LUXURY YACHT

Timaru Herald, Volume CXLII, Issue 20505, 25 August 1936, Page 11

LUXURY YACHT

RECOVERY OF COST SUIT AGAINST FORMER OWNER By Telegrapti—Press association WELLINGTON, August 24 The cross-examination of McArthur in the ownership of the yacht Morewa case, was continued to-day. Before continuing the cross-ex-amination, Mr Watson asked leave to amend the statement of claim by adding a further alternative cause of action. This, said counsel, was in substance based entirely on defendant’s own evidence on Friday afternoon, which, it was contended, spelled out a further alternative cause of action against himself. Mr Watson said McArthur stated in evidence that in December, 1933, he agreed with the Pacific Company to take the yacht over at cost price, and that he was to pay for it by assuming the Pacific Company’s liability, pro tanto, to the Sterling Co. The amendment it was desired to make was that McArthur had never discharged that liability to the Sterling Company. Mr Tripe, replying to the application, said it was highly unusual for plaintiff to amend a statement of claim after the case had been completed. In the present case it was unquestionably embarrassing to the defence at this stage, as it had not had time to consider the amendment, which might alter the whole form of the defendant’s case. His Honour allowed the amendment, saying he could not see how the defence would be at a disadvantage. Mr Watson asked McArthur whether he disagreed with the statement in the report of the inspectors, that the Sterling Company was hopelessly insolvent. McArthur: From the point of view of the Investment Executive Trust that was quite untrue. Mr Watson: Never mind. Do you agree or disagree with that statement? McArthur: That gives a very untrue— His Honour: Do you agree or disagree with the statement? McArthur: I don’t agree. Mr Watson: Perhaps you will agree that it would have been very much more solvent if you had not stripped the company of a very substantial portion of its assets? McArthur said he did not agree. Called by the defence, Robert Arthur Glen, public accountant, said he had investigated the books of WynwoodSterling to ascertain the nature of the transaction regarding the yacht. It appeared to him the asset for the Pacific Company debt to the Sterling Company, including the debt for the yacht, was transferred to McArthuru. It appeared also that the Pacific Company debt was paid for by McArthur in the Sterling-Wynwood transaction. Neither the Pacific nor the Sterling Company in their balance sheets claimed either ownership of the yacht or any money owing in respect of it. Donald Gordon Johnston, public accountant, corroborated this evidence. This concluded the case for the defence. Mr Tripe, addressing the Court, said the facts were that McArthur agreed to buy the yacht. He obtained a legal title with the Pacific Company’s consent and paid for the yacht by taking over as at February 29, 1934, the Pacific Company’s liability to the Sterling Company, and by giving consideration therefore by the cancellation of £60,000 worth of Sterling debentures which he at all material times held. Mr Watson submitted that defendant had not given consideration to either of the plaintiff companies for the purchase of the yacht. McArthur, he said, was a man who would say anything to satisfy his financial greed. He came into Court as a man whose financial depredations were of such a nature as to warrant combined action by three Governments. Mr Watson dealt at length with the Sterling-Wynwood transaction which he described as being tainted with greed and avarice. The books, he said, contained no record of any payment whatever having been made by McArthur for the yacht. His Honour said he would take time to consider his decision, which would be given next week.