9th Parliament · 2nd Session
The President (Senator the Hon. T. Givens) took the chair at 3 p.m., and read prayers.
page 2176
Provisional Parliament House
– Have arrange ments been made for turning the first sod in connexion with the constructionof a provisional Parliament House at Canberra f I should like toask the Leader of the Government in the Senate whether the consent of the Senate was obtained for that ceremony, or whether its approval has been anticipated ?
– Arrangements had been made by my colleague, the Minister forWorks and Railways (Mr. Stewart), to hold a ceremony at Canberra in connexion with the turning of the first sod. He fixed the date on the assumption that the Loan Bill to authorize the expenditure on this work would previously have been passed by Parliament. The Loan Bill has. not been passed’, and, accordingly, the ceremonyhas been postponed for a week. The postponement will enable both Houses of Parliament to register their will in the matter.
page 2176
Inquiry into Contract.
– Abouta week ago I placed a question on the noticepaper to ascertain whether the. Government had appointed a Royal Commission to inquire into a certain contract entered into in connexion with the erection of War Service Homes. The Minister replied that the Government had the matter under consideration.I now desire to ask whether the Governmentis still considering the advisability of appointing the suggested Commission ?
– A number of questions arise in connexion with the appointment of such a Commission. One is concerned with the terms of reference. These are under consideration, and are ap. proaching a stage when it will shortly be possible to make a statement regarding the intentions of the Government.
page 2176
Action by Cattle-raisers .
– Has the Government noticed that the cattle-raisers in Queensland, notwithstanding the recent action of the Federal Parliament, have decided to combine their forces and fix a minimum price below which tbey will not allow their cattle to be sold f If so, does the Government intend to take any action to prevent such a Combine!
– I have not seen the statement referred to by the honorable senator.
page 2176
Comparison of Prices
– Will the Leader of the Government in the Senate state whether it is a fact that the phosphatio rock supplied by the Nauru Commission to the fertilizer manufacturers of the Commonwealth is sold at a greater price to-day than was charged for it before the war ? How does the price to-day compare with the price charged before the war? Is there any prospect of a reduction being made in prevailing prices ?
– Senator Lynch drew my attention to a statement that was made last week on this subject-, and I have had inquiries, made during the week-end. I have received a letter from Mr. A. Harold Pope, chief represent tative of the British Phosphate Commission. It is dated “ Melbourne, 3rd August, 1923,” and is addressed to “ Mr. A. G. Brown, Senate, Federal Parliament House, Melbourne.” It states -
In reply to your inquiry by telephone for figures required by Senator Pearce, tbe price of Nauru-Ocean phosphate, c.i.f. Australia, before tbe war was 48s. 3d. During the war tbe price rose from 46a. 3d. up to 80s. Since tbe 1st July, 1920, when the undertaking was purchased by the three Governments, the price has been brought down by successive stages to 48s., which came intoforce on the1st July, 1923.
The price now is 3d. per ton less than it was before the war.
page 2177
The following papers were presented : -
Lands Acquisition Act - Land acquired for Postal purposes in New South Wales at Coogee and Fairfield.
Norfolk Island- Ordinance No. 4 of 1923 - Deserted Wives and Children.
War Service Homes Act - Land acquired at Richmond, New South Wales.
page 2177
. - (By leave.) - I move -
That this Senate agrees to the following resolution : - “ We, the members of the Senate of the Commonwealth of Australia, express our deep sympathy w.ith the people of the United States in tile death of their President. “ We grieve that this great citizen should have been struck down at a time- when the world had need of his eounsel, but trust that the example of his life will stimulate to still greater efforts alt those who labour in the cause of universal peace.”
I think it very appropriate that we, in this young Democracy, and particularly in this the States’ House of the Democracy, should place on the records of our Parliament the motion which I have submitted. There is, of course, a great deal of similarity between the people of the United States and ourselves. They have sprung, very largely, from the same stock. Their legislative machinery was the progenitor, to a large extent, of ours, and their ideals and’ ours have much in common. I would remind the Senate, also, that our destinies approach each other on that great ocean - the Pacific - which laves our eastern shores. We have much: m common there, and we have much in common, too, in that great cause in which the late President distinguished himself so highly - the cause of the preservation1 of the peace of the Pacific. Hia passing away, therefore, is not without deep significance to us in Australia. All. of us, I am sure, have followed with the deepest interest his work in the cause- of peace. We have been stirred by his straightforward, manly,, and simple actions at that great Conference in Washington, a Conference which was unique, I think, among the diplomatic councils of the world, in that all the cards which, in diplomacy, are usually concealed, were placed upon the table. I doubt whether there was ever a previous Conference in which the nations treated one another with such frankness, and I attribute that very largely to the example set by the United States in convening the Conference, and particularly to the opening speech made by the late President on behalf of that country. I should like to direct the attention of the Senate to one extract from that speech. Speaking to the representatives of the assembled nations, he said -
We are met for a service to mankind. In all simplicity, in all honesty, and all honour, there may be written here the avowals of a world conscience refined by the consuming fires of war, and made more sensitive by the anxious aftermath.. I hope for that understanding which will emphasize the guarantees of peace, and for commitments, to less burdens and a better order which will tranquilize. the world. In such an accomplishment there will he added glory to your flags and ours, and the rejoicing of mankind will make- the . transcending music of all succeeding time.
As Earl Balfour said subsequently, the; President gave the Conference a motto, and that motto was, “ Simplicity, honesty, and honour.” If, Mr. President, that became- the motto of the nations in dealing with one another, what a tremendous benefit would be conferred on the world! What a change there would be in international relationships! It is. because the late President so distinguished himself in those particular qualkiesj and took such a leading part at the Conference, that I feel sure the Senate will agree to the carrying of the motion, and will be proud to have it placed on the records. Of the. late President, personally, I think we can all say that the words of Tenny-i son in his Ode on the Death of the Duke of Wellington, are very apropos.
Rich in saving common sense,
And, as the greatest only are,
In his simplicity sublime.
. - In seconding the motion, I feel sure that all honorable senators deeply deplore the loss of the President of the United States of America. In Mr. Harding’s, death the world has unquestionably lost a friend of peace* The seriousness of such losses in high places at the present period in the world’s history cannot be accurately computed’. There has always been, to- my mind, a close link between the people of the United States of America and the people of Australia. The spontaneous outburst of enthusiasm on the part of the Australian public, when the United States Fleet visited these shores some years ago, came as a surprise to most of us. No one could have anticipated that the Australian people would give such a warm welcome to the Navy of the United States of America. The heartiness of the greeting exceeded all expectations, and it was a tangible expression of the warm feeling existing between Australia and the great nation across the Pacific. Just as Australia rejoiced upon the occasion of the visit of that fleet to these southern seas, it now sympathizes with the people of the United States of America in their great sorrow due to the loss of their President. With all its advantages as a great Democracy, the United States of America also has its disadvantages. In the number and wealth of its people and in its material progress, it is the greatest of all the nations, and yet in world politics it does not take first place. The summoning of the Washington Conference certainly did put the United States in its proper position - that of a leading nation leading the other nations to peace and harmony. I join with the Leader of the Government (Senator Pearce) in the motion expressing our deep sorrow and sympathy with the people of the United States of America in the death of President Harding.
– I wish to associate myself with the motion before the Senate. It signifies our deep sense of sorrow and sympathy with the people of the
United States of America in the loss of their President, and also a sense of sympathy with the family of the deceased President in the loss of the head of the household. But yesterday Mr. Harding was full of life, hope, and plans for the future ; to-day he is so much lifeless clay. Yesterday a word from him could sway millions of his countrymen, and arrest the attention of millions outside his country; to-day, he is but the beginning of a memory. I join with the Leader of the Government (Senator Pearce) and the Leader of the Opposition (Senator
Gardiner) in tendering this message of sympathy to the people of the United States of America.
Question resolved in the affirmative. Honorable senators standing in their places.
page 2178
Debate resumed from 1st August (vide page 1929), on motion by Senator Wil-son -
That the Bill be now read a second time.
– The Minster in charge of this Bill (Senator Wilson) did not give the Senate very much information in his second-reading speech. The impression left on my mind by his remarks was that it was merely a machinery measure containing some necessary but unimportant alterations of the principal Act. On looking into the matter, however, I find that some of tlie proposed amendment’s are of considerable importance, and liable to give rise to some differences of opinion. The Customs Act is a very bulky measure, and I notice by the Bill before us that there is a proposal to repeal a provision as far forward as section 271. It seems to me that it would have been preferable to follow the usual practice in regard to important amendments of an existing Act, and to furnish a memorandum showing the provisions of the principal measure dealt with and the amendments proposed. Such information would have been of very great assistance. . It would be of great advantage if honorable senators had the original measure and the proposed amendments side by side.
– I shall see if that can be done in this case.
– I think the Minister will find that it would be of considerable advantage. Comments on the proposed amendments have been made by the Adelaide Chamber of Commerce. It is pointed out by that body that the tendency is to deal by regulation with matters that ought to be the subject of legislation. It is urged, for instance, that the alteration with respect to warehouse fees in clause 15 is unnecessary. The principal Act definitely sets out the fees to be paid, whereas the proposed amendment states that the fees are to be as prescribed - a comprehensive manner of shifting responsibility from Parliament. With regard to clause 32, it is held that the proposed alteration of section 228 will throw a very great responsibility on the owner or master of a vessel, but I judge that, in the passage of the measure through another place, some of these objections were dealt with, because the Bill now before the Committee contains no reference to certain specific alterations which form the subject of a protest from the Adelaide Chamber of Commerce.
– That is so. The statement which the honorable senator is quoting refers to another Bill.
– With regard to clause 35, which provides that the averment of the prosecutor shall be sufficient, the Adelaide Chamber of Commerce states -
Section 255 of the principal Act has already been found to operate very harshly in certain cases, and an attempt to make it more drastic still ought to be strongly opposed. My council do not know of any other Department of the Crown that can establish a plaint by the mere averment of one of its officers throwing the onus of disproof on the defendant. If the Customs see fit to institute proceedings they
Bhould be made to establish their case byevidence. It is considered that, this clause places dictatorial power in the bands of Collectors of Customs.
I see no reason why the Customs Depart-, ment shpuld not observe the ordinary, rules of evidence. If they have a plaint to make they should produce the evidence to satisfy the tribunal that there is a case. Strong exception is also taken to clause 37, the object of which is to repeal section 271 of the principal Act, the objection being stated thus -
My council urge that the repeal of section 271 of the principal Act be vigorously opposed. The tendency now is government by regulation instead of by Act of Parliament. The repeal of section 271 would place absolute power in the hands of the Minister and deprive Parliament of the opportunity of their undoubted right to be the only taxing power.
That objection is put very forcibly.
– And the provision objected to is not in the Bill.
– Those are the main points that have been raised by the Adelaide Chamber of Commerce. I am not sufficiently acquainted with the administration of the Act to say how far they are justified, though on their face they appear to establish a jirimd facie case for a careful examination of the pro posed amendments. I put this view before the Minister, and hope that when replying to the second-reading debate he will deal with the points raised more fully than he did in his second-reading speech.
– I join with Senator O’Loghlin in taking exception to the clauses of the Bill which he has mentioned. This measure is a continuation of the system under which the government is drifting into the hands of Departments. This practice of legislating by regulation threatens to break down all our parliamentary safeguards. The position was bad enough before, when regulations had to be laid on the table of Parliament for a certain number of days before they became effective, but it will be infinitely worse in future if they are to take effect from date of publication in the Gazette. I do not know whether the Minister (Senator Wilson) will be prepared to explain the reason for the proposed alteration. I know he followed Senator O’Loghlin very closely, but possibly it may be thought not to be within the province of the Labour party to have any regard for objections to legislation raised by a Chamber of Commerce, since there is believed to be a natural antipathy’ between persons representing the respective parties.
– I think the honorable senator urged that it should be treated as a non-party matter.
– I hope the Labour party will always be prepared to ventilate the grievances of any section of” the community. We were informed by the Minister that this was merely a machinery measure, and I believe it passed another place with very little discussion in the belief that its provisions were unimportant. Any one who is at all alert must realize that several clauses, which doubtless have been framed to assist the expeditious administration of the Customs Act, need careful consideration.
– This measure has been primarily designed for the purpose of providing that goods imported into Australia by aircraft shall be dutiable at the same rates as imported goods discharged by seagoing vessels. It is deplorable to realize that goods imported into Australia during the financial year 1922-23 have been taxed to the extent of £32,872,109. The Government believe that the carriage of goods by aircraft will develop very considerably, and now wish to collect revenue from importations of foreign goods manufactured in . countries where the wages are low and the operatives sweated. Some honorable senators, and a number of honorable members in another place, believe that under a Protectionist policy local manufacture is encouraged, but such is not the case. It has never had that effect in any country. It has been stated by enthusiastic Protectionists in this Chamber that large numbers of capable and honest workmen in Australia are still unable . to secure employment. Many who are saturated with Protection do not realize the true cause of unemployment. In America and other Protectionist countries, large numbers of men are vainly seeking work.
– What is the position in -England, which is aFree Trade country?
-Grea.t Britain is not aFree Trade -country,, . as a large proportion of its revenue is derived from the Customs House. Tea and other . commodities imported into <Ga-eat Britain are heavily taxed, but in that country the duties thus imposed ; are regarded as re-venue and not as . Protective duties.
– Fiji bananas are notbeing imported . into the Commonwealth
– No,, and the supplies from Queensland . and northern New South Wales . are of an inferior q-uality. There . are largenumbers of unemployed in the Commonwealfch, . despite our Protective policy. Although the . Government are . taking further precautions to ‘.prevent the importation of goods without -the payment of duty, foreign-made goods will still continue to . come into Australia irrespective of the duties imposed. After years of arduous toil a tunnel between Switzerland and Italy, which is the longest in the world, was constructed in order to facilitate trade, but immediately the work was completed Customs barriers were established to prevent trade between the two countries. Quite . recently -a tunnel connecting the eastern and western portions of the southern islandof . New Zealand was completed, but in that case Customs officers were not stationed at each end. It does not matter whether Customs officers are stationed at the ends of a tunnel or at the port where goods are discharged ; we cannot disregard the fact that Customs duties are imposed in order to secure revenue, and not to provide additional employment for the workers in the country in which they are collected. When one sees enthusiastic Nationalists and ardent Labour men joining forces one may be . quite sure that somebody is on the . wrong side. . Surely there oan be no doubt in the mind of any person that foreign goods are still coming to Australia. To the extent to which they come the so-called Protectionist policy has no effect in increasing the -volume of work in Australia.
-Does the honora’ble senator argue that manufacturing indusdustries have . not increased in Australia on account of the Protective Tariff?
-I do not dispute that for one moment. We are qxvite unable to say to what extent they would have increasedhad we not had a high Protective Tariff.
– Had ‘there been mo Tariff Australia would have had no manufacturing industries.
SenatorGRANT. - That is purelya matter of opinion, with which I do not agree.Honoranle senators should . realize that the Tariff was designed primarily to secure revenue, and thereby avoid the necessity for imposing taxation in ithe direction suggested by ‘-interjection : by Senator Findley. -‘Senator Findley knows very -well that df a proper land tax were imposed, and by that means the Exchequer were kept filled, there would be no occasion to raise revenue by other means. Honorable senators opposite, wh’o believe in the policy ‘of Protection, ‘know very well that as long as the Exchequer is filled by the revenue -received from Customs and Excise duties, there will be no necessity to ask the wealthy people to pay taxation. That is the basic reason why, in . all countries to-day, the wealthy people are found advocating high Protection. There are tens of thousands of honest workmen who favour that poliqy also, but I believe that they ure mistaken in itheir views.
– Thereare wealthy men on the side of the Free Traders.
– The wealthy nien are not among those who advocate the imposition of a straight-out land values tax.
– Certainly they are.
– I do not know of any. This Bill has been designed to prevent leakages which are interfering with the proceeds from our glorious policy of Protection ! I feel sure that the Senate will support the Government in its endeavour to stop those leakages, and to secure as- much revenue as possible from the importation of goods produced in foreign countries.
– When introducing this Bill I stated that it was largely a machinery measure; and so it is. Senator O’Loghlin has referred to the particulars which have been supplied by the Adelaide Chamber of Commerce in a. letter which, I think, most honorable senators received on 28th July last. When I received that letter I looked up the Act, and became somewhat confused on account of the fact that a number of sections have been incorrectly stated. I discovered that, although the Adelaide Chamber of Commerce is usually a live body in watching the legislation that is passed by this Parliament, on the present occasion it is a little behind the times, inasmuch as many of the amendments which they suggest are in the original Act, and others are incorporated in this Bill. Clause 15 of the Bill proposes to amend section 80 of the principal Act. It is a desirable amendment which will permit the Department to adjust the fees as circumstances may require. It also obviates the necessity for cancelling licences, and requiring the renewal of a licence in the event of fees not being paid by the prescribed date.
– Instead of having certain defined fees the practice will be to prescribe the fees.
– Yes. Clause 20 relates to the clearance of ships and aircraft. The insertion of sub-clause 3 will meet the objections which have been raised by the Adelaide Chamber of Commerce. Clause 32 repeals section 228 of the principal Act. Sub-clause 1 applies to any person who knowingly contravenes the law in tbe manner indicated. This provision already appeal’s in the principal Act, and the amendment provides only for the inclusion of aircraft. Clause 35, to which Senator Gardiner referred, was drafted to meet the difficulty which arose on account of the judgment” given in a Customs case. A limited’ company was charged with an attempt to defraud the revenue, but the Judge held thatunder the provisions of the section) the defendant, company could not ‘ be convicted of an attempt to defraud the revenue. It is very undesirable that this condition should be continued, and the Crown Law officers have accordingly advised the insertion of clause 35 to remedy the difficulty.
– The company coufd be convicted under the clause whether it was guilty or not.
– No. The Department has always held that the law should be interpreted to make a body corporate liable for any offence committed by its servant or agent acting for it. In view of the ‘ruling of the Court, it would still be impossible, unless the amendment ls made retrospective, to take action in the event of a past offence of a body corporate being discovered.
Question resolved in the affirmative.
Bill read a second time.
In Committee :
Clauses 1 to 13 agreed to.
Clause 14 -
Section sixty-five of the principal Act is amended by adding at the enid thereof the following sub-section : - “ (2.) When any aircraft is lost or wrecked at any place within the Commonwealth, the pilot or owner shall, without any unnecessary ti el a v. make report of the aircraft and cargo by delivering to tbe Collector a Manifest, as far as it may be possible for him to do so, at the Customs House nearest to the place where the aircraft was lost or wrecked.
Penalty : Twenty pounds.”
– This clause seems to be of such a sweeping character that it might be held to apply to any type of aircraft, whether coming from overseas or used within the Commonwealth. Should it not be made to apply to what the clause aims at particularly, namely, aircraft from overseas?
– No duty is collected unless goods come from overseas.
– That is so, but the pilot would be obliged to furnish a report.
– No.
– The first thing that would concern an airman who met with a mishap in the north-west of Western Australia, or in the centre of Queensland, would be to get his machine under way again. He would not want to furnish a report to the nearest Custom’s officer regarding the goods he had on board. I move -
That after the word “ aircraft,” first occurring, the following words be inserted : - “arriving from parts beyond’ the seas.”
.- Would that amendment be sufficiently comprehensive ? It pre-supposes that only aircraft from outside Australia would be likely to have dutiable goods on board. A ship might be wrecked within Australia, and dutiable goods from it might be carried by aircraft to other parts of Australia.
Amendment agreed to.
Clause as amended agreed to.
Clause 15 (Warehouse fees).
– In replying to the discussion on the motion for the second reading, the Minister gave some additional information regarding this clause, but I still think that more is required. It is proposed to sweep away the definite provision relating to what the parties are to pay, and to substitute for it the comprehensive clause under consideration. The parties will have no means of knowing where they stand. The clause is too wide and too vague.
– Departmental officers have carefully considered this question, and when doing so they had before them the letter to which Senator O’Loghlin has referred. Clause 15 abolishes the fixed schedule of fees payable by licensees of warehouses, and makes provision for prescribing the fees by regulation. This will permit of the fees at present fixed in schedule 2 of the Act being fixed by regulation and altered as circumstances require. The present procedure under section 80 also gives rise at times to considerable trouble owing to the dates of payment of licensees fees being specifically mentioned. If such fees, through oversight, are not paid on, say, the first day of January, the licences and securities have to be cancelled and fresh ones issued. A regulation will be issued prescribing the fees and dates of payment. It is more a matter of meeting the wishes of the agents than conferring an advantage upon the Department. The matter has been thoroughly investigated, and, had it been reasonable to do so, the request would have been granted.
Clause agreed to.
Clauses 16 to 23 agreed to.
Clause 24 -
Section 131 of the principal Act is amended by adding at the end thereof the following sub-section : - “ (2) This soetion shall not apply to goods intended for . purposes of trade, or goods intended for consumption in Australian waters on trading vessels, or intended for consumption within the Commonwealth on trading aircraft, owned or managed by the Commonwealth.”
Section proposed to be amended: -
No goods, the property of the Commonwealth, shall be liable to any duty of Customs.
– This clause seems to involve an important principle that was embodied in the Commonwealth Shipping Bill. It will apparently place Commonwealth ships- in an advantageous position in - competing with other vessels in Australian waters. The clause is therefore an infraction of a principle laid down and boasted of by the Government.
– No. It provides for a duty to be paid.
– If that is so, I am glad to hear it.
– The provisions of the principal Act requiring regulations to bc submitted to Parliament appear to have been struck out, but I think that they should be restored. I take it that the words printed in erased type, in the memorandum accompanying the Bill, have been deleted by another place. I propose to move -
That the following words be added to the clause: - “Provided that all regulations made under this Act shall be laid before both Houses of the Parliament within seven days after the date of publication, or, if the Parliament is not then . sitting, then within seven days after the next meeting of the Parliament; but ‘if either House of the Parliament passes a resolution, of which notice has been given at any time within fifteen sitting days after the direction has been laid before that House, disallowing the direction, the direction shall thereupon cease to have effect.”
I protest against the deletion of the foregoing words from the original Act.
– (Senator Newland). - I point out that the words the honorable senator proposes to insert do not apply to the clause under the consideration of the Committee. They refer to section 157f of the principal Act, which, under clause 3 of the Bill, is repealed.
– The words shown in the memorandum as having been deleted and to which Senator Gardiner has referred have already been struck out. This Committee, by passing clause 3, has agreed to their deletion. It is not necessary to provide specifically that the regulations be laid before Parliament, because, according to the Acts Interpretation Act that course must be followed.
– Not only have the words referred to by Senator Gardiner been struck out, but, according to the memorandum, it is proposed to make similar deletions in other parts of the Bill. We may take it, therefore, that the deletions are intended to provide uniformity, and to simplify the measure. If the provisions that safeguard the interests of the people by requiring the regulations to be laid on the table of both branches of the Legislature are deleted, will there be the same opportunity as previously existed for Parliament to consider the regulations?
– Yes.
– I still have my doubts, but I shall not press the amendment
Clause agreed to.
Clause 25 (Manner of making protest).
– In connexion with disputes as to decisions, I would point out to the Minister (Senator Wilson), and I hope he will convey what I have to say to the Minister for Trade and Customs (Mr. Austin Chapman), that, in country ports, some collectors of Customs are very diffident indeed about taking the slightest responsibility. We pay these men a reasonable salary, but they are averse to accepting a responsibility which, in a mercantile establishment, is imposed upon an ordinary junior clerk.
– I think that, without reference to the Central Administration, they are not allowed to give any decision affecting a dispute in which more than £5 is involved.
– That is a practice which I would like to see altered. The sub-collectors of Customs should have more authority. Probably they have sufficient power, but, through long service in the Department, they are afraid to exercise it.
Clause agreed to.
Clauses 26 to 34 agreed to.
Clause 35 -
Section 255 of the principal Act is repealed, and the following section inserted in its stead : - “ 255. - ( 1 ) In any Customs prosecution the averment of the prosecutor or plaintiff contained in the information, complaint, declaration, or claim shall be primd facie evidence if the matter or matters averred. “ (2) This section shall apply to any matter so averred although -
evidence in support or rebuttal of the matter averred or of any other matter is given by witnesses; or
the matter averred is a mixed question of law and fact, but in that case the’ averment shall be prima) facie evidence of the fact only. “ (3) Any evidence given by witnesses in support or rebuttal of a matter so averred shall be considered on its merits, and the credibility and probative value of such evidence shall be neither increased . nor diminished by reason of this section. “ (4) Sub-section (1) ofthis section shall not apply to -
an averment of the ‘intent of the defendant ; or
proceedings for an indictable offence or an offence directly punishableby imprisonment. “ (5) This section shall not lessen or affect any onus of proof otherwise falling on the defendant.”
Section proposed to be repealed : - 255. In every Customs prosecution the averment of the prosecutor or plaintiff contained in the information, declaration, or claim shall be deemed to be proved in the absence of proof to the contrary, but so that -
When an intent to defraud the revenue is charged the averment shall, not be deemed sufficient to prove the intent, and -
In all proceedings for an indictable offence, or for an offence directly punishable by imprisonment, the guilt of the defendant must be established by evidence.
– Notwithstanding the explanation of the Minister (Senator Wilson), I strongly object to the provisions contained in this clause. The Minister has told us that the Department has experienced some difficulty in getting convictions under the law as it stands. Possibly that was because the Customs Department did not have a good case. Similarly drastic provisions are not contained in any other Act. It is a principle of British justice, if I may be permitted to use a hackneyed expression, that the person accused shall be deemed innocent until proved guilty, and this provides that the mere averment of the prosecutor shall be prima facie evidence of the guilt of the person accused. I feel inclined to vote against the clause.
– I informed the Senate in my second-reading speech why it was deemed advisable to include this provision. I can assure honorable senators that it is necessary, and that it applies generally in all Customs matters.
– The Minister’s explanation is not very convincing. Section 255 of the principal Act contains in paragraphs a and b the safeguard that when an intent to defraud the revenue is charged and in all proceedings for an indictable offence, or for an offence directly punishable by imprisonment, the guilt of the defendant must, be established by -evidence. In -all our Customs legislation we have gone a great deal farther than is permissible in connexion with any other Department, but we should be careful not to do away with all safeguards. In . searching for dutiable goods, the Customs officials necessarily must have a good deal of latitude, but that is quite a different matter from presuming that the averment of the- prosecutor must be regarded as primd facie evidence of the guilt of the person accused. The evidence of the prosecutor should be taken for what it may be worth. I see no good reason for any alteration of the existing provisions, meijely to make it easier for the Customs Department to obtain convictions, because, even if convictions are obtained, the person convicted may -be quite innocent. I shall require a better explanation from the Minister before I consent to the elimination of a safeguard which the Parliament, in its wisdom, placed in the original Act.
– I am surprised that, on an important matter like this, we have not had a formal protest from Queensland Chambers of Commerce. In the absence of any such communication, I can only come to the conclusion that the provisions of the Bill have not been brought before those bodies. With the Leader of the Opposition (Senator Gardiner), I prefer the provisions of the original Act. The averment of the prosecution should not, of itself, be sufficient.’ If no amendment is submitted, I shall vote against the clause.
– The Minister’s explanation or lack of proper explanation is not satisfactory. He has told us that this provision is included in all Customs Acts. That fact alone does not make it a right principle.
– It is an amendment of the present Customs Act, at all events.
– Yes, and I know that we have objected to proposals to include similar provisions in other Acts, because it is an inversion of the well-known principle of British law that an accused person should not be required to prove himself innocent. The’ onus of proof must be on the prosecutor. The Minister (Senator Wilson) should be more explicit when replying to questions asking for information on important questions . like this. I am glad that Senator Thompson intends to vote against the clause. I hope that the Minister . will withdraw it, rather than risk having it struck out of the Bill. I direct attention especially to paragraphs a andb of sub-clause 2, and placing myself momentarily in the position of a defendant, I ask what hope would I have of escape, no matter what answer I might have to the averment of the prosecution. I shall oppose this amendment of the law, as I would prefer the whole clause to be deleted.
– Before the clause goes to a division, I desire to move that the following sub-clause be added after subclause 5 : -
In all proceedings’ for an indictable offence, or for an offence directly punishable by imprisonment, the guilt of the defendant must be established by evidence.
The effect of the amendment is to retain paragraph b of section 255, which it is proposed to delete.
– (Senator Newland). - If those words are inserted the clause will be contradictory. It is already provided that certain evidence shall not be necessary; but the proposed amendment makes it mandatory that that evidence shall be forthcoming.
– Does not paragraph b of sub-clause 4 cover the point mentioned by Senator Gardiner?
-I prefer the wording of the original Act.
– Sub-clause 4 provides -
Sub-section 1 of this section shall not apply to
an averment of the intent of the defendant; or
proceedings for an indictable offence or an offence directly punishable by imprisonment.
I do not see why the provision should not remain in the direct form inwhich it appears in the original Act.
. - This provision is substantially the same as that in the original Act, and the proposed -wording has been adopted to -conform to the section as redrafted. Senator Gardiner is afraid that a person might be placed in prison on the averment of a Customs official, but that possibility does not exist, because the other clauses give the protection provided in the . sub-clause which Senator Gardiner wishes to be inserted. “Until I read paragraph b of sub-clause 4 I was inclined to agree with the argument submitted by Senator Gardiner, who is anxious to prevent an individual from imprisonment on a mere averment by -an official of the Department.
– Yes, or the possibility of a prima facie case being established, and the case going to another Court on the averment of an official of the Department. A person should not be put to that trouble if the evidence supports his case.
– Whatever protection a person has under the original section he has, in effect, under paragraph b of sub-clause ‘4 of this clause-
– I desire to make it doubly sure, so that even a magistrate cannot blunder.
– That is impossible.
Senator NEEDHAM (Western Australia [4.40]. - I do not believe that paragraph b of sub-clause 4 meets the point raised by Senator Gardiner.
-brockman. - It will meet what Senator Gardiner’s . amendment seeks to achieve.
– Sub-section 1 of section 255 reads -
In any Customs- prosecution the averment of the prosecutor or plaintiff contained in the information, complaint, declaration, or claim shall be prima facie evidence of the matter or matters averred.
Sub-clause 4 of this clause reads -
Sub-section 1 of this section shall not apply to-
an averment of the intent of the defendant; or
proceedings for an indictable offence or any offence directly punishable by imprisonment.
We are anxious to prevent the possibility of a conviction by a Court presided over by a resident or police magistrate or a justice of the peace on a simple averment by any Customs official. I do not know whether the amendment submitted by Senator Gardiner is in its proper place; but the Committee should be very careful before allowing the clause to pass in its present form. The averment of a Customs official might make a convict of an innocent man.
– Senator Needham has just quoted sub-section 1 of section 255, and paragraphs a and b of subclause 4 of clause 35 of the Bill. The ordinaryrules obtaining in Courts apply unless amended by this measure. The onus of proof is on the Crown unless we alter it by Statute. We are providing that in certain cases the averment of the Crown shall obtain, and the fact that it has been averred, unless proved to the contrary, must be accepted except in any proceeding for an indictable offence or an offence directly punishable by imprisonment. Senator Gardiner is attempting to re-establish the principle that in a criminal charge a simple averment is not sufficient, and that the Crown must prove its case. If sub-clause 4 were not embodied in the Bill a simple averment would be sufficient, but the insertion of this subclause re-establishes the position which exists in the original Act, and which obtains in common law. I am just as keen as is Senator Gardiner that in all criminal matters, particularly where a person’s liberty is at stake, the Crown should not place the onus of proof om the accused. I believe the position is covered in its present form as much as it is in the original Act.
– Would this apply to fines ?
– No; but it would where a man’s liberty was at stake.
– It would appear that an attempt has been made to lessen the rigour of the law under section 255 of the principal Act, which reads -
In every Customs prosecution the averment of the prosecutor or plaintiff contaiued in the information, declaration, or claim shall be deemed to be proved in the absence of proof to the contrary, but so that -
In. the amendment we propose to allow the original Act to stand except in regard to certain classes of cases, of which Senator Drake-Brockman has mentioned one. Under the principal Act an indictable offence was included.
– No.
– In the Bill it is quite clear that an indictable offence does not come under the old section. I direct Senator Gardiner’s attention to the mixed averments which involve law and fact. In such a case the averment’ of fact is to stand, whereas it will not follow that the averment of law. shall do so, consequently the position has been relieved. . Senator Gardiner’s fears are not well grounded, as Senator Drake-Brockman has already pointed out that sub-clause 1 sets out the position very clearly, and, therefore, the existing law will apply.
– Notwithstanding what Senator Drake-Brockman and Senator Lynch have said, I still maintain that the explicit provisions contained in the principal. Act should not be deleted unless very good reasons are given. The Parliament which enacted them evidently thought they were necessary, and there does not appear to be any justification for their deletion. If the protection given in the principal Act is still preserved, there should be no objection to adopting the additional sub-section which I have suggested. The words of the subjection are clear and explicit. Therefore
I do not think any harm will be done if the Committee agrees to insert them as an addition to the proposed new section.
– The honorable senator proposes to insert something that has always been the common law of thecountry.
– I realize that common law is quite as good as Statute law. I am endeavouring to have this amendment accepted, because I fear that the Government is atttemping to alter what has been the common law, and to have a special law for Customs officials. Even in the ‘most trivial matters that system is altogether wrong. Why do we permit it in our Customs laws? Because Customs officials find it difficult, to carry out their duties if they have to stick to the old common law. I do not favour making things easier for officials in the Customs Department, and harder for the persons who trade through the Customs House. Those whom I represent have very little to do with the Customs House; they have never been fined large sums of money for defrauding the Customs revenue, as have some of the people whom honorable senators opposite represent. T desire to retain the wording of the old Act because in my judgment it is so clear and plain . that it cannot be mistaken. If it does not conflict with this clause, no harm will be done ; on the contrary, we shall make assurance doubly sure. If it is not in accordance with the clause, strong reasons should be advanced for striking it out. Notwithstanding the arguments of Senator Lynch, and the excellent case made out by Senator Drake-Brockman,I. still fail to see why there is any occasion to interfere with the wording of the old Act. I am very suspicious. The trend of legislation during the last ten years has taught me that every Parliament in Australia is working at breakneck speed to make things easy for the Departments, and is forgetting the old safeguards of liberty. For twenty years this sub-section has done good service. Suddenly a new Minister, who has not had much experience, asks us to alter it. What difficulties have occurred during its operation which make necessary its repeal ?
– I have stated the difficulty which has been experienced by the Department, rendering necessary this alteration.
– It ia being altered to make matters easier for the Department.
– The Department has to put the law into practice.-
– That bears out my complaint against this and other legislation, which tends to make it easier to obtain convictions against people who are annoying the Departments.
– To some extent I am responsible for the form in which the Bill leaves the Committee. If I can avoid it, I do not desire that clauses of a contradictory nature shall appear in it. I point out to Senator Gardiner that if his amendment is inserted where suggested by him it will be distinctly contradictory. The honorable senator i3 also repeating words, that already appear in the clause. I suggest that he move the insertion of this new sub-clause as a proviso to sub-clause 1. It will then read -
Provided that, in all proceedings for an indictable offence or for an offence directly punishable by imprisonment, the guilt of the defendant must be established by evidence.
I point out also that paragraph b of sub-clause 4 contains the words -
Proceedings for an indictable offence or an offence directly punishable by imprisonment.
It will thus be seen that there will be a repetition of those words if the amendment is agreed to in its present form. I do not take the responsibility of ruling the amendment out of order, but I suggest its insertion after sub-clause 1, in order to make the clause read correctly.
– I accept your suggestion, Mr. Chairman, with a view to effecting the purpose mentioned by you.
Amendment, by leave, amended accordingly.
– Senator Drake-Brockman put the position very clearly when he stated that the provisions of the clause meet the whole of Senator Gardiner’s case. The Crown Solicitor has gone into the matter very carefully, and the clause has been drafted in such a way as to facilitate the work of the Customs Department, having due regard to the necessity for meting out that justice to which Senator Gardiner referred. I am sorry I cannot accept the amendment, and I ask the Committee to negative it.
– I quite agree with the Minister (Senator Wilson) and Senator DrakeBrockman that the clause as it stands amply protects all parties. When Senator Gardiner, first raised the question, I thought he had discovered that something had been done to which the Committee could not agree. Further consideration of the matter and a careful examination of the clause led me to the conclusion that there was not as much in his contention as I at first supposed. The clause deals with three kinds of offences against the Customs Act. Subclause ia refers to an offence in which there has been an attempt to defraud the Customs Department. In a case of that description it would be necessary to call evidence to prove intent. Then there is a reference to proceedings for an indictable offence or an offence directly punishable by imprisonment. In such a case it would be necessary to call evidence to prove the guilt of the person charged. There is a third class of offence, in which there is no intent to defraud the Department or to bring into Australia contraband goods. That is the small offence committed from month to month by the commercial community, more particularly by clerks. A clerk goes to a Customs House to pass an entry. Without any intent to defraud the Department, he unknowingly makes a false statement which may have a .very serious effect upon the Customs revenue. When it is discovered the Customs Department decides to institute a prosecution, in view of the amount of revenue involved. If the clause remains as it is at present drafted, it will be sufficient for the Department to produce before, the Court the entry made by the clerk; there will be no necessity to call evidence. There would be no evidence which they could call.
– Would my amendment interfere with that?
– If the honorable senator’s amendment is agreed to by the Committee, it will be necessary for the Department not only to produce the entry, but to call evidence to prove; the committing of the offence. An offence of that sort is1 generally admitted; the firm charged does not put forward any defence.
– If they did not admit it the statement of the Department would be accepted as proof.
– Only so far- as those proceedings were concerned ; but if the firm was still of opinion that some one else had passed the entry in their name with a view to prejudicing them in the eyes of the Department or the public, it could always appeal’. I do not know of an instance where such a difficulty has arisen, but I have known numbers of cases where false . entries have been passed unknowingly by clerks. They have made the usual declaration that everything . contained in the- entry was “ true and correct,’’” and it has turned out afterwards- that- something was incorrect. They have been haled before a magistrate and fined, a nominal amourufc. Not the , firm, but, the. person passing the entry, would be fined.. It is quite suffi cien.t,. in these, cases, to produce the entry which tha clerk attempted to pass. There is no necessity to call, other evidence. The clause- will save time and money, and no harm can result to any one. Cases in which there is an intention to introduce “contraband or to defraud the Customs Department of large or small sums of money are not identical. These are covered already; they cannot be dealt with by a mer* averment, and evi’dence mast be tendered; in support of the* charge.
– Senator Duncan has supplied splendid arguments, why S’eiiator Qarcfiner’s amendment should be agreed to-. He said that a Customs clerk might go to the Customs desk and unintentionally put in a statement which was afterwards discovered to be false. There is- a vast difference between the words “false” atnd . “ wroniSf’.” Tbei honorable senator has said that an error might be made: in presenting tha statement,; and that it might.be committed, by a.. very junior clerk under instructions from the. head of the firm.. Such a statement could not be :‘faise ‘’” if it were made in error. There might be no intention to defraud, but if the clause is passed a man can be fined ari the “mert averment of a Customs officialsEvidence should be- called to- prove that the defendant wilfully made a wrong or false entry, with intention to defraud. Senator Drake-Brockman- has- said that the amendment moved by Senator Gardiner is not necessary and that the- common la,w already protects, the individual. If the- clause- is passed the common law will be- no protection to- the individual,, because he may be fined - I will not say he can be imprisoned - without evidence being, called. The very fact that a man is haled before a court of justice and fined means that a conviction is recorded against him as a citizen. The clause will provide easy machinery for that bad mark to be recorded against him,
– Why not vote against the clause instead of seeking to amend it ?
– I will do anything to defeat the object of the clause. In the first place, I shall vote for Senator Gardiner’s amendment, and, failing success in that, I’ shall vote against the clause. I, as a citizen, hold that I ought not to be either fined or imprisoned! without aja opportunity being given to me to tender evidence in preof of my innocence. Senator Wilson says, “ I am advised by the Department that this is right.” I suggest to him that he is not placed in his present position to be led by the Department, or to accept all that departmental! officers say to- him.
– I’ do not.
– I do not say that the Minister does, but in the preisent instance the only argument he has adduced in. defence; of the clause, is that the Department, on the one hand, and Senator Drake-Brockman, on the other, believe that it is necessary. He has not stated his own opinion one way or the other.
– The Minister has stated that he is- concerned about the Department,, and has asked the Committee to pass, the clause in. ordier t& convenience it. I am concerned about the mercantile community of Australia. There is no- danger from the clause- in capital cities like. Melbourne and Sydney, where Customs Act procedure’ is well understood, but it would be very undesirable in distant places if a magistrate- could decide against a man- on the mere averment of a Customs official. There might be differences of opinion between an honorable firm and the Customs Department, and they might result in a prosecution. The magistrate, if the clause is passed, would probably take the departmental statement for granted. I want to avoid that sort of thing. The clause should be deleted and the section of the Act allowed to remain. We appear to be reverting to the principle applied to the mercantile community of Australia by the first Minister for Customs. He decided that they were all rogues unless they could prove themselves honest. The clause says that the Customs Department is quite correct, but those opposed to it may not be correct. I urge the deletion of the clause.
.- I cannot understand the object of Senator Gardiner in moving the amendment. If he admires the law as it stands, he should adopt the simple expedient of voting, and persuading honorable senators to vote against the clause. The provision is exactly the same as that contained in the Arbitration Act. I am not prepared at the moment to argue definitely that it is a good provision, but there are certain classes of offences which are commonly regarded as being extremely difficult to prove. Some of these are offences against the Customs Acts, and others are offences against tbe Arbitration Act. In order to make the law effective, Parliament decided to place upon the- defendants the burden of disproving their alleged guilt. That is a very drastic change in our law, but, nevertheless, in these two classes of cases, the principle has definitely been adopted. If ona is in favour of that change, it seems to rae that one should support the clause, because it makes no drastic change in. the- law, but merely attempts to» make more effective a change, which has already been agreed to. Thei Courts have held that the provision in the Arbitration Act has a very limited application. For example, it was held that the section had no application where a question of mixed law and fact was involved. The clause seeks to improve the law in that respect by providing that, although there is a question of mixed’ law and fact involved, the section shall apply, but to tha extent only of the averment of fact, and not as to the averment of law. That is the meaning of paragraph 6 of sub-clause 2,.
– Will not that make the existing law easier ?
– It will make the existing law more easy -of- application. The Court having held that where mixed questions of law and fact were involved, the whole section in. the priucipal Act went by the board, the Customs Department received no benefit in those cases from the section. The clause provides that it shall get the benefit, in so far as the facts only are concerned. The Court also held that where the Department did not rely strictly on the averment, but proceeded to strengthen it by calling evidence, it then waived the benefit of the section. Having once given evidence, it had to> go the whole length and prove the case throughout. There seems to be no reason why, if the Crown elects to strengthen its cas.e by calling evidence, it should lose the benefit of the section.. Honorable senators, need not feav that they will be making the law more drastic by agreeing to the. proposed change. On the general question whether we should interfere, with the common law to the extent of throwing the . burden of proof upon the defendant in all similar cases, including industrial cases, I am not at present prepared to argue but having adopted the principle, we should not be averse to going a step farther and making the section which deals with it workable.
– I support Senator Gardiner’s amendment, and I agree with Senator Thompson that the whole of the- words proposed to be struck out of the section proposed to be amended ought to be retained. I believe that no man should be deemed to be guilty until he is proved so. The duty is on the Crown to bring home the offence to any person charged. In South Australia, in connexion with the Insolvency Act and in other instances, I have seen a- well-recognised principle of British justice violated by placing on the defendant the onus of showing his. innocence, whereas it ought to be the duty of the informant to prove the defendant guilty. I wish that Senator Gardiner had seen fit to move for tha deletion of the whole clause.
Question - That the words proposed to be inserted (Senator Gardiner’s amendment) be so inserted - put. The Committee divided.
AYES: 11
NOES: 13
Majority … … 2
AYES
NOES
Question so resolved in the negative.
Amendment negatived.
– Although there might have been some complication if the amendment proposed by Senator Gardiner had been agreed to, the consensus of opinion seems to be that the whole clause should be deleted. It contains drastic and unfair provisions .
– I intend, unless a satisfactory explanation is forthcoming, to vote against this clause with a view to restoring the original section.
– Before rejecting the clause with a view to restoring the section in the principal Act, let us consider what the adoption of that course would mean. It was the intention of Parliament that in certain cases, where prosecutions were instituted by the Department, the averment of the Department should be sufficient, protection having been provided for in those cases where punishment by imprisonment followed conviction. In a case before the High Court where the averment was a mixture of law and fact, the Court held that averments as to facts only could be made. Honorable senators can readily understand that it is impossible very often to make an averment intelligible unless it is one of mixed law and fact. The present clause is intended to cover the position, so that an averment of mixed law and fact may be made.
– And without evidence.
– The averment of course, is capable of being rebutted. The principle is contained in the principal Act, but it is so worded that it is unworkable in many cases. I suggest that the wise thing to do is to adhere to the principle, not as it is stated in the principal Act, ‘but as it is now set out in the Bill. The principle has been established for many years, and the clause is intended merely to make it workable in view of the recent decision of the High Court, so that averments may be made in an intelligible way. The law as it stands to-day is liable to abuse. The principle may be wrong but it has been established, and no honorable senator has suggested that we should alter it.
– I think the provision’ in the old Act is sufficiently plain, and that the proposed clause is not clear enough.
– According to the High Court decision the law as it stands is not at all clear.
– I cannot follow Senator DrakeBrockman’s argument. This is not a question only of mixed law and fact. The clause seems to me to be a violation of a principle of British justice, and I inftend to support Senator O’Loghlin’s suggestion. The principle in the original Act is perfectly clear. Before a person is deemed to be guilty he is to be proved so, but the present proposal practically condemns him before he opens his mouth. It is a well-established principle of British law that no man is bound to incriminate himself in his own evidence, and, whether on a question of fact or of law, I object to the proposal. I have seen this principle violated in South Australia, and I do not intend to support its violation in Commonwealth legislation.
– If honorable senators will read the two provisions they will see that they are entirely opposed to one another. The section in the original Act says -
In every Customs prosecution the averment of the prosecutor or plaintiff contained in the information declaration or claim shall be deemed to be proved in the absence of proof to the contrary……
The present clause proposes that an averment shall be accepted as prima facie evidence without proof. I have not seen any evidence of need for a drastic revision of the law. The new provision is altogether different, and entirely alters the scope and tendency of the section in the principal Act.
– The question is whether the clause shall stand, or whether the section in the Act shall be inserted in its stead. Let us see what the Act provides. Section 255 states -
In every Customs prosecution the averment of the prosecutor or plaintiff contained in the information, declaration or claim shall be deemed to be proved in the absence of proof to the contrary…..
I particularly direct the attention of Senator Thompson to the fact that if he votes to strike out the clause with the idea of including the section in the original Act in this Bill, we shall be substituting the provision which I have just read.
– And that is most objectionable to me.
– The section goes on to states - but so that -
That is being repeated in the Bill. We want to be quite clear about what we propose to do. If the Committee strikes out this clause, we shall be re-establishing the law as it stands to-day. The Government desire a modification of the law, and the case on general principles has . been well put by Senator DrakleBrockman. But I think it woiild be just as well if I quoted a case in point, and stated the necessity for an amendment of the law. The case is mentioned in 20 Commonwealth Lata Reports, in which it is stated that where an information was laid, say, under section 33 of the Customs Act, that A.B. did, without authority in accordance with the Act, interfere with certain goods subject to the control of the Customs, in that he did, without the authority aforesaid, remove from No. 10 Wharf at Melbourne certain specified goods which had been imported, but had not been delivered for home consumption or exported to parts beyond the seas, then in the words of Griffith, C.J., in Symons versus Schiff man, “ the allegation that A.B. had interfered with goods subject to the control of the Customs is an allegation of mixed fact and law.” In averring that the goods were subject to the control of the Customs, it was implied that the existence of certain facts made the goods subject to control of the Customs within the meaning of the section, and in averring that they had been interfered with, it was again implied that certain facts amounted to interference with such goods within the meaning of the section. Even though the general averment of the offence was followed by words describing the particular act complained of, the averment was not, as section 255 stands at present, evidence of any facts stated therein, as then the actual facts were placed before the Court and must be proved by evidence.
– That is the old law.
– That is not the old law. It is a statement of what may happen under the law. I therefore invite the Committee not to stultify itself. We are simply considering the question of the principle which appears in an imperfect form in section 255. I ask honorable senators to accept the clause as it stands. It does not seek to establish any new principle, but simply to fix the principle in the existing law, as necessitated by a jiidgment of the High Court.
– The principle to which certain members of my party take exception is embodied in all our Customs Acts, and I take the stand that, no matter what our opinions may be on other matters, we ought to be exceedingly jealous concerning the receipts from Customs. It is easier, under this provision, for a person against whom an averment has been made to prove his innocence than for the Department to prove his guilt.
– That is the crux of the whole debate.
– And, as has been shown, the averment of the - prosecutor will not apply in indictable offences. If I may be permitted to use the vernacular, it should be as easy as “ falling off a log “ for a person wrongfully charged with a non-indictable offence under the Customs Act to prove his innocence.
– It is stated that the averment of the prosecution shall be sufficient evidence.
– Yes, for the person charged to be placed upon his trial and have an opportunity of proving his innocence. I am not going to be inconsistent and vote now against a principle which, I believe, has been operative ever since we have had a Customs Act.
– It is a new principle.
– It is not a new principle at all.
– It has been in the Act since 1901.
– It is not in the principal Act to-day, or this amendment would not be required.
– We have been told why the provision has been so worded. Certain difficulties have arisen in cases where questions of fact and law are involved, and apparently as the result of a decision of the High Court, we are asked now to tighten up the provisions of the Act. I intend to help the Government, because I know that some persons are only too prone to take advantage of any flaws in our Customs legislation. It is not the duty of the Department to prove guilt, but for the person against whom the averment is made to prove his innocence.
– I am sorry that Senator Findley is under a misapprehension as to what we propose to do. The principle contained in this clause is something new. I want to get back to the principle in the Act. It is wrong to place on an accused person, whether he is a big commercial man or in a small way of business, the onus of proving his innocence.
– I am indebted to the Minister (Senator Pearce) for his statement to the Committee. I am just as much opposed to averments now as before, but the Minister has shown that, if we strike out this clause, we shall retain the provision in the existing law. Therefore, much as I dislike the principle of the averment, I shall vote for the clause.
– As I have already stated, if this were the introduction of the principle into our legislation, I would certainly have a good deal to say against altering the common law. But, in1901 this Parliament deliberately incorporated the principle in the Customs Act, and subsequently in its industrial legislation.
– In the Excise Act, also.
– And in the Bounties Acts.
– Therefore, it cannot be regarded as a new principle. It is, in fact, firmly embedded in certain of our legislative provisions.
– But cannot it be regarded as an obnoxious provision ?
– But this clause will not make matters any worse. On the contrary, it will improve the position. In man)’ cases it is practically impossible, without this provision, to prove guilt, and, as Senator Findley has said, it is relatively easy for a defendant to disprove an averment of his guilt. He has simply to produce his books in Court, and reveal the whole position. I point out also that, for serious offences punishable by imprisonment, sub-clause 1 will have no application whatever.
– And also in cases containing mixed questions of fact and law.
– In mixed cases of law and fact, as Senator Drake-Brockman and Senator Pearce have clearly pointed out, the original section, although it was clearly intended to apply, failed as a result of the decision of the High Court. The principal Act is so badly worded that it was held that it could not cover certain cases which the present proposal is clearly directed to include. The fact that the legal phraseology has been somewhat changed involves no change of principle. I am just as anxious as are other honorable senators concerning the liberties and rights of citizens, but as we have deliberately adopted the principle, it should be made workable. It is proposed to delete from the principal Act these words -
In every Customs prosecution the averment of the prosecutor or plaintiff contained in the information, declaration, or claim shall be deemed to be proved in the absence of proof to the contrary.
That is a specific violation of the rule at common law. The proposed new subsection reads -
In any Customs prosecution the averment of the prosecutor or plaintiff contained in the information, complaint, declaration, or claim shall be prima facie evidence of the matter or matters averred.
That is merely stating in legal phraseology the effect of the original section, and the remaining sub-clauses are to make the provision more effectively cover cases which involve law and fact. If honorable senators agree to the principle embodied in the principal Act, they should have no hesitation in supporting the proposed new section.
– I am of the opinion that he who avers must prove, and as the proposal appears to be a violation of that principle, I intend to support the amendment suggested by Senator O’Loghlin.
– Senator O’Loghlinhas not submitted an amendment.
– My learned and gallant friend, Senator Drake-Brockman, and the Minister for Home and Territories (Senator Pearce) have endeavoured to convince us that sub-clause 4 meets our objection, but I am supporting those who are opposing the clause. Subclause 4 reads -
Sub-section (1) of this section shall not apply to -
an averment of the intent of the defendant; or
proceedings for an indictable offence, or an offence directly punishable by imprisonment.
Sub-clause 2, which also relates to this point, still remains. It reads -
This section shall apply to any matter so averred, although -
evidence in support or rebuttal of the matter averred, or of any other matter is given by witnesses; or
the matter averred is a mixed question of law and fact, but in that case the averment shall be prima facie evidence of the fact only.
I am still opposed to the attitude of the Government on this proposed new section, as the position is not clear.
– To clear up any doubt which may exist in the mind of Senator Benny and other honorable senators, I move -
That the words “Sub-section (1) of” in subclause 4 be left out.
The sub-clause would then read -
This section shall not apply to -
An averment of the intent of the defendant, or
proceedings for an indictable offence, or an offence directly punishable by imprisonment.
The provision will . then, to my mind, have exactly the same effect as at present, but if the amendment is adopted, it wijl remove all doubt as to its application to sub-clause 2, to which Senator Benny referred.
– The amendment moved by Senator Elliott will not remove my objection to this provision, because sub-clause 2, which is the objectionable portion will still remain. If we are to deal with the matter effectively the whole clause should be negatived, and the law in this respect would remain as it is to-day. The object which Senator Elliott has in view will not be achieved by the deletion of the words he proposes to omit.
– In the limited time at my disposal, I have been unable to consult the draftsman to ascertain the effect of Senator Elliott’s amende ment, and I therefore ask him not to press it at this stage.
– If the Minister (Senator Wilson) will give me his assurance that he will consult the draftsman, and, that if necessary, the clause will be recommitted, I am prepared to withdraw my amendment.
– I shall do that.
Amendment, by leave, withdrawn.
Amendment (by Senator Needham) proposed -
That the clause be postponed.
Question put. The Senate divided.
AYES: 7
NOES: 18
Majority . . . . 11
AYES
NOES
Question so resolved in the negative.
Question - That the clause stand as printed - put. The Committee divided.
AYES: 17
NOES: 7
Majority … 10
AYES
NOES
Question so resolved in the affirmative.
Clause agreed to.
Clause 36 agreed to.
Clause 37 (Regulations).
– I trust that the Minister will not insist on the retention of this clause in the Bill. If he does, I shall appeal to honorable senators to vote against it. It is the most far-reaching and important clause in the Bill. Legislation by regulation is always objectionable. There are occasions, I suppose, when it is necessary; but safeguards should be provided. This clause proposes to repeal section 271 of the principal Act. That section provides -
All regulations so made shall -
Be published in the Gazette,
Take effect from the date of publication or from a later date to be specified in such regulations; and
Be laid before both Houses of the Parliament within seven days after publication if Parliament is in session and if not then within seven days after the commencement of the next session ; but if either House of the Parliament passes a resolution at any time within fifteen sitting days after such regulations have been laid before such House disallowing any regulation such regulations shall thereupon cease to have effect.
It is proposed to entirely dispense with the safeguard provided by that section and to make no provision to take its place.
– The Acts Interpretation Act provides that regulations shall be laid before Parliament and may be disallowed by motion, passed within a certain time of their presentation to Parliament. That provision is not included in the Bill because it would be superfluous to do so.
– The Acts Interpretation Act has been on the Statute Book for many years. If it were necessary to have this safeguard in the Customs Act in the past why should we now dispense with it ?
– We are not dispensing with it.
– Section 271 is to be repealed; therefore we are doing away with the safeguard which it provides.
– The clause provides for the repeal of Section 271 of the Principal Act. That section provides that all regulations which, are made shall be published in the Gazette, and shall be laid before both Houses of Parliament, as the honorable senator has stated. The repeal of that section will not make any alteration in practice, because an amendment of the Acts Interpretation Act which was made subsequent to the enactment of the Customs Act contained the same provision with regard to regulations as is contained in Section 271 . There is no necessity to include that provision in this Bill.
– If an assurance given by a Minister would be accepted in a Court of law I should most gladly accept the assurance which the Minister (Senator Wilson) has just given. But Judges and juries deal with the law as they find it. The control of the Customs has practically passed out of the hands of Parliament, and has been placed in charge of a Board, which can impose and remove taxation. It is quite in keeping with the spirit that animates honorable senators opposite to make sure that nothing shall be left in the Bill which will interfere with the operations of the Board. I am opposed to government by Boards, and I want to provide every possible safeguard. The Minister gave us to understand that this Bill was introduced merely to make the existing legislation apply to aircraft. The few matters brought forward by Senator O’Loghlin have given rise to discussion that will convince most people that the Bill is entirely different from what Senator Wilson said it was. 1 think that we ought to have in this and in every Bill the provision that regulations shall be laid upon the table of the Senate for a certain number of days.
– That will be done.
– I believe that if the Minister remains in charge it will be done. It seems to me a very strange thing that such a provision is not contained in this Bill. A Chamber of Commerce can bring to the consideration of matters an intelligent and practical frame of mind. The Adelaide Chamber of Commerce has put forward very grave reasons for changes to be made in this measure. The Minister should mention some of the Acts that have been passed in recent years without this provision. The Acts Interpretation Act has been in existence for a number of years, but notwithstanding that fact I could point to a dozen Acts passed since I came into this Chamber which incorporate this provision. I protest against its exclusion from this Bill because the whole of the Customs business has been handed over to a Board.
Question - That the clause stand as printed- put. The Committee divided.
AYES: 15
NOES: 7
Majority . . 8
AYES
NOES
Question so resolved in the affirmative.
Clause agreed to.
Clauses 38 to 41 agreed to.
Schedule (Consequential amendments in the principal Act) agreed to.
Title agreed to.
Bill reported, with an amendment.
page 2195
Message received from the House of Representatives, intimating that it had agreed . to the amendment made by the Senate in this Bill.
Sitting suspended from 6.26 to8 p.m.
page 2195
Senator WILSON (South Australia-
Honorary Minister) [8.0]. - I move -
That the Bill be now read a second time.
This measure is by no means new to the Senate. It is practically the same Bill that Senator Gardiner once? presented to the Senate, and it was again presented to the Senate and explained in a lengthy speech by Senator Pearce in the dying hours of the last Parliament. The Bill must be classed among the measures that relate to finance and trade, such as bills of exchange, trade marks, patents, and banking, and such other matters in respect of which the Commonwealth Parliament has already passed legislation. The constitutional authority for the Bill is to be found in Part V. of the Constitution, section 51, which states -
The Parliament shall, subject to this Constitution, have power to make laws for the peace, order, and good government of the Commonwealth with respect to . . .
This is one of the subjects that affect the whole of Australia, and it is very clear that only Federal legislation could put on a satisfactory basis a matter affecting the whole of the population without regard to State boundaries. Trade and commerce should not be trammelled by different laws and different, practices in the several States, and the advantages conferred on trade and commerce throughout the Commonwealth, for example, by the Bills of Exchange Act, should also be conferred by an Act to simplify and consolidate in a single measure the most useful provisions relating to bankruptcy find insolvency law. The different Bankruptcy Acts and rules and practices in the States as they now exist are a distinct hindrance to trade and commerce, especially between the residents of one State and another. Further, a uniform bankruptcy law will facilitate commercial relations between the United Kingdom and overseas Possessions. I find that only recently no less distinguished a person than Judge Moule, of Victoria, speaking of tho value of the Insolvency Court, said -
If the Insolvency Court is working properly there is little danger to the commercial prosperity of the country, as this Court is the guide which stops it from going, astray, . . . If the Insolvency Court is not in a vigorous state there is a chance that the community will slip into a state of commercial dishonesty.
This Bill has involved an enormous amount of labour and research and the consideration of over twenty bankruptcy or insolvency Acts of the United Kingdom and the States. I shall mention some of them, namely, the English Bankruptcy Act 1914, the English Bankruptcy Act 1890, the New South Wales Bankruptcy Act 1898, the Victorian Bankruptcy Act 1915, the South Australian Insolvent Acts 1886 and 1915, the West Australian Bankruptcy Acts 1892 and 1898, the Queensland Insolvency Act 1874 and 1893, the Tasmanian Bankruptcy Acts 1870 and 1899, the English Deeds of Arrangement Acts 1898 and 1914, and also Part XI. of the South Australian Insolvent Act 1886 relating to compositions and assignments without insolvency.
Some inferences may be drawn from the dates of these measures. It will be noticed that, where trade and commerce were in the ascendant, the Acts are of most recent, date, and contain the most up-to-date provisions, and, further, accord more closely with the latest bankruptcy provisions of the English Bankruptcy Acts. The bankruptcy legislation of Victoria, having received recent revision, is most nearly in accord with the English legislation in respect of the latest innovations, especially in relation to trustees and bankruptcy offences and private deeds of arrangement.
The Bill contains fifteen parts and over 200 clauses, so that the explanations of the parts and clauses is essentially a matter to be done in Committee..
– No; that would be asking too much. But to understand the general principles of the Bill and the general scheme, a brief historical and analytical examination is necessary, as the measure is founded largely on the latest English legislation on bankruptcy and the best material to be found in the State Acts. The mercantile community in each State will not easily appreciate at first sight the uniform law in place of their existing laws, but it can be said without hesitation that nothing complicated, but much that is simple, has been introduced to secure uniformity, and that much that should be enacted to simplify procedure and to secure protection for both creditors and debtors’ and prevent, irregularities has been ‘ provided for. Further, the main principles’ of each main State Bankruptcy Act are continued, asthey are, as will be shown, based more or less on English legislation.
To show the common source of most of the State Bankruptcy Acts and points of’ similarity and difference, I shall cite a number of leading measures. The English Bankruptcy Act 1883 succeeded that of’ 1869, and was amended by the Bankruptcy Act 1890, and consolidated by the Bankruptcy Act 1914. This latest Act is the chief measure on which the Bill is framed. The New South Wales Bankruptcy Act of 1898 is a consolidation of all existing Bankruptcy Acts in force in the State in 1898, being based mainly on the English Bankruptcy Act of 1883. The Victorian Insolvency Act 1915 is a consolidation of the Victorian Insolvency Act of 1890, as amended by the Acts of 1897 and 1903. It is based principally on the English Bankruptcy Act of 1869, but it contains provisions adopted from the English Bankruptcy Acts of 1883 and 1890 and the Deeds of Arrangement Act 1898. The South Australian Insolvent Act of 1886- is an Act to amend and consolidate the laws relating to insolvent debtors. These laws, consolidated, were all passed from 1855 to 1882, and, therefore, were framed prior to the English Act of 1883. The provisions of these Acts are, to some extent, based on the English legislation prior to 1883, but Part XI., “ Compositions and Assignments without Insolvency,” was passed in an amended form in South Australia in 1886 - or rather an up-to-date scheme was invented for “ Compositions and Assignments without Insolvency.”
– South Australia has shown the way to other States in legislation of this nature.
– It is certainly very creditable to South Australia. The Queensland Insolvency Act of 1874 is based principally on the English Bankruptcy Act of 1869, while the Tasmanian Bankruptcy Act of 1870 is practically a copy of the English Act of 1869. The Western Australian Bankruptcy Act of 1892 is adopted from the English Bankruptcy Acts of 1883 and 1890, and the Western Australian Act of 1898 is practically a copy of Part XI. of the South Australian Insolvent Act of 1886.
– South Australia is one of the wealthiest of the States.
– The most solvent State in the world.
– There is a curious use of the words “ bankruptcy “ and “ insolvency.” The title “ Bankruptcy Act “ is used in the United Kingdom, the States of New South Wales, Western Australia, and Tasmania. Victoria and Queensland use the expression “ Insolvency Act,” and South Australia “ Insolvent Act.” The term “ bankruptcy “ is the better term, and therefore is adopted for the Commonwealth Bill.
I come now to the question of the application of bankruptcy laws. The Bill will, as in England and Western Australia, apply to the Crown, and to foreigners, and married women; it does not applyto corporations in respect to which windingup provisions are made. The administrative provisions of the Bill are to be found in Part II., and follow closely the English scheme. The system of control is centred in the AttorneyGeneral, and provision is made for an Inspector-General, registrars, and official receivers. Their duties aTe set out in the respective sections relating to them. The administration will be simple and effective, and will take the place of the existing State Administrations, which are hard to define, but which, together with the English system, may fee summed up as follows : - In England the administration (apart from the administration conducted by the Judges and registrars) is carried out by the Board of Trade. There is a special Department of Bankruptcy, which exercises . an active control.
The Board appoints and removes the official receivers; calls for and audits their accounts; where there is no Committee of Inspection, acts, through the official receivers, as a committee; exercises general and effective control over trustees; and examines the receipts and expenditure of trustees of private deeds of arrangements..
The control of trustees by the Boar-d and the creditors is a special feature of the system, and it has been said, “ What with the jealous scrutiny of creditors ranging at large or focussed, and the Committee of Inspection on the one side, and the strict official supervision of the Board of Trade on the other, it demands genius of no common order on the part of a trustee to perpetrate any irregularity.”
In the States there appear to be no separate Departments of Bankruptcy. The officers appointed to carry out the execution of the Bankruptcy Acts, generally speaking, belong to the permanent dtaff of the Crown Law Department. In some States there are officials, whose work may be said to appertain wholly to bankruptcy ‘business, who exercise administrative functions similar to the officials and official receivers performing bankruptcy duties under the Board of Trade. The number of such State officials are few; most of the other officers who perform duties in regard to insolvency attend also to the business of the Supreme and other Courts.
Jurisdiction is provided for in Part LTL of the Bill. In England, bankruptcy jurisdiction is- vested in (1) the High Court; and (2) in certain local Bankruptcy Courts (County Courts). In New South Wales, bankruptcy law is administered by the Supreme Court in its bankruptcy jurisdiction “ by Judge in Bankruptcy,” subject to appeal; and by the Registrar. In Victoria, bankruptcy jurisdiction is exercised by a “ Court of Insolvency,” with powers of Supreme Court, and the County Court Judges of the Insolvency Court, with assigned districts. In South Australia, the bankruptcy jurisdiction is vested in a Commissioner of Insolvency, and, locally, in Stipendiary Magistrates. In Western Australia, the Supreme Court has jurisdiction in bankruptcy, the bankruptcy business being transacted under the direction of one of the Judges assigned for that purpose. In Queensland, the jurisdiction is vested in the Supreme Court, with power to the Governor in Council to appoint any District Court to be a Court of Insolvency. In Tasmania, the insolvency jurisdiction is administered by a Supreme Court Judge at Hobart and a Commissioner in Bankruptcy at Launceston, all powers of the Commissioner in Bankruptcy being exercisable by a Judge of the Supreme Court. The Courts on which bankruptcy jurisdiction will be conferred are such Federal Courts as Parliament creates for the purpose, and such State Courts or Courts of a Territory as are specially authorized to exercise that jurisdiction. No new Courts are created by the Bill. The Courts invested with bankruptcy jurisdiction under the Bill Will have that jurisdiction throughout the Commonwealth or any specified district and proceedings may be transferred from Court to Court or from place to place. Any question of law arising in any bankruptcy proceedings may be referred to the High Court for its opinion. With the exception of certain specified matters, the jurisdiction of a bankruptcy Judge may be exercised in chambers. Officers of the Court exercising bankruptcy jurisdiction are to a more or less extent intrusted with statutory powers and jurisdiction in bankruptcy matters. The jurisdiction provisions of the Bill will be found simple and elastic so as to meet all requirements, and to secure simplicity and prompt transaction of business over wide areas. I refer honorable senators to Part III., which also provides for procedure and evidence.
Divison 1 of Part TV. deals with acts of bankruptcy, and the law in each State on this important matter fortunately shows a great deal of uniformity. The States follow very closely the English provisions. The New South Wales Act practically only differs from the English sections by the addition of some consequential amendments and two additional acts of bankruptcy, viz., being an uncertificated bankrupt according to any Court of competent jurisdiction in or out of New South Wales, and non-compliance with a request to file petition when that request is made by a majority of convened creditors after admission of inability to pay debts. In Victoria, the acts of bankruptcy closely follow those of the New South Wales Act. In the South Australian Act of 1886, the acts of bankruptcy may be said to embrace the principles of the acts of bankruptcy mentioned above. The Western Australian Act is a copy of the English, with consequential local variations. The Queensland and Tasmanian Acts follow the English Act of 1869, which, in respect of acts of insolvency, has been reproduced without any material alteration in the latest English A.cts. The Bill follows closely the English Act of 1914.
As regard procedure, there are some noticeable differences between the English and some of the State practices. First, as to the English Act, the petition in due form having been presented, a receiving order is made. It is not a divesting, but a protecting, order. The official receiver is constituted receiver of the property of the debtor pending the appointment of a trustee. On the receiving order being made, one of three courses may be followed : - (1) The creditors may, without the debtor being adjudged bankrupt, accept a composition or scheme of arrangements; (2) the debtor may be adjudged bankrupt; or (3) the creditors, after adjudication of bankruptcy, may accept a composition or scheme of arrangement effecting the annulment of the bankruptcy. The scheme of arrangement referred to here is distinct from the private deeds of arrangement referred to in Parts XI. and XII. In New South Wales, on a valid bankruptcy petition being presented, the Court makes a sequestration order, whereupon - (1) the debtor becomes bankrupt and continues bankrupt until a certificate of discharge is issued or sequestration is annulled; (2) the property of the bankrupt vests in one of the official assignees until the appointment of a trustee, when the property vests jointly in assignee and trustee. All these cases prove conclusively the necessity for a uniform bankruptcy law. The six different States have different laws in relation to bankruptcy which seriously interfere with the Inter-State trade and commerce. On the sequestration order being made, one of two courses may be taken - (1) composition or scheme, and on acceptance and approval by the Court, the bankrupt may obtain release; or (2) general administration and distribution by trustee. As to the composition or scheme ?i arrangement, New South “Wales has followed, although not absolutely, the English Bankruptcy Act.. In Victoria,- ou valid bankruptcy petition being presented, the Court makes an order nisi placing the estate of the debtor under sequestration in the hands of one of the assignees, and when the order is made absolute, the debtor becomes insolvent.
Bankruptcy does not follow immediately on the making of the “ receiving order “ in England; but it does on the making of the sequestration order in New South Wales, and on the making of the order nisi for sequestration absolute in Victoria. In England, the creditors have to decide as a first step whether or not an approved composition or scheme of arrangement can be agreed upon. If so, there is no bankruptcy; if not, the debtor is adjudged bankrupt. In New South Wales, bankruptcy follows as a consequence of the sequestration order, and the first step is to ascertain, whether or not an approved composition or scheme of arrangement can be agreed upon. If so, the debtor may obtain his discharge; if not, the debtor’s estate goes through the general course of administration and distribution. In Victoria, on the order nisi being made absolute, the debtor becomes bankrupt, and his estate goes through, the usual course without any preliminaries as to whether or not a composition or scheme of arrangement can be effected; but there is this provision, that if at any time, after sequestration, threefourths in number and value of the creditors agree to a composition, the Court may grant the insolvent his release. As to adjudication of bankruptcy, the Western Australian Act of 1892 is. with consequential amendments, a copy of the English Bankruptcy Acts of 1883 and 1890, while the Queensland, and Tasmanian A.cts, as to this subject, are a copy of the English Bankruptcy Act of 1869.
The Bill provides a uniform practice and follows the New South Wales bankruptcy law, which, in view of all the provisions relating to private deeds and compositions is deemed the most desirable. A true line is drawn between the two. Therefore, upon the Court making an order for sequestration the debtor be- comes divested of his estate, which is then subject to distribution. After sequestration comes the debtor’s statement’ of affairs, showing particulars of his assets, debts, and liabilities, the names, residences, and occupations of his creditors, the securities held by them respectively, and such further or other information as may be prescribed. In the different States there are practically no differences in the essential features of the provisions relating to the debtor’s statement of affairs. The Bill simply follows the ‘established practices.
Most of the State Acts contain similar provisions based on the English Acts with regard to meetings of creditors, but with a slightly varied procedure in some cases, the more up-to-date and uniform provisions being found in the New South Wales and Western Australian Acts. It may be observed that where provision is made for the office, the official receiver is the officer who takes the chief part in the creditor’s first- meeting. Similar duties in this respect appear to be divided between the Registrar and the Official Assignee in New South Wales, and between the Chief Clerk and Official Assignee in Victoria. Uniformity herein is best effected by following the latest English legislation and English bankruptcy rules, and provision to this effect is contained in the Bill.
Next in order comes the public examination of the debtor against whom a sequestration order has been made. Of the provisions in the State Acts those of New South Wales and Western Australia are based on the latest English model which the Bill follows. The rules and regulations as to proof of debts will be found in the second schedule of the Bill.
On the bankruptcy of the debtor special provisions relate to the appointment of the trustee either (1) by an ordinary resolution .of the creditors; or (2) by the Committee of Inspection, his appointment and eligibility being an essential part of the whole scheme of bankruptcy. But the general provisions relating to trustees - appointment of joint and successive trustees, official name, remuneration, discretionary powers and control thereof, audit, &c. - are numerous, and, generally, based on the provisions of the English Acts. The tendency has been strongly in favour of getting into line with and adopting the language of the latest English provisions on .the subject, and this has been practically accomplished by New South Wales, Victoria, and Western Australia. The control exercised over trustees under all the later bankruptcy laws is stringent and effective. This remark applies with equal force to official assignees. The Bill has followed the latest legislation and contains very complete provisions as to trustees.
I wish to draw special attention to Part IX. A special procedure is, by the English Bankruptcy Act, provided for winding up, with or without bankruptcy, the estate of a debtor v/hose property is not likely to exceed £300. As in the case of ordinary bankruptcies, a petition by or against the debtor must be presented, and thereupon the Official’ Receiver holds a personal interview with the debtor in order to determine whether the estate should be subjected to summary administration, and the Court will make an order for this purpose if satisfied, on the Official Receiver’s report, that the property is not likely to exceed the amount mentioned. The making of the order does not relax tbe provisions of the Act relating to the examination and discharge of the debtor, but the following chief modifications, subject to certain exceptions, take effect : - The Official Receiver will be the trustee and take the place of the Committee of Inspection. Costs will be lower, there will be no advertising in the local paper, and no jury; no “ composition “ or “ scheme of arrangement “ will have to be submitted, six months will be allowed for distribution of dividends, the estate must be realized with all despatch, and, where practicable, distributed in one dividend. The debtor, it has to be observed, need not be made bankrupt unless he makes default or the Court so orders. In practice it appears that he is almost without exception adjudged bankrupt. The provisions of Part IX. of the Bill follow closely the English legislation, and this innovation, I have no doubt, will result in getting rid of a great deal of unnecessary formality and expense. It will result in a saving to creditors and will “ temper the wind to the shorn lamb.”
In England, and in all the States, exceptVictoria, the trustee’s title to property which he may claim for distribution among creditors is not limited to the date of the receiving order, or of the adjudication, or of the sequestration order, but may relate back to the time of the first act of bankruptcy committed by the debtor within a definite time immediately preceding the commencement of bankruptcy proceedings. Uniformity is desirable, as the following variations in the present law will show: - England, three months of date of presentation of petition ; New South Wales, six months of date of presentation of petition; Victoria, no provision ; South Australia, twelve months of date of presentation of petition; Western Australia, twelve months of date of presentation of petition; Queensland, six months of date of presentation of petition;- Tasmania, twelve months of date of presentation of petition. Honorable senators will thus see the tremendous variations that exist. The Bill provides that relation back will not extend beyond six months. This is. a matter of interest to lawyers.
– I can promise the Minister that he is going to experience considerable trouble with that clause.
– I expect that. Whilst I might lose the honorable senator’s support, that loss will be balanced by the support which I shall probably receive from Senator Grant, judging by his remarks the other night. As to property divisible amongst creditors, the provisions in all the Acts are practically the same, being based on those of the English Act of 1869. With regard to the avoidance of voluntary settlements, similar provisions are found in each Act with variations as te* periods: - Victoria 1915, section 143, two and five, years; South Australia 1886, sub-section 158- 160; Western Australia 1892:, section 45, two and ten years:. The periods provided for in the Bill are avoidance of settlement “ within two years of bankruptcy, or within five years unless proof is made of bankrupt’s ability at time of making settlement to pay all his debts without the aid of the property settled.
Avoidance of Fraudulent Preferences. - The principle is the same in each State, but there are some variations in the language of the sections of the Acts. The Bill fellows generally the provisions of the New South Wales law, which is of a legal and technical character.
Protected Transactions. - Certain transactions in connexion with the bankrupt or his property, which take place before the date of the receiving order or sequestration order, but after the bankrupt has committed an act of bankruptcy, are protected. This matter is dealt with in section 45 of the English Act of 1914.
The principles are the same in all the State Acts, which, however, contain in some cases additions and modifications. The Bill follows the English Act and gives certain protection to bankers. In respect of the following matters there is no serious variation in State practice.
Priority of Debts. - The order in which debts are payable in England is regulated by tha English Bankruptcy Act 1914, section 33. The Crown has no priority. The existing legislation in England gives priority to - (1) the wages or salary of any clerk or servant, not exceeding £50, in respect of services rendered during four months prior to the receiving, order, and (2) the wages of any labourer t-r workman, not exceeding £25,. for. services - whether time or piece-work - rendered during two months prior to the date of the receiving order. In support of these priorities it is urged’ that, in addition to their being only small creditors, the employees have helped te make the assets. The Bill provides for £50 in regard to the wages or salary of clerk, servant, or workman in respect of services rendered within four months of date of sequestration order.
– What clause is. that?
– Clause 84. Clause 85 applies to an apprentice or articled clerk, and clause 82 deals with the question of interest.
Rent. - A landlord’s power to distrain is limited, under some Acts, to rent for a certain period ; under others, he has no power to distrain, but receives, in lieu thereof a priority to an amount equal to rent for a stated period. However, in either case, the practice varies, as. the following comparison shows: - England, distress for six months’ rent; New South Wales, no distress after bankruptcy, but priority for sum equal to three mouths’ rent ; Victoria, three, months’ distress repealed, now three months? rent out of estate in respect of which there were goods on the premises liable to distress for rent ; South Australia, distress for various periods according to nature of tenancy: Western Australia, six months’ distress; Queensland, no distress, but priority for sum equal to three months’’ rent; Tasmania, distress for twelve months’ rent. Subject to other priorities, the Bill provides for a prior right for three months’ rent similar to that granted under the Victorian Act, the balance being treated as an ordinary debt. The matters dealt with under the following heads are practically the same in each State: - Mutual debts, conduct of debtor and control exercised over him - duties of debtor, redirection of debtor’s letters, and arrest of debtor.
The English Act 1914, section 10, gives power to the Official Receiver to appoint, on the application of a creditor, a special manager of the estate until a trustee is appointed. Security has to be given. Western Australia has followed the English section, with consequential alterations. There is a corresponding section in the New South Wales Act. Where a special manager is. not appointed, the Official Receiver is to act as manager pending appointment of the trustee. This, provision is’ included in the Bill. Similar provisions are found in all the States in respect of the following, matters: - Realization of property: Possession of property by trustee,, seizure of property of bankrupt,, vesting and transfer of property, disclaimer of onerous property, powers of trustees to deal with bankrupt’s property, powers exercisable bytrustee with permission of the Committee of Inspection, declaration and distribution of dividends, joint and separate dividends, provision for creditors residing at a distance, right of creditor who has not proved debt before declaration of dividend, final dividend, no action for dividend, power to- allow bankrupt to manage property, right of bankrupt to surplus, and unclaimed funds.
Discharge of Bankrupt,. - This is a matter in respect of which there is comparatively a considerable variation. The English Act of 1914, section 26, is a very long section, but, epitomizing the essential points, they are found to be - (1) The Court may grant or refuse an absolute order of. discharge or suspend the operation of the order for a limited time,, or grant it subject to conditions with or without a suspension ; (2) the Court shall refuse the order, except for special reasons, when the bankrupt has committed certain offences under the bankruptcy law ; (3) on proof of certain facts the Court shall either refuse the order or suspend it for a period of not less than two years, or until a dividend of not less than 10s. in the £1 has been paid to the creditors, or require the bankrupt, as a condition of his discharge, to consent to judgment being entered against him for any balance or part of any balance of the debts provable under the bankruptcy, subject in this last case, under certain circumstances, to modification after two years; and (4) where the bankrupt has made a fraudulent or unjustifiable marriage settlement the Court may refuse or suspend the order or grant it subject to conditions. The provisions of the New South “Wales Act are practically the same as those of the English Act. The Court may (a) grant or refuse an absolute order of discharge; (6) suspend the operations of the order for a specified time; (c) grant an order of discharge, or suspend the operations of such order subject to conditions as to earnings or after-acquired property; but shall (d) refuse the discharge when misdemeanour as to bankruptcy is committed; (e) refuse or suspend discharge, or grant it conditionally on proof of certain facts. This is generally common to all later Bankruptcy Acts. In Victoria the details of the application for discharge and the principles on which the application is granted are nearly the same. The Court may (a) grant or refuse an immediate absolute certificate of discharge; or (fe) suspend the certificate from taking effect for such time not exceeding two years as the Court may think fit ; or (c) suspend the certificate until such dividend - not exceeding 7s. in the £ 1 - as it may fix has been paid to the creditors, or until security for the payment of such dividend has been given to the satisfaction of the Court. In other respects the Victorian law is similar to that in England and New South “Wales. Western Australia adopted the English provisions. The South Australian provisions relating to certificate of discharge are not in conformity with those of the other State Acts. They provide for first, second, and third class certificates, and other provisions in connexion with discharge which have been adapted from earlier legislation. The provisions in the Queensland and Tasmania Acts aS to discharge are borrowed, with slight variation, from the English Acts. The Bill follows closely the English legislation.
Deeds of Arrangement, Liquidations by Arrangement, and Compositions. - These are matters of vital interest to the mercantile community. It has been said of the English bankruptcy system, as for- mulated by the Acts of 1883 and 1890, that it represents a via media, consulting the wishes and interests of creditors with just enough official control to prevent those abuses which spring up so easily from the supineness or self-seeking of creditors, the dishonesty of debtors, and the rapacity of trustees; that it discriminates, as no previous system has done, between insolvency brought on by misconduct and insolvency due to misfortune. I think honorable senators will readily realize that there is a great difference between a man who is insolvent because of misfortune and one who is insolvent by reason of his roguery. In every way possible the Bill tries to make a distinction between those two classes. It is generally agreed by those most competent to judge that the man who has become insolvent by misfortune should have every consideration possible within the bounds of the law. It has been further said of the English system that by steadily discountenancing the one class, and dealing gently with the other, it insensibly purifies commercial morality, but that the vulnerable point of the system is the number of insolvent estates which are liquidated outside the Bankruptcy Court. Traders favour private arrangements to bankruptcy. That they do so is set down to their antipathy to officialism and publicity. The expense and “red-tapism” of bankruptcy proceedings have been urged as objectionable features. It appears clear that the recognition of deeds of arrangement must find a place in any general bankruptcy system. In view of the different practices prevailing, care is necessary to determine what form legislation on this subject of arrangements without bankruptcy should take. There are three methods in use. The English Deeds of Arrangement Act 1914, together with the important provisions of the Bankruptcy Act of 1914, which operate in regard to control of deeds of arrangement, applies and incorporates the main bankruptcy provisions relating to trustees and other provisions relating to proof of debts, the property available for their payment, the effect of bankruptcy on antecedent transactions, and the realization and distribution of the bankrupt’s property. This system has been introduced as Part XII. of the Bill. Compositions and assignments without bankruptcy are provided for in Part XI. of the South Australian Act of 1S86, and the Western Australian Act of 1898. This is provided for. in Part XI. of the Bill. The later legislation in Victoria embodies the principle of deeds of arrangement. The New South Wales Act contains no provision for a , scheme of arrangement or composition without bankruptcy. There appears to be no danger that private deeds of arrangements or compositions will be resorted to to commit frauds on creditors so long as they are subjected to official control, to which there appears to be no great objection on the part of the commercial community. The evidence in England, where figures are obtainable, goes to show that, under private deeds of arrangement, as compared with ordinary bankruptcy proceedings, dividends are larger and costs of administration less. Of the total number of insolvencies in England, including administration orders relating to deceased insolvent debtors, approximately not much more than onehalf are administered in bankruptcy. The rest are dealt with by private deeds of arrangement.
South Australia, in Part XI. of the 1886 Act, re-enacted a system of compositions and assignments without insolvency. It should be observed, however, that this system., based, to some extent, on the provisions of former English Acts relating to liquidations by arrangement and compositions with creditors, was adopted before the passing of the English Deeds of Arrangement Act of 1887, and the subsequent important provisions of the English Bankruptcy Act of 1890, relating thereto, now known as the Deeds of Arrangement Act 1914. Nevertheless, in 1898 Western Australia adopted this part of the South Australian Act with a few amendments, the reasons given by Mr. Kidston, as reported in the Western Australian Ilansard, page 658, for its adoption being that the system had found favour in South Australia, and that the eastern colonies were anticipating altering their bankruptcy laws to fall in with those of South Australia. Some tangible reasons for the adoption of the system were to simplify procedure, reduce expenses to enable creditors to get control without recourse to bankruptcy proceed ings, to bring deeds of assignment under the purview of the Court, and to provide for the deed of assignment being binding when signed and assented to by a proportion of creditors in number and value. The most satisfactory scheme of arrangement to secure what creditors and debtors alike demand - efficiency at a minimum of cost, no unnecessary publicity, and just so much judicial and official control as is requisite to maintain even-handed justice and to prevent fraud - will probably be found, for present purposes, by adopting, as has already been done to some extent by the State of Victoria, the English Deeds of Arrangement Act 1914, and by incorporating also the main bankruptcy provisions relating to trustees, proof of debts, property available for their payment, the effect of bankruptcy on antecedent transactions, examination of debtors, and the realization and distribution of the bankrupt’s property; and by adopting Part XI. of the South Australian Bankruptcy Act 1886. Provisions to this effect have been included in the Bill in parts XI. and XII.
Chambers of Commerce and other bodies have been afforded the opportunity of making suggestions as to the proposed bankruptcy law, and I have received from South Australia a number of recommendations which will receive my very careful consideration. From what I have said, honorable senators will see that the groundwork of the Bill is the most recent legislation on bankruptcy. I have shown the difference existing in the bankruptcy legislation between the States. There is no need for the variation, which, as may be inferred from the dates of the Acts I have quoted, is due to the fact that the legislation of the States has not been kept up to date. Had the States been amending their Bankruptcy Acts they would have proceeded on the lines of the Commonwealth Bill, which may be regarded as a consolidating and amending Bill in respect of the whole of the existing Australian legislation on bankruptcy.
– Is it not a fact that several of the States have been waiting for the introduction of a measure of this kind before amending their legislation?
– That is so. Uniformity is, of course, imperative. The same bankruptcy law will apply to every
State of the Commonwealth, and, so far as it is applicable, the Commonwealth bankruptcy law may be applied to the territories. The application of a uniform bankruptcy law will not cause any revolution in existing practice. There are no radical changes in the substantive law. The machinery of bankruptcy jurisdiction and administration will work more smoothly, and will secure more effectively the moral and legal control that is indispensable in the innumerable transactions of Australian modern mercantile life in which enterprise must be stimulated, risks faced, and’ courage shown. There is no mercy shown in the measure to those guilty of fraudulent transactions, and, to secure the same amount of protection against fraud in all States, some very serious gaps in State legislation have been filled up, especially in relation to private deeds of arrangement and trustees.
Apart from the general principles I have touched on, the Bill is essentially a Bill for Committee. There are innumerable details, but they have long stood the test of experience, and have been found practical. Some innovations will commend themselves to honorable senators. In Committee, I hope to be . able to give the Senate full information on the separate clauses in cases where fuller information than that disclosed in the clauses themselves is desired. For the most part theclauses are self-explanatory, and one does not require to be a lawyer, or to have been a petitioning creditor, ot an insolveut debtor to understand them. The passage of the Bill, at an early date, is very important. As embodying a function intended by the Constitution to come within the scope of uniform Federal control, it has been too long delayed. With the assistance of honorable senators, I hope to pilot the Bill through the Senate by an early date.
– It has been said that insolvency laws were made for the relief of honorable men who get into difficulties, but that rogues frequently avail themselves of those laws. It does not always follow, however, that the rogues succeed. I remember a case in which I was interested where a man who sold out his business put all the money into bank drafts, and left Queensland for the Old Country. He escaped before we imagined what he would do; but we made him insolvent, and ascertained on which banks in London his drafts were to mature. The result was that when he reached the Old Country he had to cable out to the creditors to allow him a few pounds with which to carry on. In the end, we obtained the full amount of our claims, and all the legal expenses were paid.; so that I do not think that gentleman will again try to evade payment of his just debts. I congratulate the Minister (Senator Wilson) upon the way in which he has placed this very lengthy measure before the Senate. The case was exceedingly well prepared, and the Bill will be very welcome to the mercantile community of Australia, which has been waiting for many years for such a measure.
– It may have to wait a little longer.
– Possibly so. But the introduction of the Bill is a beginning, and if it is not passed this session it should become law next session. As far back as 1911- I was appointed a member of a sub-committee of the Rockhampton Chamber of Commerce to look through the draft of a Federal Bankruptcy Bill, and I believe that a good many of the suggestions made by that sub-committee are embodied in the present measure. When the Bill is going through Committee, I hope to offer some further suggestions that will make it more useful. Uniformity in legislation of this nature will be a great boon to the mercantile community, and to debtors and creditors generally. As has been mentioned by the Minister, the main provisions are taken from the British Acts, That is where the title of “ Bankruptcy Act “ came from, although, personally, T prefer the term “ Insolvency Act,” possibly because people in Queensland are more used to that title. There are a good many provisions in the Queensland measure which might with advantage be included in this Bill. Thei Queensland Act has stood the test of nearly fifty years, and it has proved to be a monumental measure in the cases heard, and experience gained under it. It has been described as a masterpiece of legislation.
Seeing that the late Sir Samuel Griffith was its author, and that much of it was taken from the English legislation, it goes without saying that the measure should be a very fine one.
– Why not follow the English legislation as closely as possible ?
– Because experience in Australia in mercantile matters is quite different from that in the Old Country. Let us take from the English measure what is suitable to us, but let us legislate for our own requirements. In Queensland we have liquidation by arrangement. This provision gives immediate control of the assets, and it also gives control of the discharge of the insolvent for all time. There is no such provision in the Bill before us; but it would be a very great improvement if there were.
– Provision is made for compositions and assignments.
– The assignment principle which operates in Queensland is different from what is proposed in the present Bill, and it is an excellent method, especially for small traders. Another matter, that of assignments, is considered a wise provision in Queensland, but it would be an offence under this measure, and I hope that an alteration will be effected in Committee to include assignments. In sections 108 and 109 of the Queensland Act fraudulent preference is dealt with in a way that I should like to. see followed in the present Bill. The examination on oath by the trustees of debtors is not provided for in this measure. I point out to Senator Elliott that it is a wise provision, and although it is not contained in the English legislation it has been found in Queensland to be of the utmost use in obtaining at an early stage necessary facts as to the assets of a debtor.
– That is provided for under other Acts.
– I do not think so. The trustee in Queensland has power to take a debtor into his private room and cross-examine him on oath in order to obtain all the information he possibly can concerning the man’s assets. An insolvent charged with offences has to be tried by special jury in Queensland, and we contend that that wise provision should be embodied in the Commonwealth law This Bill prohibits canvassing by trustees. I ask honorable senators how a trustee can be appointed at all if he does not canvass for the appointment? We should have strictly honorable men as trustees, but we should not prohibit them from canvassing for appointment.
– I think it is a very wise provision.
– I cannot agree with that contention. The practice in Queensland, has been found quite satisfactory. That, however, is a comparatively small matter. This Bill does not fix the minimum remuneration for a trustee, as does the Queensland measure. There is a good deal of power, given to the Public Trustee under this proposal, but I do not favour placing estates in the hands of public trustees at all. Our experience is that they are. expensive in their administration, and that the delay occasioned in winding up estates is extreme. I prefer the tried private trustee. One of the effects of this measure will be largely to increase expenses and delay the liquidation, owing to unnecessary formalities and restrictions. I shall be able to point out this defect in detail in Committee. The Minister has stated that there are no unnecessary formalities and restrictions, but I shall show that there are, and I shall also explain that the expenses will be greater than they are in QueenslandAbove all things, we should aim at keeping down legal expenses. Perhaps some honorable senators will not agree with me in that respect.
– Yes, we do.
– I have seen small estates eaten up by law costs, and I should like that to be a thing of the past. On many occasions creditors receive practically nothing, because estates have been almost wholly absorbed by the payment of the legal expenses. I have a number of requests concerning this Bill from the Rockhampton Chamber of Commerce and other bodies. I also have a private letter from the manager of one of the branches of a leading firm in Queensland, which has its head office in
Glasgow, and also has branches in London, Brisbane, Rockhampton, and Townsville. The letter states -
Personally, I trust that whatever other alterations aremade, assignments for the benefit of creditors will be permitted. As you personally know, this is quite the simplest and best way in many cases of dealing with small estates which- were insolvency insisted upon, would yield little or nothing to the creditors.
I have received a telegram - and, I believe, that Senator Sir Thomas Glasgow has a similar communication - from the Rockhampton Chamber of Commerce as follows : -
Merchants’ Association, Employers’ Association, and Chamber of Commerce strongly support inclusion Bankruptcy Bill, liquidation by arrangement, assignments, and other desirable Queensland provisions.
Following that, Mr. Joseph Kenna, secretary of the Merchants’ Association, has written on behalf of that association and the Rockhampton Chamber of Commerce as follows: -
Dear Sir,
My Association, . in conjunction with tbe Chamber of Commerce, has considered the federal Act relating to bankruptcy, and both bodies strongly protest against the measure in its present form. I have therefore been directed to place the views of . the two Associations before you and to ask your assistance in combating the prosent proposals. The idea of a uniform Insolvency Act is excellent, but uniformity should not be -secured . at the price of efficiency and increased costs. Uniformity should be based on , the best that is in -the various State Acts, conceiving tihat to lie best which gives adequate protection to the debtors and : aniple powers to the creditors. As iB corollary to this conception . of excellence it iB submitted “the functions of . the Court should be reduced to an absolute minimum compatible with efficient supervision, and, Ahe opinion is expressed, the powers of ‘the Court should be stressed only in its coercive capacity.
The statute law of insolvency of Queensland is contained principally in The ‘Insolvency Act of 1874 and The Insolvency Amendment Act of 1876. The Act is generally regarded as a masterpiece ‘of its kind. Fifty years of use have proved it to be, on the whole, adequate to the needs of the comJttercial community; moreover, it complies with what must be regarded as the canons of insolvency’ law and practice, viz. : - (a). Adequate protection of debtor.
Widest possible powers to creditors.
Limitation of interference of Court.
It is recognised that time has revealed the limitations of the ‘ Queensland Act and that modifications and improvements could be suggested. It is thought, however, it would make an . admirable framework for the proposed legislation. Its deficiencies could be supplemented byenactments conceived in the light of experience and the demands of modern business. In Queensland . a person unable to discharge his liabilities may call a meeting of his creditors and ask for time in which to pay his debts. If, however, he is unable by negotiation . to obtain relief from his pressing creditors, he can make his estate available for distribution among all his creditors in three different ways : -
By petition for adjudication in insolvency.
By liquidation by arrangement or composition with his creditors.
By the assignment of his estate to a trustee for the benefit of his creditors
If the debtor fails to take steps satisfactory, to his creditors, the latter may themselves take proceedings under 1 and 2, as provided by the Insolvency Act of 1874. The proposed Federal Act is based chiefly on the English Bankruptcy Act, but incorporates many provisions peculiar to the insolvency laws of the various States, including Queensland ft abounds in arbitrary prohibitions and eiiouunents. It eliminates, many useful powers now . en j oped by creditors in . this State, substituting therefor the jurisdiction of the Court. It if> complicated and inelastic; whereas to meet tbe demands of a new country such as Australia, it should be simple, flexible, and economical. Tbe cost of insolvency proceedings will be enormously increased. The administration will be made more cumbersome, entailing the employment of a large staff of clerks, thus adding to the ever-increasing burden on <the . people. Some of the worst features of the proposed Act are as follows ;
Distribution of Property - Section 110. -
This section provides, amongst other matters, that the first dividend, if any, shall, be declared and distributed within four months after the . conclusion of the first meeting of creditors, unless the trustee satisfies the Court that there is sufficient reason for postponing the declaration to a -later date. ‘It is difficult to understand why a time should be stipulated within which to declare a first dividend, neither can we see any justification in compelling the trustee to satisfy the ‘Court if a dividend has not . been declared within the time limit. . Section 152 of the Queensland Act appears to be quite adequate to -protect the interests of creditors, and, at the same time, affords the trustee an opportunity of explaining to creditors the reason for any undue delay in declaring a dividend. The declaration o’f a dividend is surely -a matter of interest to -the creditors only, and in withdrawing the mandate to the taustee to report to the creditors any delay the Federal Act throws on the property -of the insolvent an unwarrantable expense, because an application to the Court will almost certainly involve legal fees and expenses.
Discharge of Bankrupt - Section 117. -
Clause 1 of this section is particularly objectionable. It coanp.els “the insolvent to apply to . the Court . for an order of discharge, releasing Kim from his debts whenever ordered so to do by the Court on the application of the trustee. Ohe insolvent’s discharge is surely a matter which mostly concerns himself. Why should the trustee be asked to interfere? Section 167 of the Queensland Act deals with -.this matter more effectively than section 117 of the Federal Act. The Queensland Act provides that the insolvent may, of his own volition, apply for the. discharge, and confers on creditors certain powers if they wish to be indulgent to an insolvent, yet granting discretion to the Court in the matter, he elimination by the Federal Act of the powers of the creditors removes them from a sphere in which they are specially interested. discrimination between creditors - section 120. - We quite fail to see why there should be discrimination between creditors other than those to whom preference is granted ; but assuming discrimination to be expedient, why is it confined to cases where the liabilities of the bankrupt do not exceed £200?
Remuneration of Trustee- Section. 131. - This clause should’ provide for a minimum remuneration. Small estates are frequently much more troublesome than larger ones, particularly where legal actions are found necessary, and, in theabsence of a minimum fee, trustees would scarcely be- expected’ to be- over zealous in the execution of their duties. Payment by results with a minimum fee has proved an. excellent plan, in Queensland.
Solicitation by Trustees - Section 133.
This section, prohibits solicitation for trusteeships by. would-be trustees. This is surely inexpedient. Solicitation does not cost the creditors anything, neither does it involve the estate in any expense, moreover, if it be “not Eermitted, how are new trustees to get into usiness ?
Small Bankruptcies - Section 152.
This section provides that the Official
Trustee shall administer all estates where neither the assets nor liabilities exceed £200.. It must be apparent that at first it will be very difficult, if not impossible, to determine whether tbe value of the assets of an estate will be within the limit or not. Very frequently an insolvent’s statement of affairs discloses little or no property, yet through theacumen and energy of the trustee, property of considerable value may be recovered for’ the creditors. The best interests of the commercial community demand that no eBtate, however small, should be withdrawn from the ambit of the Creditors’ Trustee.
Compositions and Assignments without Sequestration - Part XI.
This, to some extent, takes the place of liquidation by arrangement and composition with, creditors as provided by Parts 9 and 10 of the Queensland Insolvency Act. Part 9 of the latter section of the Queensland Act provides a convenient method of winding up a debtor’s affairs without making him . insolvent. It confers on the creditors the absolute control of their meetings, the appointment of a receiver without any application to tbe Court, and the debtor’s discharge is entirely at their discretion;, and Part 10 provides that creditors of a debtor unable to pay his debts may, without any proceedings in insolvency, resolve that a composition shall be accepted in satisfaction of the debts due to them from the debtor.
This is a simple and easy method which enables a debtor to relieve himself from pressing liabilities with very little expense. It also enables the- creditors to treat leniently a debtor towards whom they desire- to show indulgence It is speedy, effective, and inexpensive.
The Federal Act.
The procedure substituted by tbe Federal
Act for the two foregoing methods is both cumbersome and expensive. It withdraws from tbe creditors that control over the discharge of the debtor Which they enjoy under the provisions of Part 9 of the Queensland Act, as already referred- to. It makes no provision for the appointment of a. receiver except, by application to the Court, it gives the Court power to reject a composition or scheme if it thinks that the terms of the composition or scheme are not reasonable- or not calculated to . benefit the general, body of creditors. We fail to see why discretionary powers in these circumstancesshould be conferred on the Court. The- creditors are surely the best judges as” to whether a composition or . scheme is reasonable, or if it is calculated to benefit the general body of creditors. We favour the retention of Parts 9 and 10 of the Queensland Act in their entirety.
Deeds of Arrangement- Part XII.
In Queensland a debtor in financial difficul ties may, with the consent of his creditors, execute a Deed of Assignment. A Deed of Assignment may be broadly defined as a contract in writing between debtor, -creditors, and Trustee, whereby the debtor agrees to assign, the whole of his assets to a trustee for the benefit of his creditors. This is the most simple and convenient method of dealing with an estate and releasing a debtor from his liabilities. It is very economical, the legal costs rarely exceeding £1 ls. It obtains the same result without the publicity or the cost of insolvency proceedings. The Federal Bill proposes to make the procedure a criminal offence if entered into outside the Act. The Act provides for assignments, but terms them Deeds ‘ of Arrangement. It provides a cumbersome procedure entailing expense and, most extraordinary of all, by section 201 takes from the creditors the right to fix the trustee’s remuneration. The fixing of a trustee’s remuneration is essentially a matter for the- creditors’, seeing that the money must ultimately come from their pockets. Deeds of Assignment under Queensland conditions, should certainly be retained.
Trustee.
Much of the insolvency work in this State is transacted by creditors’ trustees, who are generally qualified accountants with commercial and legal experience, and who are subject to the supervision, of the Court. These trustees enjoy the esteem of the commercial community, and by their affiliations in the mercantile world, have opportunities for pursuing the inquiries sometimes necessary in this class of work, that would not be available to the officials of the Court,, who must necessarily be remote from the- main currents of business life, and-, therefore, lack access to a source from which the creditors’ trustee can draw copiously. In the majority of case’s, payment is by results,, with a minimum commission. The proposed Federal Act will seriously hamper the private trustee, as you will have gathered from our remarks on sections 131, 133. and 152. The control conferred by the Act is so oppressive and the requirements so onerous that we doubt very much whether private trustees will care to continue to act, and their withdrawal would certainly be a -serious loss to the commercial community.
The Schedule.
Clause 18 of the schedule specifies certain persons to whom general proxies may be given. !o provision is made in this privileged category for the public accountant who may be the creditor’s auditor or financial adviser. There are very few businesses of any size these days that do . not retain a professional accountant in the latter capacity, and it is submitted that the relationship so established renders such a person with the qualifications he possesses a far better representative at creditors’ meetings than some of those whose callings are specified in the clause referred to.
General.
It is a pity the new Act does not include sections 108 and 109 of the Queensland Act. These sections, which relate to fraudulent preferences, are peculiar to Queensland. Through the instrumentality of these sections, trustees have been able to recover large sums of money and property of considerable value that otherwise would not have been available to creditors. Provision should also be made for the examil nation on oath of the insolvent by the trustee as provided in the Queensland Act. Much valuable information’ may thus be elicited at a minimum cost, and in many cases litigation would be avoided. All insolvents charged with offences under the Act should’ undoubtedly be tried before a special jury. The above are the views of the Rockhampton Chamber of Commerce and my Association based on a rather hurried perusal of the Federal Bankruptcy Bill and comparison with the- insolvency -laws of Queensland. The short notice of the ‘ intention of the Federal Parliament to deal with the Bill immediately prevented a more exhaustive study of its provisions, and their consequences if an Act is passed containing sueh provisions.
The following telegram was despatched by the Brisbane Chamber of Commerce to the honorable member for Brisbane (Mr. D. Cameron); but in his absence it was handed to Senator Sir Thomas Glasgow, who is acting for him. It reads -
Senator Thompson has copy recommendations for Bankruptcy Bill sent him by White’s Agency. This chamber supports recommendations; would appreciate your co-operation with other members.
Mr. Thomas E. White, who is probably the greatest authority in Queensland on insolvency, has also submitted the following information -
When Sir Samuel Griffith, late Chief Justice of Australia, brought in the Queensland Insolvency Act of 1874, he extended the theory of fraudulent preference by two sections, which are almost . peculiar to Queensland, namely, sections 108 and 109. These the Federal AttorneyGeneral proposes to omit from the new Bankruptcy Bill, thereby diminishing the protection afforded to creditors by fully twothirds. The wisdom of the late Chief Justice in inserting these sections is amply proved by the decisions given under them during the past forty-nine years. The only section retained in the new Bill is the Queensland 107, which renders voidable any payment -made or security given . with a view to giving preference to any creditor. The section as now introduced in the new Bill has an important omission; the last clause is wanting, namely, that pressure by a creditor shall not protect any transaction. This considerably weakens the efficiency of the section. Queensland section 108, which is not in the new Bill, included every transaction which was not made for a reasonable and sufficient consideration given at the time. This has been availed of by trustees in very many cases. The principal provision of Queensland section 109, which we are also to lose, rendered voidable any transaction which diminished the -property to be divided, amongst the creditors. This also hoa been ‘the aneans of recovering valuable assets for estates. It will be observed that the new section 93 for the avoidance of preferences applied only to creditors, and any person -who is not a creditor, but is a party to a fraudulent transfer of a property cannot be attacked. The Springall-Lonsdnle case affords an. excellent illustration of . the inefficiency of the proposed section. In this case, the insolvent having obtained advances against bond warrants for fictitious butter bought on credit, delivered to the defendants a large quantity of butter immediately before insolvency. This the trustee won under Queensland section 109, because it lessened the dividend payable to the creditors. There was certainly no intentto prefer Lonsdale.’ The insolvent’s motive was obviously very different. In another, the “ Tronson “ case, the insolvent transferred property to his family to . defraud his creditors, coining within Queensland sections 108 and 109, but not 107. We strongly urge our Queensland representatives, both in the Senate and House of Representatives, to press for the retention of these sections, which have stood the test of forty-nine years’ experience. It is no argument against them to say they are not in the English law. Sir Samuel, Griffith was capable of introducing something entirely new and desirable, which time has justified. The good faith defence is deleted, and the effect of this omission will lead to further complications. The inclusion of a preferred guarantor is an excellent point. We confess that we do not understand section No. 93-2, and the marginal reference is obviously incorrect.
Mr. White further says
Our principal objections to the Bill are:–
I know these two gentlemen, who are leading authorities in Queensland in regard to insolvency law. They are perfectly in accord with, tbe proposal to have an Australian Bankruptcy Bill passed by this Parliament, and their suggestions are made in a helpful spirit, in order that the measure shall be in the best interests of the community. I hope) that honorable senators will be afforded full opportunity in Committee for effecting amendments along the lines suggested.
Debate (on motion by Senator Benny) adjourned.
page 2209
.- In moving-
That the House do now adjourn,
I invite honorable senators to avail themselves to-morrow of the opportunity to debate the financial proposals of the Government. I am sure that, towards the end of the session, honorable senators, will complain that they have not had opportunities for doing so. We are not pressed with work at tbe present time, and the motion - “ That the Budget-papers be printed “ - will give honorable senators ample opportunity to deal extensively with the financial proposals of the Government. That will be the first business to-morrow.
.- I invite, the attention of the Minister for Home and Territories (Senator Pearce) to the fact that in another place the question of the erection of the nucleus of a permanent House of Parliament at Canberra, or of a provisional building, has engaged attention. So far the matter has not been discussed by the Senate. Tn effect, beyond the information to be gleaned from the report of the Public Works Committee, the Senate has no official knowledge of what has been done. If I understand the position aright, the plan submitted to the Committee did not meet with its approval, and certain amendments were suggested. I trades-stand that it has been decided by tbe Committee to make such an alteration that at least one end of the proposed Senate chamber should be open to the - fresh air. In this country it is not desirable to construct a chamber with corridors ail around it, and so, in effect, to imprison members of Parliament. In the Commonwealth a type of building has been developed which is distinctly Australian, and is typical of what is required. In Queensland, almost invariably, the houses have verandahs on four sides. Further south, the verandah space is curtailed to some extent. The old style of home, without any verandah provision, is confined to the extreme sou theo- /i part of the continent and to Tasmania. It is quite out of date, and altogether unsuitable for any portion of New -South Wales. I feel certain that honorable senators will not entertain for one moment the proposal as ib affects the Senate chamber and the House of Representatives. In order to give honorable senators an opportunity of expressing an opinion upon this question, the amended plans of the Committee should be made available for inspection.
– If’ the honorable senator’ will look up the report of the Parliamentary Standing Committee on Public Works, which has been circulated to every honorable senator, he will find that the plan which was submitted to the Committee, aud the revised plan of che Provisional Parliament House, are included in it.
Question resolved in the affirmative.
Senate adjourned at 9.42 p.m.
Cite as: Australia, Senate, Debates, 7 August 1923, viewed 22 October 2017, <http://historichansard.net/senate/1923/19230807_senate_9_104/>.