SUPREME COURT Judge To Sum Up Today In Companies Act Case

Press, Volume CIX, Issue 32221, 13 February 1970, Page 10

SUPREME COURT Judge To Sum Up Today In Companies Act Case

The evidence against Sydi ney Raymond Forsyth, former manager of the Credit Union Society of Canterbury, Ltd, who is on trial in the

Supreme Court on three charges under the Companies Act, was “all one way," submitted the Crown Prosecutor (Mr N. W. Williamson) in his address to the jury yesterday afternoon. The three charges

had been proved to the hilt, he said.

Of all people in the Credit Union Society, the accused must have known its position, yet had been prepared to be dishonest and deceitful in carrying on its business when it was trading fraudulently. This, suggested Mr Williamson. was because the accused, in control of an organisation, had a certain “power sense” (which he had wished to continue. And he also had a I good salary from the society, I the possibility of insurance commissions, and a car The accused—who elected not to give or call evidence—made only a brief address to the jury, lasting just under 15 minutes, in which he said: “It is suggested 1 ruled everything, and I made a good job for myself. Is throwing away half a lifetime’s work to make a job for myself what one wants?” 'Mr Justice Macarthur will sum up the four-day case this morning. Forsyth is charged that between August 11, 1985, and (June 24, 1966, he was general manager of the Credit Union (Society—registered under the Industrial and Provident Societies Act, 1908—in respect of which proper books »f account were not kept: that in |or about April, May, and i.lune, 1966, he was knowingly la. party to the carrying on |of its business with intent to (defraud its creditors; and ■ that on June 20, 1966, being

general manager, he ' destroyed papers relating to its affairs within 12 months of the commencement of the society's winding-up. Forsyth, who has conducted his own defence, has pleaded not guilty on all three counts.

Crown’s Address The Crown did not say that the accused was totally to blame for the loss and failure of the Credit Union Society, said Mr Williamson, but said that he was responsible in the ways charged. As to the charge alleging, failure to keep proper books’ I of account, the evidence showed that the accused had la responsibility. He had re- ' ported to the directors on financial matters, he had issued instructions to staff regarding records, and had dis-: cussed the society's financial affairs with a bank manager. “Where a society is handling people's money paid for a specific purpose—to pay their accounts—can it ever be ex-

cusable for an officer to default in keeping proper books?" asked Mr Williamson. As to the charge alleging

fraudulent trading, the evidence showed clearly that the accused was a party to it, and knowingly a party—“in fact, he managed the society," said Mr Williamson. For instance, the accused

had had numerous complaints from persons whose accounts

had not been paid yet still went on encouraging members. “Of all people in the Credit Union, he must have known the position,” Mr Williamson said. “Power Sense” As to the charge of destroying papers, said Mr William(son, the evidence that the acIcused had destroyed letters from Credit Union files—at a itime when investigations had I started and the office had been closed—had not been challenged in cross-examina-tion. The only inference was that the accused had destroyed the papers to conceal the state of affairs. i The accused, who must have :known the position was hopeI less even before this—in April, May and June, 1966 [had been prepared to be dis(honest and deceitful in carry ing the society on. “1 suggest that being in control of I this organisation he had a [certain power sense which he wished to continue." Mr Wil liamson said. ( On this point, he asked the 'jury to read, and appreciate 1 the tones of the many memor anda issued by the accused One said: “As from this date It is my intention to sign all letters going out of this office jS R Forsyth.” Was that an example of the (“memorandum as a courtesy [to the directors" of which the [accused had made so much in his cross-examination?

Accused’s Address The accused, addressing the jury, said that he had been approached by one of the soci ety's directors as the only man, known to that director, [who could help them, and had been told to “go ahead.'

If he, the accused, was cap able of doing part of the work required, did it follow that , he had had the knowledge to do all of it? Did . accused have “the , trained knowledge" to lay his hands on everything, and [know exactly what, how, oi [(where everything was? If he . did have such knowledge, he I was knowingly carrying on the business of the society , and defrauding creditors. But I did he have that knowledge? . Was it established beyond • reasonable doubt that he had | (it? . “1 do not know of any legal ' implications in the laws of lithe courts, but I do know that •[in the rules of the society by ■[which I was employed you

I will find that even in April 1 was still being told by the directors what I had to do,’’ the accused said. The accused ended his address by saying: “The Crown: says the directors were deceived, the bank manager was deceived. But were they?” I Accountant's Evidence Graeme Edward Purchas,. an accountant with the flrm i of Hutchison. Davies, Ander-; son, and Company, chartered; accountants—whose evidence: occupied most of yesterday, morning—said that he began ; an investigation into the Credit Union Society’s affairs on May 19, 1966: although initi-j ally his firm understood the: society wished to improve its accounting systems. There appeared to be no double-entry bookkeeping system, witness said, and because of- the lack of this it took members of his firm 200 1 to 250 hours work to arrive; at an estimated position of the society’s affairs. After traversing matters of I accountancy, witness summarised his evidence by saying that the records available had not represented the position: of the Credit Union Society.; There were insufficient • records to enable the financial position of the society to be arrived at. The books did not: explain the financial position, and such books as had been kept were not properly kept. The accused made only aj brief cross-examination. Initially he asked: “During the course of your investigations, did you find any evidence of theft on the part of the accused. that is. myself?" Witness: No, I did not. Accused later asked: “These records you referred to as double-entry records, if they were not in existence or not available, no-one would have known the financial position?” Witness: It would be extremely difficult to tell the financial position.