ABILITY TO PAY

Evening Star, Issue 22790, 27 October 1937, Page 9

ABILITY TO PAY

COMPLETE BAR TO RELIEF IMPORTANT COURT OF REVIEW RULING [Pan United Press Association.] AUCKLAND, October 26. In a lengthy written judgment, the Court of Review, presided over by Mr Justice Johnston, has virtually decided ■ that undoubted ability to pay is a bar to relief under the Mortgagors and .Lessees’. Rehabilitation Act of last . yea* - - . , The decision was given on an appeal against the decision of the Wellington City Adjustment Commission, which dismissed an appellant’s application for adjustment of a liability. That applica- ; tion was made in respect of the. lease of premises in Wellington, and it was refused on the ground that the appellant’s admitted ability' to pay the rent in regard to which, adjustment ,was sought rendered an adjustment un- . necessary. The court now holds that the commission was right in dismissing the application for adjustment, and it dismisses the appeal. The appellant’s application was accompanied by a statement of assets and liabilities ‘as at September 30, 1936. This showed a net surplus of assets Over liabilities of over £160,000, and the holding of leasehold and freehold properties of the value of approximately £115,000, subject to mortgages amounting to approximately no .more than £45,000. The appellant ■was admittedly an important and wealthy corporation, carrying on a large business throughout New Zealand, and was in such a sound financial position that no question of its. ability - to meet its obligations in any direction could arise. The appellant said, however, that the lease in respect of which it claimed a reduction of rent was one. to which the Mortgagees’ and Lessees’ Rehabilitation Act, 1936, applied, and that ; on an application by it to the commission ; the commission was bound to proceed to find the basic rent, and, if the rent ■o found was lees than that payable under the lease, it was likewise bound to reduce the rent payable under the , lease to the basic rent, unless other * relevant considerations would make such a reduction inequitable.