THE SHAW CASE AGAIN.

Dominion, Volume 7, Issue 1979, 9 February 1914, Page 8

THE SHAW CASE AGAIN.

■ ■ -—»' '- ■' ' Y FINANCIAL OPERATIONS. SCATHING REMARK 6 BY JUDCE. (Br AasMtattasJ Chrlstohuroh, February 8. Judgment in what is known as the Shaw case was delivered by Mr. Justice Denniston at the Supreme Court ou Saturday morning. In this suit the ' Official "Assignee (pjaintiff) asked for a declaration that an agreement made between Samuel Trevurza, Walter Shaw, and the Tim'aru Property Company and all transfers and related' documents be adjudged void, or be set aside, as . against plaintiff upon such conditions as tljo Court should deem just. The ' ground of the application, shortly put, was that the agreement was, as against Shaw, inequitable and unconscionable. , His Fabrio of Fraud. After dealing exhaustively with the evidence and commenting thereon, His Honour .said: "It was urged that Shaw was, throughout the transaction, without independent professional advice, but ■ he was himself a solicitor. Had he gone through the form of consulting another solicitor ho would; have done what he ' did, with the solicitors with whom lie had relations during the transaction. He would have lied to ,and deceived them. 'Why- should he' invite or require outside advice? Then was ho in distress? That lie was, in fact, in the deepest water financially is now abundantly evident, but lie certainly was not so to the knowledge of tho defendants. He in fact represented himself as more than solvent. It is suggested that the' circumstances of the- transaction,should have aroused suspicion. I have said t'llat I see no goorl reason to doubt the good faith of all those who, assisted in ■ carrying tho transaction out. When the amount-' of Trevurza's. alleged.! indebtedness led the solicitors for the defendants to question ■ Shaw ho gave them most definite assiirances Which they, honestly accepted. Much reliance . also.had been placed on the suggestion of "weakness of mind,' body, or dispositions—that is, that he was so mentally and bodily upset by the strain of creating and supporting his .complicated structure of embezzling and fraud 'that he was unablo to protect himself. The answer to this , seems to me to be that, in a small community where the, slightest slip might he fatal; he was "able to construct a scheme and'carry , it out for years beforehand for months after th 9 execution . .of tho .agreement.' Witnesses as to, whose honesty I am satisfied,'- testify as to' his. coolness and readiness and coherence before and at the date of the agreement. Against this is set tho evidence of. two'witnesses who speak to his having' broken and shown signs of mental and physical disturbance.' ' « Hjs State of Mlrid. "On this point there was tendered in evidence for plaintiff a diary or book of Shaw's, containing®ritries cov- ; cring the i period beforo and after the transaction, which,' .it was claimed, would show that his mind was unhinged. Independently of the ■ danger of allowing such evidence as lending itself to fraud; I doubted if it was admissable. It certainly would not be admissable if a knowledge, of Shaw's state of ( mind was. essential, as to which I have already expressed my opinion. I may, however, say that, in any case, I do not consider that the diary does not indicate any'such, state of mind as would be evidonce of the absence of mental capadity. The entries are tho .outpourings of a fervid and quiet man, conscious of criminal' fraud, and yet with strong religious feelings and beliefs in the direct intervention of , Deity in answer to prayer, could be shown' by many well-known .instances, this is not an uncommon combination. That he was deeply concerned as to his position, and ih that sense distressed, is obvious.'_ That, however, is not the sense in which 'distress' is 'used... position of Creditors. "In this connection there is an element '-present which 1. have not been able to ■ find in any reported case. Shaw was ■' not only eager —even insistent —in -in- ! during .and completing the transaction.' iHe employed for, these purposes fraud ' and falsehood. It is not a question ■ 'of merely concealing facts. He, on his own admission on oath on this trial, deliberately, understated' Trevurza'n liability, arid he outrageously mis-stated his own. financial position:; / Ho procured a statement- from his banker which he knew to be untrue, to bo shown to other parties, to reasSur® them. -He concealed, facts whioh, if stated or even hinted'at, would nave at once put an end to his negotiations. When asked why, if he were solvent, lie was releasing so much of Trevurza's liability he gave a false but specious reason, his real ground was the fact that any inquiry into his relations 'with Trevurza. and a consequent examination of, his accounts would bring the entire fabrio. about .his ears. Had he answered truly the questions _which were put to him _ at the time of tho settlement, it is - clear that the matter would have proceeded .no further. This action is not, it it is true, brought by Shaw, but by his offi-. ; cial representative', on his ' bankruptcy, and for the benefit of his creditors, but it was admitted—in, my 'opinion, properly admitted—by counsel for plaintiff that the assignee stands in no better position than bankrupt. Supposing that Shaw, by somo miracle, had been ablo to retrieve his position • and " escape bankruptcy, could ho have been heard? Or on his death, could his represerita- ~ tives have been allowed to advance this claim? I know no Teason—and I have found or been referred to no'authority —which suspends or modifies in..-the case of a' plaintiff claiming relief for a hard and unconscionable bargain, the doctrine that who comes for equitable relief must como with clean hands. Judgment will be for defendants." , ' Application to.Disbar Shaitf. Upon the annlication of W. Hunter ' on behalf of the Canterbury Law Society, Mr. Justico Denniston also made an order directing Shaw to appear before tho Court in banco to show cause why he should not be struck off the ro'l - of barristers and solicitors. The Law Society's application was based on the ground that Shaw, at a sitting of tho Court, held at Timaru on September 1 last, was charged with having committed certain indictiblo offences, as follow:—Between July, 1907, and Decomber, 1912 Theft of, £2040, stealing valuable security, £300; stealing valuable security, £250; stealing valuable security, £600; criminal breach of trust, £2022 2s. 6d.; criminal breach of trust, £250;, criminal breach of trust, £650; falso pretences, £475. ' Shaw, thereupon pleaded guilty to all the jhaTges. ;