DID NOT KEEP PROPER BOOKS

Nelson Evening Mail, Volume LXVI, 20 March 1935, Page 6

DID NOT KEEP PROPER BOOKS

iCHMWiCK POUND GUILTY REMANDED FOR SENTENCE At the Supreme Court yesterday afternoon the jury returned a verdict of guilty against Frank .Shaw Chadwick who was tried on a charge of failing to. keep the usual proper books in the conduct of his business, the Reliance Suit Qlub, within three years of his becoming bankrupt in August 1934. His Honour Mr Justice Kennedy presided. Mr C. R, Fell, Crown Prosecutor, conducted the case for the Crown, accused being represented by Mr A. L. Holdings. . _ i Continuing his evidence Chadwick, said .the books disclosed his position. He knew he was becoming financially embarrassed from the books, front which lie could ascertain his own position. * To Mr Fell witness said lie knew he was,, becoming financially embarrassed when lie went, to Palmerston North in June. He knew‘the collecting was cost-ing'-more than it should have. In the cash book which was lost he entered the. amounts collected alter the, agents had' deducted their commission. The whole amount collected from the members was entered, and the amount kept by the agents entered on the debit side. Fitzpatrick, his partner was collecting from the North Island (Wanganui and Palmerston) clubs. Fitzpatrick had 20 clubs under his supervision ..ancf - forwarded lump sums. Witness said he never took out. trial balances. He bad liad trouble paying Ins tailoring firm in January prior to June when be went to Palmerston North. Altogether be bad eight agents. The last he saw of the cash book was in Nelson. Emilv Edna Chadwick, wife of the accused, said they were married m May. 1934. She knew the accused for the. whole of the. time he was conducting the Suit Club. She knew lie kept a cash book and other books, as she assisted him in keeping them. She helped him approximately every week with the entries. Witness used to do most of the; writing in the books, and she assisted him in that way up to the time they were married. She worked on the east) book . and members’ subscription book. The totals from the subscription books

wore transferred to the cash book. .She hud nothing to do with the payment entries but she knew they were also entered. Working usually together they would balance up the cash book. However, she did not know if the cash shown in the book and that in the bank reconciled. ,

Mr Rollings, .in addressing the jury pointed out that some evidence had_ introduced accused’s financial position, Oat lie wished the jury to confine its consideration to the evidence about, the books. He asked the jury to accept the statement, supported by accused’s wife, that there was a cash book kept. The books were entered up each week, except when Chadwick was away. He contended the whole matter depended on the evidence of the cash book. Mr Fell submitted there was no cash ; book. However, if the jury found that ’ Chadwick had a cash book, that did not- : end the case in accused’s favour. He 1 submitted that the accused's books end- j 1 cd with the members’ subscription • books. . I; His Honour, summing up, said the accused was charged with failing to 1 keep the. usual and proper books within three years of his becoming bankrupt, 1 from February, 1933 to August 1934., His Honour said there was by statute : a positive duty oil a person who be- , 1 comes bankrupt, to have kept in his ’ business the usual and proper book’s. , He must not only have books, but keep ! them so that they set forth his business transactions and disclosed his financial position. There was no dispute . in the case that the accused was carrying out the Suit Club business as de- < scribed. Accused became bankrupt on 3rd August 1934, with a considerable ■ deficiency of over £ISOO. What books ; should the accused have kept, and what; did the evidence show lie kept? He, should have had therein entries setting forth his business transactions. There was no dispute that the accused kept the books produced and lie says, supported by his wife that lie kept n cash , book. It was accepted by the Crown that the record of the collection from members had been properly entered and i that those books were part of the neces-' sary system. There was dispute regard- 1 ing the casli book which accused said had not been forwarded to Palmerston North with the other books, and bad been lost. Mr Boves. who examined the books, formed the opinion, based on the lack of a ledger that there was no cash book. Could the jury accept. Mr Boyes’s conclusion in the face of | what Chadwick and his wife had said ? j From the books produced the Official! Assignee had said lie could not check i up or ascertain bankrupt’s position. I Mr Boves bad described how be spent a fortnight in order to be able to give the information he had given in evidence. It was conceded that a list of liabilities, as described as list D, was not recorded. The accused had said certain purchases were not recorded as he paid promptly after the transaction, such transaction being recorded in tho cash book when the cash was paid. Could a man say lie kept records setting forth his business transactions if the liabilities were not shown? Were such books kept so that his financial position was disclosed from them ! From usual and proper books the Official Assignee could, without undue investigation, ascertain the correct position.- The records should disclose the position without unreasonable difficulty to the businessman and Assignee after him. If the books bad been properly written uo, should be not have been aware of his position earlier? To get the true position Mr Boves had had to ascertain something not in the books—that of the liabilities. Accepting that, and it was a fair statement, could it be said that accused had kept proper books disclosing bis financial position? The jury retired at 3.35 p.m. and returned at’ 4.25 p.m. with a verdict of guilty. , , . , , The accused was remanded in custody for sentence on Friday morning.