McARTHUR CASE

New Zealand Herald, Volume LXXIV, Issue 22779, 13 July 1937, Page 10

McARTHUR CASE

JUDGMENT FOR £8931 STAY ORDER REFUSED POSSIBLE BANKRUPTCY PRIVY COUNCIL APPEAL [by telegraph—OWN correspondent] WELLINGTON. Monday Stay of execution of tho judgment for £8931 obtained on appeal against John William Shaw McArthur by tho Public Trustee as statutory liquidator of the Pacific Exploration Company, Limited, and the Sterling Investments Company (N.Z.), Limited—tho case involving the former ownership of tho yacht Morewa —was refused by the Court of Appeal to-day. Counsel for McArthur, applying for provisional leave to appeal to the Privy Council on the judgment against McArthur and also for stay of execution, pleaded that the enforcement of tho judgment would drive McArthur into bankruptcy, a change of status that could not be remedied by a successful application to tho Privy Council. Provisional leave to appeal was granted.

On the Bench were tho Chief Justice, Sir Michael Myers, Mr. Justice Ostler and Mr, Justice Smith. Mr. G. G. G. Watson, with him Mr. 11. J. V. James, appeared for tho Public Trustee and Mr. 11. E. Tripe for McArthur. Mr. Tripe submitted that if execution were effected it would render a successful appeal to the Privy Council nugatory, as bankruptcy forced upon McArthur would result in an irremediable change of status. McArthur had tho right of appeal, a right from which ho would bo barred. Question of Security

In reply to the Chief Justice, Mr. Tripe said 110 security could be given for the amount of the judgment, and any security for costs on the Privy Council appeal would not conio out of the assets of McArtluir, because ho had none. Ho had .3000 shares in the McArtliur Trust, which his affidavit said were of little or 110 value. Ho had to meet tlio costs of prolonged litigation and the £SOO fine imposed in the criminal proceedings against, him, the reasons which accounted for his selling somo of his shares.

If the judgment were enforced McArtluir would, as nmplo evidence in his affidavit showed, bo forced into bankruptcy, which besides making a successful appeal nugatory would damago his means of livelihood, v?hich included a contract of employment at £750 a year. Mr. Tripe contended that 110 injury could be caused appellants in the Court of Appeal by granting stay of execution, as tliero wero 110 assets. Conduct in Australia How did the Court know that? asked the Chief Justice. It could not shut its eyes to the history of McArthur's dealings. It was not necessary to infer fraud, but a similar type of conduct was going 011 in Australia. It made it all the more difficult for appellants to find the fruits of their judgment. Mr. Tripe said the affidavit of the Public Trustee did no more than raise a suspicion. Shares held by McArthur had nothing but contingent future value. The intention to go to the Privy Council was bona fide, and counsel's present instructions were that security for costs would undoubtedly bo found, although not out of McArthur's own assets. The fact that McArthur was paying by instalments the costs to the Crown in Australia, incurred in his appeal against extradition, showed that 110 was genuine. Ho was working now for a modest salary and his legal right of appeal should be preserved. Mr. Justice Ostler pointed out that stay of execution could be granted only on substantial grounds. Disposal ol Shares Mr. Justice Smith: How would it affect you if there was no stay of execution, but only a condition that McArthur should not bo made bankrupt? Mr. Tripe: At the moment I cannot see any objection to that. The Chief Justice: Can you show us any authority for that? Mr. Tripe: I am afraid not, sir. If McArthur's affidavit was correct, continued Mr. Tripe, ho had been a man of straw all through the proceedings, and people were not in the habit of trying to recover from men who could "not pay. The disposal of shares by McArthur had been for necessary money, and had been in tho interests of the shareholders. Mr. Watson said McArthur wanted to go to the Privy Council with _ his creditors' money, while the creditors were postponing their rights. Since the action started in the Supreme Court, McArthur had sold £55,000 worth of shares out of tho £60,000 worth he had. Counsel's Intention Far from preventing bankruptcy, everything would bo done by counsel for tho Public Trustee to expedite it, Mr. Watson added. Some of McArthur's transactions were now attackable, but soon tho time limit of 12 months would operate. He had transferred £55,000 worth of shares from one company to another until finally he had received a paltry £2OOO for them. The Court gave an order granting conditional leave to appeal to the Privy Council, £SOO security for costs to be given within three months. Stay of execution,' said the Chief Justice. could only be given on substantial grounds. No good reasons had been given: on the contrary, there wero reasons why stay of execution should not be granted.