REPORT ON BANKRUPTCY.

New Zealand Herald, Volume XIX, Issue 6422, 17 June 1882, Page 6

REPORT ON BANKRUPTCY.

[BY TELEGRAPH. —SFKCIAL CORRESPONDENT.! Wellington, Friday. The sub-committee on bankruptcy have drawn up a long and interesting report, of which X make the following abstract: — The report states with regard to tho discharge of a debtor very littlo information is given, even by those whom we should expect to bo the most competent of judging and possessing tlie greatest experience, namely, the Judges of the Supreme Court, one Judge not feeling called upon to furnish answers to important questions, and another stating that he is not in a position to suggest any alteration in tho law relating to bills of sale, which would be likoly to be of substantial use in preventing frauds. The same learned Judge says that ho has no experience of arrangement by deeds, and again he recommends i that creditors should prosccute fraudulent bankrupts with leave of tlie Court. . The course that might naturally bo supposed to be tho most advisable would be that a fraudulent debtor should bo dealt with by the Court, on satisfactory evidence and hearing, in tho usual way, instead of its being made compulsory that creditors should be forced to adopt a costly and dilatory mode of proceedin" by means of a prosecution, "we would venture to say that tho suspension, of tho discharge has been found in every case, almost without exception, a farco. It is true that, in ono or two cases, it has called forth assistance from a kind friend of a bankrupt in an offer to pay a composition, and therefore .the power to suspend should be maintained ; but unless something more is added it will, as we have said, in a large number of cases prove a farce, and wo have therefore made a recommendation bearing specially 011 this point." . Tho committeo find that it is almost impossible to prepare a Bill that would meet the views and wishes of creditors generally, but think that much may be done towards facilitating the means for protecting the assets of an insolvent person, and securing a speedy realisation and distribution of tho assets at as little cost, and within as short a period of time as possible, and to a certain ektent to prevent fraudulent transactions. The committee resommond that the Government should prepare a consolidation of the Acts now ill force, and so altered as to accord with, and include the amendment which they now suggest, namely, that section 8 of the Act of IS7C, vesting full powers in a Judge sitting in bankruptcy to try all cases {vide section 12 of the English Bankruptcy Consolidation Act, of 1549) should be repealed, aud a new clause inserted, to be founded; on section 72 of the English Bankruptcy Act, of ISO 9, and it should be made perfectly" clear and distinct, and- beyond arguraont; :that the Judge of tho Court shall have all the same powers as. the Supreme Court,-in all matters arising out of the bankruptcy, whether for the.' setting aside of alleged fraudulent deeds, or other transfers of property, or in any matter whatever in which the trustee claims any property from third parties; and that such proceedings shall be taken on simple procedure, without pleading. A suggestion of Mr. J us'tice Williams- is recommended by giving the Court fn . which the bankruptcy is pending jurisdiction to set aside deeds .without, the necessity of the trustees bringing an action -in the Supreme Court. Section 9 of the Now Zealand Act of 1576 is useless in practice. 1 The sub-committee recommend that there should bo official assignees appointed as officers of the Court, and the creditors should have power to appoint one or two trustees to act with such officers ; that such officer shall, under liability of a penalty for omission, file a statement of the, accounts of a bankrupt, and pay a dividend, ouceat least every three months, unless such period shall be enlarged by consent of a meeting of creditors ; that any creditors may at any time apply to the - Court, 011 good cause shown," to order an official assignee or trustee to pay any-money into Court, or to proceed with the distribution of the estate forthwith, or to Make any such order in the matter as the- Court may consider £he exigencies of..the, case require," and that the Court, if satisfied that such application i 3 "frivolous, may order the .persons applying to. pajr such .costs as tho Court may fix; that section.22 of the Bankruptcy 'Amendment Act 1579 (English), be embodied in tlie'new Act, and be altered so -aB to "give a Judgo power*.to order the discharge .of" a bankrupt, on the condition that he shall pay such sum in the pound as the: 1 Court may fix, not exceeding in the whole ten shillings in the pound, and also giving the Court further power to rescind, or alter, such order, but so as not to increase'the amount to be paid ; that a Judge of the Supreme Court shall have full power to hear and try all cases of fraudulent bankruptcy under the Act, providing the trial takes place in open Court, and that witnesses may be examined and cross-examined in the usual manner, and-if upon such trial'the Court shall be satisfied that the persons charged with any fraudulent act under the bankruptcy laws have been guilty of such act, or if they shall have been guilty in "the opinion of the Court of gross misconduct in tlieir business, the Court ' may sentence such persons to imprisonment for a period not exceeding twelve calendar months, and with or without hard labour. ;

The suh-committee recommend that the [ costs shouM I e.fixed by a scale similar to j that in force in the District Court, and that' under no circumstances should l there be costs'between solicitor and client. The subcommittee are of opinion that a very im* portant element in any proposed scheme of bankruptcy laws is that of limiting the possibility of wasting an estate in costs, a coarse too frequently adopted, by the taking out of summonses fcr all kinds of purposes, which, in a very large majority of cases, result simply in 'the expenditure of the assets in needless legal expenses ; that the official assignee should be compelled to pay all monies in-his hands in each estate at once to. a separate account, to be kept at the bankers of the Government for the time being, in the joint names of himself aud the trustees, if any, or in his own name when there is-no trustee. A number of minor alterations arc proposed, and a scale of fees suggested. The report seems to bo ably drawn up.