RETURN OF DEDENTURES CLAIMED

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

RETURN OF DEDENTURES CLAIMED

MISREPRESENTATION ALLEGED EVIDENCE IF M'ARTHUR CONIINE LIQUIDATOR [Per United Press Association.] CHRISTCHURCH, December 8. Further evidence was heard to-day by Mr Justice Northcroft in the case in which George Ernest Argyle, printer* of Ashburton, claims the return by the defendant, the Australian Investment Corporation, of debentures to the face value of £l7O in the Investment Executive Trust, and of dividends paid by, the Public Trustee as liquidator of the Investment Executive Trust. Plaintiff’s allegation was that; he had been induced to transfer the debentures to the defendant company by the misrepresentations of defendant’s agent, Osmond Arthur Bridgewater. John Gordon M'Thie, of -the Publio Trust Office, Wellington, said he had been dealing with the liquidation of the assets of the M‘Arthur combine. There were £507,852 worth of debentures issued in the Investment Executive Trust* including £272,000 worth held by a company called the New Zealand Shareholders’ Trusts Ltd., those debentures having no voting ‘power nor qualification for a dividend. He gave details of the transfers of the debentures to the defendant company, most coming from Canterbury, Nelson, Marlborough, and West Coast districts. “ The Public Trustee opposed the reconstruction of the trust company.,”said witness, “ because he had information which led him to believe that if reconstruction were effected the assets might find their way back into the hands of M'Arthur.” At the date of the liquidation of th# trust (he said) Bridgewater held four £lO debentures. He had' transferred to the defendant company £l3O worth held by one Kitty S. Levy, but he still held his original £4o' worth. The consideration paid by Bridgewater for K.S. Levy’s' debentures was £52. The firm of O. A. Bridgewater and Coheld £l2O of face value in the Trust Company when it was liquidated, afid £IOO worth were transferred to the defendant company. THE DEFENCE. Opening the case for the defence, Mr Gresson said that at the outset it seemed that the debenture holders in the Investment Executive _ Trust were faced with forced realisation of their assets. Bridgewater hit on the excellent idea of forming a holding company to unite the debenture holders, “ From the start the matter to be overcome, was the debenture holders’ distrust of M‘Arthur. An assurance that M‘Arthur had nothing to do with the proposed holding company was readily given. That I admit,” said Mr Gresson. “That was the representation of a then existing fact- I say with confidence that it cannot be shown that M‘Arthur had any connection with the formation of the company. We are now indirectly connected with M'Arthur through "the new development company.That was because M'Arthur had been working in Australia on similar lines to the defendant company, buying the trust debentures. There arose a position where something had to be dcfae to prevent cut-throat competition for the debentures, and to fight for control of the assets. Bridgewater made it clear that he could enter into no agreement with M‘Arthur on account of the assurances he had given!. Our company is completely free from M'Arthur’s control.” His Honour: Having regard to the subsequent history of the case, the whole thing hinges on hay impression of Bridgewater’s honesty. “I am prepared to stand Bridgewater in the witness box,” replied Mr Gresson. . . , Bridgewater, in evidence, said, his first association with M'Arthur was in 1931. Asked why he advised M‘Arthur to burn a letter he had written, Bridgewater said: “ I thought if it were showil to everybody that it would give rise to the inference that the plaintiffs are trying to give it at this stage.” Mr Young; There is no letter on the file to show you repudiated M'Arthur’e scheme to obtain control of the assets which the Government , had taken special measures to withdraw from hie control. . Bridgewater; I did not repudiate hie schemes straight out. I did not went to antagonise M'Arthur. He might) have been useful. Mr Justice Northcroft; In othep words, you wanted to use M'Artnup as a tool. . Witness: Yes, to a certain extent-