CHARGES FAIL

New Zealand Herald, Volume LXXIII, Issue 22464, 7 July 1936, Page 11

CHARGES FAIL

McARTHUR discharged

theft allegations

honeys of company

no case to answer ' MAGISTRATE'S COMMENT [BY TELEGRAPH —PRESS ASSOCIATION*] WELLINGTON, Monday A decision that there was no case for accused to answer was given in the Wellington Police Court to-day by Mr. K. D. Mflsley, S.M., when three charges of theft were preferred by the Crown against John William Shaw McArthur. Accused was accordingly discharged on all three counts. The charges were:— That on or about September 10, 1932, at Auckland, accused committed the theft of £3oo of moneys of the Sterling Investments Company (N.Z.), Limited. That on or about the same date at Auckland he committed the theft of £4OO of the moneys of this company. That on or about October 20, 1932, at Auckland, he committed the theft of £320 of moneys of the company. The prosecution was conducted by Mr. C. Evans-Scott, and Mr. H. F. O'Leary, K.C., with him Mr. R. E. Tripe, appeared for the defence. Power ol Attorney Kenneth C. Aekins, solicitor, of Auckland, who was chairman of directors of the Sterling Company until its liquidation, gave evidence regarding a power of attorney in favour of the managing director of the Investment Executive Trust, the reason for such power being requested being to furnish collateral security for debentures held by the Investment Executive Trust. It remained operative until revoked on December 5, 1932, said witness, when, at tho same time, another power of attorney was granted in favour of C. G. Alcorn.

Witness was not aware of any resolution being passed that Alcorn should operate on a separate account of tho company. Under the first power of attorney, said witness, McArthur requested him to arrange for the opening of a separate account at the National Bank, to be called the Sterling Company investments account, and to be operated upon by McArthur. Witness said that at nq time during his period as a director was he informed that McArthur was drawing cheques on the investments account and depositing them in a private account, and witness had no knowledge that he was doing so. Bank Officer's Evidence

In further evidence, witness said accused was not a shareholder of the company, nor was he at any time director or servant. His only capacity was that of attorney. He had no authority to make personal drawings from the investment account, as far as witness knew. The company had never granted any loans to McArthur to witness' knowledge, and there was no reference in the minutes book to any loans to accused since the power of attorney was given. The company did grant loans in the ordinary course of business, and those of which he was aware were given upon some form of security. John Leslie Guinness, of the National Bank of New Zealand, at Auckland, said McArthur, as attorney for the company, operated on the company's account, and no one else did. The three cheques, the subject of the charges, were drawn by McArthur from the account in the National Bank. McArthur's private account was in another bank. \ Complete Record Left After evidence had been given by Hector Bishop Gauntlett, of the Commercial Bank, Auckland, witness said in cross-examination that the three accounts which were the subject of the charges were paid into McArthur's private account. Witness said there was a complete record of the dealings with these amounts in the Commercial Bank and the National Bank. Mr. O'Leary: Somewhat an unusual thief, is he not? There is a complete record left by the man himself. Witness: Yes.

Evidence was given also by Madge Gregory, formerly secretary for the Sterling Company.

The next 'witness was John Leslie Griffin, one of the four inspectors appointed to investigate the affairs of the companies named in the special Investigations Act.

Mr. Evans-Scott in his questions trespassed on ground subsequent to the dates of the charges, and this Ifne of examination had to bo abandoned. The questions related to amounts figuring in the names of T. R. McArthur and J. W. S. McArthur. Deposits in Account

The , cross-examination by Mr. O'Leary was devoted to obtaining an acknowledgment from witness that if the amounts Mere all actually J. W. S. McArthur's, he had a right to operate them, and if there was a credit there could not bo theft.

Witness was shown a copy of the National Bank statement of the Sterling Investments account. He said that, assuming the first deposit of £5260 was made by T. R. McArthur, that, prima facie, would create a credit for T. R. McArthur. Oil the debit side the same day were payments out totalling about £SIOO. If those payments were not made to, or on account °f; T. K. McArthur, his credit would still remain on the hooks of the company. If, on September 10, T. I?. McArthur's credit account was £750 or wore, he would be entitled, prima facie, Ret that amount at that stage, no fnattcr where the money came from into credit. Similarly, on October '2O, if he was still in credit above £'l2s. he as entitled to that amount. - If, in this credit created in the name of K. McArthur was rcallv the credit °f J- \V. S. McArthur, who drew the deques, that was the end of the theft barges. Company's Balance-sheet hi the report, on the company made JJ'th Mr. Ellitfe, continued witness, he oau stated that the balance-sheet dated August 31, 1932, was found among the ponipatiy'g papers in the Trust Buildin .Sydney, and that cheque butts that-date to February 28, 1034, , cn new books were opened, were al *o available. lhe balance-sheet showed that on ' f KUSt ' I''''2, ten days before the first cheque mentioned in the theft charges was drawn, T. It. McArthur ? as in credit to the amount of £5130. ■lt was shown, on the other side, that McArthur was debtor for Witness was satisfied that, of p \l (Ja tlla t went through the National ™»k account. £4910 came from T. R. There was an amount of ,7'| from W. McArthur, making a 1° £->2OO. The first deposit in the Wnk statement was two amounts from McArthur's. To the best of his recollection, witbelieved that the amount of £l9lO li't'W I • It. McArthur from Modern mcs . Limited, and from Edgecumb*

Forests, Limited. He believed he had heard accused say before the Royal Commission in Sydney that these transactions were really his own, and thai he had merely made use of his son's name. Witness remembered saying in his report that, in the absence of tho Sterling books, it was impossible to say how the matter was adjusted, but that credit certainly disappeared from the Sterling books prior to March 1, 1934 Liquidator's Evidence

Re-examined by Mr. Evans-Scott, witness said the balance-sheet of August 31, 1932, showed accused as debtor to the company of £877. If he was entitled to a credit of £5130, he should not have been shown as a debtor. Arthur Eric John Anderson, accountant in the Public Trust Office, Wellington, said he had been carrying out liquidation work under the Companies (Special Liquidation) Act, 1934. On January 21, 1932, three cheques were drawn from the Sterling Investments account. One was for £IBO in favour of T. It. McArtluir, another for £4BO, also in favour of T. R. McArthur, and the third, on the same date, was for £4475, payable to Modern Homes, Limited. On the same date as those three cheques were drawn there was a deposit of £5260.

Witness said that was the only deposit of an amount equal to or greater than tho £4475 in the account. The total of the three cheques was £5135, and, as far as he could ascertain, tho deposit of £5260 in the investment account on January 21, 1932, was the only payment which could represent a loan back by Modern Homes to the Sterling Investments Company of the £4475 paid to Modern Homes on the same date. Magistrate's Conclusion

Mr. O'Leary submitted that there was not sufficient evidence of theft on which to send accused for trial. He said the transactions might be explained on a variety of perfectly innocent grounds. At the time McArthur drew tho cheques he was the authorised agent of the company, under power of attorney. He had absolute power to do so, and at tho conclusion of his term what he did was approved at a meeting at which all the directors of the company were present. On behalf of the Crown Mr. EvansScott submitted that the prima facio credit was not the credit of accused. He contended the Crown was entitled to have the case sent forward to the Supreme Court. " I have listened very carefully to the evidence given on behalf of the Crown, which is really of first importance at this particular stage," said the magistrate. " I have also listened to tho cross-examination, and 1 have come to the conclusion that there is not a substantial prima facie case for accused to answer."

Mr. Mosley said he did not wish to give substantial reasons for the conclusion he had reached, lest it prejudice proceedings at another stago. "Above all things," he added. " Wo want to see McArthur have a fair trial, and we also want to see that the people, as represented by the Crown, have a fair chance. Accused is discharged on the three charges of theft."