Nelson Evening Mail. TUESDAY. SEPTEMBER 30. JUDGMENT DEBTORS AND THE LAW. IMPORTANT RULING BY THE CHIEF JUSTICE.

Nelson Evening Mail, Volume XXXVI, Issue XXXVI, 30 September 1902, Page 2

Nelson Evening Mail. TUESDAY. SEPTEMBER 30. JUDGMENT DEBTORS AND THE LAW. IMPORTANT RULING BY THE CHIEF JUSTICE.

A Tt-.LKt.UAM from Wellington yesterday announced that the Chief Justice has given a judgment considerably limiting the power of punishing debtors who make default of payment on suits recovered through the ordinary channels of the Courts. His Honor sad that the interpretation of the law of proceduro on judgment summonses would so limit power to punish, but that seined to have been the iutention of the Legislature. As the issues here raised are of considerable importance to the mercantile community, it may be of interest to give a narrative of 'he case out cf which the judgment of the Chief Justice has arisen.

• • • The point binges on the exa'-t value of the tense of the verb "To have' 1 in section 3 of the Imprisonment for Debt Limitation Act of I'juO, taken in conjunction with the intention of ihe prinpal Act (sub-section 5 of section 8 of the Imprisonment for Debt Abolition Act, 1874). In Chambers at Wellington Daniel Coronno, through Mr Hindmarsh, raoved for a writ of prohibition in connection with a judgment order mado against oronno for payment forthwith to Charlotto Burgess of a judgment debt of £'16, wages due. Mr Wilford, for the judgment creditor, opposed. Mr Hindmarsh admitted that his client's case had no merits of its own— -in fact both judgment creditor and judgment debtor are in Australia, and therefore the latter is practically beyond the jurisdiction of the colony, and the only use of the case was to settle f .he law point on wh>ch the debtor relied. • a • The sub-section sof section of the Act of IS7-1 provides for the imprisonment of a debtor if the Court on summoning the debtor for examination is satisfied " that the party so summoned has then, or has had since the time of obtaining such order or judgment, sufficient means and ability to pay the sum so recovered against him, and so due and unsatisfied as aforesaid. 1 But the imprisonment for Debt Limitation Act i! |( JU id (o "form part of and be rend together with'' the A' t 1 874, and section 3 of the Act of 1900 reads: ''Except in the cases which by section '6 of the piii.iipal Act (ltwl) are dv c'ared to 1-c excepted from the operation of that section, and except also in cases wLere the debt has been incurred by fraud, or where it is proved or by the debtor admitted that lie lias money of his own which he has refueed to pay to the judgment creditor, no order of committal to prison for default in payment of a judgment debt, or of any instalment thereof, shall hereafter be made under the principal Act against a judgment debtor.'' • • •

Mr Ilindmarsh contended that tliere was no evidence on which the Magistrate could make an order, oi commit the debtor to prison in default of payment, as tnere was no suggestion of fraud, and no admission that the debtor had refused to pny. It was admitted that irame-dfalx-ly after judgment bad been obtained against him debtor had mortgaged his whole plant and stock for £70 ; but it was contended lhat even if the debtor had received this sum of £70, there was no proof that "'it was nwney of hia own (not property) at the time of the hearing of the judgment summons. 1 ' Tbe debtor ob L aiued the money a'ter the ju Igment was entered against him, but before the issue of tbe judgment, summons, and the money was spent in the purchase of machinery. Mr Hindmarsh held that section -'5 made it clear that, before an order could have been

made by the MagistratP, it must J have been shown — ll) tbat debtor j had then (at thc time of hearing of the judgment summons) money, or (w) that he had had money since the issue of the judgment summons. Perhaps he need not go so far as to admit No. 2 ; perhaps the efiect was limited to No. 1. '■Has" Avas a sort of continuing perfect, and had replaced the "has baxl " of ths Act of 1874. His I'onor said the Magis' rate had assumed that su - section 5 of section .S of tho 1*74 Act was still in force, and that an order could be made if debtor has had sufficient means to p:\y since I jndgtnent was obtainod. There was I a further point : that, if proof of possession of money since judgment and before a judgment order was 3»im'cient evidence, thc question then rose whether a man who had three judgment debts, and who exhausted bis money in paying ono of them, .vould not be liable to a judgment irder on the two unpaid debts. » » •

For the judgment creditor h was contended by Mr Wilford that thc Magistrate had jurisdiction, one ground being that the judgment debtor, in mortgaging his property two days after judgment had been y,iven against him had done an act of fraud on tlie judgment creditor. His Honor replied, however, that to establish fraud it must be fraud on tho original debt. Mr Wi'foid then asked for an order <o be made, inasmuch ae the judgment debtor had received £70 after judgment. He held that the Act hardly required a debtor to Lave actual gold in his pocket at the particular moment of the issue of thc judgment. Sir JSobert Stout replied that in substituting -' has money " for -• has had money " it seamed to him that the Legislature bad simply .struck out imprisonment for debt altogether. » # .♦ In continuing, the Chief Justice gave an indication of what his finding Avould be. lie said that, had

the Legislature intended to frame such a provipion, it might have left imprisonment for debt open only as a pcnishment foi* debts incurred byfraud. As the provision now was, he thought with fc'.e Magistrate, that if Mr Hindmarsh's interpretation was right, it was almost impossible to deal with this Act, and the Magistrates would have great difficulty. Judgment would be reserved in order that he might inquire into the question of law.

His Honor haa now given his judgment, upholding Mr Hindliiarsh s contention that a debtor must be proved to have money of his own at the time of tbe issue of the judgment order, and the point is that between a judgment on ordinary I summons aod an order on a judgment summons a debtor may mortgage his property or mako away with money in hand. Uf cours-i whether a mortgage so mad • will hold against a judgment made befor ) the act of morcgage and before it is satisfied, is another i-uestion at law. The point just decided is that a debtor cannot be imprisoned on the merits of bis case, but on the actual fact that there has been disobedience of a judgment by the withholding of money then and there in the debtor's possession.