SUPREME COURT

Dominion, Volume 13, Issue 59, 3 December 1919, Page 3

SUPREME COURT

ALLEGED MISFEASANCE DAVID JOSEPH NATHAN'S CASE His Honour the Chief Justice (Sir Robert htoutl delivered reserved judgment in the bunrenio Court in Banco yesterday in the caso of the Uniteti Farmers' Co-, oprativo Association, Limited (in liquidation). v. David Joseph Nathan, which ww heard last week. "This was an application under the Companies Act," observed tho judgment, "ealliut: upon David Joseph Nathan to show cause why ho should .not account to the liauidator of tho United Farmers' Co-operative Association for tho'value of all benefits secured by him under a certain asreement dateo! June 9, 191G, made bv him with the W.F.C.A., and whv an account should not be taken for that purpose; or in the alternative why he should not be liable to contribute to the assets of the United Farmers' Association as compensation for his aliened misfeasance as a director. Tho misfeasance alleged against him is that lie .was a director of the United Farmers' Association at tho time ho entered into the a a£reement with the AV.F.C.A. He also was a director of the W.F.C.A., and also a director of Joseph Nathan and Co.. Ltd. The agreement • gave him .£2OOO as a commission for his sendees in the winding up of the United Farmers' Co-operative Association." All that the Court had to do was to see that Nathan was allowed out of tho ,£2OOO the costs of tho iinuidation and any sums which he might actually loso out of his liquidated debts that he lwd taken over. He lost nothing in this respect, and therefore the only sum that he was entitled to claim was the amount of the payment of the costs of the liquioation. He claimed as .costs travelling expenses on various trins to Masterton. "These expenses were for trips," remarked His Honour, "incurred previous to the linuidation. and I cannot conceive, therefore. how they can bo termed costs of tho. liouidation. That applies to all tho items in the list; amounting to .£130." After referring to othor items not 'contested. and to those to be settled by the parties, His Honour said: "The next three items come under one head— 'amount paid to W.F.C.A., Lttf., under 6alo nnd nurchase agreement.' They amount to -.£262 Is. Id., nnd they are important. They aro amounts that were naid bv Nathan to the W.I'.C.A. under the guarantee given by him in the agreement. The position was that the United Farmers had .£IB,OOO which was placed in tho hands of tho W.F.C.A. to hold for the United Farmers, and instead of pavini: the money to tho liquidator it was agreed that shares were to be taken in JoseDh Nathan and Co. to the extent of 18.000 shares of £1 per share, and Nathan miarantecd that the shares so taken should pay a dividend of dC6 10s. per cent, per annum. Under that agreement he paid this amount of .£262 Is. Id., nnd ho now claims that he has to be allowed this in his account. He can only be allowed it if it was for costs of the •linuioation. or had any reference to the debts lie had guaranteed. In my opinion. if. is clear that those sums have no reference to either of those items, and therefore, in niy opinion, they are not 1 recoverable, and his claim for this amount .£202 Is. Id. must be disallowed."

At the hearing Mr. T. Young appeared for certain shareholders of tho United Fanners' Co-op. and Mr. C. P. Skerr?tt. TC.C.. with him Mr. M. Myers, for Nathan.