DEBENTURE TRANSFERS

Evening Star, Issue 22516, 8 December 1936, Page 15

DEBENTURE TRANSFERS

MISREPRESENTATION ALLEGED REPERCUSSION OF INVESTMENT EXECUTIVE TRUST CASES [Per United Press Association.] CHRISTCHURCH, December 7. In tbe Supreme Court, before Mr Justice 'Northcroft, George Ernest Argyle, of Ashburton, printer, petitioned for the return of debentures in the Investment Executive Trust to the value of £l7O, the allegation being that he transferred them in consideration, of debentures to the same nominal value in the Australian Investment Corporation, which company was the defendant in the action. The plaintiff’s claim stated that he had been induced to make the transfer by the misrepresentations of Osmond Arthur Bridgewater, and of William Munro, admitted agents of the defendant company.

The defendant company, counsel for plaintiff (Mr Young) said, had .collected debentures in the Investment Trust to the face value of £85,000. It was known then that only 12s 6d in the £ would be paid to the unfortunate investors. ' In April the Publio Trustee paid a dividend of 2s in the £. The annual meeting of the Australian Investment Corporation . had been held some months ago. The balance sheet revealed that Bridgewater, or his promoting company, 0. A. Bridgewater and Company Ltd., received £I,OOO for establishment costs and over £4,000 commission, this_ being later deducted from money which had come from-the public by way of a dividend from the liquidated companies. By , securing the transfer of debentures in the Investment Executive Trust, the corporation had received about £27,000 in the distribution by the Public Trustee. The balance sheet also showed that £3,250 was invested in the Investment Development Corporation of New Zealand Ltd., a company which had been formed in Wellington on June 5, 1936. The shares in this company were also held by the M'Arthur Trust, formed by J. W. S. M'Arthur in Queensland, where no legislation similar to that of New Zealand and New South Wales had yet been enacted. The first proof of a definite connection between Bridgewater and M'Arthur was obtained on July 15, 1936, when their names were entered with , the Registrar of Companies in Wellington as directors of the Investment Development Corporation. The representations complained of had been made to the plaintiff by Bridgewater in August, 1935, „ The plaintiff believed that Bridgewater was a loser through the M'Arthur transactions. The transfer was effected, and it was not until the following April, when he found another debenture holder who had not transferred his holding had received a dividend from the Publio Trustee, that his suspicions were first aroused. The plaintiff’s claim was for the cancellation of the contract between the plaintiff and the defendant company for the transfer of debentures and for the return of the debentures. ..Evidence <jn..the lines indicated by counsel was given by the plaintiff, who said _ that after he had consulted his solicitor with a view to recovering the shares he_ was interviewed by Bridge--1 water. Bridgewater represented to him that his solicitor, Mr Young, had lost interest in the case, and that several other persons who had consulted Mr Young had since withdrawn the matter from his hands. The case is part heartj.