PICTURE THEATRE SHARES

Greymouth Evening Star, 27 April 1937, Page 5

PICTURE THEATRE SHARES

A CONTRACT DISPUTE.

[PER press association.]

WELLINGTON, April 26.

The rescission of a contract to purchase 10,000 shares in Majestic Theatre, Wellington, Ltd., in 1928, and the recovery of the purchase price of £lO.OOO were sought in the Supreme Court to-day by the Masterton Picture and Entertainment Company, Ltd., the defendant I ring William Robert Kemball, comp / director, of Wellington. The p. .. s involved

allegations of misr< t ..ntation and a claim that the shan. •: ? valueless. The case, which is being heard by the Chief Justice (Sir Michael Myers), is expected to last three days. Several alternative causes of action are set out.

Defendant was a director of the plaintiff company from the date of its incorporation until August 13, 1935, said the statement of claim. Acting on an agreement made orally on March 29, 1928, with the defendant, the directors of the plaintiff company on April 30, 1928, paid £lO,OOO for 10,000 fully-paid shares in the Majestic Theatre, Wellington, the money being paid on Kemball’s directions to the chairman of Fuller-Hay-ward Theatres, Auckland. About May 3 in the same year the plaintiff company received- a certificate for the shares.

On March 27. 1926, the statement continued, the plaintiff company notified the defendant that it repudiated' the agreement, and claimed repayment of £lO,OOO, but the defendant had failed to repay it. The 10,000 shares in the Majestic Company, it was alleged, were valueless. Certain allegations were repeated in the three other causes of action. In the first four causes the plaintiff company claimed rescission of the agreement and judgment against defendant for the £lO,OOO paid by the plaintiff company with 6 per cent, interest' from May 2, 1928. Alternatively, judgment for £lO,OOO damages was claimed. A similar amount of damages' was claimed in the fifth cause of acr tion.

For the defendant, it was contended that the 10,000 shares were purchased' by the plaintiff company from New 1 Zealand Picture Supplies, Ltd., and that he was acting in the purchase as agent for the plaintiff company. If the other directors of the plaintiff company had no power to enter into the agreement, such irregularity on the part of the defendant and the other directors was waived, and the agreement ratified, if the agreement had been entered into, which the defendant denied. The directors- subsequently adopted 1 balance-sheets, which showed the plaintiff company! as holding the 10,000 shares, and accepted dividends- from., the Majestic Company to March 31, 1935. By accepting the dividends the plaintiff company was stopped from repudiating the agreement. The defendant denied wilful and fraudulent misrepresentations. If any representations were made to the plaintiff company,, the defendant made them in goodfaith.

The only witness to-day was’ Arthur David Low, public accountant, of Masterton, and secretary of the plaintiff company. His examination and cross-examination were mostly directed to the meaning and accuracy of the minutes of directors’ meetings. He was still in the box when the Court adjourned until to-morrow.