THE BANKRUPTCY ACT.

Otago Witness, Issue 852, 28 March 1868, Page 3

THE BANKRUPTCY ACT.

The following case, before Mr Justice Moore, at Auckland, is reported in the JSoutheni Gross of the 7th inst. The decision of Mr Justice Chapman, which is quoted, was given on an application by Mr Smythies, in the case of John M'Garrigle :—: — Re Peter S. Mackenzie. — Mr Hesketh made an application, under the Bankruptcy Act, for the discharge of the debtor from prison, who was in custody at the suit of David Nathan, on a judgment recovered. The application was made under the 49th section of th 9 Act, the debtor having filed a declaration of - insolvency, after which, being gazetted;

w>*iQOTfcess, was available against the libj^ in Respect of the debt without lamof the Court. 'He first drew the afteJKLOii of the Court to. the fact that in the ||lbtf there were' two classes of the proogedings,' viz.,' proceedings by the, debtor bytfleclaration of insolvency, and proceedMgs' by creditors to make the jdebtor^bankrupt. The question before the C^^£,was this : What is the meaning of the^Sfcjrds tf No process shall be available"? 1)q they apply to past processor to future process, or to both ? He contended that the words referred to both past and future process, and quoted Marks v. Hall, Law Exports, vol. 2, Queen's Bench, p. 31, where the whole of the Judges, including Chief Justice Cockburn, were unanimous in the opinion that the words included both past and future process, and they ordered the debtor to be forthwith discharged from custody. Chief Justice Cockburn, in his judgment, says that "the words 'no process shall be available' are general, and relate to. al! process against a debtor, and mean that all process shall cease to have any effect against him. Though the creditor had a vested right to detain the debtor, yet when the deed was registered he was entitled to his release, and therefore must be discharged from custody." He then referred to Rogers v. Roberts, 2 L.R. , Ex., p. 35, where the full Court were unanimous on the same point ; and to Kent v. Tomkinson, 2 L.R. fc Common Pleas, p. 502, whei'e the Judges of that Court were all of the same opinion. He likewise referred to other cases containing judgments, all agreeing in the same point. The meaning of these words having been determined by the judgments of these three Courts, the next question was, is the Act upon which these judgments were given similar to the Act of this Colony 1 He submitted that it was the same.

His Honor : What is the meaning of the 89th, 90th, and 91st sections?

Mr Hesketh : These sections relate exclusively to proceedings by creditors against the debtor, and not to proceedings taken by the debtor to obtain bankruptcy against himself. Proceedings by the creditors do not protect the debtor from arrest, and, therefore, if a creditor took proceedings to make his debtor a bankrupt, there is nothing in the Act to prevent any other creditor from arresting and imprisoning such debtor pending these proceedings ; and it is to this imprisonment that these sections refer. But, irrespective of this, these identical sections are contained in the English Acts, upon ■which the above judgments -were given, and, this being so, it must be presumed that the learned Judges at Westminster gave their judgment upon the whole of the Act, and not upon an isolated portion of it ; and they must have been fully aware of these sections.

His Honor : Mr Justice Chapman has decided against the release in a case at Dunedin.

Mr Hesketh : He has done so, and I have the case here, but there is not a single authority cited to him in the case. He appears to have acted entirely from his own view of the Act. Here are the judgments of three full Courts, and Mr Justice Chapman does not appear to have been aware of any of them. Neither was his'attention drawn to the fact that these particular sections relate to proceedings by creditors, and not to voluntary proceedings by debtors. If the debtor files a declaration of insolvency, as in this case, no proceeding, such as " ssurrende r referred to in these sections, is necessary.

His Honor : It do.es not appear that the attention of the Co\irt in any of the cases you have quoted was drawn to these particular sections.

Mr Hesketh : Upon the face of the reports it does not seem that such was the case, but surely these learned Judges would not have given their judgments without reading the whole of the Act. We must presume they knew the law, and that is the whole of the Act, and not a portion of it. Besides this, the cases were argued by 'eminent counsel, and it seems incredible that both Judges and counsel could have overlooked clauses which your Honor is disposed to think would, if noticed, have entirely altered the whole train of decisions.

His Honor : It appears that, in the argument before Mr Justice Chapman, counsel used the very argument of Mr Justice Mellorin the Queen's Bench, who said, that if the words "shall not be available" applied to future process only, the Act should have said " after notice, no process shall issue" — not "no process shall be available;" and this argument having been used before Mr Justice Chapman, the case now cited would not have altered his decision.

Mr Hesketh : That was a mere argument of counsel ; this is a solemn judgment of the full Court of Queen's Bench. Surely, for instance, your Honor would not give to my argument, however strong, the weight to which the judgments of the English Judges are entitled. Mr Wynn appeared to oppose the application.

His Honor observed that, if it was any satisfaction to the debtor, he would say that bis counsel had urged every possible point in favor of the application for his discharge.' A similar application, had been made, before Mr Justice Chapman', and refused by him. Mr Justice Chapman waa of opinion that the section relied on (49) only related to proqess after the filing of the declaration. He (Mr Justice Moore) was prepared to put a larger construction upon the section ; yet, at the same time, he could not say that the debtor had a right to his discharge onfiling his declaration of insolvency. He could not grant the application without going opposite to the decision of Mr Justice Chapman, which he was not disposed to do. He was sorry for it, as he agreed with Mr Justice Chapman that the sooner imprisonment for debt was done away with the better. The application was, therefore, refused with costs.