UNPAID DEBT

Hokitika Guardian, 29 October 1928, Page 2

UNPAID DEBT

APPLICATION TO COURT,

TO HAVE DEBTOR MADE BANKRUPT.

AUCKLAND, Oct. 26

The practice of the firm of Builders’ Supplies, Ltd., to petition the Supreme Court for adjudication as bankrupt a client against whom they had j>r >cured judgment was queried by Mr Justice 'Smith tins afternoon. Mr R. B. Purser, appearing for Builders’ Supplies, Ltd., who sought to have J. A. Mason, a 'builder (Mr Quartley) made bankrupt, said that his clients were acting somewhat along the lines of Commissioner Hay. His Honour: To clean up’Auckland? Mr Purser: Yes. He does it morally; We do it commercially. Charles H. Booth, accountant of the petitioning firm, gave evidence that the company had obtained judgment in the Magistrate’s Court for' £3O, which had not been satisfied.

Mr Quartley submitted that the petitioning creditor bad involved the debtor in a great deal of unnecessary expense. To Mr Purser, witness said that the usual practice of his firm to recover debts was to petition for their bankruptcy when no security was available. Mr Justice Smith: How long has the debtor been dealing with the petitioning creditor ? Witness: About seven years.

His Honour: Did you say that when anybody owes you money and you are not paid promptly, you proceed to have them made bankrupt? Witness: Only when judgment has not been satisfied. Mr Quartley argued that the debtor had been cornered by the petitioning creditor. There was vindictiveness in the petition.

His Honour : Is the man unable to pay.? Mr Quartley: He is not unfinancial. He owes £ll2 altogether, but has had trouble in getting satisfaction out of the contract.

In evidence, Mason said that he had been in business in Auckland since the war. He had always paid his debts. Cress-examined, witness denied that the main reason why he opposed the proceedings in the Magistrate’s Court was that the petitioning creditor had taken lien proceedings for £126 instead of the £9O actually owing. He admitted that the mistake had been rectified.

Mr Purser: The. position is quite clear. The debtor is simply sore because my clients went about the proceedings in a business-like way. His Honour:' When did your clients start this system of making people bankrupt?—lt has been done for many years. They found that distress warrants were not satisfactory,

His Honour : In the last two years how many bankruptcy petitions have you asked for?—l should think from eight to ten. One or two have been adjudicated.

His Honour: I think the matter wants some consideration. Your clients may be using the Bankruptcy Act simply to put pressure upon debtors in a way which is not justified. However, I do not say that they are doing that.

Mr Purser: The experience of myclients has been that many builders put a whole lot of unsaleable paper equity before the creditors and go on trading. We think these people are a menace to the general merchants of the city. They go deeper and deeper into the mire until they stage a good crash, thereby causing a great loss all round. His Honour: Then you are acting in a salutary way. Here followed the reference to Commissioner Hay. Hugh H. Bricknell, Director of Builders’ Supplies, said that the debtor had advised him that he was in difficulties. His firm withheld action as long as possible. He made it clear to Mason that they bore him no malice, but simply wanted their money. They had no knowledge that there were other creditors. Their only intention "was to secure their money in a legal way.

Mr Purser: His Honour has raised the question of your viewpoint toward these builders.—We have acted on our experience of debtors who, allowed to carry on, only get deeper and deeper into- the mire.

To His Honour, witness said that he believed his firm had not put more than three out of business in the last two years. There was no question of vindictiveness. It was a matter of policy.

After hearing further argument, his Honour reserved his decision.