CLAIM FOR TAXES

New Zealand Herald, Volume LXXII, Issue 22131, 10 June 1935, Page 12

CLAIM FOR TAXES

SEQUEL TO BANKRUPTCY OFFICIAL ASSIGNEE'S ACT appeal to the court [from our own* correspondent"! HAMILTON. Sunday A dispute between two Government departments involving novel legal points came before Mr. Justice Reed ill the Supreme Court at Hamilton yesterday, when the Commissioner of Unemployment. for whom Mr. Gillies appeared, sought a reversal of the decision of the official assignee at Hamilton, Mr. V. R. Crowhurst (Mr. Johnson), in holding that the commissioner should be regarded as an ordinary creditor in a bankrupt estate. Mr. Gillies said that Charles Lidwell Beamish, cabinetmaker, Rotorua, bocame a bankrupt. Before doing so he deducted unemployment tax from the wages of an employee. Ho sometimes purchased stamps as he. was required by tho Unemployment Act to do, but on many occasions ho put the money aside. When he became bankrupt there was £4 19s 9d due to the Commissioner of Unemployment. There was cash in hand at the time of the bankruptcy amounting to £6B. The official assignee held that the Commissioner of Unemployment became an ordinary creditor, while the commissioner contended that the £4 19s 9d due to him was trust money and should be paid in full. The money did not belong to the bankrupt or to his employee. The only owner was the Crown, submitted Mr. Gillies. For the official assignee, Mr. Johnson said an important principle was involved, although the amount claimed was small. The official assignee had two other cases, and the Labour Department had a case in which £lB5 was involved, which would be affected by the decision in the present case. Mr. Johnson submitted that the Crown was bound by the Bankruptcy Act, and it stood in the present case as an ordinary creditor. The issue before the Court was a simple one. Was the amount involved trust money ? Mr. Johnson contended that tho money in question was not identifiable, and that neither the bankrupt nor the official assignee was a trustee. The relationship between the commissioner and the bankrupt was merely that of creditor and debtor. The penal provisions of the Unemployment Act indicated that there was no question of trust involved. His Honor said he had no doubt that tho official assignee was right in refusing to accept the Crown's claim for preferential treatment, but, as the matter was important, he would put his reasons in writing. Decision in the case was reserved.