The Egerton Case

From The History of Ballarat, from the first pastoral settlement to the present time, with plans, illustrations and original documents.

By William Bramwell Withees, Journalist, published in Ballarat by FW Niven & Co., 1887, at pps. 209 ff.

"Of all the celebrated mining suits here, the most celebrated was that known as the Egerton case, in which Messrs. A. J. L., T. L., and S. L. Learmonth, the Ercildoun squatters, who had purchased the Egerton mine in 1863, and in 1873 sold it by their S. L. Learmonth to Martin Loughlin for £13,500, sued said Loughlin, William Bailey, James Williamson, Owen Edward Edwards, and an unnamed contingent called the Egerton Company. Bailey had been the plaintiffs' mine manager, and sold, as their agent, to Loughlin, joining Loughlin, Williamson, and Edwards thereupon as equal partner. The plaintiffs' case in effect was that these four defendants had played a comedy of fraud, in which Bailey, the confidential adviser and agent of the plaintiffs, who was said to have wept under pressure of antecedent gratitude for Learmonth favors, and Loughlin, the purchaser, were star actors, and Williamson, manager of the Union Bank, Ballarat, where the purchasing cheques were honored, and Edwards, a broker at the Corner, performed the parts of general utility men, whilst at the back of the stage was a chorus of nondescripts who held 1000 of the 25,000 scrip into which the chief actors had converted their original shares. But if the chief plaintiff felt the logically dramatic significance of his case, how the iron must have entered his soul. For there had been that tender and touching prologue to the play in the form of an interview between the confidential manager and his employer, in which the former softening, as it would seem, and almost Enamoured more, as more remembrance swells With many a proof of recollected love, became, for one short, soft moment, " like Niobe, all tears."

"The plaintiffs brought their suit in equity before Mr. Justice Molesworth, and it subsequently took the form, before Chief Justice Stawell and a special jury of twelve, of the live following issues to be tried as an interlocutory proceeding : —

"I. That the quartz contained in the mine, the subject matter of this suit, before or on the 15th clay of September, 1873, was richer in gold than the defendant William Bailey represented to the plaintiff Sommei-ville Livingstone Learmonth.

"II. That the defendant William Bailey did make a representation to the plaintiff, S. L. Learmonth, of the value of the quartz in the said mine, or of the value of the said mine false and to the knowledge of the said defendant, and with the intention of inducing the plaintiff to sell the said mine at an under value.

"III. That the plaintiff, S. L. Learmonth, was induced by the representations of the defendant, W. Bailey, as to the value of the said mine or quartz therein to sell the mine to the defendant, M. Loughlin, for the sum of £13,500.

"IV. That there was on or previously to the 15th day of September, 1873, an agreement or arrangement between the defendant, M. Loughlin, and W. Bailey that the defendant, W. Bailey, should have a share of the said mine after the sale thereof by the plaintiffs to the defendant, M. Loughlin.

"V. That both the defendants, J. Williamson, and 0. E. Edwards, or one of them knew of the existence of such agreement or arrangement at the time of their or liis entering into a bargain for the purchase of the mine.

"The four chief defendants represented the four quarters of the Imperial flag, and were all then in prime middle age. Bailey was a tallish, light-complexioned, stoop-shouldered Saxon Englishman. Loughlin was over six feet high, a dark complexioned Irishman, with, perhaps, a strain of Hispano-Galway blood in him. Williamson was a Scotchman, of broad make and middle height, and fair complexion, one of Green's north of Tweed English. Edwards was a light, mobile, middle-height Welshman, who spoke good English with a Cambrian accent. Their answer to the plaintiffs' suit was, in effect, tliat they were all as innocent as new born babes. Tlie poverty of the mine before the sale, and its richness after the sale, were not coincidences of the type so delicately liinted at by Mr. Weller, senior, but were events honest and true, irrefragable as tlie postulated innocence of in- fancy. And so, in sooth, they may liave been. Mining luck is full of such sudden changes.

"S. L. Learmonth deposed that Loughlin had written on 1st September, asking if the mine was for sale, and Learmonth, remembering some former advice of Bailey's, replied that he would sell for £50,000. Then, communicating with Bailey, Learmonth was advised to sell for £12,000, as the mine had been yielding poorly, and was only worth three years' purchase, Bailey saying that he would not give more if he had a cart load of gold. Upon this Bailey was authorised to sell, and did sell to Loughlin for £13,500, receiving froni Learmontli 5 per cent, commission on the sale. Then the quadrilateral partnership was formed, the company floated in 25,000 scrip, the quad holding nearly all the scrip, and the output from the mine began to improve almost im- mediately, Bailey admitting in the witness-box that up to the date of the suit (14th March, 1876), he had received as his share of the gold " about £30,000." The defence set forth a denial of the allegations in the five cited issues, and an averment that " the rich stone after the sale was owing to the discovering of the new reef in the Rose (shaft)." Each side employed four barristers, and the case was opened on the 14th March, 1876, before Chief Justice Stawell and a special jury of twelve. Witnesses of all classes from all parts of the colony gave evidence ; plans and models were used in profusion, and the public interest excited was great, as the allegations and denials were often very strongly opposed, and in the popular mind the unpopularity of tlie rich squatter plaintiffs was pretty well balanced by the fact of the sudden change in the mine's value after the mine had gone from their possession. On the 3rd April the judge sumraeduptothe jury ; the jury could not agree, not even a majority of three-fourths, and they were discharged.

"Mr. Dovan, one of the jurymen, said at the close of the iudge's charge that he wished to make a statement which he con- sidered a duty to himself and his fellow jurymen. " Last Wednesday evening a fellow came up to him in the interest of the defendants and offered hiiii £250 to stand out and give a verdict on their side, and told him at the same time that they only wanted one to complete the number to form a disagreement." When the jury had announced their final failure to agree the judge said to Dovan : —

" Can you recognise the person you said spoke to you?"

" Dovan replied : —

" Yes, I can give his name."

His Honor then discharged the jury.

"The defendants won the battle along the whole line, injunction motions, issues, everything, for when the plaintiffs' made another essay to get back the mine they fared worse, the jury finding for the defendants on all the issues. Disconcerted, but not yet vanquished, the plaintiffs obtained leave to appeal to the Privy Council, but after a while began to treat with the defendants. This sent the defendant company's shares up 5s. and, as it was calculated that an absolute settlement would enhance their value 200 or 300 per cent., the defendants agreed to forego all claim for costs, which were estimated at £26,000. The dispute was settled on these terms, the plaintiffs' costs being about £50,000 or £60,000 of which, if rumor were not a liar, not less than £15,000 was paid to one man to act as general overseer of the tight for them.

"This was the heaviest single suit in all Ballarat Mining liti- gation. It seemed to close the belligerent period that followed upon the advent of large companies and frontage complications — the halcyon time of the unscrupulous jumper and the fruitful source of disputes ; just as the largest and most disastrous of the Ballarat conflagrations closed the specially igneous period of old Ballarat."