BANKRUPTCY DISPUTE.

New Zealand Herald, Volume LXI, Issue 18891, 13 December 1924, Page 13

BANKRUPTCY DISPUTE.

PROOF OF DEBT ALLOWED.

ACTION BY BANKRUPT'S FATHER

COLLECTION OF SON'S DEBTS.

A problem in bankruptcy was brought before Mr. Justice Stringer in the Supreme Court yesterday. A motion to icverse the decision of the official assignee in rejecting proof of debt in connection with the bankrupt estate of Augustus Gordon Roose was brought by John Bo.wden Roose, father of the bankrupt. Mr. Leary appeared for the father, and Mr. S. L. Paterson for the official assignee.

Mr. Paterson said there were two motions, one by the father to admit his proof of debt, and one by the official assignee that the father pay to him certain moneys Chat be had collected on behalf of his bankrupt son. The only object of the official assignee in rejecting proof, was to enable the other claim to be brought and disposed of. Subject to disposition of that, proof would be admitted.

Augustus Gordon Roose the bankrupt, was carrying on a grocery business at Dargavillo prior to adjudication. In October, 1923, he disposed of his business, leaving Dargavillc on November 4. An order of adjudication was made on December 10. The moneys collected were apparently debts owing to the son in connection with the grocery business, which bankrupt placed in his father's hands for collection. On various dates the father collected those amounts and disbursed them to creditors.

Letters Between Father and Son. Mr. Paterson put in correspondence which had passed between tbe father and son subsequent in date to the collection and dispersion of the moneys. Counsel contended that the father and son had been in collusion. The son, counsel said, went to Sydney, where he was associated with another man in regard to the acquisition of a business. The other man was a well-known Sydney "crook," and it was probable that .young Roose got into touch with him quite innocently. There was a complaint by the Sydney vendor of the business as to the method in which ho had been entrapped into the sale of his place. Roose had paid £100 deposit on that business. Tt was those happenings in Sydney which led to the arrest of Roose.

Mr. Leary submitted that the letters between the father and son were open to a perfect 1\- innocent interpretation. Mr. .1. B. Roose gave evidence to show that when his son went away he was perfectly solvent and able to pay all his debts.

The Judge's Decision. His Honor said that a letter sent by the father on March 14 was most indiscreet, but it was capable of a different explanation/ The father had distributed the money among certain creditors. The son owed money to his father and if the latter had been really dishonest he could have retained the money, as against, his own debt. His Honor thought that until December 3 it had not been shown to him that the father had notice of the act of bankruptcy. On that date, as Mr Leary had very properly admitted! he had knowledge of the bankruptcy proceedings, and knew what the position was From that time he was not .justified iri receiving and distributing further moneys from his son's estate. His Honor allowed the proof of the debt, but directed that J. U. Loose should pay over £-36 1,5s 7d that being the amount distributed after service ot the bankruptcy proceedings. His Honor made no order for costs