BANKRUPTCY LAW AMENDMENT.

New Zealand Times, Volume XL, Issue 6846, 31 March 1883, Page 3

BANKRUPTCY LAW AMENDMENT.

- - An important part of the business at the annual meeting of the Chamber of Commerce on Thursday was the adoption of a report of a sub-committee which had examined the new Bankruptcy Bill. The report was as follows : The sub-committee have made a careful examination of the Bankruptcy Bill, and are glad to bo able to report that to a considerable extent effect has been given to the recommendations of the conference of del-gates of Chambers of Commerce hold on the subject of bankruptcy law in June last. They propose to point out to what extent the recommendations hove, or have not, been acted upon, and afterwards to offer some remarks upon other portions of the Bill. They will first take the recommendations of tho conference in order. No. 1 contains several suggestions as to the appointment, functions, remuneration, &0., of an official assignee; which are practically adopted in the Bill. No. 2 suggests the creation of four bankruptcy districts. This has not been adopted, the old Supremo Court and District Court districts having been retained. No. 3 suggests the appointment of two judges in bankruptcy. The sub-committee regret that the Government has not seen its way to adopt this suggestion. The Bill provides for tho appointment of judges in bankruptcy from among the judges of the Supreme Court, and who shall hold tho office of judge in bankruptcy in addition to that of judge in the Supreme Court. The defects in the existing system are in a great degree defects of ad ministration, and your committee fear that there will not be a satisfactory administration of the law until special judges are appointed for bankruptcy without any other functions.

No, 4 contains suggestions as to certain offences, These are partially adopted, but the Bub-committee regret that the recommendation that a debtor should not, except under special circumstances, be entitled to his dis charge unless or until his estate paid ten shillings in the pound, has not been accepted. The object of tho delegate} in making thissuggestiou was that it might come tu be understood to be the duty of traders to place their affairs in the hands of their creditors so soon as they find that their assets represent less than twenty shillings in the pound of their liabilities, instead of continuing until their assets are still further dissipated. It is sub* mitted that with tho saving clause provided i i section 164, no hardship or injustice would be likely to occur. The sub-committee further suggested that in dames 158 and 169 the •words which make convictions depend upon a jury being satisfied as to the existence of fraudulent intent should be omitted, as it has been found very difficult to got juries to convict under such circumstances. The mere fact of tile bankrupt hiving committed the acts specified should be enough to lender him liable to punishment, subject to tho discretion of the judge. No. 5 sugge-ta that prosecutions should bo by the Crown prose tutor. This is adopted, but your committee would suggest the omission from clause 172 of tho concluding words alter the word “prosecution” in the 89th line.

No. 6 suggests that an examination in open Court be made compulsory before a debtor gets his discharge, but not necessarily to entitle him to a discharge ; and that the assignee or any cr ditor ho entitled to oppose without notice. This is adopted.

No. 7 suggests that no debtor be allowed to file who has not £!5 worth of assets beyond excepted articles. Your sub-committee regret that this has not been acted upon. The present condition leads to great frauds, as there are some persons who file periodically and put d >wn their assets as £25, or less, iu excepted articles. No. 8 suggests that any undischarged bankrupt getting goods on credit subsequent to his declaration, and not informing the seller that he is an undischarged bankrupt, and not eventually paying for such goods, be held guilty of a misdemeanor. The sub-committee regret that this has not been adopted. No. 0 suggests power to arrest absconding debtors by telegraphic message signed by one or two magistrates. This is not directly provided for, but the object can bo accomplished, it is believed, under the Act, as, by clause 42, a debtor, departing from hia usual place of abode with intent to defraud, commits an act of bankiuptoy, and any creditor for £25 can lodge a petition of bankruptcy. Then, under clause 95, a warrant can bs taken out for his arrest, which enables the police to arrest him on suspicion. The committee consider that this is insufficient, and that a further representation on tho subject should be made to the Government.

No. 10. That tho present provision for distress for rent remain unaltered, is adopted. No. 11. That the provision that a debtor shall be hold to be discharged at the end of three years bo repealed. This is adopted. No. 12 suggests that a debtor, who failed to satisfy tho Court that bis bankruptcy arose from circumstances beyond his centre, should not bo allowed to hold any public official position until he has paid ft dividend of 10s ic the pound. The sub committee much regret that this has not been adopted, and consider that the Government should be urged to give effect to it with a view of making bankruptcy disgraceful. No. 13, That the judges in bankruptcy should have power to deal summarily with cases of fraudulent or alleged fraudulent disposal of property. This is adopted. No 14. That proceedings bo made simple and inexpensive. This has practically been given effect to. No. 15. Suggesting the regulation of legal charges and costs. This is adopted in the main ; but there seems to be no provision fur a debtor's obtaining the necessary forma, with the requisite stamps. No. 16. Suggesting that the bankruptcy should bo made to relate back to the first act of bankruptcy within a year. Adopted in Clause 54. No. 17. That judges should have power in case of any debtor in receipt of a certain income to set aside part of future income for the payment of a dividend. Adopted in Clauses 161, 162. No 18. That onus of proof should lie with the debtor as to solvency at time of making settlement. Adopted in danse 78. No. 19. That solicitors’ lien over deeds for property of debtor should only be for actual coats of such deed. Ad«. ted. No. 20. In regard to bills of sale. The Government seem to have attempted to give effect to this suggestion by clause 82, but experience shows that such a provision will not have the desired effect, as it can always be evaded by the passing of fictitious cheques. It is there fore earnestly recommended that the Government should be urged to give effect to the suggestion of the conference by passing provisions similar to those of the Victorian Act referred to in their report. Further, that to make the bill of sale effective it should be necessary that the notice of intention should be advertised in the local Gazette for fourteen days, to give creditors an opportuoity to lodge a caveat. The sub-committee would also submit the following suggestions : Clause 33. That the security to be giveu by the assignee should be not less than £SOOO, This would tend to secure a first-class man. Clause 60, subsection 3. That the papers of a bankrupt should bo open to inspection of any person on payment of a foe, as is the case at present. Clause 62, su’--section 4.—That a secured creditor shoo! I u,ean a creditor holding security over any property of the debtor, whether given directly or indirectly through another person. Sub-section 5, line 15.—The provision making a proxy subject to approval of creditors would be open to abuse. It would be better to provide that it should be signed before a Justice of tho Peace.

Clanse 87, sub-section 4.—The sub-commit-tee recommend that the landlord or other per-

son interested should be required to give notice to the assignee, calling upon him to exercise his election, as in some cases the assignee might be ignorant of the existence of a valuable lease. (See (ffause 88) Clauses 39 and 91. That the secretary, manager, or other responsible officer of any company, society, or corporation in which the debtor held, or was entitled to, any shares, inonav, or securities should, without demand, inform the assignee of the facts, and should hold iuch shares, money, or securities to the order of the assignee only. Clause 90. That a clause be added that in cases where the debtor has any reversionary or contingent interest in or towards the realisation of which it should be necessary or advantageous in the interest of the estate that an insurance should he effected on the life of the debtor, the debtor shall submit to medical examination, give information, and do or allow such other things as may be necessary to facilitate such insurance.

Clause 138. There is a discrepancy between the words “twenty pounds’’ in the 48ch line, and the words “ fifty p mads ’’ in the 49ch line. Clause 218, The words “ creditors’ trustee ' are erroneously used in this clause instead of official assignee. Costs.—That the assignee’s commission should not bo chargeable on sums u-e I to pay off mortgages or other incumbrances, as that would be tantamount to paying double commission on such Hum.

That the supervisors’ commission should not exceed 2j; per cent, in all (as recommended by tho joint Parliamentary Committee), and further that it be reckoned on the net receipts of the estate.

Forms.—That a form be furnished in the schedules to the Act for a creditor’s petition. On the whole, tho sub-committee consider that a strong endeavor has been made by this lull to meet the wishes of the mercantile community, and they anticipate that it will be found to exercise a very beneficial effect if it becomes law. They trust that before the next annual meeting .hey will be able to congratulate the chamber oo the Bill having become law. They would suggest that the report, if adopted by the committee, should be printed and circulated among other Chambers of Commerce. J. E. Nathan, Chairman, sub-committee. r I he report was adopted without discussion.