BANKRUPTCY & MORTGAGES

Greymouth Evening Star, 22 June 1937, Page 5

BANKRUPTCY & MORTGAGES

APPEAL COURT’S DECISION [PER press association.] WELLINGTON, Juno 21. An important judgment affecting bankruptcy cases, where the Mortgagors and Lessees Rehabilitation Act is also involved, was delivered in the Full Court this morning. The case was that of Richards v. Pike. Jieard before the Full Court, on Aprifl.3 last. It concerned a petition issued by David James Richards, of Wellington, against a debtor, Norman Heaton Pike, and was founded upon the non-payment, of unsecured payment of costs due by Pike to Richards. After the issue of the petition Pike filed several applications for relief under the Mortgagors and Lessers Rehabilitation Act, which have not yet been heard.

Al the hearing of the petition in bankruptcy, counsel for Pike contended that the pendency of debtor's application for relief prevented the Supreme Court, from adjudicating the debtor bankrupt. Counsel for Richards held that unless the debtor established himself tis a farmer applicant the Bankruptcy Court had power to adjudicate him bankrupt.

The trial Judge, with the consent of counsel, thereupon addressed the following questions to the Full Court: (at Has this Court jurisdiction to determine whether or not the debtor is a farmer applicant?

(b) If the answer is in the affirmative and the Court determines he is not a farmer applicant, has the Court jurisdiction to adjudicate him bankrupt during the pendency of his application for relief? In a judgment delivered this morning, the Chief Justice (Sir Michael Myers) stated that the debtor's application under tin 1 Mortgagors and Lessees Rehabilitation Act could be decided only under that act, and this

necessarily involved the suspension of proceedings under (he Bankruptcy Act.

Air. Justice Smith. Mr. Justice Fair, and Mr. Justice Ostler, in a joint judgment. held that the peculiar legislation of the Mortgagors and Lessees Rehabilitation Act conferred exclusive jurisdiction upon the Court of Review to determine who was a farmer applicant. No other Conn had this power and the present petition must stand adjourned sine die until the order of the Court of Review had been made, determining the debtor’s application. The Court’s judgment was to answer the first question "No." in which case it was unnecessary to answer the second