BANKRUPT BUILDER.

Hauraki Plains Gazette, Volume XXXX, Issue 5396, 6 March 1929, Page 2

BANKRUPT BUILDER.

W. W. SCOTT’S APPLICATION. DISCHARGE REFUSED. The application of W. W. Scott, of Hamilton, builder (Mr. J. F. Strang), for an order of discharge in- bankruptcy, which came before Mr, Justice Blair in the Supreme Court, Hamilton, on Saturday, was strongly opposed by the official assignee and creditors.

The statement of the official assignee, Mr J. H. Robertson, disclosed that the bankrupt, in spite of his large contracts in Paeroa and Morrinsville, had failed to keep adequate books and could not satisfactorily account for his bankruptcy. He had drawn cheques for wages £BOO in excess of the total amount accounted for in 'his wages book, and several large progress payments had been cashed, and no explanation was given as to the manner in which these payments had been expended.

Mr N. y. Johnson, representing the Rangitikei Timber Co., Ltd., said that assuming bankrupt’s statement to be true, that he was solvent, in January, 1926, when he commenced operations in Paeroa, he had lost over £2OOO in the; following 18 months. His cp®tracts were all profitable with the exception of one, on which he Tost £700; Mr Johnson also refeilredi to the discrepancy between the cheques drawn for wages and the amounts shown in thq wages book, and remarked that this was in spite of tlie fact that Scott’s own drawings were epunted in the wages book. Mr C. N. O’Neill, who appeared for W. Fleming and Son, Ltd., Le Manquais, Lamb and Co-, Ltd!, and Messrs Short Bros., all of Paeroa, said that the complaint of the Paeroa creditors was substantially the same; as that of the Hamilton If the bankrupt was insolvent when he went, to Paeroa he should have notified; his creditors before obtaining such a large amount of credit and should have been metic.ulously careful in keeping a check on his position to ascertain whether he was making or losing mcaiey, neither of which things he did. If, on the other hand, he was solvent when he commenced his Pae-, roa contracts, the loss of £2OOO in 18 months’ trading w;is eloquent of rashness. The creditors had no control over the position, and now, when they desired to know where the money had gone bankrupt’s books were useless. Mr O’Neill suggested that bankrupt should consent to judgment for a reasonable sum in order to compensate to a small extent, the innocent creditors who had; suffered so heavily through bankrupt’s conduct. He also submitted that nothing, short, of positivf proof of misfortune should suffice to secure for bankrupt his discharge. Mr Wills, a creditor appearing in person, gave; evidence concerning the debt owing to him, and prod'Uved letters from Scott containing promises that had not been kept. ■Mr Strang, referred to the excellent -Work that had been carried out oy Scott on these contracts. Thtj Pacroa. theatre was a credit to the builder. He then proceeded to show that Scott was quite solvent when he wentto Paeroa.

His Honour : It doesn’t really matr. ter, Mr. StYa.ng, You have the choiqe ; you may be clubbed to dfeath or tickled to. death.

Mr Strang then referred to the great expense in which Scott had been involved as a result of. the proceedings taken by creditors to enforce liens on the contract moneys. The progress payments had been withheld, and as a result the Supreme Court at Auckland was full of liens—shoals of them. His Honour: What else could be expect? Scott had no capital, and he should not have; taken on the contracts. A man sht ukl not. start a job unless, he has 25 per cent, of it in hand. Scott should have had) £3500 in hand- or obtainable before he Commenced the theatre contract of £14,000. I know enough about, build-, ing contracts to know that. Mr Strang said it. was an invariable practice for builders to start contracts without having the 25 per cent, in hand. < His Honour : Then the sooner the practice stops the better. Scott started work without money, he kept no books, and when he was asked what had happened to the money unaccounted for he replied, “I do not know,”

Mr Sprang recounted the efforts made by Scott to meet the position when he found himself in difficulties. He had called a meeting of his creditors and explained his position to them. ,He had (Done all he could, and he stated his willingness to) Ale in bankruptcy. The creditors almost unanimously passed a resolution expressing themselves as satisfied >vith Scott’s conduct. He Was asked not to file, and his affairs were placed In the hands of a private assignee to realise. Mr O’Neill said he was present at that meeting, and the; resolution re-, ferred to had been passed by the creditors under a. misapprehension. They thought some money would be fort'hcomihg from the balances due on the contracts. He had! already taken steps towards the filing of a bankruptcy petition, and had advised that this be proceeded with. The creditors, however, were in favour of a private assignment, so the bankruptcy petition was withheld. The committee had now discovered tlu true position, and Scott had been forced to file.

Mr Strang submitted that, if bankrupt had been promptly paid he would not have lost 'his discounts, and if the extras had not been cut flown he might have weathered the position. Sc.ott had been asked to) submit to judgment for £lo9o', but he was 48 years of age, had a delicate wife and two children, and he had lost his home and his plant and c'oulfl not possibly consent, to judgment. His Honour said the position was that bankrupt had speculated with other people's moiney. He had muddled along and not kept proper books. The motion for discharge was refused.