BANKRUPT IMPORTER

Evening Star, Issue 23322, 19 July 1939, Page 10

BANKRUPT IMPORTER

BREACHES DF ACT ALLEGED CROWN'S CASE AGAINST H. V. SMITH Tho hearing of the nine charges of breaches of the Bankruptcy Act preferred against Harry Vivian Smith Was continued in the Supreme Court to-day before Mr Justice Smith. Mr F. B. Adams conducted the case for the Crown, the accused being represented by Mr O. G. Stevens. Concluding his address yesterday afternoon, Mr Adams said it was submitted by the Crown that the removals of goods by Smith were fraudulent in that the goods which were removed were the property of the Official Assignee. It was suggested that the purpose of Smith’s actions was to prevent the Official Assignee from seizing that stock, selling it, and distributing the proceeds among the creditors. “ That is fraud,” Mr Adams said, “ It is not a question of motive, but of intent.” The Crown Prosecutor read the statements made to the Official Assignee by Smith. Tho explanation of Smith’s attitude, ho said, was_ that he had decided to leave sufficient stock in the hands of the Official Assignee to pay his New Zealand creditors and to keep knowledge of his bankruptcy from his overseas creditors. With what stock ho had left he had intended to start again and pay his overseas debts. That explanation was no answer to the charges,' Mr Adams said. The whole of the property should have been in the hands of the Official Assignee. Evidence was given, by James Milne Adam, Official Assignee at Dunedin. He detailed Smith’s bankruptcy proceedings from the date on which Ins petition was filed, January 27, 1939, and read various statements made by Smith. In those statements Smith, outlined his business progress, his ownership of racehorses, and his expensive association with the making of the film, ‘ Phar Lap’s Son.’ To ‘Mr Stevens, witness said that Smith had hot seemed to appreciate his position. In fact, even lately, he still did not appear fully to understand his circumstances. Since the full stores of his stock were made available he had his best to be of assistance. Leonard M'Kendrick Satterthwaite, public accountant, said that the books' produced by Smith were not “ books ” at all. in tho strict sense of the meaning. They -were merely correspondence hooks, lists of orders, etc., but he did see indications that a ledger had also been kept. Evidence that Smith stored some stock in a shed owned by the witness at Anderson’s Bay was given by William Somerville, an agricultural contractor. Smith had asked for the storage space n,hout the end of January, saying that he was moving his stock.

Angus M'Leod, a warehouse manager, described his valuation of hardware and agricultural lines submitted to him for that purpose by the Official Assignee. Thomas M'Kenzio Brydone, who was a clerk in the Official Assignee’s office at the time of Smith’s bankruptcy, and is now stationed at Invercargill, described his visit to the latter’s premises at 315 Castle street to take possession of the stock shown in Smith’s statements. There was no one at home, but, looking through the broken window of a shed, witness saw a number _of implements and other goods therein. He supposed these were the goods mentioned by Smith. Witness later questioned Smith as to his stock, and the accused said this was at his office in Castle street. Witness had seen no premises that appeared to be an office, and his suspicions were aroused. Smith then took him to premises across the road in Castle street, where there was a miscellaneous collection of stock. A rough inventory was made out and signed by the accused, who said he had other stock at Mosgiel. Witness asked Smith if he was sure ho had set out all his stock, but he made no disclosure of the goods witness had seen in the shed at 315 Castle street. Later witness went to this shed and removed the stock from there. The accused then said that he had lost his head, and had been trying to protect the “old man” (his father-in-law). Witness referred to the discovery of other goods at Mosgiel and Dunedin, of the existence of which Smith had never told him._ Smith’s explanation was that he considered he had surrendered sufficient assetk to cover his New Zealand creditors.. He proposed to carry on, ■he said, and pay off his overseas creditors in full. _He gave witness the impression that this was his plan on a number of occasions. Smith’s mail was re-directed to the Official Assignee by order of the Supreme Court, and in this mail were found cheques for £l9, £7, and £3 odd in payment of accounts owing to the accused, who had made no reference to them in his statements. Witness produced a series of admissions by the accused as to goods seized at Mosgiel and Dunedin, and the fact that he was in possession of three Fire Board debentures, valued at £3OO. To Mr Stevens, witness 'said the accused appeared to be perfectly honest in his desire to carry on as he proposed, It was explained to him that he could not adopt such a course, but he could not see why. This was a matter of complaint with him on several occasions. Witness conceded that often, when a bankrupt was being examined at his meeting of creditors, material facts emerged during the course of his examination. Smith did not seem to appreciate his position, but had expressed a desire to pay his creditors in full. He rendered every aesistance possible to the Official Assignee in disposing of his goods. Smith had more than once told witness that there was no necessity for him to have filed in bankruptcy and that this was caused by one creditor issuing a distress warrant for something between £2O or £3O. At this time Smith urns excited, upset, and muddled, and seemed to have a lack of understanding of the Bankruptcy Act. Smith was very late for his creditors’ meeting, and when Mr Stevens (his counsel) asked him to remove the cigarette he was smoking from his mouth. Smith turned to him and remarked: “ Say ‘ please ’I ” At one stage of proceedings Smith said ho was “ fed up,” and asked counsel to continue on his behalf. Joseph Richard. Tilbury, store manager of the Tilbury Forwarding Company, said that his company had stored 16 cases and three or four bags of goods on Smith’s account. To Mr Stevens, witness said Smith gave as his reason for storing the goods that the floor cf his office would , not stand the weight of the stock. Arthur Vincent Gain, a director of the Gain Forwarding Company, said his company had had goods in store on Smith’s account and held them against a debt owing by Smith. The debt was about £36. From tinie to time Smith took some of these goods, making payments on account, and at the time of his bankruptcy there were only three cases left. Charles Lester Mitchell, * taxi driver, said Smith hired a truck

through his firm on January 30, and witness drove him to Mosgiel. There they shifted two loads of farm implements from Smith’s premises to another shed. They returned to Dunedin with goods on the truck, and left a regenerator afc the Silver hern depot. Then fthey went to Smith s house in Castle street, where they unloaded the remainder of the goods. To Mr Stevens, witness said he and Smith left Dunedin soon after 6 p.m. and finished the job about 1.15 a.m. Thq lunch adjournment was taken at this stage.