ABILITY TO PAY

Wanganui Chronicle, Volume 80, Issue 256, 28 October 1937, Page 8

ABILITY TO PAY

A BAR TO RELIEF WEALTHY COMPANY’S SUIT ADJUSTMENT OF LEASES [ Per Press Association. ] AUCKLAND, Oct. 26. In a lengthy written judgment the Court of Review, presided over by Mi Justice Johnson, has virtually decided that undoubted ability to pay is a bar to relief under the Mortgagors’ and Lessees’ Rehabilitation Act of last year. The decision was given on appeal against a decision of the Wellington City Adjustment Commission, wnicb dismissed appellant’s application for the adjustment of a liability. That application was made in respect of a lease of premises in Wellington, ano it was refused on the ground that appellant’s admitted ability to pay Uig rent in regard to which an adjustment was sought rendered the adjustment unnecessary. The Court now holds that the Commission was right in dismissing the application for adjustment, and it dismisses the appeal. Appelant's application was accompanied by a statement of assets and liabilities as at September 30, 1936. This showed a net surplus of assets over liabilities of over £160,000, and the holding of leasehold and freehold properties of a value of approximately £115,000, subject to mortgages amounting to approximately no more than £45,000. Appellant was admittedly an important and wealth corporation carrying on a large business throughout New Zealand in such a sound financial position that no question of its ability to meet its obligations in any direction could arise. Appellant’s application was accomlease in respect of which it claimed a reduction of rent was one to which the Mortgagees’ and Lessees’ Rehabilitation Act, 1936, applied, and that on the application by it to the Commission the Commission was bound to proceed to find a basic rent, and if the rent so found was less than that payable under the lease, it was likewise bound to reduce the rent payable under the lease to the basic rent unless other relevant considerations would make such a reduction inequitable.