ALLEGED FRAUDULENT BANKRUPTCY AND CONSPIRACY.

Patea Mail, 28 July 1882, Page 3

ALLEGED FRAUDULENT BANKRUPTCY AND CONSPIRACY.

NORTH V. WILLIAMS.

In the District Court at Patea, beore Judge Rawson, the case of North ■. Williams was brought to a close toiay (though not finally disposed of), by , decision on a motion for upsetting a loof of debt ns fraudulent. The case Id occupied the Court eleven days, ■rand was alleged against Williams and Is sons,, and conspiracy was alleged bainst the trustee and several creditors mo are prominent tradesmen in Patea. Mr Hamerton reviewed the evidence

riven, and argued that every material boint had been explained, and that the .heory of fraud and conspiracy was ixploded by the evidence, Mr Hughes addressed the Court about bight hours, reviewing the whole case on behalf of Mr North. He stigmated this as & gross and shameful swindle, reflecting on [the honesty of many business-men in Patea. jgartnership, he argued, is to be inferred Rfm Mr Williams’s actions in connection yith bis sons’ business. It was difficult o prove this by direct evidence, because t was the sons’ interest to deny the partlership, but the indirect evidence was itrong and abundant. He quoted evi-

lence to show that Mr Williams had made nconsistent statements at different times jefore his bankruptcy, as instance when ie told Mr Tennent, then his banker, that laving left the Government service he ntended to resume his interest in the msiness of his sons. Another evidence of his partnership was the manner in which ie signed the lease of fellmongery from Mr McCarthy to Mr Howe. The true

reason for changing the name of the firm

without changing the debtor’s real interest in it, was that Mr Bryce complained in Parliament of a Land Purchase Com-

missioner dealing with the natives in

buggies. As to the great question of fraud* the counsel referred at length io certain debts being purchased by the sons in order to remove .opposition at creditors’ meetings, and secure voting power to defeat Mr North. Mr Duncan’s claim of L 232 was bought, after Mr Duncan had appeared at one meeting and opposed the deed of arrangement. The object being to defeat other creditors in dealing with the estate, was not that evidence of a fraudulent intent? Mr Barker’s account for £33 6s 6d was purchased for the same reason, after Mr Barker had shown opposition at one meeting. Mr J. Patterson’s debt of £34 12s 3d was extinguished by a contra account due to the sons’ business, thus

showing connection in the business, and

showing the same intention to get voting power to defeat Mr North. These purchases of debts by paying 20s in the pound for them could be impeached as between the parties, and impeached as against North and other creditors. A fraudulent intention was also shown by Williams asking Patterson to attend and vote at the creditors’ meeting, as Williams wanted to give North as little as possible. Mr Farrah’s claim for £IOO was criticised with jocose severitj'. Was this £IOO promised to Farrah for an honorable purpose? Ho was an instrument employed in dirty work, to defeat the proper operation of the bankruptcy act; and one of the Valuable services rendered for this £IOO was for Farrah to try and induce North’s creditors to put pressure on him. This debt of £IOO could not be due before the bankruptcy because the services to be rendered were not completed until some time after the actual bankruptcy. To vote on such a claim was contrary to the intention of the Bankruptcy Act. His services to Mr Williams were in-the nature

of a conspiracy to defeat the intention of

the Act. The contract was illegal because Farrah undertook to bring pressure on

North to accept less than be was entitled to. It did not form part of Mr North’s case to show that Mr Cowern had acted dishonestly. It was sufficient to show that his acts, however honest, had been wrong ; and that his acts, whether wrong or not in themselves, have had a prejudicial effect on Mr North or on the creditors as a body. Mr Cowern had taken up what he called a neutral position. What is that position ? They found the trustee on every occasion in consultation with the debtor ; and where advice was needed he had acted towards the debtor in the spirit of a personal friend. In one memorable

instance.the trustee had rejected the proofs of natives for £5,411, although the debtor that he got the natives’ cheque Tor that amount, and had actually put this

debt in bis schedule as due and owing. The trustee ought to have ascertained what was the actual counter-claim against the natives, before rejecting their proof of debt for £5,411 on account of Kaitangiwhenua moneys. The offer which the trustee received for the estate, although he professed it was a hasty affair just before the meeting, appeared rather to have been deliberately pre-arranged, being so carefully drawn as to close every avenue against Mr North’s re-opehing of this transaction. He closed his able address by asking for justice to be done to Mr North.