MATAMATA BANKRUPT.

Matamata Record, Volume VI, Issue 492, 26 November 1923, Page 2

MATAMATA BANKRUPT.

COMMITTED FOR TRIAL. Alleged Breaches of Act. Several breaches of the Bankruptcy Act were preferred against Geoffrey L. Malion, formerly produce merchant of Matamata and at present a resident of Whangarei, before Mr. H. A. Young, S.M., at Hamilton on Friday. Mr. Hi T. Gillies prosecuted on behalf of the Crown, bankrupt being represented by Mr. F. Swarbrick. The charges were arranged in three sets, the first " that he brought about his bankruptcy by unjustifiable extravagance," the second " that he carried on trade by fictitious capital, by representing that money was coming to him from his father's estate, and that he contracted a debt of £ll2 2s 6d to Kempthorne, Prosser, Ltd., and one of £5 5s to W. Percival, well knowing at the time that he had no probable expectation of paying these debts as well as his others, and the third " that being adjudged a bankrupt on July 27, 1913, he induced W. W. Livingstone to guarantee his account at the bank by the false statement that money was to come from him from his father's estate, and so did obtain credit from the bank, with incurring debts of £56 2s Sd with F. E. Lark and £lO 7s lid with the Cargill PubJishing Co., knowing that he had no "reasonable expectation of paying them." Edith Kingsford, clerk in the office of the official assignee, Auckland, produced the books of the bankrupt and the order for adjudication. Mr. Gillies said that Malion was adjudicated bankrupt in July of this year. The official assignee engaged an accountant to, investigate his af- ! fairs, who would state that bankrupt must have known he was insolvent 12 months before he was adjudged a j bankrupt. It would also be shown that he had incurred debts which he must have known he had no hope of paying, and that during the period December, 1922, to the date of his bankruptcy he was living at the rate j of £6OO a year. William A. E. Leonard, public accountant, said that acting under the instructions of the official assignee he investigated Mahon's affairs, and the position showed that at, the end of 1921 he could not have paid 20s in the £, but witness regarded two things as conclusive evidence that in July, 1922, bankrupt was well aware of his position. One was his practice of giving post-dated cheques, which began in 1921 and later became very general, while his bank overdraft was increased by £6OO, and a very substantial drop in his monthly sales took place. In July, 1922, bankrupt wrote to Robertson and Lewisham explaining his inability to meet his engagements. By January | 1, 1923, a balance-sheet of bankrupt's j affairs showed.that his position had become very much worse, and his deficiency, taking all his assets at full stated value, was approximately £7OO. By reference to bankrupt's books witness found that he had made attempts to ascertain his position, and, in witness' opinion bankrupt had np justification whatever for carrying on his business after December, 1922. . Mr. Gillies: Could ho have paid the sum of £24 15s to A. Wright as well as all his other debts, or a debt of £175 12s 3d to the Waipa Collieries?—No. , ' ' Witness said he had investigated bankrupt's drawings throughout the whole period of his business—from September, 1920, to July, 1923—and a careful analysis of his cash payments showed that the drawings amounted to £1430. This represented drawings against his total business receipts, which amounted to £L2,l<4, and amounted to more than 10 per cent, of his turnover. For the last seven months of bankrupt's trading he withdrew for his private use ££Bl, and witness found evidence that part of his stock was used for his family purposes—coal, firewoo.d, kerosene, etc. Witness would therefore estimate his drawings during this period to be at the rate of approximately £6OO per annum. , ; .. Adam Wright, tea merchant, said that on April 13 bankrupt purchased from him tea to the value of £25 15s. He had not been paid for it. i tforris William Bell, representative , of the Waipa Railways and Collieries, Ltd., proved an account for £l2l in- j curred by Malion between May 31 and July 27, 1923. The goods had been delivered but his company had not been paid the amount. Charles Joseph Molloy, representing Kempthorne, Prosser, Ltd., proved that his company had supplied bankrupt with goods to the value of £ll2 2s 6d between March and May, 1923. His company had not been paid. , William Percival, taxi driver, said Mahon incurred a debt with him in October, 1922, for £5 5s for driving him to Matamata. Witness had not been paid. , , ; Frank Edwin Lark, commission agent, Matamata, gave evidence that bankrupt contracted a debt for £36 2s 8d with him in February, 1923. Tlie full amount of the account.was £56 2s Bd, but before the end of March he received tw.o payments of £lO each. William Livingstone, farmer, of Matamata, deposed to his having lent accused £250 in August, 1921, on Mahon's representation that there was enough coming from his father's or his people's estate to cover this amount. Accused gave him a p.n. for the amount. But for the representation made witness would not have lent accused the money, as he had no security to offer. Accused repaid about £l5O of the loan. About a year later witness became one of three guarantors for accused's account. At 'the time of the guarantee accused owed witness £IOO plus the interest he was supposed to pay. When Mahon was guaranteed witness asked him if he was still expecting from the estate, accused replying that "he was. After the guarantee had been fixed up witness had received only £l2 from Mahon, but the remaining amount had not yet been paid. Witness had had to pay his share (one-third) of the £4OO to the bank, the amount of the guarantee. At the conclusion of the evidence Mr. Swarbrick submitted that ' a prima facie case had not been made out on the charge of commencing business on fictitious capital. There was nothing to show, he contended, that accused had not received anything from his father's estate. His Worship concurred that there was no evidence to show this, but Mr. Gillies was granted permission to recall Edith Kingsford from the official assignee's office. She gave evidence that nothing had been shown (Continued in Next Column.)