A BLOCK OF FLATS.

New Zealand Herald, Volume LXIV, Issue 19607, 8 April 1927, Page 14

A BLOCK OF FLATS.

CONTRACT AT CHELTENHAM.TWO BANKRUPT BUILDERS. MEETING OF THE CREDITORS. The manner in which a scheme for the erection of four flats at Cheltenham "was carried out was discussed at a meeting of the creditors James Stur- j rock and Frederick Powley, builders, held yesterday, the official assignee, Mr, G-. N. Morris, presiding. » The firm's schedule showed £2469 due to unsecured creditors. . Against this there were assets totalling £1726, including book debts £1563, a deficiency of £743. Powley's personal debts were £IOO2 15s and his principal asset was a property at Birkenhead valued at £IOOO, and mortgaged to the Government. , Sturrock, in his written statement, said his partnership with Powley began in November, 1925, with a verbal, agreement to share profits equally. They had no capital. He had'been in a previous part- j Heirship with L. G. Wilson, which had assigned its es'fcate with liabilities approximately £650, and it was understood that Wilson and he were to reduce their debts from profits made subsequent to their dissolution. - . After detailing particulars of other contracts in which he and Powley were concerned,: including jobs with the Public Works Department for alterations and additions to the Remuera and Mount Eden automatic telephone exchanges, Sturrock said that while these were proceeding he was consulted by Mr. V. D. J. Grahame as to a block of four flats at Cheltenham. He estimated the cost at about; £2600, but alterations were mads which brought the amount down to £2400. Subsequently Mr. Grahame obtained plans and specifications from an architect, at an estimate of £3500. Further discussions led to a Verbal arrangement that the bankrupts should start the job, Mr. Grahame undertaking to give £IOO each over the actual cost. In September Grahame asked for a written tender of £3500 for the purpose of raising £3OOO on mortgage, and this tender was given. Statement to Creditors' Meeting. In January, Sturrock continued, he t(sld Grahame that the job had cost £2688 up to the end of December, but that adjustments would probably reduce this amount. A statement which he submitted to the firm's creditors on March 17 showed an approximate cost to Grahame of £3300. At that meeting it was decided that the firm should file. At this meeting, said the bankrupt, "I made a statement that the contract price of this job was £2400. This statement was made by me under duress, and it was pointed out to me and my wife, who is in ill-health, the far-reaching consequences were it known that I had made false entries in my books —meaning the above-mentioned items against Mr. Grahame's job. ... In order to save my sick wife undue worry, I agreed to state that the price was £2400." Summing up the course of the firm's trading, Sturrock said that on 24' contracts, aggregating £9344 odd, a sum of £348 had been lost. He could only account for this through lack of proper control, through the jobs being scattered, and misplaced reliance on the workmen. Powley had entrusted him with the administrative side of the business,, the oversight of jobs, tendering and general financing. Examination of Partner. Powley, under examination, said that when arranging for the partnership he was led to believe Sturrock was quite'solvent. He had never had reason till lately to suspect that the business was not paying. He had every reason to believe that it was. His own part in the firm's business had consisted wholly of his work as a bricklayer, Sturrock having charge of the management. , \ Sturrock, on oath, admitted that Powley would have no means of knowing how the business was progressing. Witness had never taken out any balance-sheet. Out of his drawings, averaging £8 per week, he had paid off £62 of his old liability. The losses fit the firm were due to lack of control of the jobs owing to their scattered nature. The Official Assignee: Seeing that you had been in. trouble before, I think you have been lax in taking so many jobs at one time. . That's all I will say in passing. ilemarks by the Assignee. The officiaT assignee said Mr. Grahame had told him it had been agreed that the price for the job was to be £2400, but had admitted there was no written agreement. As it seemed probable that a Court case would result from the bankruptcy, he was dubious as to the wisdom of examining the debtors now, for that would mean placing the creditors' cards on the table. The examination stage, *he thought, should be deferred until later on. Several creditors concurred in the assignee's view, and on the motion of Mr. R. A. Aickin (C. Aickin and Sons, Ltd.), seconded by Mr. D. Connell (Selwyn Timber Co.), a resolution was passed authorising the official assignee to take such action as he deems expedient with a view to arriving at the true position of the Grahame contract, and also indemnifying the assignee against the costs incurred in contesting any claim brought against him by Mr. Grahame. Mr. Grahame urged that it was unfair to him to take Sturrock's word entirely, and claimed it was obvious that Sturrock was not telling the truth., He said it had not been his intention to limit the debtors to the- £2400. He had meant at the conclusion of the job to take accounts with them and make whatever further allowances were found fair and reasonable. i' ■ ; v. . _ Tho assignee deprecated the idea of going further into the details just now, His own course would be to put the creditors' interests into the hands of. a solicitor, with whom Mr. Grahame would be able to deal before* the matter went into Court. A committee of creditors was appointed to assist the assignee in regard to further procedure.