The Nelson Evening Mail. MONDAY, AUGUST 2, 1880.

Nelson Evening Mail, Volume XV, Issue 182, 2 August 1880, Page 2

The Nelson Evening Mail. MONDAY, AUGUST 2, 1880.

Although the report of the Select Com* mittees ou the Bankruptcy Laws hns been sent in, the. replies given by the Judges and certain public bodies are still of interest, as showing the diversity of opinion that prevails on this subject. Question No. 3 is: — What circumstances should disentitle a bankrupt to bis discharge? To this the Chief Justice replies — "Would have provision similar to Section 120 of the Act of 1867, but with additional defined causes, such as extravagant living, reckless trading." Mr Justice Johnston says—" I think that a bankrupt should not be entitled to his discharge in cases where his debts have been fraudulently contracted; where he has traded recklessly; where he has given fraudulent preferences; where he has concealed or made away with property; or where he has endeavored to frustrate, or refused to assist in, the administration of his estate." Mr Justice Richmond remarks— "No substantial alteration required in policy of present laws.'' Mr Justice Williams replies at great length to this question, He commences by saying, "This question, in my opinion, goes to the root of bankruptcy legislation." Ho then goes on to recommend that a bankrupt's discharge should be left entirely to the creditors, but that no one should be entitled to hia discharge unless a resolution bo passed to that effect by a majority in number, equal to three-fourths in value of the creditors, such majority to mean a majority of the whole body of creditors. The learned Judge concludes his reply as follows: — " Each case, must stand on its own merits, and it seems to me that the creditors in each case are likely to be the best judges of whether a debtor should be discharged or no. I think it would be found, if my suggestion were adopted, that in nine cases out of ten the honest debtor would get his discharge, while the fraudulent or reckless trader would be deprived of the opportunity of committing further depredations. Under any state of the law there must be hardship on one side or the other, and it is far better in my opinion that on rare occasions an honest debtor should have to suffer by the refusal of his discharge than that encouragement should be given by law to the fraudulent and reckleßS." Judges Ward, Kenny, and Harvey, the Law Society, Auckland, and the Chamber of Commerce, Christchurch, think the best thing is to re-enact Section 120 of the Bankruptcy Act, 1867, which worked admirably. Judge Weston apparently thinks the matter should be left absolutely to the discretion of the Judge, a proved creditor having the right to oppose. " The examination should be of a most searching character, the presiding Judge taking an interest therein. For my own part I examine in all cases, whether there be opposition or not, with satisfactory results." From this we imagine bankrupts— honest or dishonest — must have a lively time of it on the West Coast. Not only may opposing creditors represented by counsel make their souls sorrowful by much badgering, but there is also lying in wait for them the Judge himself, who, " whether there is opposition or not," takes "an interest " in seeing that the examination is of the most " searching character," and, as he says himself, " with satisfactory results," although we are not sure whether the satisfaction accrues to the bankrupt, the creditors, or the Judge— it may well be to the latter, who has been afforded an opportunity of displaying that strength and vigor he seems to think should be the special qualifications of a Judge in Bankruptcy. District Judge Mansford thinks that " Any transaction which the Judge may deem fraudulent should disentitle a debtor to his discharge till after the expiration of a time to be limited by the Judge, not exceeding three years." Taken literally as the witness states it, this would be a most dangerous power to give to any single Judge.

District Judge Shaw thinks it better to leave the matter to the discretion of the Court, as '• it would be impossible to set out in detail every possible sin of omission or commission that a bankrupt may be guilty of." On this subject nomau's opinion that weknow of is entitled to greater weight than judge Shaw's. Judge Harvey appears to think that we canuot do better generally than fall back upon the provisions of the old Act of 1867. He is also of opinion that it is not desirable to iequire a fixed amount of dividend to be paid by any debtor, inasmuch as an exceedingly honest, though unfortunate, debtor may not be able to pay Is in the £l ; a criminally dishonest debtor may be able (o pay 15s, or probably more. Judge Broad recommends the following grounds which should disentitle a bankrupt to his discharge j— " 1. Where there has been any active deceit on the part of the debtor. 2. Where there is evidence that the debtor had reason to believe at the time he incurred the debt that he was in insolvent circumstances and unable to carry on his business. 3. Where ho has failed to keep proper books of accounts 4. Where the debtor, not being a trader, has incurred liabilities by grossly extravagant living. 5 . The Court to have, as at present, full judicial discretion to delay granting a certificate of discharge where there has beeu any misconduct other than the above either before or in the course of the bankruptcy/ From the replies received from the different Law Societies and the Chambers of Commerce it appears that their general opinion, as a whole, ia in favor of reverting to the provisions of the Act of 1867 with some amendments. The Chamber of Commerce, Wellington, also thiuk that the non-payment of a dividend of seven shillings in the pound ought to be a ground for refusing a discharge. In a future issue we will refer to the answers given in respect to the law of bills of sale ; the right of distress for rent ; by whom a bankrupt should be prosecuted ; what claims should be treated as preferential ; and whether arrangement by deed should be continued.