ACTION QUERIED

Timaru Herald, Volume CXXXIX, Issue 20132, 12 June 1935, Page 13

ACTION QUERIED

BANKRUPT MILK VENDOR ABANDONED BUSINESS The action of a bankrupt milkman, Clifford Basil Andrew, in abandoning his milk round, for which he had paid £IOO, in favour of another Timaru businessman evoked considerable criticism at a meeting of creditors yesterday and the legality of the action is to be investigated. The meeting was presided over by the Official Assignee (Mr W. Harte) and bankrupt was represented by Mr W. D. Campbell. Mr G. J. Walker appeared for Mr T. Rickerby and Messrs G. R. Aitken, S. J. Brown, and A. F. Phillips were represented by Mr J. Emslie. A statement of bankrupt's finances showed amounts owing to unsecured creditors £239/11/11, to secured creditors £3l/19/5, leaving total liabilities £239/11/11. Assets were shown as book debts £l9/12/3, estimated to produce £ll/17/-, cash in hand £52/17/-, plant £l2. making a total of £7B/14/-. The resultant deficiency was £162/17/11. Bankrupt’s Statement Bankrupt in his statement said that in July 1933 he leased from Thomas Rickerby a property at Milford containing 80 acres at an annual rental of £3OO. which was subsequently reduced to £250. Owing to the fall in the price of butterfat he got behind with the rent and was unable to carry on. The Farmers’ Co-op. seized the stock and plant on December 23, 1934, and he had to walk off the property.

“While I had been on the farm,” continued bankrupt, “I started a small milk round on my own account. Just before leaving the property. I purchased a further milk round from the Canterbury Farmers’ Co-operative Association, Ltd., and worked at this until April 8 last. The round showed a profit, but as Rickerby was pressing me for a large sum on account of my lease, I held a meeting of my creditors on March 11, 1935. I offered that, if I was allowed to carry cm as I was doing. I would pay my currenttrade accounts, and a sum of at least £lO a month to Mr Campbell for distribution pro rata amongst my creditors. This was agreed to and Rickerby fixed his claim at £SO which the other creditors agreed to. I continued my round, and was doing what I promised until early in April when the producers who supplied me- with milk refused to continue. One notified me on April 4, and then on April 5 the’ other supplier shut down on me. On Saturday, April 6. I consulted my solicitor and was to see him again on Monday, April 8. to file. On the Saturday afternoon. I spoke to a friend. Mr Day, who thought he could persuade some producers to give me milk. We went as far as Temuka, but nobody would supply me. To prevent my customers being left without milk. Mr Day said he would buy milk himself and employ me to deliver it. He has been, doing that since April 8. I then formed an idea of collecting all the money, owing to me that I could collect, and calling my creditors again instead of filing. While I was collecting, I was summonsed by three suppliers and had, no option but to file.” Cross-Examination To the Assignee, bankrupt said that he thought Mr Rickerby had forced the situation by issuing a summons. Had he been allowed he would have carried on. Mr Campbell said that when Andrew walked off the property he thought he was quit of it, but he had found out that he was liable for £l5O damages to Mr Rickerby for breach of the lease. It was explained by Mr Walker that Mr Rickerby’s claim was £SO, subject to no bankruptcy proceedings being taken, but he now claimed a further £l5O as damages, making liis total claim £2OO.

The Assignee: Have you disclosed all your assets?—To the best of my knowledge. What about a wireless set?—l did not pay for that. My fiancee paid it off for me.

It cost £22 and £l9 has been paid off it. The last payment of £5/19/- was made last month? —She made the last payment, but I paid all the others.

Where is it now?—My fiancee has it. But the creditors have an interest in it up to £l4?—lt is the only thing I had. When I was on the farm I did not spend my money on pictures or anything. But you went to the pictures, too. You spent 4/- on the pictures the other day. It was not your money to spend. The money was your creditors, and some of them are very sore about it. Bankrupt was then questioned regarding a cheque butt showing a payment of £4. What was that for?—l cannot say. Was it for a wristlet watch? There is an allegation that it was?—No. Mr Campbell explained that it had been for legal advice at the first meeting of creditors. The Assignee said that the New Zealand Farmers’ Co-Operative Association, of Ashburton, held chattel security over bankrupt’s plant and read a letter from the firm advising of that fact that stating that a mower, a separator, a half ton truck and a grubber had not been accounted for. What did you do with the truck?— I left it at Wood’s garage and they sold it. But they had no right to sell it. It belonged to the New Zealand Farmers. Did they seize it or did you tell them to sell it?—l told them to sell it and that it was under security to my uncle. What did the sale realise?—£B. It was not theirs to sell, but that is a matter for the New Zealand Farmers to take up. Mr Campbell remarked that it appeared as though Wood’s would have to find the money. What did Mr Day pay you for the nftlk run which you bought for £100? Nothing. I abandoned it because the suppliers would not supply me with milk. You gave it away? Why did you give away something which belonged to your creditors? You received not a penny?—No. Mr Day employed me to work on the round. Did you take steps to inform your creditors that you were going to drop the run?—No. The suppliers dropped me so suddenly. Mr Campbell then explained that Andrew had gone out as far as Temuka looking for someone who would supply him with milk, but there appeared to be a conspiracy against him. Eventually Mr Day had bought the milk himself and employed Andrew to deliver it so as to keep the round going. If the customers did not get their milk the round would suffer. Assignee’s Attitude Queried. When the Assignee: continued to question Andrew regarding his efforts to obtain a supply of milk, Mr Campbell said he thought that the Assignee should assume a neutral position and not act as a cross examiner. The Assignee: I do not agree with you, Mr Campbell. These are questions which the creditors want answered. Mr Campbell: I object that a man should come here as a suspect.

The Assignee: You may have been misled. Mr Campbell: I do not assume that the man is a rogue. The Assignee: I have my job to do, Mr Campbell. Mr Campbell: So have I. and with all respect, I say that I have a right to say what I think. Mr Campbell went on to say that Andrew had not been able to obtain milk, but Mr Brown remarked that he was still supplying bankrupt with 45 gallons. Mr Aitken said that there had been eight gallons in his shed waiting for Andrew, but he had not called to collect it. Andrew had said nothing about not being able to get milk. He had said that he wanted it cheaper. Mr Campbell said the creditors had told him that Andrew was holding long contracts, and was selling the milk at unremunerative rates. The Assignee: He was cutting prices. I do not think he did a thing to help himself. Mr Campbell: He was foolish in many ways. The Assignee: He is dull. He did net give the creditors an opportunity of carrying on the run. A letter from bankrupt to Mr Day was then read, in which Andrew offered the latter the run, on the understanding that he (Andrew) would be employed at a weekly wage and that Day should pay all the costs of delivery. Mr Campbell: That was not done on my advice. • I told him to file. He appointed Mr Day his legal adviser in my absence, and that was his advice. He should have filed. Mr J. H. McAuliffe (secretary to the South Canterbury Electric Power Board) said that Andrew’s account with the Board went back to when he was on the farm. The Board had supplied him with “juice” and some months had received nothing, and on others small payments. They had sold him an electric dairy, cylinder which had not been paid for. “I think he has been extravagant. If I were in his position I would not go to a photographer and have my photo taken and then put in a glass case on the street. All my creditors would be chasing me.” Price Cutting Admitted. The Assignee to Andrew: You were cutting prices weren’t you?—Yes, at the beginning. Mr Emslie: What were you selling the milk for?—For 4d a quart on the round. And what were you paying for it? —About 6d a gallon. The creditors complain that you were always driving your car about the town and not attending to your business?— I was doing my business when I drove the car. The Assignee: It looks to me as though the suppliers were deliberately misled. When he went to them he did •so to protect his successor and not in the interests of his creditors. Mr Aitken said the round was still a saleable asset, and the creditors should be able to obtain something from it. The Assignee: It has been given away. Can we take back something which has been given away? It is a point of law which will have to be tested. I can assure the creditors that the position will be thoroughly investigated. A motion instructing the Assignee to dispose of the assets was earned. It was decided not to allow bankrupt to retain the wireless set.