THE COLONIAL BANK.

New Zealand Herald, Volume XXXIV, Issue 10409, 6 April 1897, Page 5

THE COLONIAL BANK.

THE PROPOSED SALE OF MR. WAKD'S DEBTS.

[BT IBLSQKAI'II,— HtKSS ASSOCIATION.) Donbdin, Monday. The application of the liquidators of the Colonial Bank for the sanction of the Court to the sale of the debts due by the Hon. J. U. Ward to the Colonial Bank to John Batger, of Invercargill, came bofore Mr.

Justice Williams in Chambers this morning. Mr. B. C. Haggitt appeared in support of the application, and W. C. Macgregor appeared on behalf of the Colonial Bank Shareholders' Association. Mr. Huggitt raised a question as to the desirability of the proceedings being published. It would be seen as they went on that there was reason why thoy should not be published. His Honor statod that he thought there was no power to prevent matters in litigation being published. Mr. Haggitt said it could hardly be said there was litigation. He then proceeded to detail the steps taken in the matter. Ho said the liquidators had no desire to screen Mr. Ward, but to do the best for the liquidation. If the scheme was carried out the liquidation would benefit to tho extent of £3000, the offer exceeding the estimate of value by that amount. They considered the offer double what would be realised if bankruptcy should ensue. Then with respect to the draft given for £16,000 in connection with Nelson Brothers' share, the interest was accumulating at the rate of £960 a year, while the security was steadily decreasing in value. The offer was different to that made by Lee Smith and J, B. Reed, which was to carry on the business as a going concern, and that His Honor decided in the interests of commercial morality was not a good thing to do.

The affidavit of the liquidators set forth that the account of the Hon. J. G. Ward

appeared on the "B" list between the Colonial Bank and the Bank of New Zealand,

and that Mr. Ward stood indebted inter

alia in the sum of £55,150 represented by his promissory note of October 19,1895, to the Colonial Bank, and £16,000 on u draft drawn on London. The draft was guaranteed by the Colonial Bank to the Bank of New Zealand,

and on paymenb thereof the liquidators would bo entitled to the draft and 16,000 shares in Nelson Brothers, Limited, now

practically unsaleable. The affidavit stated thac " John Batger, of Invereargill, has offered to purchase from us, for the sum of £8500, the said promissory note of the said Joseph George Ward for the sum of £55,150; the eaid debt of £16,000 and interest thereon in respect to the said draft on London, and the said 16,000 shares in Nelson Brothers, Limited, held as security

for the same; the amount claimable by us from the said Joseph George Ward under the said guarantee of the account of the Hokonui Railway and Coal Company (we reserving our rights and remedies against all other persons liable on the said guarantee); and the amounb claimable by us from the said Joseph George Ward under the said guarantee of the ovordraft of the J. G. Ward Farmers'

Association of New Zealand, and all our rights under the said letter of October 19, 1895, the said Joseph George Ward further undertaking to pay off the overdraft due by the said Joseph G. Ward on bis account with the Bank of New Zealand, amounting to £7000, so as to obtain the full bonefit of the securities mentioned or referred to in the said letter of October 19,1895. By the terms of the agreement £4000 of the purchase money is to be paid in cash within one month and the balance at six and twelve months." Mr. Keith Ramsay, one of the liquidators, paid the liquidators were unanimously of opinion that the agreement was in the interests of the liquidation. 'i,'liey were very strong on the point. It was a serious matter in the interests of the Bank if this offer were nob accepted. The' difference between the offer and realisation in any other way was considerably more than the sum named in the affidavit, viz., £2500, especially if there was a forced sale. That Bum was a consideration so far as the liquidation was concerned. Ib might in short make the difference between a call and no call. The liquidators had taken steps to get Mr. Ward a bankrupt, and had correspondence with the Bank of New Zealand, the latter Bank pointing out that the promissory note was in the hands of the liquidators. There had never been any desire or intention in any way on the part of the liquidators to screen Mr. Ward, or to save him from the Bankruptcy Court. Their only desire was to obtain the best price they could for Mr. Ward's assets. There were only two debts—the promissory note for £55,150, and the Hokonui matter—in respect to which they could make Mr. Ward bankrupt, and they were advised that the promissory noto was not included in the deed. If the sale were con-

firmed, Mr. Ward would be still liable for about £!iO,OOO on his 8000 shares in the Ward Farmers' Association. Witness knew that hostile proceedings—he believed genuinely hostile proceedings—were now being taken against Mr. Ward by some of the shareholders of that Association. The continuance of these proceedings was not likely to increase the value of the securities held by the liquidators. If Mr. Wan) were made bankrupt, the saleable value of tbeae securities would certainly decrease, fie was prepared to advise the Court to sanction the sale, its a refusal would be disastrous to the. liquidation. In reply to Mr. Macgregor, witness said he could not say what relation Mr. Henderson (Mr. Batger's partner) was to Ward, but ho had heard accidentally he was his brother-in-law. Mr. Simpson and Mr. W. S. Vigers, the other liquidators, also supported the agreement being sanctioned, as they considered it) a good sale for the liquidation. His Honor said : "I am quite satisfied that) so far as the interests of the shareholders are concerned, ib would be desirable that this agreement should be given effect to, if it can be done consistently with the principles which, in my opinion, should guide the court in cases of this kind. Whether, however, consistently with those principles the agreement can be given effect to I am not at present prepared to decide. I will give the matter my further consideration, and give judgment in writing. I may say this, I feel the position ono of very great responsibility. Ido nut wish for a moment to shirk the responsibility, but the sitting of the Court of Appeal i? at hand, and it would be certainly a great satisfaction to me to have the opinion of the other judges on the question of whethor I am right in my opinion of what are the principles which should govern the Court in cases of this kind, and secondly, whether, if I am right in that particular, how far the facts in the present case justify the application of those principles." Hβ would defer his decision till after the sitting of the Court of Appeal.