THE Grey River Argus. PUBLISHED DAILY. TUESDAY, SEPTEMBER 12, 1871.

Grey River Argus, Volume XI, Issue 976, 12 September 1871, Page 2

THE Grey River Argus. PUBLISHED DAILY. TUESDAY, SEPTEMBER 12, 1871.

One of the most difficult subjects for a colony or even a nation to deal with is that of insolvency or bankruptcy. Various have been the remedies proposed even, almost from the Creation down to the present time, but with little or no effect. One class of people will, or do, get into debt despite the most stringent measures of the Legislature to prevent it, and therefore another class must suffer, and the question still remains which is the best method to meet the evil. No measure can, however wisely framed, deal justice with the necessity, but though great might be tho evil it is one which any legislature must look fairly in the face and grapple with. Insolvencies or bankruptcies are of two kinds, one in which the insolvent endeavors to deal honestly with his creditor, but through the force of circumstances over which he has no control, or through a too easy disposition, which makes it hard for him to say "Nfjiy" to the necessities and wants of his fellowcreature, and therefore renders him unable to meet him to whom he is justly indebted, and the other is that of the debtor who makes up his mind to wilfully swindle his fellow-man out of that which he is duly owing, and it is to meet those two extremes — to act equitably as it were between the fraudulent and unfortunate debtor that all insolvency and bankruptcy laws are supposed to be framed. The experiences, of all courts io which the relations between debtor and creditor come under cognizance show that there is much to be desired, and perhaps which will never be attained, aud as every nation and colony, and perhaps every district, has its own great or little peculiarities to meet it, is hopeless to expect that an insolvency or bankruptcy law can be framed that would meet all requirements. Amendments of laws are at all times dangerous, as, they leave room for quibbles through which it is possible, as an eminent Victorian Q.C. once said, to drive a coach and four through, and therefore it is better at all timea to frame anew Act, and this seems to have been the idea of the Hon. Mr Sewell in introducing a new Insolvency Bill into the Legislative Council. He said : The first alteration of importance was in the constitution of the bankruptcy court.* At present jurisdiction in bankruptcy was exercised either by the supreme or district courts. It was an alternative jurisdiction, and great practical inconvenience had been the result. It was obvious that the jurisdiction should "He carefully defined, and this bill proposed so far to alter the law, first of all by giving the jurisdiction in bankruptcy to district courts where Sbere are district courts, and where thee no district courts to make commissioners' districts, and where no provision is made for either district or commissioners' courts, the Supreme Court should exercise its ordinary jurisdiction. That was one alteration, and he thought it was a most important point affecting the proper working of the law, its satisfactory working depending more on the tribunals than upon administrative details. In England there was a special court of bankruptcy, and in Victoria the courts were, presided over by judges having special qualifications. It was open to ques> tion whether a similar practice should not be adopted here, but that involved expense and special difficulties arising out of the constitution of the Colony. The next important point in which a substantive change of -law was to be made was what were called voluntary sequestrations. In that respect the present law was found to be exceedingly unsatisfactory. Under the present law a person who might be harassed by creditors might present a petition to the court ; the effect of that petition was to put in motion the provisional trustee, who was a mere official, and who was not likely to take a very active part in securing the estate; and the petition remained, as it were, dormant. At the expiration of ten days any creditor might found proceedings on this voluntary petition, and make the person a bankrupt. This, it would be seen, was a dilatory process, and tbe only effect was to provide means for the person who sought time to avoid the action of his creditoi s. The present bill would enable any person who found himself unable to pay his debts to present a petition to the court, setting forth the circumstances, and the court might immediately order a sequestration of the estate— might irumedieWy set in motion the powers of the Act, and thereupon would follow all the-consequences applicable to an ordinary bankruptcy. The assignee would administer the estate, and scenre for the 'benefit of the creditors the insolvent's assets. He thought this would be found to bo a very considerable improvement upon the present law. There was nothing in the general principle as to compulsory sequestration, which materially differed from the present practice. There was just one point. lit the administration of a bankrupt's estate, the present law was that the provisional trustee was the general official administrator At present he was a very ineffective officer, and the arrangement had generally been found unsatisfactory. In compliance with the suggestions of the Chamber of Commerce . ft wa3 the intention to appoint as official assignees persons who would undertake the ad interim assignation of bankrupts' estates. The existing law depended upon the interference of the creditors themselves, and practically it wa3 found that they would not take any great trouble in these matters. Bankrupt estates were often small in amount, and any particular creditor bad a limited interest in the estate. The system had been found to bo unsatisfactory, and in lieu of it it was proposed to appoint official assignees. He would be the practical administrator and winder-up of estates, except in cases where creditors themselves agreed tq theappointmeut of trustees. That would, no doubt, be found to be a practical improvement upon the present law. There was another important change with regard to what was termed the close of a bankruptcy. At present a bankrupt nii<.'lit obtain his certificate on certain conditions prescribed. These conditions did not really secure every justice to the creditors. The present Act adopted what had been introduced in the English and Victorian Acts, making it a condition that before any person get* his certificate he must pay 10a

in the pound, and under somespecinl circumstances he may be relieved from that, ct-edi-tors being themselves the judges. Following that, there was the status of the undischarged debtor/;! At present, in the case of a man who h¥d not paid 10s in the ponnd— who had not obtained a certificate— his after>acquired property might be made available for his debts ; but it could be only on application to to the Court, and for the benefit of all his creditors ; but usually no person troubled himself to scenre the broken fragments of an estate. The proposed law would place the uncettificated bankrupt who had not paid 10s*in a different position. First of all, a period of three years would be allowed him. during which, as it were, he would not be liable to be molested. At the expiration of that time, any creditor who had not recovered 103 in the pound could deal with the debt in the nature of a judgment debt. He might apply to the Court, «nd the Court might, in its discretion, limitiug the extent to . which the judgment may be enforced, give to the unpaid creditors, who would then be as judgment creditors, an order against tbe estate. He could not but think that this principle would have a very salutary effect as regiirdsd the results of the administration of bankruptcy. Another change made by thft Bill had refer- ; ence to deeds of arrangement. Very great abnjsie took place under the present law. The way in which a man effected a deed of arrangement now was to receive the assent of a certain number of creditors. This led to a practice which by no means advanced tbe interests of the general body of creditors. The law which was now proposed provided that, instead of this arrangement, it should be done by resolutions at a meeting of creditors. Due provission was made for those, meetings of creditors, ami the resolution of creditors adopted at these meetings would have all the effect of deeds of arrangement. There was this difference between the Bill and the practice in England, that in England the resolution of creditors agreeing to accept an arrangement wa3 determined by a certain proportion of creditors— three-fourths in number and value of the creditors assembled at . the moetintr. This might apply in 'England, where creditors -were generally resident in the country ; but in Victoria an alteration had been made by which it was required that the number should be a majority of the whole body of creditors. It will thus be seen that an uncertificated, insolvent cannot get rid of his liabilities under the proposed New Zealand Act till he has paid fiO percent., or 10s in the pound, and this payment extends over a period of three years. There are many cases, more especially on the Gold Fields, in which the estates are of small value, and therefore tho creditors do not car© to trouble them ; but these- cases would be met in the proposed Act.* Several objections might be urged against the Bill, and one is the power of appeal which U given against the decisions of the Commissioners of Insolvency, This might have an injurious effect, it may be urged, unless the power of appeal was conferred to tbe creditor. In reference to the working of the Bankruptcy Acts the following facts may astonish our readers : — The returns were published in July, 1870, and the, results during the year previous were these— There were £G97,000 of debts proved against bankrupt estates. The debts realised were £41,379 ; law expenses, £2950 ; miscellaneous expenses, £3145 ; trustees' commission, £2099 ; dividends paid and unpaid, £12,522 ; expenses, £2803 ; balance remaining in the hands of trustee, £1324. On an average the assets realised, compared with the debts proved, might be about one shilling and sixpence in the pound, and the dividend which ought to have reached the hands of creditors would be about fourpence in the , pound. .Therefore it is time that some alteration of the law was desirable.