DEBTOR AND CREDITOR.

Otago Witness, Issue 877, 19 September 1868, Page 2

DEBTOR AND CREDITOR.

The sudden and, we may say, unexpected changes which were made during the last session of the Assembly in the laws relating to Debtors and Creditors have, as most of our readers know, produced far from satisfactory reaults. With regard to the Bankruptcy Act, we have already explained our opinion that the system which it superseded ought to have had a much more complete trial than was allowed to it. Those points in which it was not adapted to the circumstances of the colony were gradually being recognised as the public and the legal profession became acquainted with its working, and those emendations which experience had suggested might well have been incorporated with the system as it stood, without the introduction of an entirely new method of procedure. The subject is universally recognised as one of the most difficult upon which legislations required, and not only in England, but in each of the more important colonies of the Empire, Bankruptcy Laws are under discussion. Nor is there any country in which the laws relating to Insolvency give anything like general satisfaction. Even the Scotch law, which has by far the highest reputation of any, is admitted to be still far from perfect. To adapt methods of this latter to the circumstances of a colonial community is the problem we have been trying to solve in New Zealand, and if one thing ia more certain than another in regard to such a problem, it is that experience alone can lead us to its solution. If, then, the whole law is to be revolutionised every few years, in accordance with the theories of a few legal gentlemen who get the ear of the Government, the necessary experience will never be attained, and the law will never fit itself to the requirements of the trading classes, for whoße benefit it is more particularly framed. There can be no doubt, however, that , fly&n the short ex.pe. jrience had, of the pre-

sent law has shown some lamentable deficiencies in the A«t, which require to v c promptly remedied. These are in its details, and it is only with them that the Assembly, if it is wise, will consent to deal during the present session. Grave exception has we know been taken in many quarters to some of the principles of the Act, and it is not improbable that it may hereafter be found desirable to modify them. But it is very much too early yet to judge of these. If here and there a hardship has occurred, or justice has not been done, eitherto adebtor ortohis creditors, it is highly imprudent to generalise from such a particular instance and condemn the law. It is almost certain that no law will fit all circumstances that may arise, or provide for every contingency in the complex transactions out of which the relations of debtor and creditor may arise. We view with some alarm, therefore, the proposal of the Government to introduce an Amending Act during the present session, founded upon the suggestions of one individual, without previous consultation with any of the recognised organs through which the mercantile comimmity can express its opinion. The Bill is to be f oundSd upon certain suggestions made to the Government by Mr Justice Ward. We have every respect for Mr Ward, and that portion of the public to whom he is unknown will readily accept his 'appointment as Judge of the Supreme Court of Otazo during the contemplated absence of Mr Justice Chapman, as a guarantee of his ability. His suggestions will be of value, however, not in proportion to his personal ability, but exactly in the ratio of his experience in the matter in hand. As we have already said, oxcept in regard to a few details, no one has yet had sufficient experience of the working of the Bankruptcy Act to qualify him to criticise or amend it. Yet, as we have learnt to our surprise, the Amendment Bill has been drafted without any further advice being taken, or inquiry made. If we are not misinformed, no reference was made to others among those official persons by whom the Act has to be administered, the Bill not having been submitted even to the Accountant in Bankruptcy, by far the most likely person to offer useful advice. With little exception, this is the way in which the Insolvency Laws have been tinkered from year to year ever since Mr Stafford came into power, and is a fair specimen of the way in which all domestic legislation in the interests of the European part of the population has been dealt with throughout the history of the colony, so far as the General Government and the Assembly have had to do with it. From the way in which the time of the Assembly has been occupied, it is possible that the Bill will drop through. On the other hand, it is equally probable that it will be hurriedly passed after many of the members have returned hsme. We believe the former mishap will be the least likely to prove mischievous.

There is one part of the law between Debtors and Creditors not included in the Bankruptcy Act, but intimately connected with the Insolvency Law, which has been much canvassed by the tradesmen of the Colony. We allude to the clause in the Resident Magistrate's Act of last year, which does away with imprisonment for debt under ten pounds. That the sudden introduction of this change in the law has been severely felt by many shopkeepers is certain. From every part of New Zealand complaints have been made in regard to it. Of little service to the unfortunate whose inability to pay small tradesmen's accounts may have arisen from causes they did not foresee — from illness, loss of employment, or other casualties of life — it is simply a premium upon one of the commonest forms of dishonesty. However harsh the judgment may appear, no one who has passed any length of time in the colonies, will venture to differ from us, when we say that the reckless incurring of debts without any consideration of how they are to be paid is one of the most prevalent of vices. Colonial life does, as compared with life at home, foster only too readily those habits of improvidence which lead to the petty insolvencies, the numbei* of which is a disgrace to our communities. No worse state of society could have been chosen in which to experiment upon the abolition of imprisonment for debt than that which exists in these new countries. And if an experiment was to be tried, this one was certainly beginning at the wrong end. When a trader becomes insolvent, to allow any one of his creditors to put him into ga,ol, whilst it gives as a, rule no real

advantage to the detaining creditor, does often seriously interfere with the prospeot which the general body of creditors might have had of olo l taining- a dividend. Pre ably every mercantile man can point to some case within his own experience in which the arrest, or threatened arrest, of the debtor by one creditor has prevented settlements which would have been very favorable for them compared with the subsequent result. It might have been a suitable experiment to refuse .the right of imprisonment for any trade debt. But so long as we know that not even the fear o£ a debtors' prison will restrain a very large section of the community from improvidently running into debt, and that there does exist a very considerable number of persons who live by preying in this way upon tradesmen, it is highly imprudent to take away the right of imprisonment for small debts. More especially was it improper to make the new law virtually retrospective, and allow it to apply to debts incurred at a time when the creditor thought he had this protection against an abuse of the credit give. Many tradesmen in Otago who have felt severely the lo3s of this instrument of pressure will be glad to learn that the Government has promised to support a measure which Major Atkinson has undertaken to introduce into the Assembly modifying the law so far as to gife discretionary power to the Magistrate, bo that the last resort of imprisonment may still be available, where no reasonable excuse for non-payment can be shown. At the same time we cannot refer to this subject without joining our voice ■with those which have lately, both iD Parliament, and out of it, been raised against the too easy credit so customary in the Colonies. When this matter was under discussion in the Assembly, one speaker recommended quite a different remedy from that which Major Atkinson desired to introduce. He suggested that it nij-ht be well to go further still, and abolish all remedy for debts under LlO, except in case of specialty debts, and those secured by written instruments, so as to prevent the credit system now carried on. He instanced in support of his idea an arbitrary rule laid down by Judge Fentow, in the Waikato district, of refusing to issue a summons under £10. "At first," he said, "the proceeding was strongly objected to, but twelve months after, the residents unanimously thanked him for the course he had adopted, as they were then paid in cash, instead of scores being run up without a probability of their recovering their money." Our tradesmen have a still better remedy^. their own hands— the only one whicli>sl go to the root of the cvil — and until ifoy abstain from extending credit imprudently, they will too often have themselves alone to blamg when they lose their money.