Executor To Pay £500 To Standard Insurance

Press, Volume CVI, Issue 31115, 19 July 1966, Page 15

Executor To Pay £500 To Standard Insurance

CVero Zealand Prett Asiociatian)

DUNEDIN, July 18. • i Pl° maS k Sidey had established that he was entitled to substantial relief, said Mr Justice Woodhouse, of Auckland, m a reserved decision given today in a claim against Sidey by the standard Insurance Company, Ltd., in liquidation.

His Honour ordered Sidey to be wholly relieved in respect of £1772 and partially relieved by an amount sufficient to reduce payment to £5OO in another portion of the claim.

The company sought £8427 10s from Sidey as sole executor by representation in the estate of David Baxter. It alleged he was liable to meet the call on 16,835 shares in the estate on April 9, 1962. This followed the collapse of the company in 1961 and the hearing was held on June 28, 29 and 30. Mr E. C. Champion, with him, Mr E. J. Somers, represented the company, and Sir Wilfrid Sim, Q.C., with him Mr C. B. Chettleburgh, appeared for Sidey. His Honour said Sidey was given notice as representative of the late David Baxter that he would be required to pay £8427 10s in respect of the shares registered in Baxter’s name. Sidey, he said, took the position that the estate could not and that he personally would not meet this call. He had no beneficial interest in the shares, and in his view no personal obligation of any sort.

The company claimed Sidey had made himself liable for the call because he had distributed part of the assets without making provision for the uncalled share capital. It was said these distributions amounted to a devastavit (wasting of assets). Between March, 1957, and September, 1960, Sidey received £4240 in dividends from the company in respect of shares registered in Baxter’s name.

His Honour said the real issue in the case revolved around two submissions—that the company had suf-

fered no loss by Sidey’s acts, and that the dispersement of income could not be made the subject of a complaint such as this. “In one sense then, it can be said the company is complaining as a creditor that the defendant has prevented it from having recourse to an estate asset which it recognises would now be worthless anyway.” His Honour said he did not think the transfer of 10,000 shares amounted to a devastavit The company was not prejudiced in regard to its contingent claim by the transfer and he found in favour of Sidey. In the case of the 1000 shares sold for £lB5O, his Honour said he must hold in favour of the company. It seemed clear this was a sale by the estate followed by an application of the money to the beneficiary. “In the circumstances I cannot resist the conclusion that the estate was thus deprived of money which was available, even though temporarily, to meet the contingent claim of the company,” said his Honour. Discussing dividend payments, his Honour said the principle might seem a hard one, but creditors were entitled to be considered before beneficiaries and this applied to income if the capital assets were insufficient to meet creditors’ claims. “I have some sympathy for the defendant, but I must hold these income dispersements should not have been made without a court order.” The company had failed in its principal complaint that Sidey dispersed the 10,000 shares without making provisions for calls on the remaining shares, and also in respect of four of the dividend payments totalling £2467. It had succeeded in the matter of the transaction involving 1000 shares and the dispersement

of the four most recent dividends totalling £1172. Having regard to the claims in which the company had succeeded, said his Honour, it had been submitted that these were technical breaches of Sidey’s responsibility to the company and that he was entitled to be excused in respect of them. The defendant’s honesty had never been in question and circumstances showed he had acted reasonably. The mistake made by him was not his belief that these payments could safely be made, but his failure to obtain the order which certainly would have sanctioned them. Sidey had made out a strong case for relief. The court would have approved the dispersement if he had made application, and it would have also approved the dividend payments. In any practical sense Sidey’s failure to obtain the direction of the court had cost the company nothing. His Honour ordered Sidey to be wholly relieved in so far as the four most recent dividend payments amounting to £1772 were concerned, and to be relieved in respect of the share transaction to the extent that he would pay £5OO in all.

Tests for Pylons.—Europe’s biggest tower-testing station has been opened in a 200-foot deep quarry In the Mendip hills near, Cheddar, in England. The central electricity generating board has spent £340,000 on the massive button-controlled structure designed to test by completely novel methods the strains and stresses to which all types of pylons, steel chimneys and concrete towers will be subjected by ice-loading high winds and the drag of current-carrying wires.—(Reuter.)