TYPING EVIDENCE.

Auckland Star, Volume LXIV, Issue 135, 10 June 1933, Page 11

TYPING EVIDENCE.

OVER 1200 SHEETS.

SPEEDWELL OIL CASE.

ADJOURNMENT TILL MONDAY.

Twelve days have been taken up in the hearing of the Speedwell Oil ,(N.Z.) case, and the end is not yet in sight. Exhibits in the shape of documents continue to pile up, and over 1200 sheets of foolscap have been used by the Judge's associate iu tho typing of the evidence. There are 49 plaintiffs, represented by Mr. Gould and Mr. Dyson, and the defendant is Harry Clinton McElwain, a former director of the Speedwell Oil Co. (N.Z.), Limited. The plaintiffs claim £4033, alleging statements which appeared in the prospectus to be untrue. Discovery of Documents. In the later stages of his crossexamination yesterday the defendant McElwain said that in no way did he restrain his solicitors from making discovery of all documents material to the case. He left New Zealand shortly after tho order for discovery was made on May 17, 1932. All the documents were in the keeping of his solicitors. Mr. Gould: Do you say on your oath you did not have a service agreement with the China Clay and Pottery Co.? I did not. Did you go to England and buy plant .for the company I —No, I accompanied Mr. Dickson to England. Were you manager of the company? No, I was appointed works manager for a brief period. I had nothing to do with the company. Did you draw a, salary?—As works manager I drew a salary for four or five months, I think. This closed the cross-examination of the witness, which had occupied seven and three-quarter hours. Witness then asked if ho could make an explanation regarding an interview with Chas. Adams. His Honor: Yes, you are entitled to do that.

Witness said that it was in February that he visited Charles Adams, in company with Millikin and Parkes. Adams was informed that they might be short of £2400. It was .suggested to Adams that if he could find £2-100 he could take 2400 fully paid-up shares in, tho company and sell them, the money to be handed to the company, and he could then draw his commission of £240 on the sale of the shares. He was also to receive 700 shares from witness. "It was a kind of underwriting agreement," said witness. "He was not to put any money up at all. He said his friends had invested £5000 in another proposition. There was no agreement binding on him." Re-examined by Mr. Weston, witness said that while he did not wish to blame the solicitors then acting for him, for any failure or delay in disclosing documents after the order of discovery, the documents were in their possession, and he did nothing to restrain them from making discovery. As a matter of fact he did a not know what "discovery" meant till it was explained to him. Hβ was convinced, taking everything into consideration, that the Newmarket company was a healthy and sound business when it was taken over. The slump subsequently affected the business very seriously, and many customers were lost. . His Honor: You say you arenot going to promote any more companies? Witness: I am never going to have anything further to do with a prospectus. One lesson is enough. | Mr. Weeton: The profit and loss and trading account of 1929, on which you bought, showed a profit? —Yes. The witness then left the box, his evidence and examination having occupied 12J hours. Drafting of Prospectus. F. G. Massey, solicitor, eaid he personally dealt with tho technical parts of the prospectus of the Speedwell Oil Company (N.Z.), Ltd. Other particulars were supplied by ' McElwain. In the first place, witness drew a rough outline of the provisions concerning the directors' qualification clause. , It was provided that the directors should have a qualification of — shares, the number to be discussed and fixed later. McElwain said he did not want the clause

to apply to the first dircctore, who, he explained subsequently, would undertake to acquire 200 shares eo long as they were free to get them wherever they pleased. A clause, on McElwain's instructions, was then inserted. The provision would cover directors getting shares by gift, purchase from the underwriter, or they could even hold them ae trustees, providing they were actually the holders.

No "Catch." Mr. Weston: Was there any "catch" in it? —To.my knowledge there was no "catch" whatever intended. Do you know if McElwain had, at that time, promised any ehares to any of the directors?— Not to my knowledge. Continuing, witness eaid that the first proposal with regard to the underwriting was that Burleigh was to be underwriter, but, as Burleigh definitely decided to be a director, Stocker became the underwriter. Mr. Weston: Had you any knowledge of an agreement between Burleigh and Stocker?—No, I did not know either of them, and had no knowledge of the ability of either to undertake the underwriting agreement. \fter dealing with the prospectus, first filed on Decc oer 28, l'J29, and refiled on 4ipril 3. I'J3O, witness mentioned an agreement between McElwain and Leslie Clarence Adams. He knew nothing about any third party to that agrce-

meiit. McElwain brought it to witness to ece if it was correct in form, and later Leslie Adams called and took it away Witness would not be certain it it was executed at that time. It was subsequently executed by McElwain. Witness knew nothing of the suggestion that there was another agreement with Charles Adams, and that the name oi kdaine was substituted for that Of Charles Adams. Witness had no knowledge of any promissory note. Did you at any time hear any suggestion from the provisional directors, particularly by McElwain, that the business was not one- that should be offered to the public?— Not at all. They were convinced It was a perfectly sound proposition. - • ■ The further hearing was adjourned till Monday.