Couple hoped magazine profit would pay debt

Press, 2 May 1984, Page 4

Couple hoped magazine profit would pay debt

A couple had hoped to continue a free monthly magazine in Christchurch to repay the amount owing to a printing firm, and was increasing the revenue available from advertising when they were told to stop trading, pending bankruptcy proceedings by the printer. This evidence was given in the District Court yesterday, the second day of the trial of the couple on two charges against each of false pretence involving a total of $26,896, from Caxton Press, Ltd. Alan David Hammond, aged 28, and Dian Joan Hammond, aged 25, a housewife, have denied the charges, which relate to their contracting the firm to print a monthly magazine, "Lifestyle,” early last year. Defence evidence began yesterday afternoon, and will continue today. The trial is before Judge Pain and a jury. Mr B. M. Stanaway appears for the Crown, and Miss E. H. B. Thompson for the defendants.

Prosecution evidence on the first day was that Mr E. B. Bascand, managing director of Caxton Press, had believed that the Christchurch City Council had given financial backing to the publication. Miss Thompson, opening the defence case, said the Hammonds had not been “fly-by-nights.” They had put a tremendous amount of work into the project.

There had been some division of labour and responsibilities between the two, with Mr Hammond being responsible for sales and advertising, and Mrs Hammond for editorial content of the magazine. Throughout the period involved, from December, 1982, to June, last year, they had tried to keep the magazine going so they could repay Mr Bascand, and for their pains they ended up in a criminal court.

Miss Thompson said the onus was on the Crown to prove false pretence by the defendants. She submitted that what happened could have been attributed equally to* misunderstanding, over-enthusiasm, lack of business experience, and a break-down in communication between the defendants in crucial areas of the operation.

Mrs Hammond said in evidence that her husband became redundant in June, 1982, and could not find another job. They began work on the magazine to fill their time and to do something worth while.

The idea of the magazine was her husband’s. She thought it was a tremendous idea and that it would provide stable employment for him in the future.

They spend considerable time working on the concept of the magazine, which they planned to be free to clubs and societies and the general public. They approached several lending organisations, and a person at Development Finance Corporation referred them to the Christchurch City Council. They saw Mr Rowan Gibson and were referred to a bank manager, who said they needed a guarantor.

Two advisors also compiled a report on the concept of the magazine. She believed this was used at the council meeting when the council considered fin-

anting them. They saw Mr Barry Meikle, a company director and member of the City Council’s small business advisers, and explained the concept of the magazine. He ordered order books for advertising and told them to get the magazine together and he would worry about the bills. Mrs Hammond said that she then began compiling editorial material. They obtained quotations for printing the magazine very early on because it was impossible to work out their expenses without them. They approached several printers and received prices from two, D. N. Adams, Ltd. and Caxton Press, Ltd. They received the quotations while they were compiling cash-flow forecasts for the City Council. They thought the money would come from Mr Meikle, based on what he said at the first meeting. The Caxton Press quotation was accepted in December, 1982. Mrs Hammond said that just before Christmas, 1982, she asked Mr Meikle to guarantee an overdraft of $3OOO to meet immediate expenses before the printing of the first issue of the magazine. He told her to approach her bank manager, which she did. The bank manager told her that Mr Meikle was not recommended as a guarantor. She immediately telephoned Mr Meikle who said there was a misunderstanding and he would get in touch with the bank manager himself. Mrs Hammond said that she had never told Mr Bascand that the City Council would provide money for the venture. They still believed Mr Meikle to be acting as guarantor. In January, 1983, the bank manager was on holiday and Mr Meikle was unable to see him. Later in the month, Mr Meikle advised that he had seen the bank manager, and had decided not to finance them. He gave the impression that the bank manager had influenced his decision. Mrs Hammond said that she saw Mr Bascand and told him that their finance had fallen through. Mr Bascand was livid and said he would hold the City

Council responsible for payment She told him that it was not the council’s responsibility at all Subsequently, Mr Bascand had said that if they could find $3OOO he would finish the binding of the first issue, which was already in preparation. They could not come up with this money.

They were told by Mr Bascand to attend a meeting at the City Council chambers. Several suggestions were made in relation to the project One was that Mr Bascand take over the magazine but the Hammonds rejected this.

Mrs Hammond said that she tried to keep away from the advertising side of the project. She sent invoices and a 'copy of the magazine to those advertisers whose advertisements appeared in the first issue. The next day she received a call from a person who said he had not authorised the advertisement. She had believed that all the advertisements were authorised. She advised Mr Bascand and he said he was going to take over the magazine and she was to close it down.

After discussion, she and her husband decided to continue the magazine as the quickest way to pay Mr Bascand. She advised him and he thought it quite humorous and said he would file for bankruptcy against them.

They produced a later issue of 10,000 copies, which was printed by D. N. Adams, Ltd, as Mr Bascand had said that he would not print for them in the future. This issue was financed from money left over from a suspensory loan received through the Labour Department

Mrs Hammond said that she believed the printing cost was $l7OO. Advertising space sold returned $650. They received further advertising orders throughout the next month for the next issue. .

No subsequent issue was printed. They were advised by an accountant acting on Mr Bascand’s behalf, that they could be committing an offence by continuing to trade, so they closed down.

Mrs Hammond said that about $3900 worth of advertising would have been available had the next issue been printed.