ABILITY TO PAY

Otago Daily Times, Issue 23333, 27 October 1937, Page 10

ABILITY TO PAY

BAR TO RENT REDUCTION COURT OF REVIEW'S RULING CASE OF WEALTHY CORPORATION (Per United Press Association) AUCKLAND, Oct. 26. In a lengthy written judgment the Court of Review presided over by Mr Justice Johnston, has virtually decided that undoubted ability to pay is a bar to relief under the Mortgagors and Lessees Rehabilitation Act of last year. This decision was given on an appeal against the decision of the Wellington City Adjustment Commission, which dismissed an appellant's appl : cation for adjustment of a liability. That application was made in respect of the lease of premises in Wellington, and it was refused on the ground that the appellant's admitted ability to pay the rent in regard to which adjustment was sought rendered an adjustment unnecessary The court now holds that the commission was right m dismissing the application for adjustment, and it dismisses the appeal. The appellant's application was accompanied by a statement of assets and liabilities as at Septembei 30, 1936. This showed a net surplus of assets over liabilities of over '£ 160,000 and the holding of leasehold and freehold properties of the value of approximately £115,000, subject to mortgages amounting to approximately no more than £45,000. The appellant was admittedly an important and wealthy corporation, carrying on a large business throughout New Zealand, and was in such a sound financial position that no question of its ability to meet its obligations in any direction could arise.

The appellant said, however, that the lease in respect of which it claimed a reduction of rent was one to which the Mortgagees and Lessees Rehabilitation Act, 1936, applied, and that on an application by it to the commission, the commission was bound to proceed to find the basic rent and, if the rent so found was less than that payable under the lease, it was likewise bound to reduce the rent payable under the lease to the basic rent, unless other relevant considerations would make such a reduction inequitable.