BANKRUPTCY ACT.

Dominion, Volume 1, Issue 133, 28 February 1908, Page 3

BANKRUPTCY ACT.

NEED FOR AMENDMENT. : ANACHRONISMS AND INCONGRUITIES. TSI.EGBAPH—SrECIAL COKItESrUNDENT.I ; .- Chrjstchurch, February 27. ; : ;In tho course of his address yosterday, the President- of tho Canterbury Chamber of Commerco referred to the necessity for material alterations in tho Bankruptcy Act. "It.is many years since this Act was put on: our Statute' I3ook;" 'ho said, "and . at that time tho conditions of business life were altogether different from what they are now. The-Act-was then specially framed to meet '.a class 9f trades who have no existence -n our: business community to-day. It was passed principally for the object of punishing, fraudulent debtors. , .Fqw of . these exist at the present day;;. The Act is entirely.out of joint with the timo. It .contains 'anachronisms .and incongruities .-which.-'-require sweeping away, and, in,my opinion it requires simplification almost in every parti-' cular. There has grown-up during the last' fifteen years a system under which creditors,' administer themselves the estates of'idebtors who are; unable to pay .their way. . I. ,am given to . understand * that 75' per cent., of' tho whole bankruptcy business of this country is transacted outside the Bankruptcy Act. .This seems 1 to ma to.show that the Act in its present forui must''bo-considered, by the trading'community" as obsolete, and io points to the absolute necessity of either Compelling all such- ostatbs to be .wound up under the Act, or; as ah conferring upon the-trustees elected.'by.' .;the creditors similar ijowers.' to those which,are now. possessed by.-the official assignees. Although 75 per cent, of tho estates are placed in the hands of-private trustees for administration, those gentlemen hive really jo powers at.all, other than"those derived from their contract with-, the debtor, and the time has .now . come when primary trustees should receive legislative sanction of their appointment, and be compelled to find the same security that the t official assignees are required ■■ to: ; find; ,and ' should be. armed with the same . powers . for: setting, aside fraudulent :preference, .for compelling the.debtor, to attend .anf.bie-.oxamined:' upon, his oatli', and fori attaining possession, of-the, property of the debtor m tho way as the: official assignees can. I .am eliminating the large number of small estates which pass, through tho official assignee's' bands;.:: in- most of vdiichy the assets -aro only nominal. -: There' is a class of debtors . wlicf; possessing no assets,..simply'.'take, advantage of the Bankruptcy, Act for the purpose' of; obtaining relief , from ;tho ■ pressure • of. their, creditors; In these cases the creditors tako no interest because, there' are no assets, 'and, judging i from the fact that the■ criminal-prosecution against' tho bankrupt is now ;very seldom instigated toy the official assignee, 'it is clear tlfat all thoso provisions in tho Act aro never wanted in tho case of peoplo, very fow of : whom aro traders, and; who-filo, not for the purpose of dividing their estates, because thoy have none, but only with tho object of , obtaining- rolicf. In : the . Bankruptcy Act of 1876 a debtor who "did not apply for his discharge became discharged by oporation of tho law within, three years. In 1883, when the', change-.was.: made from private, trustees to, official assignees, this clause was not re-enacted, 'and now a debtor, small or largo, cannot obtain. a .discharge except in ;opon;. Court; The consequence is, that we have undischarged bankrupts iii tho •community, and I think; that' relief should bo given-to these by an amendment of the' 'Act, and it is an exceedingly bad thing for the business community to-be leavened 1 with undischarged: bankrupts, and - an equally bad thing for the bankrupts themselves."-- .