LEGALITY OF PAYMENTS

Evening Post, Volume CXI, Issue 93, 21 April 1931, Page 13

LEGALITY OF PAYMENTS

Reserved .judgment ivus delivered yesterday by tire Ohici' Justice, Sir Michael' -Myers, in an action in which the Official Assignee applied for mi order to declare fraudulent and void certain payments made by a bankrupt, C. Lambert, grocer, lof Farcmata, on t>ui March, ."1930, to C. B. Lempricre am Co., Joseph Nathan and Co., Ltd., and Alma Brown respectively. It was claimed on behalf of the Official Assignee that the payments to Lcmpncre and Co. and Joseph Nathan and Co., Ltd., were fraudulent preferences within the meaning of section 70 of tlio Bankruptcy Act. Alternatively it was contended that the payments, and payments made to certain other creditors by tlio bankrupt .on Bth and 10tu March, amounted to a fraudulent conveyance, jmd, therefore, wore an act of bankruptcy within section 26 of the Act, in whicli case the transactions would have to be set aside unless protected under section 82. At the hearing of the application, Mr. C. Bollard on behalf of Alma Brown, agreed to an order being made as asked by the Official Assignee iv re-1 spect of a payment of £40 to her. An order by consent was made, and his Honour directed that the £40 must be refunded by Mrs. Brown to the Official Assignee and that she must pay the Assignee's costs, £3 ;is. So far as the other two creditors wero concerned his Honour decided that they accepted payment in tlio ordinary course- of business and in good faith. As to the al-j tei-native claim that the payments niado by Lambert on Sth and 10th March amounted."to a scheme for payment of some o1: tlio creditors, leaving tho others unpaid, his Honour said ho was not clear that in all the circumstances of the case the payments to Lempricrc and Co. and Nathan and Co. could bo j said to come within section 20. But assuming that they did, the payees claimed the protection of section S2. | The authorities showed that the very j payment which constituted an' available act of bankruptcy might bo protected if the creditor receiving the j money acted in good faith. . . . The application made in respect of the payments to Lempriere and Co. and Nathan and Co* was dismissed with .£7 7a costs to each of the creditors. ■ . '.'' ' ■" Mr. O. Evans-Scott and .Mr. D. W, Virtue appeared for the Official Assignee; Mr. "W. L. Rothonbcrg for Nathan and Co.; and Mr. C. Bollard, for Lempriero and Go. and Mrs. Brown.