The Bankruptcy Act, 1883.

Southland Times, Issue 4792, 15 November 1883, Page 4

The Bankruptcy Act, 1883.

Numerous attempts have been made during the last half century in England, and for many years in this and the neighboring colonies, to establish a sound principle for bankruptcy proceedinga. The Imperial Parliament has, however, at laßt, in the session of this year, passed an Act which meets with very general approval ; although it is admitted to be an impossibility to frame a measure which will meet all the various phases of bankruptcy arising out of the reckless, or at least too easy trading, which is carried on under a Vstem of indiscriminate credit* The ques«dn of the amendment of the bankruptcy laws in this colony was specially referred to a Select Committee of the House of Representatives in 1882. This Committee, Lad, we believe, before them the draft of Mr Chamberlain's bill, which, as * stated", above, has now become law, and they v adopted its main principles in their recommendations. The Government accepted these, and consequently, " The Bankruptcy Act, 1883," which comes into force on January Ist, is very much a transcript of the Imperial, and with such differences as circumstances render necessary..; The principal alterations in the existing law is the appointment of official assignees as officers of the Court of Bankruptcy, whose dntieß will be to take immediate possession of bankrupt estates ; summon and preside at all meetings of creditors ; report to the creditors as to any proposal with respect to liquidation, and to the Court as to the conduct of a bankrupt, and as to the manner in which he has kept his books of account. The creditors maj by resolution at any meeting appoint two of their number to be " supervisors," for the purpose of superintending the administration of the bankrupt's property, and adyising with the official assignee thereon. On the filing of a petition, the property of the debtor vests absolutely in the assignee, pending tho order of adjudication 5 and , after the order of ad j udication has beeu mad c is to become divisable among the creditors, in proportion to the debts proved by them. The Court may, on the application of any creditor, appoint the assignee to be receiver and manager of the debtor's estate, and direct him take immediate possession of his property or business, pending the order of adjudication. The assignee is to summon the first general meeting of creditors for a day not later than seven days after the adjudication. The bankrupt is to attend the first and other meetings and submit to such examination, and give such information as the meetings respectively require, and if he fails to do so he will be guilty of a contempt of Court. Any such examination may be upon oath if the assignee shall think fit. It is further specifically provided that no debtor or other person who is examined by the fiaukruptcy Court or by the asignee shall be excused from answering any question on the ground that the answer may criminate or tend to criminate himself, but no statement thus made is to be admissible as evidence at criminal proceedings, except on a charge of perjury in respect of sucli testimony. Among the facts which are to be deemed acts of bankruptcy are the making, whether voluntarily or otherwise, a conveyance or assignment of property to a „ trustee or trustees for the beiiefK of one or more creditors. This would appear practically to prohibit deeds of arrangement by insolvent persons prior to bankruptcy, and compel all composition to be made under tbe Act. The creditors may at any meeting pass a preliminary ordinary resolution that a composition be accepted, but this must be conirmed by a subsequent special resolution, which shall not be passed unless a notice stating the terms of the proposal, and a report ot the assignee thereon, has been circulated amongst the creditors not less than seven days previously to the meeting. When the confirming resolution has been passed, the assignee is, within four days, to report to the Court as to the composition, and any creditor is entitled to attend and be heard when the report is presented. If the Court jis of opinion that the terms of the composition are not reasonable or calculated to benefit the general body of creditors, or that the bankrupt has committed any such misconduct as would justify tbe refusal or suspension o£ his discharge, the Court may refuse to approve the composition. When a bankrupt makes a composition he is to remain liable for the unpaid balances of any debts which he incurred or increased, or whereof he obtained forbearance by any fraud. If he makes default in payment of any sum due in pursuance of a composition, the Court may order that the , bankruptcy be revived, and continue as >£ the composition had not been approved. Bankrupts are to be publicly examined on oath in Court as to their conduct, dealings, and property ; any creditor may examine, and they are not to be deemed to have passed their public examination until the •Court) by order, declares that their affairs have been sufficiently investigated. The application for discharge is to be made subsequently, and on hearing the 6ame the Court may examine the assignee and hear objections of creditors who have proved. The Court may, thereupon, in its own absolute discretion, either grant, refuse, or suspend, an order of discharge. The new Act is very stringent and comprehensive in regard to the punishment of fraudulent debtors. Every Court having jurisdiction in bankruptcy is vested with power to commit for trial any bankrupt, where there is ground to believe that he has been guilty of any offence, made by this or any other statute, a misdemeanor in cases of bankruptcy. The Court has further summary jurisdiction in regard to certain offences defined, and may at the final examination, or on the hearing of the application for discharge, adjudge the bankrupt to be imprisoned for any term not exceeding twelve months. Among these offences may be noted the carrying on of trade with fictitious capital ; the contracting debts without any reasonable ground of being able to pay the same ; in tentionally concealing the true state of his affairs ; baying within three ye?.rs faikd to keep usual books and accounts ; tho having incurred any debts under false pre - tences ; the havin?, with intent to defraud creditors, made any gift, delivery, or transfer, of any charge on bis property ; " if the Court is of opinion that the bankruptcy is attributable to rash and hazardous speculations, or unjustifiable extravagance in living." — Mercantile and Bankruptcy Gazette.