The Ashburton Guardian. Magna Est Vbritas r Prevalreit. “ MONDAY, SEPTEMBER 24, 1883. The New Bankruptcy. Act.

Ashburton Guardian, Volume IV, Issue 1056, 24 September 1883, Page 2

The Ashburton Guardian. Magna Est Vbritas r Prevalreit. “ MONDAY, SEPTEMBER 24, 1883. The New Bankruptcy. Act.

The new Bankruptcy Bill; for which certain Chambers of Commerce hare been clamoring so loudly, has now found a place on the Statute Book, and will come into force on the Ist January next. Having perused the Act, we cordially agree with the opinions expressed by the Ministers who respectively took charge of the Bill in the two Houses of the General Assembly, that the measure is not likely to produce any radical change for the better in the relations between debtors and creditors, for-while it contains some useful clauses, the benefit which will be derived from those provisions will be . counterbalanced by other clauses of an opposite nature. The most startling feature of the Act is that which virtually! removes the ; management of bankrupt estates from the creditors to the hands of Government officials. It ;is ‘plain that the ‘ Adt will call into existence a .new Government department of fip .insignificant dimensions, and further, augment- that already numerous class of the population who are already dependent ’ upon Government, pay,, for their daily -bread. the Act is also objectionable in that its tendency is to concentrate the business of winding up bankrupt estates, wherever situated,' in the large towns; for although the Act, as it now stands, empowers the Government td appoint as many official assignees in each Supreme Court district as it pleases, still its evident tenor is that the official’ assignee''who resides in the chief town of each provincial district shall virtually manage all bankruptcies which take place in that district. The - inconvenience and loss which will thus be occasioned to country creditors is manifest. Under this Act the first meeting of a bankrupt’s creditors is not, as has hitherto been the case, to be held at the Courthouse of the Court wherein the bankruptcy proceedings have been instituted, but at “ any convenient place " which may ' be appointed by the official assignee; and if, for instance, the official assignee for this district resided in Christchurch, he would be pretty sure to direct the meetings to be held at Christchurch, in which case the Ashburton creditors would be put to the trouble and expense of going to Christchurch to attend the first meeting. If, on the other hand, the official assignee appointed Ashbtirton as the place of meeting, then his own expenses for attending that meeting would be charged against the estate, so that in either case the’ original loss of the creditors would be aggravated. Again, if an official assignee be appointed in every small town the country will be covered with £ horde of bankruptcy officials. Another objectionable feature of the Act is that it will increase the expense of winding up estates. A great deal has been said at different times about the expense of administering the Act of 1876 ; but as a matter of fact the expense entailed by that Act is just about as moderate as could be expected in bankruptcy administration. If-the creditors- choose to waste the estate in useless litigation, no doubt heavy expenses may easily be incurred; but if they are wise enough to let an estate be wound up in a business-like manner, we do not believe that under any bankruptcy system which could be devised greater economy could be obtained. Of course where the assets of a bankrupt estate are next to nothing, a large "proportion is sure to be swallowed up in expenses; but that defect is in no way met by the provisions of the new Act, and, as we pointed out in a previous article, the best remedy for that grievance is to pass a Bankruptcy Act "which will compel persons to go into the Bankruptcy Court as soon as they become insolvent, instead of permitting them to go on incurring debts and expending their assets until the latter become but a fractiori of the former. , Under the Act of 1876 the highest allowance which could be made to any trustee for his services was five per cent.; but under the new Act not only will the official assignee be entitled in estates of Lx,ooe in value, or under, to receive a commission of 5 per cent., but it is competent for the creditors in every case to appoint supervisors to assist the official assignee in the discharge of his duties, and these ’ gentlemen will likewise be able to ;

claim their two and a-half per cent commission. Upon estates where the 1 assets exceed ;£i,ooo, the commission 1 upon the excess will be at a lower scale. The procedure under the new statute being of a more intricate nature than under the Act of 1876, more notices will have to be given and documents filed, all of which means the saddling of estates with additional expenses; and the Government itself, as Mr Conolly plainly hinted in the House, is determined to have its slice of the pudding, for whereas a declaration of insolvency can now be filed the fee upon filing a debtor’s petition under the new Act, which will be the substitute for a declaration of insolvency, is fixed at the enormous sum of serve that all the money which a man may expend in filing a debtor’s petition will be taken out of the assets otherwise available for distribution amongst the creditors. Among the strong points of the Bill appear to be the public examination of the bankrupt, which is made compulsory in every instance ; and while an ordeal not to be feared by the honest debtor, who has fouid his way into the Court through misfortune, it will be calculated to deter persons from attempting to use the Court, as they now often do, as a shield for dishonesty. So, too, the Act wisely confers a larger discretion upon the Judges in bankruptcy in the matter of granting orders of discharge than they now possess. At present, so long as the forms of the Act are complied with and the debtor has refrained from committing a breach of the criminal law, the Judge is virtually bound to grant an order of discharge, and he must grant it unconditionally; but the new Act gives a wider latitude, and the order of discharge, even where made, can be granted “ subject to any condition or conditions touching any salary, pay emoluments, profits, wages, earnings, or income which may afterwards become due to the bankrupt, and . touching after-acquired property of the bankrupt.” The Registrars of the Supreme Court and the Clerks of the District : Court are, we are also glad to seei deprived of the power of granting orders of discharges; in short, the path through the Bankruptcy Court will, in the ! future, be strewn with many difficulties.