Supreme Court Defence Opens In Claim For 9000 Shares

Press, Volume CII, Issue 30145, 31 May 1963, Page 7

Supreme Court Defence Opens In Claim For 9000 Shares

The movement of money in the deposit accounts of J. A. Redpath and Sons, Ltd., indica.ed that no gift had been involved in the taking up of 9000 shares by the late Wayne Redpath, but that a trust had been created or a loan made This submission was made by Mr R, A. Young, opening the case for the first defendants, when the hearing of the claim by the widow and son of Wayne Redpath was continued before Mr Justice Wilson in the Supreme Court yesterday. A declaration is being sought by the plaintiffs that the 9000 shares, transferred from Redpath’s account to his mother's account after his death in 1956, were in fact owned beneficially by him and were not held in trust for his mother.

The plaintiffs, Ayleen Betty Redpath and David John Redpath (Mr P. T. Mahonl, claim that the transfer by Wayne Redpath’s trustees constitutes a breach of trust The first defendants are Walter Neville Norwood and Arthur James Lee, company directors. of Wellington, trustees of Wayne Redpath’s estate.

The second defendants are the trustees of the estate of Evelyn Maud Redpath, Wayne Redpath’s mother — Walter NeviUe Norwood and Ralph Patrick Thompson, a Christchurch solicitor, both represented by Mr B. McClelland and Mr A. D. Holland.

The estimated value of the shares and accumulated dividends is now £55,000. Mr Young said it was apparent from the evidence that the sole matter in dispute was the ownership of 9000 shares held by Wayne Redpath in his own name at the time of his death. Trustees’ Evidence The evidence of Wayne Redpath’s trustees would be that they did not know’ they had been appointed executors and trustees until after his death. Evidence would be given by Lee and Norwood of inquiries they made and evidence they gathered in fulfiling their duties. Mr Young said the results of all their inquiries revealed and evidence in writing satisfied them, that when Wayne Redpath was allotted additional shares in November. 1951, and after payment for them, he held 1000 in his own name and 9000 in trust for his mother.

It was alleged against the trustees that in transferring the shares from Wayne Redpath’s estate to his mother they committed a breach of trust. It was for his Honour to consider whether they acted honestly and reasonably.

Lee would say he had never told Mrs Redpath. jun., that the 9000 shares would come back to her children on the death of her husband's mother. He had never seen the testamentary disposition of Mrs Redpath. sen., nor discussed with her what she was going to do. Lee would say both trustees bad endeavoured to preserve the income-earning assets of the estate to ensure an adequate income for Mrs Redpath. jun., and her children.

“Having satisfied themselves that a trust did exist for 9000 shares they took further action to help the

widow and children,” Mr Young said. In 1957 Mrs Redpath, sen., made a gift of £3718 from accumulated assets in the W. D. Redpath trust account to the two children of Mrs Redpath, jun. Because of a shortage of ready money for death duties a further £lOOO was received from Mrs Redpath, sen., to help to keep the incomeearning assets of the estate intact

Lee would say the trustees believed that of the 12,500 shares in the company in the name of Wayne Redpath. only 3500 were owned by him. Lee would say the first time he heard any suggestion that this was an erroneous assumption was when Mrs Redpath. jun.. spoke to him about them. She told him she thought the shares belonged to her late husband.

Lee would say he told her he would have liked to see thepi come into the estate, but all the evidence the trustees had been able to gather was against it In evidence, Arthur James Lee said that in addition to the £lOOO contributed by Mrs Redpath. sen., to the death duties on Wayne Redpath’s estate the company contributed a farther £2OOO. When Mrs Redpath, jun., told him in 1957 that she thought the 9000 shares were really Wayne Redpaths, he explained to her he had documentary evidence suggesting that this was not the position. This had been corroborated by Brian Homiblow. the secretary, and N. S. Kirby, the auditor for the company. Mrs Redpath, jun., said she had no documentary evidence to support her claim, the witness said. “I asked her what we could do. She said she knew we could do nothing, but Wayne had told her he owned the shares.”

Cross-examined by Mr Mahon the witness said that at no time before Wayne Redpath died did he hear anything from Norwood about any possible difficulty in paying death duties. Before he went to Christchurch to look into the assets of the estate he had never heard that Wayne Redpath held shares in trust for his mother. The witness said he examined the books of the company in Christchurch. Horniblow told him Wayne Redpath had set up a trust account in favour of his mother. Mr Mahon: He didn’t say at any time Wayne Redpath was holding shares in trust for his mother? The witness: He certainly did.

The witness said that when he asked Homiblow for particulars of the trust, Horniblow was unable to help and referred him to Kirby. "I assumed Horniblow aidn’t know the background oi the trust but knew it existed,” he said. Second Defendants

Conduct amounting to a crime was alleged against Evelyn Maud Redpath and the two trustees by the plaintiffs' witnesses, said Mr Holland, opening the case for the second defendants. Mr Holland said the allegations involved two crimes at least. One was the obtaining by a false pretence by E. M. Redpath of shares not belonging to her at the expense of

ner son's estate. The other was that the defendants had been parties to a scheme to deceive the Inland Revenue Department. Mr Holland submitted that the plaintiffs had failed to discharge the heavy burden of proof they had assumed. Ralph Patrick Thompson said in evidence that he acted as solicitor for the trustees acting in the administration of Wayne Redpath’s estate. He was also a trustee in the estate of Evelyn Maud Redpath. The witness said that Mrs Redpath, sen., had been most concerned at all times that no assets earning income for Wayne Redpath’s estate should be sold. At no time before Mrs Redpath’s death had he heard any suggestion that the 9000 shares were not held by Wayne Redpath in trust but in his own right. The hearing was adjourned to today.