PROOF OF DEBT.

Auckland Star, Volume LVII, Issue 110, 11 May 1926, Page 8

PROOF OF DEBT.

BANKRUPTCY ACT ACTION. INTENSIVE THEFTS ADMITTED.

MOTION TO REVERSE DECISION VERDICT FOR PLAINTIFF. A motion to reverse the Official Assignee's rejection of a proof of debt of Mrs. Lucie Raymond, in the bankrupt estate of Gennaro Nigro, which was heard by Mr. Justice Reed last month, was the subject of reserved judgment to-day. Mr. Fleming appeared for Mrs. Raymond and Mr. Mat-kersey opposed the motion. His Honor said: — "The grounds of. rejection are: (1) That the proof of debt was not filed within two months of adjudication as required by the Bankruptcy Act; (2) . that there is no liability. As regards the first point, section 100 (9) of the Bankruptcy Act, 1908, enacts: 'No proof shall be admitted or amended after the expiration of two months from the date of adjudication, except under special circumstances approved by the Assignee, or by the Court as sufficient to justify the delay." "The debtor was adjudicated bankrupt on July 24, 192;% and the proof of debt, was lodged on December 11, 1925. Until December 8 there were no assets disclosed in the estate, but, on that date, the Official Assignee recovered judgment against a brother of the bankrupt, which brought a sum of something over £3000 into the estate, for distribution among the creditors. I think that the fact that there were apparently no assets in the estate is a reasonable excuse for not proving, and that when assets were discovered there is no reason why a proof should not be allowed. I think the facts bring the case within the exception. "The secnod ground raises the question whether Mrs. Raymond lias any legal claim against the bankrupt. She had commenced aii action against Nigro which was automatically stayed by the bankruptcy. It was based upon an alleged agreement in writing. The statement of claim alleged that Nigro had sold the property at Rotorua, and that all conditions had been fulfilled to render the sum of £500 payable in terms of the agreement. There is no actual evidence, either way, as to what became of the property at Rotorua, but it is clear that the defendant has parted with it. If he has not sold it, he has, at all events, parted with it in such a manner as to render himself incapable of performing his covenant to sell 'as soon as reasonably possible.' In such circumstances the right to sue has arisen. The whole question therefore is whether the document constitutes an enforceable contract. It is attacked on two.grounds (1)

it is without consideration, and (2) Mrs. Raymond has no right of action on the document. j "I desire to say that the case has not come before mc in the most satisfactory | manner. It would have been better if the original action had been allowed to be' continued, and the questions involved decided at the trial. J "For the reasons I have already j stated, I think that Mrs. Lucie Raymond is entitled to prove in the bankrupt's! estate for the sum of £500, and for the ' j costs allowed by the Supreme Court in dismissing the motion to strike out the writ against Nigro. £2 2/. I have heard I no argument on the question whether! I she is also entitled to prove for her: legal costs against Nigro up to the date of the bankruptcy. A further question | should also be considered, namely,' whether the proof of debt should not be \ amended to show til? destination of the' money. Mrs. Raymond, although entitled! to sue upon the contract, is, of course, j not entitled personally to the money, j If the parties are unable to agree on these points further application may be made to the .Court. 1 think the appli- ■ cant is entitled to costs £10 10/, and j disbursements, to be paid out of the; bankrupt's estate." i