OVERSEAS DEBTS

New Zealand Herald, Volume LXXI, Issue 21935, 19 October 1934, Page 16

OVERSEAS DEBTS

PAYMENT OP EXCHANGE / COMPANY SEEKS RULING / " SUPREME COURT DECISION A question regarding the rate of exchange payable on certain bills and promissory notes given by Macky, Caldwell, Limited (now. in liquidation), and payable in England, was determined by Mr. Justice Ostler in a judgment delivered in the Supreme Court -yesterday. When the matter was argued in Court Mr. Stanton and Mr. Mackay appeared for Tootal, Broadhurst, Lee, Oompany, Limited, and other English creditors of Macky, Logan, Caldwell, and Mr. Rogerson represented H. J. Mills, liquidator of Macky, Logany Caldwell. In reciting the facts, His Honor / said that when flacky, Logan, Caldwell, Limited, went.' into voluntary liquidation on November 4, 1932, there were outstanding bills and promissory notes payable hy the company in London to the approximate amount of £12.000. Those bills and notes were payable on /dates' subsequent to the date of the commencement of the winding-up. The rate of exchange ruling between New Zealand and England on thut date was 10 per cent, but it was altered to 2o per cent on January 20, 1933, and had continued ever since at that rate. Some of the bills-and notes were not due for payment until after that date, although the due date for payment had now passed for all of them. Tho question for determination was whether , the debts became due upon the due dates for payment of the respective bills and notes, or whether the liquidation of the company accelerated the due date in each case, and made each debt due and payable upon the date of the commencement of the liquidation. "In my opinion," said His Honor, "the liquidation did not accelerate tho due date of such debts, and notwithstanding the liquidation the bills and notes became due on their respective due dates. It is clear from the words used in section 106 of the Bankruptcy Act that the due date of a debt on a negotiable instrument is not accelerated by the bankruptcy of the debtor, and as section 246/ of the Companies Act, 1908, speaks of future and contingent liabilities in a winding-up, I think it equally clear that the intention of the Legislature is/the same with regard to insolvent companies in. liquidation. "I determine that the English debts which fell due before the alteration of the rate of exchange must have 10 per ' cent added, and those which fell due after must have 25 per cent added for the purpose of proof. I allow £5 os and disbursements a 9 the costs of the motion to be payable by the liquidator out of the proceeds of the liquidation."