BANK RUPTCY ACT

Hawke's Bay Tribune, Volume XVII, Issue 214, 24 August 1927, Page 3

BANK RUPTCY ACT

PROPOSED AMENDMENTS HASTINGS CHAMBER OF COMMERCE DISCUSSION. A special meeting of the Hastings Chamber of Commerce was held last night to discuss the provisions of the proposed Bankruptcy Amendment Act. Mi E. J. W. Hallett presided Mr. C. Duff pointed out that one ot the most important points was the need lor enforcing the penal provisions of the Act by the police. A man accumulated debts to a considerable amount, with no assets, and the creditors felt that there wa s no use in their sending him to gaol, so there was no meeting, the matter dropped and in a few months the man was whitewashed and let loose on the community again.

Regarding the amendment to section 79 of the principal Act. as co fraudulent preference, Mr. Hallett said that the endorser of a bill of exchange was often merely a surety, but he was not recognised as a surety in law, On the motion of Mr. Duff, it war decided that the amendment should lie extended to include ths accommo dation party to a bill of exchange. With reference to the amendment to section 93 of the principal Act relating to the prohibition of publication of bankrupts’ examinations. Mr Hallett considered that it went too far. Of course. he said, if a bankrupt was asked a question under examination, tne answer to which might incriminate him. but which, under the Bankruptcy Act, he was bound to answer, although in an ordinnn court be would not be obliged to do so, then he should be protected from the publication of his answer. The clause should be limited to answers to questions which inclined to in criminate the bankrupt. Mr. Duff considered that power to prohibit should not be left in the hands of the Assignee. This diseretion.had been bestowed on niagntrates, many of whom declined to exercise it. if the law wanted this thing done, why did it not declare it absolutely, instead of placing the responsibility to suppress publication on a magistrate or other official? Mr Tonkin pointed out that any recommendation made should be framed in a form which would protect the press from trouble, by making the order for suppression of evidence come as the result of the application of the bankrupt, or his legal adviser, through the presiding official.

On the motion of Mr. Hallett it was decided to suggest “that, when a bankrupt, or his legal adviser, claims privilege regarding an answer to any question which the bankrupt would not be bound to answer but for the provisions of the Bankruptcy Act. such answer should not be published without tne consent of the magistrate, or the Assignee.” Regarding section 120 of the principal Act liminating landlords preferential claim for rent in cases of bankruptcy from six months to three months. Mr. Hallett quoted the case of a lease under which the rent is payable every six months. The tenant might go on for five months and then go bankrupt, but the landlord could onlv claim for three months. On the motion of Mr. Duff it waresolved that, in the opinion of the meeting there was no good reason for reducing the time to three months Dealing with the amendment (12) providing protection of leases against forfeiture on the tenant becoming a bankrupt, it was decided that sub section 8, providing “that an application to the court for relief may be made at anv time within six months after the lessor has re-entered or taken proceedings, by action or otherwise, to enforce forfeiture.” the time be reduced to three months. GENERAL SUGGESTIONS. The chairman then ashed for any other suggestions that would be calculated to assist. Mr. Tonkin pointed out that a creditor would have to live ten miles away before he could send a proxy to a bankruptcy meeting, with nowei to vote, but a person living within a 10-mile limit could only give his nroxy to his manager, clerk or someone in his regular employment. He considered that the privilege should be extended to all creditors, so as to enable them to appoint whom they pleased—their solicitor, their public accountant, or anyone else.

Mr. Tonkin's motion in that direction was carried.

It was decided that the Assignee should be made a paid officer of the State, connected with the Justic? Department, who would not have to depend on the number or value of the estates that passed through ins hands for his remuneration. During the discussion Mr. Tonkm said that he had heard unofficially, a few days ago, that the bankruptcy proceedings had now been transferred to the courts. On the motion of Mr. Duff it was resolved to support the Wellington Chamber of Commerce in their efforts to have approved persons as trustees in bankruptcy, who might act in and administer cases of bankruptcy. It was also decided to support the Wellington Chamber te secure the payment by the State of expenses if extraditing and returning to New Zealand any person who has left the Dominion in such circumstances that it is apparent there is an intention to defeat or defraud his creditors It was pointed out that this power of extradition could be exercised in cases of embezzlement and should apply equally in the case of an absconding bankrupt. It was also decided that when there were known irregularities on the part of the bankrupt, and there was a clear case of fraud made out. tin bankrupt’s affairs should be investigated at the expense of the State.

It was resolved to support the Wellington Chamber with regard to the administration of insolvent deceased estates by the Official Assignee or Public Trustee, or trustee in bankruptcy, and aipo respecting this and clause 9 of the new bill, that regard should be had to uniformity in the marshalling of assets in order of priority of payment. On the motion of Mr. Rainbow it wa s decided that attention be drawn to the anomaly regarding preferential claims for wages existing under the Companies and the Bankruptcy Acts.