THE COLONIAL BANK.

Otago Witness, Issue 2669, 10 May 1905, Page 49

THE COLONIAL BANK.

THE COMPANY DISSOLVED.

BOOKo TO BE RETAINED FOR SIX MONTHS.

PARLIAMENT TO BE PETITIONED

FOR AN INQUIRY.

On the 2nd inst., in Chambers, Mr Justice Williams considered the motion, adjourned from Friday last, for the dissoluSion of the Colonial Bank of New Zealand, - and for directions as to the disposal of the books and documents.

Mr J. F. M. Fraser supported the motion or. behalf of the Official Assignee, as liquidator ; Mr J. H. Hosking appeared for the Bank of Now Zealand; and Mr J. F. Woodhouse for Mr William Barron and Mr William Burnett, representing the Shareholders' Committee, oppceed the motion. Mr Fraser said that the affidavit filed by Messrs Barron and Burnett, and dated Ist May read as follows : —

1. We are shareholders in the above-named bank, and were so at the time of its going into liauidation

2. After reading the report of the official liquidator made herein m the month of February last, we are of opinion that certain matters in connection with the affairs of the said bank lequire further investigation — an opinion in which we are aware many of the other shareholders in the said bank concur. a. Colin Allan, of Dunedin aforesaid, gentleman, another shareholder in the said bank, and ourselves have arranged to present a petition to the General Assembly of this colony, at its next sitting, praying for a parliamentary inquiry into the affairs of the said bank and if the prayer of the petition be granted the dissolution of the said bank and the destruction o£ the books and papers of the bank would render such inquiry futile.

4. We became aware yesterday for the first time that an application had been made to this court for the dissolution of the said bank.

5. A petition praying for an inquiry into the liquidation of the said bank was presented by the ss>.id Colin Allan and ourselves to the G-eneral Assembly in. the year 1903, and the Petitions Committee of both Houses of Parliament recommended that the prayer of the said petition be. given effect to.

Mr Fraser went on to say that the Official Assignee was naturally anxious to be relieved of the liquidation. Nothing appeared to have been done by the shareholders since 1903, when the petition referred to in the affidavit - was presented to Parliament. If ifc was suggested that the directors or the liquidators had acted in such a manner as to give shareholders a right of action, or good grounds for an inquiry, then the matter should have been litigated long ago. The position of the present official liquidator, who had taken up the liquidation at a very late stage, was that he had finished what remained to bo done in the liquidation. The affairs of the company were completely wound up, and he preferred to be relieved of th>c liquidation. There must bo some finality in a matter of this kind. All the years since the liquidation had been in hand the court had not been moved in connection with the general administration of the bank.

His Honor said that was so,

Mr Fraser (continuing) said that if fair grounds existed for the assertion that relief might be obtained by the shareholders through an investigation there might be some reason for the present opposition ; but that he never been suggested, and was not suggested now. The liquidator had no funds.

Mr Woodhouse: He has £80, has he not? Mr Fraser said: No; he had claims for storage and other payments, but practically no funds, and he was naturally desirous of being relieved of the burden of holding the matter in suspense any longer. Mr Woodhouse said that the opposition taken by the opposing shareholders wa3 this : they had for a long time been dissatisfied with the liquidation. His Honor would recollect that the liquidation was closed very suddenly. The persons who were liquidators were out of office, and the Official Assignee was substituted for them by act of Parliament. They never made a report : it wa6 not their duty to do so. The gentlemen for whom he appeared really represented the Shareholders' Committee. They had petitioned Parliament, and their petition waa favourably recommended by both Houses of Parliament* and it waa

assumed that the Government would take some steps in pursuance of that recommendation. Since then, however, theie had been a report, and it was probable that the Government considered that in the first plae© it was desirable that a report should be made before dealing with the recommendation. That report came out about two months ago. The shareholders whom he represented had perused that repoit: it was of a rather meagre nature, and did not shed much light on the proceedings.

Hrs Honor : I understand that the present official liquidator knew little about the facts, and employed accountants to investigate. I suppose if they wanted some information from the previous liquidators they would ask for it.

Mr Fraser : They asked for it, and they obtained it.

Mr Woocihouse wont on to say that the shareholders, having perused the report, considered that there were matters in it that required further investigation. They now proposed to petitioa Parliament again for an inquiry. His Honor : There is no reason why they should not.

Mr Woocthou=f» . No : but if the company i« dissolved and the books destroyed

His Honor : But if the books are not dc =;t roved ?

Mi* "Woodhouse said that even if the books weroi not destroyed the company <-hould ))ot b& dissolved, boravse the result of the investigation might be that proceedings should be taken by the bank.

His Honor : Do you propose to go to Parliament en a fishing ■expedition to see if you hi'voi .a civil action? Mr WoodhouiEo remarkod xhat the proposed petition was for a general investigation, and if the company were dissolved it would be futile. Parliament had evidently c-onsidere-c) that there were grounds for an inquiry. Tho books certainly — in view of a parliamentary inquiry — should not be dertroyed; and as the company had stood so long undissolved no harm would be done by standing a little longer. His Honor : The affairs of the companyhave been wound up?

Mr Woodhouse :

Yes, your Honor,

His Honor: Then, iinder &ection 270, the court has no comsa open to it but to dissolve tli-o company. As to the destruction of the books, that is another^ matter. It may be very proper, in view* of this affidavit, thaj; the books should he kept. "What have you \u say. Mr Hosking? Mr Hoskmg-: I have nothing to urge on behalf of thei bank. My application has only to deal with ihe destruction of the books if destruction is ordered, because tho bank is custodian of a large number of books that are not asked by this order to be destroj cd. It costs £40 a year to store Ihom, and we wish to get rid of the obligation. By the contract of sale, all the hooks were to become the property of the Bank of New Zealand on the dissolution of the Colonial Bank. If your Honor makes an order for the destruction of the books, wo wish it to be extended to the vouchers aleo, which are at present in the custody of tho bank. My friend has asked only for the destruction of what are in the hands of the assignee. Imk that that order, if made, be extended to what is in the custody of the bank

Mr Woodhouse said it was unusual in any ease to destroy the books immediately on dissolution.

His Honor : Jf it had not been for your motion, as the liquidation was subetanitally concluded six or f-even years ago, it would be proper to make an order for the destruction of the books because £ll debts and claims would be statute barred. But what you state in your affidavit may be sufficient to suspend an order for destruction, but it is not sufficient to' suspend an order for dissolving the company. In order to suspend nn order for dis^olvin? tho company you would have to make out ut anyrate a prima facie case that somebody concerned with the winding up had been guilty of fraud, and there is no sug-jjesticn of that I think the proper order would be that the company be dissolved, and that after the expiration of 12 months Ihe books be destroyed.

Mr Frasea- suggested that they be destroyed at the expiration of six months, unless an order be made for extension.

Hia Honor : There is no objection to that, I suppo^?

Mr Woodhouse : No. We can apply for an order for extension. But I would ask that the order be made to extend to all documents and puoers.

His Honor: Very well. Order that the company be dissolved from this date, and that the books, etc. be retained for mx months and then destroyed, except c.thei*vrice ordered by the ccwrt