his- property comprised two runs

known as Surrey Hills and Windemere. There was in the will a trust for sale and a power to suspend the sale for a period'not'exceeding seven' years. This period expired in 1909. * The division of the estate was a quarter to H. H. Wright, an eighth to the testator’s wife, an eighth to his son Edward F. Wright, an eighth to D. G. Wright, an eighth to Florence J. M. Wright, an eighth to Lilian Kate Wright (Mrs Nosworthy), and an eighth to Eva Ethel Wright. In 1905 Douglas Wright agreed to buy H. H. Wright’s quartershare in the estate. About the same jtime Douglas Wright agreed to buy Edward F. Wright’s share. To make the purchases Douglas Wright borrowed the money from Messrs Gould, Beaumont arid gave them a mortgage. In 1905 Douglas had bought threeeighths shares and himself owned oneeighth. In 1907 he purchased from the trustees the . Surrey Hills farm. Mr Upham detailed at length the financial arrangements made at that .time. At the present time Douglas Wright’s interest in the place had gone, and possibly £30,000 or £40,000 besides. The trustees purported to create what they termed a sub-trust of £24,000, representing tbe three-eighths shades of the daughters. The position when the Court of Appeal gave its decision was that the sub-trust comprised £IB,OOO worth of questionable securities of a nominal value of £IB,OOO, and £6OOO which Douglas Wright owed on Windemere as unpaid purchase money. The daughters were perfectly justified in thinking the‘trustees were carrying out their duty. Mrs Morgan and Mrs Roberts did for a time question the rate o t interest. Mrs Roberts had not been a partisan in any prior litigation. His Honor: Is this necessary?

Mr Upham said it was. Sir John Findlay said that it would be exceedingly unpleasant for him to have to controvert that. Mr Upham said that Mrs Roberts left for England in December, 1923. At that time Douglas Wright had commenced proceedings against W. A. Morgan for £20,000 odd. Douglas Wright, he understood, was being pressed by the bank at that time to get his securities into order. Mrs Morgan considered Douglas was taking the action out of spite and was threatening to retaliate against Douglas and the trustees, but she had not actually done so when Mrs Roberts left for England. Mrs Morgan.wrote to Mrs Roberts from time to time.

After referring at length to the correspondence, Mr Upham said Mrs Morgan’s action was heard in October, 1924. Mrs Morgan appealed from the decision in that case, and it came before the Court of Appeal in April, 1925, and an undertaking was given by Sir John Findlay that the trustees would retire when the accounts were taken. The appeal was adjourned and the trustees virtually dropped out of the matter. At the next sitting of .the- Court of Appeal the trustees were not represented. Mrs Wright wanted in that action to get the retirement of the trustees and there was also the question of the assignability of the right to purchase. The injurious allegations against the trustees were withdrawn. An officer of the bank asked Mrs Nosworthy and then Douglas Wright to act as attorneys for Mrs and - they refused, and finally Mrs Wright agreed to act. Sir John Findlay said it would be denied that an officer of the bank had approached Mrs Nosworthy and Douglas Wright.

Mr Upham said he was not suggesting fraud, but many things could go perilously close to it through inadvertence. The Court of Appeal judgment was made known in August, 1925. It was in favour of the daughters of E. G. Wright. It decided that the sale to Douglas of the land was invalid. Upon that being made known Mr Gresson wrote to Sir John Findlay stating that Mr Wright had decided to appeal to the Privy Council. . Attention was drawn in that letter to the fact that some of the securities held by the Bank of New Zealand as security for Douglas Wright's overdraft, were trust assets. Mrs Roberts knew nothing whatever of the appeal. Sir John Findlay visited Christchurch at that time and conferred with counsel in Christchurch. At that date the bank was not a party to the litigation. An effort was made then by the conferences that occurred to settle the matter. At that time Mr Purnell was solicitor for the trustees. The bank wanted a declaration that its securities were valid before it would make any further advances. Mr Gresson’s view was that the decision of the Court of Appeal would jeopardise the bank’s securities. Wright wanted further advances to enable him to take the case to the Privy Council. The validating of the securities was a matter of equal importance to the daughters. Mrs Roberts was in England, and Mrs Nosworthy was practically stopped from questioning the securities. The question for weeks was what Mrs Morgan would take for validating the securities. Anything that - Mrs Morgan got would have to be debited to Douglas Wright. Then the bank commenced its action.

The plaintiff then forwarded her power of attorney, in response to a cable message. The cable did not indicate that matters concerning the estate would have to be dealt with It referred only to the litigation that was pending. The .beneficiaries had received no income for some time, and a considerable sum had thereby accumulated. The bank had thrown back on the trustees the obligation of paying £2OOO land tax that accrued while the bank was in occupation o S the land. Bank Sells Land. Sir John Findlay said that the assessment was made on the trustees. No assessment had ever been made on the bank. The bank had sold the land and were no longer mortgagees. Mr Cotterill said a demand had been made on the bank. Sir John Findlay said that the assessment was made on the estate and a copy of it was sent to the bank. Mr. Upham said that all Douglas Wright’s assets had gone. The deed of compromise went far beyond any question of settling any dispute. It went far beyond what was required by the litigation. The action was really only part of the machinery for the deed of compromise. As matters stood, the infants had the guarantee of the bank up to £IO.OOO. In that Mrs Morgan had a life interest.