CROWN CASE

Dominion, Volume 33, Issue 191, 9 May 1940, Page 3

CROWN CASE

Trial Of Chrystall And Aston CONSPIRACY CHARGE Second Day’s Hearing In Supreme Court SIX WITNESSES HEARD The trial was continued in the Supreme Court, Wellington, yesterday of Harvey Maitland Chrystall and Gordon Percy Aston, who are jointly charged with conspiring by deceit to defraud the former secretary of the New Zealand Racing Conference, Hartley Roy Sellers, deceased, of £6765. Six other associated charges include two of false pretences, one of theft, one of receiving and two of attempted false pretences. The case is being heard by Mr. Justice Smith and a jury of 12. The Crown Prosecutor. Mr. W. H. Cunningham, with him Mr. W. R. Birks, is conducting the prosecution. Mr. W. IS. Leicester, with him Mr. R. T. Peacock, is appearing for Chrystall, and Mr. D. W. Russell, Christchurch, for Aston. When the Court adjourned at 5 p.m. yesterday till 10 a.m. today, the sixth Drown witness was in the box. Evidence of Solicitor. Continuing his evidence yesterday, Alexander Cormack Jessep, barrister and solicitor, Wellington, said he understood Sellers had invested motley in the venture. It was somewhat indefinite what Sellers was going to get out of it. At the interview previously mentioned Chrystall said they had been conducting experiments at Nelson in some bay and out at sea. No details whatever were given and witness had some difficulty in obtaining the name of the inventor. Cross-examined by Mr. Leicester, witness said no agreement to give a guarantee was ever arrived at, but Chrystall said a premium of £2OOO could be arranged, to be paid in London. The term of the guaranteeing of the overdraft suggested was approximately three mouths. Mr. Leicester: Nou were quite satisfied on the Saturday morning that it was impossible to recommend the proposition? ■ Witness: Yes.

Both Sellers and Chrystall were extremely optimistic of the outcome of the proposition?—That is correct. Mr. Sellers was a genial type of man inclined to great'enthusiasm?—Yes. The effect of your probing was that the further you probed the less you got?—l was suffering from a lack of information. Cross-examined by Mr. Russell, witness said he never saw Aston at .any stage. He had decided it was impossible to entertain the proposition unless he saw one of the parties more closely associated with the invention. Sellers then got Chrystall to come up from Nelson. Sellers's statements were somewhat indefinite. Mr. Russell: You understood each of them had invested in this? Witness: Yes. Were Chrystall and Sellers indisposed to give you the name of the inventor? —They seemed to be loath to disclose it, but they did give it. Real Estate Agent’s Evidence. Ernest Palliser, real estate agent, Wellington, said be had known Sellers for 25 years and Sellers had been one of his closest friends. He had met Chrystall in Sellers’s office at the end of January, -1938, and about the beginning of March he introduced Chrystall to Batt. Witness had lent many sums to Sellers, totalling £5OO. Later Sellers indicated that he was in something big with Chrystall. At a conference in March at which Chrystal, Sellers and witness were present, the question of guaranteeing a bank account was mentioned by Sellers. Witness said he could not advance any further cash, nor could he see his way to enter into a guarantee. Chrystall and “Mr. X” were said to be going overseas and wanted the guarantee to

clear up certain expenses. ChrystaU then gave a fairly clear statement about the patent and its purpose, and said a sale had been made to the British Government for ‘ £280,000. It was a process of treating steel, plates of which were affixed to the hull of ships below the water-line and by some electrical action they could deflect torpedoes tired at the ship. It was claimed that the steel cost £3O a ton and was subsequently sold to the Admiralty at £3OO a ton. The name of the inventor was not disclosed. He was known as “Mr. X,” Chrystall saying that they were both bound by the Official Secrets Act. Metal had been treated and tested at Home. Of the £280,000, £BO,OOO had been paid over, Chrystall said. The £BO,OOO had been used for the purchase of steel. Witness subsequently arranged for Sellers and Chrystall to meet Batt. Chrystall went through the whole story again, and subsequently Batt took Sellers and Chrystall -to his solicitors. Witness in March received a promissory note for £lOOO payable in Condon for his loan of £5OO. The note was endorsed by Chrystall. Witness met “Mr. X” in May, 1038, in Sellers’s office. “Mr. X” was the accused Aston. Aston was the worse for liquor and in a very abusive frame of mind at that meeting. He attacked Batt, and said he had had more worry over Batt’s “lousy” £3OOO than he had had over deals of hundreds of thousands. Discount of 8 Per Cent. He offered to pay Batt out at a discount of 8 per cent, and pulled out a cheque book. Batt said he was not prepared to accept a discount of 8 per cent., and that he expected Chrystall and Sellers to carry out their obligations. The payment was to l»e made in June. Aston and Chrystall said that they, were going to England, and witness extended his promissory note to September 18. Aston arrived back in 'Wellington unexpectedly in July and said that when he got to Sydney Admiralty officials flew him to Singapore and back. While in Singapore they had discovered weakness in some of the plates that had been supplied to the Admiralty and he had had to come back to New Zealand for a cheek up before he could go to London. > Aston was most informative at that meeting. He drew a sketch of a ship’s hull and gave an idea of what the patent was. He said the defects were not serious and could be readily rectified. The Admiralty, he said, wanted him to develop a plant in Australia. At that interview or subsequently, he said the flnal payment would be made

by the Admiralty on March 31. Chrystall referred to his share as being £120,000, and they referred to Sellers’s share as £20,000. Reported Experiments. In October Aston returned from Australia again and said everything bad been finalized. Experiments had been carried out in Australian waters and the Admiralty required him to quadruple the plant. He said everything would be paid over in London on March 31. 1939. He carried a moving picture camera which he said bad beeu presented to him by Admiralty officials. The Admiralty had given him the privilege of using the White Ensign on his launch at Nelson, Aston said. Witness extended his promissory note, which was overdue, till March 31. The Awatea, Aston said, bad been fitted with the device at the Cockatoo Dock, Sydney. Aston said he held a controlling interest in Cranwells, in Australia, was interested in a large fruit-packing firm, and in a cigarette paper manufacturing company, witness continued. The two accused said the London end of this business was managed by Sir Robert Dowling. Aston said they communicated. with the Admiralty by an earth telephone circuit, and claimed this was his own invention. Aston said tests had been made on naval vessels and on one occasion mentioned H.M.S. Leander. Witness was not paid when March 31 arrived. On April 1 a cablegram appearing in the late cable news of “The Dominion" was discussed. Lord Chatfield said in the message that Britain had found a measure , against submarines. Chrystall gave them to believe the message ought to satisfy any doubts or suspicions they bad. On about June 16 witness saw the two accused before they again sailed for Sydney. They said there had been some difficulty about tlie title to The Hut property in Nelson. That had been overcome. Telephone Conversation. Sellers was reported missing on July 3, and on the following day. there was a telephone conversation between witness and Aston, who was * in Christchurch. “I told him we were all concerned about Sellers’s disappearance and that if anything had happened to him a grave responsibility rested on Aston’s shoulders,” witness said. “Aston said there was nothing wrong with Sellers; he was merely hiding somewhere. Aston added that whether Sellers was there or not all the obligations would be met.” Witness cabled Chrystall, who was in Sydney, asking him whether he could return immediately. He had no reply to the cable, but Chrystall wrote saying he could not move from Sydney at the moment but would return later. Chrystall returned on ikugust 7, and that day witness saw him. “I told him I thought he and Aston were two of the biggest rogues under the sun,” witness said. “He etill pleaded that everything was all right, and that he and Aston were not what we thought tlfey were, but that under the circumstances we were possibly entitled to think hardly of them. Chrystall expressed, a desire to meet Batt and I took Batt to the station, where we saw him. He etill claimed that everything was in order. Batt was so disgusted with his answers that' he got but of the car, where the interview took place.” Discussions With Chrystall. Cross-examined by Mr. Leicester, witness said from March, 1938, to August, 1939, he had a number of discussions with Chrystall, who had insisted throughout that he was bound to secrecy. Mr. Leicester: Chrystall refused to listen to anv adverse criticism of Aston? Witness: He always assured us Aston would honour his obligations. Never at any stage did Chrystall appear to waver in his belief that the patent was genuine?—-That’s quite true. To the best of your knowledge Chrystall made only one trip to Australia? —I think he made two. p Did you see any evidence of affluence on Chrystall’s part?—He said he dare not put a new suit on because his creditors would be chasing him. He said he had put some of his mother’s money into the venture. ~ ,k Did you have any belief in the earth telephone circuit?—l am not a technician. He said the apparatus was at lhe Hut, Nelson. . t , Sellers was constantly going to Nelson/ You and Batt were most concerned to <r e t at the bottom of the connexion of Sellers with the patent?—We were concerned at Mr. Seller’s disappearance and we wanted to get ,a plain, statement from Chrystall. . Chrystall insisted everything was and had been genuine?—Yes. Attitude of Sellers.

Cross-examined by Mr. Russell, witness said Sellers was very much enamoured of th Mn °l<ussell: Chrystall and Sellers were u.ot anxious to disclose the name or the inventor? ~ Witness: No. They said they were bound to secrecy. Who suggested Batt should have a premium of £6000?— Chrystall. You thought Aston was a very substantial man? —Yes. Did it not occur to you why he was wanting money in New Zealand. It 1 had met Aston before lending money to Sellers, my advice to Sellers would have been not to lend anything. His first impression was an unfavourable one. Did your opinion of Aston improve. Yes. Guarantee of Account. Edward Augustine Batt, managing director of Edward A. Batt ami Company, Limited, Wellington, said he met Chrystall through Palliser, and was invited to guarantee Sellers’s account up to £3OOO. It was explained that Chrystall and “Mr. X.,” the inventor, were sworn uuder the Official Secrets Act. Chrystall stated that they required money to clear up debts in connexion with experiments of £lOO,OOO by the Admiralty. Chrystall said they had been engaged in exhaustive experiments from The Hut, and that £BO,OOO had been spent on them. “I told Chrystall I was not very partial to putting money into inventions,” witness said. He and Sellers assured me there was no risk whatever, that the invention had been sold to the Admiralty. For my guarantee they said they would release the guarantee aud pay £6OOO into my bank in London. Chrystall said he was associated with the experiments in his capacity as an engineer. He said a man named Levine, an American, and also an engineer, had invested £lOO,OOO in the venture, aud up to the time of his death had worked with Chrystall and ‘Mr. X.’ Mr. Levine was said to have been killed in the engineroom of the ship on which he was travelling to England. "I agreed to give the guarantee, ami next day the guarantee was completed. Chrystall and Sellers perused it and Sellers signed. They were to pay off the bank on June 8, aud pay me in Loudon £6OOO free of exchange. Chrystall said polarized steel plates were affixed ou the outerpart of the ship's hull and connected by wiring with .electrical machinery within the ship, which deflected torpedoes from their course.” Identity of “Mr. X.” Witness said he believed the assurances he had received. About two months later he met “Mr. X.” in Sellers’s office. He turned out to be Aston. Aston was partly intoxicated, mid rather heatedly said he had had more — trouble over witness's lousy £3OOO than he had had over deals of hundreds of thousands. Sellers said he could not explain Aston s attitude, other than that he had written to Aston urging him to honour the agreement and be prepared for the due date. Aston fiaid be would pay witness out, and demanded a discount of 8 per cent., which witness objected to. Nothing was done. Aston, with numerous adjec-

tives, said he had been working day aud night and was not going to worry over financial matters. The guaranteed account was not paid off in June. Sellers and Chrystall sought a renewal till August. They offered another £lOOO in Loudon, and a fresh document was signed, postponing payment of the overdraft till August 17, with a payment of £7OOO in London on that date. Aston told witness and Palliser on one occasion that the Awatca had been fitted with the plates at the Cockatoo Dockyard, .Sydney. He said Onekaka iron was very Well suited to his purpose. Witness did not get payment in August. Sellers and Chrystall asked for a further renewal and witness granted it. Under the new agreement the.guaranteed account had to be paid forthwith and the bonus payment was postponed till January 31 in London. Final Payment Dat-o. Aston, at a later interview, said final payment would be made at the end of March, 1939. He had been at sea ou one or two destroyers when on a visit to Australia aud the torpedo deflecting apparatus had been tremendously satisfactory. Witness had understood from Aston that he had important interests in Australia, aud Aston said he had an 80 per cent, interest in Cranwells. which he said had bought the assets of the defunct Producers’ Bank. The disappearance of Woolcott Forbes who had embezzled a large sum from the company would further delay finalization of his Admiralty payments. He said Sir Robert Dowling was his London representative. Witness looked up “Who’s Who” and found there was no such man mentioned there. In November, 1938, witness was passing through Nelson and went to The Hut. He found it to be a tea room. Witness thought Lord Chatfield's statement might refer to the device. Chrystall and Aston claimed only by inference that it was their invention he had referred to. In May Aston said everything depended on the release of a mortgage of £750 on The Hut. He said that payment would be made about four days after his arrival in Australia. He returned on June 1. He left again for Australia on June 16 and arrived back on July 1. On July 3, the day Sellers disappeared, Aston asked whether hd could see witness urgently. Witness went to the Carlton Hotel and found Aston very agitated and dressed as though he were ready to leave. He asked whether witness had seen Sellers. Aston said, “Well, he’s cleared out, and that he had been with him that, morning till 10 a.m. He also said: “I suppose you know he has embezzled the conference funds.” Witness said he was not aware of that, and was very surprised. Aston said be hud told Sellers everything was all right and that he had the money to make up Sellers’s defalcations and would pay it in next morning. He said Chrystall had gone to London and was going to pick up £27,000, and if he ehose to pay witness 5/- in the £ or nothing at all witness must accept that as final. W’itness told him that after hearing that he was not surprised that Sellers had disappeared. Aston said the — Jews in Australia had got the rest of the money from the Admiralty. Appeal to “Play Ball.” Aston rang witness from Christchurch subsequently and said there were some strange things happening in regard to Sellers in Christchurch. He said he had paid Sellers £-100(1. held his receipt for it. and this was intended to release witness's guarantee at. the bank. He said he was holding Chrystall in Sydney. Aston appealed to witness to play ball with him and he would play ball with

witness. He said witness would get all that was due to him. He would have to report Seller's disappearance to Australia, and the event had placed him (Aston) in a very invidious position. The police had interviewed him. On Chrystall’s return from Australia witness and Palliser saw him and made an appeal to him to clear the whole atmosphere in regard to the alleged Admiralty contract.- ■' Witness asked him whether he would still maintain he and Astou ever had a contract with the Admiralty. He said that most certainly they had. He was particularly cautious and was not prepared to be frank. Witness lost patience. Chrystall seemed to be very agitated. Cross-examined by Mr. Leicester, witness said he had seen no evidence of Chrystall spending money extravagantly on himself. He was rather an untidy and unclean sort of man in his clothes and personal appearance. He had told witness his mother had put £SOOO into the venture. Amount of Premium. Mr. Leicester: Your guarantee was for £3000? Witness: Yes. You were to receive £6OOO in English currency on the first agreement?—Yes. If the guarantee had been used only, say, to £l5OO, you were still to receive that premium?—That aspect was never discussed. You were entitled to insist on that?—■ Probably legally I would have been entitled to. As a commercial proposition, if genuine. it was rather a "plum”?—l don’t know that it was a commercial proposition. It was a financial one. You have had many years’ commercial experience?—All my life. It came to this, you had to fall back on the personal factors? —Exactly. .Sellers you knew as a man of good repute?—Yes. Chrystall was represented as a man of high integrity?—Yes. At the original discussions Chrystall impressed you with his belief in what he was saying?—l was rather more influenced by Sellers’s knowledge of Chrystall than by Chrystall at first. Probably on meeting Chrystall the first time I believed him. Flying the White Ensign. Cross-examined by Mr. Russell, witness said that from the beginning Sellers was enthusiastic about the proposition. At the time witness was given the impression that Aston was a very substantial man. He did not believe the statement that Aston was allowed to fly the white ensign. Mr. Justice Smith: What statements were made to you by Chrystall as to whether he was in partnership with Aston? Witness: He said ho and "Mr. X had a contract with the Admiralty and had sold the patent for £280,000. Did Aston at any time'say Chrystall was his partner?—-I cannot remember if he ever referred to him as his partner. Personal Loan of £3OO. Leonard Coker Blundell, a member of tile firm of Blundell Bros., Limited, proprietors of the “Evening Post,” said he knew Sellers very well. In February, 1938, Sellers asked witness to back him at the bunk for £lOOO. Later he came back and said he was interested in a torpedo-diverting patent. Witness lent him £3OO, purely as a personal loan. It was to be repaid in either one or two months’ time. No premium was stipulated. At a later date. November 10, witness received a promissory note from Sellers, endorsed by Chrystall. He had never presented the note and the money had not been paid. Wilfred- Hugh Robertshaw, stock and sharebroker, and for six years: till De- -

cember 16, 1939. manager of the Bank of Australasia, Wellington, said Sellers was a customer of the bank, and had introduced Chrystall and Aston to him. Several cheques from Sellers’s ordinary account were paid out to the accused as follows:—1/10/37. £l9O, to Chrystall; 13/10/37, £4OO, Chrystall; 29/10/37, £lOO/3/6. Chrystall; 2/12/37, £l2Ol 10/6, Chrvstall;. 25/2/38. £3OO/8/6, Chrystall; 1/7/38, £5O. Aston; • 5/8/38, £2OO, payable self, forwarded to Nelson for credit to Cbrynlall; 17/8/38, £l5O 14/9, Chrystall. sent to Sydney to credit of Aston; 16/12/38, £6B, payable to Aston, endorsed Chrystall.