ADJUSTMENT COURT

Hawke's Bay Tribune, Volume XXI, Issue 306, 10 December 1931, Page 7

ADJUSTMENT COURT

THE NAPIER SITTINGS TO-DAY’S PROCEEDINGS. HEARING OF APPLICATIONS The sittings of the Hawke’s Bay Adjustment Court at Napier were continued to-day. On the Bench were His Honour the Chief Justice, Sir Michael Myers, Mr. H. D. Vickery and Mr. L. O. H. Tripp. “In filing a petition in bankruptcy in such a case as this, there is no stigma,’’ said His Honour in the first application called. “In faet, the Law Society might consider the question of making representations to the Government to obtain an amendment to the Bankruptcy Act, giving power to the Supreme Court, or to this Court, to annul the bankruptcy where it has been brought about consequent upon the earthquake as soon as the estate has been administered.’* Counsel for the applicant: There has not been a erop of bankruptcies to make it worth while. His Honour: But there may be some more. Counsel suggested that filing in bankruptcy could be avoided by the assets being distributed by a nominated assignee. His Honour said that the circumstances were entirely different from those in which such an order was made yesterday by the Court. No order was made, and counsel intimated that the applicant would file his petition, a course which was recommended by His Honour. REDUCTION OF MOETGAGE SOUGHT. “The remedy is to pay us off,” said counsel representing the first mortgagee during the hearing of an application for the reduction of mortgages on a property in Hastings. “That can’t be done. There isn’t the money to do it with,” said His Honour. “If that attitude was taken up you would? never get anywhere with the restoration of either Napier or Hastings. ’ ’ Counsel submitted that the security was estimated to be worth £3500, while the first mortgage was for only £lBOO. That being so, he saw no reason why it should be reduced. He also pointed out that the mortgagees had suffered heavily as the result of the earthquake. One of the mortgagees who lost relatives in the earthquake was obliged to meet certain death duties, and to do so she would be obliged to pledge her securities, of which this mortgage was one. Any reduction made, counsel considered, would be inequitable to his clients. His Honour suggested that if the matter was postponed the position might be met by the giving of further securities. He added that he saw no reason why there should be any abatement of money under the first mortgage. Counsel for the second mortgagee submitted that the security was worth enough to cover the first two mortgages. The building recently erected was of a good type, and would last for years, during which time it would bo capable of bringing in good returns. He suggested that the applicant should not rebuild in permanent material for a number of years until forced to do so. His Honour: You don’t need any money for rebuilding now? Counsel: No, sir. The building, however, is only a temporary one, for which the permit is only for two years. Hie Honour: Providing the present building remains the security is sufficient to meet the second mortgage? Counsel: That is so. If the Behabilitation Committee comes along to-mor-row and grants a loan to build in brick, what would be the position? His Honour: You need not place too much reliability on the possibility of sueh a grant coming along to-morrow. (Laughter)., Counsel representing the third mortgagee and guarantor for the second mortgagee, said that they were willing to take over the property subject to the first and second mortgages in full satisfaction of the claim. Counsel submitted that applicants’ position should be further investigated, as it was still obscure, before the mortgagees were asked to release him. NO CASE MADE OUT. His Honour said that the Court did uot think that any case had been made out for a reduction to be made in the mortgages. If the third mortgagee was prepared to take over the property, subject to the first two mortgages, any reduction would be unjust. A suggestion was then made that the proceedings be adjourned in order that the assent of the creditors be obtained, who had already assented to accepting a compromise payment, and that no order be made in regard to the secured and contingent creditors. Counsel raised the question of the payment of interest, which the mortgagees were anxious to ree'eive. His Honour, in replying, said that the Court would not make an order that would cripple the applicant.. Counsel admitted that the applicant deserved credit -for the effort he had made to carry on. Couusel for the applicant said that n honest attempt was being made to .ncet everybody concerned. His Honour: We must give the appliant a chance; if not, there is no use us being here. We are not hurting the secured creditors, and the worst that can happeh to them is the postponement of the payment of interest for a month or two. An order was made regarding a compromise with the unsecured creditors, but no order was made to secured or contingent creditors, liberty being reserved to the secured creditors to apply in the event of their interest and rates on the property not being paid. .