MORTGAGE. ACTION

Evening Post, Volume CXXII, Issue 68, 17 September 1936, Page 5

MORTGAGE. ACTION

DEBENTURE-HOLDERS' CLAIM

INVOLVED HEARING

(By Telegraph.—Press Association.)

AUCKLAND, September 16.

The legal action involving a Review of the activities of a number of companies associated with Mr. J. W. S. McArthur was continued in . the Supreme Court today. Counsel for the^plaintiffs, Mr. Ba:v-owclough, completed his opening address and called a number of witnesses, some of whom produced the.books and records of several of the companies concerned, making Court exhibits to the number of 45.

The plaintiffs are T. H. Dawson and L. Knight, as trustees for the debenture holders of New Zealand Redwood Forests, Limited, and T. E. Jones, of Dargaville, one of the debenture holders. The defendants are Sterling Investments Company (New Zealand), Limited, in liquidation, Wynwood Investments, Limited, and the National Investment Company of Queensland Proprietary, Limited. The action 'was brought by the plaintiffs for the purpose of having declared invalid a mortgage of £7500 which was given in April, 1931, by New Zealand Redwood Forests, Limited, to Kotahi Lands, Limited, and on subsequent dates.was transferred to various other companies. Continuing his opening address, Mr. Barrowclough read from the minutes of Redwood Forests, Limited, which he alleged showed that the chairman, J. W. S. McArthur, who was a large shareholder, had in defiance of the wishes of his co-directors imported on to the board M. H. Hampson and F. F. Hockley. The result was that control of Redwood Forests was passing into the hands of McArthur and those who were of like mind with him. The defendants alleged, Mr. Barrowclough said, that the plaintiffs had been guilty of acquiescence m the validity of the memorandum of mortgage and could not now claim that it was invalid, but no one could be held to have acquiesced without full knowledge, not only of the facts, but of his right of relief. It was not until the commission of inquiry was set up by the Government that the affairs of all these interlocking companies came to light, and the trustees knew they had a right to take proceedings against Kotahi Lands for alleged fraud. The hearing was adjourned.