THE BANKRUPTCY LAW.

New Zealand Mail, Issue 999, 24 April 1891, Page 12

THE BANKRUPTCY LAW.

A PROTEST FROM THE COUNTRY. The Committee appointed by the Palmerston North Chamber of Commerce to consider the proposed Bankruptcy Bill, have forwarded us a copy of their report. They state that the intent of the Bill seem 3 to be to concentrate the administration of the Act in the centres of cities of the Colony. The effect of this would be that the mercantile community of the centres would rule the creditors as to the plaoß or locality in which the bankruptcy should be administered, and they point out that the clauses dealing with this question would enable the creditor resident at the Supreme Court centre to secure an advantage over the local creditor at a distance. They contend that by this Bill a section of the creditors would snatch in the short time of one month (within which time, after adjudication, proofs are to be lodged) an advantage over the rest of the creditors, which waa unjust and impolitic By seotion 1 of the Bill the word ‘‘Judge” included Resident Magistrate having jurisdiction in bankruptcy, and “Registrars” includes Clerk of Court. By section 6 the Court having jurisdiction shall be the Supreme Court, and they suggested that this provision could only be attributed to some inhabitant of the four cities desiriug to withdraw the business of the other (more insignificant) towns to his own, as it is neither founded on English precedent nor colonial experience. The only gainers under this would be fraudulent debtors (who desired to institute proceedings in bankruptcy distant from whore the debts were contracted) and oity Business men, who would benefit by_ the proceedinga being administered in their midst. Referring to the clauso3 under which full power is given to Registrars to act in the absence of Judges, the Committee point out that the framers of the measures either do not know or do not care anything about upcountry Resident Magistrate s Court sittings, or what sort of persona at numerous of these up-country courts (as such clerks) consist. Frequently the policeman in charge acted as bailiff, and the clerk was the person upon whom the duties and functions of a Judge would devolve. At Foxtoo, Woodvilie, Pahiatua, and numerous other placeo a policemen would be invested with the full powers of a Supreme Court Judge. Under sections 10, 11, 12, 13, and 15, this policeman bailiff would sit in Chambers to hear petitions to adjudicate merchants and traders bankrupt against their will, a state of things that could not redound to the credit of Parliament to submit as legislation for a free people, admitting that, it was desirable that certain investigations in bankruptcy should take place before a Resident Magistrate, there was no reason why the Resident Magistrate’s Court should be a Bankruptcy Court. Sections 79 and 82 seem to be intended to induce debtors to give preference to such creditors as are willing to provide solioitors for them. Section 55, sub-Bection 2 and 4, and section 90 each enabled the freeholder to be turned out into the streets while the tenant enjoyed the landlord’s house rent free. It would pay a bankrupt to go through the Court whenever he was distrained upon for £lO rent. Section 118 did not provide for composition befoie bankruptcy. This omission was probably in the interests of the revenue, but the revenue must suffer in the long run if bankruptcies were numerous. Summing up, the Committee state that obey consider the Act unworkable, expensive, injurious to the independence of country districts, and severe upon honest debtors, while it is favourable to the inhabitants of large cities, fraudulent debtors, and Government officials, and calculated to oppress and harass the less wealthy tradesman, established and trading in smaller centres ; that the administration of the Act would be enormously expensive to tbc smaller creditors and a heavy chargo upon revenue, and in the aggregate would inflict a wrong upon the trading community ; and would class honest men as criminals, whose only crime is miefertnne. The Bill also sought to invade every privilege hitherto considered as a family right, recognised by fchs law, and necessitated by the constitution of civilised society, in the endeavour to benefit one class, the trader, who gives credit when he should demand cash. The present law was beginning to be understood by the community, and until the present system of voluntary bankruptcy was abolished they «aw no use in introducing new forms as a cloak for practical . advantages to the inhabitants of the cities and others who had points to work. borne of the faults in the proposed law were taken from the present law ; this was no excuse, and showed that nothing was gained by repealing existing Acts. The power a man had of placing liis money or others property out of the reach of his creditors by expending it on his wife or other property which does not legally belong to him, was not affected The Committee also suggest a number of amendments in the Act,