BANKRUPT'S DEBTS

Sun (Auckland), Volume III, Issue 674, 28 May 1929, Page 9

BANKRUPT'S DEBTS

PROTECTED PAYMENT MONEY TO BE RETURNED “I do not think it is open to a creditor who has notice of an available act of bankruptcy to enter into an agreement with the debtor, the effect of which is to divest himself of such notice and then accept payments which will be protected.” In these terms, Mr. K. C. Cutten, S.M., found for plaintiff in a reserved judgment he delivered in the Magistrate’s pourt this morning in the case of the Official Assignee in property of F. W. Fitt against Lightband. Plaintiff (Mr. Hubble), claimed from defendant the sum of £42 10s, representing three payments made by Fitt to the defendant within three months prior to Fitt being adjudicated a bankrupt. Plaintiff suggested that the defendant had notice of an available act of bankruptcy committed by Fitt at the time the payments were received. The payments made to defendant had been £25 on June 15, 1928; £lO on June 21. and £7 10s on June 28. For Lightband, Mr. Gould had contended that the defendant had no notice of the act of bankruptcy. The magistrate considered that defendant could have had no better notice, as on May 18 Fitt had committed an act of bankruptcy in that he had failed to comply with the bankruptcy notice issued and served on him by defendant on May 10. “It seems to me,” continued Mr. Cutten. “that the agreement to withhold further proceedings in bankruptcy and the payments made under the agreement. are all parts of the same transaction. and this was entered into by defendant at a time when he had notice of an available act of bankruptcy committed by the bankrupt. I do not think, therefore, that the payments In question can be held by the defendant.”