BANKRUPTCY CASES

Nelson Evening Mail, Volume LXXI, 22 June 1937, Page 7

BANKRUPTCY CASES

WHERE REHABILITATION ACT IS INVOLVED IMPORTANT JUDGMENT GIVEN IBy Teleeraph - Press Association! WELLINGTON, This Day. An important judgment affecting bankruptcy cases where the Mortgagors and Lessees Rehabilitation Act is also involved was delivered in the Full Court this morning. The case was that of Richards v. Pike heard before the Full Court on 13th April last. In concerned a petition issued by David James Richards of Wellington, against the debtor, Norman Heaton Pike, and was founded upon the non-payment of unsecured payment of costs due by Pike to Richards. After the isue'of the petition Pike filed several applications for relief under the Mortgagors and Lessees Rehabilitation Act which had not yet been heard at the hearing of the petition in bankruptcy. Counsel for Pike contended that the pendency of debtors’ application for relief prevented the Supreme Court from adjudicating debtor a bankrupt, while Richards’ counsel held that unless debtor established himself as a farmer applicant the Bankruptcy Court had power to adjudicate him a bankrupt. The trial judge, with the consent of counsel, thereupon addressed the following questions to the Full Court: (a) Has this court jurisdiction to determine whether or not debtor is a farmer applicant? (b) If the answer is in the affirmative and the court determines that he is not a farmer applicant has the court jurisdiction to adjudicate him bankrupt during the pendency of his application for relief. In the judgment delivered this morning the Chief Justice, Sir Michael Myers, stated that debtor’s application under the Mortgagors and Lessees Rehabilitation Act could be decided only under that Act (and this necessarily involved the suspension of proceedings under the Bankruptcy Act. Justices Smith, Fair and Ostler in a joint judgment held that the peculiar

legislation of the Mortgagors and Lessees Rehabilitation Act conferred exclusive jurisdiction upon the Court of Review to determine who was a farmer applicant. No other Court had this power and the present position must stand adjourned sine die until the order of the Court of Review had been made determining debtor’s application. The Court’s judgment was that the answer to the first question was “No,” and it was unnecessary to answer the second.