BERT THOMAS INDICTED

Taranaki Daily News, 20 August 1930, Page 7

BERT THOMAS INDICTED

BANKRUPTCY LAW CHARGES

yRIAL IN SUPREME COURT BEGINS

story of crown case outlined

DEALINGS WITH FARM PARTNER.

Having been brought back from Sydney under arrest soma .months ago, Jjei'l Thomas, formerly a farmer of Upper Mangorei, was yesterday brought for trial before Mr. Justice Ostler at Now Plymouth on six charges under fhe Bankruptcy. Act. There' were still' a number of witnesses for the prosecution to hear when the adjournment was reached last night. The hearing will be continued this morning. Mr. C. H. Westbn acted for the Crown and Mr. C. H. Croker represented Thomas. - The . following jury was empanelled: Messrs.. William Groombridge (foreman), J. Birmingham, A. W. Robson, ’Lance Free thy, William Callopy, R. 0. Dean,' William de Malmanche, G. H. Hogarth, H. E. Hill, William Humphrey, H°J.' Calgar, W« W. R. Harvey. * The charges were: — That, being a bankrupt, Thomas on February Iff, 1930, put one of his creditors, James McNeill, New Plymouth, to unnecessary expense ;by a frivolous and vexatious defence to the action •brought by McNeill in the. Magistrate’s Court to recover the sum of £2lO 10s Id, being the Amount of a debt due ■jby the bankrupt to the action bein'* removed ‘on the application of the'bankrupt into the Supreme Court and a defence thereto being then filed by tho bankrupt. ' >' . That Thomas, within two years of a bankruptcy petition which was present-, ed against him on February 4, 1930, fraudulently removed part of his property to tho value of . £lO or upwards. That accused, with intent to defraud his creditors, and since one of Kia creditors, Samuel Oliver, New Plymouth, obtained judgment, against him, removed part of his property —the proceeds of a sale of a farm belonging id the bankrupt. • That Thomas, on or about January 31, 1930, quitted New Zealand and took with him part of his property, £2O, or upwards, that should -by law be divided pmongst his creditors, with intent to defraud tho creditors.

' That with intent to x defraud accused did not, to the best of his knowledge and belief, fully and truly discover to Assignee all his property—the proceeds of the sale of the farming prosper ty and stock and chattels—and how and to. whom and for what consideration and . when he disposed of tho same, except such as he disposed of in the ordinary way of his trade or laid out in the ordinary expenses of his family.. That Thomas, with intent to defraud, failed to deliver up possession to the Assignee part of his property which was divisible amongst his creditors, and was in his possession or under his control- —the proceeds of the sale of his farming property, stock and chattels. ' ALLEGATIONS BY THE CROWN. The story of the charges in chronological order' was given by Mr. Weston. All the charges, he said, wqre really based o n the maxim that, an honest man. was supposed to pay his debts if he could. It was customary for a man to back up his debts with, his property, and in these days credit was obtained bn the security of the property held. The Bankruptcy Act offered certain rules for the enforcement of payment of debts by nien who were able to pay. ■ Thomas and Oliver were partners- in

a farm at Upper Mangorei. Both were returned’ Soldiers. Thomas was an old customer of James, McNeill, grocer and merchant; he. had been a customer before, the war. ’ Oliver had left the employ of McNeill, to go to the war; his •? affairs'during his absence he placed, in McNeill’s hands. . When these two men .returned from - the front they decided they would go in. for a farm, and this they did after taking McNeill’s advice on the matter. The arrangement was that Thomas worked the farm while. Oliver returned to the employ'of McNeill. They had a partnership account • with McNeill, while, in addition, Thomas had a private account. This partnership continued until early in 1928, when Oliver sold hi's share in the farm to Thomas, who took over the farm and stock. As part of the consideration for taking over the property Thomas agreed to pay the debts of tho partnership. There was practically > one only—that owing to McNeill. McNeill and Oliver went into the account together and made an agreement virtually settling., the amount owing at so much. ’ Oliver did not receive cash from the .partnership,' but . had to; take Thomas’ promise to pay., This was the subject of a rather peculiar ‘ agreement owing to the fact that at’that time it was considered doubtful whether the farm, if realised, would provide enough to pay Oliver. It was- agreed, then, that if the farm did not realise more than £l2 ..an acre Oliver was to get nothing, but if it realised more than that he would receive payment in proportion to the amount in excess of the figure named. Payment was really fixed .on a sliding scale above £l2 an acre. ■Thus if the farm were sold, for £l6 an acre Oliver'was to get £172 10s. Oliver was therefore dependent to a certain extent on the honesty of Thomas.’ The position in 1928 was that McNeill had fixed his account at a certain figure and Oliver’s payments from the dissolved partnership were to be on a/ sliding scale. NEGOTIATIONS FOR SALE. About the end of Aughst, 1929, 19 month# after the dissolution of the partnership, E. L. Mason, land salesman for the .Farmers’ Co-operative Society, took Adlam, a client, to Thomas farm with the -object of effecting a sale. Adlam offered £2OOO for it as a going concern, including land and stock, and 'apparently Thomas agreed to that. But he made it a condition that' he would not accept the arrangement unless the sum were divided in two. He insisted that Adlam should make the transaction in the terms of £l2OO for 105 acres of land and £BOO for the

stock, the total amount being £2OOO. Counsel here observed that had this arrangement been carried into effect Oliver would . have received nothing from the sale moneys, because the pui< ...chase price for the land would not have reached.” £l2 ' an.- acre. Mason knew

about Oliver and Thomas, however, ° continued Mr. Weston, and hi# suspicions were aroused. He came to the conclusion that such an arrangement would not be honest because the stock ’ could not be strictly valued at as much as £BOO. Eventually he and Adlam decided they would have nothing further to do with the matter. Mason warned Thomas there would be trouble over such a eale, but Thomas ’ went out of his way to explain how it’ could *be done. • Mason asked permission ’■ to go to see Oliver and obtain hie ’consent, "but Thomas would have nothing to do with such a proposal.. Counsel-said the suggestion was that , in August, 1929, Thomas had made up his mind to defeat Oliver’s claim if he could. ■■ . ’ • ’ Some time after this McNeill, apparently having’ heard that Thomae intended to sell, became rather worried about an account for £216. He went to see Thomas on the farm and had a perfectly friendly discuceion. Thomas gave him afternoon tea and some milk to take home.; There was also a discussion concerning a suggestion ■ by Thoma# that he should buy a car from McNeill. The amount of the debt to McNeill was mentioned, but Thoma# queried some of the items. McNeill told him he could confirm the amount by looking up the books, but Thomas wanted every item checked. McNeill said that would be impossible because it' would involve looking through 60,900 to 100,000 duplicate dockets extending over a period of years. Thomas then offered to pay £175 cash when he sold his farm, but McNeill said it was not possible for him to accept that in settlement. Finally, however, he offered to accept £175 on the sale of the farm and the balance when he could pay. The account had been increased only slightly between 1928 and 1929. SALE OF THE PROPERTY. Eventually Thomas gold the farm "to a man named McDonald and the transaction was put through Messrs. Croker and McCormick, acting apparently for both parties. McNeill then got in. touch with Messrs. Croker and McCormick and on November 28 was told that Thomas wanted an account with every item in it. McNeill replied that that was very queer as they had come to an arrangement in that matter. He said that if he were to be put to the trouble of looking through every item he would want the whole amount paid in cash. Mr. Croker replied that Thomas was quite prepared to pay the account when the items were supplied. On December 3 McNeill received a letter from Messrs. Croker and McCormick asking for a detailed account, ae arranged. Thomas would be callin<y next afternoon, said the letter, and they would be glad to go into the account with him. “Thomas desires you to satisfy him as to his liability to you,” continued the letter. “There is no doubt as to his ability to pay if he is liable.” .That day McNeill wrote the -legal firm enclosing statements of Thomas’ private account and the account of Oliver and Thomas. Regarding the ‘private- ac-

count it was explained that the items referred to duplicate • invoices for amounts above ss, but that it would have been too tedious to go through the others, which would be for such small things as tobacco and matches. The original invoices had been checked at. the time, So far as -the partnership account was concerned; the. invoices for everything - were found, excepting totalling about £l6. On tire same . day, or the following morning, McNeill saw Mr. McCormick and explained the whole- account to. him, saying that if any item at all were questioned he would explain it at any time. The amount then owing by. Thomas was £2lO 1&3 Id. McNeill heard nothing further.- from Messrs. Croker and McCormick on. that matter. According to the price paid for the farm by McDonald, Thomas had. to pay Oliver £172 10s.’ Oliver .-was a little suspicious and he . saw Mr.. McCormick and explained how he came to be owed money by Thomas. The sale wa# completed and Thomas received through Messrs. Croker and McCormick a cheque for £1062 16s. In addition £2OO was left in suspense in the savings bank. Oh December 4, 1929, Thomas opened four accounts with the New Plymouth Savings Bank. He presented the cheque and deposited £7OO, taking-away £362 16s in cash. ’ ' LEGAL PROCEEDINGS TAKEN. On December 13 Oliver issued a sum moiis against’. Thomas in the Magistrate’s Court at New Plymouth for £172-10s, and on the same May McNeill issued a summons for £2lO 10s Id. On the same day Mr.. Southam ’served both summons. Upon their- presentation Thomas was alleged to have said to Mr. Southam; “They will never well be paid.” He added he did not think they would go bn with it. On December 21 or 23 application was made by Thomas to move McNeill’s case into the Supreme Court, and he lodged £2O as security for costs. Counsel suggested Thomas’ object in doing this was to gain a delay and put Me-. Neill to unnecessary expense by a frivolous and vexatious defence, a defence that was not bona fide and was most annoying to the creditor. Thomas’ application was granted and-on January 21, 1930, the case was removed to the Supreme Court. On February 10 Thomas filed a defence in which he. said he did not owe the money. On January 16, 1930, Oliver secured judgment against Thomas for £172 10»3, plus £8 costs; Thomas had raised no defence and had allowed the judgment to go by default. On January 24 Oliver had not been paid, so he issued bankruptcy proceedings against Thomas and the same day Thomas drew £702 from the Savings Bank. On January 27 Mr. Southam served the bankruptcy notice and Thomas took it to his solicitors. “Therefore,” commented Mr. Weston, “on January 27 Thomas knew •that Oliver had obtained judgment against him and taken out a bankruptcy petition.”... Towards the end of-January Thomas told Mason he- intended going -to.. Aus-

tralia to buy a farm. He said he had sold hi# car. After January 27 Thomas disappeared entirely, leaving no assets and- his. debts unpaid. On February 26 Thomae was adjudicated bankrupt on a petition filed on February 4. Various creditors filed proofs of debt as folio we: Joseph Swainson (New Plymouth) ■ £1 4s; Taranaki Hospital Board, £25. 8s 2d; Charles J. Southcombe, farmer, Kent Road, £3 18s; Samuel Oliver, merchant, £lBO Ifte; James McNeill, £2lO 9s Id; Newtbn JCiiig, Ltd., New Plymouth, £2l 7s . sd. When it was discovered Thoma# was in Australia steps were taken by the creditors to bring him back, and Constable Davis .was sent from New Plymouth for. him. Thomas , was arrested in Sydney on April 24, 1930. All that was. found on him w r as four New Plymouth. Savings Bank books, two statements given him. by Messrs. Croker and McCormick regarding th© sale to McDonald, a statement of costs from the same firm, and £2 6s 2d in. cash. “These things were , cold comfort for the creditors,” observed Mr. Weston. THE RETURN FROM SYDNEY. Upon hi# return to New Zealand on May 14 under the jurisdiction of the Bankruptcy Court he was under certain obligations as a bankrupt to comply with the Act. He was bound to hand over to the Assignee certain statements and what property he had so that’ the Assignee could distribute it among his’ creditors. The only statementeby him referring to his. property had been to the £2 6b 2d in the hand# of the police and to the £2O in the hands of the court. • He. had not explained about the money from the farm, but he admitted he owed Oliver £172 10s and Newton King, Ltd., £2l 7s sd, while the amount owing to McNeill was shown as “unascertained.”

McNeill gave evidence on the lines of the Crown Prosecutor’s opening address. Referring to Thomas offer at the farm to settle the account in full for £175 when he sold his farm witness had said it was impossible to accept that as he had not charged interest, though the account had been then running on for over 41- years, ■’’’inally he accepted an offer from Thoto pay £175 cash when he sold the farm and the balance when he was in a position to pay. Thomae mentioned he thought of buying a wood and coal business in town and would require a fair amount of capital to start with.

McNeill was cross-examined by Mr. Croker at • considerable length. “How much more ha# the removal into the Supreme Court cost you?” he was asked. - -

McNeill said his solicitor had told him it would cost more. He had not yet received an account for the whole amount.

He reaffirmed that from March to October, 1923, Oliver had paid as. much, as Thomas. Oliver had-paid £3Bl 9s 3d. -

• Counsel was proceeding to question regarding .various accounts when Hie

Honour asked whether it was proposed to <ro through all these small items. “Bnly sufficiently to show the jury that the defence filed was not frivolous and vexatious,” said Mr. Croker.

The examination proceeded through a o-reat mass of detail. Witness, explained the differences between the amounts on cheques produced and the book entries by saying he had? given change on them. PAYMENT TO FORMER OWNER. He remembered paying Walker, the original owner of .the farm, £lO and charging it to Oliver and Thomas. He. denied Thomas had paid this. Counsel: Last year did you not agree to take £175 in full settlement of your account and as an inducement you said Oliver would take £5O? —I have no recollection.’ .' ' The judge: What do you mean by “no recollection?” Did it occur or not? —He is putting these questions to me but I cannot remember, the incidents mentioned. He denied that at Thomas’ farm he ■offered to settle the account by selling him the car and giving Oliver .£5O. Samuel ’Oliver, grocer, said that at the time of dissolution of the. partnership he had put into the farm £3Bl 9s 3d. The maximum he could receive on the sale of the farm was £172 10s, about half of what he had put in. To Mr. Croker: He told Thomas to go to his solicitor ajid get the partnership drawn up on his . own terms. The solicitors who drew up the agreement were Messrs’. Weston and Billing. He knew Thomas had a dispute with McNeill concerning the amount owing. . There had been no disputes until Thomas sent a letter in 1927.

Counsel: Would that be when he found out the state of the accounts ?— No.

To His Honour: Invoices were given to Thoma# for each lot of purchases and accounts sent him every month.

Counsel: Is it correct that on one occasion Thomas received a su“ar-saek full of accounts? —No. .If he got anything in a sugar-flack it would be a pair°of . boots, or a suit of clothes. Although he knew Thomas was trying to beat him he had agreed to take £75 from Thomas in settlement. He could not remember if he had subsequently agreed to take £5O. It was correct that the settlement of his account wa# conditional on McNeill’s account being paid. He, admitted he and Thomas had oc-< casionally bet on the totalisator. He might have had a bet on a certain horse with Thomas. His Honour; How on earth can that be relevant, Mr, Croker? Counsel: I should not have asked it had it not been relevant, sir. I Jiad an object in asking. His Honour: Yes, but I want to know the object before I can allow you to continue asking such questions about betting. Counsel: It is quite all right, sir. I have finished now.

Further evidence wa# given by Edward Laidley Mason, ; land salesman,

and by Guy Macallan, solicitor in thfc office of Messrs. Goyett, Quilliam and Hutchen, who acted for McNeill in the proceedings . to recover, from Thomas. The latter’s evidence was of a formal kind concerning his search of the title to the land. McDonald, he said, had taken over a mortgage of £9OO and made a payment of £llOO. On November 29, 1929, Thomas had received the cheque for £1062 16s.

Replying to Mr. Croker Macallan said the removal of the action by Thomas to the' Supreme Court had meant additional expense to McNeill owing to the cost of perusing the defence, attendance of the/ solicitors on McNeill, and the higher scale of charges.