COURT OF APPEAL

Greymouth Evening Star, 15 March 1937, Page 2

COURT OF APPEAL

OWNERSHIP OF YACHT MOREWA. [per press association.l WELLINGTON, March 15. The Court of Appeal commenced, this morning, the hearing of the case of the Pacific Exploration Co., Ltd. (in liquidation) and the Sterling Investment Co. (N.Z.), Ltd (in liquidation) v. John William Shaw McArthur, an appeal from the judgment of Mr. Justice Johnson, in the case involving a. transaction concerning the yacht Morewa. In September last, the Public Trustee, as statutory liquidator under the Companies (Special Liquidation) Act, 1934-35, brought a claim against McArthur for £10,335/4/4, allegedly due by reason of transactions concerning the disposal of the Morewa. The Pacific Company, which was formed in 1932 as a. private company, for the purpose of exploration and development work In the Pacific, had the Morewa built. The construction and equipment of the boat was paid for out of moneys advanced by the Sterling Company, without security. In turn, the Sterling Company received the moneys direct from the Investment Executive Trust of New Zealand, Ltd., upon the security of debentures, part of which was diverted to the above purpose. From December, 1933, McArthur obtained possession of the yacht and treated it as his own, having registered it with the Registrar of Shipping in his name, as owner. In October, 1934, he mortgaged the yacht to the National Investment Co. of Queensland Proprietary, Ltd.; to secure £6,000, and in January, 1935, transferred it to this company, in consideration of the discharge of: the mortgage. It was held by Mr. Justice Johnston in the Supreme Court, that the only reasonable inference to be drawn from the evidence was that McArthur had complete control of the appellant companies, and that their officers were subject to his direction and under his control. His Honor further held that it had not been shown that the creditors, whose interests were at stake, wore deceived or defrauded, or had suffered loss, and that consideration had been given by McArthur for the yacht. Accordingly, judgment was entered in his favour, with costs. On the hearing of the appeal, to-day, Mr. G. G. Watson, for the appellant companies, stated that the real foundation of the action was whether the yacht, the property of one or other of the appellant .companies, which had admittedly passed into the possession of respondent, who had dealt with it as his own property, had come into his hands by reason of his having given valuable consideration for it to either company. MAINTENANCE CASE. WELLINGTON, March 15. At the conclusion of argument in the Court of Appeal, in the case Hole v. Hole, the Chief Justice intimated that the Court would reserve judgment.