BREACHES OF TRUST

Hawke's Bay Herald-Tribune, Issue 201, 10 September 1937, Page 6

BREACHES OF TRUST

Our Oira CorrespOudent.)

McArthur Liable To Account For £19,340 JUDGE'S FINDINGS

(From

WELLINGTON, Last Night. A finding that John William Sliaw McArtliur, company director, of Wellington, had been guilty of breaelies ot trust, or misfeasance, wliile a director of the lnvestment Executive Trust of New Zealand Ltd., now iu liquidation, and was therefore liable to account for . £19,340 to the assets of the company was reached by the Chiof .lusticc, Sir Michael Myers, iu a reserved judginent delivered in the Supreme Court to-day. The judgment, however-, \Vas deferred to allow counsel ior McArtliur to raise furtlier contentions, if dusired. On oue oi the breaches of trust allegod, his tlonour touiul ior McArtliur. The following declaratious were sought by tlie Lublic Trustee: — That McArthur, haviug obtaincd an ailotment to hiniself of 1(3.700 ordinary shares oi' 2/- each in tho capital of tho company, on i'cbruaiy 20, 1931, was party.to procuring tue lssue to himseii oi 10,200 of the sbaies as luily paiu lor a consideratiou, purpurting to be uioney paid to him out oi the luuds oi the company, but being, 111 fact, an invalid and liiiproper eonsideration designed to conceal tlie Lrue uature of the transaction, which, in the cireumstances, represeiited a gilt of 10,200 shares from tne company to him. That McArtliur, liaving obtained an ailotment to himself of 193,400 ordinary shares ot 2/- each in the capital of the •company, on or beiore Ma., 20, 1933, was a party to procuring tlie issue ot the shares to himself as lully paid, and ui breacli of lns duty, accepling, on uehalt of tbe company, as tbe ostousible consideratiou therel'or, certain debentures held by luiii in the Hnti.sh Nationa] Trust J.td., tbe circumstances of the issue of which either rendored such debentures an lmproper and illusory consideratiou ior dnectors to accept for the shares, uistead of cash, or Cuiistituted such debentures an asset ucyuired by him tbrough misuse and by the utilisation o.f tlie lunds of tho lnvestment Executive Trust, a braneh of trust tnat made iiini uccuwiuable to the company ior tlie debentures. A tuither declaration was sought Lhat McArtliur was liable to coutnbute j.2u,90o to tlie assets of the company as eompensation ior tlie breacb oi tiust, and the C'ourt vvas asked to order imn to pay that suin, or nbatever tho eourt dliiecAd to the i'ublic Irustee as liquid.vLOr ot the company. Alternatively, the Lourt was asked to dcclare that 38,U8U mares iu the company, the balance of inireel oi 193, 4U0 sbares still remain.ig in McArthur's naiue, crcdited m the ouipany's books as lully paid-up, were mitributiug siuues, on which uo part oi' the capital represeiited by tliem had j oeen paid, and tliat McArtlnir was i liable to be placed on tlie "A" list oi the conti'ibutories oi the company o respect of tliem.