BANKRUPT’S BOOKS

Sun (Auckland), Volume IV, Issue 947, 14 April 1930, Page 10

BANKRUPT’S BOOKS

FORMER BUILDER IN COURT SENT FOR TRIAL The business affairs of Clarence William Brucc. a bankrupt builder, forraerly of Auckland, were investigated in the Police Court today when he ; laced a charge of failing to kevp pro- : per books. After hearing evidence, Mr. P. K. H t. SJ mitt to the Supreme Court to stand his trial. Bruce vas adjudged a bankrupt when he filed his petition on July 5 last year. The assistant Crown Prosecutor, Mr. Hubble, conducted the prosecution, and Mr. Jordan appeared for the accused. The bankrupt’s schedule was produced by Thomas Charles Douglas, a clerk in the Official Assignee's office. This document showed the liabilities owing to secured creditors to be £28,230 and the estimated value of securities at £25,160, leaving a deficiency of £7O. Assets, other than under security, consisted of five unencumbered sections at Swanson, which were valued at £25. but on which the Official Assignee had been unable to raise anything. Some of the creditors had proved against the estate because of deficiencies in the securities amounting to £S6O. The liabilities to unsecured creditors, other than the deficiencv. amounted to £4 14s. Bankrupt had been a speculative builder and at the date of his adjudication he held 26 properties, consisting small houses and sections. Accused’s practice had been to buy the sections, paying the deposit and raising the balance by mortgage, the first mortgage money being raised for building purposes. The amounts of the first and second mortgages were set out in the schedule, the securities being valued by accused at £o less than the amount of the two mortgages. Witness considered the information supplied by the bankrupt to be unsatisfactory, there being no ledgers or journal, no proper cash-book and no wages book. The sum of £1.644 had been drawn in bearer cheques, marked “wages'’ during the five months prior to the bankruptcy. Some of the amounts included £lO notes and three £SO notes were also drawn—abqut £BO a month—but in the month of April £490 was drawn. In none of the bankrupt’s books or statements were there any particulars of how the wages were made up. When bankrupt was questioned at the creditors’ meeting about the wages he admitted having kept no books. In witness’s opinion the cash hook had been written up at the same time to cover a period of IS months. It appeared to be in the same writing as the statement alreadv produced.

Edward Lewis Thwaites, solicitor, who attended the first meeting of creditors, and who assisted the former Official Assignee in a full investigation, said the question of wages was "raised from the start. There was no record except the drawn, and a copy of the bank statement and a record of cheque butts. He considered that the books had been obviously written up for the occasion.

Replying to Mr. Jordan, witness estimated that the houses cost between £4OO and £450. Accused had paid £IOO on the sections and drew £7OO on mortgage. NOT SET OF BOOKS - ntant. George Grey Campne.l. vho examined -the receipts, bank aRd the cheques, .said that ‘ u - data did not constitute a set of books at all. There was no detailed uiiormation from which he could ascertam wages payments, nor could he make , out a profit and loss account c ? rtainly could not learn the p. out or loss on any contract, or on trading-, or the amount of stock There was no means of finding ou t. f her the asset s disclosed were all bankrupt possessed. The cash-book v-as merely a statement of receipts and expenditure, and there was no indication of the amount owing to sundrv ci editors or liabilities of sundry fir?t 01 ' S - , Th ° - net cas h banked from fiist mortgages was £21.525, to which \" d to be added the cost of raising o-'-e 6 ~\° rtpages - "hid, amounted to ahe sum of £756 had also been 1 aid out to a timber company on order oeiore the money was received. This iought out the total amount raised ’ m «nf aeeS !° over ~ 23.000. whereas die fiist mortgage shown in th~ schedule were only £19,000. He could c°inn a n SCertaiß " here the balance of £4.000 came from.

Replying to Mr. Jordan, witness said a maa ln accused’s position who did no L keep proper books was a fool -Ef ' vas allowed in the sum of £-00, or two sureties of £IOO each.