Court clears firms

Press, 15 March 1978, Page 4

Court clears firms

PA Auckland A Supreme Court judge has found that neither Mortgage Management, Ltd, nor Safe Custody Nominees, Ltd, both subsidiaries of Securitibank, Ltd (in liquidation) carried on the business of moneylenders and breached the Moneylenders Act. Mr Justice Barker gave a 55-page written judgment in the Supreme Court at Auckland after an application by the liquidator, Mr K. S. Crawshaw, for direction on a number of points. His Honour said that priority had been given to the case because the liquidator needed to know what securities he could realise and whether any of them were “tainted with illegality.” News reports had indicated that a number of people was considering litigation against the group. His Honour felt that the course now adopted should result in a lesser volume of litigation in the long term. Mortgage Management, had full records showing the destination of each contributor’s funds and there was an absence of any unequivocal declaration of global trust. “Accordingly I conclude that each investor’s contributions have not been mixed in one large fund,” said his Honour. “Each investment is clearly traceable in the books of M.M.L., which clearly regarded the funds as being allocated to the particular investor.” His Honour said that the Syndicates Act definition of a syndicate could not be applied to the Mortgage Management contributorymortgage scheme. Interest rates were in accordance with rates prevailing for mortgages at the time, rather than higher moneylenders’ rates.