ALLEGED BREACHES OF THE BANKRUPTCY ACT.

New Zealand Herald, Volume XXXI, Issue 9442, 23 February 1894, Page 3

ALLEGED BREACHES OF THE BANKRUPTCY ACT.

further charges against WALTER TIBBUTT. At the Police Court yesterday afternoon, before Mr. R. S. Bush, R.M., a young man named Walter Tibbutt, appeared to answer to two charges, brought against him at the instance of Mr. J. Lawson, Official Assignee in Bankruptcy. Mr. McAlister instructed by the Crown Prosecutor conducted the prosecution, and Mr. McGregor represented the accused. The first charge was that the accused had for the six months immediately prior to his bankruptcy, failed to keep such books and accounts as were usual for the proper carrying on of his business. John Lawson, Official Assignee in Bankrupty for Auckland and the Northern District of New Zealand, produced the books and papers in the matter of the bankruptcy of Walter Tibbutt. Witness had examined the books carefully. The book produced, and called a cash-book, was handed to him by the bankrupt. There were no entries between Ist April and 31st October, 1893. The book commenced on the 20th November, 1893. There were entries of personal accounts beginning on the 3rd May, 1892, and continuing until September, 1892, and most of them in 1893, There was no other cash-book for the period from April to 31st October, 1893. Witness had examined the ledger, and in that he found that the defendant's private drawings were not accounted for between April Ist and October 31st, 1893. Witness produced the | bank pass book. He found that there were | entries on folio 297 from 18th October to Ist December, 1893. The defendant had no account in the books kept by him of his bank account from April Ist to 18th October. The bank pass book referred to was with the Bank of New Zealand. There was no entry in the ledger of his dealings with the National Bank between Ist April and 31st October, 1893. Witness had examined the blocks of his cheque book, and in most cases the names of persons to whom moneys had been paid were entered. The balance-sheet produced, showing the state of the debtor's affairs in June last, was found among the papers. Witness had examined the debtor's books for the period contained in this bal-ance-sheet, and had failed to find any entries accounting for the stock mentioned therein, but it corresponded with loose sheets amongst the debtor's papers. Witness had examined the ledger. A large portion of it had not been kept from day to day, as they are written by the same person and at the same time. There were a number of book debts which were said to be good, but they had not been shown to be correct. As a person who had had a large experience of keeping books, witness would say that the debtor's book produced to him did not show the state of his'affairs. By Mr. McGregor : From the bankrupt personally witness received no books, the books having been taken from the shop. Witness had had many small grocers'books amongst bankruptcy estates, and he found as a rule their books were badly kept, but he could not say that he had taken action in any case. He had had them without any day books or ledgers at all. Tibbutt had been in business for a year and a-half. Witness knew Nesbitt (Tibbutt's shopman). He had had both Tibbutt and Nesbitt before him on several occasions. It was the bankrupt's duty to give all his books up to witness.,

Alexander Grierson, a member of the Institute of Chartered Accountants of England and Wales, said he had had 25 years' experience as an accountant. He had examined the books of the debtor from Ist April to the 31st December, 1803, and he found no cash-book for that period, but there had been a cash account kept from the 20th November to the 16th December, 1893. He would say as an expert in these matters, that a cash book was absolutely necessary. Witness had seen all the papers and books (produced), and he could not verify the balance, because he found with regard to the item liabilities, £530, there was no list of creditors, and no accounts iD the ledger at the date of this statement. With regard to items stock £362 12s 2|d, fixtures £148 2s—these existed on loose sheets of paper only, and there were no entries in the books that witness had examined. With respect to the item of boo«. debts, £344 18s lOid, there was a list of personal accounts on this sheet, but witness did not find all the accounts in the ledger, therefore the balance, £283 5s Id, shown as a surplus belonging to the debtor, was very uncertain. There was no record of the defendant's private drawings. _ The I debtor's'books were not kept so as to disclose disclosed the true state of his affairs. John Nesbitt, clerk, deposed that he entered the employ of Walter Tibbutt in May, 1892, and then there was started a ledger, cash-book, counter-book, and wagesbook. The ledger was kept right up, the cash-book for six months, and was discontinued until 1893, because Tibbutt went to Wellington, and when he returned he was sick. Witness saw all the books in the office, and there was no account of defendant's personal drawings. Witness used to po3t up the ledger in pencil, because Tibbutt said it would do better in his figures. After 31st October, 1893, all entries wete made in pencil. On tha 31st October, 1893, they were written in iuk by Mr. Keyte. The cash-book was again started after the period ending 31st October, 1893. Tibbutt was pressed for cash from March to the time he failed. When bills came payable Tibbutt would issue cheques, and witness and Keyte would fly round amongst the customers and collect money to meet them. A bill-book was kept from March to October, 1893. He saw one in the office just before they closed. By Mr. McGregor : From the time he opened business until he closed he always kept books of account, except from March to November,, 1893. There was no secrecy over inking witness s pencil entries in the ledger. There were no bogus entries in the ledger to his knowledge The books were always in the office, and accessible to witness. All entries in the ledger were made in proper order. They were made from the day book. The bulk of Tibbutt's trade was retail. The Whangarei trade was wholesale. Witness did not think he could have arrived at Tibbutt's position from his books. This concluded the case for the prosecuThe first witness called by Mr. McGregor was Richard Arthur Hould, clerk in the Official Assignee's office, who deposed that he went up to the bankrupt's shop and took possession. He brought away with him sundry books and papers. He believed some were.left behind. Witness locked up the premises, and a public auction sale was held of everything contained in the shop, as was customary. By Mr. McAlister: The bank- ! rupt did not give his books and deliver them j at their office as required by section 61 of the Act. When witness went to the bankrupts premises he left no books that were likely to have any bearing on the affairs of the estate. He did not leave any books as large as the ledger before him. James Keyte, formerly an employee or Walter Tibbutts, gave evidence as to the maimer of carrying on his business. W ltness had had considerable experience in this line of business, and had been in several different firms. He considered that Tibbutt carried on his business in a satisfactory way. He inked the entries over in the ledger. The entries had been made in pencil by Nesbitt during the time Tibbutt was ill. Dugall Crawford, grocer, deposed that when in business he kept a day-book, ledger, and cash-book. They were the usual books kept by grocers. Witness had been in Tibbutt's employ from April to October, 1893. He was present when the balancesheet was prepared, and considered everything was in order. Witness was sure he could have taken over the books and stock and arrived at Tibbutt's exact position. Mr. Bush said he thought that the matter could have been decided in the Supreme Court without bringing it to this Court. He thought that a prima facie case had been made out, and it was his duty to send it for trial, though he did not know what the result would be. , , ... Walter Tibbutt was further charged with having unlawfully, with intent to conceal the true state of his affairs, wilfully omitted between the Ist day of April, 1893, and the 31st day of October, 1893, to keep proper books or accounts. . to th« Bmch to Mr. thfi accused also committed on this l fUp accused also committed on this to H« 3««dd that when .debtor did not keep proper books he must be held to be concealing the true state of his affairts and he could not shut his eyes to the unavoidable consequence that the omission to keep proper books of account must incur. Mr. McGregor submitted that there was absolutely no evidence that the debtor had attempted to mislead his creditors by the omission to keep proper books of account, and that there was no suggestion of any fraud on the debtor's part. His Worship dismissed the charge.