“FAMILY CONTEST”

New Zealand Times, Volume XLIX, Issue 11246, 26 June 1922, Page 4

“FAMILY CONTEST”

UNDE* BANKRUPTCY ACT ‘’SOURCE OF MISDIRECTED LITrGATIOX." SUPREME COURT PROCEEDINGS. The judgment of Ilis Honour Mr Justice Chapman was read by the Registrar, Mr W. A. Hawkins, in tho Supreme Court, in the matter of “The Bankruptcy Act, 1908*’ and Mary Ana Coulter, of Master ton, widow, a bankrupt. The hearing of the case took place on. April 6th, 7th and 11th last, Messrs EL G. Jelliooe and C. A. L. Treadwell appearing in support of the motion, Mr Blair opposing for the Official Assignee and for W. C. Coulter, a creditor. In reviewing the evidence. His Honour Mr Justice Chapman said the proceedings, though taking the shape of a motion pursuant to section 136 of the Bankruptcy Act, 1908, to annul the bankruptcy of Mary Ann Coulter, had features of co uncommon a character as to render it necessary to go into matters beyond those usually investigated in the bankruptcy proceedings. Before tbe date of the transactions out of which these proceedings arose the bankrupt resided on her own property at Solway, rear Mas tartan. The property consisted of a freehold residence subject to a mortgage of «£350 to one Pickering, falling due March 31st, 1920. William Charles Coulter, the owner’s eldest son, was a party to this mortgage, and together with his family lived with her, and apparently bore the largest share of the cost of tho establishment.

In February, 1918, Coulter and her son, W. C/Coulter, and another son, David Gibson Coulter, were apparently on perfectly good terms. W. C. Coulter had in the previous year written to both D. G. Coulter ami another brother, James, stating that their mother was giving him a good deal of trouble and expressing the hope that one of them • would come and live with, her He was willing to allow £1 per week to help keep his mother. William had then been living for many years with his mother, and since his marriage, some 10 years before, hie wife had lived there. D. G. Coulter, a married man, was living at Paekakariki, where he was, or had been, an engine-driver. Then some arrangement was arrived at involving D. G. Coulter making arrangements to come to .Solway with his family and livintr with his mother. There was, said His Honour, a conflict of evidence as to what was arranged. D. G. Coulter contended that the residenop was to be made over to him unconditionally, while W. C. Coulter contended that it was to be transferred by hie mother to bis brother, under a tripartite arrangement which recognised that he was entitled to receive the major part of the value in payment of sums he had in the course of rears expended on the property, or otherwise paid for his mother, and sums he had advanced to her. He said that this had been going on for years, and that a large sum was owing him which, though he had no security, he expected to be repaid in this way.

In the circumstances Mr Gawith, of Gawith and Logan, solicitors, Masterton, was instructed to prepare the necessary document or documents, commencing with a deed of gift from Mrs Coulter to D, G. Coulter. Mr Gawith stated that Mrs Coulter was his client, and that he never, rendered an account to anyone else. This statement he made in answer to a suggestion that he acted for D. G. Coulter as well. He had proved jm the bankruptcy for the bill of cosraKv. The intended transaction, as desoriSpAyby Mr Gawith and W. C. Coulpeculiar one representing what thefcSNlaid was arranged with Mrs Coulter. Their version was, His Honour said, disputed by I). G. Coulter, whose claim that the property should be unconditionally transferred to him would obviously mean that he was not bound by the instrument to keep* his mother there, or indeed, to contribute to her support. ' , In support of his statement that, so far as his instructions went this was the intended transaction. Mr Gawith had produced the agreement of the conveyance from D. G. Coulter to W. C. Coulter, which was never executed, but which, he states, wae prepared as part of the arrangement. The actual point reached by Mr Gawith was that the deed of gift was signed by Mrs Coulter, and that her signature was attested by Mr Gawith. His Honour said the contest between members of the Coulter family had been a fertile source of misdirected litigation; and it might be as well here, said His Honour, to mention that in the present proceeding Mr Jellicoe argued that tho incomplete deed, called for convenience the first deed of rift signed on February 11th, should be regarded as an operative instrument, ana’ that what was called the eecond, to which 'he proposed now to refer, was properly a deed of con- 1 firmation. The answer to that contention, was that the first had never been treated as a completed deed, and the. eecond did not purport to be a deed of confirmation. A eecond deed was duly- stamped, registered, and in due course oazne to the knowledge of W. C. Coulter. To meet the new situation thus created the old lady was induced or advised to become bankrupt, which she did on March 12th, 1919. This was followed by a proceeding in bankruptcy in. pursuance of which tbe Chief Justice, on September 11th, 1919. declared the dee£ of conveyance. of May 22nd to be void. That, in turn, was followed by an action for possession in which a writ of possession was on Maroh 19th, 1920, awarded to the Official Assignee.

Assuming l that the question of the deed beiny binding was not dealt with by the Chief Justice, that was presumably because His Honour considered that he had not jurisdiction to inquire into anything beyond the fact that it was a voluntary gift executed within twelve months of bankruptcy. The present step had now been taken, said Hie Honour, to get rid of the adjudication and again copious affidavits had been filed, and Messrs Gawith, Low, and W. -O. Coulter had been exhaustively cross-examined. A person applying to set aside an adjudication must rely on section 186 of The Bankruptcy Act, 1918, which was different in terms from section 99 of the English Bankruptcy Act of 1914, under which the court might, perhaps, have considered the whole matter, treating the jurisdiction as discretionary. Williams on Bankruptcy, 12th Ed. 130. The onus, said His Honour, was, in. the case of an old woman like this, entirely on the person who sought the benefit of the deed to show’ that she made the gift with a full understanding, not only of its effect, but of all its consequences, in depriving the grantor of her property, and of doing what it was alleged the errantee had since done, leaving her to he supported by other members of the family. His Honour said the bankruptcy van admittedly the result of advice given to Mrs Coulter to take this step to set aside the voluntary gift, and that Mr Jellicoe had avowedly based his case on a charge of conspiracv and fraud against Mr Gawith and Mr Low, the Deputy-Official Assignee. His Honour found that Ihe charge was absolutely unsupported, and he thought it only fair to an officer of that court and an official holding a Government appointment that he should aev sp in uneouiyocal terms. Mr Blair, counsel for W. C. Coulter, had stated that the step was taken under his advice, anil that he was willing to take the whole responsibility for it. Having decided that there was no foundation for tbe charge of fraud made against Mr Gawith and the Deputy-Official Assignee, His Honour could not possibly entertain that motion, even if he wore disposed to euterlain it, without, first insisting that the ordinary creditors should be

paid or at least secured: and that, the claim of XV. O. Coulter should be *o secured that he should not lose it until it had been adversely adjudicated upon. His Honour dismissed the motion with costs JJ3S. and with witnesses’ expenses and disbursements.