CLAIM AGAINST DIRECTOR

Press, Volume XCV, Issue 28257, 20 April 1957, Page 15

CLAIM AGAINST DIRECTOR

Decision Reserved

In Supreme Court

Decision reserved by Mr Justice Adams in the Supreme Court on Thursday on the claim by Anthony Andersen (1952), Ltd., in liquidation, against Robert Nelson Anderson, a draper, and formerly managing director of the company, for £ 1357. Mr P. T. Mahon appeared for the company, and Anderson was represented by Mr E. B. E. Taylor and Mr P. H. T. Alpers. The case for the company was that the amount claimed was made up of advances by the company to Anderson. The hearing began on Wednesday, and later in the proceedings, counsel for the company said that £ 134 18s of the amount claimed should be allowed as a credit to Anderson.

When the hearing was continued on Thursday, Anderson gave evidence on the work he did and the time he spent in managing the company, the number of staff employed and his drawings as wages and dividends.

Walter William Moseley Percival, formerly proprietor of the White Hart Hotel, gave evidence on the time Anderson lived in Christchurch when managing the business. Mr Taylor said that ,Mr Mahon had argued that Anderson should have claimed salary or wages from the liquidator, and he also said that if the claim was allowed it would be depriving other creditors of what was owing to them. Mr Taylor said that this argument was without merit. The creditors had let themselves get into the position they were in. These creditors knew that the company had been unable to meet its accounts for some time, and if they had been prudent they would have stopped .supplies.

“Caught in Credit Squeeze” Though Anderson had carried on business on his own account for 30 years he was, like mariy other businessmen, caught in the credit squeeze of 1955-56 and it overwhelmed him. A business which had done .reasonably well in 1953 and 1954 rapidly went downhill and collapsed. Mr Taylor said he agreed with his Honour that some of the figures were not satisfactory. Anderson applied himself to the management of the business and left the books to his accountants. As a director he discussed the annual balance-sheets and accepted them. In spite of the method of recording the moneys he drew, Anderson did think he was drawing salary week by week. The books of the company showed that Anderson received a salary of £3OO in each of two years. He was entitled to remuneration of £1250 less some allowance for the time he spent at Greymouth. On the basis of award wages he must be entitled to remuneration irrespective of whether the company was making a profit at the time. As far as dividends were concerned, Anderson had more than £5OOO in the business, and the whole of it had been lost.

Mr Mahon said that the evidence had established beyond doubt that Anderson was rightly debited with £1222 2s. There was a liability on Anderson to rebut the debt he had acknowledged in his statement of affairs to the Official Assignee, and he had not discharged that liability.