SALE OF SHARES

New Zealand Herald, Volume LXXI, Issue 21911, 21 September 1934, Page 18

SALE OF SHARES

FALSE PRETENCES CHARGE DIRECTOR AND SALESMAN DISMISSAL BY MAGISTRATE [by telegraph—OWN correspondent] NEW PLYMOUTH, Thursday In the Magistrate's Court yesterday Mr. W. H. Woodward, S.M., dismissed eight charges of false pretences brought against A. R. Dalley, Auckland, and J. S. Payne, Auckland, director and shares salesman, respectively, regarding the sale of shares in Xtravac, Limited, to persons in New Plymouth, on the ground that " promoters' " shares were falsely represented to be ordinary company shares. Detective Meiklejohn conducted the prosecution, and Mr. J. F. W. Dickson appeared for the accused.

The magistrate said the allegation was that Payne had sold shares in the company on the representation that the shares were ordinary shares, the proceeds of which sales would go to the company, whereas the shares he 6old were, in effect, "vendor" shares belonging to Dalley, the proceeds of the Bale of which went to Dalley. Payne did not appear to have said in words that the shares were ordinary contributing shares. He could not find in any of the Evidence that Payne definitely said any such thing. There was, however, said Mr. Woodward, an application form which was Sut before buyers, which was adressed to "Xtravac Process Company," and there appeared to be no such company, unless accused were entitled to call themselves by that title. That form purported to sell "an interest in" Xtravac Process Company, which would be represented by £1 shares in Xtravao Prooess Company, Limited. There was no such company. The only incorporated company was Xtravac, Limited. Elements ol Doubt Did the presentation of Buch an application form amount to a false pretence ? That might well amount to false pretence, but there was another element of doubt to be considered. Was the money obtained by a false pretence ? Mr. Woodward said he could not see that any representation by that means was the cause of the persons concerned parting with their money. They bought because Payne sold them shares in a company for the purpose of exploiting this process. He had no doubt Payne knew the complainant persons were being deoeived, but ne . did not think non-disclosure or suppression, no matter how flagrant it may have been, was the cause of inducing people to part with their money, or that it amounted to a false pretence. There may have been some fraud on the company, but whether there was an intention to defraud the persons concerned must remain in doubt. Because the company owed Dalley a considerable sum of money, and it might be the sale of Dalley's shares whereby he received money which in the ordinary course would have gone to the company, did not amount to intention to defraud other persons. In dismissing all the informations of false pretences against both men the magistrate said he relied on evidence which did not disclose that there had been any false pretence. Allegation ot Forgery The question then arose as to the place of hearing of the nine charges against Dalley of alleged forgery in connection with the transfer of shares. He was being .charged with making in each case a false document with intent that it be acted on as genuine. Mr. Dickson submitted that the proper Court for the hearing of the charges was at Auckland, as if there had been an offence it was committed there. The first allegation had been that an offence was committed at Auckland, then at New Plymouth and now the police wanted to substitute for either of those places the Dominion of New Zealand. The charge of forgery was laid by Xtravac, Limited, because they were the only persons who could have suffered if there had been forgery. Their office, the books of the company and several witnesses were in Auckland and the Crown could better afford to pay the cost of taking witnesses to Auckland than could accused afford to pay the cost of bringing his witnesses to New Plymouth. - Detective Meiklejohn said if the charges were heard in Auckland it would mean taking nine witnesses from New Plymouth, while there were only three witnesses for tHfe prosecution in Auckland. Mr. Woodward said the signatures on the transfer paper purported to be signatures of persons resident in r*ew Plymouth and he held, therefore, that the proper place for the hearing was New Plymouth. . After evidence had been heard accused pleaded not guilty and was committed to the Supreme Court for trial. Bail of £l5O and a surety of the Bame amount was allowed.