ADJUSTMENT COURT

Hawke's Bay Tribune, Volume XXI, Issue 304, 8 December 1931, Page 7

ADJUSTMENT COURT

SITTING IN NAPIER EIGHTY APPLICATIONS FILED, DESIRE TO SEE TOWN RESTORED A sitting of the Hawke’s Bay Adjustment Court was opened at Napier to-day. On the Bench were His Honour the Chief Justice, Sir Michael Myers, Mr H. D. Vickery, and Mr 1,. O. H. Tripp. f> A total of 80 applications have bed*: filed and this morning there was a record'number of twenty-one members of the legal profession present. “You people in Napier want to get to work as soon as you can and have some buildings erected, ’ ’ said His Honour. “We all want to see tho town restored, and tho Court wants to help in that direction.” His Honour’s remarks met with warm approval from the members at the Bar. “There is a strong feeling of dissatisfaction among Ihe populace of tho town at the policy the Government has adopted in regard to rehabilitation,” said counsel, representing a first mortgagee, during the hearing of an apph cation in which applicant’s house had been a total loss. In such cases, he considered that tho amount of the free grant should be more generous, thus reducing the amount of the loan ad vanced. “It is quite right for you to urge it, but I know what you would do if you had to decide,” said His Honour in replying to counsel who appeared on behalf of a second mortgagee asking that the loss should be adjusted on a pro rata basis among the mortgagees. This suggestion was not accepted by the Court. It was pointed out that the first morgagee was no responsible for the further finance being arranged. Counsel submitted that if it had not been for the second mortgagee, the building in the first place could not have been erected. An application was made to have a mortgage removed from a title of a property that was originally worth over £2OOO, and was now valued at not more than £lOO. The land was now unsafe to permit of a dwelling remaining there.. Counsel stated that the Rehabilitation Committee had agreed to advance the applicant a loan for £7OO, on condi tion that a mortgage for £6OO was cleared. “That is rather a strong arbitrary stand,” remarked His Honour. “What ar e they going to do for the mortgagee whose property must be taken away?” Counsel submitted that the offer from the Rehabilitation Committee was practically valueless. Mr Vickery pointed out that a n application was to be made to the Rehabilitation Committee next week that the applicant be allowed the income on £7OO rather than have a loan. The Court discharged the mortgage and the applicant from any obligations thereto. REDUCTION IN MORTGAGE ASKED FOR. Au application was made by a prominent drapery finn in Napier for a reduction to be made in the mortgage owing to the bank. His Honour stated that tho Court had considered the application, and was of the opinion that the only course open was for the business to liquidate. He pointed out that the whole of the share-capital was gone. Counsel for the applicant admitted that the business at present could not pav twenty shillings in the £. His Honour pointed out that if the company rebuilt it would be starting off without one shilling capital, while there would be no equity in the building. His Honour failed to see how it could start off under such conditions. Tho Court felt the greatest sympathy for the shareholders, and in all cases where they could see any chance of a firm or businesses pulling through, the Court was most willing to assist. Counsel submitted that the offer made to the bank was most generous. “It appears to the Court to be a hopeless task,” said His Honour. “The managing-director ma v not thank us for our advice, but we cannot help feeling that he would only be inviting trouble by the course he proposes to take.” His Honour pointed out that the Rehabilitation Committee, in considering the position, had decided that liquidation was the only course for the company. It was not proper for the Court to make an order, which would only land an applicant into a hopeless task. It would be better for the company to liquidate, after which a new company could be formed, and the Rehabilitation Committee and the bank might then be approached. The matter was adjourned till the next sitting of the Court, and in the meantime the course proposed by the Court may be undertaken by the applicant.