EXECUTIVE TRUST

Evening Post, Volume CXX, Issue 135, 4 December 1935, Page 12

EXECUTIVE TRUST

DISPOSAL OF ASSETS

A SUGGESTED SCHEME

M CAETHTJE"S POSITION

A denial that J. W. S. McArthur had any knowledge of the proposal to form a company to take over from the Public Trustee assets of the Investment Executive Trust of New Zealand (in liquidation) was made on his behalf by Mr. W. Perry before Mr. Justice Blair today. Mr. Perry, who had received his instructions from McArthiit by cable, was given leave to mentioQ the matter when his Honour was ab»ut to resume the hearing of an application by William Henry Bracey, of Auckland, for permission to convene a meeting of the trust company's debenture holders to consider the scheme.

After Mr. Perry had been heard, Mr. T. P. Geary, who appeared for Bracey in place of Mr. H. P. Richmond, intimated that a decision had been made not to proceed with the summons. His Honour accordingly dismissed the application, but made no order as to costs.

"This morning," said Mr. Perry, "I received a cable from Mr. McArthur in which appear the following words: The statement that application to the Court inspired by McArthur Trust is untrue. Neither the company nor I has any knowledge of the proposal before the Court other than newspaper reports.'"

His Honour said that that coincided with the position put by Mr. Richmond. The position, said his Honour, was that it was claimed that a Queensland company had been acquiring a number of debentures in the New Zealand Investment Executive Trust, and that Mr. McArthur was interested in the Queensland company.

Mr. Perry said it was true that the Queensland company had acquired a substantial portion of the debentures, totalling, he thought, about £84,000, but he did not know what McArthur's holdings in that company were.

His Honour: What I said to Mr. Richmond was that if Mr. Bracey's application were acceded to, then in order to get the position clarified it would be necessary to have the votes represented by these Queensland shares put in a separate category. FUKTHER COMPLAINTS. Mr. Perry: Mr. McArthur further complains that according to Press reports a statement was made in court that people were being ruined by him at the time of the special legislation, which he claims is contrary to proved facts. He protests against this suggestion being made in proceedings to which he is not a party. His Honour: I do not know so much about that. It is difficult to avoid some reference to the circumstances which were deemed to justify the passing of special legislation to wind these companies up, and some reference of course was made to that phase of it. Mr. Perry said that the last thing that Mr. McArthur compained about was that counsel for the Public Trustee' was reported to have said that he was astonished that people still trusted j him (McArthur). He complained) that that statement was made at proceedings to which he was not a party. NO WITHDRAWAL. In answer to-Mr. Perry, Mr. E. P. Hay, who appeared for the Public Trustee, said that as far as any statement made by him at the hearing of the summons was concerned, he did not retract any word of what was said. Whilst Mr. McArthur had perfect liberty to intimate his view to the Court as he had done, it was still considered by the Public Trustee that he had a very definite association with the scheme and a very definite interest in it.

"I repeat, sir," said Mr. Hay, "that it is a matter of astonishment to any outside observer that after the disclosures about Mr. McArthur's companies in the past, all these debenture holders should be foolish enough to transfer their debentures in exchange for shares in a Queensland company, which, apparently, has not a penny of assets apart from these debentures which it has. acquired in exchange for shares. When I say a penny of assets that is probably an exaggeration. . The company has about £ 1000 subscribed, but there is nothing to indicate whether that is in cash or not."

Mr. Perry: Of course, other proceedings may. be brought before the Court later in which Mr. McArthur may have the opportunity of disproving, if he can, any statements that have been made against him. NO CHARGE MADE. "My recollection," said his Honour, "is that Mr. Hay was very careful. He was not making any charge at that time, but he did refer to certain matters, which it was suggested were matters that ought to be brought to the knowledge of the Court when dealing with the application. My recollection is that he studiously avoided anything of an extravagant nature. He was very very careful of the language he used."

His Honour then explained to Mr. Cleary that when he adjourned the matter previously he wanted to be satisfied in connection with a certain affidavit. As far as the scheme was concerned it seemed to him to be in embryo, and that it would have the effect of tying up the operations of the liquidator for a period of nine months. There were other features of the scheme which were unusual and obviously required amendment.

Mr. Cleary said he understood that these various matters had been considered by those who had been supporting the scheme, and the result of their consideration of the matter was that they had decided not to proceed with the summons. This decision had been influenced by the limited resources those who * supported the scheme had at their control. Under the circumstances the only thing to do was to ask that the summons be dismissed.

The question of costs was then discussed, and- his Honour said he had to assume that Bracey thought that the debenture holders would benefit by the scheme. Under the circumstances he thought the proper course to take was to dismiss the application and make no order as to costs.