Supreme Court Hearing Of Claim For Transfer Of 9000 Shares

Press, Volume CII, Issue 30143, 29 May 1963, Page 9

Supreme Court Hearing Of Claim For Transfer Of 9000 Shares

The hearing of a claim by flie widow and son of Wayne Redpath. seeking a declaration by the Supreme Court the* 9000 shares in J. A Redpath Sons, Ltd., teamferred from his . account to his mother's account after he died in 1056, were in fact owned beneficially by him and were not held in trust to. his mother, continued before Mr Justice Wilson yesterday. The plaintiffs. Ayleen Betty Redpath and David John Redpath (Mr p. T. Mahon), claim that the transfer by Wayne Redpath’s trustees constitutes a breach of trust. They

ask the Court to declare that the shares and accumulated dividends, of an estimated value of £55,000, should be re-transferred to his estate. Wayne Redpath’s mother died in 1961 after the shares were transferred to her, and her will, made in 1957, left her estate in equal shares to six persons—Wayne Redpath's two children, Mrs W. N. Norwood (Wayne Redpath’s sister), and her three children. In Wayne Redpath's will the shares were given, with the rest of his estate, to his widow and two children. The first defendants are the trustees of Wayne Redpath’s

estate—Walter Neville Norwood, who is married to Wayne Redpath's sister, and Arthur Lee, both Wellington company directors. They are represented by Mr R. A. Young The second defendants are the trustees of the estate of Evelyn Maud Redpath. Wayne Redpath's mother. They are Walter Neville Norwood, and Ralph Patrick Thompson, a Christchurch solicitor, both represented by Mr B. McClelland and Mr A. D. Holland

Manager “Surprised” Continuing his evidence under cross-examination by Mr McClelland, Tainui Thomas Alfred Robins, general manager of J. A. Redpath and Sons, Ltd., said he was surprised when Norwood told him Wayne Redpath's shares were held in trust for his mother Norwood said there would be a further increase in capital in the company Mrs Redpath. sen., would not take up the shares, but they would go direct to her children. The witness said he did not advise Wayne Redpath’s widow to take proceedings until after Mrs J. A. Redpath's death. “I cant tell you why not exactly. Ln the end I felt she must start proceedings,'’ he saiid. Because he regarded Lee as Norwood's shadow he did not approach him about this

arrangement. the witness said. The arrangement was costing the estate a considerable amount of money. Mr McClelland: You knew something was happening which was wrong and detrimental to Wayne Redpath’s estate? ■Die witness: Yes. He said he understood Mrs Redpath had made a declaration saying the shares were hers and not her son's. “I do not say Mrs Redpath deliberately made a false statement,” he said. Brian Gerald Donovan, a director of Bituminous Roofing Products, Ltd., said he knew Wayne Redpath very well. He saw him on business matters two or three times a week. The witness said he knew J. A Redpath and Sons, Ltd., was increasing its share capital from £15,000 and that Wayne Redpath had acquired shares in the new issue. When the proposal was made to increase the capital Redpath was concerned as to how he would be able to take up the additional shares. “I remember the day he told me his mother had made the necessary funds available to take up the new shares,” the witness said. “I understood this was in the vicinity of £9OOO. He told me repayment on these would be made by the dividends declared on the shares by J. A. Redpath and Sons. Ltd.” The witness said he pointed out to Redpath that the dividends he received would increase his tax liabilities. In a later conversation Redpath said he would repay his mother the gross amount of the extra dividends less the additional tax on his income. To Mr Young, the witness said that if repayment was to be by way of dividends he agreed Wayne Redpath should pay tax on the dividends. “He did not tell me he was not paying tax on the dividends.” The witness said he knew the company dividend was 10 per cent, and that £lOOO a year would be available on the dividends. After deduction of the additional tax his net income would be the same.

“The question of interest to his mother did not arise with me.” He said he first heard the shares were not being treated as part of Wayne Redpath’s estate about March, 1957.

Mr Young: Did it come as a great surprise to you? The witness: Yes. Widow’s Evidence

Ayleen Betty Redpath said in evidence that her husband discussed with her the allocation of additional shares in the company. “He told me Mr Robins had offered to lend him the money. We also discussed putting a mortgage on the house. He came home one day and said his mother had offered to lend him the money to take the shares. He said the dividends would go

into a trust account and when they amounted to £9OOO they would repay his mother.” The plaintiff said that her husband had been worried about the extra tax, and his mother was going to pay the extra for him. “When we went to thank his mother she said she was very pleased to help him. She did not need the £9OOO and would get it back eventually.” The witness said she never heard of any alteration to this arrangement sntil after fier husband’s death. When her husband was in hospital Norwood told her he was worried about death duties on her husband’s 9000 shares.

The day her husband died Norwood said he thought it possible to transfer the shares to Mrs Redpath, senr, and when the death duties had been paid, find some way of giving them back to Wayne Redpath’s estate.

The witness, said that Lee had told her not to worry about the shares. He said he was sure that Mrs Redpath intended to leave the 9000 shares to her two children.

The plaintiff said she thought her husband owned shares valued at £12.500 in the company when he died. She had not contested the matter in court before because of what Lee had told her and because Mrs Redpath, sen., had been very sick.

The hearing was adjourned to today. ,