ADJUSTMENT COURT

Hawke's Bay Tribune, Volume XXI, Issue 306, 10 December 1931, Page 10

ADJUSTMENT COURT

NAPIER SITTINGS RESUMED. The Hawke’s Bay Adjustment Court continued its sitting in Napier yester day. On the Bench were His Honour the Chief Justice, Sir Michael Myers, Mr H. 1). Vickery, and Mr L. O. H. Tripp. guarantor seeks release An application was made by a guarantor of an account to a bank for release from a portion ot the guarantee. Counsel for the applicant referred to the earthquake losses sustained and to the necessity for the applicant to conserve every shilling of his capital to enable him to carry on his business. Counsel submitted that the applicant should bo placed in the position of the debtor seeking release. In reply to a point raised by his Honour counsel stated by special Act the Court had the power of nullifying many of the principles that had been observed for a long time past. His Honour said that if the guarantor was to be placed in the debtor’s position there was little use in the bank having a guarantee at all. Counsel submitted that in the ordinary course of business the guarantees held by the man who was backed by the guarantor were sufficient to have enabled the amount of £l5OO to be advanced by the bank without the guarantee at all. Counsel for the bank was emphatic that the money would not have been advanced without the guarantee. Counsel further stated that applicant had estimated his earthquake losses at between £7OOO to £lO,OOO. When the bank called up the guarantee he was prepared to pay a substantial portion of it, but the bank refused his offer. Cross-examined, applicant said that he had not stated that he could not pay the guarantee, but he thought that he was enitled to any consideration that the Court could see its way to give. At this stage the Court adjourned. The Court, in giving its decision, had every sympathy for the applicant, but felt that if it granted the application it would be laying down a principle that any person in the province, no matter how wealthy, who could easily pay his debts, might come to the Court because he made a loss, and could ask that other people should share it. The application was dismissed DISTRIBUTION OF ASSETS An application was made'to have all assets distributed among tho creditors so that a filing in bankruptcy may be avoided. Counsel for applicant said that there was no desire to avoid responsibilities, and the virtue of the application was that no creditor would have any undue advantage. The total liabilities were £787, and by. the application it was hoped that the rights of the creditors as between themselves would be adjusted. Counsel representing one creditor pointed out that the applicant, who was the solo beneficiary and executrix under her husband’s will, went into possession and so became liable for any liabilities. Applicant stated that she lost everything in the earthquake, amounting to £2OOO. Sh e had £3OO in cash, this being the remainder of her late husband’s estate, and £lOO from her mother’s estate. By consent the estate is to be assigned to a nominated assignee and the money to be distributed as if administered in bankruptcy-. LESSEE Al'l-r IES FOR RELIEF Some unusual eirceinstanccs were disclosed i n the hearing of a:i applia-

tion by a lessee of a local body’s endowment when relief was applied for. The leasehold property in question was situated between the Tutaekuri and an old channel of the river. Counsel for the applicant stated that the building on the property was badly wrenched by the earthquake, being made quite uninhabitable. The land in question was also greatly damaged. As a result of the earthquake the applicant was forced to abandon the house, to which nothing had been done by the owners in the way of repairs. Owing to th echanged levels of the land the river was a menace in time of flood. The Hawke’s Bay Rivers Board had completely changed the embankment system, making the property more liable to flooding. He understood that the Harbour Board was taking steps to have another bank -.rented which, would pass alongside the dwelling. His Honour; You have not been paying the rent. Counsel: No, but it has been demanded while there has been a refusal to accept a surrender of the lease. Counsel for the owners said that the land concerned in the lease was raised considerably by the earthquake. The earthquake damage would really be a benefit to the lease although tht house had been damaged. Hiss Honour: Why has the house not been repaired? Counsel: 1 find that all the correspondence on that deals only with the surrender of the lease. A bank had been made from the main river to the old channel to the main road, but this was not done by the local body owning the property. The area had never been immune from flood, and with the building of the proposed bank it would be much safer than previously. He realised that if a surrender of the lease was not accepted the house would have to be put in otder. His Honour: The best thing to do is to accept a surrender of the lease; then you will be free to do the repairs as y'ou like. Counsel: This is a lease that we prefer to hold if possible, because we are getting a good rental. His Honour: You can’t have it both ways. I think you should agree to a cancellation of the lease. If not you may have to consider a possible reduction of rent.

The matte’ was adjourned till the next sitting of the Court, and in the meantime the local body owning the property is to consider the position