THE BANKRUPTCY ACT.

Auckland Star, Volume XXXVIII, Issue 165, 12 July 1907, Page 3

THE BANKRUPTCY ACT.

PROPOSED AMESTDMENTS. .- REPORT OF CHAMBER OF COMMERCE. For some time, past the question of amending- the Bankruptcy Act has been "urged by' the Auckland Chamber of Commerce. At the meeting of the Council yesterday afternoon, Mr A. B. Roberton submitted the.report of the committee appointed by the Chamber to draw-up- suggested-amendments to the present Act. The report was as follows :—

It is found" here ttist whilst we have a most capable assignee his hands are tied in regard to the deputy assignees and agents who are appointed by the Government, and wiho often seem to be appointed without any regard to their qualifications for the office.. or to their ability to deal with legal and commercial questions frequently raised in the administration of estates. Moreover, remunerated as they are by a percentage on receipts, their pay is uncertain, and under such conditions it is doubtful- if pood men could be got to the wort. The increase in population and expansion of trade in outlying portions of this bankruptcy district would seem to warrant the readjustment of boundaries and the appointment of more assignees. Again,-the necessity of having to go to a judge of the Supreme Court on most -bankruptcy business, and the fact that these judges are more often away on circuit or on Appeal Court business thnn not, and that when they are in the district the pressure of other wort forces bankruptcy "business to the bottom of the list, to be rushed through at thfi last 1 moment. ' All this suggests the advisability of .one.or more jndgcs being appointed, whose special business shall be bankruptcy work., and who, when not sitting in open Court, could in chambers devote their time, to supervising and advising the assignees, thereby saving n large portion of the assets now frequently eaten up by obtaining legal opinions and by entering on hopeless actions. They iriight also assist the stipendiary magistrates. ',

• Section 29, Acts of Bankruptcy, requires strengthening by the' addition of a further sub-section, reading, say, "If ho sells his business and stock or the principal part thereof, and allows one or more particular creditors to receive payment for a past debt in full, without bavin? given notice of such intention to all his other creditors." Section 8 wniilr] be improved by contributing the calling of n creditors' meeting for the purpose of considering the debtor's position an available act o* bankruptcy.

! Section 77, Antecedent Transactions: A new clause should be added as follows: — ~"Every disposal of the whole or major portion of a trader's business and stock-in-trade, shall, If the debtor be adjudicated a bankrupt under this Act within three months of the date of such disposal or sale, be void as against the official assignee, unless it be proved that the fact of such disposal has been advertised In one of the principal newspapers of the district, at least once a week for four weeks, and that the proceeds have been placed for one month into a trust account.

Section 137, Penal Clauses: (a) It seems necessary, in view of repeated failuTe to secure conviction undfir sub-section 4, that at least one. or two of the books of acconnt required to be kept should be enumerated; fh). a new sub-section making ness as aliove a pecnl offence, /is required (c) penal clauses should be pruned of such terms as "unless it he proved, he had no intent to defraud." because, although It would appear that the onus is on the bankrupt to prove he had no Intent to defraud, this phrase Is actually a protection to him. and often a means of escaping punishment.

Section 173. Scale of Fees: A matter of tie highest importance to creditors is that a means to stop assets being frittered away in legal expense* snould be devised. For instance, the bankrupt's solicitor, according to present' scale, receives a fee up to £10 through the mere incident that the assets happen to realise £200 or over. If they reached -£25 the' fee would lie £2 2/, which is generally considered a fair remuneration for the wore done. ,A fixed fee is the remedy. Further, -n reduction should he made in the fee for filing petitions which, as it stands at present, is excessive. Also, a fixed snm should be stated for a petitioning creditor's solicitor. ' ' Snetion 124, Discharge: (a) The official assignee should be empowered to grant a discharge with the consent of creditors, instead-ff having to apply to a judge of the . Supreme Court or Bankruptcy Court; (b) the proposal of Mr Justice Cooper, that all bankrupts should obtain their discharge. by lapse of time, should be opposed. Recently several large amounts, have been recovered by the assignee after a lapse of many years. Insolvent- in bands of Public Trustee should be passed over to the official assignee immediately they are found to be insolvent. The Public Trustee has not the same facilities for dealing with these as the official assignee, and entirely ignores the rights of creditors who should be consulted in regard to the realisation of the estate. Any proposal to place the administration of bankrupt estates in the hands of the Public Ttastee should be vigorously opposed.

Provision should be made whereby bills of sale on stock. agreements, for sale and purchase of business, and assignments of insurance policies, should be void as against ofßcial assignee, unless registered under the Chattels Transfer Act four months before adjudication.

Unregistered Bills of Sale: Execution under powers given by unregistered bills of sale ehould be void as, against official assignee if made within, three months immediately preceding bankruptcy proceedings.' All private assignments of estates to creditors' trustees should be required to bo registered under the Chattels Transfer Act or by similar process.

. Statement of Accounts: It should be made compulsory for official and trade assignees to furnish to each creditor in an estate a complete statement of the tccelpts and disbursements dealt with immediately- the estate- is finally wound up.

' Your committee, recommends that the suggested, amendments and additions be printed and copies of same forwarded to each member of the Legislature, together with a copy of the motion passed.

Mr Roberton said there was a consensus of opinion that the present Act required amending. In sbme parts of the colony it was suggested that creditors', trustees should take the place of an official assignee, but the committee considered the latter officer should be Tetained, even if trustees were appointed. Another important suggestion was that if a person purchased a business, he must pay the .money, not to the seller, but in trust for one month, to see if any creditors put in claims. That meant that a man buying a business must be sure that he was not buying what was practically stock belonging to the seller's creditors. Another suggestion was that the official assignee should have the power to grant a "debtor his discharge (subject to the consent -,of : the creditors), and thus obviate the need for going to the Court. . -

Mr Peacocke raised the point with regard to the , clause that calling creditors together should be an act of bankruptcy, that a man, might be quite solvent and still wish to consult his creditors, to get more time. .

Mr Roberton said it read,' "an available act of" bankruptcy." As the Act Stood'at present the available acts of bankruptcy were such that probably every gentleman present had committed an "available act" af some time or other without knowing it. '

,Mr Peacocke said that should be struck .out, it was too drastic

Mr Gunson said; as. to the assignee granting a discharge,'-it should only be done when the creditors were unanimous.

This was agreed to.

Mr Gunson seconded the adoption of the • report, -which was agreed to. It was .also •decided to send a copy to each member\of .Parliament.

For Chnoren's Conga .at nlgnt, Woods' Great Peppermint Cure, 1/8 »ud 2/6 eti bottle. ; - ', —i-