CLAIM SETTLED

Waikato Times, Volume 122, Issue 20494, 10 May 1938, Page 11

CLAIM SETTLED

ACTION ABANDONED TAIHAPE BUBINEBB DISPUTE SUIT AGAINST CAMBRIDGE MAN “I am happy to be able to announce that your Honour will not be troubled further by this action, as a settlement has been arrived at which Is acceptable to both parties,” said Mr A. H. Johnstone, K.C., In the Supreme Court, Hamilton, late yesterday afternoon, following a brief conference between the parties and the counsel engaged upon the action in which the Taihape Printing and Publishing Company, Limited, claimed from a former major shareholder of the business & previous management) £IOB3 18s 3d, as money allegedly lent. Defendant was John Edward Hamill, journalist, of Cambridge, who was represented by Mr Johnstone and Mr C. L. MaoDiarmld. Plaintiff was represented by Mr H. E. Barrowclough. am v «ry glad to hear that a settlement has been reached,” sajd his Honour, Sir Michael Myers. “It was obviously a case where a settlement was desirable.” The case was then struck out. The hearing was resumed yesterday afternoon with the cross-examin-ation of William Aubrey Smith, public accountant, of Hamilton.

Aocumldated Profits Witness admitted that the accumulated profits of the company at August 31, 1936, amounted to £706 17s sd. and agreed that these were available in Mr Hamill’s time for distribution. The books could have been put in order by legal entries. Witness admitted suggesting in a report that the drawings might be offset by an entry against the goodwill account. Witness had seen that if they took advantage of the legal position, his principals could secure the assets for £IOOO less. This position had arisen through the sale of shares instead of assets. Re-examined, witness agreed that the method mentioned, of adjusting the accounts, was one which would obviate the necessity of defendant making any payment.. Witness could not inform his Honour. from his investigations whether, fairly and properly, with no depreciation charged between 1932 and 1936. the profits shown in the profit and loss accounts could fairly be regarded as the profits of the company. If the profit and loss accounts were correct, the company had not paid the income-tax it should have done. “Without Moral Foundation” The defendant was brought before the court as a person who owed money to plaintiff, said Mr .Johnstone, in opening for Hie defence. The present shareholders, the defence would, however, submit, were using the company to assert a claim which they knew to be without any moral foundation. The mere fact of defendant and his wife passing some resolutions and making some entries in the company's books would have made the present action an impossibility.

“This court,” sa‘d Mr Johnstone, “is not bound by book enlr'es, and we trust that it will consider the substance of this action." At all times material to Hie action, defendant and his wife were Ihe. only shareholders in the company, and defendant carried on the business purely to make what profit he could for Himself and his family. In evidence, defendant said that while he and his wife owned the business it was left to him. after consultation with his wife, lo regulate what salary lie drew, according tu the state of t lie banking account. f Compromise Suggested Defendant gave evidence regarding the purchase of a car and the source of the purchase money. His wife knew that it came the funds of the company and approved of the action. Defendant had decided to sell out his business after contracting ostro-arth-ritis, as he wished to move lo a better climate. Defendant described the granting of the option and the subsequent negotiations with Hie syndicate* ife had then gone io Rotorua and later lo Cambridge. He met Mr McGuire in Taiiliape laler, when Hie latter showed defendant two letters from Messrs English and ?mith, which suggested that defendant owed the company £7BO. McGuire had suggested a compronrse providing for the surrender of defendant's right to the 320 shares left to him. Regarding the income-tax returns, defendant, sakl that his returns had been made up by an accountant. It was at this stage that leave was granted counsel to withdraw, and following a brief retirement it was announced that agreement had been reached.