KAWHIA DAIRY CO.
STORE DEBTS WOT RECOGNISED.
BEYOND SCOPE OF ARTICLES
An order debarring certain Auckland and other merchants from participating in the cash assets held by the liquidator of the Kawhia Cooperative Dairy Company, Limited, was made by Mr. Justice Herdman in the Hamilton Supreme Court on Tuesday. Mr. Strang, for the liquidator, Mr. H. Hine, said the company was incorporated in 1923 to carry on a dairy business. The company also embarked on a collateral storekeeping business. When the company went into liquidation, it was found that the storekeeping department was ultra vires of the company, and that the liquidator had no authority to recognise any debts contracted in respect of the store.
Mr. Strang said the case emphasised the great care that should be exercised by business people in dealing with a limited liability company in case that company should be conducting a business beyond the scope of its articles of association. Counsel added that the facts were outlined to the Court on September 12. last. Mr. Bagnall, of Auckland, then undertook, on behalf of dissatisfied creditors, to submit written legal argument.in support of his contention that the merchants' debts could be admitted. That argument had not heen submitted, and Mr. Bagnall had abandoned his defence to the petition that his clients' claims should not be admitted.
The law was quite clear that the liquidator could not admit the merchants' claims, and the position now was, said Mr. Strang, that the merchants would have to do without their money.
His Honour: The only way they can get it is by the shareholders of the company making a gift to them. Mr. Strang agreed. He added that the liquidator had about £517 in hand, and the admitted claims totalled about £4OO. The creditor shareholders of the company would receive 20s in the pound, but the surplus would not be available to the disallowed merchant creditors, whose claims aggregated £294.
The petition for the rejection of the merchant creditors' claims was allowed.
Permanent link to this item
https://paperspast.natlib.govt.nz/newspapers/KCC19341206.2.36
Bibliographic details
King Country Chronicle, Volume XXVIII, Issue 4632, 6 December 1934, Page 5
Word Count
333KAWHIA DAIRY CO. King Country Chronicle, Volume XXVIII, Issue 4632, 6 December 1934, Page 5
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