THE COLONIAL BANK.

Otago Daily Times, Issue 13586, 7 May 1906, Page 3

THE COLONIAL BANK.

MR BRAUND'S FURTHER ACTION,

THE COURT RESERVES JUDGMENT,

In the Supremo Court, in Banco, on Saturday morning, before their Honors Mr Justice Edwards and Mr Justice Cooper, Victor M. Braund, of Wellington, moved for a review of the decision of Mr Justice Cooper, given on April 30. refusing liis application for a suspension of tho order of Mr Justice Williams for tho destruction of the books and papers of the Colonial Bunk. Mr Braund based his motion on the following grounds:—(l) That tho said books and papers will be required in tho action of Braund v. M'Lean and Neill; and (2) that on returning to Wellington ho intends to commenco proceedings by petition or otherwise, as ho may be advised, against tho liquidators, claiming damages or compensation for misfeasance and breach of trust, in that they have been guilty of impropriety in not. bringing the directors beforo the court in order to ask for an order upon tho directors similar to that which was jnado in ro tho Exchange Banking Company. -

In his affidavit, filed in tho court on May 2, Mr Braiintl set, out the following additional reason for proceeding against tho liquidators:—That they had been guilty of impropriety in tho conduct of the liquidation in failing to summon meetings of the shareholders, in wrongfully distributing the assets of tho bank, and in refusing fo allow access to fho share register and other book's of tho bank.

In an affidavit filed on Saturday, Mr Braund slated: "I liavo been in communication with tho shareholders of tho bank by circular and otherwise from tho commencement of tho liquidation of tho bank until tho present time, with tho view of arriving at somo common course of action for tho general benefit of those who are interested in tho winding-up. I represent shareholders in tho bank holding shares with a total paid-up capital of about £30,000. and tho documents aupointiiijj nip. their rcprcsonfativo aro in the. hands of tho liquidators of tho bank. The present proceedings _ and the further proceedings referred to in my affidavit of the 2nd of May are and will bo for tho general benefit of those who aro intoreslcd in Iho winding-up of the bank in that they will, if successful, roiiilt in increasing tho assets of the hank. Tho books, documents, and papers - of tho bank worn in part, excepted from tho contract. dated the 18th of October, 1895, and entered into with tho Bank of New Zealand, and in part sold subject as to tho lafter proviso that tho purchasing bank shall produce and show at such times and to such persons as tho selling bank shall reasonably require stioh books, documents, and papers of tho selling bank passing to the purchasing bank." Attached to the affidavit was a copv of a letter addressed by Mr Braund to tho general manager of the B;ink of Now Zealand, copy of a letter received by him from the general manager of tho hank, and an extract from fho Otago Daily Times (19th of February. 1896) containing tho official report of tho proceedings on tho motion for tho appointment of permanent official liquidators. Mr Braund appeared in nerson'; Mr J. F. M. Eraser represented the Official Assigned (Mr C. O. Graham).

Mr Braund said that, tho motion in Chambers was dismissed by Mr Justico Cooper on fho ground of want of jurisdiction.

Mr Jusiico Cooper: And on fho ground that, you wero not entitled to the order.

Mr Braund went on to say that in his judgment. Mr Justico Cooper had dealt all ■along with tho motion as if it woro ono for inspection of tho books. But nowhere in tho papers was thero a motion for inspection. All Ihat was asked was tho preservation of tho books, so that they might bo produced at the action that had been commenced in tho Supremo Court in l Wellington.

Mr Justicc Edwards said that thero was a. preliminary difficulty that Mr Braund must get over. Ho claimed to intervene in the liquidation, and yet in none of tno papers ho had filed was it shown that ho was cither a shareholder or a contributory or a creditor. It thercforo appeared io the court, subjcct to anything tlioy might hear fo tho contrary, that thero wero serious difficulties about Mr Braund's iuterveniiift at all.

Mr Braund submitted that he was not intervening in tho liquidation. He thought ho had a bona fide causo of action, and if ho had such an action he must come and ask their Honors to preserve tho books.

Mr Justico Edwards: Ic is not a question of what wo might do, or even what wo would like to do, but what wo can do, and so far as wo know no person can intervene in a liquidation who has no locus standi— that is to say, unless ho be a shareholder or a contributory or a creditor.

Mr Braund submitted that ho was interested in the winding-up, and section 256 of the Comp'anios Act gavo him tho right to move.

Mr Ju3tioo Cooper said the right was that of a contributory. Did Mr Braund suggest that any person at all who was in. terested'could come in?

Mr Braund repeated that as lie was interested as a shareholder he was entitled to move. He was tho beneficiary owner of the shares.

Mr Juiticc Edwards: We assume that yon havo bought shares and put them into tho hands of a trustee, and he is, in the contemplation' of the iaw, tho shareholder and the person entitled to move.

Mr Braund; If you so rule', I may say that I am attorney for the actual holder of tho shares. 1 have given him an indemnity, and be has passed all right, title, and interest in these shares to me, and I am actiiig as'his attorney. I have the power of attomoy with mc. Mr Justice lldwartls: He is not the plaintiff in your action. You are moving as the plaintiff.

Mr Braund: I submit lam the only one who can come here and ask the court to save the books which aro to be produced at a trial I have commenced bona, fide in the court m Wellington.

Mr .liutice Edwards: Still it is n question of what we can d 0... It is a question of jurisdiction. Every power of attorney of the court depends on authority. Wo are pointing out to you that upon tho threshold of your proceedings there is what appears to us to be a difficulty. Mr Braund said lie would try to convince the court as to his right. He submitted, on tho authority of Blair v. Agar, that ho was entitled to relief in equity, sinco a thcreholde.- was held to be so entitled where fraud was alleged.

Mr Justice Cooper. You liavo first to show that you aro u shareholder. Mr Braund: I am a shareholder.

Mr Justice Cooper: No, you are not. It is unfortunate that you havo not taken legal advice.

Mr Braund: There is a difficulty about thsi. hut it is a matter I need not go into. Mr Justice Cooper said that tho right •that Mr Braund suggested he had to move

was limited to a member of the company, a contributory, or A creditor, and Mr Braund was not. one of those.

Mr Braund: lam sorry your Honor did not point that out in Chambers. Mr Justicc Cooper: 1 Why should I raise difficulties? I assumed everything in your favour and was compelled to decide against you, and I gave you a week to take legal advice. What moro could I do? I assumed everything in vour favor. Mr Braund: I have endeavoured to act up to your Honor's advice, but. the circunistanccs arc such tlwt 1 would rather not cuter into them.

Mr Justice Cooper did liot think it. was tho proper function of a judge to advise at all.

Mr Braund did not suggest that, but his Honor did raise a question of jurisdiction. Mr Justice Oco*;er: At tho outset I raised the question of jurisdiction.

Mr Justice Edwards faid that when a layman placed a matter before a judge it did not follow that tho judge would see all the objections at n glance. In this caso Mr Justice Cooper saw one objection which in his opinion was fatal, and he did not look further.

Mr Eraser: As a matter of fact Mr Justice Cooper did point out this very point in Chambers. It was pointed out that lie had no locus standi.

Mr Justice Cooper: At the outset I pointed out to Mr Braund that lie would have to show his status. I said there were two points upon which he had to satisfy mc—that tlm court had jurisdiction to mako tho order, and that, if it .had jurisdiction, tho order was olio that the court ought to make.

Mr Braund said lie did not remember that his status had lieen challenged.

Mr Justice Edwards: I suppose tho Otago Daily Times report may be taken as correct. According to that report liis Honor said:—"lt is unfortunate that you arc representing yourself. This is not an action by shareholders, or eontributories, or creditors, it is an application made by an individual in an action brought by him againit the directors, in which you seek tho production, inspection, and retention of books not belonging to tho defendants but to third persons and relating to third persons, and which arc not in tho posses-ion of tho defendants. I want you to showto begin with—that I have jurisdiction to make the order."

Mr Braund: I took that to mean not that his Honor challenged my status, but that it was a question of a shareholder bringing an action that was not for tho benefit of the general body of shareholders but for himself. At no time, however, was my attention drawn to the fact that my right to bo here was challenged. Mr Justico Cooper: I>,did not specifically mention tho objection, hut I allowed you to go on long after I thought I ought to liavo stopped you. I let you bring in a good deal of extraneous matter.

Mr Braund: If it had been made clear to mo, as I submit, it should have lieen, that my status was challenged, I would not have waited here and -wasted my time. I tako it that should have been done.

Mr Justice Cooper: What duty is there on tho part of a-judge to advise a litigant as-to the proper course tx ought, to take? Mr Braund: I take it it is tho practice of the court to challenge the status of any individual who appears hero.

Mr Justice Edwards: It is a mistalco to suppose that a judge carries tho law of England or the law at New Zealand in his head. It is not his business to look into theso quest ions beforehand. Perhaps he has not read tho papers beforo coming into court.

Mr Justico Cooper was understood to say that, that was his position in this case.

Mr Eraser: Your Honors in my address I said, "His Honor was "asked to reverse the judgment of 'Mr Justice Williams, becauso a person—not a contributory—had brought a personal action." That shows that tho whole matter was beforo the court.

Mr Braund: It dees not follow from what learned counsel pointed out that I had no status.

Mr Justico Cooper: You have to show lis that you liavo a status now. Wo draw your attention to the difficulty at the outsot, so that you cannot say jour attention was not drawn to it or that you could liavo met it if your attention had been drawn to it.

Mr Braund .submitted that he clearly had an. interest in the 212 shaves. His money was invested in those* shares before the winding up. By transfer all the interest in those sharas became his. Therefore, ho submitted that lie had an interest in the winding-up, and consequently a- right, to'ask for this order. If the court did not tjranfc the order a gross injustice would be perpetrated in the' namo of justice, and surely their Honors wero there to prevent that. Mr Justice Edwards said they wore thereto administer the lans as they' found them. If they thought they should have a jurisdiction that they hail not, ihov eonld'not proceed as if they had it. Their powers wero limited.

Mr Justice Cooper: If you say tbofc tliis order ants unjustly to you, that is your own fault for not taking proper proceedings. You have had five years in which to tako them, and 12 months or more lx;fore tlu> expiration of Mr Justice Williams's order.

Mr Braund: I have endeavoured tc eX' plain the delay.

Mr Justice Cooper: All you Have to satisfy us about in tile meantime is as to your status.

Mr Braiuid: I submit that this is a court of equity as. well as law, and if tho court sees an injustice about to l>o done if a discretion is not exercised, the court will not place itself in that position.

Mr Justice Edwards said that Mr Braund seemed to think that ''equity" meant whatever the judge (bought ought to bo But that was not the meaning of '' equity " in these courts. The meaning cf it was that where there was a. right tho court had power to enforce. If the court had no power, then tltero was no equity aa < far as the csurt- was concerned. It might, seem to a judgo that, ho ought, to be ab'e to deal with a matter, but it might bo that. !•<? had neither law nor equity to deal with it.

iMr Braund repeated that if this point had been made clear to him at the Inst hearing, ho would Ime mode a fresh motiop. in the namo of an individual shareholder. In that ease he should havo to get counsel.

Mr Justice Cooper said that, thq mistake Mr Braund had made was in omharlcinn on extremely technical procoedinps without legal advice, although he (bis Honor) had emphasised the necessity of his obtaining it and had given him time to get it. Mr Braund 6aid lie had endeavoured to act up to what his Honor had said at Iho former hearing, but ho bad been unable to do so, for reasons which he did not wish to state. He hoped, however, thoir Honors would sco their way to allow him to arguo the case. Mr Justice Edwards: We have rot stopped you. We have pointed out tie difficulty, that it seemed to- us obvious that you had to meet. Wo pointed it out at the beginning of the proceedings in order that you might not bo taken by surprise at the end of them.

Mr Braund said then lm would proceed. Tho two points upon which ho had to satisfy this court were, that -the court, hnd jurisdiction to make the order asked for. and that, if 50. it was right that the order should bo made. Ho submitted that there WO6 no mention in Mr .Tustic* Cooper's judgment on his former motion of the question of status. Ho did not nsk for tho inspection of the books, as his Honor had seemed to assunio. All ho aAod was that the books which contained the record of a gross fraud or. t.ho shamholders 'of the tank be fiftv-ccl from threatened destruction. Production of iho books was demanded by the Supreme Co"Vl at Wellington through"the subpoena served 011 the Official Assignee in Iho action referred to. Tho suhncena called upon that official to nroduce the books and "fail at your peril.'* Could this bo disregarded? Mr Justice Edwards said that the best possible reason that could, bo given for not producing the boohs would be that the Suj>rcniv Court had made an order for their destruction. There were documents and books he must, produce, and others he could leave bohind.

Mr Braund thought that in such caso the court could be put in a very anomalous position. ITo maintained that therewere several sections which' showed that Inn books were producible. They wore books which tho Official Assignee could not refuse to produce if the court ordered him to produce them. Inspection was not asked for. _He merely wanted production, and Jie maintained that the wbolo of Mr Justice Coopers judgment was based on the assumption that- inspection was asked for.

Mr Justice Cooper said that there was no such assumption. \Vha f he had held was that as Mr Braund could not in subsequent proceedings obtain inspection there was no need to mako an order for retention.

Mr linumd thought that in taking that siam! his Honor was anticipating the decision of another court. He had taken legal advice, although ho was representing himself. If the books were allowed to bo destroyed the order of the court would ignoro the action brought in the Supreme Court at Wellington, and would destroy the ovidcnce on which that action defended. Ho did not.know whether the

arm of the law was long enough or slrong enou'di to reach a caso like this. If not, the. Jaw was' defective. If tho present application was refused it. would allow an officer of the court to set at. naught the summons of another branch of the court. He must disobey one or the other, and surely the court would not place its officer or itself in that position, If the order were current for another six months the official liquidator would be compelled lo produce the books, assuming they wero procurable, as lie maintained they were. The court had power to order those books to be produced under the head of " Extraordinary Powers of the Court," Mr Jusiico Edwards: That relates lo the winding-up. Mr Braund: Yes; and surely your Honors can stretch a point in that direction. If tho court- can order the production of Iho books in tho winding-up, it, has control over thorn. Mr Justico Edwards: The winding-,up is concludcd. Mr Braund: No, I submit not. Mr Justice Edwards: His Honor has made an order dissolving the company. Mr Braund: I submit that that order is not absolute. Mr Justico Cooper: There is an absolute order made dissolving the company. Mr Braimd: If the company is dissolved the liquidator is functus officio. Mr Jusiico Cooper: There is an absoluto order made dissolving the company and authorising the official liquidator to destroy the books unless tho court shall otherwise order. Mr Braund: There is nothing to provent the assets of the company bcjng increased by any proceedings tliat may bo taken. Mr Justice Edwards: If anything' comes in now it must, go to his Majesty. You ought to liavo attached the order for dissolution. Mr Braund said he wished to do so. Continuing, lie again referred to the North Brazilian case, which Mr Justico Cooper had apparently regarded as a complete answer to tho Chambers application. Ho submitted that that caso referred wholly to a question of the inspection of books. Production was not. asked for. Here ho simply asked the court to enable the production, so that, the order of tho Wellington court might, bo carried out. And if lie were asking for inspection, he submitted that inspection would bo for the general benefit, of others who wero interested in the windim'-up. His affidavit showed that lie had been in communication with the shareholders from time to time, and that Ihere was no doubt ho represented a much dissatisfied minority of those shareholders. 'They had contributed from time to time in a small way as much as they could afford to the proceedings that had been taken. Any good result from these proceedings must bo for the general benefit of the shareholders, because it gave to each and every ono of them the right to bring an action similar to that ho (Mr Braund) was going to bring. It would give them the right, to recover not only from tho directors, but from the liquidators and from any officials of iho bank who I had been parties to the publication of false reports and balanco sheets. In tho North Brazilian case the books wero in tho unconditional possession of a third party, ■but in tho present oast) the agreement of 1895 showed clearly that the books wero in tho absolute control of an officer of tho court, and therefore under the control of tho court. He therefore submitted to tho court that that case did not apply in the way in which Mr Justico Cooper had applied it. and that the caso was, if anything, decidedly in his favour. The cases wow similar'in regard to fraud, except that in tho case taforo the court there was a suggestion of gross fraud. If the books wero pToduoed, he believed ho would be able to substJHif iate a very serious case of fraud. Mr Braund read the statement, of claim in the case against Messrs M'Lean- and Neill. the statement covering several pages of foolscap, including lengthy extracts from bulancc sheets and speeches. If ho could support tho allegations made in the statement, this was cno of Iho most serious cases known to the financial world. There were peculiar features in connection with the whole matter than randored it absolutely necessary thai Iheir Honors should take as broad a view as they could in regard to this application. On general grounds, as well as on grounds of public policy, lie trusted that if their Honors could see their way to stretch the law, if the law was against him, it would enable this matter to l>o sifted and this action to be tried, and if theso liicn wore guilty of the charges laid against them they should pay tho penalty tho law of tho colony demanded. If their Honors refused the order thesa men, if guilty, would escape the consequences of their guilt.

Mr Justice Edwards said ho did not thinlc so, though it might too so. From tho statement of claim lie judged that. there would be enough evidence in the balance sheet and tho agreement referred to. Mr Braund said the difficulty was that to prove that the offences aJleged were committed knowingly, the boolu must bo produced. If he succeeded in his action, every shareholder who had purchased on the strength of the balance sheets complained of would have a right to briny actions and recover from these men. This thing had bcirn goinjr oil during about half the life of tho bank, .and during-the last 20 years all who bought in wore misled by the balance sheets. Therefore, he maintained that the books were within tho scope of the powers of discover}-. He quoted cases in support of this view. He would lay spccial stre-s on t.ho fact that Lad Justice Cotton gave a discretion, and that this provided a loophole through which the court could squeeze him (Mr Braund), and lie mibmittcd that the court would so pu?h him through if lie showed that bio onse came within tho extraordinary cases which Lord Justice Cotton said might arise. W'liv should not tho court grant the order? He did not ask for a reversal of Mr Justice Williams's judgment. From tho first the orders as (o destruction of the books wore always conditional. Besides, in >Jr Justice Williams's decision on December 23, bis Honor based iiis remarks on the fact that no fraud was alleged, and now that fraud was alleged, it was mitolv- a. following up of Mr Justice Williams's thought.?

and opinions lo stay (lie destruction. As lie took it, their Honors were practically .sitting as locum tnuens for Mr .Tusfiee Williams, and worn bound by his thoughts and opinions. Mr Justice Cooper: I said nothing of the kind. You know I said nothing of the kind.

Mr Remind: Tlmt was the interpretation I put 011 it. Mr Justice Cooper: There was no suggestion made of such an absurd position. I put it perfectly clearly before you. Air Braund said ho would ask their Honors' special attention to the views of Mr Justice Williams that it would bo highly improper to open the proceedings unless fraud could ha suggested. Then, if fraud was suggested and alleged in the most substantial my, surely their Honors would agree with him that Mr Justice Williams would havo inn do a. different order if fraud had been alleged. The whole wording of Mr Justice Williams's judgment was in the direction of refraining to do injustice to anybody, and in the direction of so acting as not to stifle inquiry. If the court were against him on tho points now raised lie would -ask, for a suspension of the order so as to allow of an application to amend the list of contributories \>y making liim a contributory, feeing that in fact he was a shareholder, though unregistered. The shares wero. genuinely his property. He could sell and transfer if lie chose. The court now had notice that it was his inten-

tion, on his return to Wellington immediately after tho conclusion of tho hearing of the present application, to commence proceedings against the liquidators of tho bank to recover damages or compensation, on the ground that the said liquidators had been guilty of impropriety in tho conduct of tho liquidation of the bank, in failing to summon meetings of the shareholders in

terms of the powers and requirements of the Companies Aot, in not bringing the directors of tho bank heforc tho court in

order to ask tho court to make an order upon tho directors, in wrongfully distributing tho assets of- tho bank, in refusing to allow access to the share register and other books of the bank, and in refusing to give

information, and in other ways. Mr Justice Cooper said that tho only liquidator was Mr Graham.

Mr Brauml said that lie-meant the two surviving liquidators and tho present liquidator. They were not discharged from their obligations. Ho had such it. strong; ease that he would go on with it even if the destruction of tho hcoks was ordered. Tho answer ho was setting from the shareholders generally was that it was hopeless to fight for the preservation of theso books; but if they were destroyed tho commercial reputation of this colony would be shaken to its foundation, and in the long run it would recoil on tho colony and on its financial credit. ,

Mr Justice Edwards: Until wo see our jurisdiction it is vain to talk of exercising our discretion.

Oil resuming after lupolicon, Mr Braund read tho' agreement between the Bank of New Zealand and the Colonial Bank showing that under that agreement tho bulk of tho books beeamo the absolute property of tho Bank of New Zealand. Theso books the bank should now be ordered to retain for production. Mr Justice Edwards: What power have we to make an order against the bank as regards books which arc tho bank's own absolute property? Mr Braund: I say the order of the court

made previously is wrong. 'The bank should not have been directed to destroy tho books at any time. Mr _ Justice Edwards: But you aro objecting to an order of tho court under which tho books have been preserved 12 months. Had it not been for that the bank might havo destroyed all tho books on tho 3rd of May last. Mr Braund said that these books wero absolutely in possession and control of the Bank of New Zealand. Were, tho order for their destruction not in existence, the bank would now bo bound to produce the books under subpoena. But the court had made an absolute order that the books

were to be destroyed—books not under the

control of tho court—on tho 10th of this month. Surely, that was an extraordinary position. Mr Juatico Edwards: Your position is more extraordinary. As tho thing stood when this order was made on the 22nd of May, 1905, tho bank had absolute power to destroy the books there and then; but in order that nobody might have cause to complain, they agreed to keep them on certain conditions, and they also then agreed that everything should be destroyed at a certain date. What can anyone complain about in that? Tho-books havo been available during tho whole of that year. Mr Justieo Cooper: And at the outset the bank was not bound to keep them. Mr Braund: Assuming that the liquidator, foi the sako of argument, was making tho application fraudulently. Mr Fraser: Ho was bound by law to mako it. Mr Justice Cooper: The Bank of New Zealand, on tho 3rd of May, 1905, could, had it chosen, have, destroyed theso books without, any mandate from tho oourt. They were the bank's ■ absolute property under the agreement. But the bank said, "No; we are quite content to hold them for another 12 months." Whafcr havo you to complain about in that respect? You are really complaining because the order directed them to bo held for another 12 months—an order which, possibly, could not havo been made without their consent-. _Mr Braund: I complain of il: because finwi then certain things have happened which render it absolutely necessary in the interests of justice that the books should be preserved. Tho order of the court for their destruction is an order of the court absolute.

Mr Juslico Cooper: What order do you suggest that wo should make?

Mr Braund said tho bank people had to destroy these books because they had permitted themselves to bo made a party to tho order of tho court. They had no discretion. It-was a most unprecedented thine for a bank to destroy ledgers, and he did not suppose that, in 'fact, the bank would destroy thorn. But they would lw destroyed to tho world, and they would not be accessible to him.

Mr Justice Edwards: And your point is this—that the bank when they are asked about it will bo able to got- rid of any odium attached to it by saying thai tho court ordered it?

Mr Braund said that thero was a good deal in that point. Thero were honourable men at the head of tho bank, whose letters showed clearly that they were willing, te hein: but these books would be destroyed. Ho thought the court should expunge the, order, and leave tho court free to do as it chose. The order should be annulled, so far as tho Bank of Now Zealand was concerned.

Mr Justice Edwards: What you ask is quite out of tile question. Yon come to this court asking us to review the judgment of the learned judge who has given the oiider for the destruction of these books; and that is all that is before us. You cannot in tho course of proceedings, if you find that you havo mistaken your remedy, turn round and ask for something else. Mr Braund: Seeing an order of tho court, I assumed that the order had been made in the way I am now working upon. The whole of my argument has been directed to thaf. Legally, the dissolution of the Colonial Bank is not absolute, but tho Bank of New Zealand has now got to destroy these books. It must obey the order of tho court.

Mr Justice Cooper: The dissolution is absolute.

Mr Justice Edwards: I don't say anything at all about the construction of this order. You must read it and put your own construction upon it, and ask us for what you think you arc entitled to.

Mr Braund: May I sec the order, your Honour?

Mr Justice Edwards: Certainly you may. Mr Braund: This ardor has placed the Bank of Now Zealand in the position of being unable, notwithstanding that tlioy mighty wish to do so, to produce the books at the trial of my action or of any other action. The court's order has rendered the Bank unable to comply with any subpwna issued from any. branch of this court or of any other court. It the books were produced the bank's position would not be prejudiced and mine would bo proved.

Sir Braund proc-ceded to read extrada from correspondence between himself and (lie official liquidator, urging tliat he had addressed questions to the liquidator which that officer hod not answered, and making statements strongly condemnatory of the conduct of the liquidation.

Mr Justice Cooper: First yon 'have to assume that you had tho right to ask questions, and wo know that you were not a member of tiie company. Seriously, yon must assume that, if yoii had a right to interrogate the liquidator, these are proper interrogations.

Mr Justice Edwards: Here are 32 quesi ions. I imagine that you can suggestproper question? -to Mr Graham, ajiil thatlie has refused to answer every one- of t-liem. What then ?

Mr Braund: Not only has he refused io answer thorn, but lie Ims refused to acton tliem.

Mr Justice Edwards: What lias that to do with the question of whether we can and should prcyeyt these books from being destroyed?

Mr Braund: Because it all points to the lack of desire oil the part of Ihe Official Assignee to have this matter properly investigated. Mr Justice Edwards: What lias that lo do with us? We assume, for ,purposes of argument, that you have brought a good action, in which you may succeed, and that

you want tho books kept, for tho purpose of that action. What has this to do with thai ? Mr Braund: It is my intention 011 returning to Wellington lo commence an action against tho liquidator (Mr Graham).

Mr Justice Cooper: If you arc gains: into tho whole history of the Colonial Bank and criticism of the directors and of two sets of liquidators we shall lie here for a week. Tho question of impropriety on tho part of tho liquidator is not relevant to the motion, and there is a judgment of the court, exonerating the liquidators. Mr Justice Williams says distinctly, "I think there is not the slightest reason to suggest any fraud in the conduct of the liquidation."

Mr Justice Edwarde: If you think wo arc going to' try people and find them guilty 011 this sort of material you aro very, very inuoh mistaken. ; Mr Braund said that, if he established a prima facie case against the liquidators that would give the court an additional reason to save these book's. Tho Official Assignee was asked to furnish information. Even suposing that ho (Mv Braund) had no locus standi he represented £30,000 capital, as tho Official Assignee knew well. Mr Braund proceeded' to read a report from the Official Assignee and other documents. Mv Fraser: Ho insists on making a personal attack on the official liquidator, who is not present. He is reading matter that is not oil affidavit before the court, and that has nothing whatever to do with the application. I formally object. Mr Justice Edwards: I think you should havo objected earlier.

Mr Fraser: I did not want to intervene unnecessarily. I thought he was going to stop every minute. Mr Braund: I have nothing more to say. Your Honors will not allow mo to show cause wiiy your Honors should say that I establish a prima facie case, at anyrato against tho offioials of this bank, directors or otherwise, for misfeasance and broach of trust. I submit that

Mr Justice Cooper: You have had a latitude which no counsel in the colony would havo been allowed in dealing with all kinds of extraneous and irrelevant matter, and we have not stopped you.

Mr Braund contended that he was entitled to bring More tho court any affidavit or document nccccsiry to establish a prima facie ease against persons connected with the liquidation.

Mr Justice Edwards: Wo don't think vou havo made a prima facie case at all. You have brought an action making charges of fraud against certain persons, charges which may be true or may not. You are entitled to all the ordinary assistance of the law to enable you to establish those charges, and all that you shall get. But to suppose that_ we shall sa-y that there is a prima, facie case of fraud against certain gentlemen is quite out of the question, We know nothing whatever, one way or another. It is not neesssary that you should make a prima, facie case here. All that it is necessary for you to do is to show that you Jiavo brought an action which on its faeo alleges fraud and that you arc entitled to a means of procuring certain evidence. We are quite satisfied that you have brougnt an action. What- we are not satisfied about is our jurisdiction. All this tall: about tho merits of your case cannot possibly affect that.

Mr Eraser, in re;ily said: The Official Liquidator, who is an officer of the court, is naturally not present at this proceeding. At the same time, I oonsider it my duty as representing him, to bring certain facts before the court. In the first place, I would beg respectfully to remind the court that this bank has lieen legally in liquidation for the past 11 .years, that some nino years ago there was an exhaustive public examination of all the officials of the bank, including one of the defendants in tho present action, and that it was not until last year tliat the order was mado for the destruction of the books—an order which was advertised all over the oolony, and which was extended on a subsequent appliT'hcro can be no suggestion on the part of . the appellant that he in any way is surprised. Neither oanj there be any valid excuse offered by him -for his appearance in this matter at this stage. It must te ■borne in mind by the court that tho appellant has been familiar with tho details of this litigation ab initium. He was a candidate ■ for the _ position of liquidator—a disappointed candidate. He has been tho stonily petrel of tho litigation throughout, flitting in and out at various critical periods. When the application .for the destruction of the books was lxforo the court it n«s telegraphed aJI over tho colony, and tho appellant admits that ho knew of it, and he made no effort to be uresenfc. But at the last moment ho hunchcs a pflocceding, and on it bases this application; but to strengthen' tho application, apparently, and in consequence of a remark that' Mr justioe Cooper let fall in Chambers-which I personaliy thought would to pregnant of contequciiecß—he also proteoses to launch forth litigation agaimt the liquidators, including the present Official Assignee. 'I havo only to sav this, sirs: that as tile appellant contemplates those Action?, and intends to bring them, y>me of the intemperate comments that he lias made it would have been more seemly that he should not have made. I pass from the n:ai.cr finally saying this: that throughout the term of the present Official Liquidator's otticc-but was put there by statute—the position has been that this officer took over a liquidated bank. Ho has been throughout actuated simply bv a senso of duty. And I respectfully submit to the court, if 1 may be allowed to express mv own opinion, that he would have been wanting in a sense of duty had bo accepted tho gratuitous services offered bv tho appellant. If the court will allow me, I respectfully submit that had the official liquidator allowed any stranger to come in and peruse the bank accounts of a largo number of solvent people, he would have been guilty of a very great wrong, and had ho not Men wise in his choice of such a person he might havo placed a weapon in tho hands of that person which by a week's work would have rendered him a life's competence. It is unfortunate 'that, tho appellant has not had tho advantage of being represented here, although ho states he has had tho benefit of legal advice. If he has consulted a professional man I think he must have been told that under no circumstances could ho possibly hope to attain his wishes. He states that for the purpose of succeeding in his present action-a personal action against tho ex-directors of the Colonial Bank—ha must seo the books. If ho had consulted a professional man he wou.d have been fold that in these circumstances ho could not see tlio books, lie could not seo tho bank ledger. Nor has, he any right to seo it. There is an' instructive caso in which the court in dealing with an application very similar to tho present one, and an applicant of the samo stylo as this appellant, stigmatised tho application as "monstrous." (Pollockv. Garle, 46 W.R., p. 66), The case is also governed by tho Brazilian Sugar case, and by tho Imperial and Continental Water Conservation caso (33 C.D., p. 314). Mr Justice Cooper: That was on a different section, tho question being whether they wero to examine.

Mr Fraser: Tho principlo is the samo running all through theso cases. In conclusion. I suggest that the appellant has absolutely no locus standi in tho present application. He is not a shareholder, nor a contributory. Ho is not a member of the comnanv. And even if ho were a member of tho company, as I havo endeavoured to point out. lie could not attain what, lie socks. I therefore submit that tho appeal niust be dismissed, and the learned judge's decision iu Chambers sustained.

Mr Braund said !in had nob been delaying at all. Tho matter had been alive smeo December, 1904. He took action as 0110 who lind lost much money in t.ho bank-, and who thought that a prave injustice had been perpetrated. Ho was neither' a disappointed candidate nor a stormy petrol. No one Itncw more about theso matters than lio did.

Their Honors intimated that they would give their decision at 10 o'clock on Wednesday morning. Mr Braund asked if, in case the decision was against him, he would he granted leavo to appeal to the Anpeal Court. Mr Justico Cooper: It is a rather pecuhar application to make-that wo snould eivo you leave to appeal before judgment. Mr Justice Udwards: If we refuse your application. you are really asking us to give yon in tho guise of an appeal what we have refused. Mr Justice Cooper: You don't require to leave to appeal. You enn appeal as a r "vht from Iho decision of the Court of Banco.