DEBENTURE TRANSFER CASE

Northern Advocate, 9 December 1936, Page 6

DEBENTURE TRANSFER CASE

DEFENDANT’S CASE OPENED

[Per Press Association. Copyright.] CHRISTCHURCH, This Day.

Further evidence was heard yesterday by Mr Justice Northcroft in the case in which George Ernest Argyle, printer, of Ashburton, claimed the return by defendant, the Australian Investment Corporation, of debentures to the face value of Ui7o in the Investment Executive Trust Company of New Zealand, Ltd., and of dividends paid by the Public Trustee, as liquidator of the Investment Execute Trust. PlafnjLiffT allegation was that he had been induced to fi-ansfer the debentures to the defendant company by the misrepresentations of defendant's agent, Osmond Arthur Bridgewater. At the date of the liquidation cf the Trust Company, Bridgewater had held four £lO debentures. He had Transferred fto £hfe 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 Company held £l2O face value in the Trust Company when it was liquidated, and £IOO worth were transferred to the defendant company.

The Defence Opens.

Opening the case for the defence, Mr Gresson said that at the outset it seemed the debenture holders in the Investment Executive Trust were faded with, a forced realisation of assets. Bridgewater had hit on the excellent idea of forming a holding company to unite the debenture hold-

“From the start the matter to be overcome was the debenture holders’ distrust of McArthur. The assurance that McArthur had nothing to do with the proposed holding company was readily given. That 1 admit,” said Mr Gresson. “That was the representation of the then existing fact. I say with confidence that; 't cannot be shown thal McArthur had any connection with the 'formation of the company.

“We are now indirectly connected by McArthur through the new Development Company. That was because McArthur had been working in Australia on similar lines- to the defendant company, buying trust debentures. There arose a position where something had to be done to prevent ‘cutHthrpat’. compatitiop for the debentures and the fight , for the control of the assets. . .

“Bridgewater made it clear he could enter into no agreement with McArthur on account of the assurances he had given. Our company is completely free from’ ' McArthur’s control.”

His Honour: Having regard to the subsequent history of the case, the whole thing hinges on my impression of Bridgewater’s honesty. 7 “I am prepared to stand Bridgewater in the witness box,” replied Mr Gresson.

Why Letter Was Burned.

Bridgewater* in evidence, said his first association with McArthur was in 1931. Asked why he advised McArthur to burn the letter he had written, Bridgewater said, “I Thought if ,it were shown to everybodj’ it would give rise to • the inference that plaintiffs, are trying to give it at this stage.” Mr Young; There is no letter on the file to show you repudiated McArthur’s scheme to obtain control of the assets, which the Government had taken special measures to witadraw from his control.

Bridgewater: I did not repudiate his schemes straight out. . I did not want to antagonise McArthur. He might have been useful. Mr Justice Northcroft; In ether words, you wanted to use McArthur as a tool. Witness: To a certain extent.

Asked McArthur For Aid,

Cross-examined by Mr Young, witness admitted that before the formation of the defendant company in 1935 he asked McArthur for information and assistance in protecting the interests of shareholders.

Mr Young: Did you ever write to McArthur offering your assistance to him in New Zealand?

Witness: I don’t remember having

done so

Mr Young: Then you will explain this cablegram received by you from McArthur on August 2, 1935:—“Much appreciate and reciprocate your offei' co-operation according to documents Webber delivered.”

Witness said he had sent .reports of the debentui'e-holders’ committee meeting and citculars. He did not remember having made an offer of co-operation.

After witness had replied to counsel that he could not tell the court what the cablegi’am meant His Honour said to him: “This case is going to be determined on the credence I can attach to your words. lam earnestly anxious to believe, but I do wish that you would try to do yourself justice. Here is an important cablegram and you cannot explain it.”

All He Could Remember. Witness said all he could remember was that Webber, an agent of McArthur, had called and witness had given him some reports and circulars to take to McArthur in Sydney. His Honour: This cable acknowledges proposals of yours for reciprocal working. Can you tell me what they were?

Witness: I'Tiave no recollection of making definite proposals. His Honour: Then that cable is meaningless to you? Witness: Yes. that is what it amounts to.

Mr Young asked witness whether ho told the present plaintiff and others that the issue of a writ against the defendant company would cost them each £IOO. Witness denied this. Ho said he told them a' writ would cost them £ ICO collectively. He told them he had never been mixed up in litigation before. He hoped the matter would be settled amicably.

Mr Young produced copies of several Supreme Court writs and asked witness \vh

‘ther he would deny he had been involved in several previous writs for fraud. Witness admitted the writs, but said he meant he had not appeared iCourt. The Court adjourned until this morning.