IN BANKRUPTCY.

Poverty Bay Standard, Volume I, Issue 197, 31 July 1884, Page 2

IN BANKRUPTCY.

(Before G. L. Greenwood, Esq., Registrar.) In re Bloomfield. The application in the above estate made by the Official Assignee in Bankruptcy, which was adjourned on Monday last, came on again for hearing this morning. Mr. Kenny appeared in support of the application, and Mr. DeLautour against it. Mr. Kenny said this was a summons which had been issued at the suit of the Official Assignee in Bankruptcy against Messrs. Common, Shelton & Co., calling upon them to show cause why the Court should not make an order to declare a certain mortgage of stock, dated the 19th day of April, 1884, void, and why the Court should not set aside that mortgage of stock as fraudulent as against the Official Assignee, on account of the consideration being partly antecedent, under the 79th section of the Bankruptcy Act. That was the section under which the application was made. The Bankruptcy Court had now very different powers committed to it under the new Act of 1883, powers which no Bankruptcy Court, either in New Zealand or at Home ever before possessed. Not only did the Judge of the Bankruptcy Court enjoy the whole of the power and the jurisdiction of a judge of the Supreme Court so far as it might be necessary to enable him to discharge his duties under the Act, but the 9th clause of the Act made provision for other special powers, and it said, subject to the provisions of this Act, every court having jurisdiction in bankruptcy, shall have full powers. In the summons they were asked for three things : first of all to declare under the 79th section that this deed was void against the Official Assignee; then it being found void against him, the property comprised in the deed was his property, and be invested in him the moment an order of adjudication is made. Therefore, they said if the court, being of opinion that the deed was void, they would further ask for an order against Messrs. Common, Shelton and Co. for the return to those animals which were specified in the said mortgage of stock, or that they be ordered to pay their full value, and they be also asked for the cost of that application* In regard to the question of jurisdiction, he would like to point out one or two things. The powers of the Court were contained in section nine of the Act, and also the 93rd, and from which the Registrar had the whole of the powers committed to a judge. Nor was this all. By the new doctrine under the Bankruptcy Act at Home, the Registrar could by delegation exercise the whole of the powers of the Chief Judge of the Bankruptcy Court, and as a matter of fact he did so, and only exceptionally important cases were taken by the Chief Judge. Ample powers were therefore given for the Registrar to deal with that case. Now they would be able to show that this mortgage of stock which was signed and delivered by the bankrupt to Messrs. Common and Co, on the 19th day of April 1884, and the consideration in which purports to be £lOl2 was for a debt- or debts which were either wholly or partly antecedent to the date of the delivery of that security, and they could show distinctly that part of that money consisted of a cheque which was handed to the bankrupt, amounting to £73 and some shillings, but which had nothing to do with the transaction, and was only meant to cover the bankrupt’s general accounts with Messrs. Common, Shelton & Co., and that was clearly a debt antecedent to the date of the giving of the security. That cheque, he was informed, was handed back to Common, Shelton & Co. on the very same day. There was a larger amount of some £750 or more. It appeared that the bankrupt purchased some sheep in January last, and that Common, Shelton & Co. paid for those sheep for him (the bankrupt), and in return he gave them a P.N. for £770 Gs Gd, which fell due on the 4th of April, 1884. He would be able to prove that the consideration, £770 and more, for this mortgage of stock, was thus antecedent. If they proved either of those matters, that would be sufficient to set aside the mortgage. There was no doubt the transaction had been cloaked by certain cheques which were given and passed between the two parties, but that was no more than they could expect, and he submitted that if a cheque was given and handed back, then the, consideration for that cheque was thus antecedent. The Registrar—l understand you wish to pursue the property in the possession of those that now hold it.

Mr. Kenny said that was all. There was no doubt they could pursue it, but he might say that by a sort of agreement it was understood with them that they should not take that course. As to the question of the costs of the application, if it succeeded, there could be no doubt the Assignee was entitled to his costs.

The Begistrar—Would it not be advisable, £ Mr. DeLautour disputes my jurisdiction, or you both to argue the matter out before iroeeeding with the evidence. Mr. DeLautour—l shall object to any evienoe beina taken from Mr. Shelton because hold strongly, that neither the Registrai ior the Court has any right on an ex parte ummons to set aside a deed. We would limply have a lot of evidence adduced many nonths before the trial would really come on, md would very likely prejudice the parties :oncerned. Mr, Kenny—This is not an ex parte sumnons, because the parties have been served, ind they are here present in answer to it. Mr. DeLautour—My contention would be he other way, so that it would be as well to ettle the question of jurisdiction, and get your .eoision on it before proceeding further. Mr. Kenny—Very well we will dispose of hat first. Mr. DeLatour said he divided the objection o the question of jurisdiction into two parts, irst the Registrar’s own jurisdiction sitting n Chambers as Registrar, and secondly the 'urisdiction of the Court itself, to set aside a deed on the alleged ground of fraud, by a summary proceeding taken in Chambers. First as to the Registrar’s powers, he underjtood Mr Kenny to argue that he (the Registrar) had absolutely all the powers of a judge, and of the Court in the absence of a judge, He submitted, with all respect to his friend’s argument, that it was not so. The Registrar’s duties ana jurisdiction were not now greater or more enlarged than they were under the Act of 1876. They would find that the powers under the new Act were of enormous extent, but they did not allow the Registrar by a stroke of his pen to do away with £1,500, as in this case. Those large powers were given by delegation by the judge; but there was no such delegation in this instance. The Act only said that the Registrar should Bit in Chambers for the dispatch of such business as authorised in the provisions of the Act itself, or by a delegation of the Judge Thus he (the Registrar) would have to look to the Act for his powers. The Registrar—The Judge was not absent from the judicial district, as mentioned in the Act, he was in Wellington, and on that ground alone the application must fail. In Christchurch, Jludge Johnston found it necessary to make two distinct delegations of power on minor matters, while, under Kenny’s contention, the Registrar would have absolute jurisdiction in himself. It is necessary that the Registrar should be clothed with the power to act in a matter of this lOrti Mr. Kenny—This question has been argued and decided before, when it was held that in the absence of a district judge, the clerk or his deputy could exercise full powers. Mr. DqLautour—My objection is that the judge—is not absent. I now quote from McCassy, page 884, in re Henri Shepperd. That case was of a similar nature to this, and the petition was dismissed. If clause 9th gives power to set aside a deed, then it only gives that power as a Court aided by a jury and to try the facts of the case. Clause eleven was quite clear, and provided that if in any proceeding in Bankruptcy there arises any question of fact, and if either parties wish it to be tried by jury, the Court may direct such trial to take place. It would be a monstrous power, if a judge on a summary proceeding could make an order of his own mere motion dealing with thousands of pounds of property and depriving parties of their right of trial. This was a case of facts, and should be tried by jury. Left Sitting.