SUPREME COURT.

Dominion, Volume 2, Issue 515, 24 May 1909, Page 9

SUPREME COURT.

cqu ESTibrir ;'fl^^ 0 rfmKADGOLD: VERSUS . OFHOIAL ; V 1 aotibn- totwceii : \Gcorgo Treadgold,'; set-'Official-''Assignee,- iii: B» llk " ?< the'' property Albert. Clarence )a:\bankrupt,,icamo;. on.;for, hearing ':• '-before ;j\h\: ; Justice' Cooper on. Saturday....; -i 'statement'or:;claiin:setforth, -that on ;,;'April' 1/ 1908, Albert ;Claronce Elliott,agieed .-•'■•i-with 'plaiiititt' toV.exep'ute ;a':mortgage ; ,pver V part iseotion:! -of ::-W6llington,lfor;:£4()0 |; ; subject to e*r i _.Ua '■ Elliott* was;■■' adjudged,bankrupt, :^SM , aefondanti:wa S^officia^a S |.gnee fl Or, thati:plainti|, is & a ■transfer; ; «■ tem 8 Vof ; :to: ; ,and '/ (2)■ that.: defendant-might; -bo/.ordered to *■■ BpMincally;;:poriorm:;th<); : ,agTepment, by ,exe;;':^;*^;,.K^f, :■ '■; ■;; It ■wbs asserted m. vde-.^action-?as' the Qmeial^Assignee,haJcontrol : ;:ofthis : ostate.:: ; ;lf: it'.were proved ;that the '.•■agreement was ,exccuted,,by Jllliott, it .wag ■.•.■■■cxeoutod'.'.withia" three;; i-c of -.Elliott's bankruptcy,--and: •; with ,a. view v c.; 0 f 'giving Lplaintiff r .^' preference;over tno ''-odw crSlitors ; estate.'.., lt ;was & also alleged- ,en- '■: cumbrahcer .in.,- good : . faith.; ,:; :\-£V: ■■ /■ :,;-.-• &£iatf, SkerrettNwith. him ftappeared- onVbehalf>f;p!aintift.,; Mr .;; Young. ;' "fo/tie Official! Assignee j, ff.r. &Mri;J:'-;\),sAl'tirath,; ■: who ■ulfamatoly pui--Wchaswi;;tha;'proportyV;; ; ;U? : ;-:;- v :•.'. :>:■ \ . v,-._i '% « pn ■behalf of said : ;that m ; who .-purchased the propertyjatauction .for.-±/IUU, : ; ■■■ had-noticeSoothe- '■security,',-and,; made tne. :-: ; purchased was >.'•■ qaite.unablo' ;;the, defence. ■_ ■■ ; His;Honour::The;'defence implies: :>' transaction.was: iraiidulent.;>;.'.-'-^.-v;-?v v : ■■' Mr.''Skefrett:' An- allegation of that. kin*. •'; couldfpnljf'be ;dealt %ith .-m the./ Bankruptcy. -■-. CoiirtS ; ; ■-.';.•'"';''":i"- ; W;'•'■: '■'' ?>> &-.i--U. -. ., '■■'.■ '.-.';- ;:'•: vE; : C; ?lJevyey,'\barrister,v deposed/that tne ■. agreement ih-questioh-was"executed, by ,lU- ■ 'liottin'hiß',p;resence.; : :";ElliottvWd :him:thac ■the' mortgage.'represented', his , .indebtedness, -as- a:result joint: investment : -transactions; :?Ellioti;v;had y owed; ? ; plaintiif »£67o^.but'Hliev-:amount' ,had ;o)een. y'cb'minisbed ■byipaymonts; of: ilSQj:and. ; ifi2*. '■: 1 'Thore had to be the'Kbalancev(£32Q) ■;' a further^um ; bf;£Bo,:.being:bonus-for,delays. ■' in'conne'ciion :;;'ti6n;' ; :Altogether;there;were;:,he; understood,. • six" transactions'/between- plaintiff and . El-;;,:i^r^^f^fi^-'SiH^iyW^-^r:''

■^■•:- : Tb' ; '&l : - ; Yb.ungV" : !Withe'M:was'--s61ioitorand. ■ : Elliott , 'secretary-:"of the.Sunnybahk Estate; 'In Deceinberi 1907, hevpas not aware, of any '■•■■■difficulty-"about^finances: on■.■ Elliott's,ipart.-. ' .'During' Jlaich, : '.twp. o^ •■three ■ directors - saw '.; him : with';referiehce .:to'. : Sunny Dank: matters.;. :: Hβ was-not .awaro/.then; of any.niisappropriaW tions ?of V:Sunnyl)ank-/.nioneya.. Later'onVcomplaint.':was made ■ that JMuoM •■ had'not : ;accbunted-fpr;inoneyß recewod from ■'■"one '•' Shephprdvin :: :conriection-,with v the_ - pur-. '■chsio'bfVa"section."'. Elliott,explained"that'■;the i'mpney^'was , heldvbyihim ■on .-ittnst ;■; for ■^Shepherd ■ ■■"After-the ■'■Shep.herd in- '■:' Btructod , -witness '-tir ■'mately 'the- moneyVwaa.Prepaid,",by:.Elliott.' .'■■ Witness didnot •'■thre.aten" criminal iproceed- ■ ■ ings^agauißt'Elliottion: , behalf :of' Sunnybank /■Estate.>;->;;;v^¥- ; r: , 'v' '■-. ■ '■:■:. •:: : --Tp'Mr. I %av e r;Plaintiff.-was Satisfied vwith >■ the'■security>'whicH.was-' < give'n. him. ' told.him.that if he held-.back a. writ which •'" ho -had. been' instructed''to .issue on'.hehalf: ~of (Plaintiff h©:would;giye ; the J .ji(;cessary' se•"■sn'Hty; ■■'■ He said"that; he 'had- no mother' lia- . aind«that;;the'*.whole ,/:trouble v was K : tapse'd-'lirongh''-,^"; : ;cheqne- , nqt''''haying':beeh ■■'.■ honoured;.' : 'It' was ";ffomi b Mr. ; M'Gratlv..tnat ■■■■ iie' ;: gbt-'the-'first'inform'atibnfwith .regaTd;.to' •••■' Elliott'si';-exaci '.position.. ; ,: No ■■: proposal■■ was; 'atiarmeetini; :of..;directors ;of.'Sunny-1 ■ Dahk-'Estaie -in'VM?irch;;that Mr. M'Grath ; :.7eiaT'positi6n.'V.; : ''V;'.f- l ivV: i :.iy^ ', i At this"ißtage';liis -Honour"said that,.-.if . .plaintiff .Bucceede3,: ; the.; relief ;;tp Vwhich vhe was entitled;must.bo.limited,to a-charge ,oi this land for theJambtint of the mortgage. ':,v Mr. Skerretf:>.That;is:all'plaintiff asks.'

Re-examined, witness stated that at the aectinß 'referred to by Mr. Ncave a bonus .vns, voted to. Elliott. On behalf of the Official Assignee Mr. Young submitted that position was hopeless in September. Both plaintiff and Mr. Levvoy were aware of tlio fnct at the timo. To plaintiff's knowledge Elliott had dishonoured numbers of cheques.' Ho " alleged that Elliott was hurried out of a sick bed to execute the document in question. Mr.

: :;T:^vveylhad.^heycbritinued,; constant' : .Vcomm«nicati6n>with'JiimV. and had threatened, .'.(■ him with' jvarfaiitß ~of:' arrest in■, 'connection'. : ''-.with ;Sunnybankjinatters.-.': If -it wqr4 ■.debt- >.'. />t!b ; dominant'motive to ■\prefer; , , plaintiff, .'.or ];- : ' , if.;thore' , 'TraßV',waiit-v'pffpo!od:yfaith.'---then\the '■'-. mortgage "in. question \waa "a ; -.pre- ■. i \ferenco:-;?^'-'':^'4^i' ; .s^Y.2v:>/.v;';^/': ; ;':>\ : ;/:. , (Official■ : '■i'ssi(fneβ)■'■Eavβ .evidence that the deficiency in Elliott's es-' .;■■-; tate ■■£10,000.'■;; Plaintiff's' name ap•.;'peared:i.jn::Elliott's;:lißt:;of..iunsectired icrcdi- ■. .tors .for. £400, .and nqt; in-the. list,of 'Ee- ; :■ : cured creditors.-;-: Proof of claim had,not been <: r ii ; :-^P : - v : ; : ".-. ■■'■'■. : ; ,. ■ ■'. ;' Vr-To;^Mr.wSfccrrett:';Tyitticsa 'stated''■at, the , ■'■'■.; auctiotTj'sale (that: he ;Was:advised.that 1 plain- : ;, ; tiff!s':'claim' was'illegal,.;and ..that" if -.he- were. :.;, -.indemnified against.^costs:';ho.,would, contest :•■''■■;thfl.:claim.?'-:;\'-^.-v7''^--./:;'. : i-'v^.'-•'•';■■ "'; ■ ! 'y:\: :; ; '- >,; ;-ViWhov,advised-:you";inStho-^niatter?—Mr-■^iM'GrathK-::^;;; 1 ;;^;;;.;- 1 ;;^,;;!.-;/- ; :- \;}[ \./ : ■: ■;;.r iMr.'; ;Ybung:.: rendered .-j any , .bill iof ;costs.';in'^connection .with.-/ the ;J ■ matter P-r-Thero is biio from him 'against the' ':/■ estate.;■ : .'•' ■■ti-lp:;: ";''vi,v/;'; "-I'-V.'-'y •':.••'. v,'.'' : ,;'v.' ; ' : v ...-.!ls .'there.; : anything:;^^iri : ;the. estate;;to',pay,; ~■' vebstj,?—There' are: a few. pounds: I suppose ;,,-.they will'RO to'pay tosts.. ; -:" .■■';■•;. : '.. . : yAlbert Olarenco Elliott was th'e next.wit- : ;'_.'. n6ss. j Before 'taking ..the oath al-. .; ;■ lowed ito make .a 'statement. He' said that . he was a .conyicted;pnsonerarid.,that he had. . been-in. gaol: twelve months. ."iOnly. the provi■"ons;_day he had;been brought from Hanmor tbgive evidence! .' ; :Hp'liad not..had'an.pppqr-' :; tunity tt:;loqk:at iny-bopks'EO; as to '.refresh ;f his .:■;memory. '■{.<. He; Tvant6d..timo;to 'consider :-.';'.-:'these; matters.^'''",. ' ;'f~'-'- ]: , : . ;'".'■ ■'■■.-*' '■.-. ■ ; ; :: ' ■:".■• j'.'. ■■ His 'i Honour :: v Yours/is; ; a'Wery : . reasonable ; ■ S'V*-}■<>£;-: =;•:>'■.'. ; '." ■:■■''■■'■.■■' !'■ ,;' :> l Oontinuing, ■'witness !■ said ,-ttat ;on tho other , .;.-, cccaßion.that.-'he 'had;'givon evidence since;he I. had been; convicted the newspapors had stated _ ; nndor head, have tried to' -toll the truth. :;Evor;since'his bankruptcy. ho , ...had.'told the .truth'ywith regard "to , his • af- :. ; fairs;;. Questions/might arise which he could ..". not .answ'er'.'withpufc 'looking at the . dpeu--..■■■-inejrte..'-.'' '^•:}y^'r^r'J] :i :':" :: : '■'-'.■ ; .His Honour: If'you to look at any document yoii -will be allowed to do so.'.••'.

vWitness.stated thathe found he-wan in-. ■ TolTcd about; ohristma3,'l9o7. -He managed. . to 'keep"-' going by .borrowing ■■ from different . people by representing .to:'them :that;hohold . securities, !-an'd : .that' -tnoy could obtahva big of .interest as.profit, in a, short; period. : Bo "was not-doing ; any '-.business : 'at'' , the time. : Ono Shepherdifnrohascd a Sunny-. baiik section him for £100.' Witness placed : the.amount- to his own , credit. Dur- ■ ing March;-. '1908, ['whilst; he :was '■ Buffering from rheumatic fqvOT'ho sent a cheque to -Mr, ■LovTey.,.to v 'settlp for .the Motion.. -Elaintiff camp to'seo.him during hi 3 illness with reference to soT.orol of hie (witness's) cheques which had been dishonoured. ; On one occasion plaintiff; told him that Jnspito of tho fact 'that the SunnybaTik., account was not fully credited at the time-of audit ho would, epoak well of him among the other share-, . ; HoMmplwd. from ■their converse-: tion that-it .Was 'being talked 'about among the shareholders -that he was-to: bo prose- - asked him to settie plaintiffs debt;ho.told him' that plaintifi ; was havnig trorublo with hie bankers; -Among ',-. other-.things; L Mr, : Levvey had said that it jmglit;-be .necessary'-for him to issue a writ if.the'mattorwas'lnotsettled.. He washope-lessly,insolvent,at,-the-.timej :but:he did not wish plaintiff to be ;a '.suffered He. thought that :by K'iving {he vmortgage.he' would /cleair .innsolf of any liability to -plaintiff. .That was what be-fished to do ns plaintiff had been . such a. good friend' to .him..... Bβ - considered • Jia. 1 imong Jais cieditojsi, te«asse

ho believed he'had him to thank that he had not been '. charged with , iui'sappropriation in connection. with ' tho Sunnybank estatev No threats.of writs were mado against him until within, two days of the date of his meeting of creditors, .'"''.i-. , - '... ■•■'•■•:

( •. Thb; cross-examination' of'-witness, post'poned. '■'■'.. -. .'.'..'..V..'. • :.': '■' '■'..-'"■• '-. : Arthur Thomas'Clark, chartered accountant, Wellington,' who was next called as a witness,, asked if his evidence was not privileged in view of his professional relations to tho Sunhybank Estate. Syndicate. . _:. •His Honour decided to hear tho evidence subject to the point raised.': "'■..'. . _ . ■ Witness 'said .ho was':, instructed to audit tho books of : the syndicate/ and prepared a roport, wiiichwaS;, handed to the directors. Ho had a conversation with tho-syndicate's solicitor relative to Mr. Elliott's transactiohs.'"•.'.'■/?!-.■■.-.• : ■.•/.-.': :'-■"■■' ■" '.- ' '-■ ■'.'

''■ A.C,Elliott;was then cross-examined by Mr. iSkerrett. Witness said: he understood from' Treadgold that Clark: had reported ad■vorscly as tohis, transactions' with the'syndi-. cate.:.There was a credit to witness's name at the .present day in connection with the STndicato. Up to/March. 7 all his transactions with - the. syndicate- wero ; : in : perfept order. ■ He admitted showing Treadgold a che'quo for £2000 drawn by a New, Plymouth firm: on: a. Now .Plymouth:, bank, and -.saying that, ho had omitted to include the cheque in his account before. , He asked Trcadgold to:hold over the obequo for a couple of days. .A day or two afterwards Treadgold called on witness':in connection with tho cheque, but witness did not remember explaining to him ■that owing to.some. irregularity theVcheque had not been mot, but that tho.irregularity could bo.put right.in.a few days if Treadgold iivould wait. : If other, .evidence was to this effect ho would not 'deny it. Ho told .Mr.'Levvpy that .he -had this., oheque when, the latter threatened him with a writ. 'Hβ didLnotvthink he told.Mr. Levyey that he had no beside Treadgold. Hβ did not'think'he told "such a big one as that;"' V~:•': '::.•' ■•■■:■..'■; '-■ .■'■' :"\ '' : .■'• Mr. :Skerrett:...you think ..-that.that would have been too much, for anyone to. swallow ? — Witness:! should think so.r .■.'.,'' ■ •, .Witness,' continuing, said: -that, ho':, was keenly.desirous at that'.timo;to postpone the ineviUiblo.cnd. .'.'V-. ,' : \, ': '.. .■To Mr. Neave: When '.witness Rave the security to .Treadgold he owed him £400. He .owod other creditors considerably more than that. ;■■ ■ Ho; did; not know , ; whether Treadgold 'knew, or. when,he knew; 'that the securities given.him were:.valueless., ~ ..,: .'. ■'•;■ . At this point, the caso was adjourned till 'Wednesday at: 10.30 a.m.. .;-.■.-. ~ :.;-.'■'■'. ■'