A HAMILTON BANKRUPTCY

Waikato Argus, Volume XIX, Issue 2979, 12 September 1905, Page 2

A HAMILTON BANKRUPTCY

The adjourned inquiry into the bankruptcy of Alf rod Ueorge TibbutL, photographer, of Hamilton, was hold before fho Official Assignee, Mr H. Giorard, yesterday afternoon. Air it. Watts appeared for the bankrupt, and Mr A. iSwarbriok for the creditors. There were present: Messrs L. Williams, 111..oilman, W. Taylor, U. Stone, VV. C. Davis, K. (Jhiloott and It. Peace. Mr Watts stated that ho was unable to make a better offer than previously, and withdrew his previous offer. He might, however, be able to submit an offer later on, but could say nothing definite at present. Mr Swarbrick pointed out that further indefinite adjournment was useless.

Mr Gierard said he did not think it would bo fair to adjourn the case again. He asked the bankrupt to produce a statement of receipts and expenditure for tho last three years.

Mr Tibbutt did so. The statement showed tho receipts in 11)02-3 to he iM-22 Is fid, and the expenditure .£122 4-s lid ; tho following year, JC3IO 3s Sd and .£317, leaving a debit of 16s 4d ; and last year A 245 IDs and J1250, leaving a debit balance of .£-1 10s. Air Gierard: How do you manage to balance this to a penny, and what system of double entry or single entry have you got f

Air Tibbutt; The amounts were taken from the cash-book. Air Gierard : You did not have a solitary penny left at the end of the year IIIU3 ? You give a most detailed account, it appears, and you say you did not have a single penny left. 1 think it is a most extraordinary thing that a man can manage that. Air Tibbutt; ft is singular, is it noth Air Gerard ; I am not joking; lam commenting on it. It is more than most people can do, and it does not look too well that it has been done. You have my opinion clearly on that point. 1 do not think these business people here could start with nothing, work the whole year, and finish up with nothing. Take the item “ sundries.” What does “ sundries ” represent ? You no doubt have little expenses, say the “ corner house.”

Mr Tibbutt: Very little sir; it does not trouble me much ?

Mr Gerard: lam sorry to say I have these little expenses ; what do you put it down to ?

Mr Tibbutt: It goes down to expenses. Mr Gerard ; But you make it pretty well the same every week; because it does does not vary very much here (looking at the statement). Mr Tibbutt: When 1 am away on the goldfields it costs me £5 ; but it would not cost so much in a smaller town,

Mr Gerard: In the first year you put through £422 4s 3d. In the second year yon managed the most extraordinary teat of spending 16s Id more than you received according to this statement. This brings us down into the third year, a deficit to start with. How you manage this it is hard for me to say. 1 have same knowledge of books; but I do not know how you manage to got a deficit in the cash book. How did you manage that ? How can any man expend more than ho gets ? Mr Tibbutt: I keep rough books; but I do not understand the system of book-keeping. Mr Gerard: Is this statement in your writing ? Mr Tibbutt; Ko; I got a young fellow who was staying with me to make it.

Mr Gerard; Well generally according to this statement it all must be duly accounted for, and nothing is left at the end of the year, while at the end of the third year you are £4 10s short. The debtor says in his statement that as far as he knew it was a true and correct statement from the cash-book. He would no doubt be able to produce vouchers and receipts for the expenditure.

Mr Swarbtick: I see he puts all his payments into the Bank down as expenditure ; this is not a balance-sheet at all.

Mr Gerard; Yes, according to the statement he has to account tor a very considerable amount. Ido not see any ro-entry’of the money. Mr Tibbutt: It has been paid out by cheque for household accounts. Mr Gerard: Well, you have gone in pretty stiilly—one week £7, another .£2O 14s, and so on. This statement means that you have not accounted for all the money.

Mr Tibbutt said that owing to the fact that ho travelled so much he had his bank account transferred to his wife.

Mr Gerard: The bank book does not give any information, and there was nothing to show where the money had gone. Many of the cheques have been made to order, and we cannot tell who received the money or what it was for. You have introduced the payments into the receipts and expenditure in a lump sum.

Mr Swarbriek: The money must bo in the bank still. He has treated the money paid into the bank as though he had spent it.

Mr Williams: What we want to know is what has become of the money paid into the hank ? Mr Gerard: This is not a statement of receipts and expenditure at all. It does not show what has been done with with the money, but only the amount paid into the bank after paying hills, etc.

Mr Swarbriek : The amount of money paid into the bank has nothing to do with the receipts and expenditure. Mr Gerard: He simply put what money he did not expend in cash into the bank. He has failed to show what the cheques were issued for entirely. As to what was agreed between he and his hanker, we have nothing to do with that. Strange to say, in the statement he shows ho had no balance, and yet he actually had a credit balance of Jls 9s 9d. The work was not a credit to the man who had made it. Mr Watts: There has been an omission of all the money paid by cheque. Mr Gerard I feel pretty sure ho will be unable to show how the money went out, (To the bankrupt) : Have you the blocks of the cheques to show what became of tho money. Mr Tibbutt : Yes ; most of them ; but I kept no record of a number of small cheques. Mr Gerard; Do you call £0 odd a small amount in your small business ? Mr Tibbutt; No. Mr Gerard; The money paid by cheques to numbers would run into hundreds. 1 think you bad better produce the butts of the cheques. Mr Tibbutt; I have not been keeping a bank-book for over 12 mouths now, and I do not place any value on the butts since the account was closed. Mr Gerard : Unless you can satisfactorily explain many of tho disbursements wo can only assume that the money went into some other channel.

Mr Tibbutt ; 1 do not think that was the case.

Mr Gerard ; It may be so and it may not he so; but that is the only deduction we can take from it.

At Mr Gerard’s request Mr Tibbutt then left for his house in order to produce as many cheque butts as possible.

Mrs Alice Tibbutt was then called She said her husband had been carrying on business as a boardinghousekeeper for 15 months. She lived in her own house and on her own property. Two other houses were on the property, and they also belonged to her. For the last 15 months they had had a number of boarders, from four to seven on an average. She had not kept any books showing the receipts from boarders, nor had her husband done so. They had lost a good deal through the hoarders not paying up when they first started. She would have to rely on her memory for the amount that was due by them. To Mr Swarbrick : The three houses and the grounds wore bought by her. The laud cost X 260, -CIOO of which was paid down. There was one house on it at that time, and it was included in the price. The large house cost X 4-11 and the smaller one Xl 10. Mr Watts here handed in a statement of receipts and disbursements in connection with the property. Witness continued : That makes ,£787. She had £IOO of her own that she had in her possession for five years. She put it into the property', which was bought in December, 1902, and put the dill into it later on. She then gave mortgages of d! 120, £350 and £75 to Mr Reynolds, and she also had a loan of £IOO from Mrs Russell. Rents, d! 79 17s, had gone into building the last new

bouse. Other receipts wen;:—Sale of furniture, illl4 Jus; sales from old building, £7 ; loan, .IX cash from Mrs Russell; amount received from Mr Tib butt, £4l 12s '.id.

Mr Swarbrick . 'i'iio witness therefore accounts for £SHK Ills, which she has received apait from her husband. The cost of the. buildings, the old studio and legal expenses, etc., amounted to .£9lO lls !)d, instalments on piano £2O, making a total of £920 1 Is 9d. Witness, continuing, said that was all the money that had been spent on the properly to the best of her knowledge. The deficiency (£ll 12s 9d) she could not account for. Mr Gerard : It must he borne in mind that this was the minimum of her expenses. Witness said it was prohahly paid by her husband in small amounts. Her husband bad been keeping boarders about 15 months. They paid Ids per week. The average number was four. Mr Gerard : The bankrupt has shown the amounts received from boarders; but how he could show it now, considering ho kept no books, I do not know. However, it is only on a par with other items that appear. Witness continued ; Mr Tihhut.t paid all the accounts up to the time Mr Williams stopped supplies about, three months ago. The accounts were in her name now, and in order to pay them she had had to borrow money from her relations. She also got some money from the boarders. The total sum would be about £2O. They had three boarders during tho last month.

By Mr Gerard: If you keep an average of four hoarders would there he a deficit of from £7 to £S per month ?

Witness said she kept no books and could not say. Since February last her husband had drawn the money for the boarders; he paid the household bills with it. She had paid no money into the bank since September, 1901, and had paid no money into tho savings bank in her own or anybody olse’s name. There was no money in the savings bank in her children’s name. She had not had a savings bank account for five years, Mr Tibbutt was then recalled. In reply to Mr Gerard he said that on the advice of tho bank manager he had put the account in his wife’s name. She signed the cheques in her own name and ho signed cheques “per pro” on his wife’s account.

Mr Gerard: It was extraordinary advice. Would it not have been much simpler if the account had remained in your name, and Mrs Tibbutt had power of attorney to sign cheques on your behalf ?

Mr Tibbutt: “ I suppose so.” Mr Gerard: Well, it is for you to explain. 1 can see the complication, but it is not for mo to suggest anything. The cheque butts were then produced in Court, and Mr Gerard said in hardly any instances was it shown what the payments were for, but names were given. Mr Tibbutt (re-examined) said he kopt no books to show the takings from boarders.

Mr Gerard: If so how do you explain that you can set out items down to Gd to October, 1904, and reconcile your statement that the statement was an extract from your cashbook. Witness said be had to roly to a great extent upon memory. Mr Gerard: How does your statement that you relied upon your memory coincide with your former one that you made tho statement up from the cashbook ? You balance the statement to a penny from accounts that are shown to be incomplete. Am I to understand that the amounts sot down £5, £6 or £8 are only guess work ? I want an explanation, otherwise I hold that the statement is of very little value and perhaps wrong ? Mr Watts explained that MrTibbutt’s cash-book had got behind of late, and he had written it up partly from memory. Mr Tibbutt said he wrote it up partly from memory and partly from some records he had in his possession. Mr Gerard : When did you write up the cash-book P

MrTibbutt: About, a fortnight ago. Well—perhaps a little before. Mr Gerard : Your wrote it up just before or about the time of your bankruptcy, i Mr Tibbatt; Yes. Mr Gerard: Your statement shows that you commenced to keep boarders in October last. Mrs Tibbutt, on oath, said it was 15 months ago. Mr Tibbutt said he and his wife had come to the conclusion that it was about 12 months ago. Mr Gerard; And that is why you show in your statement that the first payment from boarders commenced in October. I suppose if it had been 15 months you would have shown 13 months. It amounts to this, that this statement has been prepared for the occasion and that the receipts have been prepared to suit the expenditure. As far as 1 am concerned you have admitted quite enough to do for my purposes, and that is why I do not propose myself to go into details. By Mr Swarbriok; The cash book was net written up until a little over a fortnight ago.

Mr Swarbriok: In the cash book whole pages are written up showing sixpences and shillings, and yet this was disbursed twelve months ago. The man must have a marvellous memory. Mr Gerard: Yes; a marvellous memory or something else—l would not like to say what. Mr Tibbutt said the earlier part of the cash book was written up three months ago. Mr Gerard : How is it that you conceived that it was necessary for you to write up these back records all of a sudden three months ago ? Was it because you thought you were likely to get into trouble ? What was the apparent need for writing up the details after nine months had expired ? Did you not think “ I am in trouble ; I shall be asked certain questions and I had bettor write this up ? ”

Mr Tibbutt: No, it was not done with that end in view. Mr G erard then wrote on the cashbook witness’ statement that the book had been written up partly from memory arid partly from records three weeks ago, and asked Tibbutt to sign it.

Mr Watts demurred, and asked leave to alter it to read; “ From three months to three weeks ago.”

Mr Gerard; Very well; it makes no difference as far as the Act is concerned. An adjournment seems necessary, as 1 do not wish the man to incriminate himself, and I wish to give him every chance to clear himself and give a real cash statement showing what had been disbursed and what represented the items covered by cheques. I will also give him another opportunity to meet his creditors, and unless he does so his solicitor will inform him what the result will Lo. Mr Swarbrick ; In August, 1901, the bankrupt started a totally different system of keeping books. It was most unsatisfactory, and the items had evidently been written up at the present time.

Mr Gerard: 1 have personally refrained from examining bankrupt on the details. Mr Swarbrick; If the bankrupt can show that ho has acted straightforwardly, and that everything was right, tiro creditors had no wish to go any further, but they had a right to obtain this information. Mr Gerard; In suggesting an adjournment 1 do not wish to press what I otherwise would press. I can see that there is an absolute necessity' for an adjourned meeting. I will give him a fortnight to supply the information, and the creditors will again meet in about three weeks’ time, say on 2nd, 3rd or 4th October,

In reply to Mr Swarbrick, bankrupt said ho was positive that neither his wife nor any of the children had banking accounts or savings bank accounts. It was agreed to leave Mr Tibbutt in possession of the assets.