ALLAN HOPKINS.

Press, Volume LVII, Issue 17127, 23 April 1921, Page 13

ALLAN HOPKINS.

- ADJUDICATED A BANKRUPT. Mr A. H.- Holmes, Registrar of the Supreme Court, sat yesterday to hear a creditors' petition for the adjudication in ■ bankruptcy of "William Allan Hopkins, land agent, Christchurch. Mr Sargent, with him Mr Thomas, appeared; for the petitioner, Mary Ann Edwards, Mr Johnston for the debtor, and Mr Flesher for the trustees, under the deed of assignment executed by Hopkins. Mr Johnston said the matter was one of very great importance. The estate was one of over £IOO,OOO, and a balance-, sheet prepared showed a considerable surplus.- , A deed of assignment had been executed in favour of the creditors. Two meetings of creditors were called by the Assignees, under that deed, at one of which a hurried illconsidered'motion was put, and a resolution was passed, apparently unanimously, although a large number present did not vote, that the debtor ' should become bankrupt. Then, aftei the matter had boon reconsidered, there was a later meeting at which the resolution first adopted was rescinded by 34 votes to 20. Since then the deed had been proceeded with, and there were 73 creditors, who had'signed it, and those comprised a very largo majority of the total creditors of Hopkins. In the present period of financial stress he took it the main point at issue was the consideration of what was best for the benefit of the creditors. That being so, and with such large interests involved, and seeing also that whatever order was made would be subject to review, he 'would ask that coutideration of tho petition be postponed until it could be dealt with by the judge. The petition having once been lodged the question of time did not become material, because, if eventually the debtor was made bnnkrupt, the bankruptcy related back to the acts alleged in the petition on which the bankruptcy was finally adjudged, so that even if the period of three months were exceeded it would not prejudice the creditors. The affidavits filed had created quite a new phase, and-he had had no opportunity of going into the matters dealt with in them. ' The debt alleged, the proceeds of the sale of a property, belonged to quite a different category, as shown by tho documents of deposit attached to Hopkins affidavit filed. The sum in question, some £6OO, had been placed on deposit with Mr Hopkins for three months, from July last, and repayment was subject to. one month's notice, and it was clear the money, was money »on deposit, and not money received. The character of the debt was changed so that in any event the petition could not proceed until after amendment had been made. That being so, he would ask that the hearing of the petition be taken before the judge.

Mr Sargent, in reply, said it was true the matter was ono of some moment, particularly to a good many creditors, who were standing out of their money, and therefore it was of urgency to theiii to have the matter dealt with as speedily as possible. "If the adjournment were granted it would not he possible to have the case dealt with-oy the judge until the end of the present month. The Act was clear, that the Registrar had the power,, in the absence of the • judge, of dealing completely with the matter. The Registrar: There are caigies where the Registrar lias dealt with such' applications. • Mr Sargent said it had been held that the Registrar might proceed under the Act, notwithstanding the 'importance of the matters brought before him: The; Registrar would be quite justified'''in dealinc with the present, position, particularly as it was a" matter of some urgency. As the investiga-tion-had proceeded so far into the affairs of the 'debtor, the liabilities were found in a very .unsatisfactory state. ~ If -. the facts were true in one of,the affidavits filed, it might bo a matter in which the' Court might have to investigate later under the penal clauses of the Act. The fact that the Regwrar dealt with' the matter now, would not prejudice the debtor, because he had the right to apply to the judge afterwards to review the whole matter. People were .crying out for their money, and the thing should be settled one way or the other as speedily as possible. The Registrar said he would proceed with the hearing of the petition. . Case for the Petitioner. ' Mr Sargent, in opening, said the petition was by Mary Ann Edwards, a married woman, in resp»ct of some £6OO owing to her. The money originally reached the hands of Mrs Edwards on the completion-of the purchase of a property, and had remained in.the hands of Allan Hopkins ever since. Hopkins induced the woman to allow the. money to remain on the understanding .that she could get it at any time on giving a month's notice. He held the money for many months? and made many promises of repayment, but failed entirely to pav over the amount. On 'November 9th. 1920,' he wrote a letter to the creditor: > ,

"Re the £6OO bearing interest at 6 per cent. per. annum. I am taking tho necessary steps as quietly but as effectively "as ■ I can to arrange so that you will have'the use of the £6OO. as expeditiously as possible. Of course, you will' readily understand that at a time like the ; present, with the conditions ruling as a result of the war, and the moratorium still bding in force, you cannot get tho money in as quickly as was the case in ordinarv times, but for old time's sake you may rest assured that no unnecessary delay will occur on my part." ■ Hopkins repeated the promise to pay since tlmt da'te, but' the money had notbeen paid. It was suggested in one of the affidavits that tho debt' was not £6OO at all, hut only half that amount, the other half belonging to petitioner's husband, who was not a party to the petition. It was quite immaterial what tho amount was provided it was over £3O. According ta the Act it was j necessary for the Court to be satisfied (1) -that a c-opv of the summo # ns was duly served; (2) that the debtor had committed an act of hankruptcv within i three months, and (3) that the debtor was indebted to the petitioner in tho sum of £3O or upwards. Kvidence either by affidavit or oral would prove those conditions. Three acts of bankruptcy would he relied on —(1) The deed of assignment for the benefit of creditors; (2) that there had been a notice of suspension, and (3) that he had called a meeting of his creditors, a, majority of whom in numbers and value, by resolution had required him to file. It would- be contended that the Court should exercise its power and refuse to make an order on the ground. €hat the execution of the deed would be to tho advantage of creditors and should not be -deemed an act of bankruptcy. His reply was that If there were any other acts of bankruptcy it would be impossible for the Court to refuse tbe_ petition. The' Court should not exercise its power if there was an)' matter requiring investigation by tho bankruptcy officials, or if there had been any misconduct on the part of the bankrupt.' Under the section, the onus of proof lay. heavily upon the debtor to show that the order of adjudication. should not bo made. He intended, to show by evidence and affidavit that there were matters requiring serious investigation. The debtor under the Land Agents Act had a trust account,-which at the time of the deed of assignment was overdrawn. A considerable cumber of his liabilities related to deposits Avliich lied 'been paid on the .purchase of propeftfps, and. those -deposits-'hpd not been placod in tho trust account or -were. ! not 'there at the date of the

execution of. the deed. Mr Lucas, had filed an affidavit that James Walkerhad purchased land from William T. Prisk subject to three mortgages, one of them from Prisk to Hopkins. It appeared that at the time Walker purchased the land Hopkins held certain moneys belonging to Walker, and Walker was indebted to Hopkins iii £471. In 1920 Walker paid Hopkins and obtained a, receipt, Hopkins agreeing to discharge a certain mortgage and forward it to Walker. Walker was unable to obtain it, and in February,' 1919'; a caveat was lodged against the mortgage under' a deed of . lien fiven by Hopkins in favour of the ank, .< ancTthe bank declined to hand over the' mortgage. On the face of it, Mr Sargent added, this matter in tho interests of public policy should be investigated. ' The deed.of assignment contained the signatures'of a number of women, and there was no evidence that they had. independent advice. Luther Hopkins was indebted to Hopkins to tho. tune of' £7.000. He. was a son of the debtor,'and -the.'Court should carefully 'consider* Mr Luther Hopkins's position with regard to obtaining execution of the deed. The case would be exceptional *if it were - not of advantage the' creditors, tobe administered in bankruptcy. Hopkins was''a substantial shareholder in native leases which could be disclaimed as onerous properties 'by the Official Assignee, who could also more effectively, investigate, other matters,.'- and could require persons who'might have information regarding the bankrupt to give evidence.on- oath> without being excused from answering questions tending to incriminate them.' Mr Sargent added that in the. deed of assignment Hopkins Bet out his inability, to pay,.h'is. debts. «Shortly after, the execution of the deed Hopkins went intq a mental hospital as a voluntary boarder. "It was a haven of rest," Mr Sargent added,' "from which> ho has been recently' excluded as being no longer a voluntary boat'der. Since that time his business has been at a standstill.^' - The Evidence. ' '

Roy Twyneham, solicitor, Christ-, church, examined by Mr Thomas, said he had acted on behalf of Mr W. Hornby. He produced a statement of accounts between his client and -Hopkins and receipts by Hopkins for £66,5s Id and £350 on second and first mortgages, both dated September 22nd. 1920. Since the assignment ho 'hud, made application to Barker's Estate for the release of tho first mortgage, and tho reply was that the trustee? knew nothing of the money paid r ,o Mr Hopkins and they |woiild only givo a receipt when th'es' got the principal and interest. Witness was alio acting for one of the shareholders in the Rangitoto Estate Company. Tho shares were fully paid, but there was a liability on somo of Mr Hopkins's shares amounting to about -5s or (is; a .diaie, the total being considerably over £IOOO. The company was not at present a paying proposition. To Mr Johnston: The leaseholds were native. Tie did not think it would 1 jrny to disclaim the shares, for Mr Hopkins had paid no 13s or 14s per share To Mr Flesher: He did not think the whole liability was called up by the company. The shares- ho held on behalf of an estate were fully paid up ; and ho would not disclaim them. >

Mary Ann Edwards, wife of llen.jdimin Edwards, of Riccarton, said thai, in 1920 Mr Hopkins became possessed of money belonging to lier arising out of the sale of a house m Juno, 1920. Slio gave Hopkins a letter leaving themoney on deposit for tlnco months, with a month's notice before repayment, t-ator, she nutlgniihrd her son to obtain payment from Hopkins. All the money in question belonged..in her. She had made personal application to Hopkins, but- was not successful in getting the money. She received £9 interest in October. • To Mr Johnston: She hac; never given notice in writing to Hopkins, but she asked him for the money Ivtorc goiirj; to the Xorthjlsland, and wrote to him from there." To, Mr Thoma«: In tho letter produced, Hopkins undertook to pay the amount on November 9bh.

To the Registrar: Wboii Mr Hopkins received the £CCO, no pari of thai' amount belonged to her husband; il was her own money. She and her husband applied lor pensions before they ttot tho money,- and while it was still in theproperty.

Thomas Artjuji*Edwards, loco, driver, said that in September he received an authority from his mother and father to uplift the money. Ho nn'w Mr Hopkins, who promised to pay, and he made further frequent applications. Hopkins said he would repay definitivein January, "as a New Ypsir present." Hopkins, however, had never paid ihe money. Witness had received no notice of the creditors' meeting, but he saw the advertisement. •

James Arthur Fleshor, solicitur, Ciiristehiireh, said ho : acted for tho trustees in the preparation of the deed of assignment. He first saw Mr Hopkins when he ..went to get Jus signature to the deed. Prior to that Mr Hopkins had consulted him in rtgard to his affairs.

Mr Johnston said he objected to any evidence -* relating to w'hat passed between Mr Fleshcr'anU his -client, - Mr Hopkins. Sir FlesLcr said a meeting of Hog-

kins's creditors was held on February 10th, and T balance-sheets were produced which showed tho trust account to be in debit in September previous. The meeting' was a large one, but a great, many people present were not creditors, for groups of several people were present representing one claim. The resolution was carried withdiit dissent. Mr Hopkins was not consulted in the matter of that meeting. His estate had been handed over to trustees, I no, himself, was in the Mental Hospital, and 'witness, on behalf of tho trustees, palled the meeting. At the second meeting ot creditors the motion requiring Hopkins to file a petition was. rescinded, hut nothing was said in regard to tho deed. To Mr Johnston: The decision .of the meeting really was that the majority ot tho creditors present desired to proceed under the deed. Ho gob his iristriH" tuns to "prepare the deed, from the trustees, and thereafter he acted for the trustees.-

Mr Johnston said the "bank book showed a credit of £356 Is on September SOt'h.V ' .:'.■'' "

■; •■ Mr Thomas:.lt wasn't.half enough. We had thousands of pounds ourselves for 'different creditors whose money did not appear in the Trust account, j.... : Henry.Kitsonj ;df- the firm of" Stewart Beckett and' Co., auditors and accountants, saidihis -firm, wore acting'as: accountants forthe trustees. The account • "William-Allan Hopkins Trust Account No. 1" showed a credit of £2 3s|4d today. ' , # , , James "Ainger, £>f Hicks, Ainger and Co, accountants and auditors, said 'that uritiL lately, he•-was-acting;as accountant for' the creditors,'.under .the deed of assignment. ' To a certain'extent he knew the state of Mr Hopkins's finances. Some of the liabilities were for deposits paid in by clients on l aceount of purchases.. To Mr Johnston—He could not,say whether any particular items were trust monevs (until each case was investigated. This concluded the case for the petitioner. . »

( Counsel in Keply., Mr Johnston claimed that although there was. a sum of £6OO originally ( owing to Mrs Edwards it, by arrangement, became a joint debt, and the petition imist fail because Mrs Edwards alone - was...not. the The. deed of assignment was.no notice to-:,'the creditors that Hopkins had suspended payment, nor was the granting of the deed alone an act of bankruptcy. The first meeting was a yery sli)>s'liqd affair, and there was no evidence to show who voted. The Court was not justified in going-' beyond ' the- assignment ■ hecauso certain creditors wanted Mr Hopkins pilloried. The estate was now in the hands of capable business men as trustees, and the benefits'derivable by the creditors from the private assignment and realisation of the estate should not be taken away on the complaint of one or two creditors. There was nothing except suggestion which would authorise the Resistrar to override tin* assignment. Furthermore.; the petition itself wa.«. not in order, for it was not properlv attested, iriismnc-h as a solicitor's clerk was the nttes-linn; party inst»n<l of n. Ji'stire of the Peace or a solicitor as laid' down by the Act.

Mr' Thomas >:aid the C-ourt'-had power to remedy a technical defect provided that no person was injuriously affected ■therebv.

The Registrar said lie did not think any good would be served bv upholding the technical objection, * and lie would allow the petition to Ik.- reattested by Mrs EaVitrds.

Thomas De l'cnzi Jlniiijan, solicitor, Christcliurch, called by Mr ThouiuF, Mated that on April 'Ji.li ho' tool; petitioner's affidavit to the. petition, and ho initialled the petition, which was already altered by Mr Mai troy. th.> witness.

Jules Omar MallYoy, law clerk, Christchiirch, also gave evidence relating to the signing of the petition, and the taking of the petitioner's uffidavii. The Registrar, Mr A. H. Holmes, in giving judgment, said he allowed the amendment because it would not affect the merits of the case, or touch the rights of the parties. The Court in considering whether an order should be made adjudging :i debtor i<. bankrupt, or the debtor' - .* estate allowed to be wound up under the deed of assignment, had to consider not only the advantage of creditors, but also the interests of public and commercial morality.

From the oral ovidcnco giffen that dny, and on reading tho affidavits filed, no was satisfied there had boon disclosed evidence of fraud, and, in his_ opinion, the estate was one which should bo administered under the Bankruptcy Act. 1008, in the interests of public and commercial morality. Ho found the sum owing to the petiturarag creditor amounted to a sum of not 1«M than £3O. . Tho order for adjudicatioß would bo granted, with petitioners costs £2O, disbursement*, and witnesses' expenses, and £lo lo» ctots or the trustees. '