PARTIAL DISMISSAL

Taranaki Daily News, 7 March 1935, Page 7

PARTIAL DISMISSAL

BANKRUPTCY PETITION THE OWNERSHIP OF A GARAGE. HEARING IN SUPREME COURT. MR. JUSTICE BLAIR'S COMMENT. Critical remarks -were made by His Honour Mr. Justice Blair during the hearing of a petition for adjudication as bankrupts in the Supreme Court at New Plymouth. The petition was made by the Vacuum Oil Company (Mr. R. J. Brokenshire) against Maire Margery Arthur and Norman Alfred Arthur, of the Westward Ho garage and service station, New Plymouth. Previously a judgment had been entered in the Magistrate's Court at New Plymouth in favour ' of the company against N. A. Arthur and the garage. In later proceedings it was not proved that the business belonged to Arthur’s son. On a distress warrant . against Arthur and the garage goods were seized and sold for £4O Ils, the judgment being for £127 18s lOd and costs £l2 Ils 6d. His Honour dismissed the petition in respect of Mrs. Arthur as. no act of bankruptcy had been established. The judgment, he said, was limited to the husband. Judgment was reserved in respect to N. A. Arthur. It might be, said the judge, that the company would be better off without an order as Arthur had no assets and had expectations, it was stated, from his father’s estate. OPINION OF MAGISTRATE. There was a contest as to which of the two was the real debtor or whether both were, and the witness W. F. Southam said the magistrate had expressed an opinion that N. A. Arthur was the proprietor of the Westward Ho garage, and he had only the word of Arthur that Mrs. Arthur was the proprietor of the business. In answer to Mr. Middleton the witness said he had never executed a distress warrant against Mrs. Arthur. He had known Arthur for many years and was aware he had no assets. J. A. C. Barnes, warehouse superintendent for the Vacuum Oil Company at New Plymouth, gave evidence to the effect that his firm had always regarded Arthur as the proprietor of the Westward Ho garage and service station. . Carl F. Walker, a clerk in the Magistrate’s Court at New Plymouth, deposed to a note on the original, plaint notice which he said he made pursuant to a comment by the magistrate that if necessary he was prepared to find that N. A. Arthur was the proprietor of the Westward Ho garage. In answer to Mr. Middleton the witness . said he knew that an application was made to vary the judgment in some way in so far as it. concerned Mrs. Arthur. He did not know if .an attempt was made to issue a distress warrant against the separate estate of Mrs. Arthur. Witness was instructed by the magistrate, some days later, to notify counsel, that he would not vary the judgment. To Mr. Brokenshire: He had understood from counsel that there had been a mistake in the entering of the judgment, but he did not know what the mistake was. There was no written application to the magistrate. N. A. ARTHUR’S EVIDENCE.

Norman Alfred Arthur, called by Mr. Brokenshire, said he had been a garage and service station proprietor, but was now a garage attendant. The Vacuum Oil Company had no security for the Westward Ho garage debt to the company. The amount of the debt, in addition to that for which judgment was obtained, was still owing to the company. The witness produced an agreement, dated September 17, 1934, .signed by Mrs. Arthur and himself, relating to the sale of the business to the company. At that date and the date of the supply of oil by the creditor, company Mrs. Arthur was a principal in the garage business.

To Mr. Middleton: He himself had never been a principal in the garage firm. He did not sign the agreement as a principal. When the business was commenced in 1933 it was made clear to all oil companies, including the Vacuum Oil Company, that he had no assets and the business was Mrs. Arthurs, and business arrangements were entered into on that basis. The borough council license was issued to Mrs. Arthur and the petrol pump agreements with the oil companies were in her name or the name of the Westward Ho garage, with his signature as manager. On the first invoice from the company he was shown as proprietor of the garage, but he at once took steps to notify the company that the busmess was not his. Another oil company had taken a judgment against Mrs. Arthur, and there was a further judgment against her in respect of some furniture purchased. The witness said he had made every attempt to effect a settlement of this matter. An endeavour had been made to induce him to get his father to assist him, but his father had declined to help as he considered the Vacuum Oil Company had ruined the business and there would be no chance of getting his money back. The witness said he was still willing to assign any share in his father’s estate for the purpose of discharging the debt, but he pointed out that his father had said if he was made bankrupt he would cut him out of the estate. His father had had a long and honourable business career in the district and he insisted on the debt being paid. It was partly on account of these proceedings that he had left the district. LEGAL POINT RAISED.

Mr. Middleton took a preliminary legal point that there had been no proof that at the date of the petition there was a debt of £3O or more owing, and on that ground alone he applied for the dismissal of the petition. He made the further point that there must be a good petitioning debt and an act Of bankruptcy, which he submitted had not been proved. Mr. Middleton intimated no further evidence would be called, and he proceeded with his legal argument. In the course of this His Honour took exception to an affidavit which said that Norman Alfred Arthur was manager of a garage known as the Westward Ho garage; that Maire Margery Arthur was the proprietor of a garage known as the Westward Ho garage; that there was more than one garage at New Plymouth known as Westward Ho garage. The affidavit, said His Honour, did not disclose the garage of which Mrs. Arthur was proprietor, or that of which N. A. Arthur was the manager, or even that Maire Margery Arthur was the wife of N. A. Arthur. There might be, so far as the affidavit went, a hundred Westward Ho garages, but which of them was Mrs. Arthur’s and which one N. A. Arthur managed was not shown. The affidavit was not a frank one, and he was not surprised that the creditor firm got its back up on account of it. His Honour also said that the argument purporting to transfer the business to the son was worthless. An infant could not be held liable under it, and it was not worth the paper it was written on or the stamp that had been affixed to it.

Mr. Brokenshire argued that as Mrs.

Arthur had been served with notice of the proceedings in the Magistrate s Court and had not appeared they were entitled to execute the judgment against a defendant served who had not appeared. The seizure of her stock in the business was an act of bankruptcy.. His Honour pointed out that no judgment had been given against Mrs. Arthur. What was necessary was to establish that she was proprietor of the business or a partner in the firm. Mr. Brokenshire said the note on the file made by the clerk of the court was not part of the judgment, but merely the clerk’s report of what he thought the magistrate had said. . , r. His Honour asked if the judgment could not be varied by the adding of the name of Mrs. Arthur as a partner or proprietor of the business. Mr. Brokenshire said an application had been made, for a variation of the judgment on the ground that a mistake had been made. His Honour pointed out the magistrate had refused to vary the judgment and said no mistake had been made. That was a finding of fact It might be a wrong finding, but it was the magistrate’s finding of fact ■