III.-Proposed further alterations not dealt with in the "Suggestions" of the Council.

The following questions are dealt with by the Bill, in addition to those already mentioned :-

19. By § 4 the limit of the debt of the petitioning creditor is reduced from £50 to £20. I am not aware of the arguments in favour of this reduction, but, so far as I am aware, there is no occasion for it, and it may work harshly in some cases.

20. By the same clause, a petitioning creditor's debt may be a "growing due" debt, e.g. a current bill of exchange. I think this is reasonable, seeing that it must be accompanied by proof of an act of bankruptcy on the part of the debtor.*

21. § 16, sub-sec. 7, provides that no proof shall be admitted or amended after the expiration of three months from the date of adjudication except under special circumstances approved by the Court as sufficient to justify the delay. I think this provision is wholly unnecessary and may operate most harshly. If a creditor does not lodge his proof in time before the declaration of a dividend he is excluded from it; surely that is sufficient penalty without saying that because he has been so careless as to miss a first dividend when it was declared he is never to have a claim to a dividend at all. I sug gest therefore that

Sub-sec. 7 should be omitted from the Bill.

22. By § 21 the appointment, or otherwise, of a committee of inspection is made optional, instead of being compulsory as at present. I do not think it an improvement.

23. § 34, relating to the closing of the bankruptcy, and the corresponding clause (47) in the Act of 1869, are to my mind unnecessary, and may under the altered circumstances created by this Bill give rise to serious complications. What is the meaning of the "close of the bankruptcy?" It cannot mean the bankrupt's discharge, for a bankrupt may be discharged long before the close of a bankruptcy. Neither can it mean the release of the trustee, for that is provided for under § 32. What, then, does it mean? Is it intended, by closing the bankruptcy, to forfeit all unclaimed dividends in the hands of the Paymaster-General? If so, this is a most objectionable provision; and if it does not mean any of these three things I cannot see what it can possibly be intended to mean. If, on the other hand, in compliance with this clause, the Court makes an order that the bankruptcy has closed, on being satisfied that "the whole property of the bankrupt has been realised," what becomes of the future

But how inconsistent to allow a creditor to make a debtor bankrupt on a current Bill of Exchange and then prevent him voting at the meeting of preditors,

liability of the bankrupt where he has been refused his discharge under the 35th Section? If, in consequence of misconduct, his future earnings are to any extent made answerable for his debts, how can the bankruptcy be closed while that liability subsists? As it can lead, therefore, to nothing but confusion, I submit that

This clause 34 ought to be omitted.

When the bankrupt is discharged, the trustee released, and all the dividends paid, the bankruptcy will have closed without any special provision on the subject.

24. § 36. By this clause it is provided that a bankruptcy may be annulled when the debts are paid in full, or when, where a bankruptcy is closed, and the bankrupt has passed his public examination, the Court is satisfied, after taking into consideration the report of the official receiver, that the bankruptcy arose from misfortune, without any misconduct on the part of the bankrupt. I think this clause is one to be supported, in the interests of honest but unfortunate traders, but for the reasons mentioned before I would suggest that— Instead of the words "when a bankruptcy is closed," the words "when a bankrupt has obtained his discharge," should be inserted.

25. § 37 to 39 contain some very proper disqualifications of a bankrupt from holding public offices, or sitting in Parliament for seven years from the date of the adjudication, unless it is in the meantime annulled on the ground of payment of the debts in full, or of misfortune.

26. § 41 to 42 authorise the Court to order a prosecution of a fraudulent bankrupt on the report of the official receiver, and where the Court has ground for believing the bankrupt guilty of any fraudulent offences, it may at once commit him for trial, without the necessity of making application to a criminal Court.

27. § 43 provides that in all estates not likely to exceed £300, the official receiver shall be trustee, unless the creditors appoint some other person. I have already dealt with this question under No. 6. 28. § 48 to 50 abolish the Court of Bankruptcy and transfer the business to the Chancery Division of the High Court of Justice, with power to appoint an additional judge. I scarcely feel qualified to express an opinion upon this subject. It is of more interest to lawyers than to mercantile men.

29. § 51 requires a debtor to present his petition in bankruptcy to the Court of the district where he has resided or carried on business for the longest period during the six months preceding the petition. This is a useful amendment of the present law.

30. § 52 requires the power of committal for contempt, and any question of law, or involving the exercise of judicial discretion, which any person interested may so desire, to be determined by the judge and not by the registrar.

31. § 54 regulates appeals in bankruptcy matters, the principal feature being that appeals from the County Courts shall be direct to the Court of Appeal; a very satisfactory proposal, as tending to shorten time and expense.

32. § 57 provides for the administration of a deceased person's estate in bankruptcy, which is also highly satisfactory.

33. § 63 prevents a landlord distraining after an adjudication in bankruptcy for rent due before, but permits him, with the leave of the Court, to distrain for rent due subsequently.

34. § 67 makes the provisions of the Act applicable to married women acting otherwise than as the agents of their husbands.

I have now gone through nearly every provision of the Bill of any practical importance, and the only further points which occur to me as worthy of consideration with the view of making the measure as comprehensive as possible are embodied in the two following suggested clauses, viz. :

*35. A creditor shall not vote at any meeting in respect of any proof unless the same has been lodged with the receiver or trustee at least 48 hours before the holding of such meeting. And every creditor who has lodged a proof shall be entitled to see and examine the proofs of other creditors before the first meeting and at all reasonable times.

*36, The trustee shall make up and submit to the committee every four months a statement showing the particulars of all proofs lodged on the estate, the securities held, and the valuations placed thereon, and also distinguishing those which have been admitted and those which have been rejected, with the grounds for such rejection, if any, and all other particulars necessary to enable the committee to form a proper estimate of the liabilities of the estate, and such statement shall be open to inspection at the instance of any creditor who has proved his debt at all reasonable times. Any person interested may bring under the notice of the Court any neglect on the part of the trustee in adjudicating upon any proof, as required by the principal Act or this Act, or any adjudication thereon which, in the opinion of such creditor, is unfair and not in the interest of the other creditors; and the Court may, on hearing parties make such order in the matter as it shall think fit, and may hold the trustee personally liable for the consequences of any such conduct or neglect, provided that the Court may, if it think that the person so applying had not sufficient grounds for making such application, find him liable in expenses.

The object of these clauses is, first, to enable a proper investigation of all proofs to be made before they are used for voting purposes, for it is clear that the time of a meeting of creditors should not be occupied by questions of this sort; and, second, to secure impartial dealing with all proofs by the trustee in regard to which point (strange to say), there are no provisions either in the Act of 1869, or in the present Bill, though it is one which is fully provided for in the 126th and 127th Sections of the Scotch Act.

* See Appendix, pages 284-5.

These notes have proved somewhat longer than I intended, or desired, but I have found it impossible, in shorter compass, to deal with the many points involved in this very comprehensive measure. I would only say, in conclusion, that while the form of the Bill as an amending instead of an amending and consolidating measure, may, to some extent, enhance the difficulty already felt of ascertaining the law upon any point, and may therefore point to the necessity for having a more competent digest than any we at present possess, I cannot doubt that it is the intention of Government, if it becomes law, to follow it up as soon as possible with a consolidating or codifying measure, in which the whole of the complicated provision of the bankruptcy law shall be brought into a simple and well-ordered arrangement. I have on a previous occasion, through the kind invitation of the Council, had an opportunity of pointing out the various differences betwixt the English and the Scotch systems of bankruptcy, and the great superiority of the latter. I am bound, however, to say that if this Bill is adopted subject to these suggested amendments, and provided that no new disturbing element in the shape of "experimental" legislation is introduced, we shall have reason to congratulate ourselves in having secured a measure in no way inferior to the Scotch bankruptcy law, while it will in some respects undoubtedly be superior. I have already noticed the groundlessness of one objection to the Bill, in regard to what is termed its tendency to officialism. The only other objection, so far as I am aware, is that taken by a London daily newspaper, which describes it as a measure which recalls the severity of the older bankruptcy laws for the mere purpose of promoting what Mr. Chamberlain calls public morality."* But just as on the one hand no honest and honourable trustee will object to submit his accounts to an independent audit, so on the other hand no honest and honourable trader will object to the exclusion of reckless and dishonest traders from the benefits of the Bankruptcy Acts. In fact, in both of these respects the Bill will only fulfil the first requirements of any measure of administrative justice, inasmuch as it proves "a terror to evil-doers, but a praise to them that do well."

66

* Morning Advertiser, 9th April, 1881.

APPENDIX.

THE subject of proofs of debt and votes on bills of exchange being of special interest to the banking community, it is thought desirable to show, in a collective form, the precise amendments in the Government Bill suggested in the foregoing paper in regard to these two points.

1.-PROOFS OF DEBT.

The following are the provisions of the Bill, as per Clause 16:16. (1.) Every creditor shall send or deliver his proof of debt as soon as may be after the adjudication.

(2.) The proof shall be sent or delivered to the official receiver, or, if a trustee has been appointed, to the trustee.

(3.) The official receiver and trustee shall respectively have power to accept or reject proofs, subject to appeal to the Court.

(4.) A creditor may, with the leave of the official receiver or trustee, amend his proof, and thereupon shall be entitled to be paid out of any money for the time being available for dividend any dividend or share of dividend he may have failed to receive by reason of the inaccuracy of his original proof, before that money is made applicable to the payment of any future dividend, but he shall not be entitled to disturb the distribution of any dividend declared before the date of the amendment.

(5.) A secured creditor shall state in his proof the particulars of his security, and the value at which he estimates it, and shall be deemed to be a creditor only in respect of the balance due to him after deducting the value so estimated.

(6.) A secured creditor shall, on application made by any person interested within a prescribed time after the date of adjudication, and on payment of the value of his security as estimated in his original or amended proof, give up his security to be dealt with as part of the property of the bankrupt for the benefit of the creditors. (7.) No proof shall be admitted or amended after the expiration of three months from the date of the adjudication, except under special circumstances approved by the Court as sufficient to justify the delay.

The following are suggested in place of the above :

16. (1.) Every creditor shall, as soon as may be after adjudication, send or deliver his proof of debt to the official receiver, or, if a trustee has been appointed, to the trustee.

(2.) Such proof shall state the amount of the debt alleged to