BORROWED MONEY

New Zealand Times, Volume XLVII, Issue 10966, 30 July 1921, Page 7

BORROWED MONEY

BOROUGH COUNCIL AND CLIENT. AN IMPORTANT JUDGMENT. Per Press Association. TIMARU, July 29. A case under the Moratorium Amendment Act, 1920, r probably the first of its kind in New Zealand, was dealt with in Chambers by Mr Justice Herdman to-clay. The Timaru Borough Council has -received considerable sums of money on deposit at call, and in November last received £4OOO from 'Evans and Co., flourmillers, at Si per cent, at call, the lenders wishing to keep that sum liquid for. /business purposes. The amending Act of last year gave borrowers the right, by giving notice to the lender, to extend “at call” to any date not later than December 31st, 1921, on paying an additional 1 percent. interest. The Borough Council gave that notice, and when asked for the principal, said it could not get the money. Clause 8 gives the lender the right of appeal to the Supreme Court for relief in the case of "hardship. The judge held that a lender who wanted money for business purposes waa in a different position from an investor of spare funds, and it would he a hardship if he had (as in this case) to pay 7 per cent., while tha borough used liie money at 4 ). Mr Justice Herdman gave the council a week to decido whether it would pay extra interest from March 23rd, and, if not, he would make an order for the repayment of the principal. This case was not to he a general precedent, as every case must be treated on its merits.