NOVEL LEGAL POINT

Greymouth Evening Star, 30 November 1926, Page 5

NOVEL LEGAL POINT

PROPERTY SALE DISPUTE. ?• q ; d ~ " LIQUIDATOR’S..QUANDARY i (Per Press. Association.) AUCKLAND, Nov. 30, A point of law, said to be without precedent in New Zealand, was argued before Justice Ostler in the Supreme Court.

Victoria St. Estates Ltd. acquired from the trustees of the Outhwaite block, at the corner of Victoria lligli and Kitchener Streets, a lease of the property for 100 years, at a rental of twti thousand pounds a year for the first forty years and of three thousand pounds a year for the remaining sixty years. Under the lease, Victoria St. Estates were to erect within five years, a building to cost not less than £BO,OOO, another clause in the lease providing that the buildings at present on the property should not be pulled down until security for the second £15,000 was provided. Having acquired the lease, Victoria St. Estates re-sold it co another company, the Unique Pro-] perties Limited, at a profit of £15,000 cafch, then went into liquidation for che. purpose of dividing the capital and profits among the shareholders. The trustees of the Outhwaite block then gave notice to the liquidator that he was not to pay out any of the money without making provision for the payment of rent, and for the erection of the building in the terms of tlic lease, notwithstanding the assignment to Unique Properties Limited. Being pressed on the one hand by shareholders, and on the other Hand by the trustees, the Liquidator applied to the Court for direction. The position on these lines was explained to the Judge by Mr. Northcroit, for the liquidator. Mr. McVcagh argued that as the trustees had the right of recovery against Victoria St. Estates Limited for any breach of lease during the whole term of the 100 years, the liquidator was bound to set aside sufficient money to answer any possible claim. Mr. Finlay, for the shareholders, argued that the trustees having agreed to the assignment to Unique Properties Limited, and that Company being* more substantial financially than Victoria St. Estates Limited, the possible claims of the trustees' against Victoria St. Estates Limited had become a contingent debt within the winding up provisions of the companies Act. Mr. Finlay contended, however, that no sum should be set aside in view of the demonstrated values of the lease ,and the financial responsibility and position of Unique Properties Limited. The Judge reserved the decision, and remarked that the case was interesting and without precedent so far as New Zealand law was concerned.