SUPREME COURT Public examination under Insolvency Act

Press, Volume CXII, Issue 33037, 3 October 1972, Page 17

SUPREME COURT Public examination under Insolvency Act

The first public examination of a person in Christchurch under the Insolvency Act, 1967. was held in the Supreme Court yesterday before Mr Justice Wilson. The bankrupt under examination was John Reginald Gisby, a former fisherman, now a restaurant manager of Taupo. Mr G. K. Panckhurst appeared for the official assignee (Mr I. A. Hansen); Mr J. L. Woodward for Stark Bros, boat builders, a creditor, Mr M. P. Boyce for Port Hutt Fishing Company, in liquidation, a creditor; and Mr R. A. Galbraith, of Auckland, for Mr Gisby. Mr Gisby said to Mr Panckhurst that he was adjudicated bankrupt on September 18, 1968, and that he had not obtained a discharge. He was married to his second wife, Mary, in February, 1965. She had about $2OOO, a life insurance policy and personal belongings. Mr Gisby said that he and his wife ran a company which operated the New Oban Hotel on Stewart Island. The hotel was sold in 1965 and after the repayment of the mortgage and other expenses he received a profit of $22,850. This wife was paid nothing from the hotel sale. About 1963 or 1964 Mr Gisby said he began his fishing operations and his Chatham Islands fishing venture began with the purchase of the Echo in December, 1965, for $6OOO. He had sold the hotel and entered into fishing because of the talk of the big catches of crayfish which could be made at the Chatham Islands. The money from the sale of the hotel was reinvested in the fishing venture. FIVE VESSELS Early in 1965 Mr Gisby said that he had a fleet of five vessels. His first fishing trip to the Chathams was made in February, 1966. At that time he was not heavily committed but he could have had a small overdraft. The first Chathams trip was not really financially successful. There was only one processing shed on the islands. There was no way of getting the fish ashore. Sometimes it took two days to unload a catch and half of it would be rotten. The trip proved that there was crayfish there in some quantity. A loss was not made on the trip. His wife remained in Dunedin while he was in the Chathams. In all he made about 15 to 20 trips to the Chathams. His fishing boat Haleyon was being repaired on the beach at Waitangi when it was damaged beyond repair. The insurance company paid out $6OOO. His boat the Willumee was refitted as a mother and factory ship. Refrigeration units were fitted. The Willumee sank while under charter to

Alexander Helicopters. The insurance company paid out $20,000 but witness received only half of that. By June, 1967, Mr Gisby said, he had lost or sold his fleet of vessels. His profit from the hotel was gone and he was in debt. The Willumee had been declared black by the Seamen’s Union and he had to put a Seamen’s Union crew on the boat and it cost him thousands. SUPPLIES BOUGHT

While he was in the Chathams his wife was buying supplies and other items to be sent to him, Mr Gisby said. She was not paid a wage. He knew of no reason why her financial position should have improved by the middle of 1967. At the time of his adjudication he owed $28,000. He had lost money on a restaurant venture in Dunedin. By the time the last of his boats was lost his financial position was becoming precarious. In August, 1966, the Port Hutt Fishing Company, Ltd, was formed to operate the Willumee. The company never really operated. One proved debt was for $lB,OOO, being a call on his shareholding in the company. His wife had paid that amount and $2OOO which represented her call. He did not know where she obtained that money. The first boat he leased, said Mr Gisby, was the Saraband in June or July, 1967. It was leased in the name of the company with a personal undertaking from witness. Some time in 1967 his wife purchased a hull for $l5OO, Mr Gisby said. It became the vessel M.K. which was fitted out with an engine and equipment at a cost of about $lO,OOO. He did not know where the money came from. He negotiated the purchase. A good deal of the cost was charged up. Those creditors were paid last week by his wife. The M.K. sank at Milford Sound on January 18, 1968. The insurance company paid out $ll,OOO.

TWICE CONVICTED The M.K. was registered and run by his wife because she had the capital and he die not. Mr Gisby denied that he knew he was precluded from owning a fishing boat because he had been twice convicted of offences involving crayfish. One was for the possession of undersized crayfish tails and the other for tailing crayfish at sea. Mr Gisby admitted telling a meeting of creditors on October 25, 1968, that the M.K. was his boat. He was mixed up. His wife had given or lent him the $ll,OOO from the insurance company. It was paid into his account to meet outstanding accounts. His wife had made a few thousand fishing the M.K. The next vessel that his

wife fished from was the Darnley. Witness arranged the charter in Auckland. His wife contributed $2OOO towards the purchase of a house costing $6OOO. The Darnley was chartered for two years. The charter Cayments were substantial ut they became payments towards the purchase price of $16,050 if an option to purchase was exercised at the end of the term. The boat would then have become freehold in his wife’s name. Mr Gisby said that he was his wife’s guarantor. The $4OOO deposit had come from his fishing account into which the $ll,OOO had been paid earlier. INSURANCE PAID The Darnley fished at the Chathams for crayfish. It sank there on August 14, 1968. The insurance company paid out $21,000 and his wife received $5OOO of that. Over all the Darnley lost money. On August 8, 1968, his wife purchased the Seaway for a deposit of $BOOO. The money came from the National Mortgage Company. It was later paid off for a total of about $34,000, the witness thought. Mr Gisby said that he could not remember if he was the guarantor but he could have been. The contract was completed about a month and eight days before he filed in bankruptcy. The Seaway was fished from the Chathams and witness was the fishing master but he had to have ticketed men and engineers. He was paid so much a ton and his wife paid all the expenses. The vessel was fished very profitably for about 18 months when it was sold. Mr Gisby said that he was adjudicated bankrupt on his own petition. He did it for a variety of reasons. He had a number of writs out against him and he owed his brother and sister money and their solicitor wrote saying that they were going to take out proceedings against him. ‘NO GUARANTEE’ Mr Panckhurst: Was it not apparent from the very beginning that the Seaway was going to.be a profitable venture?—There is no guarantee. Out of 1000 people in the Chathams in the crayfishing boom I don’t think that there would be more than six who made any money. A wellknown businessman had an engine breakdown and I think he waited 65 days for the parts. He finished up by putting a revolver in his mouth and blowing his head off. The Seaway was eventually sold for about $50,000 to a New Plymouth syndicate. His wife purchased the Kotare which was operated from Gisborne. It was not really successful.

Mr Gisby said that he had nothing to do with the formation of the company, Four Seasons Motels, Ltd, which was set up in February, 1970.

He had discussed the venture with his wife and they were in agreement. It was formed to purchase a motel business in Taupo of $lOO,OOO. There was a mortgage of $40,000. He was not sure if his wife paid the balance in cash. The business was sold to W. I. Davey, Ltd, for $122,000 about July, 1970. Witness and his wife operated the motel for about five months at a reasonable profit. Following the sale of the motels the company leased a restaurant in Taupo. It was later leased to a man with the right of purchase but he made a mess of the business and never exercised his right. MONEY FROM SYDNEY Mr Gisby said that he could afford tp pay between $BO and $lOO a month off his debts. Recently he had received about $650 from Suva and $2OOO from Sydney from accounts witness operated in those places. To Mr Galbraith Mr Gisby said that he had lost his money through operating the Willumee and a variety of reasons. The engine from the freezer blew up and the Seamen’s Union declared the ship black and demanded that he had to take on board able seamen who knew nothing about fishing and who demanded three meals a day. His Honour: Quite unrealistic from the point of view of the job?—Yes, I think so. Every person, you could quite safely say, who has owned a fishing boat over 100 ft has gone bust in New Zealand. Once you get over 90ft the Seamen’s Union grab you and that’s the start of the finish.