NORTHEIN ADVOCATE CASE.

Dominion, Volume 7, Issue 2112, 1 April 1914, Page 8

NORTHEIN ADVOCATE CASE.

PLAINTIFF «UiTED,

LIBERALS & A NEWSPAPER

Aft unexpected turn of events brought abdht a somewhat dramatic conclusion yesterday in the "Northern Advocate" caso which was being heard i.u the Sspremo Court, WcliiHgton, Shortly after tno case'for.tho plaintiff had bfeon concluded, and jttst when it see-med that defendfliit's side of tho m.a.ttcr was .to bo pat before the Oottrt-, events took a turn which culminated in a nonsuit.

lie plaintiff in the action was Tlionias Arthur Lloyd fox, ami tiro defendants wore Peter Hayes, formerly Comniissioner of Taxes, aiid Joseph M'ChigRage, of Stratford, Plaintiff alleged that ho was induced by Misrepresentations to invest in a company which Was floated to fun tho Wha.iigafcei ne-ws-P3per, tho "Northern Advocate," and liß -claimed for , losses alleged to have been sustained as tho result of tho ti-3ns3.ofcio.li'.' His Honotir Mr. Justice Edwards heard tho case. Sir. A. W. Blair appeared for the plaintiff, and Mr. 1<715. JPetherfck for the defendants. The hearing was commenced on Monday morning.,, whew it appeared that. Cox cSait«cd'£43:7 tOs, for'losses on shares, eight.-per cent, on the money im iii vected m' tte company, aftd sttch ftfrther and otijer relief as the- Court might, deem him entitled to.

Evidence of Mr- titanAWi M.J*. •When tbo bearing was resumed yesterday., morning,. Francis Maiidef, M..P. for Marsdeii, was caifed as ». witness. fte said that during the ownership of the papist by Frank Bytfe he held a registered mortgage over the property, A week oi!. two before Hyde's death ho had.to take possession, hi Hyde's lifetime, witness had made him (Hyde) a.ij offer with regard to discharging • his security; he said Mjafc ho would take Jfls, hi. the £, on the a-mount owing to him fabout £1600). Hβ understood from H.ydc that a company was, being, formed by Hcyes to protect Hide's, interests.' Witness jvask possession of tho paper fer some months before Cox took the paper over, and was f timiiiig it in tho edacity of a -"mortgagee iii possession." Some eonsideraMo time afte.-rVywrcls a company ivas formed. When ho. handed tfver his seeutitieß ho Passed .over.Hyde's-debt (which he gave fef JB81S), ssinc interest in the "ProSs" —aiiethcr newspaper in Wh&ngarei— ('about £300), aiid an .insurance policy oil file's life for. £.500. Heyes had some , difficulty iu raising thq fctQ-ney to float- tho company, bo witness agreed to tafco 2t50 slimes, the eoirvjJa-n.y was to I>e fbtmCtt on a capital of $4000 . (so Heyes said). There- was not very touch said at the time- shout the venture. Witness wou!d : rather have liad h.is fito-nfiy,- tett, as i* V«s not easy to get 'it, ho-agreed to take the shares. Arrangements were made- to take oto Hyde's debts, but at that time, witness ! clid nat know what ths debts weir«. Ho anderstood that; the- assets woiVki.bß tbe t\v.,b newspaper pj'a-nts at Wba,tigarei nnd "that .the , Jiaililifies would: bo HS'do's. tteMs and a suitt of £1500 which was duo to'oiio at tire' bitnks. 'This. £1500 (he then imderstoad) had' been obtained , . ■by Hyde and J>ae;ke.d by Heyes, It was : the manager of the bank who told : him about ttifi? £1500— Heye-s did wot-, niefttiiflii it. ' The- value of ilia sttarea , (£''2.so) s whfeh witness agreed to tafav' wa,s tis be taken off tho amount'of £.813 j which was owing to ' Wjn, so that .>l?e was to set £665. < He got • ■ that. amount ajfrig'-hfe, but-, later 'jm, ho had. ia- sub hi i'sum of j>ll3, which lie liad ' ,\lefe iu the bank to carry, CO the cora'.pany, and £13CMvhicJi; he had ■!?»* te Heyes.; Witness eajiie to Wellington., with Cos mil the auditor tip. join 'i.ti an appliestfon' loir an inspcetiou of the cbnrpa.ny's affairs, CoVs . evidence.respeOiiflg' this trip to Wellington Was substantially correct ' ' Subsequently ;w : i-tness purchased Cois's shares for 2a, ■6dj.. eapE<, 13:6 did not, however, ..think that they were worth th&t. art 4he; time. !fhe auditor told him tha* tile shares Were worth nothing, but witiie-ss wanted tta- shafts and wits prepared to pay that'anjou'iit fof thpm. He (witness) ■.-ultJmaMy aoijuifed cotitwl of the cpm-p.a.n-.V, a'fld also of the books of tbe',com-, pany. Howfever, lie was now- out of the business— ha hoped. • o - Mr, Wander on the Books. Sir. Didii't Sir. Hcyes dlv <!Hss withy&u tho niattfir of tho -£1309 dcht : Witness: I'-cairjs remeuiber defini-tc-Ij. t eah't swfear positively as to that, : You WO'u-ld riot deuy it?— I a'ni jiot'sute about it." : Mr. Fetlverick r TJp to this time- what ! was jour opinion of as to his ' honesty f " ■ - Bin Honour: ¥ou cannrt' g<> into : that. Surely you know, that, ■ A lit-tte later Mr, Pothftrfek oh-' served: "Sayes has got -nothing ou£ of it.".,. '] Kk Honour: Well, if.Heyes has got noihi&g of it, well and good. The Story is;, thoagh, that Heyes has got ■a greatv.deal- out of it. 'Ef. iP'etihcrJok *. Wlm.t was the nature *s? C'px'.s eompfaint to you? . Wjtiiftss: So. eismptaincd tliat the money-flf the. .oofnp.any had. boon itth&y* .pr.opriat-4a, and that ho couM not uflderstand -whero it had gone. ■WJicia. jt&u ea-ftie to . Wellington oil that visit of iftspectmn, did .Hpyes show yofl tho books of the fioiftpa-ny »■•—"Yes." Did you have, any difficulty ■ in gstit see the books,?—"Oh, no. ,s Were you ..sat-isfied'aftei 1 seokg the boolfg that sil was right?—'*We.] : l, not exactly, I -will say that I wns satisi.ied that the bqofcs were regutar. J. couM not -understand where somo- ef tho money had gou<», J aln flftite cl«ar oil Wist point now, but I ■Uor*. that- it will fto brought out." D.o you >.g ( 'c9. with Cox in these cbar-ces oi fraJid? _ HipMo-npur t That is a q.uestisn that I will nqb allow ohy witness i<> ha asfeed —iniless he. wishes, to answer It. ■ Witness!, t had fctuwn Jl.v. Heyes for twenty years, snd had alwitys fo-u'iid him sstisfaetory, *nd was jehi.ctaut to be. uevo against him.

"Northern Advocate." Hβ finado a report on'tljo position <j.n September 30, ■1012. It seemed from Wro books that ha ss\r tlra.t all tha capital had disaj>peared except a suggested surj : >hts of £2% 10s. 2tl,

Mr, Blair: There were sftmo entries in tltfl books which you eauld no> under* stand.

.Witness: Yes, some- I coiiid not make hend or tail oi'.

Do tho books shew , ' as hivmg.paid ia iuiythittg on his shares? -"Only £100." .

Do tJiey show Osx as having .pakJ any tiling?— ; 'No,"

Dβ they show Heyes as having paid anything ?•—"No; only -as having drawn certain sums.".

Payments it J, D. Slovwriglft,

Witness said that accflfdiiig to tlio books £1101.1 cash was received into theconipauj-,) ami bo procecdecLto read to His Haiumr tho enkics in tho books. Aioong the paynittiits to •}. D, Sievwrigl.il li'crp salary £SB, Cornniission on tha flotation of debonttifes £D 3, tfavcflhig; expenses ii-Si, SrA petty oxiieuses £10 4s; 3d. , ' •, . • Mr. Biair i When you saw these books was there anything in them to indicate that 2500 fully .paid*iir> sharee had been ■iiistrocj.i l

'Witness: Tlicro is an entry "1* Hoyes, promoter's share's, £SW;. T. C. li. Cox, promoters shares, £500." Is tluet-o an entry there abptit tho Bank of New Seirtlj Wales ?—"There is an (jntrj l roajjecting £i&fy?U> tho Bank of New South Wales, a-itd tbe Jjanb is tfcaiod hero as a shareholder , '"

Mr, Blair: Suppose tho company issiros fiiliy paid up shares m eonsiJleratios of assets, tow is that to be shown in 4ho e«;m pauy's baoka? 'i'iio witness aiiswercd that respect" isi.g any shares issued for other *»»» .siteation than nioftey, tho full details of tho. transfer sho/uld be eiVtei;ed in tho company's'bodks, with particulars of tho number of shares, 'and so on. Mr. Stair: You know Mr. H-eyes? Witness: Yes. ■ Is. he a registered public practising a6ctfijnfemt?~-*"Tes." . . •

"fteqliiratt & Great Peal of Explanation"

IS . Mr. Potlioriek: tottr re- *■ gartljiffi , these--entries aro subject to cx- °. pliination -b-v tlifi person who tept thqeo a bflolvSf , ' ". 5 Witness: II onoliad certain dooumenta % : he might gather morfe about theso en- * trios. x Mi\ Petlicrick:. You iiieait that you 6 need tho Whgngarei books to rqad with ft tWboofos? . «■. Mv. Btott: The WJiangare.i bookis '- shew o-i-ily trading aceounts. _ S Sir. Pothw-kk: Have you $ anything in tlio books to slroW that tho-accou-ntis arc false,? • . ■ : •• Witness , ; Ihat is ra.tbei' a s-troii.g term t —"to she*'the accounts ivero false/ d Bis fiijttbw: if- yptt knew that Qas 0 -j»aid' £4 : 09 what would you say id this " acfiflwit?' .. j I 0 Witftess (smiliu?); it needed a; ? : croat deal of explanation. , ' h His Honour (.gianoiiiß at Mr. Ma«de.r, '• M.P.): oUgW to , nave be.on.Ji poll--1 tioiaiii , dlreotar's importartt EvWeriisi). I John Alfred , Piimmer, wh.p -was a' slia-reiwlder and director iji.tlte "J*W>.-thorn-Advocate" -Compaiiy, said tiiM * he' toolf 20.0 shares iu flie ,eoffl;pan.y . w'hifrh lie paid foi 5 ta.cash. He came 5 to'invest in ibe eompany t-liUbugu being asked to do. so by Heyes, who saitf; ~ h was for tio' purpgso of relieving Mr-; 1 Sranlv Hydej too was in a -rathe-p Sim- ■■ 5 liilt position. Witness was pT.osent at ■■ { tho' fifs;i? meetiKg of the cewtpawy, and' 1 lw-d ujitestood that £40.90 was- the 3 eapitntof t-hecbmpaHf. Ho knew now j ;■ that- there xm air afreewent for the J i-Sjstiß of 2500- fully shares, -The; r aw-roettfgWt was produced »t-'- the first f; ■nieetiiig. : -As"laT : B''lfe could:"now re-i 1 ; ceilect tiro contest of,■■■the agreement) ' was related, but tnfe dtomettt was TTot-i ■ reads and ft purported-td hp.-:a-train=fei: , j *■ to the company of the assets in. Hyde's. 1 estate. . He uiideTstcioi that a sum oi. 1 iSoQQ' was to go i<l Heyes to re.Hivbur.se s- : 'htm. Subscqufently wijiiess objected to ' ;£SOO. of that going to JJeyes- in share?: > :w!iieh ! H:oyes -ms not goiiig io 3*4' l° r ' ' It was. til? first tinvo , lie had heard tliat i -aiiyofle Was to get shares whiels they ■ iworo not to pay for. He did. Dot think . Hcyes , was entiUod to , tlio sftarcs, and i did not ktie-w of niiy rosoluiion of tbo I directors eniittiftg HeyeS , to such sliants. " v i. **'■%&& : "Heyes Had Not Paid a PcnnV," His Honour; How did you- -get to ' fcuo-w about these 600 shares? ' Witness; Mr. Gsx had been com■plsiiiing to me. that he did not. kiio\y where .'tho capital ha;/i goiio, and I asked- Hcyes for fi list showing' who ■' kad/received shares a-iid wliijt had bfeen ■ paid on there. I'ronj this Ks-t I ■ered thai Beves, had not paid a -penny, so I objected to Soycs gqitsn* , .500 ■abates tiittil an outsidn Sola'ditar's o.pfniaft had qeen'dbtaiiied'.on.tjid a-gree ■ Mcflt. • ■ ■ ■ ■ At tho first weeting., was thefo any discussion asto-flio .capital tlrnt woffltt hi availaWo for the purpose of tlio paper?—"l dorft think so-." How did this _6wm of £25.00 come to ■ bo tfl-entioited?—"Only a.s it was In tho deed/' ■' . Bid' y*u road the- deed?— "No." Mj - . Petheripk: Cos; wsl.s preseet at tbe- , first niecting of directors? ■Witness: Yes. .He was tlie-ro -when the matter of tlie #3500 was mentlonea 3U"\ T « B ," . Vera Gt'egory ijown,, a derl? in tljc : Bank of New Sftit-t'li Wales, aiid Everett Hales) a clerk in flte I'ublio Trust Office, also gavo eyide*6e. Tho luncheon adjourament was then taken. 'the Sudden f jid. The cjtse Unexpeetcdly te.riiiiijat.ed in a noraatfeflWy brief space of tiriw aftw Ivmdj. A rtinute or sa after IRs Hoii<tiiT had taken, iris s:eat oii the. Bernsh : im was iDaviitg tho Ugiirt with the ca-.se-concluded, Wlwii Hjs Honour resumed Jio asked Mr. Blrnr if, after lidafin-g Plimlfter s evidence, ho Was jjitijared to fio on. *" ' ' b ■Mv. Blair .replied, that -Iks realised nrat lie would lisye -q acwpi » iionsuit as- regarded M'pluggag.e. His Hoiittur said thai be woiiM enter n iwnisuit as affected both defendants (Hoyes iM M'Oluggagß), this with costs nccordaig i® sea] D .