SET ASIDE.

Auckland Star, Volume LXVII, Issue 173, 23 July 1936, Page 8

SET ASIDE.

FRAUDULENT DEED.

BROTHER'S LEGACIES.

WIFE LOST MAINTENANCE. SUIT AGAINST HUSBAND. A decision that a deed of assignment between two brothers,- Alfred William Maxwell, and Roy Alfred George Maxwell, was an attempt by them to conceal a fraud, was given by Mr. Justice C'allan in the Supreme Court this morning in a reserved judgment in an action brought by Alice Maxwell, wife of Roy, to set aside the deed as fraudulent.

The action was heard in the Supreme Court last week. Mr. A. K. North and Mr. S. E. Clarke appeared for the plaintill, and Mr. R. X. Moody for the defendant, A. W. Maxwell, the other brother not filing a defence.

In the deed Roy Maxwell purported to assign to his brother Albert all his one-tliird interest in the estates of his father and mother for £000, said his Honor, in reviewing the evidence. The father died in 1925 leaving an estate, of which the final balance for death duty purposes was £4075. It consisted of seven freehold cottages, £500 in cash, and some liouseliold furniture.

The effect of the testamentary depositions of the father was that after a life interest to the widow. Roy Maxwell was to receive a legacy or i'riOO and the residue of the estate was divisible equally between the two brothers and a sister. The widow died in 1932, leaving an estate of which the final balance was £39S!>. Her estate, too, was divisible among the two brothers and the sister in third shares'. His Honor said that lie saw no reason to doubt Roy Maxwell's evidence that in due cflWse after his mother's death lie "received his legacy of £500 and that prior to the deed of assignment between the brothers in .1934 each of them had received substantially all moneys available for distribution arising from the cash in the estates of their parents.

The -two estates ■ -consisted substantially of nine small houses, or cottages, small and old, and not in a good locality. It was difficult to discover what was in 1934, or to-day, tlio value of these properties. '"No one to-day put the value of. Roy s share as low as £000, at'which he purported to sell it*. The lowest estimate was £750 to £800 and an estimate as high as £1700 was given/' said his Honor. "Roy Maxwell is a carpenter by trade, but he ceased work shortly after his. mother's death. His brother Vlbert, who does not seem to have been jurdened by' domestic responsibilities, Kcems to have ceased work even earlier. I infer that from at least shortly after their mother's death each brother proceeded to live on his capital. In the case of Albert this amounted to some £1000. In the case of Roy, he says that after deducting some advances previously made to him by a solicitor he received some £1300. Plaintiff swears that the brothers habitually drank to excess and hi .the company of each other. I believe' her," said Ms Honor.

Wife's Separation Order. > The Judge then went on to deal withthe pt > sepai atiopV maintenWe; and guardianship orders to Alice ' Maxwell against - her husband Roy, in August,; 1934. The ground of the order, adjudged to be true, was. "habitual, inebriety." Hoy Maxwell was ordered to pay his'wife' £2.10/ a week, and also to'deposit £200. witlr the Public Trustee as security for obedience to the order. His. Honor said that lie . was satisfied that Roy , Maxwell felt strong resent l mr-nt .against -bis wife because of this order; ,In effect he admitted it in crossexamination. His brother was more guarded ; in the witness box, butihis Honor was satisfied that his sympathies, were definitely with his brother and. ; against his sister-in-law. Roy Maxwell and his wife and children had been living rent free in one of the estate houses, 58. Franklin Road,, and when;the order was made Roy; Jeft and-immediate steps were taken by the. two brothers and their sister to get Mrs. Maxwell out of the house. Consequent upon this the magistrate increased the order to £3 5/ a week. As soon as the plaintiff had vacated the house the two brothers took up residence there.

Roy's Share Sold. Somewicr- about March, 1934, the two brothers came to an understanding a.bout Roy's, share in the nine house properties. The two brothers swore that what was, arranged was a genuine bargain and that Albert should purchase Roy's share for £000 cash., The plaintiff contended that what was arranged was the perpetration of a fraudulent sham aimed at defeating her of her rights to get maintenance. His Honor then referred to Albert drawing £000 from the Savings Bank, paying it to his solicitor, who in turn paid lloy £575 in an open cheque, which was cashed. Roy swore that he took this money home and Scored it in .the house in Franklin Road in a box in his tool shed. Albert swore that he did not know what his brother had done with the money and that they never discussed the matter, although tliey were living in the same house. The Stamp Department looked into the sale, and the effect of its investigations was that Roy s one-tliird share, which he "ttas selling at £000, was taken to be worth £1371.

£400 In Forty Days. His Honor then referred to what appeared to him a remarkable cireurostauce. As from April, 1934, Roy Maxwell, with £575 in bank notes ii. his possession at the house, made withdrawals from his Post OiTice savings account. On June 29 lie had onlv°a few shillings left in the Post OOice. and began to draw on his Auckland Savings Bank account, where some £200 had been lying for some months. The withdrawals from this account, from July to September, totalled £90. i'ov Maxwell did not give any explanation why, with his alleged store of bank notes at />B, Franklin Road, he should continue his usual practice of withdrawing moneys, apparently for his current expenses, from his savings bank accounts. "He does not claim that he promptly lost or spent or gambled away the £575. On the contrary, he claim? still to have had £300 of it as late as September 20. On that date he drew £110 from his Auckland Savings Bank account,- leaving only 1(3/4. He then left Auckland, leaving unpaid a fortnight's maintenance money, due on September 21. He says he -\Vent to Palmerston North. A warrant was obtained for his arrest. After just 40 days he was arreste<l «s he arrived back in Auckland. He had only a few slii! • Yras in his pocket, though he swears i -> went away with some £400. If that V true he must have squandered £400 io dnvs. In evidence, lie merely

| said that he 'did in the lot' in that | short time in racing and drinking. When he was brought before a magistrate he was sentenced to one month's :u:pri-so:i-mcnt," continued his Honor, "but the relevant arrears, £9 15/, were at. once forthcoming. Hoy Maxwell then resumed his residence at 58, Franklin Road, with Albert. Except for a period in a relief camp he had been there ever since. Roy drew 17/ a week sustenance and said .lie contributed out of this from 7/0 to 10/ a week for i.h~. food of Albert and himself. He paid no maintenance fees to his wife." His Honor then went on to deal with Albert Maxwell's financial ail'airs, and said that there was approximately £300 paid into Albert's bank which could not have been received from the estate. Albert gave two explanations: He said it was his practice to keep considerable sums in oasli at 58, Franklin Road, of which Roy knew nothing, just as he knew nothing of Roy's business. He also said that he had been fortunate in racing and other gambling. His Honor added that lie was faced bv the circumstances that neither brother made upon him a. favourable impression in the witness box.

'Considerable Amount of Cunning.'' "My impression after watching' and listening to them is that each of them possesses a considerable amount of cunning. ... I find that a leisurely consideration of the whole of the circumstances brought out in evidence satisfies me that the deed was not bona fide, but was. by arrangement between the two brothers, a mere cloak for retaining the benefit to Roy of his shares in the estates, freed from liability for his wife's maintenance payments.

I am satisfied that this deed was an attempt by the two brothers to conceal a fraud. I add that 1 do not believe that the solicitor who prepared the document was a party to the fraud, nor have I any reason for thinking that anyone else who gave evidence in the case, or whose name wa* mentioned in the case, was such a party."

His Honor then made an order sett in? aside the deed as fraudulent, and void under the statute of Elizabeth.