LIQUIDATION DISPUTE.

New Zealand Herald, Volume LVI, Issue 17337, 8 December 1919, Page 8

LIQUIDATION DISPUTE.

ALLEGED MISFEASANCE. CLAIM AGAINST IT. J. NATHAN. His Honor the Chief Justice (Sir Robert Stout) delivered reserved judgment in the Wellington Supreme Court in Banco this week in the case of the United Farmers' Co-operative Association, Limited (in liquidation), v. David Joseph Nathan, which was heard last week. " r^' '\» was an application under the Companies' Act," observed the judgment, "calling upon David Joseph Nathan to show cause why he should not account to the liquidator of the United Farmers' Co-operative Association, for the value of all benefits secured by him under a certain agreement dated June 9, 1915, made by him with the Wairarapa Farmers' Co-operative Association, and why an account should not be taken for that purpose; or in the alternative why he should •not be liable to contribute to the assets of the United Farmers' Association £3000, as compensation for his alleged misfeasance as a director.

The misfeasance alleged against him is that he was a director of the United Farmers' Association at the time lie entered into the agreement with the W.F.C.A. He also was a, director of the W.F.C.A., and also a director of Joseph Nathan and Co., Ltd. The agreement gave him S2O(K) as a commission for his services j m the winding up the United Farmers' Co-operative Association." All that the Court had to do was to see that Nathan was allowed out of the £2000 the costs !of the liquidation and any sums which [he might actually lose out of his liquidated debts that he had taken over. He, lost nothing in this respect, and therefore the only sum that he was entitled to claim was the amount of the payment of the costs of the liquidation. He claimed as costs travelling expenses on various trips to Masterton. " These expenses were for trips," remarked His Honor, ''incurred previous to the liquidation, and I cannot conceive, therefore, how they can be termed costs of the liquidation. That applies to ail ■the items in the list amounting to £130." After referring to other items not con-, tested, and to those to be settled by the" parties, His Honor said"*. "The next three items come under one head—'amount paid to W.F.C.A., Ltd., under sale and purchase agreement.' They amount to £262 Is Id, and they are important. They are amounts that were paid by Nathan to the W.F.C.A., under the guarantee given by him in the agreement. The position was that the United Farmers had £18,000, which was placed in the hands of the W.F.C.A. to hold for the United Farmers, and instead of paying the money to the liquidator it was agreed that shares were to be taken in Joseph Nathan and Co. to the extent of 18,000 shares of £1 per share, and Nathan guaranteed that the shares so taken should pay a dividend of £6 10s per cent, per annum. Under that agreement he paid this amount of £262 Is Id, and he now claims that he has to be allowed this in his account.. He can only be allowed it if it was for costs of the liquidation, or had any reference to the debts he had guaranteed, In my opinion, it is clear that - those sums have no reference to either of those items, and therefore, in my opinion, they are not recoverable, and his claim for this amount £262 Is Id must be disallowed."