APPOINTMENT OF OFFICIAL LIQUIDATORS.

Otago Daily Times, Issue 10600, 21 February 1896, Page 4

APPOINTMENT OF OFFICIAL LIQUIDATORS.

The argument of the motion for the appointment of permanent official liquidators for the Colonial Bank of New Zealand was resumed before his Honor Mr Justice Williams in Chambers at 11 o'clock yesterday. Mr B. C Haggitt appeared in support of the motion ; Mr J. F. M. Fraser to represent certain shareholders by whom he had been instructed to support tbe appointment of the liquidators nomiDa^ eS, bj;rthe dir," ctOT3; and Mr W. C. MacGregor and Mr Young (of Wellington) appeared for other shareholders to oppose the appointment of the gentlemen nominated by the directors, nr ■ rT?onD& in resuming, said heunderstood that Mr Haggiit undertook to produce certificate showing how the "B" and "C" accounts were made np.

Mr Haggitt: I undertook to ask for it. His Honor : There cannot be any reason for not producing it. Mr Haggitt: Unless there should ba some good reason tor not producing it. His Honor: I suppose they are bound to give it if tbe court asks for it. ,Mr Haggitt: Or to show good reason why it should not be given. His Honor: They are the servants of the court and must do it, unless it cannot be done. I cannot conceive of any reason why it Hhould not be made public. If there is any substantial reason in the interests of tbe shareholder., why it should not be made public that would be a dilferent thing, but they would have to show that. Mr Haggitt: That is so. His Honor : Of course Mr Haggitt cannot give a personal undertaking. "IYv Y? Ui ng s*'d tlle reasou for pressing for it S'p,*,., o was some tli,rk mystery about the C list. So far as out-iders were concerned there was no conceivable reason why there should be a class of doubtful debts. His Honor: Parlt ment has dealt with that. Mr Haggitt: It has nothing to do with this motion, ihe shareholders have ratified the agreement.

His Honor said that when he saw Mr Braund's affidavit it was obvious to him that the court should have this particular piece of information on the motion.

I MrYmmgsaidthatwithreferencetothe"C" list he would refer his Honor to clause 18 of the agreement, which provided thit, immediately on tbe latihcation of the agreement for'sale and purchase, the amount standing in the right-hand column of the C" list must'be written off at ones and credited to the respective amounts in, the "C" list. It would be seen that this C list referred to the account of some person or persons of sufficiently powerfid interest to procure special treatment of their account or account*. The effect of this provision was that, immediately on Ihe ratification, a certain amount, the sum of wbi.'h h. (Mr Young) did not know, was written off beyond recall, no matter what happened witb reference to the agreement at any subsequent time. His Honor: 'J'his section forms part of tbe contract. /V\ c cannot go behind it and speculate as to why it was framed. Mr Young: What has happened shows that /some influences were at work, and that affects the conduct of the directors. His Honor: This is not' the time, is it, to examine the conduct of the directors ? The court has no materials before it. Mr Young said that was the difficulty. He was only trying to show that there was reasonable ground tor asking for an explanation as to the management of the concern. They could not say definitely what had happened, but ha (Mr Young) suggested that there were some mysteries in the matter which required investigation. He desired to draw attention to the question of contingent liabilities. The provisional liquidators said that these were very mixed, but as they appeared to exist from the agreement they might be very great Under clause 9cf the agreement the Bank of New Zealand with the consent of the Colonial Bank might make further advances to the Colonial's late customers, and these further advance would be guaranteed with what wS?-« Practicaliy a continuous guarantee His Honor : If consent is given. Mr Young : It practically means that they may carry on those accounts, and possibly make further losses.

His Honor : They need not unless they like. Mr Young : But they may, aud that is a contingent liability. Learned couusel proceeded to speak of the guarantee of the "C" list under clause 18, ths guarantee of the balance sheet under clause 25, the risk of further evpense under clause 11, the guaranteeing of letters of credit under clause 21, the expense of. liquidation, the question of compensation tn officers under the Banking Act, and the amount, of £60U0 odd which was not taken over. Against all these contingent liabilities thu provisional liquidators held tbe balance of £1.33,000 received, out of which they liad paid a dividend oi 10s, leaving £33,000 and also whatever might be got out of the reserve of £327,000 His Honor: And out of the "D" list. Mr Yov.ng assented, and i-aid that was apparentally totally bad. Learned' counsel proceeded to refer to section 10 of the agteeraent. and said tbe result of that clause was tbat until the amount on the left-hand side of the "B" and "C" lists had been reduced below tho amount on the righthand side as a total no moneys could be paid to the Colonial Bank! That was to cay, there was £700,000 in those two lists, and until that amount was rednc il by £400,000 there dould be no money paid ovci to the Colonial. Mr Young quoted from clause 13 of the agreement in support of this statement. That clause provided that when the right-hand column exceeded the left-hand column, the difference should be handed over to the Colonial Bank.

His Honor: Yes ; only the surplus of the righthand column over the left-hand column in tie " B " list is to be paid to the Colonial Bank. Mr Young: Nothing can be paid over until about £loo,t>oohas been realised out of the "B" and " C" lists, and that may be the process of years.

His Honor: The difference between the "B" and " C " lists is this : If there is any loss over and above the reserve in the "B" lift the Bank ~f New Zealand makes the loss; if there is any loss over and above the reserve in the "C" list the Colonial Bank makes it.

Mr Young, continuing, said his remarks had been addressed to the unfitness of the present liquidators for permanent appointment. The people he. represented wished to say that Mr Braund was a proper person to be appointed. His Honor w*s not bound to take the nomination of the shareholders. He had absolute discretion. For reasons that hacl come out, he (Mr Young) suggested that that meeting was not quite a fair one. Great pains had been taken to exclude Mr Braund, who was an equitable shareholder, while others were admitted who were not shareholders. Mr Braund had sent round to shareholders a pamphlet showing tbe position of the bank. At the meeting referred to he represented proxies for 7000 shares, while Mr Vigers, he (Mr Young) understood, held proxies for Mr Braund to a considerable amount, and the Dunediu committee also held some. Mr Vigers had refnsed to make an affidavit as to what number he held, and Mr Johnston-Brown was not quite sure how many there were in the committee's lot. He (Mr Young) had summoned these gentlemen, and now a°ked for the information, with the object of showing that Mr Braund was the representative of a large number of shareholders, though he >yos excluded from the meeting. His Honor: Of course he was excluded, and properly so. He was not a shareholder. Th* fact of his being what you call ap equitable shareholder did not entitle him to be present. Mr Young: I wish to put that in with the view of showing that he is the choice of a considerable number of shareholders as liquidator. His Honor : How cau you make that out? Mr Young: Because they were instructed to vote for him.

His Honor: He was never proposed as a liqul dator.

Mr Young: He was not; but if be had got into the meeting he would have been.

His Honor : Of course he could have been progosed by anybody. A mau need not be a shareolder to be a candidate for the office of liquidator.

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Tffir Young observed that there were peculiar 'circumstances surrounding his non-proposal. His Honor: It is rather difficult for the court to say on anything cow before it what would bave happened if Mr Braund had been proposed. Mr Young: I do not ask for that. I merely want to get before the.court the fact that Mr Braundwas the choice of a large number of shareholders. I have tried unsuccessfully to get it before the court on affidavit.

I His Honor asked whether it wai known bow i inaoy proxies wete sent in favour of Mr Braund. 'I Mr Young said that Mr Braund himself held i 7000; it was said that Mr Johnston-Browa held 70:i0, and Mr Vigers 1000.' ,rAx ter furthe!' discussion, it was understood that Mr MacGregor would get an affidavit from the I committee, and that Mr Haggitt would ask Mr Vigers how many proxies he held. Mr Youag said that he did not object personally to tho nominees of the rest of the independent shareholders, Messrs Begg. Brown, and Simpson. His client recognised these as independent men, and therefore of a different type to those proposed on the other side. The objection he (Mr 1 oung) took was that tbers was not a banker amongst them. He submitted that Mr Larnach was disqualified on duo cause shown. That Mr Vigors was also disqualified, be being on | the register of applicants for employment in the IBank of New Zealand. He was on it ue^essarily by the agreement which placed all tha officers of of the Colonial on the list. . I, Mr Haggitt: Mr Vigers ia absolutely indepsn. 1 dent of the Bank of New Zealand or any other I bank.

Mr \ oung said it was convenient that a banker should be among the liquidators. Mr Braund was a perfectly independent man, of good character, and a capable officer. If there were the matters already suggested to come up for investigation, it would take a man of fearlessness and independence and capacity to do the work. Few people believed that they had got to the, bottom of the balance sheet and the agreement. Mr Braund had shown by his analysis that he could do so, and the directors, appareatly recogoisiog this, had adopted a hostile attitude towards him all along. It was quite evident that he was to be nomioated, and also tbat the votes intended to go to him went to swell the others' numbers.

• His Honor: I think it is agreed on all sides chat there should ba a banker among the liquidators.

Mr MacGregor : I say to the contrary. Mr Young, in concluding, said that his client objected to the provisional liquidators because of thoir interest and of their being concerned in the past management of the Colonial Bank. Mr W. 0. MacGregor, in addressing tho court against tbe motion, said his learned friend Mr ■Haggitt had treated the matter as one of importance only to one class—namely, the shareholders of the company. The matter was no doubt of great importance to the shareholders, but he submitted tnat the matter was of importance not only to tbe shareholder?, whose interests he and his learned friend Mr Young contended had been sacrificed,

but it was of equally great importance to the directors, who, they said, had sacrificed those interests, and of the greatest importance possible to the general public in the interests both of political and commercial morality. He wished to point out lhat thu was not an ordinary contest lor the positioo of liquidator. It was not a contest as between two bodies of shareholders,.each Oi whom proposed otherwise unexceptionable candidates, but it was a protest on the part of what he termed the independent shareholders of the institution against the misconduct aud mismanagement of the directors and officers of that institution in th-, past, and was intended as a deliberate protest to the court against that management b.-ing continued in the liquidation, as it obviously was intended to be by his learned friend and his clients. In order that the court should inform itself as to whether or not the statements he had made as to mismanagement were justifiable, it would be necessary for the court to satisfy itself first as to what was the true position of the bank immediately pnor to its sale to the Bank of New /-.eolsn'i as reprwented by the balance sheet ot 31st August ISBS, which formed the basis of the contract; and secondly, »s to the true position of the bank as disclosed by the searching investigation courted by the directors. He thought b-s learned friend (Mr Young) bad conclusively shown to the court tint the bank's position was not the position disclosed in the balance sliest, and he submitted that oveu on the figures before them one of two things must be the case. If the balance stieet contained a true and accurate statement of the bank's position, then the sile showed that the directors and management of the bank had sacrificed a sound and valuable institution as a going concern. On the other hand, if tho ba.ance sheet was not correct it was equally clear that the directors had induced the Bank of New Zealand to purchase their business by means of false representations. Fortuuately or unfortunately, a searching investigation did take place, and the result was now before his Honor. The directors were in this dilemma : either tl\ey had made a shockingly bad bargain for the shareholders, or they had"been guilty of publishing a false balance sheet. Under such circumstances he subinitte.l that the court would not appoint as liquidators rhu nominees of those who hat so conducted themselves and the affairs of this institution. The provisional liquidators had refused all inforniatiou, and aad said that if those desiring to investigate the bank's affairs had any leg*l, rights they must go to tlie court and enforce them, and that tbey were compelled to do. Mr Haggitt: That is what the act says must be done.

Mr MacGregor said that might be so, but the fact was that the provisional liquidators had apparently taken every opportunity to balk their endeavour to get at the facts and figures. The learned counsel then addressed himself to the law as to the question of inspection, aod then to the facts as fur as tbey could be ascertained, wliich showed that a thorough investigation was necessary. What, he asked, was the position of the bank immediately prior to the contract .for the sale of the Colonial Bank to the Bank of New Zealand? The c.nr.ract waa based professedly on the balance she«-t of the 31st of August 1895, and what was called tbe face vslue of thu consideration was dealt with in clause 3. His learned fri-nd Mr Young had dealt with the question of face value. He proposed to deal with the amount which, assuming thebalance sheet to be correct, should have been immediately available for distribution among tbe shareholders. That amount was very simply arrived at in this way: They were told not only in the balance sheet, but by express statement from tli* chairman, acquiesced in presumably by his brother directors, that the capital of the bank was intact. No indication had been given of any material alteration in the bank's position, and the figures iv- tbe balance sheet were tbe strongest possible intimation that the statement was correct If they took tbe capital at £400,000 and added tbe revenue and the undivided profits it made up a total of £484 000, which, assuming the balance sheet to have been correct, should have beeu divisible amongst the shareholders. Instead of that. £100.00(1 had been divided, and the balance of £33,000 had been retained to meet contingencies. But in addition to the £401,000, the face value of the consideration as stated in the agreement between the banks, there waß a sum of £75,009 which was represented in the balance sheet by no tangible ssstf whatever. The learned couusel assumed that this was paid by the Bank of New Zealand to the Colonial Bank as goodwill If that were so—and it whs difficult to see what else it was paid for,—it meant that a furthur sum of £75,000 must he deducted from the £133,000. That was, the shareholders, instead of getting £133,0011 would get only about £60,000. The fact, therefore, was that the whole of the paid-up capital, £400,000, had disappeared as the result of the contract. If the figures in the balance sheet were correct, the shareholders wore entitled to get back from 47s to 48* per share; instead of which they had got 10s per share, with apossibility of getting other 3s 4d.

Mr Haggitt: Who says that? Mr MacGregor: That is the result of the contract. .

Mr Haggitt: They expect to get another 15s at least.

Mr MacGregor: The best test of that is the price of the shares. Why don't tho directors buy up all the shares ? Mr Haggitt: It would be very improper for tbem to do that.

Mr Fraser: Possibly the price of shares lias been depreciated by these proceedings. Mr MacGragor, continuing, said it must be perfectly plain that some explanation was wanted of what had become of the paid-up capital of the bank. A mere statement of the affairs of the bank was sufficient to show the court that in the present case there were ground, for investigations. As stated, it was impossible for them to get access to tho books for strictly legal evidence to state what tbe reason was, whether it was a case of mismanagement or misrepresentation, or both. The bank had been represented as being in a sound position when it was undoubtedly at the time the statements were made nothing of the kind. The learned counsel suggested that the liquidators appointed to investigate such a state of affairs should, above all things, be above tho suspicion of being interested. It was one of Bentbam's apothegms, he believed, that it was more important that tbe administration of justice should be attributed to be pure than that it really should be,and that applied forcibly to the present matter; aud whether or not the liquidation of the gentlemen proposed by the directors be or be not pure, it would most assuredly be believed not to be pure unless some independent personor persons be associated with the liquidation of the affairs of the bank. Cases were cited in support of the contention that the officials of a company should not be appointed to conduct its liquidation, and the learned counsel submitted that there was quite sufficient before the court in the attitude the provisional liquidators had taken up to convince the court that they had not appreciated the fact that they were officials of the court and had to act impartially and fairly and not in favour of any class or individuals. Mr Haggitt said that these general statements were easily made and quite unfair. He asked that specific instances should be mentioned and particulars given. Mr MacGregor replied that this would be done in tho affidavit to be filed on the following morning. He then dealt with the statement made by the Hon. George M'Lean at the recent meeting of shareholders, contending that it was virtually an admission that false balance sheets and misleading statements had been made, and that the plea was put forward, as in the case of the directors of the Glasgow Bank, that it had been done in the interests of shareholders. The learned counsel then dealt with the qunlificitions of the candidates, and argued in favour of the appointment of the candidates proposed in opposition to those nominated by the directors (Messrs Begg, Brown, and Simpson), on the grounds that they were thoroughly independent and reliable men. Mr Fraser replied briefly as representing shareholders favourable to the permane-'t appointment of the present liquidators, repeating briefly the arguments previously urged, and also stated that if a change was to be made Mr Si" pson was preferable to any of the other candidates named. He, however, urged that in the interests of the shareholders the, appointment of the acting liquidators should be confirmed, as the longer the matter was delayed the more seriously were the interests of the shareholders likely to be affected. Mr Haggitt, in replying, eaid that what his learned friend had just stated was undoubtedly true ; tbe longer thia contest was continued and tbe more attempts were made to throw discredit upon the past management ot the bank, the worse the results of the liquidation would undoubtedly be. Everyone who had been connected with the affairs of the bank for the last three months

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J must know that such was the case. There was a ' great deal of management required in connection ■with the liquidation; and the only way it could be done successfully was that it should be carried on < by men acquainted with fhe position and who could act in concert in connection with the management of these accounts with the Bank of New Zealand as bad been successfully done by the present liquidators; ■ A great '• deal had been gone into which he had never ex- , pected to be opened at all. For instance, he bad never expected to be called on to defend the management of the bank or the conduct of its chairman and directors for years past, or the conI duct of the directors in selling the business as they had done. These questions seemed to him utterly outside the object of the motion before ■ ! the court. Hereafter the liquidators might or ; might not be called upon to cause inquiry to ba made into the past management of the bank ; and if they were called upon to do that and refused they could be removed or dealt with for a breach of duty. Until that occurred there was not the slightest reason for suggesting that they would shirk the performance of their duty, and if it did occur there was ample provision to meet the case. , Undoubtedly the court could order that access | should be allowed to the books. Over and over again judges had ordered the inspection of -. books by certain persons appointed on behalf of shareholders to inspect them.' If occasion arose for the exercise of that power there was ample provision, but the exercise of such power was quite foreign to the present occasion. It bad never been used for the purpose of ascertaining who were proper persons to be appointed liquidators. He had never contended, either, that the court was absolutely bound to act upon the recommendation of a meeting of shareholders. The fact was that tbe court had undoubtedly the matter in its absolute discretion and wa3 not bound to recognise tbe recommendation even of the persons most interested, who were in the present instance the shareholder?. But as a matter.of fact two rules were laid down to be followed. The one was that the persons who had the conduct of the proceedings hud the right to nominate, and the other was that, caster in paribus, the persons nominated by the petitioners would be accepted by the court notwithstanding that other persons might be nominated who were perhaps in some respects better qualified tor the office. The whole of the inflimmatory matter introduced into the proceedings had been before the shareholders prior to the last meeting, but in spite of all agitation on tbe matter the shareholders, by rnoru than 2to 1, bad declared in favour of the candidates nominated hy the directors. The rule being that the wishes of the shareholders were to be regarded, his Honor was asked to construe that to mean not: the wishes of the majority but the wishes of the minority. Mr MacGregor : Have minorities no rights ? . M- Haggitt said the right of the minority was to submit to the majority. That was so in connection with all our proceedings. We had uot introduced the Hare system for the representation of minorities, and it was the opinion of tbe majority that was represented in everything. There was no question that the court had power to order an inspection of the books. Tbe question was whether the necessity to do so had arisen, and whether the court would create a precedent for the purpose of encouraging what was merely a "fishing" inspection. In a recent case it was decided distinctly that such applications would not be encouraged, and that for an inspection of I the books of a company good grounds must be j shown. The agreement for the sale of tbe bank, i which was challenged, had been adopted at a j large meeting of shareholders without a single I diss-ntient voice being raised. All these questions were raised for the first time, and tho only excuse for it was that the liquidators had been nominated by the directors, which had been done in accordance with the rules and the practice of the court. If, as suggested, the directors had done anything that was wrong, the proper way was to raise the matter under sections 226 and 22S of the act, when the directors—who were not no*-, properly speaking, before the court —would have an opportunity of being heard in their own defence. All he would say in answer to tbe criticisms made as to the balance sheets and the agreement between tbe banks was that the balance sheets were absolutely correct, and that the discrepancies which rendered them open to criticism were to be accounted for by the depreciation of securities. Furthermore, there could be no question tbat there was an- entire alteration in the conditions nf banking business after the Government of tbe Qolony had taken up the Bank of New Zealand and virtually created it a State institution. Whilst previously it was possible to carry on the business of tbe Colonial Back successfully, competition with the Bank of New Zealand, owing to tbe alteration made, beciine impossible. He did not, be would remark, appear for the directors now except so far as they were petitioners in the matter, and he merely suggested thes« considerations in reply to matters mentioned outside the question before the court. It must also be apparent that the value of the assets of the bank as a j going concern was different from their value when i transferred to another institution, as it was of ] course utterly impossible to transfer all the ; accounts orto guarantee that the customers of the ; selling bank would continue to do business with : the purchasing one. It had been assumed that | the "li" and " C" lists must be absolutely bad | because the Bank of Now Zealand would not take them over without a guarantee, but there wss no foundation for the assumption. It had been stated, and ho repsated the statement, that £56,000 of the " B " list had been taken over and the Colonial Bank released from all liability regarding those accounts. Considering the conditions under which the agreement was come to and the haste that had to be made in the closing days of the session, it was not unreasonable that the guarantees should have been asked for and given, and it should be remembered that they were j dealing with £604,000 worth of accounts, and tbat r the reserve was considerably less than 10s in the pound. Mr Stewart had asked him,to mention I Mr Young objected to statements being made I that were not on affidavit.

Mr Haggitt said that be had been requested to state that as to the difference between the £272,000 and the £305.009-the £33,000 which had been written off the "D" list—security had been taken for the amount before the Colonial Bank consented to write it off.

Mr MacGregor: From whom? Mr Haggitt said from the persons liable. Then there was the discrepancy between the £9170 (the value of the furniture) and the £6250 referred to in paragraph C, article 5, of the agreement. His learned friend had uot noticed, or had not cared to notice, that there was deducted from that the allowance in respect to the working expenses in London. There was the explanation on the face of it. As to Mr Larnach's, indebtedness to the bunk, it was seriously asserted that, for the sake of gutting rid of this indebtedness, which must have been fully covered by the shares or it could not have been paid off by tbe dividend, Mr Larnach had improperly induced the court, by means of a false affidavit, to which he was a psrty, to consent to the distribution of £100,000 of money which ought not to have been distributed, aad which but for his indebtedness would not have been. Could his Honor believe that Mr Larnach or any other man in his senses would have been guilty of such an act ? Learned counsel referred at length to the qualifications of the candidates, urging the fitness of the provisional liquidators, and, regarding those suggested iv opposition, saying that he differed in opinion from his learned friend Mr Fraser, and said that personally, from a long acquaintance and a close acquaintance in bus-mess matters with them, he was distinctly of opinion that Mr A. C. Begg was beyond all question the best. In concluding his remarks, he said, he would read the affidavit which had been filed by Mr Ramsay— and did so, the document being as follows :—

" I, Koith Ramsay, of Dunedin, shipping ageot, one of the provisional liquidators of the Colonial Btnk of New Zealand, make oath and say as follows:—

"1 I have read in the Otago Daily Times newspaper, of the 19th February instant, the remarks reported to have been made by Mr William Cunningham MacGregor, of Dunedin, solicitor, with regard to myself, to the following effectviz., ' Mr Ramsay has been put forward and poses as a representative of the independent shareholders, but we wish to make it clear tbat he in no sense represents them. He took part in the meeting of independent shareholders and acted as chairman, and he was spokesman of the deputation to tbe directors with regard to the appointment of an outside liquidator, but he has not now the confidence of any of them. Further, he stated publicly, or semi-p»bliely, that he would not accept the position of liquidator if it were offered to hini, and tbat he would bave nothing to do with any liquidation or liquidators who would take proceedings against the directors or any of them. These I submit are facts which the court ought to be informed of.'

"2. At the meeting of the so-called 'independent' shareholders referred to, and at which I acted as chairman, eight shareholders only were present—viz., Mr Colin Allan (I think), Mr William Barron, Mr William Brown (of Dunedin, accountant, now one of the candidates for appointment as official liquidator). Mr A. J C. Brown (his son), Mr Peter Barr, Mr Alexander Bathgate, Mr Charles Haynes. and myself, and the said William Cunningham MacGregor The said meeting was held in the oflice of the said William Brown, and before the business of the said meeting commenced I asked the said William Cunningham MacGregor whether he was a shareholder of the bank, and he replied in the affirmative I have since ascertained that tke said William Cunningham MacGregor was not then or at anytime a shareholder of the said bank. Had I known at the time that the said William Cunningham MacGregor was not a shareholder I would have declined to go on with tbe business of the meeting in his presence. "3. At the next meeting of the ' independent' shareholders I attended the same eight shareholders and Mr MacGregor were again present, and it was at this meeting a deputation < was appointed to wait on the directors with regard to the appointment of an outside liquidator. I asked the said William Cunningham MacGregor to accompany the deputation, but he declined on the plea of a previous engagement. "4. Of the eight shareholders who, including myself, alone attended these two meetings, four, representing 1394 shares, voted for me as oue of the official liquidators at the meeting of shareholders hold on the 22nd day of January last, aud the other four, representing 443 shares, did not. The four who did not included the said William Brown, who was himself a candidate, aud his son (Mr A. J. C. Brown), who naturally voted for his father, who is also his partner in business . " 5. If the said William Cunningham MacGregor, in using the phrase 'independent'shareholders, intends to designate those shareholders who support Messieurs Simpson, Begg, and Brown, then the fact is that of those shareholders who voted for those gentlemen as official liquidators at the said meeting on the 22nd January last more than 20 per cent, of those who voted by proxy for Mr Simpson voted also for me, about. 25 per cent, of those who voted by proxy for Mr Begg voted also for me, and about 30 per cent, of those who voted by proxy for Mr William Brown voted also for me, whilst of those who voted in person at tho said meeting about two-thirds voted for me, includiEg many who also voted for Mr Simpson. Mr Begg, or Mr Brown, so that whether it be those who attended the meetings of shareholders at which I attended or those who voted at the meeting of 22nd January last, who arc designated < iudupendent' shareholders, the statements that Ido not in any sense represont them' and that ' I have not now the confidence of any of them' aro not correct, and are unjustifiable. "6. It is not the fact that I stated publicly, or simi-publicly, or at all, that I would not accept the position of liquidator if it were offered to me; but it is tbe fact that I had no inclination to take upon myself the responsibilities of the position of a liquidator, and when I was urged by the directors of the Colonial Bank to allow myself to

SRY OABADIAJK CLUB WHISKY,

be nominated as a provisional liquidator I at first declined to do so, and it was o»ly after much consideration and on being pressed to do so and in the belief that I should be able to do something in the interests of the shareholders that I consented to be nominated. "7. It is not the fact that I stated publicly, or semi-publicly. or at all, that I would have nothing to do with any. liquidation or liquidators who would take proceedings against the directors or any of thorn ; but I did say at tbe fir3t meeting of the so-called ' independent' shareholders, referred to in the second paragraph of. this my affidavit, that if the prosecution of the directors, or tbe raking up ot the 'wretched past' was to be the chief object of the agitation, and not the making the best of the assets of the bank in the interests of the shareholders, I thought it was a mistake, and I would not be a party to it.

"8 I had at that time no thought or expectation that I should be proposed as a liquidator of the bank, and tbe remark I made was in reply to one by some other person present at the meeting, I think Mr Barron, that tho directors should be prosecuted, or something to that effect. "9. If I should beappointed oneof the liquidators I shall be prepared to perform any duty which may be incumbent.upon me as. such, whether it may involve proceedings against the late directors or any person or persons whomsoever." His Honor said he would give judgment as soon as possible—probably some day next week. Mr MacGregor said he would, as promised, file on the next morning several affidavits, and asked that he should be heard in reply on the question of the summons for inspection.

His Honor said that if there was anything arising out of the affidavits he presumed Mr MacGregor would have a right to speak on them. The court adjourned at 4.25 p.m.