CRAFTSMAN CASE

Evening Post, Volume CXIX, Issue 32, 7 February 1935, Page 13

CRAFTSMAN CASE

ALLEGED FRAUD

TRIAL mUUNG-THE END

The trial of Ernest Mabin Gilmour. I and Charles Ernest Vickers for al-' legcd conspiracy and false pretence I in connection with the Craftsman Manufacturing Co., Ltd. (in liquidation) was continued in. the Supreme Court yesterday. Mr. Justice Smith is the trial Judge, Mr.. P. S. K. Macassey and Mr. D. W. Virtue are prosecuting, and 'the defence I is being conducted by Messrs. W. E. Leicester and T. P. McCarthy (for Vickers) and Mr. W. P. Rollings (for Gilmour). ■The Crown.: case . concluded at 3.45 pan., and Mr. W. P. Rollings, : for Gilmour, announced that he would not call evidence. Mr. W. E. Leicester, for Vickers, summed up the*-!; Crown's-. evidence, criticised it, and outlined ■ the course the defence of Vickers would take. Vickers entered the box for twenty minutes before the Court rose for the day. The. last,of. the Crown's witnesses were heard yesterday afternoon. Frederick Jenness, jeweller, Wellington, said that .Vickers .came into his shop in April, 1930, and said that a company was going to be floated.; Marvellous business' was being done' in Australia—big contracts with the rail- j ways and trams. Witness saw the! lights. Subsequently, witness went to a meeting in Mr. Hislop's office, .when I Barbour, Vickers, Robinson, Hislop, and witness were present. Vickers later offered witness half the .royalty which he said he had the right to.;sell. Witness gave him- £250 and a diamond ring, and received 500 shares, which were.;; never .transferred. Witness gave Vickers a diamond ring, valued at £500, itv consideration ;of half the royalty and 500 shares, making witness's payments. £750 V altogether. Witness received nothing .by way of royalty. Cross-examined by-Mr. Rollings,'1 witness said ,that he was one of the original subscribers of the company and had signed the memorandum of association. INSTRUCTIONS TO SELL. "Immediately I bought • the shares, I gave instructions to have them sold," said-witness, cross-examined by Mr. Leicester. "I" think it • was suggested by" Gilmour that, I should give a discount- of 25 per cent. He asked me for 25 per cent, discount and-1.-offered, it to him. ... I offered Gilmour's wife a diamond ring if he 'could.*'sell the shares. I was interested in the royalty more than shares." Asked if he had had shares, in the Australian company, witness said, "Yes, I am sorry to say; unfortunately it was a swindle." At a meeting in Mr. Hislop's office witness remembered ■ Mr. Barbour asking to see'a1 certificate, of the patent rights. Mr. Hislop had. said.he would look into .that matter, and satisfy, himself that everything was ; all .right. Sydney H. Higgs,: registered patent agent in New Zealand since 1908, said, he was consulted by A. B. Fitchett in! February, 1931, and.was asked to see if a light similar to the one produced, had-been registered as a patent. He. saw none .patented, in No.sv Zealand, similar to the1 one produced, nor/did he find any applications by Flight, or by the Craftsman Company.- He searched, and assumed there had been no appli-. cation made. There was registered a trademark "Flight Light" however. Between December, 1930, and April, 1931,' a set of lights was received from the Craftsman Company for trial, said Reginald Gow, Railway Bus Manager. Up till April 14, lights were tested on. the buses and proved satisfactory, but advice-was sent the company then that; no purchase was proposed. Later the, lights were found to ■be defective, he said, re-examined. Tf|E DEFENCE. • The same .charges were made against Vickers as were made against Gilmour, said Mr. Leicester, opening Vickers's defence. • The first was of conspiring to defraud, between May 28, 1930, and' March.,27, 1931, some persons induced to .. buy shares in the Craftsman, < Company., Both were charged jointly also with obtaining money from Herrick and McKinny by false pretences. • , ' As to the conspiracy charge, three elements must be proved: (1) Conspiracy;'^) deceit; and (3) vintent to de- : fraud-C- Someiagreemeht between the accused for unlawful purpose was imperatiye for/conviction, and before any notice' could, be ftaken' of a lot of the ■other-evidence^*' ':'!,'-;' ': ■' -.-■.-. :;; ; ,"It was Vickers's job'to get money: for>FUgKt,Vwhof;had7.l2,ooo; shares • in the company,','^ said-1 Mr. Leicester.' "The Crown madea large number,'of allegations in supporLof the theory that these twp,,,m diva duals, were together and that Vickers came vjitri an- agrees ment 'already prepared" in Melbourne. ■V! :'■■** .But : theVcbmpany had a reput-able'isolicitor-in'Mr.^ Hislop and-coiild have had'a snew agreement prepared. : "Mr. Macassey has. said that' anyone .could manufacture this article, but there's not a single, suggestion that anyone has manufactured the article in ■Neiv! Zealand,' and unless a person had the' dies-frarid-it was a secret pro-; cess—nobody could 'possibly manufacture the articles. -That doesV not concern" Vickers at all.:1 '■■:'■■■ ■-.■ "The company' had; the benefit of independent legal.-advice, and technical advice; andat was not Vickers's fault. Everything,was \ inorder so far. as allotment of the shares was concerned— absolutely legal and proper. Vickers, as .attorney, had.the right to elect any director as managing director. . That was provided,for;inc the agreement. Gilmour was1 appointed by the other directors,.. and. Vickers ,did,not vote." ..Describing, how Vickers had come to New Zealand, counsel said Vickers would say that he assumed that who- . ever, purchased the New ■ Zealand rights of'the light : would go, to a solicitor, iWho would see that all was in order ibefore the' sale went through. So far as Vickers' was concerned, Flight had world rights, and the light was,being manufactured in; Australia.: The New •Zealand company had bought the dies and similar articles could only be produced by the dies. ■■.-.;'... , ; PROTECTING THE COMPANY. j Mr. Hislop, ' on whom Vickers called, perused the papers' Vickers had,:' and said it would need.seven men to sign the articles to form a company. Did Vickers know of any, because there were some Mr. Hislop cguld get' to join such a company? Vickers was .asked if ■' Flight's Tights were ■' protected.' Vickers telephoned for a reflector and; Mr. Hislop saw it and said, "Ohi yes, here's the number." Mr. Hislop _ said he would look into it. • : : Vickers naturally had thought that because a New Zealand solicitor was acting for the New Zealand company all that was' necessary ', would be done.. Vickers had no technical knowledge of patent rights,'but believed that the payment of the consideration would give. the company all it required. Mr. Hislop had said he would look, into the matter. "It was, all said and done, his job to see that the company! was protected," said Mr. Leicester. ' :• ■ • . .

Sketching Vickers's career, counsel

said accused had left the State school in Australia before he reached 13, and spent the next ten years in farming operations in Australia, where he was born. He then had'two years with an auctioneering, firm, following which he set up in business as an auctioneer as Vickers Bros, on his own account, dealing in cattle and bloodstock farms. He sold out to a firm which kept the name of Vickers Bros., and it was not until 1929, when he answered an advertisement in the "Argus" in Melbourne for a managing share salesman and organiser, that he met Flight, the' inventor of, the reflector. Vickers got the job and handled the sales of some 6000 reflectors in Australia —reflectors which, as the New Zealand prospectus stated, were used by many important public services in Australia. In 1930, about April, he came to New Zealand with a letter of introduction from the manager of the National Bank in Melbourne to the manager of .the. bank in Wellington, and some papers which, he subsequently gave to Mr. Hislop, recommended to Vickers, who was Flight's attorney, as a reputable solicitor by the bank manager in Wellington.

Evidence in chief along these lines was given from the witness-box by Vickers, who spoke calmly and clearly.