THE BANKRUPTCY LAW.

New Zealand Times, Volume LII, Issue 9274, 21 April 1891, Page 3

THE BANKRUPTCY LAW.

A PROTEST FROM THE COUNTRY.

The Committee appointed by tho Palmerston North Chamber of Commerce to consider the proposed Bankruptcy Bill, have forwarded os a copy of their report. They state that tho intent of tho Bill seems to bo to concentrate the administration of the Act in tho centres of cities of the Colony. The eJfect of this would bo that the mercantile community of the centres would role the croditurs as to the place or locality in which tho bankruptcy should bo administered,and they point out that tho clauses dealing with this question would enable tho creditor resident at the Supreme Court centre to sjeure an advantage over the local creiitor at a distance. They contend that by this Bill a section of the creditors would snatch ,io tho short time of one month (within which time, after adjudication, proofs are to bo lodged) au advantage over the reat of the creditors, which was unjust and impolitic. By section I of the Bill tho word “Judge” included Resident Magistrate having jurisdiction in bankruptcy, and “ Registrars ” Includes Clerk of Court. By section C the Court having jurisdiction shall bo tho Supreme Court, and they suggested that this provision could only be attributed to some inhabitant of tho four cities desiring to withdraw tho business of tho other (more insignificant) towns to hia own, as it is neither founded on English precedent nor colonial experience. Tho only gainers under this would be fraudulent debtors (who desired to institute proceedings in bank* rnptcy distant from where the debts wore contracted) and city business men, who would benefit by the proceedings being administered In their midst. Referring to tbo clauses under which full power is given to Registrars to act in the absence of Judges, the Committee point out that the framers of the measure? either do not know or do not care anything about upcountry Resident Magistrate s Court sittings, or what sort of persons at numerous of these up-country courts (as such olerko) 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 Foxton, Woodville, Rahiatua, and numerous other places a policemen would bo invested with the full powers of a Supremo Court Judge, Under sections 10, U, 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 tako place before a Resident Magistrate, there was no reason why tho Resident Magistrate’s Court should bo a Bankruptcy Court. Sec. tions 70 snd 82 seem to be intended to induce dsbtois to give preference to such creditors as are willing to provide solicitors for them. Section 55, sub-section 2 and 4, and section 90 each enabled the freeholder to be turned out into tho 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 before bankruptcy. This omis. sion waa probably in the interests of the revenue, bat the revenue mast suffer in the long ran if bankruptcies were numerous. Summing up, the Committee state that they consider tho Act unworkable, expensive, injurious to the independence of country districts, and severe upon honest debtors, while it is favourable to the inhabitants of largo cities, fraudulent debtors, and Government officials, and calculated to oppress and harass tho less wealthy tradesman, established and trading in smaller centres ; that tho administration of the Act would be enormously expensive to the smaller creditors and a heavy obargo upon revenue, and in tho aggregate would inflict a wrong upon the trading community ; and would class honest men as criminals, whose only dime is mirfortune. The Bill also sought to invade every privilege hitherto considered as a family right, recognised by the law, and necessitated by the constitution of civilised society, in the 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 piesent system of voluntary bankruptcy was abolished they *»aw no use in introduciog new forma as a cloak for practical advantages to tho inhabitants of the cities and others who had points to work. Some of tho faults in the proposed law wore taken from the present law ; this waa no excuse, and showed that nothing was gained by repealing existing Acts, The power a man had of placing hia 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, waa not affected Tho Committee also suggest a number of amendments in the Act.