FALSE PRETENCES CHARGE

Dominion, Volume 23, Issue 45, 16 November 1929, Page 13

FALSE PRETENCES CHARGE

QUARTERLY DIVIDENDS CASE PROSECUTION OF SECRETARY JURY FAILS TO AGREE By Telegraph.—Press Association. Invercargill, November 15. Charges of false pretences against David Neilson Johnston were resumed in the Supreme Court to-day. Accused, who pleaded not guilty, and who was represented by Mr. C. J. L. White, of Dunedin, is representative in New Zealand for Quarterly Dividends Ltd. and National House Purchase Ltd., and it was in connection with money accepted on behalf of these organisations that the charges were laid. Accused gave evidence that he waS a married man with two children living at Dunedin. He had served in both the Boer and Great Wars, and as a result of ill-health bad had to give up his work as a trained masseur and take up * the occupation of selling Bibles. He said that the scheme had been brought to his notice by a member, but he had waited until the visit of the promoter, William Taverner, to New Zealand. He had attended a meeting addressed by Taverner, over which a previous witness (Moir) had presided. Moir, as chairman, had said that the scheme had great possibilities, and after hearing Taverner’s address witness had joined the organisation. He had become secretary for New Zealand after twenty other men had been I suggested for the post, but had refused it. He himself had had implicit faith iu the scheme until the hearing in the lower court, when he had heard rhe evidence of tlie Government actuary. He still believed in the scheme, but would like to hear the evidence of an actuary of equal calibre as the Government actuary, as be had been assured that the scheme had been submitted to actuaries of the highest standing. In fact, he had been assured that the company would send out an actuary to testify. Objection to Evidence. The Crown Prosecutor (Mr. Macalister) objected to that evidence as being subsequent to the charges laid against accused, and the objection was upheld. Proceeding, witness said that his wife and his. two daughters were subscribers to the scheme, one of his daughters paying her contribution out of her salary. They were still paying and still believed in the scheme. When addressing meetings he had said that 2J years was a fair average computation for waiting periods for loans. The scheme had been in operation since September of 1920, and until 1925 a reward was offered to anyone who could show’ that the scheme was fraudulent. 'The companies haJ been registered in New Zealand in 1928. He himself received no salary for his services, but was on' the same footing as any other member of the organisations, who received £1 for every four members enrolled. Implicit Belief in Scheme. Cross-examined by the Crown Prosecutor, accused said be had told people whom he had canvassed that they would reach the £5OOO class in about 74 years, but he certainly had not told them that they would draw dividends on the £5OOO. The highest man in New Zealand was in the £3OOO class, but he was drawing dividends on £4OO. He did not know that Taverner was the controlling force of the organisation. He repeated that be simply and implicitly believed in tlie scheme. Although this was so, he would not continue to enrol members until he had received actuarial support of his belief. He had read a leading article in the “Evening Star” of Dunedin in which was quoted an extract from the London “Truth” severely criticising Taverner. Still he had believed in the scheme. He had also read in New Zealand “Truth” strictures passed on Taverner by English Judges, but had still retained his belief. He had been with Taverner in Wellington when he had been questioned by a detective in the police station there, and on the conclusion of the interview the detective had shaken hands with Taverner, and had wished him well. • Under these circumstances he felt that he could be excused for ignoring the newspaper articles. It was a fact that he had received a loan of £3OO from Taverner's companies to pay for a shipment of Bibles which had gone astray, and for which witness had accepted responsibility. Witness had enrolled 1000 members in the organisations; he had received a commission of ss. a member. Apart from his communications with Taverner witness had not taken any steps in New Zealand to make inquiries concerning the soundness of the scheme. After the proceedings in the Lower Court he had shown the Government’s Actuary’s report to an accountant in Dunedin, who had stated that he could not set himself up as an authority against a man possessing such high qualifications as the Government Actuary. Since the prosecution had been commenced he had accepted money posted to him, but had not solicited any deposits. At a meeting he had hold at Waimate it had been condemned by the Mayor and the president of the Retailers Association. He considered that he knew as much about the financial aspects of the scheme as did these men, who he did not enm-ider as experts.

Scheme in Operation since 1920. After further evidence had been culled for the defence, Mr. White, in addressing

the Court, said he would emphasise to them the fact that this scheme had been in operation since 1920, under the very nosi i of the financial experts of the world, and yet this was the first criminal proceeding in connection with it. Question for Jury. Proceeding, Mr. White said that the question before the jury was-not as to the soundness or otherwise of the companies, but whether defendant was a criminal. One would have thought the Crown would have stamped out the companies if false to prevent their continuing to delude the public, but he would go further: Not only had the Crown not thought fit to act in this way, but it had actually encouraged the continuation of the scheme by allowing the companies to register in New Zealand. Then again the Police Department,- although it had had the promoter of the scheme (Taverner) in New Zealand, and iu fact had interviewed him, it allowed him to return to England without prosecution. As to the soundness of the company, it had been shown that the company was prepared to send out one of the world’s financial experts to assist counsel for the defence. This had been denied accused, said Mr. White, on account of the manner in which the case had been precipitated by the Crown. Counsel referred to the fact that accused was a depositer, and that his wife and daughter were depositors also, and that they were all paying into the scheme. “Complicated Explanation.” . In addressing the jury, Mr. Macalister said that Mr. White had stated that in order to establish an offence the statement made must relate to the past or present, not to the future. That was so, but with certain qualifications, A pro; raise might be made which of itself implied that the man making it had power to carry it out. Accused had made a very complicated explanation of the workings of the companies. His promise was such that it was clearly a representation which involved the power of the company to carry out what he said it could do. Mr. Macalister emphasised that the root and branch of the defence rested upon the assertion that accused was not aware his representations were false. Judge Sums Up. His Honour’s summing up occupied an 'hour and a half. He exhorted the jury to banish from their minds anything they might have heard prior to the hearing. Accused was entitled to q verdict upon the evidence heard in that Court, and they should arrive at that verdict upon such evidence. Before a verdict of “guilty” could be brought it was requisite that the following three essential ingredients of crime must be proved beyond all reasonable doubt: Firstly, that there was an intention to defraud; secondly, that there was in fact false pretence, and thirdly, that money was obtained by means of such false pretence. That was the law: the jury were the judges of fact. , The jury retired at 4.55 and returned at 9.10, when the foreman announced that they were unable to agree on any of the six counts. A new trial was ordered for Monday.