Supreme Court £l500 Claim Against Company Director Adjourned

Press, Volume C, Issue 29638, 7 October 1961, Page 14

Supreme Court £l500 Claim Against Company Director Adjourned

An action in which the Official Assignee (Mr O. T. Grattan), as official liquidator of South Island Holdings, Ltd., claimed £l5OO from Albert William Henry Falla, a company director, on the ground that Falla owed that sum to the company in liquidation, was adjourned by Mr Justice Richmond in the Supreme Court yesterday. Falla was the majority shareholder in South Island Holdings, Ltd., there being only one other nominal shareholder, when a Court order was made, on the petition of a creditor, to wind up the company. In the action which came before the Court yesterday, the company in liquidation sued Falla as a debtor allegedly owing it. £l6OO.

Mr C. M. Roper appeared for the Official Assignee, as plaintiff in the claim. Mr A. F. Wilding appeared for Falla, as defendant to the action.

Mr Wilding said he had been instructed on Thursday to ask for an adjournment of the hearing of the action. He had not been instructed at all in the matter before that.

When the writ was first issued against Falla, the company (in liquidation) had £2OOO owing to creditors and contingent liabilities of £2500. Apart from the debts owed by Falla, the comoany (in liquidation) now owed other creditors £3OO and had contingent liabilities of £350. Debts Assigned Falla had paid out other creditors and had their debts assigned to him. He wished the Official Assignee to hold a meeting of creditors to decide, by vote, whether the Official Assignee should proceed in the claim against him. Falla said he was entitled now, as the major creditor of the company, to be present and vote at that meeting. Falla had instructed him. said counsel that if the other creditors would agree to a moratorium of six months, he would be in a position to pay them out. The Official Assignee, as official liquidator of the company, had refused Falla’s request to have a further creditors’ meeting. To his Honour, counsel said that Falla was the major shareholder in South Island Holdings, Ltd., a car-dealing firm. There was only one other, nominal, shareholder. Falla had filed an amended defence to the claim against him. He now wished to file an amendment to that amended defence, counsel concluded.

Application Opposed Mr Roper said he must oppose the application for an adjournment. The v writ against Falla had been served and filed more than a year ago after a winding-up order had been made by the Court. Falla had taken no action since the serving of the writ claiming £l5OO from him until he was aware that a fixture had been given by the Court for the hearing of the claim. “It has to be conceded that Falla now has enough assignments of the debts owing to creditors by the company to

have a controlling vote. But such a vote would be a fraud on the minority of creditors. Falla is attempting to use his position as an assigned creditor to evade his obligation as a debtor to his company now in liquidation. “He wants to have this creditors’ meeting to rescind a minute passed when the creditors wished the official liquidator to take urgent action against him to recover the money he owed the company in liquidation so it could be used to pay creditors."

-To- his Honour, counsel agreed that the Official Assignee (as official liquidator of South Island Holdings, Ltd.) was not bound in law by any decision or vote of a meeting of the company’s creditors but had only to take notice of the creditors’ wishes.

“I am in a position almost to assure your Honour that there has been no change in heart by the creditors,” Mr Roper said. He said that Falla had filed what purported to be a statement of defence and amended defence. It really was, in effect, not a defence

but a counter-claim. Counsel said he opposed an adjournment of any length, as it seemed Falla was only trying to avoid his obligations. His Honour said that a short adjournment could do no harm, and the Official Assignee could tidy up some aspects of the matter by learning creditors’ present wishes if he so desired. If the Court refused an adjournment, it was obvious Mr Wilding could not proceed.

Mr Roper agreed that Mr Wilding would have to withdraw if the hearing went on. There was no sign of the defendant, Falla, in court, and therefore the hearing could not go on. “I shall adjourn the hearing. The Court will give another fixture for the action during the next criminal session. and then you should let your client know, Mr Wilding, that there will be no excuses and no adjournment,” his Honour said. On the applicaton of Mr Roper, his Honour ordered that Falla pay £6 6s, as costs of hearing the application for an adjournment, to the plaintiff.