“Political Undertones In Action”—Counsel

Press, Volume CIV, Issue 30724, 13 April 1965, Page 3

“Political Undertones In Action”—Counsel

(New Zealand Press Association/ WELLINGTON, April 12. There were “political undertones and overtones lurking in the background” of the criminal prosecution of two company directors, Ronald Alfred Brierley and John Selwyn Lawrey, their counsel, Mr 11. Taylor, claimed in the Supreme Court todav.

Mr Taylor said Brierley and Lawrey were ‘ entirely reputable citizens.”

The Crown is asking the Court, by way of case stated, to determine the extent of criminal responsibility of company directors for allegedly untrue statements in a company prospectus issued to the public.

In Jlarch this year three informations against Brierley and Lawrey all e g i n g breaches of the Companies Act by making a misleading statement in a prospectus of the Financial Corporation of New Zealand, Ltd., were dismissed in the Magistrate’s Court.

Mr Justice Hutchinson is on the Bench. The SolicitorGeneral (Mr H. R. C. Wild, Q.C.), with him Mr G. S. Orr. is appearing for the Crown. Mr Taylor, with him Mr C. A. Beyer, appears for Brierley and Mr R. G. Collins for Lawrey.

Replying to Crown submissions Mr Taylor said it was relevant to submit that there had been no evidence of an affirmative nature called by the Crown in respect of any of the charges. In particular.

J the informant had not been! I called and there was evidence! 'in the first charge that had l been dismissed, that he had: i no fault to find with the prospectus or the defendants. I It followed that the remain- : ing three charges could not i be considered in isolation from ■ the fourth charge, which had I been heard in full, both as to the filing and issue of the ! prospectus, on the facts and j on the merits, said Mr Taylor. I The whole of the evidence ■ had been provided from the

records of the defendants or records of the companies under their control, notwithstanding threats of police search warrants and other "strong-arm tactics.” he said.

“Absurd Condition”

If the intentions of the Crown were correct it would mean that every single copy of a prospectus or what passed for a prospectus could become the subject of a prosecution. That would produce a condition of complete absurdity.

Mr Taylor submitted that there had been no issue of a prospectus or any authorisation of an issue than on September 30, 1963. There had been no issue of a prospectus by the publication of an advertisement in the press on October 16, 1964.

Mr R. Taylor said the law provided a remedy against directors if their conduct justified such a course. It had not been found illegal for copies of a prospectus to be circulated in the widest possible form within 13 months as prescribed by the 1960 amendment to the Companies Act. Mr Colins submitted that i the role played by Lawrey 'was a subsidiary one and had been so treated by the Magistrate.

Lawrey was simply a professional accountant. Admittedly he did the accountancy' work for the company of! ; which he was a director, and he had his name included in I the introductory pages of the I prospectus. I There was a great deal of 'concern among members of iLawrey’s profession concerning the Crown’s submission that there could be more than one official issue of a prospectus. It was a particularly grave matter for the commercial community if the Crown’s ;submission went so far as to | say that every time within 'the statutory 13 months’ i period a batch of prospectuses was circulated it was a fresh 'issue of the prospectus. I Mr Collins submitted that I the appeal against Lawrey I should be dismissed on the I ground that he did not authlorise the publication of the j advertisement of October 16, (1964, nor did he know that 'the prospectus was to be i printed as an advertisement i in a number of newspapers. ' His Honour reserved his decision.