LIBEL ACTION SUCCEEDS

Southland Times, Issue 23229, 18 June 1937, Page 5

LIBEL ACTION SUCCEEDS

Damages Of £5O Awarded BUILDING SOCIETY ACCOUNTANT CLAIM AGAINST FORMER EMPLOYEE An action for libel occupied the attention of the Magistrate’s Court for two hours yesterday afternoon, when Hugh Ritchie, accountant for the Southland Building Society, claimed £5O damages for libel from Emil Schlaepfer, a retired farmer and a former employee of the Building Society. The Magistrate (Mr W. H. Freeman), after hearing the evidence., gave judgment for the full amount claimed. The action arose from the following letter, copies of which defendant had distributed among certain people in Invercargill:—

“I wish to point out to you that you have not given to me the so-called British fair play yet by holding an inquiry into the various serious charges which I made to you on several occasions against the dishonest practices of your assistant secretary, H. Ritchie, at the expense of some of your very worthy but not well-educated shareholders, who have been either forced or tricked into selling their homes at great sacrifices, quite unnecessarily, as they had plenty of margin. ‘“Take Wilsons of Clifton. At one time these people owed you £250 besides a second mortgage of £250 to Mr F. Stevenson. In the course of years they paid off the second mortgage and reduced yours to £lO3. To get round the Mortgagors Relief Act these, simple people were tricked into signing an undertaking (like several others) leaving it to the Southland Building Society to do the best they could, and the result was a ruinous sale at £l2B—- — Mitchel and Broughton offered to lend £250 on it. Mrs Lynch, Nelson street, was similarly treated. She had actually signed a sale note before Tucker’s salesman and Macalister’s clerk at her home to sell for £232, being in poor health and unable to stand worry. I am glad to say I got her £3OO elsewhere to pay you off, and die has sold the property since for £475 cash. There has been an unholy combination of Tucker and Ritchie and other parasites, a real menace to trusting, simple people. “The same Ritchie, boasts that you dare not sack him and it certainly looks as if he could do as he likes. He has let contracts for repairing houses without any competition or supervision at too high prices and getting shoddy work. Then again a lot of houses have been let to undesirables, sometimes deliberately against my protests, and with bad results, as predicted. You must have had a lot of complaints about Ritchie’s high-handed behaviour and you are not helping the victims the least bit. You have had some peculiar court cases, always due to Ritchie. I want that inquiry, even if Ritchie has to stage another nervous breakdown. (signed) E. Schlaepfer. Plaintiff was represented by Mr H. J. Macalister, and defendant, who was not represented by counsel, conducted his own case. DISTRIBUTION OF LETTERS Mr Macalister said that the defendant had l for some years been eking out a precarious existence one way and another, and for some time during tht. depression he had been employed by the Building Society as a collector. He had then drifted into a position supervising repair jobs. His appointment with the society had terminated some considerable time ago, and ever since he had left the society he had been conducting a vendetta against the plaintiff. He had not been checked to any extent because not much notice had been taken of him, but he had now gone to such a length that the plain tiff was compelled to bring proceedings. The present proceedings were limited to the one letter. The defendant had written this letter in April, making allegations of dishonesty against the plaintiff, and a committee of directors was set up to investigate the charges. On April 17 a reply was sent from the secretary saying that the directors were satisfied that the charges made were not justified and that Mr Ritchie had only carried out the instructions of the directors. That did not satisfy the defendant who adopted the practice of going round with copies of the letter and handing them to people to retain, saying that he was doing this so that shareholders would know what was going on. The copy produced had been handed to Mr Lusty, a City Corporation employee, who told the defendant that he did not want to have anything to do with the letter, pointing out that the defendant was inviting trouble. The prosecution would prove that these statements were baseless fabrications sedulously circulated by the defendant.

“The effect of this campaign has become so evident,” Mr Macalister added, “that Mr Ritchie has been placed in the oosition that he must show in the court that these are libellous statements made by a malicious and vengeful man. Since this has been going on people have been avoiding him, and it is a most damaging libel.” Counsel added that Mr Ritchie felt that he would rather not make a criminal matter of it but would content himself with a civil action. When defendant was advised that a prosecution would be instituted and was invited to withdraw his statements he replied: “Please go on with the good work. A thorough inquiry is necessary. I have been asking for it for a few years.” “We have claimed £5O damages,” Mr Macalister said. “That is, of course, a mere nominal amount. Taking into consideration Mr Ritchie’s position and character we could have taken the case to the Supreme Court and been justified in claiming £lOOO Mr Ritchie is not out. however, to make money, but is nomine to the court in the interests of himself, the employees and the shareholders of the Southland Building Society.” EVIDENCE FOR PLAINTIFF Ernest Henry George Lusty said that the defendant had got into touch with him when he was doing work for the Building Society Within the last month or two defendant handed him copies of two letters (produced) asking witness to read them Witness asked if it would cause any trouble, and defendant said that there was no harm in it and that he was just giving the plain truth. Witness was asked to retain the letters and, if he so desired, to show it to Building Society shareholders. Defendant told him that he was disposing of other copies which would put the shareholders “wise” as to what was going on. • Defendant: Did you find me honest in your dealing with me?

Witness: Yes, you never did me any harm.

George Merivale Broughton, of the firm of Mitchel and Broughton, solicitors, said that he had been asked to inspect a property and repay a loan of £lOO to the Southland Building Society and to finance repairs to the property. He paid a visit of inspection and found the house to be very old, in a poor state of repair, and in need of painting and papering. It was occupied by a man and his wife and three young children. Witness did not offer to lend any money. There had previously been a second mortgage on it. In 1924 Mr Stevenson advanced Mr and Mrs Wilson, the occupants, on second mortgage, the sum of £250. The main security was a farm of 82 acres at Taramoa but two other properties were also given as collateral security. One was the Clifton property. It was on the farm that the money was advanced. To defendant: He_ had found the Wilsons decent people." They had done their best. Witness had always felt that the defendant was sympathetic to struggling people, and had sometimes found that his sympathies had carried him away. Russell Hosie, land agent, formerly in the employ of Mr F. H. Tucker, said that he knew Mrs Wilson’s property at Clifton. A Mr Finlayson, of Riverton, came into Mr Tucker’s office one day and said that the owners of the property at Clifton wanted to sell. He inspected the property, which he found to be in very bad order, almost uninhabitable. AMr Jukes eventually offered £l4O and that was accepted. Witness considered it a very fair price. Mr Ritchie had nothing to do with the transaction'. Alexander Jukes detailed the negotiations leading up to the purchase of the property and corroborated the evidence as to the condition of the property. He thought that it was over-valued and he had had to spend £l5O to do it up. He went with Mr Hosie into the Building Society to see about the mortgage but had no business with Mr Ritchie and no member of the society’s staff had anything to do with the negotiations. Ann Lynch, Antrim street, said that she had sold a property in Nelson street to a Mrs Bennett. She had not given the Southland Building Society any authority to sell the property and had not signed a sale note of £232. Cross-examined, witness said that she had asked defendant to help her with advice which she admitted was perfectly honest. INQUIRY BY DIRECTORS Evidence was given by the plaintiff, Hugh Ritchie. He was, he said, in a position of trust, and handled large sums of money and interviewed clients. The defendant had been a collector employed by the society for about eight months. When the plaintiff returned from a visit to Australia people had been surprised to see him back, as it had been rumoured that he was not coming back and that he had been misappropriating money. On every side he had been met with a large number of rumours and accusations. The directors had held an inquiry on the letter and witness was questioned. There was no word of truth in the accusations. Mr Macalister: What has been the policy of the Building Society regarding mortgagors and shareholders in arrears? Witness said that they went before the directors and he had no powers in this respect. He might interview them as he signed letters from the directors advising what steps the directors were taking. The policy had been to give people every opportunity and if shareholders were in arrears and the money could not be recovered then directors would suggest that they try to sell. The last thing they wanted to do was to realize on a property. Witness said that he had never trapped anybody. The question of a sale or no sale was always a matter for the directors who extended every leniency to shareholders in arrears before taking such steps. By resolution of the board he was instructed to superintend repairs to houses, under the president. Defendant had been employed to collect rents and witness had suggested that he be put on to supervising repairs. Witness had never directly or indirectly reaped any benefit out of letting contracts for repair work. He had been in public life a good while and was chairman of the Finance Committee of the City Council, was on the High Schools Board, and was a director of several companies. Cross-examined regarding an instance where a repair contract was let, plaintiff denied that he had anything to do with the contract. The woman who owned the house had let the job herself. Robert John Cumming, licensed land broker and a director of the Southland Building Society, said that the. directors had absolute confidence in Mr Ritchie. The inquiry by the directors showed that Mr Ritchie had had no connection with the sales and that the allegations were entirely without foundation. It had been quite a common thing for Ritchie to ask the directors for leniency for shareholders in arrear and he had never been hard on anyone. There was no foundation for the statement that shareholders Were forced to sell when there was no need for them to.

Albert Samuel Froggatt, president of the Southland Building Society, said that a sub-committee consisting of Mr Cumming, Mr R. N. Todd and himself had been set up and the investigation showed that Mr Ritchie had had nothing to do with the sale. CASE FOR THE DEFENCE Witnesses for the defence were then called and counsel for plaintiff refrained from cross-examination until the defendant entered the box. Herbert Mitchel, land agent, said that he had sold property in Nelson street for £650. It was an exchange. Evidence was also given by Mrs Ann Lynch, Henry James Gray, who said that he had repaired the house at Clifton and that it would be worth about £lBO, and by Roland Norman Wilson. While the last-named witness was in the box the Magistrate told the plaintiff that his evidence would not help the defence at all. Evidence was then given by the defendant who said that he had written the letter and two other letters as well. “You have quite enough to answer for, Mr Schlaepfer, without producing two more letters,” said Mr Macalister. Defendant said that he had distributed about a' dozen letters among certain shareholders whom he thought might assist him to sift the matter. The directors treated the matter in such a casual way that he felt compelled to get other people, shareholders, to assist him. The statements he made were in absolute good faith and he thought they were correct. The Magistrate: And you find them now to be incorrect?

Defendant: Certain things are hard to explain when you see families turned out to make room for others. When it happens once I can understand it, but when you see it often it is staggering. Defendant claimed that he had exercised a great deal of patience. He had acted with the best intentions in the interests of the shareholders

Mr Macalister. You had a I'eply from the directors in which they informed you that they had investigated the letter and the allegations were not sustained.

, Defendant: That is correct. Do you still reiterate the statements you made?—l made a mistake in some. I hold to some others.

NOT PREPARED TO WITHDRAW Defendant admitted that the statements he had made concerning the Wilsons were “not quite true.” He admitted that the Building Society had

nothing to do with the sale but would not admit that Mitchel’s did not offer to lend one penny on the property. Mr Broughton did not decline to lend money on it. . Mr Macalister: What foundation had you for saying that Mrs Wilson had been tricked into selling? Defendant produced two letters which counsel read. “Do you say that these letters justify that statement?” counsel asked.

Defendant: Yes I do. Are you prepared now to withdraw the statement you made about the sale of Wilson’s property?—Not absolutely. Mr Macalister: Do you persist in your statement that Mr Ritchie has been guilty of dishonest practices? “I still have a certain amount of doubt,” replied defendant. I suggest you are actuated by malice. —Absolutely not. I have no feeling about it. , . ’, You realize that in distributing these you are spreading around an insidious poison among an uneducated class? I am sorry for that. It is no good being sorry—My sorrow is for the shareholders. You have been faced with absolute proof of the falsity of this statement today and you still decline to withdraw it?—Absolutely. STATEMENTS NOT JUSTIFIED “I think, in view of what you have heard here today,” said the Magistrate addressing the defendant, “if your statements are not actuated by malice it would be the proper thing for you to withdraw your statements absolutely and unconditionally, but you have seen fit not to do this, and there is only one thing for the Court to do.” The Magistrate added that the evidence for the complainant was quite uncontradicted. Mr Ritchie was a man with a very high reputation, and there was not a tittle of evidence of , dishonesty, and he did not think that the plaintiff was capable of it. He thought that defendant must be aware that Invercargill was in the Pr° u d position of having such a society which they all knew could hold its head very high in its transactions. There was ample evidence to show that the society extended every consideration to its shareholders. It was very foolish of the defendant to make statements that he had absolutely failed to justify and which had had a very damaging effect “If you throw mud,” Mr Freeman concluded, “a certain amount must stick. There are some people who have suspicious minds and it is in that direction that the damage is done. I see no reason why the amount of the claim should be reduced.” • Judgment was given for the full amount claimed.