SUPREME COURT.

Star (Christchurch), Issue 4915, 3 April 1894, Page 3

SUPREME COURT.

In Banco* THIS DAY. (Before hia Honor Mr Jutioa Dennisfeon.) A. J. H, BOWER V. THE OFFICIAL ASBIONKS. I His Honor gave judgment in this case, which was an appeal from the decision of Judge Ward in the District Court, Timaru, Hia Honor B*id:— "l think that the notices given by Ferguson on July 11, if given in time, would be sufficient. They were given in consequence of a telegraphic instruction, from Bower then in Scotland, to look after his interests ; and on July 8 a power of attorney to Ferguson had been signed by Bower. There is abundance of evidence that Ross, on June 25, committed an act oE bankruptcy by beginning to koop house with intent to defeat or delay his creditors." * * * Tbe appeal was allowed, with costs £10 10s. J. O. BOWEK V. THE OFFICIAL ASSIGNEE. His Honor also gave judgment in this case, whioh was also an appeal from the deoision of Judge Ward, at the District Court, Timaru. His Honor said : In this matter the learned Judge of the looal Court of Bankruptcy in Timaru haa ordered the document set out in the oase, and relied on by the appellant as a security, to be set aside as fraudulent, void and inoperative against the Official Assignee (the respondent) on the grounds ; stated in the notice of motion. Out of the eleven grounds so stated some were | abandoned m argument, and some are in- 1 consistent with, and alternative to, others. I should have been glad if the learned Judge had stated which of the grounds he held to bo substantiated, bo as to have in- I formed the Court oi the view he took of j the circumstances under wnicb. the document was signed, and of tbe intention and motive of the bankrupt in signing it. I j think the learned Judge was quite ( justified in holding that the Court ; J was not bound by the apparent j date of tbe document, or by the state- ( ment of Boas as to when it was signed. If a man produces a document deliberately and carefully framed, and prepared in such a way as to preclude any possible I independent evidence of when it came into j existence, the presumption would bo against i him. In the present case there are addiI tional faofs of proved frauds, perjuries and forgeries on the part of the author of tbe document. It was therefore properly j held that the document must be taken as < undated, and that in so far aa the I proof oi its existence at any given date is j essential to tbe case of the party pro- ; pounding it, such proof fails. In holding the deed fraudulent aa against the Official Assignee, tbe learned Judge must, I think (though he does not directly Bay so), have taken the document to have been signed — or, rather, as not proved not to have been Bigned, within three months of adjudication, and to have been made by the bankrupt with a view of preferring 1 the appellant. It was laid down by the English Court of Appeal in E. G. Stubbins, 17 Ch. Div., 58, that if a debtor on the eve of bankruptcy voluntarily makes good trust moneys whioh he has misapplied, tbe payment cannot be set aside aa a fraudulent preference of a trust estate. It does not, however, seem to me inconsistent with this general proposition, that where the intention is to make good trust moneys due to a particular creditor with a view, out of personal friendship or relationship, to pay such a person in preference to the creditors to whom also trust moneys are due, suoh payment may be a fraudulent preference. In the present case, looking at the intimate relations between Eosa and Bower; and the fact that Mrs Bower's liability represented ■ only- -a. small - fraction of .Boss's liabilities for trust moneys, and that he had certainly no more apparent reason to dread prosecution from Mrs Bower than j from any other whom he had defrauded, it may be said that there is Borne evidenoe to justify the view that there waa an intention to prefer. If the case depended on this alone, I should hesitate to give effect to a suggestion whioh, as as far as I know, ia without authority. But I think the transaction can be dealt with on a broader ground. What is the document relied on P It is claimed to be a declaration oi.' trust. Even if written by Eobs with the idea of in some way creating 1 j a trust in Mrs Bower's favour, it amounts \ at most to a statement by Eobs that isi ! consideration of his having committed (or \ perhaps intended to commit) a breach o: j trust in respect of moneys entrusted to him, he agrees to mortgage hia freehold estatt ] in New Zealand to the respondent in ft certain contingency. The question Beem* > to mo, ia this.an agreement which a Court ; of Equity can be asked to enforce agains; j the asiguee of the bankrupt. None of tba j cases cited go an j thing like the length necessary to support this caae. * * * It seems also open to question whether a Court of Equity would assist a creditor to enforce a transaotioc whioh, even i£ not fraudulent preference within the Bankruptcy Act ia an attempt by a bankrupt to prefer one of a class oi creditors at the expense of others of th<: ; same class. On the whole, I feel atitisfkd \ that the alleged agreement is one which j would not b 9 enforced by a Court of j Equity, and that it waa properly held inoperative and ineffectual as a security : against the land Bought to be charged. ' It ooourred to be that it might ba| very doubtful how far this question! could be raised by the Assignee in this! form ; whether it waa not for the person relying on the security to take steps to enforce it. It may, however, be eaid that ' claiming to set it up as a security entitled the Official Assignee to challenge its validity. In any case, the point waa not ; taken by the appellant, and her qouneel ■ has intimated his willingness to have the whole qneßtion dealt with in these proceed- 1 ings. The appeal will be dismissed with i £10 10s costs. I UNION BANK V. SOUTH CANTEEBUBY I BUILDING SOCIETY. Argument in this case was continued this morning, when Mr Kippenberger led arguments for the defendant company. [Left sitting.!