BANKRUPT ON TRIAL

Sun (Auckland), Volume IV, Issue 965, 7 May 1930, Page 10

BANKRUPT ON TRIAL

FAILURE TO KEEP PROPER BOOKS CONTENTIONS BY CROWN ‘‘He was asked for particulars, and his reply that he could not give them was a clear admission that he did not keep proper books. Mr. V. X. Hubble, for the prosecution, made this contention in addressing the jury, when Clarence William Bruce was tried in the Supreme Court this afternoon on two charges under the Bankruptcy Act. Before Mr. Justice Smith. Bruce was charged with wilful failure to keep proper books, with the intention of -concealing the true state of his affairs, and failure to keep proper books within three years prior to bankruptcy. Mr. Hubble enlarged on the consequences and the effects on the creditors of failure to comply with the Act in keeping proper books. 111-kept books permitted opportunities to perpetrate a fraud on creditors. proceeded Mr. Hubble, and, in such a case, a bankrupt could incur debts while he was insolvent. "Particularly is this the case in an instance such as this, when the bankrupt has been a speculative builder,” counsel proceeded. "At the time of his bankruptcy Bruce was concerned in 26 properties on which he built. BRUCE’S "SYSTEM”

"Bruce’s system would be to agree to buy a section, on which he would pay a comparatively small deposit. He would arrange with the owner to leave the balance of the purchase price in a second mortgage and he would gain the right to build on a section, raising a first mortgage on the building. "The first mortgage would be fairly well situated, but the second mortgage was bound to go short.”

Proceeding, Mr. Hubble mentioned the possibility of Bruce’s having a £IOO cash surplus on each of the 26 sections. Tie could put the sum away, Mr. Hubble said, file in bankruptcy with incomplete records, obtain his discharge and be released fr<sm the mortgages. In the last five months of business, Bruce had paid £1,644 in wages on bearer cheques. These, he had cashed himself. This was an average of £BO a week. In tw'o or three instances, there were £SO notes in these cheques. The records given to the official assignee were of no use in gaining an exact knowledge of the position. Mr. Hubble detailed at length the aspects of the allegations and mentioned the nature of the negotiations with Bruce. "I ask you seriously to consider whether BruCe has not deliberately set out to defraud his creditors,” Mr. Hubble said to the jury. Evidence was opened by Thomas Charles Douglas, clerk in the assignee’s office, who said the deficiency was £B6O. (Proceeding.)