Wellington Independent "NOTHING EXTENUATE; NOR SET DOWN AUGHT IN MALICE." THURSDAY, 5th SEPTEMBER, 1867.

Wellington Independent, Volume XXII, Issue 2567, 5 September 1867, Page 3

Wellington Independent "NOTHING EXTENUATE; NOR SET DOWN AUGHT IN MALICE." THURSDAY, sth SEPTEMBER, 1867.

A CUKBOET perusal of the Bankruptcy Bill now before the House rather disappoints us. Though certainly an improvement on the existing acts, it is at the same time rather more cumbrous and much less clear than the Scotch code of 1 854, on which it purports to be founded. Nothing has been more complained of than the imperfections of our bankruptcy laws, and perhaps on no other subject has more iguorance been erinced by merchants and professional men. The business community knew that the Acts, after one or two attempts at amendment, did not work in a satisfactory manner, but they had no idea how its defects should be remedied, and their legal advisers could not help them. The fault, indeed, did not rest altogether with the law, because neither creditors, trustees, nor solicitors, knew the best way in which to carry on proceedings under its provisions. Large powers were left in the hands of creditors, who, either through ignorance or indifference, did not use them, and thus dishonest bankrupts frequently passed through the Court with the greatest facility, because those who could have opposed, tacitly submitted to let things take their course. Unfortunately too, New Zealand possesses very few experienced insolvency practitioners, and the Act did not therefore get a fair trial. Still, the measure itself was not a very good one, and the passage of a new Bill may probably be productive of much benefit. In the measure now under consideration, the provisions are, to some extent, similar to those of the Scotch Act. Proceedings can be taken, either in the Supreme or District Courts, and sequestration is granted, either on the petition of the debtor himself or one or more of his creditors. The creditors elect a trustee, who manages the estate, collects tho debts, realises and distributes the assets. Two creditors are appointed to supervise his proceedings, and his election by the creditors has to be confirmed by the Courfc. Besides this, tho trustee is to be responsible to an official called " The Accountant in Bankruptcy," to whom he has to make returns of his intromissions with the estate, and furnish full particulars of all matters connected with the bankruptcy. The appointment of this official will do away with the necessity for some nine Inspectors in Bankruptcy, an office which was equally useless and costly. The Act appears to us to be defective in its provisions for the discharge of the bankrupt. It appears that after passing his last examination he can apply to the Court for his discharge from all further liability. Creditors may be heard in opposition, but with the Court lies the sole power of granting or refusing the discharge. Now this appears to be a very objectionable provision. The creditors should have the power of refusing the discharge, for at least a limited period. According to the Scotch Act, the bankrupt, when applying for his discharge, has to get a certain majority in number and value of the creditors who have proved their debts to concur in the petition. The proportion varies, the majority requiring to bp large when the application is made within three months of the sequestration, but it is less if the discharge is asked twelve, eighteen, or twenty-four months later. By this means an honest trader who has become bankrupt through misfortune is not refused a discharge, because creditors would readily concur in his application. On the other hand, a reckless trader could be prevented from starting in business again by withholding his discharge for a year or two. We would press upon Mr Reeves, who has charge of the Bill, the necessity of making some modification in this part of | its provisions. The Scotch Bankruptcy t Act, to be found in the Statutes at large for the year 1854, or 1856, gives the clauses at length to which we have alluded. Besides this, the Bill appears to berather defective in its provisions against fraud. The list of acts which, as misdemeanors, would render the bankrupt liable to have lm discharge refused for three yeara, does not include some offences of which it is very necessary cognisance should bo j taken. Extravagant personal expenses, ] losses by gambling, borrowing largely, | and re-selling uupaid-for merchandise at i a loss below the current price, by a trader whose assets at the tiuio are much j less than his liabilities, constitute acts which should ensure punishment ; and such might fittingly bo specified in the Bill now before the House. The French Code of Commerce, which is admirably clear in pointing out the distinction between simple and fraudulent bankruptcy, might profitably be consulted when fram- 1 ing an Act for New Zeaknd.