Judge Withdraws From Standard Shares Case

Press, Volume CVI, Issue 31086, 15 June 1966, Page 3

Judge Withdraws From Standard Shares Case

(New Zealand Press Association) DUNEDIN, June 14. Mr Justice Gresson today disqualified himself on personal grounds from proceeding with the hearing of a claim for £8,427 10s in the Supreme Court, at Dunedin.

The claim was being made by the Standard Insurance Company, Ltd., in liquidation, against Thomas Kay Stuart Sidey, as sole executor by representation in the estate of David Baxter. It was alleged in the claim that Sidey was liable to meet the call on 16,855 shares in the estate on April 9,1962.

The claim began before Mr Justice Gresson today. The company’s claim was heard and after brief opening remarks by Sidey’s leading counsel, an adjournment was taken. This was followed by discussions with counsel in chambers and when the Court resumed after lunch his Honour announced his disqualification.

He apologised to counsel and said that he was reasonably confident that another judge could be found and the case could proceed—possibly in the week beginning June 27. The company was represented at the hearing by Mr E. C. Champion and Mr E. J. Somers, both of Christchurch. Sir Wilfrid Sim, Q.C., with him Mr C. B. Chettleburgh, appeared for Sidey. Mr Champion said that on November 28, 1956, Sidey was the sole executor by representation of the estate of David Baxter. This estate was the holder of 28,205 standard shares, which on January 5, 1960, were paid up to 10s. Between September 17, 1958, and August 15, 1960, Sidey transferred 11,350 shares, leaving the estate the registered holder of 16,855 shares.

Of these 11,350 shares, he transferred 10,000 shares to himself as a person beneficially entitled, and sold the balance, 1350 shares, for £2335 12s 6d. Between 1956 and 1960, the total dividends from the shares were £4240 6s 3d, said Mr Champion, and these went to Sidey. Call Unpaid On April 9, 1962, the Standard liquidator called up the 10s unpaid on the shares. The call on the estate was

£8427 10s. This sum had not been paid and was now being claimed by way of damages. Sidey, as executor, had no assets in the estate of David Baxter, other than the 16,855 shares which were worthless. It was considered that Sidey, as executor, had distributed assets of the estate without making provision for the contingent liability on the shares, said Mr Champion. Mr Champion said there was no question about Sidey’s honesty. The concern was only with the contingent liability on the shares which had not been met. Defence Case Sir Wilfrid Sim told the Court that the case was “an action for damages against an executor in his personal capacity.” He said that it did not fit the pattern of earlier cases of a similar kind. There had been no case like it previously, and the circumstances of it were not likely to occur again. The Standard Company was described by Sir Wilfrid Sim as a company with “rocklike” security. Sidey was a director and had implicit confidence in the company which in its long history had never made a call on its shares.

The only assets Sidey had in the estate were the shares in the Standard Company and

these shares were destroyed by the company itself. Calls had been paid on the shares which Sidey had transferred to himself, and presumably calls had also been paid on the other shares which he had sold out of the estate. Sir Wilfrid Sim then examined in detail the share transfers which had been made, and in doing so emphasised that the company had gained effective shareholders who had paid them calls when these were made by the liquidator.