LIQUIDATOR SEEKS RELIEF FROM COURT.

Star (Christchurch), Issue 19238, 27 November 1930, Page 9

LIQUIDATOR SEEKS RELIEF FROM COURT.

SAYS CREDITOR GAINED AN UNFAIR PREFERENCE. Alleging that, as liquidator of Davidson and Wauchop, Ltd., he was forced to give preferential treatment to an ordinary creditor, William Samuel Newburgh, a public accountant, asked for an order from the Court that the creditor, A. J. Archibald, Oxford Terrace, garage proprietor, should repay the sum forwarded to him. Mr H. A. Young, S.M., was on the Bench. Mr Thomas appeared for plaintiff and Mr Woodhead for defendant. The statement of claim set out that on October 1, 1930, defendant seized a Chevrolet truck from the premises of Davidson and Wauchop, Ltd., and refused to return it. He, defendant, received the sum of £53, made up as fellows:—lnstalments, £47 16s; repairs, 8s; seizure, £2 2s; unpaid account, £2 8s 9d; telephone and sundries, 5s 3d. It was claimed that defendant was not entitled to the last three items, plaintiff only having paid them under protest to secure the: return of the truck. Plaintiff to recover the sum of £4 16s. Judgment was given plaintiff for the amount claimed, less exchange Is 3d. Mr Thomas said that, though the sum involved was £4 16s 6d, there was a big principal at stake. Mr Newburgh was appointed receiver and liquidator for Davidson and Wauchop, and in the course of his duties had to pay a sum which it was submitted should never have been paid, and counsel asked for an order that the amount be repaid. Davidson and Wauchop had obtained a truck on the hire purchase system from General Motors, Ltd., but the latter firm had a policy whereby General Motors Acceptance Corporation took over financial dealings with regard to the hire purchase agreement. The price of the truck was £266, payable £BO down and £ls a month. On September 18, 1930, Mr Newburgh received a letter from the corporation advising that payments were overdue and asking that a cheque should be sent to cover at least two of the instalments. An account was rendered for £2 8s 9d for goods delivered to Davidson and Wauchop by the General Motors agent in Christchurch, Mr A. J. Archibald, who told Mr Newburgh that he expected preferential treatment for the sum. The last thing for a liquidator to do was to give preferential treatment to any creditor who was not entitled to it, and Mr Archibald, who could not show that he was entitled to preferential treatment, had tried to beat the other creditors. Mr Archibald was only an ordinary creditor. Mr Newburgh sent a cheque for £47 to General Motors in Wellington, as Mr Archiball had refused to accept it, that being the mode of payment asked for. On September 29 a letter came to hand showing that Mr Archibald had told General Motors not to accept the money, and he asked them to give him the hire and purchase rights, and so get preferential treatment. The corporation wrote stating that the cheque would not be accepted, as Mr Archibald, as guarantor, had been assigned the contract, an assignment about which no notification had been given. A Young Policeman. “Mr Archibald sent down men to seize the truck because he said money due had not been paid. Mr Newburgh refused to allow the truck to be taken away and Mr Archibald called in a young constable—he must have been a very young policeman. “Mr Newburgh refused to lei the truck go and the policeman told him in an indignant tone to stand aside. That Mr Newburgh did, realising that there might be physical violence, and allowed the truck to be taken away under protest, twelve men being rendered idle. "Mr Newburgh then signed an agreement under protest to pay the money to Mr Archibald and get the truck back. On that account Mr Newburgh was seeking relief from the Court. Distribution of Assets. “The whole case is nothing else thah a deliberate try-on to get preferential treatment over the other creditors,” concluded Mr Thomas. “When a man is liquidator it is abso-.

lutely necessary that he should see that the rules of the distribution of assets should be observed. If Mr Archibald gets away with this, other men may get away with hundreds to the detriment of other creditors. It is entirely wrong that a creditor should be able to prefer himself in a devious way as Mr Archibald tried to prefer himself in this case.” Mr Newburgh gave evidence along the lines of his counsel’s address. The Defence. Mr Woodhead said that Mr Archibald was required to guarantee the contract, and during the time the contract was running the instalments were continually overdue. It was also claimed that the agreement had not been signed by Mr Newburgh under protest. The truck was not housed in its usual place one night, so defendant grew apprehensive, ana was obliged to seize the machine. Lastly, under the hire purchase agreement Mr Archibald was entitled to charge the costs of re-sale and seizure. The Magistrate said that he was of the opinion that Mr Newburgh took the proper action, and was forced to pay the amount to enable the business to be carried on. .Mr Archibald had been wrongly advised in hts action, and should have accepted the cheque tendered. Judgment would be given for plaintiff. ii *--•