How the Parties Argued.

Dominion, Volume 5, Issue 1363, 14 February 1912, Page 6

How the Parties Argued.

Mr. Neave had contended that a person who sold one of tho premium bonds in question gave to the purchaser a right to a chance of a prize, and that the person who was to get the prize was discovered by lot. Tho bonds were redeemable by (it was assumed) solvent corporations, and the money spent by the purchasers would not bo lost, so he did not contend that the scheme was a lottery because the purchasers of a bond risked money. It was a lottery because the purchaser of a bond obtained the chance of a prize, and because whether or not he got that prize was determined by the drawing of lots. It was no defence to an information under the section of the Act selected that n perfectly good security, also, was sold. It was appealing to (ho cupidity of tho investor. The attraction really appeared to he the gambling element. The chances that a person had of obtaining a prize by taking ouo of the "combinations" were thousands and thousands to one. In the present case tho loan was 170,000,000 francs, and tho bond in question a 100franc bond, so tho holder had a 17,000,000 to one chance.

In his argument on behalf of tho defendant, Sir John Findlay had said that these bonds wero being sold in London to-day. "To decide against us," he continued, "you will have to overrule—of course an impossibility—a •decision given by the House of Lords." The first esscn> Hal question was,- "What in reality are these bonds. 1 " This system of finance of European Governments had been in use many years. The total amount raised bymeans of theso bonds was no less a sum than 700 millions sterling. It would be naturally inferred that if these things were illegal they would be stopped in England. In reply to a cable message, information had been received that they were.being sold there still. Ho read a London letter saying that it was perfectly legal to deal in the bonds, but the results of the drawings must not be published, It was a safe, legitimate investment. "It must be conceded that thero was an element of gambling, but I submit," said counsel, "it is an appeal to the ineradicable gambling spirit of human nature in order to encourage thrift. It is the sugar of yico covering tho pill of virtue to enable it to be comfortably taken." In tho cases in which convictions had been obtained in England, it was because of publication, and in New Zealand publication of the liumbers was not made. He relied upon the fact that the .substantial object was to raise a loan, and not to create- a lottery.

Mr. Neavo replied that it was quite clear that the dominant motive of people m New Zealand in taking bonds of foreign countries so far away could only be the chance of setting a. prize.

Magistrate's Review. In the courso of the judgment, his Worship commented on Mr. Ncavo's contention that there was u radical difference, in building society, shares and premium bonds, the attraction in the latter appearing to be the gambling element—an appeal to the cupidih- of the investor. "I. am," said his Worship, "inclined to agree- with counsel in (his opinion." Towards the conclusion of o very long review of the ease, his Worship said: "I have fully considered the

able arguments of both learned com •sel, and the many authorities cite, li.v them,.and am. of. the opinion tha tlio defendant company has brought itself within the provisions of the Gaming Act, 1908, Section 41 (B). ' The-leading cases quoted were Tavlor i Smetteu and Hall v. jnVilliam, Englis, cases; Tart v. Williams, a New Zoalam case; Mutual Loan Agency, Ltd., v. At torney-Genernl of Now South "Wales, ai Australian case; and Horner v. Unite* Stales, an American case. It seems tc me that these cases show olearly that it goods or property are disposed' of by way of chance or lot, the person so disposing of them is doing an illegal business and cannot be excused by reason of the fact that at the same time he is giving what may be considered good value for money received.

"I cannot agTec with the learned counsel for the defence that'a scheme, was not a lottery, if .only some part'of it determined by lot to whom the benefits wore to go. I <lo not consider it necessary, to constitute a lottery, that the substantial object of the whole scheme must' lie a lottery. J, am aware that tho scheme had for its foundation the raising of loans, but I am also aware that a part cf the method by which the loans wore to be raised was the distribution of prizes by lot or chance, and this I consider brings the scheme under tho Act. . . . Defendant is convicted and fined .£50."

It was understood at tho time of the hearing that whatever the decision an appeal would bo made in order that the judgment of the highest Court would eventually be obtained.