SUPREME COURT Possession Of Bankrupt's Tools Disputed

Press, Volume CVI, Issue 31151, 30 August 1966, Page 8

SUPREME COURT Possession Of Bankrupt's Tools Disputed

A hearing before Mr Justice Macarthur in the Supreme Court yesterday of a claim by William Rezso Simon, a fitter and turner, of Auckland, against Arnold and Wright, Ltd., general manufacturers, of 10 Walker street, was adjourned until today. Simon was adjudged bankrupt in Christchurch on February 3, and his claim was brought by the Official Assignee. represented by Mr N. W. Williamson. Mr P. Downey, of Wellington, appeared for Arnold and Wright, Ltd. On January 17,1964, notices were sent out advising there would be a meeting of creditors, and on January 28 creditors met and were presented with a statement of affairs which showed an estimated deficiency of £5264, said Mr Williamson.

On January 30 the defendant company took possession of plant and tools worth £4OO from Simon’s factory at 84 Falsgrave street, and on February 3 Simon was adjudged bankrupt. The plaintiff’s claim rested on the doctrine of relation back to the date of commencement of bankruptcy, said Mr Williamson, and it was held that Simon committed an act of bankruptcy by having notices sent to creditors on January 17 indicating that payment of debts might be suspended and his property was under a possession order as from that date. The plaintiff also claimed that on January 27 Arnold and Wright, Ltd., wrongfully paid to Durax Products, Ltd. (now known as Lighting Products, Ltd.), £677 as part payment on an account of £715 purported to be owing by Simon to Durax Products, Ltd. Included in the £677 was £l9O 5s 6d related to cost of certain alterations to premises at Falsgrave street and for which Simon had disputed liability. In March, 1963, Arnold and Wright, Ltd., agreed to market Simon’s entire production of light fittings for three years, and they paid him £l5OO. Simon bought materials such as brass tubing from

Durax Products, Ltd. Towards the end of 1963 Simons financial difficulties increased, Arnold and Wright reduced their orders but would not permit Simon to sell his products elsewhere. Mr Downey said the basic question was whether the doctrine of relation back applied to January 17. If it did then it would not be contested that the tools were not in the order and disposition of the bankrupt at the time, nor would the value of the property be disputed. Arnold and Wright contend that the plant and tools were purchased by them for £7OO, but that delivery was not taken and the property was hired to Simon at £156 a year, said Kenneth Gordon King, of Christchurch, a director of Arnold and Wright and managing director of Durax Products Ltd.

King said Simon had not been refused permission to sell his goods through other firms because Simon had already broken an agree ment not to do so. King said it had been made quite clear to Simon that he would have to pay for any alteration to the premises or pay more rent if the work was done.