“THE WORST MUDDLE”

Sun (Auckland), Volume III, Issue 909, 28 February 1930, Page 1

“THE WORST MUDDLE”

LIQUIDATED BUILDING FIRM’S AFFAIRS LIQUIDATORS CRITICISED “It is one of the worst muddles that has ever come before the court.” rpHE affairs of the building firm of Cecil A. Lee, Ltd., in liquidation, were thus described in the Supreme Court today by the Assistant-Crown Solicitor, Mr. Hubble, representing the official assignee, who is official liquidator of the estate. The official assignee applied to the court for directions concerning nine remaining claims against the estate, these including two by the voluntary liquidators, T. S. Miller and A. J. Lennox. i Mr. Hubble said the court had already admitted 84 claims involving £IB,OOO, concerning which there was no dispute. There still remained nine claims, totalling more than £3O-,000, which the official liquidator had rejected. Five of these were not being pressed, he said. Representing T. S. Miller, one of the voluntary liquidators, Mr. Blomfield said the first point to he settled was whether there were sufficient funds to meet preferential claims, of which his client’s was one. He suggested that the proper course was for the court to refer the claims to the registrar for taxation. His Honour expressed the opinion, in which Mr. Hubble concurred, that the voluntary liquidators would have to bring an action to prove their claims. “The official liquidator will not admit any claims that are not proved,” Mr. Hubble stated. Mr. Northcroft appeared on behalf of the other voluntary liquidator, A. J. Lennox, and Mr. Thwaites for the Eden Construction Co. Mr. Hubble said that although the Eden Construction Company’s claim would probably be settled, the firm would have to institute an action within a month to prove its rights. NOT DISPUTED On behalf of the National Bank of New Zealand, Mr. Cocker said he understood the bank's claim was not disputed. The position of certain leases, however, required to be cleared up. The point at issue was whether the leases were subject to lien, so that the proceeds could be set against the department. Mr. Hubble said that under the liquidation, the voluntary liquidators had sold the leases for £750, but the official liquidator could not obtain possession of the leases to surrender them. His Honour made an order authorising the official liquidator to take action against the National Bank of New Zealand within a month, to recover the leases. A similar pel iod was allowed the Eden Construction Company to institute proceedings in support of its claim. The contention of Mr. Blomfield Was that the voluntary liquidator did not require to sue at all. The judge remarked that the assistant Crown Prosecutor held that the liquidators had performed their work so badly they were not entitled to receive any payment. Mr. Hubble pointed out that the rule restricted reimbursement of expenses to those “properly incurred.” The official liquidator was in no way indebted to the voluntary liquidators, he said. “The liquidators were properly appointed,” remarked Mr. Blomfield. “During the six months the voluntary liquidators controlled the business they carried on at a loss of £3,000,” declared Mr. Hubble. He explained that the official liquidator objected*to paying the voluntary liquidators because of their negligence. His Honour decided the voluntary liquidators must bring an action to support their claims.