AGENT' SUED.

Auckland Star, Volume LXVII, Issue 128, 1 June 1936, Page 8

AGENT' SUED.

INVESTMENT ECHO. TRUST GROUP'S PLAN. SHARE PURCHASE BY McARTHUR CO. DUNEDIN SCHEME SEQUEL. "Apparently the plan had been devised by the McArthur group to acquire the control of tho Dunodin company," 'said Mr. V. N. Hubble in the Supreme Court this morning, in explaining ail action brought against Cyril Ernie Richard Webber, agent, of Dunedin, for money allegedly owing by Webber to the Transport Mutual and General Insurance Company, Limited, one of the companies in the "group" which is now in liquidation, and which is being administered by the Public Trustee as liquidator. The company, represented by Mr. Hubble and Mr. Wallace, claimed from Webber (Mr. Hampson) the sums of £591 and. £1300, with interest. The company, of which it was contended that tho group had endeavoured to "obtain control, was the Trustees, Executors and Agency Company of New Zealand, Limited. Mr. Hubble said that the action was really a claim for the balance of money received by the defendant, for which the plaintiff company said that he had to account. The plaintiff company was one of the companies associated with the Investment Executive Trust of New Zealand, Limited, now under the control of the Public Trustee as the result of legislation of 1034 and 103!). The defendant admitted receiving the moneys, but said in effect that lie had accounted for them all and that there was now a balance owing in his favour. In effect ho claimed salary for services rendered before and after the liquidation, said Mr. Hubble. Payment of Salary. It was not contested, added counsel, that Webber was entitled to a salary for services" rendered. He had actually been paid at the rate of £400 a year, and the plaintiff company contended that he was not entitled to any more. The Court was asked to decide certain questions of principle and the terms of the agreement made with the company and the defendant. Mr. Hubble went on to explain that the Transport Mutual and General Insurance Company was incorporated in November 1033. Briefly it was an (insurance company with a capital of £100,000. The signatories to the memorandum of association were seven, and the first three were directors. They were a Miss Dunn and a Miss Hawley, clerks in the Investment Executive Trust Company, Limited, and the third, a Mr. Williamson, also an employee of the Trust company. At the first meeting the directors allotted some 00,000 £1 shares to the Investment Executive Trust Company, and one share each to the signatories to the memorandum. A call of 10/ a share was immediately made, and a little later £30.000 was paid in by the Trust. 011 the same day £20,455 was repaid to the Trust in payment of the purchase of various investments. "I mention these facts to show that while the Transport company was incorporated in the ordinary way it was obviously controlled by the Investment Executive Trust," added Mr. Hubble. "The only real activity was the acquisition of shares in a Dunedin company —the Trustees, Executors and Agency Company of New Zealand, Limited. Apparently the plan had been devised by the McArthur group to acquire control of the Dunedin company. It was in this connection with this activity that Webber rendered service." Agent's Former Employment. Counsel added that prior to November. 1933-. Webber had been an employee of the Dunedin company and apparently at the same time he was in touch with McArthur in regard to getting control of that company. Early in 1934, after the incorporation of the Transport Company, when Webber had left his former employment, lie was active in approaching various shareholders in the Dunedin company to induce them to transfer their holdings to the Transport Company. The most intensive period of activity was during Easter of 1934, when the stockbrokers' offices were closed for a fortnight. Tho investigations of tho Public Trustee, after his appointment of receiver and subsequently liquidator of certain companies in the McArthur group, were then refer-

red" to by Mr. Hubble. It was obvious, he said, that large sums of money were paid out to Webber, some through a solicitor in Christchurcli and some direct. The Public Trustee's investigations showed that, according to Webber's own statement, Webber owed the company £484. The investigation showed that in October. 1934, the sum of £1000 was paid to Webber, and later £300 under the terms of an agreement, which on its face was an ordinary agreement. This £1300 was the subject of one of the claims. Webber was asked to prepare a statement of his receipts and expenditure, and at the end of March, 1935, he supplied a statement which showed that ho was owing £90. In that statement, for the first time, a claim was made 'by Webber for extra salary, a claim for an increase from £400 to £1000 a year. This larger salary, Webber claimed, it had been arranged should operate as soon as 1000 share in the Dunedin company should have been acquired. The "group," said Mr. Hubble, had acquired through Webber 2427 shares in the Dunedin comDanv. Question of Salary Increase. Another item in the action, the sum of £590, was then explained by counsel. Webber said that the company owed him this sum for preliminary salary and expenses prior to the incorporation of the Transport company. To his Honor, Mr. Hubble said that there was nothing in tho minutes of the Transport company about the increase in salary from £400 to £1000 a year. Referring to the defence filed, Mr. Hubble said that the first defence contended that the arrangement for the addition in salary had been made with a solicitor in Christchurcli. An amended defence, filed this morning, gave an entirely different story. 111 this it was contended that the arrangement hadbeen made with the Investment Executive Trust, as agent for the Transport Company. 011 the original statement supplied to the Public , Trustee the defendant would have considerable difficulty in substantiating his claim, and it now seemed that every avenue had l)een explored to give it a legal basis, concluded Mr. Hubble. Evidence was then given of his investigations by Arthur Eric John Anderson, accountant in the employ of the Public Trustee, Wellington. (Proceeding.)