GAOL FOE BANKRUPT

Gisborne Times, Volume LXX, Issue 11124, 6 February 1930, Page 3

GAOL FOE BANKRUPT

FAILED TO KEEP LOOKS, I NCUIIREO "DEBT WITHOUT PROSPECT OF PAYMENT. FOURTEEN DAYS FOR E. F. MARTIN. “ACT NOT DEAD LETTER.” Strong comment oil the public disregard of the provisions of the JJankruptcy Act was voiced by -Mr. P. H. Harper, S.-M., In tile Magistrate’s Court yesterday, when imposing sentence of 14 days’ imprisonment with hard labor upon Ellis Fenwick Martin, a. bankrupt, who had pleaded gUiltv to two breaches of the Act. “it seems to hie,” stated the magistrate, “that the public have come to look on the provisions of the Bankruptcy Act as a dead letter. This is not so.” Martin was charged that, being a bankrupt, ho did, within three years of the commencement of his bankruptcy on October 31, 1929. fail to keep such books of aecuunt a.s were usual and proper in the business carried on by him so as to set forth sufficiently his financial position and business transactions: also, with incurring on July IS a debt of £l9 Ids Cd with A. E. Ivirk when he had no reasonable or proh. able expectation of being able t<> pay the same and other debts. .Mr. F. W. Nolan prosecuted on behalf of tile Official Asignee, hut accused was not represented by counsel.

Reviewing the circumstances of the ease, Mr; Nolan stated that, according to accused’s statement, he commenced business on his own account in February, 11)21), although a business had been opened in his wife’s name in December, 1028. From the outset the business was not a success and accused’s position became worse and worse. Despite this, in May, 1929. Ke opened a second shop, which also did very little business.- Finding himseT in difficutlius, accused then decided to call in the services of an accountant. lie went to Mr. M. Fry and asked for a set of books to he opened. Mr. Fry discovered that no books of account were kept except a rough cash hook, but agreed to open books, if the necessary information was -supplied. Later, after ho had investigated the position more fully. Mr. Fry found that no check was kept on the cash and 'he then refused tu deal with that aspect of the business'. Though Mr. Fry saw accused frequently from tliat stage, he was never able to obtain the required information and consequently could not open books. Dealing with the second charge, ..Mr. Nolan said that the debt wins in relation to the installation of fittings in till) second shop. It was arranged with Mr. Kirk that >:cuused should pay cash lor the work, but not a penny was paid. Had the case been contested, jt would have been shown that the business was £4OO in debt by July, 1929 while the totul was £505 at the time of the bankruptcy. Against this there were only tliTee’ assets to a total value of £ls. The charges were really grave and counsel submitted that the situation hardly admitted of any excuse. The view taken by the Department was tlial ordinary traders should not have, to take risks with other traders who were so reckless (as to borrow in this way. Jt was amazing that this man should be able to coine here, practically unknown, ami incur debts of £525 jn the short period of ten months. ■ .

i “It seems to me a very grave breach of the Act,” stated ‘the magistrate. “Accused started in business with little or no capital. From the first, his business seems to tfiavo been a failure. Instead ol trying to curtail expenses as much as possible, however, he launch*-! out and opened another branch, from then on apparently living oi. credit foolishly obtained from tradesmen and other creditors. In July, when his position was quite hopeless, he incurred u debt of £ll. 19s 6d which ho promised to pa\ forthwith. lie must have known that he had no prospect whatever of paying this debt and his action is tantamount to obtaining goods by., false pretences. -- It seems to me. judging from the number of bankruptcies, we read of in which it is shown that no books are kept and credit is obtained when the bankrupts have no .expectation of being able to pay the debts, that the public have come to look on the provisions of the .Bankruptcv Act as a dead letter. This is hot so and J think the only thing 1 cair do as a punishment for the accused and as a warning is to impose a short term of imprisonment. On the first charge accused will lie sentenced to 14 days’ iinprisoiimenf with hard labor and on the second he will be convicted and discharged.”