THE BANKRUPTCY ACT.

Otago Witness, Issue 3886, 4 September 1928, Page 73

THE BANKRUPTCY ACT.

ADDRESS BY

MR J. B. CALLAN,

On Tuesday evening in the University Club room Mr J. B. Callan delivered an address before members of the Society ot Accountants on the Bankruptcy Act amendments. The audience was large, and the chair was occupied by Mr S. P. Cameron. . r . Callan said the subject was not of ms choice, <»id it was technical. There A ad been very few amendments of the Bankruptcy Act for a long time. . The first enactment was in 1867, and it was amended in 1868, 1870, and'lB74, and then left alone until 1883. It was further amended in 1884 and 1885, and .again in 1892. To all intents and purposes it had not been again touched until recently. Of course, there had been a consolidation in 1908. Mr Callan then went on to deal with the sections of the Act in detail, the first dealing with bankruptcy notices. He spoke at some length on a judgment by Mr Justice Herdman in which complications arose through a small difference in figures. In that ease the finding was in favour of the bankrupt, costs being refused. Among other matters referred to were the powers conferred upon official assignees, which had been restricted to dealing with the disposal of property by public auction or public tender. An asignee had no power to sell privately in the past, but he had now power to sell privately. Fraudulent preference was also referred to, the speaker pointing out that if anything had been withheld the time allowed for action by the assignee had been extended from three months to 12 months, and could be extended on application to the judge. . Referring to dairy farmers, Mr Callan said that for these people he had always had a profound admiration. He quoted from a judgment of Mr Justice Ostler in a case in which a dairy farmer had agreed to allow a firm to receive money due to him in the pursuit of his calling that was not then owing. When the ' man became bankrupt this was claimed by the assignee on behalf of the creditors, and the question for the judge to decide was whether it belonged to the firm or to the assignee. The decision was that it belonged to the general body of creditors, and that it applied to something that did not’at the time of the arrangement exist. A contract in writing on the part of a dairy farmer for payment of money to become payable later on was now valid in law.' What did not now exist could be assigned in law. Mr Callan quoted another similar instance of a man having a mail contract. In connection with a landlord’s preference, Mr Callan said that next to six months’ rent came wages and salaries, and then the ordinary creditors. The effect of the change made was that the preference to the landlord had been limited to three months, and he came after the wages men. Why the landlord should have any preference at all he could not see. There was the butcher, the baker, the grocer, and the bootmaker, and these had to wait till the landlord had received his three months’ rent. That was only one instance on which the landowner was well placed by the law. In taking out a summons a person would be fairly lucky if he obtained judgment in three weeks’ time, and a further period would have to elapse before a distress warrant could be issued. They might get the bailiff in within a month. If the landlord became suspicious as to a man’s financial position he could have a bailiff in under half an hour. He had a rigid to do it. Why? Was there any justification for it? Why should he have this special advantage? The man who supplied stock had to sue and delay, while the landlord could come in and distrain.. It was time the public agitated to have the landlord’s privileges wiped out. He had been surprised that the Labour Party had not noticed the point. • At the conclusion of the address Mr Callan was warmly thanked for the information he had given.