BANKRUPTCY ACT CHARGES

Taranaki Daily News, 21 August 1930, Page 4

BANKRUPTCY ACT CHARGES

BERT THOMAS FOUND GUILTY

strong; micrcy recommendation

ACCUSED TELLS OF THE SPENDING JUDGE'S SUMMING-UP TO JURY. After a trial lasting two days, Bert Thomas was last night found guilty on all counts alleging six breaches of the Bankruptcy Act. There was a recommendation to mercy “on account of his lack of. knowledge of business matters.” “I shall consider what I .shall' do in this case, and will postpone sentence till after tho criminal trials are finished,” said Mr. Justice Ostler. “I shall endeavour to give the . recommendation ' consideration as far as I can in the . public interest. The charges were:— That, being a bankrupt, Thomas on February. 10, 1030, put one of his-ereji-tors,' James'’McNeill, New Plymouth, to' unnecessary expense by a frivolous add vexatious defence to the action brought by McNeill in the Magistrate’s Cburt to recover the sura of • £2lO 10s. Id., being the amount of a debt due by the bankrupt to McNeill, the action being removed on the application of the bankrupt into the • Supreme . Court and a defence thereto being then filed by the bankrupt. That' Thomas, within two years of. a bankruptcy petition which was presented against him on February 4, 1930, fraudulently removed part of his property, to the value 5, of £lO or upwards. That accused, with intent to defraud his creditors, and since one of his- creditors,'.Samuel Oliver,.New.Plymouth, obtained judgment against him, removed part?- of ’ his property—the ‘procbeds of a #ale Of a farm belonging-to the bankrupt. ■ . That Thomas, pn,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, amongst his creditors; with intent to defraud the creditors,,.. . , That -with intent' to' defraud accused did not, to the best of his knowledge and belief, fully and truly discover to the Assignee all his' property—the proceeds of the sale of the farming property and stock and chattels —and how and to whom and for what consideration and when he disposed of the 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. ■CROWN CASE CONCLUDED. ..•The ease for. the Crown, wasiconcludedyesterday morning, and Mr. C. H. Croker opened, at considerable length on behalf of Thomas,,.who .subsequently gave evidence on the lines indicated by counsel. Following counsels’ addresses to the jury his Honour summed up for three-quar-ters of an hour last night. The jury retired at 8.15 p.m. and returned one hour and 20 minutes later. Evidence more or less formal.in nature was given for the Crown by Cyril Lash, accountant at the New Plymouth Savings Bank, H. Gilmore Smith, clerk of the Magistrate’s Court and Registrar of the Supreme Court, J. S. S. Medley, Deputy-Official Assignee, Constable Davis, who brought Thomas back from Sydney under arrest, and Charles Corfe, manager of the Bank of New South Wales. ■ Under cross-examination H. Gilmore Smith admitted that in the Supreme Court Thomas would have the right to discovery, interrogatories ancV the investigation of the accounts extending over a period. He would not have had these privileges in the Magistrate’s Court. Regarding ThomeV ability to read and' write, Constable Davis told • Mr. Croker that on the - way from Sydney Thomas had asked for a 'radio newh sheet. He had signed the declarations.

The Crown Prosecutor (Mr. C. 11. Weston) asked permission to recall McNeill to . rebut • an ' allegation by the other side that he could not account f<?r £290 shown on a group of cheques. McNeill could explain the whole matter satisfactorily, as overnight he had consulted his books. His Honour suggested waiting to see whether the defence made anything of the insinuation. If so, McNeill could be recalled. Mr. Croker said the amount was £l7O, not £290. ' OPENING. FOR DEFENCE. In the course of his opening and review of the-evidence for the defence, Mr. Croker submitted that sufficient had been shown in the course of the case to demonstrate that Thomas • had good ground for defending McNeill’s claim and questioning the accounts. Regarding the remaining charges, counsel. said it xvas a question whether Thomas had acted fraudulently. If the jury believed his conduct was honest, then they could not convict him of the 'charges'. When he quitted New Zealand'he was penniless, and if that were so he could not have taken away property that belonged to his creditors. • Dealing with the'question' of'hon-dis-closure to the Deputy-Official Assignee, counsel said the evidence of the DeputyOfficial Assignee was that Thomas had never been asked for the particulars referred to. • It was true that Thomas had gone to Sydney, but he did not, and could not, know that he had been made bankrupt unless, someone wrote and told him, so that he could not be said to have fraudulently taken away some property that was divisible among his creditors. When he was arrested he had about £2 in his possession, and there was a sum of £2O in court. That was all he had. The whole question resolved itself into one -whether he did what he did with the intention of defrauding his creditors. The most that could be said was that he had paid some creditors in preference to McNeill and Oliver. THOMAS TELLS HIS STORY. Evidence was given by the accused', Albert Watson Thomas. Early in 1921, before he bought the farm from Walker, lie had over £lOOO or £llOO in cash, lie said. In 1923 Oliver and he bought the farm. The arrangement was that Thomas should do the work and Oliver should' keep 'the 'house in ! groceries; any otherJaboui'-’fequired would be paid for jointly by the partnership. McNeill had

previously inspected the property. The house needed repairs, and McNeill asked him if he would do the work. He said, yes. McNeill said he had money belonging to Oliver in the business, and. that there was an overdraft. McNeill asked him if he would keep all the payments going, and Thomas agreed to do that. McNeill guaranteed Oliver’s money. Witness paid for most of the stock with his private money. Money was lent on the stock by the Crown. About this time he received a cheque for £62 Ils. from Oliver. It was signed by McNeill and brought to him by Oliver. Oliver had wanted him to raise a Government loan, but witness said he had paid for the stock and asked why he should have to raise a loan. Oliver said his money was tied up with McNeill, and it would be better for them if they could get a loan from the Government. He said he had paid McNeill about £l2O. Oliver asked if he could get half of what Thomas had paid Me- • Neill would Thomas go in for the loan. He agreed, and subsequently Oliver brought him the cheque for £62 Ils. He received a number of groceries anti farm material from McNeill’s. He did not receive invoices or monthly statements, From-. 1923 till recently he had never received a debit aud credit statement from Oliver or McNeill. About the beginning of 1924 Mrs. Atkins (later known as Mrs. Thomas) was employed. Oliver might have paid, her about £3O in wages. Afterwards she received no wages ’ till he sold his farm. i • ■ ■ - No groceries for the farm should be charged to him till 1925, In that year a new arrangement was made whereby Oliver was .to give him 15s. a week without tobacco, : but with tobacco Oliver was to pay 10s. a week. Thomas chose the tobacco and 10s. a week to be sent ; out every Monday. He had not received any of the money, and had been charged for his tobacco. IN TOWN ONCE A YEAR. He came to town about; once a year, and did pot. see much..of Qliyer and Mc< Neill, He went to Auckland about May, 1923, for 12 days to see his brother. Otherwise lie had had no other holidays till the■ sale. ■ ■ ' ' ■ Counsel showed Thomas a number of cheques .issued . from February 15 ■ to August 27, 1923, and totalling £290. He jSaid that he Would sign the cheque forms when Oliver brought them on Sundays; he left the rest for Oliver or McNeill to fill in. In 1927 he wanted some more cows. About the end of May Oliver came to see him. He wanted Thomas to buy two cows from a man named Rowan, who was going bankrupt and owed McNeill some money.

The judge: Not a word of this was asked the jury. Mr. Croker: I did not intend it to go in, but did not stop him owing to his slow-working mind. The judge: Then why waste the time of the jury. Witness ,said that following the dispute about the cows, McNeill wrote, asking him to come in. McNeill said, “You know, Bert, the farm is not paying. There’s about £2OO on the books.” Thomas said: “What you and Oliver owe me would about square . the . lot. McNeill said he had paid him. Thomas replied he had received only £62. McNeill said he .had'paid‘ two cheques, but Thomas denied that, whereupon McNeill said the .butt of the cheque was available.

As a result of an altercation he told McNeill and Oliver they would pick up no more milk cheques, but McNeill said he had written to the Wanganui Fresh Food Company to send the money to him. He had not received an order from Thomas for the cheques. McNeill said a. certain amount, was owing by Thomas, which Thomas disputed. Thomas,, told him .e would not have another penny from the farm until he supplied details of the accounts. On December 22, 1927, he saw Oliver outside McNeill’s shop. Oliver suggested he (Oliver) should withdraw from the partnership. Witness then went to Messrs. Weston and Billing, where the dissolution document was drawn up. Mr. „Weston ..sent him to McNeill to make his own arrangements about the account. McNeill said there was £l9O owing to- hint. Witness said he did not .think there was £l2O owing., McNeill said.he would .show him every .item-and every account, and the way in which the .money had. been used. After that stater ment. by. McNeill .witness agreed to sign the dissolution : document showing : the partnership indebtedness to McNeill at. £132 and .the statement • showing Thomas owed McNeill £l9O. DETAILED ACCOUNT WANTED. McNeill had never sent him a detailed account, as promised, though asked many times. .-Witness was then examined at length concerning accounts of which he alleged he had never had particulars. He contended he was charged on one occasion for oats he had never had. He disputed the item with McNeill and subsequently saw him strike it out. He told- McNeill he would settle the accounts when he sold the farm, and on condition he got the details of items. He asked £23 an acre for the farm as a going concern, and that was the price he eventually sold at. Mason brought AdlanT to' him with an offer of £2OOO. He told Mason he did not think much of the offer, though he would sell if it was made on terms of £l2OO for the land - and £BOO for the stock. He told Mason of the agreement with Oliver and that he thought Oliver, should get about £5O out of it! He went to his solicitors and afterwards met Mason on the'following Friday. Mason had an agreement written for the sale at' £l2OO for the land and £BOO for the stock. This 'was' read to Adlam, who said he would not agree to those terms; his ■>. terms were £2OOO. Witness then tore up the agreement Mason had written. Mason next went to see Oliver.

He was advised by his solicitor to remove AlcNeill’s case to the Supreme Court. He had been told that was the way to get the details of the disputed accounts.

He received £1062 16s. from Alessrs. Croker and McCormick on December 4. He put £7OO of it into four different Savings Bank accounts. This was because the manager had told him he could not put it all in one name. The withdrawal sheets were given to him the same day. They were made out in favour of I. D. Thomas (Airs. Thomas or Airs. Atkins). He had been in AVellington 10 or 12 days when the slips were returned to the bank. ' I. D. Thomas withdrew the money. The £7OO was disposed of as follows: — £4OO to Airs. -Thomas as amount for wages; £3OO was sent to Airs. Rawlins (Australia), in part-pay-ment of money lent over a period of 5.} years; she had sent a receipt for this showing £5O was .owing. Mrs. Thomas bad previously .given him a receipt for the whole’ £700.'

'- Tlie ehange’he received from the Sav-ings'-Bhiik -on December 4 amounted to £302 16s. ; He owed Mrs. Atkins £9O, and gave her £lOO. She gave him a £lO note to pay'some bills. He paid Messrs. Weston and Billing £ll 3s. 6d., Fred Jordan £25. FINANCIAL TRANSACTIONS. Thomas put in a statement showing the foregoing and other ways, including debt payments, in which he had disbursed the money. Actually he had received a total of £1252 165., comprising £1062 16s. and £l5O paid through Messrs. Croker and McCormick with reference to the sale of the farm to McDonald, plus a milk cheque for £4O. According to the statement he had spent £l2 6s. 4d. more, than he had received. It was shown that he had been, to various race meetings.. ■ During two days at Hawera he had lost £2O, and. in two days.at Stratford helost-;£3o. He came out all-square at,the two-day N,ew Plymouth meeting, he lost £6O. in two days at Foxtqn ancl £4O in four days at Wellington. He left Wellington '■ for Sydney on January 31 and arrived on February 4. Counsel said these particulars had been made up by his firm with Thomas’ assistance. Thomas went to Wellington and signed for a passage to Australia in his own name. He said on this document that he was to come back. His reason for going to Australia with Mrs. Thomas (otherwise Mrs. Atkins) was that doctors had ordered a sea-trip for his boy, 5A years old, He was “just about dying” and had been in various New Plymouth hospitals and homes. When he left New Plymouth his original intention was to go .to the South Island. However, the .boy got bad at Wanganui and they left the train at Palmerston North and took a car to . Wellington. They stayed at the Arcadia. A ship was going to. Sydney next day, and they decided . they, .would - go. They went to the shipping; office next, morning and got their, tickets, In Sydney he went to one of his brothers. He and his faniily took a flat in North ..Sydney, still retaining the .name, of Thomas. A week or. a fortnight aft.er , hp, arrived' his . brother got him Work pulling ,down, a building. He was in Sydney 10. or 11 weeks 'before being brought back. Having been- gassed at tne war, .the .dust from the building being.demolished irritated his lungs, and a. .doctor, advised him to shave his moustache.'. He;denied he had shaved to disguise himself, : What would be the point when he .went under his own name? . He had- pp- money when he left for Sydney,.,; i: . : ; > 'jhe judge: Did not the Customs offiquestion you in Sydney ?—No. My honschepper filled in a list the night before arrival,-and the officials just looked. in. our bags and told us to go on. '.“KNOWN AS MRS. THOMAS.” To. Mr. -Weston: He first knew Mrs. Atkins when he was on the Junction Road farm in 1921, She was then living with her husband. He'was single, and she was later either separated or divorced. She had no children then. In February, 1924, she came to live with him on the farm. ■ She then had one child born in 1923, The second child was ' born in ■ 1925. ■ In 1926 she came to be known as Mrs- Thomas.

If Ale Neil l: had -kept his promise to furnish details of ..accounts witness would not have..been on trial that day. He had no intention of beating Oliver when Alasdn came to see him. Oliver had agreed to take £5O two or three months after the dissolution.

He ‘understood from Air. Deem, of Alessrs I .' Weston and Billing, that at £l'2oo 'fori the land Oliver would receive f, £so? It was' untrue that Adlam turned- tli'e proposition down at the fa'riu.' MaAdn had on that occasion almost gone on his knees to him to go on with'the'sale. To'hi'S Honour: He had asked for the £l2OO-on;, the land and £BOO on the stock arrangement because he thought that Was the correct thing to do providing Oliver ‘with the £5O. His 'Ho'ndur: At any rate, it would stop him -getting £172 10s.? Thomas:’ Yes.

• He thought £6O or £7O was owing to AlcNeill. Qlivcr had agreed to accept £5O provided AlcNeill’s accounts were paid; jg The moneyed been at his solicitors to pay MciOßls’ and Oliver’s claims in full if details had been supplied. Alost of the receipts for the payments made from the £362 were burnt in the fire at McDonald’s while he was staying there. Referring to the list of disbursements

! supplied by' Thomas, his Honour commented it seemed strange that he should lose in round figures at four race meetings. It could be understood in connection with one meeting, but not for’ four in succession. Surely he. must have won some dividends??, Thomas said he made a good deal of .money at Hawera, but put £5O or £6O on Melissa in the last race and lost all. He made about £1 at the New Plymouth races. - . ■ . “Who is Mrs. Rawlins?” asked conngel. REMAINED IN SYDNEY. Thomas:- She is in Sydney. She formerly lived beside him in England. She had been sending him money since 1924 when he wrote to his brother in Sydney because he had no money. 'Mrs. Rawlins usually sent the‘ money in bank notes. He. had visited Air. and Mrs. Rawlins at North Sydney. : To his Honour: The £490 was ofviug to Airs. Thomas in respect t<J'wages. His wife was not exactly penniless, but. he did not think she ■ took \any money. ,to Sydney. He had about £5 when he went on the boat: Ho had in-, tended to return to New Zealand in time for the case with McNeill. He had intended to tell Alessrs. Croker and AlcCormick he was going away to the South Island, but when he called they were away at a Native Laud' Court. He named several New Plymouth people-he told he was-going to the South Island. It . was only when they reached Wellington that they decided to go to Sydney.: He had signed the shipping document “A. W. Thomas,” and not “Bert Tho-J mas,” because the former was his cor-, rect signature. ' As far as he knew, Mrs. Thomas 'was still in Sydney, though he had had no letter from her for some time. She had the children, and the last word ■ from her was that the boy was very ill. Air. Weston: It is suggested .Mrs. Thomas is now in Auckland? Thomas: . That is news to me. He did not know what Airs. Thomas • had done-with the £4OO. When he asked her if she had any money she said, No. ■ It was not true-to say he had run away from the McNeill court case. When arrested he told the Sydney detective that in any case he would have' returned by the next boat. Had it not been for the illness of his boy he would not have gone away. William Charles Deem, of' Alessrs. Weston and Billing, said he had attended to the dissolution of partnership agreement. He gave evidence concerning dates and signing of that agreement and the agreement with McNeill. There was a large number of spectators in the body of the court when Air. Justice Ostler commenced his sum-ming-up after the evening adjournment. He' said the jury had the right to find Thomas guilty on one or more counts, but if they had honest doubts they should give him the benefit of them. His Honour explained the evolution of the law relating to debt since Roman times. Even, in England until comparatively recently it was customary to imprison a debtor unless he paid, jie said. But as times’became more the Bankruptcy Act came into force, j This gave the debtor protection, when I he behaved in the prope-r .manner. .. If he disclosed his true position and assets : to the asignec and had shown he had ! acted honestly,.he went free arid absolved from those, debts. ...

' PROVISIONS OF THE ACT

But there were certain penal provisions under the Act to deal with fraudulent practices of one kind or another by a bankrupt. Failure to pay was .no crime, but when the debtor bad the means to pay and either hid or sneaked out of the country with the money fairly belonging to his creditors he acted just as though he had stolen it. That sort of conduct was regarded as penal. Before the jury could convict on the first three charges the Crown must have proved the conduct of Thomas was fraudulent, that he took the money and bolted. His Honour pointed out that the defence raised was not that Thomas did. not owe all the money, but that he did not owe some of it. Therefore, it was said he was justified in bolting and not paying any. The jury were the sole judges. Were they going to say that was an honest defence?

“If .that is the sort of standard of commercial morality in New Plymouth, I don’t know what It is coming to,” commented the judge. “It is going to affect your pockets, gentlemen, as well as. those of McNeill and Oliver.” j His Honour proceeded to an exhaustive: analysis of the evidence relating to Oli-

ver’s debt. Referring to the arrangements made regarding Oliver’s interest in the farm his Honour said that for 4£ years Thomas . had rested content. Suppose one of the jurymen, as a tradesman, settled a partnership account and heard nothing about it for 4-. J years; he would feel very aggrieved if the person concerned at the end of the period came to him and claimed it was not settled. However, AlcNeill had gone into the accounts again 4J years later and had shown that the figures were almost exactly the same as before. Surely Thomas should have abandoned all other claims when he entered the agreement with Oliver? TWO GOLDEN RULES. His Honour said there were two golden rules used by the courts—(l) That a scrap of writing was worth yards of words afterwards, and (2) that actions spoke- louder, than words. In' the light of these ’ rules the judge'examined, the conduct of Thomas and advised the jury to adopt those maxims w’hen they retired. Oliver had denied the asser-, tkm that he agreed to.take the £5O and had supported bis denial by the production of a letter in which he said he would be-prepared to accept £75. No doubt he was getting a bit sick of the business by then and was prepared to get out of it for £75. Air. Croker- interrupted to ■ point out that Oliver in evidence had said "I don’t remember agreeing to take £50.” His Honour: That is so, but I prefer I you not to interrupt • me. ' There is no whatever that he agreed to rtake £5O. After dealing lengthily with the accounts owing to Oliver and AlcNeill, referring to the charges separately and recalling Thomas’ conduct, his Honour asked the jury if they believed that Thomas really landed in Sydney with only £5 in his pocket, and the story about Airs. Rawlings. receiving the money. The only thing they had from her, was a receipt. They had only heard of her thus late. Was it not more.likely that the truth slipped out when Thorrials told AlAsbn in New Plymouth' he intended going to Australia to buy a farm ’ Regarding AlcNeill’s account, ■ Air. Crok' • had disclaimed ah imputation of dishonesty against AlcNeill, although from the 'way the questions had ‘ been put his Honour had thought there were Imputations. However, counsel had denied that. “Are you going to accept a defence that because a man says he does not owe all the money he has the right to fun away and not pay at all?” asked his Honour later. In conclusion, he said he had been very surprised to hear Air. Croker say it was on his advice that Thomas had refused to give information, and he was equally surprised to hear there was no duty on Tho; mas to do so. If that were correct he would say it was most negligent. The duty of a bankrupt in this respect was clearly set out in section 138 of the Bankruptcy Act. After his Honour had finished Air. Croker said .some of the judge’s remarks had reflected, on him personally, and he therefore asked leave to make an explanation. His Honour had directed the jury regarding the duties laid down for a bankrupt under section 138, but counsel pointed iput that, in- his address to the jury he had distinctly said he had advised Thomas-to fulfil tlie whole of

his duties under sections 58 and 59 bfthe Act, .and headed,: “Part. 5:. Duties of a .Bankrupt.” Aledlcy, the Deputy-Offi-cial Assignee, had admitted in the box that he had not asked Thomas for the information. His Honour said he was glad to accept Air. Croker’s explanation.