PAYMENT BY BANKRUPT

Hawera Star, Volume L, 15 May 1930, Page 9

PAYMENT BY BANKRUPT

FRAUDULENT PREFERENCE [ CLAIM. ASSIGNEE’S ACTION SUCCESSFUL Judgment, previously reserved, was given by Mr. J. H. Salmon, S.M., in the Hawera Magistrate’s Court this morning in favour of the Deputy Official Assignee (Mr. K. S. Sage*) against Samuel Campbell, a settler, for £209 4s 4cl, being the amount paid to defendant by Mrs. Matilda Stackhouse before filing her petition in bankruptcy, it "being contended that the paying’ of the sum was either an act of bankruptcy under the, Act, or a fraudulent preference, and, therefore, void. On February 18, 1929, defendant gave a guarantee to the Bank of New South Wales for £2oo= in bankrupt’s favour, as well as one year’s interest. On November 9, 1929, acting on an order he had received from bankrupt, he obtained £209 4s 4d from bank rupt’s solicitors. The payment of the sum to defendant was considered by the D.O.A. to, be a fraudulent preference, and detrimental to the interests of the other creditors in bankrupt’s estate.

“The question whether such an assignment is a fraudulent one within the contemplation of the section of the Bankruptcy Act is always one; of inference to’ be drawn from the whole of the evidence and of the surrounding circumstances,” said the magistrate. “It is clear from the evidence j and from the circumstances that the transaction cannot stand, in that it is contrary to the first principle of bankruptcy, law. It is clear that in October, 1929, Mrs. Stackhouse was hopelessly insolvent. Alter a purchaser had been found for her property and the amount of her equity ascertained, the giving of the bank order in favour of defendant amounted to an assignment of practically the whole of her property. “In the view I have given of this transaction the order given by the debtor was not only a fraudulent assignment under the Act, but also a fraudulent preference.” The magistrate added that defendant had not satisfied him as to his good faith in the matter, and the onus was on him to do so. ‘On his own •evidence he, was in October very much alive to the position of the debtor, and he appeared to have taken a very active interest in her affairs in that month. He had 1 known that her property was advertised for -sale by the mortgagee and that she was indebted to the bank to the extent of over £2OO. He must have known, or ought to have known, that there were other creditors. The inference the magistrate drew was that the debtor was influenced more by the ad misericordiam appeal of defendant's own position than by any threats of proceedings cn his part. Court costs totalling £3 16s and £ll 9s solicitor’s costs were allowed, plaintiff-. for whom Mr, L. A. Taylor appeared. Mr. G. H. Ryan represented defendant.