LAW OF BANKRUPTCY.

Putaruru Press, Volume IV, Issue 155, 21 October 1926, Page 8

LAW OF BANKRUPTCY.

weakest features of New Zealand' -law •Was It'hid feet tha't there was no provision fOT sale of assets by private treaty a s in olther countries, and that the sale in Nlelw Zealand must be by public auction otr rlufblic tender. After referring in measured 'terms to the difference in order of payments in various countries, hie concluded an excelelnt exposition of the te.’w by acknowledging thfe services accountants weire able by their special training to render Ito both creditors and debtors in cases of insolvency. At the completion of the address the jjetcitu rer answered a number of questions, and was ajecoddod a vote of thanks

NEW ZEALAND LAGS BEHIND.

An interjecting lecure on “The Law of Bankruptcy” was /recently- delivered before the Wellington Accountant Students’ Association by Mr H. F. O’Ltary, M.A., LL.M.

At the outse/t of his lecture Mr - O'Leary stated Ith'alt tbeUei had been - no material the bankruptcy law in New Zealand since ISB2, and I that although 'minor amendemnts had been introduced! since that d'afe the present law 'was in every respect obsolete, and a substantial reform must be not long deiliaiyed. Tl'e 1 stressed thefact t'L'at in all the large countries of She ’British 'Empire the bankruptcylaw had teen modernised. 'ln England the law had been brought up to - date in 1914, while in Ausetralia the Commonwealth Bankruptcy Act, 1924, was claimed to be the best legislation of its kind in file Empire. He mentioned that 'Canada had recently ame tided Its legislation in regard to bankruptcy, whereas in South Africa a. new Bankruptcy Act had been passed, in 1926

Mr O’Leary, -in a concise exposition:. * of the present law in New Zealand, stated that the substantive law deal—ing with the rights and liabilities of creditors and debtors was similar in many respldcts thrciujghout the British Empire, but the procedure was very different in each country. In Ei-igland a receiving order was first made, and thq official deceiver usually a® pointed a manager of the affairs of. the debtor. Alter a receiving order was made the first meeting cf creditors was called, -wbkltn the debtor gave a definite statement of his affairs, *- and the law in England provided for a public examination of a debtor before the first meeting of creditors. He - slreis'sfed the provisions in the English legislation yfhtireby a debe'ctr might avoid bankruptcy -anti also eftcet a composition with his creditors before fankruptof proceedings were, instituted. Furthermore, Mir O’LLarty stated that in England every I effort was made to avoid bankruptcy. In Australia a debtor could make a composition with his creditors without committing bankruptcy, provided he obtained therequisite maijclrity, -buit in Ndw Zealand one creditor could stand out, .. thin's rendering futile any attempt at & a satisfactory composition by the remaining creditors. The 'fundamental principle in Australia was to endeavour to avoid bankruptcy by a deed of arrangements and, failing that the administration by a receiver in bankruptcy. S'-

The lebturer was Inclined to the opinion that the English system, by vvthich a composition was arranged after th!a receiving order was mad-e, was more beneficial t all parties, yet ». the Australian principle whereby a. debtor could make an attempt through tike Court to avoid bankruptcy was preferable to thtel obsolete New Zea- i land system whereby a universal con- r sent of the creditors 'wa s necessary to avoid' -bankruptcy. Undfer the English law all property vested in th'e official receiver immediately on bankruptcy; yet the creditors might appoint private (trustees even after an official liaceiiver had been appointed by the Court. In Australia either private trustees or the official receiveracted in controlling the affairs of a debtor, -but tlhe decision was entirely in the hands of the qreditors; while in New Zealand the creditors had no option, and the official assignee to apt -in solei control of if 1:e affairs of. a debtor.

Mr O’Leary pointed out the advantage's accptt'ing from the appo in t mtnt of a private receiver with a specialised W knowledge of the business of the debtor 'to wind up his affairs to the best: advantage, and stated that a reform in ithfet law in New Zealand along'thes l © ' lines would be welcome to the legal! profession, as well as (tlhe business' community in general. IH e outlined W the provisions of the law in England, and in Australia, whereby it was mors, difficult for a debtor to obtain his discharge from bankruptcy than in New - Zealand, and to itfhle; fa'ot that in-Aujstra-lila a debtor oo^ld 1 he made bankrupt for a debt of £SO at any time within ,six months of proceedings as against a debt of £3O within three months in New Zealand. The fraudulent prefetrance clause operated for ' six months' in Australia instead of for .three months here, and he considered (he longer period a decided advantage. Mr O (Lkiary stated that one of the