AN INTERESTING DISPUTE.

Gisborne Times, Volume XXX, Issue 3595, 7 August 1912, Page 2

AN INTERESTING DISPUTE.

OWNERSHIP OF CERTAIN EAST GOAST OIL CONCESSIONS. JUDGMENT OF THE' COURT OF APPEAL. With reference to the case W. Lissant Clayton (appellant) versus W. K. Chambers and another (respondent), nil appeal against judgment of Mr Justice Chapman in regard to the ownership of certain oil concessions on the East Coast the Court of Appeal in concluding its judgment said: “It is to be noted that in-*the report there was no statement that the original memorandum was put ail end to on the 23rd or 24th January, 1907. It was pointed out there that a company was to bo formed and that the remaining three of those who had signed the original memorandum, namely Clayton, Chambers and Hutchinson decided on incorporation as a private company under the Companies Act. There is no suggestion in this report that there was a-specific agreement that Clayton was to retain the concession he had bargained for or that he was to be allowed to proceed to get concessions on his own behalf. In our opinion the assent of Chambers to the resolution referred to cannot bo held to be an abandonment by Chambers of the right to hold that Clayton was in a fiduciary position and not entitled to hold the concessions lie obtained on his behalf. Nor do the resolutions passed on the 16th May, 1910, mean more than this, namely, that Chambers assented to the sale of the assets of the company to the New Zealand Oilfields, Ltd., on the terme mentioned. It does not seem to us that there is any estoppel on the company or Chambers raising a right of the "company or Chambers to have Clayton declared a trustee for the company. “We are of opinion that the question to be considered is in what position was Clayton after the- 23rd Januar 1907 The agreement was not put an end to unless the formation of a company on the Ist June put an end to tiie agreement, and between January and June Clayton was apparently engaged in attempting to -obtain concessions, and after the company was formed Clayton remained a director of the company. He was not only director but- he was the director who acted regarding the concessions. Chambers had left- New Zealand. Hutchinson was in -London, and there company’s interests but Clayton. _ In our opinion, he stood in a fiduciary position. He was, to iise the words of sonic cases, ‘a fiduciary agent of the company,’ and if lie was in that position lie could not, in our opinion, compete with the company in obtaining concessions for himself. One of the objects of the company was the getting of further concessions from landowners in the district for purposes of oil. “It was not contended that if lie had been a partner there would have l>een any doubt that lie could not have proceeded to get concessions for himself if it was the business -of the partnership to obtain concessions, and if it be held that he was a fiduciary agent, then it- seems to us that the case of the Tarkwo Main Reef Ltd., v. Merton (19 T.L.R.) 367) applies. That case followed the well known case of Aas v. Bonham (1891 2 Ch. 244). That was a partnership case, but where a man is a director <sf a coin-pan*-engaged in a particular business, and acting as that company’s manager in that particular business as Clayton was, and the only representative of the company in New Zealand, then we are of opinion that he could not- obtain for liis own benefit, concessions which it was in the interests of the company to obtain. He occupied a similar position to that of the employee in the AY orthington Pumping Engine Co. v. Moore (19 T.L.R. 84). Even, therefore, if the original agreement- was merged when the company was registered on the- Ist June, 1907, still Clayton-remained m such a fiduciary position as would prevent him from getting concessions on his own behalf, against the company s interests. Further, lie had obtained his information as to where concessions were to be got through Rich s report which was supplied either to the founders or to the company. “YVe have already stated that iu> do not consider that- Chambers, by agreeing to carry out the bargain with the East Coast Petroleum Company notified or approved of Clayton s holdj n(r these concessions for himselt. -tie skeins to have acted on the assumption that he could call Clayton to account for what he had done, and obtain the benefit of those concessions, and we fail to see anything m Ins conduct in which he waived any rights ho may have had against Clayton, either bv his conduct or bv the resolutions in which ho is said to have acci trie seech We are, therefore, of opinion that the appeal must be dismissed with costs on the highest scale as fiom * SoS's’ for tho wore Messrs Meek and Yon Haast (Wellington: solicitors for the respondent Messrs Nolan and Sheet (Gisborne).