BANKRUPT'S DEALINGS.

New Zealand Herald, Volume LXIV, Issue 19719, 19 August 1927, Page 14

BANKRUPT'S DEALINGS.

TRANSACTIONS QUESTIONED. THE RIGHTS OF CREDITORS. ACTION UNDER OLD STATUTE. A Statute of El ; ?:abcth, an Act which became law in England in 1571, and was aimed against "fraudulent deeds" by debtors likely to harm creditors, formed the basis of an action in the' Supreme Court yesterday, before Mr. Justice Stringer. The official assignee (Mr. West) sought an order of the Court in respect of two transactions made by Roland Darcy Mens, farmer, Hikutaia, bankrupt (Mr. Hamp* son), which it was alleged had been carried out to delay or hinder tho creditors in the settlement of the estate. The transactions concorned the giving of a mortgage by bankrupt to his brother-in-law, and the payment of money to his son prior to the bankruptcy last December. . Mr. West said two payments totalling £550 were alleged to have been made by bankrupt in May, 1925, to his son, who used the money to purchase a property in Auckland, and a mortgage given by bankrupt to fiis brother-in-law about the same time. Action had been taken by the official assignee on the ground that these transactions were not bona fide. It was asked that the mortgage should be set aside, and that the son should either repay the £550 to the assignee or undertake to hold the property in trust. Counsel added it was held by bankrupt that £SOO was paid to his son as settlement for wages and other moneys owing. Bankrupt owned a farm at Hikutaia, subject to a mortgage of £SOOO. When it became obvious he could not secure a reduction or extension of the mortgage, which was almost due, bankrupt sold a property in Great South Road for £IOOO. He received £896 in cash, and on May 16, 1925, drew £SOO from the sum already paid in to his account. His statement was that he took this money to his farm, and paid it to his son some time later. On the same day that he .withdrew the £SOO, bankrupt opened a joint account with the Auckland Savings Bank for £2OO under the name of "Blakey or Mens." Bankrupt explained this arrangement was made so that Mr. Blakey should put money to the account, which bankrupt could use when he desired. Another joint account for £35 was opened by Blakey and Mens at a branch of the bank the same day. On November 9, 1925, bankrupt's son paid a deposit of £55 on the property at Auckland. Two days previously £55 was withdrawn from the joint account. There was no explanation as to where the son obtained the £55 deposit but it was admitted he had been paid the £SOO in cash by bankrupt. He used this to complete payment for the property. Bankrupt had occupied the house rent free since its purchase. Mr. Hampson said considerable enmity had arisen between bankrupt and the two trustees of the Hikutaia farm. They refused to allow him to sell the property, and would not consent to extend'the mortgage. The farm was finally resold to a returned soldier in 1920, but bankrupt had to take it back three years later. When the mortgage finally fell drie bankrupt was forced to walk "off the farm, leaving behind the benefits of extensive improvements. Since then he had not been able to find permanent work. It was denied that the alleged transactions were made in order to defraud creditors, and no such action had been contemplated when bankrupt gave the mortgage to his brother-in-law or the money to his son. It was contended both actions were morallv and legally correct. The hearing was adjourned until to-day.