UNIQUE LEGAL POINT

Dominion, Volume 20, Issue 56, 30 November 1926, Page 3

UNIQUE LEGAL POINT

COMPANY LIQUIDATOR IN QUANDARIY. Dominion Special. Auckland, November 29. An interesting point of law, said to bo without precedent in New Zealand, was argued before Mr. Justice Ostler iu tho Supremo Court. Victoria Street Estates. Ltd., acquired from the trustees of tho Ouithwnito Block at the corner of Victoria, High and Kitchener Streets, the lease of a property for u MH) years at, a rental of 42000 a year for the first 40 years, and of 43000 _ a year for the remaining 60 years. Under the lease, Victoria Street Estates were to erect within five years a uuildiug to cost not less than 480.000. Another clause in the lease provided that the buildings of present on the property should not be pulled down until security for 4115,000 had been provided. Having acquired the lease, Victoria Street Estates resold it to another company, Unique Properties, Ltd., at a profit of 415.000 cash, aud then went into liquidation lor the purpose of dividing tlie capital and protits among the shareholders. The trustees of the Outhwuite Block then gave notice to the liquidator that he was not to pav out any of the money without making provision for tlie payment of rent, and lor the erection of a build injj in terms of the lease, notwitbstandiug the assignment to Unique Properties. Ltd. Being pressed ou the one hand by the shareholders and on toe other by the trustees, the liquidator applied to the Court for directions. Mr McVeagh, for the trustees, proceeded to argue that, as the trustees had tho right of recovery against vKtoria Street Estates, Ltd., for any breach of the lease during ‘he whole term ot 100 vears, the liquidator was bound to set aside sufficient money to answer any t,o His lo Honour: Do you suggest that this money most be kept for 109 .'' ears ‘ Mr, McVeagh: In point of law, I do. Wealth of authority was quoted uv counsel for the various parties, and the Judge reserved his decision. tie remarked that tlie case was an interestin" one. and without precedent so far as New Zealand law was concerned.