The Southland Times. WEDNESDAY, DECEMBER 18, 1867.

Southland Times, Issue 867, 18 December 1867, Page 2

The Southland Times. WEDNESDAY, DECEMBER 18, 1867.

The perusal of the " Act to amend the law of bankruptcy in New Zealand," passed in the last session of the G-eneral Assembly, and commencing to operate on j the first day of December, instant, induces the conviction that if the object of

tbe framers had been to present the public with a cumbrous, costly, and ineffective piece of legislation they have been eminently successful ; — the true character of the Act would have been more plainly shown had it been designated as " a measure for obstructing the settlement of bankrupt estates, and for swallowing up the proceeds thereof." 1 Containing no less than 354 clauses (tq which number those having profitable relation to the interests of creditors j bear but a very small proportion), it is ! in all essential respects destitute of the | most important elements in bankruptcy legislation — simplicity and clearness — its extreme length, as well as in many of its clauses, its unintelligible phraseology, tending to mystify and confuse. Sections 1 to 26 call for no particular remark, referring merely to preliminaries and jurisdiction. Sections 27 and 28 define acts of bankruptcy, the first of which rather incongruously associates tho departure of a debtor from New Zealand with tbe fraudulent conveyance of his property, he being either in or out of the Colony. Legislation on the subject of fraudulent conveyances must be under any circumstances a difficult task, and from the impossibility in most instances of obtaining proof of fraud is nearly inoperative. Sections 29 to 44 provide for the issue of debtors summonses, and appear specially adapted for the convenience of fraudulent debtors in the unmolested disposal of their estates, as reference to j the Act will show. The process in connection with the debtors summons, intended to operate for tbe production of the cash required from the party summoned, or to compel the sequestration of his estate, may be briefly described. " Any creditor whether under judgment or otherwise," may deliver to his debtor, or leave at his usual or last known place of residence, an account of particulars witb a demand for payment of the sum specified therein, and may then file an affidavit in the Supreme Court, or in the District Court in which such debtor resides, of the truth of the debt. The court may thereupon order such debtor to appear within fourteen days of the service upon bim in form provided of notice to that effect, and either at once to pay the same or to admit the debt in whole, or in part, and to furnish security for the payment within fourteen days, or, to deny the same, and to make a declaration of a good defence ac-_ companied by a bond — failing either of which he may be adjudged bankrupt ; — sections 44 to 53 provide for declarations of insolvency by debtors unable to meet their engagements, immediately consequent upon which declaration the Eegistrar or Deputy Registrar of the Supreme Court shall become, and be the receiver of the property of such debtor, and shall act as provisional trustee until another trustee is appointed ; — this declaration of insolvency shall be at once filed, and notice of filing published in the Q-azette. By whom the costs of this proceeding are to be borne does not appear from the Act ; whether the provisional trustee is authorised to expend the funds of the estate just merged into his custody for the purposes of the insolvency, or whether out of the nothing which the bankrupt is supposed to possess he is expected to defray the charges, is open to conjecture. Inasmuch as section . 52 provides that the declaration of insolvency shall not be regarded as . an act of bankruptcy until twenty-one days after the publication of notice of such declaration having been filed, and not even then unless subsequent proceedings sball be taken by the debtor, or by one or more of his creditors, to obtain an adjudication upon such declaration, it may happen that these proceedings will not be taken at all, and what then becomes of the estate? Is the provisional trustee authorised to hand it back to the debtor ? Or what portion of it — if any— is ; he, entitled to retain for his custody thereof during the time it has been under his charge ? These are questions which may be speculated on, but which the Act certainly does not answer. The subsequent clauses relative to arrangement by deed in no way meet this supposed case. Of one thing we may be certain, that the estate, small before, will, under the process through which it must inevitably pass, become beautifully less by the refinement. Sections 54 to 92 are occupied with the matters of adjudication on the petition of the bankrupt or his creditors! and the proceedings connected therewith. The objectionable features of the late Debtors and Creditors Act are inthe 1 present Bankruptcy Act retained. The amount due to one or more creditors to entitle them to be heard on petition is such as virtually to prohibit the bringing of small estates under the operation of tbe Act. The order of adjudication having been however obtained, whether on debtors own petition or on that of creditors, at a first meeting appointed in and by such order as provided in sections 93-96, "the creditors shall choose a fit person whether a creditor or

not to be the trustee of the estate and effects of the bankrupt," together witb "two or more fit persons leing creditors to superintend the administration of the bankrupt's estate by the trustee, and to be called the " Supervisors of the Bankrupt's estate." Such " trustees and supervisors " shall be under tbe inspection and o£ an accountant in bankruptcy, appointed for tbat purpose who,, ion suspicion of "malversation or misconduct " on their part, shall be entitled to instruct tbe Crown Solicitor to take such proceedings as he shall think fit. Henceforth let no man envy the otium cum dignitate of a "trustee or supervisor" under the new Bankruptcy Act. In the remarks we have now made our object has been to direct attention to tbe unwieldy and ineffective character of the Act. In a future issue we will return to the subject, and refer to the tendency of tbe measure to perpetuate tbe evils which have been so long complained of in con- | nection with Legislation on the subject o£ Insolvency.