A BANKRUPTCY CASE

Taranaki Daily News, Volume LIV, Issue 275, 17 May 1912, Page 5

A BANKRUPTCY CASE

THREATENING A DEBTOR. By Telegraph—Press Association. Wellington, Last Night. In the Supreme Court to-day Mr. Justice Cooper delivered judgment in reference to a petition by Biggs and Tyler, of Wellington, contractors, for the adjudication of W. F. Eggers, of Wellington, estate agent, as a bankrupt. The acts of bankruptcy alleged in the petition were: (I) That debtor,on or about March 4, 1912, made an assignment of his property to trustees for the benefit of his creditors; (2) that on April 3, 1912, a return of nulla bona was made by a bailiff of the Magistrate's Court to a warrant of distress issued on March 14, 1912. This warrant of distress was issued in respect of a judgment obtained by the petitioning creditors against the debtor on March 4, 1912, for a sum of £B7 17s 6d. Debtor also owed them a sum of £24 10s 9d. One of the grounds in opposition was that the proceedings taken by the petitioning creditors were for the purpose of exercising improper pressure over the debtor; that they were vexatious or oppressive; and that they also constituted an abuse of the process of the Court. In the course of judgment His Honor said that the real reason for the assignment was stated by Mr. Dunn, who prepared it in extraordinarily candid terms. He said that it was brought into existence as a formal document only, mainly to enable the said Charles Pratt to demand payment in his own name, with the object of frightening the debtor, and not with the object of securing the contingent commission payable to the said Charles Pratt. Concluding, His Honor said: "The Court will not allow its, process to be used by a creditor, who wishes thereby to carry into effect threats which the creditor has used for the purpose of inducing a debtor to commit fraud upon his other creditors, by giving to the threatening creditor an unfair advantage. Here the system of improper pressure, commencing with the calling into existence of an assignment of the debt due by the debtor, for the main purpose of enabling Parliament to frighten debtor into giving the petitioning creditors a most unfair advantage over the other creditors, was continued right up to the date of the petition, by threats to prevent this petition, and a veiled threat of subsequent prosecution under the Bankruptcy Act. Had the debtor given way to the threats, or had his trustees agreed to do so, a fraud upon the other creditors would huve been committed, and the petition, which has been filed in furtherance of these threats, is a tainted petition. This is sufficient cause for refusing to adjudicate the debtor bankrupt, and the petition must be dismissed with costs."