As to Constructive Notice.

There remains to be considered the second alternative branch of finding 9—constructive notice. The question is (1) were there suspicious circumstances known to me and pointing to Kemp's being trustee and (2) did I neglect to institute in consequence proper enquiry ? I shall answer the first part of this question by stating all the facts proved to have been known to me in 1892, and the Committee will judge whether these were suspicious, or whether, on the contrary, they justified the belief, shared by Mr. H. D. Bell, that Kemp was absolute owner.

I had known, of course, that the Horowhenua Block was held by Kemp, as already explained, in trust for the tribe, and I had also learnt that a partition putting an end to Kemp's trusteeship and subdividing the block had taken place during my absence. I should here mention that although, as I have said, part of the block on partition was allotted to Kemp (Nos. VI and IX), part to himself and Warena Hunia (No. XI), and part to Ihaia Taueki (No. XII) in trust for the common purposes of the tribe, other subdivisions, comprising altogether some 13,000 acres, were allotted among the several tribesmen is their shares, unencumbered by any trust. My knowledge, therefore, up to this point was as consistent with Kemp being absolute owner as with his being a trustee. But the following were positive signs pointing to absolute ownership :—

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I have already mentioned the prolonged dispute as to whether No. XI was trust property or not. This dispute had commenced price to 1892. There never has been any dispute as to No. VI being vested in Kemp in trust. I found in 1892 that not only No. XI, but even the admittedly trust block, No. VI, had been caveated two-deep by members of the tribe. No. XIV, on the other hand, had remained uncaveated for six years. I need hardly tell the Committee that the freedom of Subdivision XIV from caveat was alone sufficient proof of an untrammeled title. (The Land Transfer Act expressly excludes beneficiaries so careless as to neglect to lodge caveats from any claim on the assurance fund.) But the contrast of the other subdivision made this decisive.

I had Kemp's declaration, in accordance with statutory requirements, that the land was not held in trust. When I mention that Kemp in 1890 (through his solicitor, Mr. H. D. Bell) had lodged a caveat against Warena Hunia and himself, alleging that they were trustees of No. XI, the Committee will hardly blame me for a belief (which his subsequent conduct in relation to No. XI has certainly not shaken) that he was anxious to avow himself a trustee, rather than the contrary.

Such are all the facts alleged in the Report, or appearing in the evidence, as known to me in 1892. Summing up what I knew at that time, there were no circumstances at all pointing to Kemp being a trustee of No. XIV, whilst there were some pointing the other way I stated before the Commission on oath (p. 249) that I believed when dealing with Kemp that I was dealing with an absolute owner, and is for the Committee to say whether they would not, under similar circumstances, have come to the same conclusion. I must add, as a solicitor, that if, instead of acting for myself I had been acting in this matter for a client, and if, knowing neither more nor less then I did in 1892, I had considered Kemp's title doubtful and put my client to the expense of further enquiry, the legal profession would have laughed at me, and the costs of my doing so would have been disallowed on taxation.

On the point of constructive notice, therefore, I have endeavoured to vindicate myself, not by attacking the logic of the Report, but by a candid statement of what I knew in 1892. But the remarks of the Commissioners on the question of constructive notice call for such comment. These appear in the finding at the top of page 19 of the Report, and I cannot help saying that they savour of absurdity .They divide themselves under two heads: firstly, the Commission mention certain facts as suggesting a suspicion that Kemp was trustee and necessitating further enquiry; and secondly, they [unclear: indicate] what the further enquiry should have been. Firstly, then:—I have already pointed out that the fact that Subdivision XI and certain other subdivisions were allotted in trust, in view of the fact that certain page 17 other parts of the block were awarded to members of the tribe as absolute owners, did not suggest anything one way or the other as to whether Kemp took No. XIV in trust or not. Yet the Commissioners consider that I ought, to have had suspicions because I knew that certain blocks were trust blocks and—a still more irrelevant reference—because I had known of the old trust extinguished in 1886. Are the Commissioners ignorant that where the facts are equivocal the doctrine of constructive notice does not arise? Secondly:—I have pointed out that all the evidence we have goes to prove that the question of a trust was not raised among the tribe till 1895—long after the date of my dealings. (The Committee will remember that I cited the fact of Mr. Bell taking a lease from Kemp of part of No. XIV in 1893, Mr. Edwards's letter of October last, and the absence of caveats, in support of this.) In the face of all this, the Commissioners suggest that I should have made enquiry of the tribe, apparently failing to perceive that such enquiry would have led to no result !

The Commissioners, however, in the passage of their finding (at the top of page 19) support the foregoing rather weak arguments by two very serious distortions of the evidence which I cannot pass over.

In order that the Committee may understand the matter, I would remind them, in the first place, of what I have already stated, namely that Mr. Bell acted for the Muanpoko tribe (in succession to Mr, Southey Baker) from 1890 to 1892. I should also mention that my first lease of Subdivision XIV was taken in May 1892, and that in July of that year I received (in succession to Mr. Bell) a retainer to act for the tribe. This retainer, which is set out in the evidence (p. 322), authorises me to act for them in asserting the rights of the cestui que trusts to Subdivision XI—to which, as I have already explained, Kemp was laying claim against his co-trustee, Warena Hunia, on behalf of the tribe. The retainer, moreover, authorises me generally to act for them in relation to the Horowhenua block; and, accordingly, I asked the assembled tribesmen who had signed it to explain to me their grievances and disputes, and in reply learnt that there were disputes not only as to No. XI, but as to No. VI and certain other subdivisions, not including No. XIV. (I have already pointed out to the Committee that the absence of disputes as to No. XIV, in face of the disputes as to No. XI and other subdivisions, makes distinctly in my favour.)

I now proceed to consider the evidence cited by the Commissioners. They quote from part of my cross-examination by Mr. McDonald as to what enquiries I made in May 1892 when taking my lease. In answer to Mr. McDonald I state that I made no more enquiries than the Trust Commissioner, as I was perfectly satisfied that Kemp was absolute owner. Then follows a quotation from my evidence (p. 249) which anyone, reading the context in the Report and the comment page 18 thereon, would assume as a matter of course to refer to Subdivision XIV, and to prove, out of my own mouth, that at the time of my lease I had constructive if not actual notice of the trust. I appear there to admit that I knew a question of trust had been raised as to No. XIV. Mr. McDonald's question is "Notwithstanding that you were aware that a question of trust had been raised ? "—to which my answer was "I presume I was aware." The Committee will be surprised to learn that the question and answer do not relate to subdivision XIV at all, but to Subdivision XI—a subdivision the disputes as to which, as I have already pointed out, coupled with the absent of disputes as to Subdivision XIV, was a strong argument in my favour. The Commissioners have no possible excuse for quoting this question and answer as if they referred to subdivision XIV. (See my evidence on p. 249.)

But there is another not less serious distortion of the evidence in the previous sentence of the Report. The Commissioners say as follows:—" Sir Walter Buller enquired of the tribe as to the positions of Subdivisions Nos. II, VI, XI, and XII, but says he made no enquiries as to Subdivision No. XIV." The Commissioners are here suggesting that in leasing part of Subdivision XIV from Major Kemp I was wrong to assume on his assurance alone and without enquiry from the tribe that he was absolute owner; and anyone reading the words of the Report would conclude that they had succeeded in adducing a practical admission by my very conduct that I considered that Kemp's assurance required some corroboration from the tribe indeed, the passage suggests that my omission to make the enquiry as to Subdivision XIV argues at least carelessness if not a sinister design on my part in view of my enquiries as to the other subdivisions. But when I mention that these enquiries were the ones I made when the tribe retained me in July, the Committee will at once see how misleading is the reference. For I did not make these enquiries as a lessee satisfying myself as to Kemp's title, and doubting his assurance that he was absolute owner; on the contrary, they were enquires made of the tribe at Kemp's special instance with a view to my acting for them as counsel (see my evidence on p. 254). To crown the absurdity, the Commissioners argue, from enquiries that I instituted in July in consequence of information then given me, what my suspicions were, or ought to have been, in May !

But the worst is to follow. In answer to Mr. Fraser, the agent for the Crown, I said (p. 254), that I had told "the tribe that I was taking a lease from Kemp and no one offered any objection."

"With a due sense of the gravity of what I am saying, I charge the Commissioners with having acted contrary to all judicial practice in making extracts from my evidence on this point and omitting the above statement.