BREACHES OF TRUST

Wanganui Chronicle, Volume 80, Issue 215, 10 September 1937, Page 8

BREACHES OF TRUST

j. \v. s. McArthur FINDING OF THE COURT HELD LIABLE FOR £19,340 LEGAL ARGUMENT TO BE HEARD [ Per Tress Association. J WELLINGTON, Sept. 9. A finding that John William Shaw McArthur, company director, of Wellington, had been guilty of breaches of trust—or misfeasance—while director of the Investment Executive Trust of New Zealand, Ltd., now in liquidation, and was, therefore, liable to account for £19,340 to the assets of the company, was reached by the Chief Justice (Sir Michael Myers), in a reserved judgment delivered in the Supreme Court to-day. The judgment, however, was deferred to allow counsel for McArthur to raise further contentions if desired. On one of the breaches of trust alleged His Honour found for McArthur. The following declarations were nought by the Public Trustee: •‘That McArthur, having obtained an allotment to himself of 16,750 ordinary shares of 2s each in the capital of the company on February 25, 1931, was party to procuring the issue to himself of 16,250 of the shares as fully paid for a consideration purporting to be money paid to him out of the funds of the company for service rendered by him to company, but being, in fact, an invalid and improper consideration designed to conceal the true nature of the transaction which, in the circumstances, represented a gift of 16,250 shares from the company to him. “That McArthur, having obtained an allotment to himself of 193,400 ordinary shares of 2s each in the capital of the company on or before May 26, 1933, was party to procuring issue of the shares to himself as fully paid and, in breach of his duty, accepting on behalf of the company, as the ostensible consideration therefor, certain debentures held by him in the British National Trust Ltd., the circumstances of the issue of which either rendered such debentures an improper and illusory consideration for the directors to accept for the shares instead of cash, or constituted such debentures, an asset acquired by him through misuse and by utilisation of the Investment Executive Trust, a breach of trust that made him accountable to the company for the debentures.’’

A further declaration was sought that McArthur was liable to contribute £20,965 to the assets of the company as compensation for a breach of trust and the Court was asked to order him to pay that sum. or whatever the Court directed, to the Public Trustee, as liquidator of the company. Alternatively, the Court was asked to declare that 38,080 shares in the company (the balance of a parcel of 193,400 shares still remaining in McArthur’s name), credited in the company’s books as fully paid up, were contributing shares on which no part of the capital represented by them had been paid, and that McArthur was liable to be placed on the “A” list of contributories of the company in respect of them.

ALLEGED SHARE HAWKING APPEAL AGAINST CONVICTION REFERRED TO FULL COURT [ Per Tree, Association.] DUNEDIN, Sept. 9. An appeal to the Supreme Court by Harold Calvert, Wellington, share salesman, against a conviction on a charge of share hawking by Mr W. H. Freeman, S.M., Invercargill, was heard at Invercargill by Mr Justice Kennedy, who has referred it to the Full Court, which is sitting in Wellington during the Court of Appeal sittings. The case arose out of information lodged that Calvert had gone from house to house offering shares in the McArthur Trust to debenture-holders in the Investment Trust and the defendant was fined £2OO.