THE GENERAL ASSEMBLY.

Westport Times, Volume V, Issue 867, 28 September 1871, Page 2

THE GENERAL ASSEMBLY.

The following report is taken from the " Wellington Independent" :—- ItfaotVfiircir Bill. In the Legislative Council, the hon. Mr Sewell moved the second reading of the Insolvency Bill. The existing law, he said, was not satisfactory to the country, nor was he sanguine that any measure on the subject would prove sacisfactorv. The subject was so fraught with difficulties that he could well believe that even the wisest measure would fail in meeting the necessities of the two parties, debtors and creditors. This bill was now, however, proposed as a substitute for the law as it stood, and it had one recommendable feature, inasmuch as, while the existing Act consisted of 348 clauses, the proposed bill did not contain more that 180, so that the bulk of law was reduced by nearly one-half—a reduction which would have the effect of simplifying the law and making it more easily operative. The particular defects which had been found in the existing law might have been repealed by amendment, but the continual amendment of laws was found to he exceedingly inconvenient, and the object of the Government, as well as the wish of the Legislature, had been that the law should be consolidated. They therefore determined to present a measure which would not only be an amendment, but a bill which would consolidate and embody in one measure th«i whole law on the subject. In framiug the measure they had to determine whether they should frame one of their own invention, or adopt the measures of other legislatures, and they thought the latter to be both the wise stand simplest course. They had adopted the legislation of Victoria, and it was framed on an act of the Imperial legislature, passed in 1869. The Imperial Act, the Victorian Act, and this present measure would, indeed, be found to substantially agree, The general structure of the scheme would be found to be altogether different from the present law, aud ha thought it would be found to constitute a more convenient arrangement of the various subject matters of the act. He would not then refer to details, believing that the measure would bo best dealt with by a select, committee, but would direct attention simply to some of its main features and leading alterations. . The first alteration of importance was in the constitution of the bankruptcy courts. At present jurisdiction in bankruptcy was exercised either by the supreme or district c mrts. It was an alternative jurisdiction, and great practical inconvenience Bad been the result. It was obvious that the jurisdiction should be 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 there are district courts, and where there are rib 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 tribunal 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 question whether a similar practise should not be adopted here, but that involved expense and special difficulties arising out of the constitution of the colony. The nexl important point in which a substantive change of the law was to be ma<*) was in what were called voluntary ae* questrations. In that respect the present law was found to be exceedingly unsatisfactory. Under th« present law a person who miglt be harassed by creditors might rresent a petition to the court j the effect of that petition was to put in motion the j provisional trustee, who was a mer« official, and who was not like!" to take a very active part in seciring the j estate; aud the petition regained, as it were, dormant. At the expiration

of ten days tiny creditor Wight.found proceedings on this voluntary petition, and make the person a bankrupt. This, it would be Been, was a dilatory process, and the only effect was to provide means for the person who sougbt timo to avoid the action of his creditors The present bill would enable *lny 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 immediately 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 secure for the benefit of the creditors the insolvent's assets. He thought this would be found to be 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.. Iu 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 suggestions of the Chambers of Oomtoerce, it was the intention to appoint •as official assignees persons who would •undertake the tsd interim assignation <of bankrupts' estates. The existing law depended Upon the interference of the creditors themselves, and practically it was found that they would <not ta'ke any great trouble in these Bankrupt estates were often small in amount, and any particular •creditor 1 sal a limited interest in the -•estate. The system had been found to be unsatisfactory, and in lieu of it

it was proposed to appoint official assignees. He would be the practical iadaviiftsfcrator and winder up of estates, ♦except in oases where creditors themnselves agreed to the appointment of "fcr&stees. That, he thought, would be tfbundto be a (practical improvement upon the present law. There was an•other impoitant ■change, with regdrd to wlsat was termed the close of a 'bankruptcy. At present a bankrupt knight-obtain his certificate on certain •condMoss .prescribed. These conditions did not really secure every justice to the creditors. The present act

•adopted what had been introduced in the EngMsh «®d Victorian. Act, making it a condition that before any person gets his certificate, he must pay 10s in the pound, and under some special'circumstancesbe may toe relieved from that, creditors being themselves the judges. Following that, there "was tlie status of the undischarged •debtor. At present, m the case of a man who had not paid 10s in the pound—who had not obtained a certificate —his alteracquired property might toe made available for his debts, but it

<could be only on application to the "Court, attd' for the benefit of all hiß •creditors; but usually no person troubled himself to secure the broken fragments of an estate. The proposed law ■would place the uncertificated bank* frupt who had not paid ten shillings 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 expiration of that time any creditor who had not received ten shillings in , the pound could deal with the debt in •' the nature of a judgment debt. He might apply to the Court, and the i'ourt might, in its discretion, limiting the extent to which the judgment may •foe enforced, give to theunpaidcreditors, who would then be as judgment "creditors, an order against the estate. He could not but think this principle would have a very salutary effect as regarded the results of the administra- . tion of bankruptcy. Another change made by the bill had reference to deeds of arrangement. Very great abuse 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, the interests of the general body of creditors. The law which was now proposed provided that, instead of this arrangement, it shouldbe 'done by resolutions at a meeting of . creditors. Due provision was made for those meetings of creditors, and the resolutions of creditors adopted at these meetings would have al 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 was determined by a certain proportion of creditors —three-f<Hirths in number and, yalue of the creditors assembled at the meeting. This might apply in England, where creditors were generally resident in the country; bat in Victoria an alteration bad been made by which it was required that the number should be a majority of the whole body of creditors. He thought he hadpointed out the main points in which the bill would be found to vary from the law as it at present stood, and, if it were then read Jl 'a second tittle, he would take the sense of the Council as to whether it should be referred to a select committee to act in conjunction with a committee of the other Horise.