BANKRUPT’S ASSET

Dominion, Volume 26, Issue 218, 10 June 1933, Page 13

BANKRUPT’S ASSET

Fisherman May Not Retain His Launch SUPREME COURT RULING Judgment was delivered by Mr. Justice MacGregor in the Supreme Court yesterday in a case in which the Official Assignee in Bankruptcy asked the Court whether the fishing launch Sicilia, seized by the bailiff under a judgment for £229. and now in the Boat Harbour, Wellington, was a “tool of trade” within the meaning of section 121 of the Bankruptcy Act, 190 S. His Honour held that the launch formed part of the property of the bankrupt, passing to the Official Assignee, and divisible among his creditors. The launch formed part of the property of Guiseppi Lamacchia, fisherman, of Island Bay, who was adjudged a bankrupt on his own petition on April 4 last. Practically his only asset was a fishing launch, in which he formerly carried on his business as a fisherman. This launch was valued at £4OO, and bankrupt, through his solicitor, claimed that it was one of his “tools of trade” which he was entitled to “select and retain as his own property” under the Bankruptcy Act, 1908.

Official Assignee’s View.

The Official Assignee contended, on the other hand, that the launch was not a “tool of trade” of the bankrupt within the meaning of the section, and that even if it were a “tool of trade” It could not now be selected and retained by bankrupt as its value was, in his opinion, considerably over £5O. “From the wording of the Act it would at first sight seem to be clear that in no event could a bankrupt successfully claim to ‘select and retain’ any article exceeding in value the sum of £50.” his Honour said. “Mr. Willis, for the bankrupt, however, did not agree with this view. He contended that, on the true construction of the section, if there was only one article in a bankrupt estate which appeared to come within the purview of the section, the bankrupt was entitled to ‘select and retain’ it as his own, whatever its value! “Such a construction obviously might lead to strange and unlooked for results. In this very case, for example, the launch in question might have been worth £4OOO or more. Wording of the Section.

“In the present case the property in the chattel in question is now vested in the Official Assignee, and the question is whether the words of section 121 are strong and clear enough to divest that property from the Official Assignee and revest it in the bankrupt. In my opinion they are not reasonably capable of such a construction.

“Once it is admitted that the only ‘tool of trade’ in a bankrupt’s estate is over ‘the value in the opinion of the assignee of £so,’ it is, I think, manifest that there is no article which the bankrupt could ‘select and retain' as his own property under the section. “In view of the opinion I have formed and expressed on this branch of the case, there is no need to determine the question whether this launch is or is not a ‘tool of trade’ of the bankrupt in terms of the section. All I need say is that as at present advised I have grave doubt whether a fishing launch of this type can be held to be a ‘tool of trade' of the bankrupt at all.” At the hearing Mr. W. H. Cunningham appeared on behalf of the Official Assignee, and Mr. J. D. Willis on behalf of bankrupt.