BANKRUPTCY LAW.

Auckland Star, Volume LVIII, Issue 185, 8 August 1927, Page 8

BANKRUPTCY LAW.

SUPREME COURT DECISION. AfJATXST AUCKLAND DEBTOR. Points of law under the Bankruptcy Acts were dealt with in a judgment which Mr. Justice Herdman delivered in tho Supreme Court to-day, when he •djudicated Charles Bailey, the younger, boathtiilder, of Auckland, as bankrupt.

His Honor said on June 23 John Burns and Co., Ltd., signed a petition praying that Bailey Imj adjudicated. The acts of bankruptcy relied on were, that on .(une 10th or 10th, debtor gave notice to the petitioning firm that ho had suspended or was about to suspend payment of his debts, and that on June 22 he made a conveyance of hie property to a trustee for the benefit of the creditors.

In the hope of avoiding bankruptcy, counsel for the debtor and the trustee submitted that the special circumstances nt' thin case constituted a " miflicient <wmo" for refusing to make an order within th« meaning of section 40 of the Bankruptcy Act, 1008.

The Court of Appeal in England had decided that: "The fact that shortly before the presentation of a bankruptcy petition against a debtor he had with the assent of a large majority of hi* creditors, executed a deed assigning the whole of his property to trustees appointed by the creditors, to be administered by them as in bankruptcy, was not, within the meaning of the Bankruptcy Act, IHNU, a 'sufficient cause" for refusing to make a receiving order on the petition."

"There in nothing in the circumstances of the present case" Raid his Honor, "which nhniild prevent the. principle stated from operating, and no cause had been shown by he should dismiss the petition. Debtor would, therefore, be adjudicated a bankrupt, and the petitioning creditors' cost would be taxed and, paid out of the rotate."