9th Parliament · 2nd Session
The President (Senator the Hon. T. Givens) took the chair at 11 a.m., and read prayers.
page 352
– Following upon a question I asked on the adjournment motionlast night, has the Minister in charge of repatriation. got into touch with the authorities.in Western Australia in regard to the report that it is proposed to close the Kalamunda Convalescent Farm for disabled soldiers?
– Inquiries have been set on foot, and at a later hour of the day I hope to be in a position to furnish a reply to the honorable senator.
page 352
The following papers were presented : -
Public Works Committee Act. - Ninth GeneralReport.
Lands Acquisition Act - Land acquired for Light-house purposes at Bound Hill Point, ‘ Tasmania.
Territory for the Seat of Government - Ordinance No. 4 of 1924 - Provisional Government.
Railways Act - By-law No. 28.
page 352
Widows in Western Australia.
Sentor NEEDHAM asked the Leader of the Government in the Senate, upon notice -
– - The answers to the honorable senator’s questions are as follow : -
page 352
asked the Leader of the Government in the Senate, upon notice -
In view of the phenomenal increase in Customs revenue, will the Government bring down an amendment of the Tariff schedule which will give real protection to Australian industries?
– -As I informed the Senate yesterday, it is not the policy of this Government, or indeed of any’ Government, to- give answers as to policy in reply to questions; ‘but I can assure the honorable senator that the matter dealt with in his question is receiving consideration.
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Senator PEARCE (Western Australia-
Minister’ for Home and Territories [11.5]. - (Byleave.) - I lay on the table the following papers : -
Treaty of Peace with Turkey and other in- struments signed at Lausanne on 24th July, 1923, together with agreements between Greece and Turkey signed on 30th January,. 1923, and subsidiary documents forming part of the Turkish Peace Settlement (with map) : Convention between the United Kingdom, France, Italy, and Japan, relative to the assessment and reparation of damage suffered in Turkey by the nationals of the contracting Powers, together with protocol providing for signature by Roumania, signed at Paris, 23rd November, 1923,
That the papers be printed.
The Government have adopted this course to. seek the approval of the Senate for the action it proposes to takeinrecommending the Executive Council to ratify the Treaty with Turkey. The Treaty was signed on 24th July,. 1923. Australia has been at war with Turkey, not merely because we are part of the British Empire. Our soldiers haveactually fought the Turks’ at Gallipoli and Palestine, and until this Treaty is ratified a state of war with Turkey still exists. The matter has been delayed’ owing to the- British elections, but the present British Prime Minister, Mr. Ramsay Macdonald, is now urgently pressing the Commonwealth Government to ratify the Treaty. The Prime Minister of the Commonwealth (Mr. Bruce), on his return from the United Kingdom, paid a visit, to- Turkey, where,, I am glad to say, he wastreated with- the greatest courtesy, and’ he- testifies- to the great respect that -the people of Turkey have for Australia.
– It is, and that fact constitutes a reason why we should ratify the Treaty promptly in order to show the people of Turkey that, whiteour soldiers, like their own, are good fighters, now that the fight is over we are quite willing- to shake hands. The original Treaty with Turkey, known as the Treaty of Sevres, for reasons which the Senate will not wish me to recapitulate, was not ratified; but it will be- remembered that after- it was signed war broke- out afresh between Greece and- Turkey, with- varying: results. At one time Greece- appeared to be victorious, but ultimately Turkey prevailed. Out of that conflict a state of war between Turkey, on the one hand, and Britain and France, on the other, was narrowly averted. It was only the firm attitude taken up by Britain that prevented it. Had the British Govern- . ment displayed weakness, that part of Europe would undoubtedly have been once more plunged into war. It is only another instance of how a firm attitude on. the part of Great Britain has maintained peace in Eastern Europe. As a result of the conflict between Greece and Turkey, an armistice was arranged and signed at Mudania in October, 1922. This was followed by prolonged negotiations and various conferences. It was not until July, 1923, that an agreement was finally reached at Lausanne. The provisions of the Treaty then signed have been well discussed’ in the public press, and copies of the Treaty are available for honorable senators if they desire to peruse them. I shall sketchits main provisions. Turkey relinquishes any rights she- may have to Syria, Palestine, Mesopotamia, Egypt, and Soudan. The freedom- of the Straits of Gallipoli and of access through the Dardanelles to the Black Sea for all forms of shipping of all nations is secured. The control of the Straits is placed under an International Commission, under the auspices of the League of Nations. On that Commission the British Empire is represented. This brings us’, of course, to the responsibility of the League and the nations comprising it to maintain the freer dom of the Straits, because’ certain obligations rest upon Australia, as a signatory to the Treaty and as a nation represented on the League of Nations;, but the sovereign right of this Parliament to determine in- what way we- shall give effect to’ those obligations under the Treaty are not invaded. The obligation may be there, but the ultimate decision as to how effect shall be given to it will always remain the sovereign right of this Parliament. It is satisfactory to note, in view of her strong historical claim to a voice in these matters, that Russia has signed the Treaty. The safety of Australian soldiers’ graves and memorials on Gallipoli and in other parts of Turkish territory is provided for, and the land upon which they are situated is granted to us in perpetuity. That is the feature of the Treaty that should be deemed very satisfactory by the relatives of the soldiers buried there. The rights of Australian citizens who happen to be resident in Turkey or to be travelling in that country are fully safeguarded in common with those of all nationals. Attached to the Treaty is a Convention on Trade, but it is optional for any part of the Empire not to be a party to it, and as the most favoured nation treatment is involved, although we have a small trade with Turkey, the Commonwealth Government do not consider it advisable in the interests of Australia ‘ that we should be a party to that Convention. Accordingly, we have notified our desire not to be a party to it. A Reparations Commission has been set up on which Britain is represented, and Australians who have any claims for damage caused during the war have the right to place them before that body. Those are the main provisions of the Treaty, and I am sure the Senate will see the wisdom of passing the motion in order to give the Government an intimation that this Chamber desires the Treaty with Turkey to be ratified.
Question resolved in the affirmative.
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In Committee (Consideration resumed from 3rd April, vide page 286) :
Clause 77 agreed to.
Clause 78 -
The Court may …. order -
The bankrupt or his wife; or … . to attend before the Court ….
Such notes of the examination as the Court or magistrate thinks proper, shall be taken down in writing, and may, after being read over either to or by the person examined and signed by him, be used in evidence against him, and shall be open, at all reasonable times, to the inspection of any creditor or the agent of any creditor, without fee, and to the in-‘ spection of any other person, on payment of the prescribed fee.
Amendments (by Senator Crawford) agreed to -
That after the word “ wife “ in paragraph (a) the words “or, where the bankrupt is a married woman, her husband “ be inserted.
That after the word “ him “, second occurring, in sub-clause 7, the words “ in any proceeding under this Act “ be inserted.
Clause, as amended, agreed to.
Clause 79 agreed to.
Clause 80 -
Provided that no person shall be entitled under this section’ to claim the benefit of any set-off against the property of a debtor in any case where he had, at the time of giving credit to the debtor, notice of an available Act of bankruptcy.
.- I move-
That after the word “ debtor **, line 5, the words “or at the time of receiving credit from the debtor “ be inserted.
This is practically a machinery clause, and the amendment will make it more comprehensive.
Amendment agreed to.
Clause, as amended, agreed to.
Clause 81 agreed to.
Clause 82-
Subject to sections 91, 110, and 130 of this Act the trustees shall apply the estate of the bankrupt in the following order of priority -
Amendment (by Senator Crawford) agreed to -
That after the word “ to “, line 1, sub-clause 1, the words “ the next succeeding subsection “ be inserted.
– I move -
That after sub-clause 1 the following new sub-clause be inserted : - “ 1a. Where assets in any estate have been recovered by means of an indemnity for costs of litigation given by certain creditors, the Court may make such order as it deems just with respect to the distribution of those assets with a view to giving the indemnifying creditors an advantage over others in consideration of the risk run by them in giving the indemnity.”
This amendment is taken from the New South “Wales Bankruptcy Act, and is desirable as the estate is thus given the opportunity of benefiting without any risk of expense.
Amendment agreed to.
.- I move-
That the word “ six “, sub-clause 4, he left out, with a view to insert in lieu, thereof the word “eight”.
This will make the interest rate £3 per centum per annum, which is the business rate in other Courts of Justice. The rate of £6 is inadequate.
Amendment agreed to.
Clause, as amended, agreed to.
Clauses 83 to 85 agreed to.
Clause 86-
.- I move-
That the following words be added to sub clause (2) : - “ and a deed of assignment under Part XI. and a deed of arrangement under Part XII. respectively of this Act.”
The object of the amendment is to make the clause more comprehensive and to correct an oversight.
Amendment agreed to.
Clause, as amended, agreed to.
Clause 87 agreed to.
Clause 88 (Relation back of trustee’s title).
– I dealt with this clause yesterday in my second reading speech, and indicated that I would take some action in Committee. I understand that it, and other clauses related to it, particularly clauses 95 and 96, are being reconsidered by the Attorney -General. If that be so, I suggest that this clause be postponed, so that I may have an opportunity of seeing it after it has been re-cast. I shall then be able to communicate with the banking institutions, which are particularly interested, and ascertain whether they agree with the amended proposals.
Clause postponed.
Clause 89 -
The property of the bankrupt divisible amongst his creditors, and in this Act referred to as “ the property of the bankrupt,” shall not include -
Amendment (by Senator Crawford) agreed to -
That after the word “children”, paragraph (d), the following words be inserted : - “ and any sewing machine used for domestic purposes by the bankrupt or his wife or children.”
Clause also verbally amended, and agreed to.
Clause 90 verbally amended and agreed to.
Clause 91 agreed to.
Clause 92 verbally amended and agreed to.
Clauses 93 to- 95 postponed.
Clause 96 - .
Amendment (by Senator Crawford) agreed to -
That the following words be added to subclause (3) : - “ or the Attorney-General “.
Clause, as amended, agreed to.
Clause 97.
– Sub-clause 3 of this clause reads -
No person shall be entitled as against the trustee to withhold possession of the books of account or any papers or documents relating to the accounts of the bankrupt, or to claim any lien thereon.
It has been pointed out that this would be very unfair to a bond fide buyer of book debts, who would be unable to sua for the debts in the absence of the books. I should like to know if the Honorary Minister is prepared to accept an amendment.
Clause agreed to.
Clause 98 agreed to.
Clause 99 postponed.
Clauses 100 to 102 agreed to.
Clause 103- .
Subject to this Act, the trustee may do all or any of the following things: -
.- I move-
That the words “ One hundred,” paragraph (e), be left out with a view to insert in heu thereof the word “ Fifty “.
It is felt by leading business men that this is . too high a limit, especially as the trustee has full power to summon a meeting of creditors in order to ascertain their wishes.
– I cannot accept the amendment, as the amount provided in the clause is considered reasonable. I know there is a difference of opinion as to what the amount should be, but the Government believe that the figure stated in the clause is reasonable.
Amendment negatived.
– I move-
That paragraph (h) be left out.
As I pointed out in connexion with paragraph e, the trustee has power to call a meeting of creditors in order to ascertain their wishes, and as this paragraph gives too much power, I trust the Minister will agree to its deletion.
– I cannot accept the proposed amendment. A trustee is bound by the Act, and if this paragraph were deleted he would be left without any discretion.
Amendment negatived.
Amendment (by Senator Crawford) agreed to -
That the words an attorney or solicitor,” paragraph (k), be left out, with a view to insert in lieu thereof the words, “ . a barrister, solicitor, or attorney.”
Amendment agreed to.
Clause, as amended, agreed to.
Clause 104 agreed to.
Clause 105-
The trustee may, by permission of the creditors by resolution passed at any general meet ing or of the Committee of Inspection, or by leave of the Court, do all or any of the following things: -
Accept, as the consideration for the sale of any property of thebankrupt, a ‘sum of money payable at a future time, subject to . such stipulationsas to security and otherwise as the Court thinks fit;
– There is no provision in this clause for the remuneration of a trustee carrying on a business. It is frequently found very desirable for a business to be continued for a time in order to effect a satisfactory sale, and in such cases it is usual, in Queensland at any rate, to allow a commission of 1 per cent, on the turnover. I should like to know if the Minister will add a provision to that effect.
; - I move-
That the words “ the Court,”paragraph (c), be left out with a view to insert in lieu thereof the word “ he.”
That would give the trustee a certain amount of discretion. It would be absurd, when considering the sale of any property, if the trustee who wished to make a stipulation as to the security or otherwise had to go to the Court. It would also mean increasing the costs.
Amendment agreed to.
– To enable me to consider an amendment on the lines suggested by SenatoT Thompson, I am agreeable to the further consideration of this clause being postponed.
Clause postponed.
Clauses 106 to 108 agreed to.
Clause 109-
Where the official receiver or trustee has seized or disposed of any goods, chattels, property, or other effects in the possession or on the premises of a bankrupt without notice of any claim by any person in respect of the same, and it is thereafter made to appear that the goods, chattels, property, or other effects were not, at the date of the sequestration order, the property of the bankrupt, the official receiver or trustee shall not be personally liable for any loss or damage arising from the seizure or disposal sustained by any person claiming the property, nor for the cost of any proceedings taken to establish a claim thereto, unless the Court is of opinion -that the official receiver or trustee has been guilty of negligence in respect of the same.
Amendments (by Senator Crawford) agreed to -
That the words “ the same,” line 6, be left out with a view to insert in lieu thereof the words “ the goods, chattels, property, or other effects.”
That the words, ‘’ the same “ at the end of the clause be left out with a view to insertin lieu thereof the words, “ the seizure or disposal.”
Clause, as amended, agreed to.
Clause 110-
.- I move-
That the word “ Court “ be left out witha view to insert in lieu thereof the word “ Registrar.”
The purpose of this amendment is to make the Act more workable. Instead of the trustee having to satisfy the Court he would then have to satisfy the Registrar.
Amendment agreed to.
-I propose to ask that this clause be recommitted, in order that I may move an amendment in subclause 2.
Clause also consequentially amended, and agreed to.
Clauses 111 to 113 agreed to.
Clause 114- -
Amendment (by Senator Benny) agreed to-
That the words to the satisfaction of the Court be left out.
– I call attention to the want of a quorum. [Quorum formed.]
Clause also verbally amended, and as a mended agreed to.
Clauses 115 and 116 agreed to.
Clause 117-
On the hearing of the application the Court -
Provided that the Court shall refuse the discharge in all cases where the bankrupt has committed any offence under this Act, or any other offence connected with his bankruptcy, unless for special reasons the Court otherwise determines;
– Sub-clause 1 is particularly objectionable. It compels the insolvent to apply to the Court. The 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 the matter more effectively than this clause does. It provides that the insolvent may, of his own volition, apply for his discharge, and it confers on creditors certain powers if they wish to be indulgent to an insolvent, while at the same time it grants a discretion in the matter to the Court. The elimination by . thepresent Bill of the powers of the creditors removes them from a sphere in which they are specially interested. I hold no brief for Queensland in this matter. My one desire is to improve the measure, and I ask that the clause be amended by the insertion of section 167 of the Queensland Act.
– Subclause 1 provides that a bankrupt may apply to the Court for an order of discharge, but if he does not the Court, has authority to compel him to apply. The object is to prevent the creation of nocertificated insolvents. I move -
That in sub-clause (4) the words “The Court may hear the official receiver, the trustee, and any creditor,” be left out, with a view to insert in lieu thereof the words, “Upon any such application,the Court may hear the official receiver, the trustee, any creditor who- has- proved -his debt, and the bankrupt.”
Amendment agreed to.
Amendments (by Senator Crawford) agreed to -
That in sub-clause (5) the words, “for special reasons “ be left out.
That after the word “Court”, second occurring, sub-clause 5, the words “ inits discretion “ be inserted.
Clause, as amended, agreed to.
– I desired to discuss sub-clause 7 of clause 117, but the Bill is being rushed through Committee so rapidly that one is unable to give it full consideration.
-(Senator Newland). - I am not rushing the Bill through Committee. The honorable senator will have an opportunity later on of asking for the recommittal of any clauses to which he desires further consideration to be given.
Clauses 118 and 119 agreed to.
Clause 120 (Discrimination between creditors).
, - I fail to see why in this clause discrimination is shown between creditors in bankruptcies where the liabilities, of a bankrupt do not exceed ?300.
– The idea in allowing a preference to be given, to a certain class of creditors is so that small traders, such as butchers and bakers, who supply the necessaries of life, may benefit in a case where the amount of the liabilities of a bankrupt is small.
Clause agreed to.
Clause 121 verbally amended and agreed to.
Clauses 122 to 130 agreed to.
Clause 131-
– I move- ‘
That in sub-clause 1 the words “ of which one part shall be payable on the amount realized by the trustee, after deducting any sums paid to the secured creditors out of the proceeds of their securities, and the other part on the amount distributed in dividend “ be left out, with a view to insert in lieu thereof the words “ on the net amount of the estate realized by the trustee after the deduction of the expenses of realization “.
It is a matter of improving the draftsmanship. The clause aims at doing in a roundabout way what my amendment does in much simpler language; namely, to have the remuneration of the trustee based on the net amount of the estate.
– The creditors should be allowed to vote a minimum payment to the trustee in cases where an investigation is necessary without much chance of success. The present system of paying on assets has much to recommend it, but a trustee may do a lot of honest work without any result, and I prefer the Queensland practice of fixing a minimum remuneration in cases where the ordinary revenue is likely to be quite insufficient.
– The fixing of the remuneration is in the hands of the creditors; they can fix a high rate of commission in cases where assets are difficult of realization.
– I have no objection to the clause if it will allow a special remuneration to be voted to the trustee.
– The clause covers what the honorable senator wants, except that the trustee cannot be voted more than the estate will realize. The creditors can vote any remuneration up to 100 per cent, of the value of the estate, so that there is a very wide margin to allow the trustee to be paid any special remuneration thought neccessary.
Amendment agreed to.
Clause, as amended, agreed to.
Clause 132 verbally amended and agreed to.
Clause 133 (Solicitation by trustee prohibited).
– Solicitation for business does not cost the creditors anything, nor does it involve an estate in any expense. . If it be not permitted, how are young wouldbe trustees toget any business? If the Ministry is agreeable, I should like to have the clause postponed to enable me to draft an amendment.
Clause postponed.
Clause 134- . . Provided that it shall not be necessary to tax bills and charges amounting to less than five pounds.
Amendment (by Senator Thompson) moved -
That the word” Five,” line 3, be left- out, with a view to insert in lieu thereof the word “ Ten,”
– I cannot accept the proposed amendment, as five pounds might, in some cases, be an excessive tax for the amount of work done.
Amendment negatived.
Clause agreed to.
Clause 135 (Trustee not to pay into private account).
.- The penalty under this clause is £50, and I wish to know if there is an alternative penalty. If the trust money is paid into a private banking account, it is a criminal proceeding, and there should be an alternative penalty. I should like an explanation in this respect.
– If a person pays trust moneys into his private account we impose upon him a penalty which is in addition to a number of penalties existing under the criminal and common laws. If a person pays trust moneys’ into his private account, and there is not sufficient money to his credit to meet his liabilities in respect of trust moneys, he has committed a theft, and can be dealt with under the common law, and committed to prison.
– Is the money recoverable from the person’s assets?
– Yes. There is no need to amend the clause, as full protection’ is given under our criminal laws.
Clause agreed to.
Clause 136- (2.) If the trustee at- any time keeps in his hands any money exceeding twenty-five pounds for more than ten days, he shall, unless he can prove to the satisfaction of the Court that his reason for retaining the money was. sufficient -
Amendment (by Senator Crawford) agreed ‘to -
That after the word “ creditor,” paragraph] (b) the words “ or the official receiver “ be inserted.
Clause, as amended, agreed to.
Clauses 137 to 143 agreed to.
Clause 144 - (1.) The trustee shall, at the prescribed times, being not less than twice in each year during his tenure of office, transmit to the Registrar -
a report as to the bankrupt’s conduct and affairs and such other matters in relation to the bankrupt or his estate as is prescribed.
Amendment (by Senator Crawford) proposed -
That the words” being not less than twice in each year during his tenure of office,” lines 2 and 3. be left out.
– I should like to know the reason for the suggested amendment. It is only right that a trustee should submit at stated times to the registrar a report of his trusteeship, so as to insure the efficient handling of the trust. It is far better to leave the clause as it stands. This provision is contained in the Queensland Act.
– The time will be prescribed by regulation under the Act.
Amendment agreed to.
Amendments (by Senator Benny) agreed to -
That the word “ shall,” first occurring, in sub-clause (2), be left out, with a view to insert in lieu thereof the word “ may.”
That the following new sub-clause be inserted : - (2a.) If a creditor with the concurrence of one-sixth in value of the creditors including himself requires the Registrar at any time to have the accounts of the trustee audited the Registrar shall have the audit made accordingly.
Clause, as amended, agreed to.
Clauses 145 to 148 agreed to.
Clause 149- (1.) When the trustee -
Amendment (by Senator Benny) proposed -
That the word “ shall “, line 12, be left out, with a view to insert in lieu thereofthe word “ may “.
– I should like Senator Benny to explain the reason for the suggested amendment. Is not the word “may” considered, in all legislation, to be mandatory?
– The reason is not to compel a trustee to apply to the Court for an order of release when he has realized all the property of a bankrupt, or so much thereof as can, in his opinion., be realized without protracting the trusteeship.
– Under the Acts Interpretation Act the words ‘ ‘ shall “ and “ may “ are synonymous.
– If we substitute the word “may” for the word “ shall “ it will then be optional for the trustee to apply to the Court for an order of release. It is only reasonable to expect that, for his own protection, he will do so.
– It should be mandatory on the part of the trustee to apply to the Court for an order of release. If Senator Benny’s amendment were agreed to, it would weaken the clause. Therefore, I support the clause as it stands.
– Suppose he had only partly released theestate, it would be compulsory for him to apply to the Court for an order of release.
Senator KINGSMILL (Western Australia) (12.46].- The word “ shall,” being essentially mandatory, should remain, because it puts some finality to proceedings which might be uselessly and needlessly protracted. If a wider option is left to the trustee than is proposed in the clause it can only have the effect of needlessly protracting the trusteeship.
– I cannot see what the difference is, nor can I realize why Senator Benny complains. If this provision is intended to be optional the ‘word should be “may.” The word “shall” leaves quite a different impression on my mind.
Amendment negatived.
Clause agreed to.
Clause 150 agreed to.
Clause 151 -
– I move -
That the word “ seven,” -line 3, be left out with a view to insert in lieu thereof the words. “ not less than three or more than ten.”
That proposed alteration is in accordance with the South Australian practice,and will make the clause more elastic.
– I hope the Committee will not accept the amendment. The clause ought to be definite. If it is optional to give from three to ten days’ notice, the individual concerned wall probably leave it until the last moment. Whether “the period is three or ten days there should be no option.
– I am prepared to accept the amendment.
– The amendment does not appear to me to be of very great importance, and I am prepared to agree to the clause as it stands.
– I am opposed to the amendment. The clause as drafted is infinitely better. It too often happens that among the creditors of a” bankrupt’s estate little cliques are formed, and the -control of the affairs of a general meeting of creditors may be in the hands of a very small number of men. If they were required to give only three days’ notice, such a clique could remove a trustee for no other reason than that he would not give way to them. The removal of a trustee is an important act. He is chosen for his integrity and capacity, and the time to consider whether he is the right man is when he is appointed. If his removal is to be in the hands of a small section of creditors in the particular spot where a meetingcan be called, to the exclusion of creditors in other parts of the country, who could come in seven, but not in three clays, an injustice may be done. Seven days’ notice is sufficiently short. The notification of the meeting could not reach some of the creditors in three days bj post, and even if telegraphed, there would not be time for them to arrange for voting by proxy.
Amendment negatived.
.- I consider that the period of seven days is too short, and I desire to move that it be extended to ten days.
-(Senator Newland). - The Committee has decided that “ seven “ shall remain in the clause. On the motion for the adoption of the report the honorable senator may move that the clause be recommitted.
.- I would like to have a legal interpretation of the meaning of the Word “ may “ in this clause. Sub-clause “1 says that if the Court is of opinion that the trustee has done certain things it may “ remove him frsm office. It seems tome that the clause lays down reasons why the trustee should be reinoved, and then says the Court “ may “ remove him. It first says that he must be removed, and then that he may be removed.
– The Court might be of opinion that the trustee had offended in some of the respects mentioned, but in such a minor degree that it was not necessary to remove him from office.
.-I hope the clause will be allowed to remain. It provides that thecreditors may, by resolution at a meeting called for the purpose, of which certain notice has been given, remove a trustee for certain reasons. A meeting of creditors is not always a body suitably constituted to determine whether accusations against a trustee are justifiable or are borne out by evidence. It might happen that a majority ofcreditors wished to remove the trustee for motives of personal pique, and they might Carry a resolution depriving him of his office. Under the clause the trustee would have the safeguard that the matter would have to go before the Court, which would review the decision of the creditors and determine whether, on the evidence, he had been guiltyof the misconduct alleged against him. It might be a safeguard to the insolvent to retain the trustee in office. He might be acting’ in accordance with the’ interests cif the insolvent, but not- in accordance with the wishes of a majority of the creditors.
It is wise and proper to give the Court the discretion df saying whether the decision of the meeting of creditors should bc acted upon.
Clause agreed to.
Sitting suspended from 1 to 2.80 p.m.
Clause 152 - (Summary administration).
. This clause provides that the official trustee shall administer all estates where neither the assets nor liabilities exceed ?300. It must be apparent that at first it will be very . difficult, if not impossible, to determine whether the value of the assets of an estate are or are not within the limit. Very frequently an insolvent’s statement of affairs- discloses little or no property, but, through the acumen and energy of the trustee, property of considerable value may be recovered for the creditors. The best interests of the community demand that no estate, however small, should be withdrawn from the ambit of the creditor’s trustee. I should like the Honorary Minister (Senator Crawford) to postpone the clause to enable me to submit an amendment.
. -^Senator Thompson should explain more fully why he wishes the clause postponed. Can the honorable senator mention the difficulties which exist in the present provision, and suggest the direction in which he thinks it should be amended ?
– Frequently an insolvent’s statement of affairs discloses that he has practically no assets, and it is eventually ascertained that certain assets have beeii concealed. It is very difficult to determine at the outset whether an estate is worth ?200 or ?500. If the clause were postponed I could, I believe, submitan amendment which would be an improvement.
– I trust the Committee’ will allow the clause to stand. It applies only to very small estates of ?300and under, and in such cases it should not be difficult for a trustee to discover whether all a bankrupt’s assets have been revealed. The provision applies particularly to the insolvencies of, say, working men,- and ?300 is, I think, a fair limit. A great majority of the estates dealt with will be valued under that amount. We have already provided in the Bill that a trustee appointed by the creditors shall receive certain remuneration for his services. The object of the clause is to obviate the necessity of paying for a trustee in connexion with small estates in order to avoid expense, and so to enable a larger dividend to be available to the creditors. It simplifies procedure in small estates, and leaves a larger amount to be divided amongst the creditors than would be the case if a certain portion had to be paid to a trustee. The official receiver would be a Government officer, and would not receive any portion of the estate.
– The reverse often happens when efforts are made to ascertain the assets. I can say from experience that a more searching investigation is made by the creditors’ trustee than by an official trustee. It is in the interests of the creditors. I move -
That the clause be postponed.
– This clause is framed for the protection of the debtor as well as the creditor. Throughout the Bill consideration is shown to both debtor and creditor.
– In what way does a debtor require protection ?
– He might have been, forced into bankruptcy owing to lack of employment or sickness, circumstances quite beyond his control. I trust the Committee will accept the clause as printed.
Motion negatived.
Clause agreed to.
Clauses 153 and 154 agreed to.
Clause 155 -
– We have now reached Part XL, which is taken chiefly from the South Australian Act, and which was embodied later in the Western Australian Act. The whole of this part has been a brilliant success in
South Australia, and the mercantile community in that State are desirous of having it either substantially as it is in the Bill, which is practically the same as the South Australian Act, or with a slight amendment which has been suggested by a Select Committee comprised of members of the Chamber of Commerce and the Warehousemen’s and Importers’ Association in South Australia. I move -
That the word “ thirty “, line 6, be left out, with a view to insert in lieu thereof the word “ ten “.
Although the provision is practically the same as the South Australian Act, the amendment I have suggested will be an improvement. We need to fix a shorter period, because it has been found in South Australia that where several weeks are allowed to lapse before a meeting of creditors is called an insolvent has an opportunity to dispose of some of his property. Personally, I do not wish to infringe upon the rights of the debtor, who should have ample time to retain counsel to defend him, and to take all necessary proceedings, but I submit that ten clays is sufficient.
– What of creditors who may be absent?
– There is ample time for them to be notified. Sub-clause (2) provides that the meeting must be held at a time : and place convenient to a majority of the creditors. That is a safeguard to every one concerned, and it has to be certified to at the first reading.
– I am not opposed to a reduction in the period, and would suggest that the honorable senator move to- make the maximum period twenty-one days. Ten days, I think, is insufficient. It might not be convenient for the majority of the creditors’ to attend within that time.
– If the time is not considered sufficient, the meeting could be adjourned.
– I will agree to twenty-one days in lieu of thirty days.
– There is a method of procedure. As soon as a debtor calls his creditors together, the process of thelocal Court or the Supreme Court automatically operates. If a debtor has toomuch time, he has an opportunity to dispose of some of the creditors’ assets. I am prepared, however, to amend my proposal in accordance with the Honorary Minister’s suggestion.
Amendment, by leave, amended accordingly, and agreed to.
Clause, as amended, agreed to.
Clause 156 (Stay of proceedings).
.- I move-
That the following new sub-clause be added : - “ (3) Any mooting may be adjourned from time to time by resolution for any period not exceeding three months.”
This provision should commend itself to the Committee. It is right that there should be power to adjourn proceedings, especially as investigations of great importance have sometimes to be conducted.
Amendment agreed to.
Clause, as amended, agreed to.
Clause 157 agreed to.
Clause 158 (Meeting may. resolve to accept composition or scheme).
. - According to this provision every resolution has to be confirmed at a subsequent meeting. This involves unnecessary delay. Will the Honorary Minister consent to delete the portion of the clause relating to the confirmatory meeting ?
Senator CRAWFORD (Queensland -
Honorary Minister) [2.45]. - No, it is a very useful safeguard. In its absence there would be a possibility of a decision to which the majority of the creditors were opposed.
– There might be a second meeting.
– Then the creditors would have a second opportunity of protecting themselves, and it is not likely in such circumstances that an attempt would be made to “ pack “ the first meeting.
Clause agreed to.
Clause 159 - (Right of creditors to require debtor to execute a deed).
.- I move-
That the following new sub-clauses be added : -
The provisions so far as applicable of Division 6 of Part IV. of this Act shall apply to every deed of assignment as fully and effectually as if a sequestration order had been made against the debtor.
The provision so far as applicable of Part VIII. of this Act shall apply to every trustee of a deed of assignment.
My amendment would make the preceding sub-clauses apply, in the case of an ordinary deed of assignment, both to the trustee and the debtor. It is a fair proposition, and it has been recommended by the special committee of the Chamber of Commerce which inquired into it.
– I am prepared to accept the amendment.
Amendment agreed to.
Clause, as amended, agreed to.
Clause 160-
Every such deed shall comply with the following’ provisions : -
– I move-
That the following words be added to paragraph (b) : - “ and such other household property as a majority of the creditors may by resolution determine.”
The amendment would result in extending a benevolent principle to the debtor, if the majority of the. creditors thought proper. It would give power to increase the allowance of household furniture to the unfortunate debtor.
– I would point out that it is practically impossible for the deed to contain “ a true and particular account “ of the debtor’s property.
Amendment agreed to.
Clause, as amended, agreed to.
Clause 161 agreed to.
Clause 162 - (Deed to be a release of all provable debts).
– It is very inadvisable to release a debtor before an investigation is arranged.
– When the debtor executes the deed the property is in the hands of the trustee. I cannot follow Senator Thompson’s argument.
Clause agreed to.
Clause 163 - . . the trustee of the deed, and the creditors thereunder, shall, as between themselves respectively, and as between themselves and the debtor, and against third persona, have the same powers,, rights, and remedies, with respect to the debtor and the property, as a trustee in bankruptcy, or creditors of a bankrupt, have with respect to a bankrupt and’ his- property.
Amendment (by Senator Benny) agreed to -
That after the word “ rights’’, line 5, the word “duties “ be inserted.
Clause, as amended, agreed to.
Clauses 164 to 171 agreed to.
Clause 172-
The trustee of every deed shall -
Provided that, if there is any creditor residing beyond the jurisdiction of the Court, the notice shall be given to that creditor six months before the final winding up of the estate;
– - Once in- every four months is too often for a statement to be filed. I move-
That the word “ four “, line 2, be left out with a view to insert in lieu thereof the word “ six “.
Amendment agreed to.
– I move -
That paragraph (g) be left out with a view to insert in lieu thereof the following : - “ (g) not less than one month before the final winding up of the estate cause notice tobe given by post to each person, claiming or appearing to be a creditor who has not proved his debt and assented to the deed, stating that unless he proves his debt and assents to the deed within one month from the posting of the notice,, he will be excluded from all benefits under the deed, and in the event of such creditor failing to comply with the terms if such notice, the trustee may exclude him from all benefits under the deed : “ Provided that if there is any creditor residing outside of Australia, the notice shall be given to that creditor six months before the final winding up of the estate.”
My amendment goes a little further than the paragraph in the Bill, but it would enable finality to be reached when there was a dispute between the trustee and the creditor. It is based upon difficulties that have arisen in the course of practice in South Australia, and it is approved of by the Special Committee of the Chamber of Commerce and the Warehousemen’s Association.. A - creditor might claim £100, and the trustee might think that he was entitled to only £20. If neither gave way, finality could not be reached.
– I am quite prepared to accept the amendment.
Amendment agreed to.
Clause, as amended, agreed to.
Clause 173 agreed to.
Clause 174-
The trustee shall not, within ten. days after the debtor’s execution of the deed, nor until the assents required for the validity of the deed have been obtained, realize, sell, or otherwise dispose of, except in the ordinary course of business, any portion of the debtor’s property, except property of a perishable nature, passing under the deed.
– I move-
That, after the word “ not “,. line 1, the words “ without the consent of the majority of the creditors in value “ be inserted.
Unless there is provision for a little elasticity, and for extra power to: be given to the trustees, it is easy to- see that an opportunity to dispose- of a business might be lost. My amendment would give power to the trustee in special cases to sell a business when he might otherwise lose the sale.
– I support the amendment. I have, known, instances where the provision as printed has proved absurd.-
– I accept the amendment.
Amendment agreed to.
Clause, as amended, agreed to.
Clauses 175: to 177 agreed to.
Clause 178 verbally amended and agreed to.
Clauses 179 and 180 agreed to.
Clause 181-
The trustee of a deed may retain, out of the estate, as a . remuneration for his care and trouble in and’ about the execution of the trusts thereof, such a sum. of money or percentage as is allowed by the Court, or fixed by the deed and approved by the Registrar.
– I move: -
That the words “ and approved by the Registrar,” line 6, be left out.
The object of this particular part of the Bill is to provide that a deed of assignment shall be free from official control. It is to be left in the hands of the creditors and debtors with as little interference by judicial machinery as possible. That is one of the reasons for the brilliant success of the South Australian bankruptcy legislation. If the trustee is allowed to retain out of the estate such sum of money as is permitted by the Court, or provided for in the deed itself, surely there is no need to obtain the approval of the Registrar.
– The words proposed to be omitted are a safeguard.
– That is so.
– I can imagine a body of creditors fixing upon an amount as their idea of what should be retained by the trustee, but, to my mind, their decision should be subject to review.
– The creditors are not likely to give the trustee more than they can help, because the more they give the smaller is the dividend for themselves.
– In justice to the trustee very often the decision of the creditors should be subject to some review, if not by the Court, at least by the Registrar.
– That means extra delay and extra cost.
– Sometimes delay insures justice to the trustees. In any case, it would be wise to allow the words to remain.
– I accept the amendment.
Question - That the words, proposed to be left out be left out - put The Committee divided.
AYES: 10
NOES: 4
Majority . , . . 6
AYES
NOES
Question so resolved in the affirmative.
Amendment agreed to.
Clause, as amended,, agreed to.
Clause 152 agreed to.
Clause 153-
No action for any dividend shall be brought against any trustee by any creditor; but if the trustee refuses to pay the dividend, the Court may order (payment thereof with interest for the time that it has been withheld, and may also order the costs of the application.
Amendment (by Senator Crawford) proposed -
That after the word “ order,” line6, the words “ the trustee to pay “ be inserted.
– I hope the clause will not be altered.. It is very important that the trustee should not be cast in damages when he has very good reasons not to pay over a dividend.
– The amendment simply makes the meaning of the clause clearer.
Amendment agreed to.
Clause, as amended, agreed to.
Clause 184 verbally amended and agreed to.
Clause 185. agreed to.
Clause 186 (Interpretation).
– It is not clear what is the difference between a deed of assignment, Part II, and a deed of arrangement,, Part XII. Does the. latter require a meeting to be held ?
– No meeting is required, except to accept or refuse the deed.
– What- is the difference beween a deed of assignment and a deed of arrangement?
– In a deed of assignment the. debtor assigns the whole of his estate tohis creditors, and in a deed of arrangement - which really- means that the debtor arranges a composition - the creditors may agree to accept somuch inthe £1’.
– In Queensland, a man can assign his estate for the benefit of his creditors, and no meeting is necessary.
Clause agreed to.
Clause 187-
Amendment (by Senator Crawford) agreed to -
That after the word “ or”, line 5, the words “to a deed of assignment “ be inserted.
Clause, as amended, agreed to.
Clauses 188 to 194 agreed to.
Clause 195-
.- I move-
That sub-clause (1) be left- out.
This sub-clause is absolutely unnecessary, as the disposal of any property included in the deed should be left entirely to the discretion of the trustee.
– I cannot accept the amendment, as the sub-clause is considered necessary for the protection of the creditors.
– My remarks were solely in the interests of the creditors. Circumstances might arise where it would be advantageous to sell property immediately; yet under this clause it is proposed to allow a certain time to elapse before any disposal can be made.
Amendment negatived.
Clause agreed to.
Clauses 196 to 199 agreed to.
Clause’ 200- (I.) The remuneration of a trustee of a deed of arrangement shall from time to time be fixed as prescribed by the Registrar. . . .
.- I move-
That the words “ prescribed by the Registrar “ be left out, with a view to insert in lieu thereof the words “ determined by the creditors.”
The fixing of the trustee’s remuneration by the Registrar and not by the creditors is a most unsuitable arrangement, as the Registrar may fix a remuneration totally inadequate for the work done.
, - I hope that the Committee will not accept the amendment, as, if carried, it will leave the door open for a clique, or a small number of creditors, to fix a basis of remuneration to the disadvantage of other creditors. If a full meeting of creditors were in all cases guaranteed there might be some necessity for the amendment, but in nine cases out of ten, the whole of the creditors would not attend at the meeting. The clause, as it stands, is a protection to all concerned.
Question - That the words proposed to be left out be left out- - put. The Committee divided.
AYES: 8
NOES: 4
Majority … … 4
AYES
NOES
Question so resolved in the affirmative.
Amendment agreed to.
Clause also consequentially amended and agreed to.
Clauses 201 to 204 agreed to.
Clause 205 (Courts in which applications for enforcement of -trust should be made).
Amendment (by Senator Crawford) agreed to -
That the following proviso be added : -
Provided that the provisions of subsection (2) of section 20 of this Act shall apply to any such application as if it were a proceeding in bankruptcy.
Clause, as amended, agreed to.
Clause 206 agreed to.
Clause 207-
Where the trustee, under any bankruptcy, composition, or scheme or deed of arrangement, has under his control.. . .
Amendment (by Senator Thompson) agreed to -
That after the word “ arrangement,” the words “ or deed of assignment “ be inserted.
Clause, as amended, agreed to.
Clause 208 (Concealing property).
– I have previously stressed my view that all offences under the Act should be tried before special juries. This is the clause in which provision could bc made to that effect. Will the Minister accept such an amendment?
– I cannot accept an amendment on the lines indicated. As far as I know, special juries are not provided for in any Commonwealth Act.
Clause agreed to.
Clauses 209 to 219 agreed to.
Clause 220 (Penalty on trustee acting when deed of arrangement void).
– This clause isvery objectionable, because it prohibits an ordinary assignment without a meeting. Will the Minister agree to the postponement of this clause, with a view to providing that assignments shall be allowed ?
– I agree to the postponement of the clause, but without committing the Government to the adoption of the suggested amendment.
Clause postponed.
Clause 221 agreed to.
Progress reported.
page 367
Bill received from the House of Representatives, and (on motion by Senator Crawford) read a first time.
page 367
Motion (by Senator Pearce) agreed to-
That the Senate, at its rising, adjourn until 3 p.m. on Wednesday, 7th May.
page 367
Motion (by Senator Pearce) proposed -
That the Senate do now adjourn.
Senator NEEDHAM (Western Australia) [3.471. - I desire to ask the Minister if he has received any word from Western Australia with reference to the Kalamunda Convalescent Farm ?
– For the information of those honorable senators who received telegrams concerning the action being taken in connexion with the Kalamunda Convalescent Farm, I may say that this and similar institutions were established by the Repatriation Commission in the various States to form a link in the chain of medical treatment of exsoldiers. The “chain” was a carefully considered scheme, and was adopted after consultation with eminent medical advisors. The necessity for convalescent farms has now practically disappeared, and their use is tending towards encouraging the inmates to abstain from trying to take their part in the life of the community,’ which is not in the best interests of the inmates themselves. The medical advisers support the Repatriation Commission in closing the farm. The Victorian farm has just been closed and the Queensland one will also be shut down in a few months. As the men have all been classified, and are, being handled ‘ in various suitable ways, it is proposed to close . Kalamunda before the end of the calendar year. Dr. McWhae, of Perth, and the Principal Departmental Medical Officer for Australia, after personally examining every inmate and his medical history, are very strongly. of the opinion that it is not only unnecessary, but undesirable, to continue Kalamunda after the next few months. No final decision will, however, be made for a few weeks, so that the representations of honorable senators may be fully considered.
Question resolved in the affirmative.
Senate adjourned at 3.50 p.m.
Cite as: Australia, Senate, Debates, 4 April 1924, viewed 22 October 2017, <http://historichansard.net/senate/1924/19240404_senate_9_106/>.