MORTGAGE VALIDITY

Evening Star, Issue 22446, 17 September 1936, Page 2

MORTGAGE VALIDITY

ANOTHER CASE AGAINST M'ARTHiIR COMPANIES [Per United Press Association.] AUCKLAND, September 16. Legal action involving a review of the activities of a .number of companies associated with J. W. SM'Arthur was continued in the Supreme Court to-day. Counsel for the plaintiffs, Mr Barrowclougli, completed his opening address, and called a number of witnesses, some of whom produced the books and records of several of the companies concerned, making court exhibits to the number of 45. The plaintiffs are T. H. Dawson and L. Knight, as trustees for debentureholders of New Zealand Redwood Forests Ltd., and T. E. Jones, of Dargaville, one of the debenture-holders. The defendants are the Sterling Investments Company (New Zealand) Ltd., in liquidation, Wynwood Investments Ltd., and the National Investment Company of Queensland Propne tary Ltd. _ The action was brought by the plaintiffs for the purpose of having declared invalid a mortgage of £7.500 which was given in April, 1931, by New Zealand Redwood Forests Ltd. to Kotahi Lands Ltd., and on subsequent dates was transferred to various other companies. Continuing his opening address, Mr Barrowclougli read from the minutes of Redwood Forests Ltd., which he alleged showed that the chairman, J. n. S. M'Arthur, who was a large shareholder, had, in defiance of the wishes of his co-directors, imported on to tho

board M. H. Hampson and F. F. Hockley. Tho result was that the control of Bed wood Forests Ltd. was passing into the hands of M'Arthur and those who were of a like mind with him. The defendants alleged, Mr Barrowclough said, that the plaintiffs had been guilty of acquiescence in the validity of the niemorandira of mortgage and could not now claim that it was invalid, but no one could be held to have acquiesced without a full knowledge not only of the facts, but of his right of_ relief. It was not until the commission of inquiry was set up by the Government that the affairs of all these interlocking companies came to light and the trustees knew they had a right to take proceedings against Kotahi Lands for alleged fraud. The hearing was adjourned.