E. P. GILL'S ESTATE.

Press, Volume LIV, Issue 16148, 28 February 1918, Page 5

E. P. GILL'S ESTATE.

MEETING OF CREDITORS,

EXTRAVAGANCE DENIED.

Matters were somewhat lively at times at the adjourned meeting of the creditors of E. P. Gill, sharebroker, yesterday afternoon, and tho proceedings closed with an understanding that the Official Assignee (Mr T. D. Kendall) should take legal advice with tho view of further steps being decided upon. Bankrupt was questioned at considerable length regarding his dealings in petrol econoxniser shares.

The bankruptcy dates back to last year, the meeting of creditors having been held on September 3rd. At that meeting bankrupt's statement showed: —Due to secured creditors £315 Os Od (tho securities being sufficient to satisfy), and due to unsecured creditors £1129 3a lid. Practically bankrupt's only asset was an interest in a patent roadmaking material.

At yesterday's meeting two creditors were present, and Messrs A. S. Taylor and F. K. Hunt represented other creditors.

Tho Official Assignee said that ho had not been able to get any reply from Mr Blackman regarding the road material patent. Mr Percy Herman, who was interested in the scheme, had written that thero was no ciianco of launching it in New Zealand until Blackman could visit .'the Dominion. A. North Island firm, which had been communicated with regarding bankrupt's interest in certain land noar Lake Taupo, stated that. Gill was ' offered 5 per cent., commission on.,any capital he brought in; but he did not possess any interest, directly, or indirectly, in the land.

Mr Hunt said that ho appealed for a man —Cullen —from whom bankrupt was alleged to have obtained money Dy fraud. The Bankruptcy Court was provided to meet cases of hardship, but was not a place where persons could escape their criminal liability, or the effects of deeds, that were incurred by fraud.

Tho bankrupt was sworn, and was examined by Mr Hunt, who produced a letter, dated January Bth, 1916, written by bankrupt, which stated:— "As already mentioned, I am acting for the inventor, who holds most of the paid-up shares, and can put some under offer to you at 305." The offer was to be open till tho Wednesday following. Replying to Mr Hunt, bankrupt stated that he received £70 from Mr Oullen on-January 20th, 1916.

What did you do with .that £70? — , I kept the £70. Bid you put it in your own pocket?— Yes; but as I explained, I held an option on the shares from McKay, and the option to purchase was spread over * specified * time. Shares are sold every day on option. You never had the shares —Don't run away; let's get to the facts. In the agreement (i.e., the receipt), it was agreed to transfor the shares six months within the formation of the company. . But. in your letter under which you extracted ■ £70 you said you had the shares?—l object to the word ■ "extracted" ; ht) bought the shares, _ and blew their cost. 1 held the equivalent of. the shares in the written option.

Was. it honest of you to take that £70?— It was honest; my intention was to deliver the shares; the facts made it quite; honest. You had an option; why didn't yon acquire the shares? —For the reason that - 1 had several blocks to fix up in the samo way. . Mr Taylor: Why didn't you exercise yoiir option?—My agreement with McKay "was that'l was to have a settling Up on a certain date. I got some of the shares transferred.

. Did .you • get Cullen's? —No;. but paid on the same basis goi theirs. Unfortunately before I could pit it through I was unable to do so w respect of Cullen's and another's. Events have, shown that I should have delivered these shares, and I regard it.as an obligation to those two persons.

Bankrupt, replying to Mr Hunt, that at the time mentioned in 1916 he was not in affluent circumthat he did not at that period "Ske his wife to Sydney; that he was not then living at Sumner; that he nad never owned a motor-car, and *.hat jnai children were taken from Nelson CoUege at the end of 1914. . ~ av ® y°u any suggestion to make to epay these trust moneys, which bankJPP'jCy does not release vou from?— or not, I don't consider myself released. \ft t you any proposal to make?— ' offer i USe ma , kin g an y definite 7 ? I know what I can do; but insider myself released from jnis obligation by bankruptcy. In tie I not spend anything cn exce Pt' on bafe necessities. Hun* continuing, in reply to Mr , he t liat smca last September ii ad earned between £50 and £60 Sinn comi nissions—insurance comroisine?^| CQm ® issi ? n . 8 on the sale of cominrr iv ; he had been sellK wholesale grocery lines. He had A? Wholesale Club. csttl ayl ° r: You admit that in other dpi-JL? 011 ve taken money from other EPS*" vou did from .Cullen?—Yes, their sharS exCeptlon they Vo^J?* nt Vv as April of last year L tin » considerable sums from a man iWa i?V n 9 d « to deliver to him.— No. Bankrupt stated

that lie went to Auckland, on his return from Sydney in 1916, to negotiata with Mr Percy Herman regarding the road-making material. He bad stayed at the Royal Hotel and at Glenalvon whilst in Auckland. He had borrowed £15 in Auckland for Blackman, on Blackman's cheque. It was utterly untrue that he got half the amount. He had written repeatedly to Blackman and tried to get the money from him. "Was it necessary for you to live at an expensive hotel?—ln view of the business wo had in hand, it was almost a necessity. I was dealing with the Auckland City Engineer and Town Clerk, and they were writing to ire at the hotel and seeing mo there. Was it necessary for you to live so that your lavish methods and living attracted attention?—l deny that.

Do you deny that you were the giver of champagne suppers and so forth?— Certainly I do; that is entirely untrue.

Do you deny that while in Auckland you mixed up with members of the theatrical profession,—Certainly I do; these are allegations inspired by malice on somebody's part. People wiio seem to have knowledgo about it?—No knowledge at all; or no respect for truth. Mr Hunt: Have you ever done a single day's work except dabbling in shares and floating bogus companies?— What right have you to ask? I have done work which I consider at least as honourable as any legal work! . Tell mo what work you have done other than floating companies and selling shares? —A man can't do every kind of work. I have worked very hard at sharebroking. You have' a lovelv idea of the way of doing it?— You are hero for facts, and you will get answers to questions regarding facts. Tho Official Assignee: Why didn't you supply these shares to Cullen. ' It seems to me that it would have been a simple matter to do so when you received his £70?— The arrangement was that I should make up my requirements to a certain date: up to March 31st at 255; up to April aOth at 30s; and I was to put them through in one transaction.

Mr Hunt: Were you acting for the vendor ?—Yes.

- Sir Taylor: It was in January, 1916, that you took this money from Cullen and didn't deliver the shares, yet last year you again took money from a local citizen for shares and didn't deliver them? —I have no recollection.

I refer to the Wood's transaction? — That was a different thing.

Mr Taylor sa;V that, in tho instance referred to, there was a collateral arrangement whoreunder the person who advanced money to bankrupt was to get' shares. This showed, ho submitted, that a course 'of conduct had been carried out in respect to theso petrol eoonomiser shares.

Bankrupt was questioned at some length respecting a parcel of petrol econoiniser shares he had sold, but failed to deliver to one Duncan, in Wellington. Duncan had re-sold, and bankrupt's failure to deliver had. necessitated Duncan delivering some of the same shares he held. He could not remember when he sold to Duncan. To Mr Hunt: The shares sold to Duncan were McKay's, and ho (bankrupt) sold as agent. , , . , j. Mr Taylor remarked on the fact that the Cullen transaction was in 1916, and the Duncan transaction later in the same year. Mr Hunt: Then there is tho transaction to ,yonr client in which tho shares were collateral.

Replying to the Official Assignee, bankrupt stated that he had a record of how the shares were dealt with. Ho had got delivery from Godwsird and McKay of the shares he had under option from them. Did any of those who bought these shares i.end a cheque, as Cullen did, before tho shares wore delivered? —Yes. Mr Hunt, at this stago, put in bankrupt's letter and receipt to Cullen, and remarked that bankrupt had said, on one hand, that ho was a broker, and on the other that he sold, on his own account.

Bankrupt: That is quite a common occurrence. The fact that he . is a broker doesn't prevent him selling on his own. Mr Hunt: Are you a member of the Christchurch Stock Exchange?—No; I hold a license as a sharebroker. ' The Official Assignee: Bo you sell according to the rules of the Christchurch Stock Exchange —Yes.

Mr Hunt: Have you a license for this year?— No. , Did vou apply for it this year?— No. Mr Hunt: I should not, if I were y °Mr Taylor: What did you pay Godward and McKay for the shares ? — Twenty-five shillings. And sold to Cullen at 30s?—Yes. Mr Hunt: Yet you wrote: —' I am acting for the inventor," and now tell us that you got them for 255, and were selling for yourself. , , , Bankrupt: To my certain knowledge, it is commonly done. Mr Hunt: Two wrongs don t make a It is a recognised custom. Mr Hunt: A very bad custom, wen, there is an Act of Parliament to prevent it—the Secret Commissions Act. (To bankrupt): Is your conscience clear in this matter of Cullen's. Bankrupt: No. certainly not; I recognise that I am under an obligation to this roan. You sav there is nothing wrong in what you did? —I say, no wrong intent; it was certainly wrong. , This is the first time you have used the word "intent." You say you were justified in taking Cullen s and Duncan's monev? —Yes. " , Mr Tavlor: Regarding debtor s .extravagance, I have asked him questions which he has denied. I n ®. w as i v 'W ll as to his entertaining ladies or tno chorus. .. . Bankrupt: I eay thai; it an in-

famous suggestion to make: there is not a particle of truth in it! i r ou still deny that you carried on in such an extravagant manner in Auckland that it became notorious? —It is utterly untrue. You deny that you entertained people like that? —Yes.

The official assignee: Would it not have been possible in 1916 to have bought, elsewhere, shares to supply to Cullen ?—lt would have been possible to buy them, no doubt. Those were unavailable that were under offer to me. It was my duty to buy them. Mr Hunt: Did you try to buy them i —I tried my utmost to put myself in. a position to buy them. Did you not tell him that you were buying them?— No. Did you not write, in July, 1917: — ''I am now negotiating for the purchase of 50 fully-paid-up shares?" —Yes; I was certainly making an offer to McKay, but was unable to do it —nothing came of it. I have never, for » moment, considered myself freo from my obligation to Cullen and D-uncan. Mr Hunt moved: "That the matter be placed in the hands of the Crown Solicitor, with the view of prosecuting bankrupt." The motion was not seconded.

The Official Assignee said that it was not necessary to put the motion to the meeting, so long as it was the wish of the meeting —he could act on it on his own initiative. Ho recorded: That matters arising out of this bankruptcy bo placed beforo the Crown Solicitor for advice, and that further action be taken if counsel so advise*.

Mr Hunt suggested that bankruptshould not be allowed to take out a sharobroker's license.

Bankrupt: I have no intention of doing so; there is no business to be done. -Mr Hunt: If you did, I would feel it my duty to ask tho Official Assignee to advise that one should not bo issued to you.