9th Parliament · 2nd Session
The President (Senator the Hon. T. Givens) took the chair at 3 p.m., and read prayers.
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Assent reported.
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Senator LYNCH brought up the report of the Public Works Committee, together with minutes of evidence on the proposed construction of a railway to connect Canberra with Yass.
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Shipments to the South.
– On the 16th May, Senator Findley asked the Minister representing the Minister for Trade and Customs the following question: -
I am now able to furnish the honorable senator with the following information : -
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– On the 16th May, Senator Newland asked the following questions : -
I am now in a position to furnish replies as follows : -
Officers were transferred to the State Services in the various States at the salary appertaining to their permanent position in the Commonwealth Service as at the date of transfer. In these States, several officers who, prior to transfer, were receiving allowances for performing the duties of a position higher than their permanent one, lost the allowance upon transfer. The positions held, and which entitled officers to these allowances, were, of course, recognized as being only temporary, and as such did not entitle the officers to carry such right over to the State. Had they remained Federal officers, they were liable to lose the allowance at any moment, in which case they would have had no grounds for complaint. Under arbitration determinations, the assessing section officers received increases to their salaries, but such increases were treated by the Public Service Board as allowances whilst performing assessing duties. Upon transfer, these allowances lapsed in the case of certain officers -
A deputation of Victorian transferred officers recently waited on the Treasurer regarding this question, and at present the representations made are being investigated and reported on by the Commissioner of Federal Taxation and the State Commissioner of Taxes.
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(No. 2).
Bill presented by Senator Ogden, and read a first time.
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Bill presented by Senator PEARCE, and read a first time.
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– Will the Government be prepared to accept from the PerthCity Council, or from some other body, a reasonable offer by way of compensation for the land required to widen Forrestplace, and to recoup the Commonwealth for any expenses incurred, in order to retain that area on such a scale as will be in keeping with the new Perth Post Office, and the improvements about to be effected by the State Government?
– I cannot say what the attitude .of the Government will be until a proposition is put before it ; but I can say that any proposition submitted will be given the fullest consideration.
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The following papers were presented : -
Northern Territory - Report of Administrator for year ended 30th June, 1923.
Ordered to be printed.
Inscribed Stock Act - Dealings and transactions during the year ended 30th June, 1923.
Lands Acquisition Act - Land acquired for Postal purposes at Julia Creek, Queensland.
War Service Homes Act - Land acquired at Peakhurst, New South Wales.
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asked the Minister representing the Treasurer, upon notice -
– The answers are -
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Bill read a third time.
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In Committee (Recommittal Consideration resumed from 16th May, vide page 725) :
Amendment (by Senator CRAWFORD agreed to -
That the following new clause be inserted :- 22a. A Court may delegate to the Registrar such of the powers vested in the Court (except this power of delegation) as the Court .deems expedient to be delegated to him.
Clause 23-
Court exercising jurisdiction in bankruptcy as the Court delegates to him.
– I move -
That sub-clause 1 be left out with a view to insert in lieu thereof the following new sub-clause : - (1.) Subject to rules, a Registrar shall have, in addition’ to the powers which may be delegated to him by the Court under the provisions of this “Act, the following powers, duties, and jurisdiction of a Court, namely : -
To hear debtors’ petitions and to make sequestration orders thereon, or to give leave to withdraw the petitions;
To adjourn any proceedings before him, to amend any written process or proceedings under this Act, and to take the whole or any part of the evidence in any matter either viva voce or otherwise; (fc) To authorize the official receiver or trustee to commence and prosecute any action in the name of the official receiver or trustee and of the bankrupt’s partner;
This provision is in operation in New South Wales, and is inserted in the Bill to facilitate the administration of the Bankruptcy Law and .to avoid expense. Much of the court work will be promptly done by the Registrar, and this simplification of court procedure is generally requested. Right of appeal to the court is preserved, and will be strictly controlled by the rules.
Amendment agreed to.
Clause as amended, agreed to.
Clause 24- (3.) Where default is made by a trustee, debtor, or other person in obeying any order or direction given by the Registrar or by the official receiver or by any other officer under any power conferred by this Act, the Court may, on the application of a registrar or official receiver or other duly authorized person -
Amendment (by Senator Crawford) agreed to -
That after the word “receiver,” second occurring, sub-clause 3, the words “ or creditor who has proved “ be inserted.
Clause, as amended, agreed to.
Clause 41 - >
For all or any of the purposes of this Act, a corporation may act by any of its officers authorized in that behalf under the seal of the corporation, a firm may act by any of its members, and a lunatic may act by his committee or curator bonis.
Amendments (by Senator Crawford) agreed to -
That the words “ Except where otherwise expressly provided “ be inserted at thebeginning of the clause.
That, after the word “ members,” line 5, the words “ or a duly authorized agent “ be inserted :: -
That the words “ and any person may act by his agent duly authorized in that behalf “ be added at the end of. the clause.
Clause, as amended, agreed to.
Clause 46 -
Subject to rules, any affidavit to be used in any proceeding under this Act may - (i>) in the case of a person out of the Commonwealth … be sworn before -
any person qualified to administer an oath in that place, he being certified by any of the persons mentioned in the last two preceding sub-paragraphs, or by a notary public of the country or by the superior court of the place to be qualified as aforesaid.
Amendment (by Senator Crawford) agreed to -
That thu words “qualified as aforesaid,” sub-clause 6. paragraph iii, bc left out, with a view to insert in lieu thereof the words “ so qualified.”
Clause, as amended, agreed to. Clause 47 -
In case pf the death of the debtor . . . the deposition of the deceased . . . shall be admitted as evidence of the matters therein deposed to.
Amendment (by Senator Crawford) agreed to -
That, after the word “ admitted,” the words in any proceedings under this Act” be in serted.
Clause, as amended, agreed to. Senator CRAWFORD (Queensland) [3.28]).- I move-
That the following new clause be inserted : - 49a. (I.) Where any examination: of a bankrupt or witnesses or of any other person is had before- any Court, the Court may, on the application of the trustee or any creditor (but at the expense in the first instance of the party making the application) direct the evidence of the bankrupt or witnesses or of any other person, or any of them, to be taken down by a shorthand writer appointed by the Court. (2.) The shorthand writer shall be sworn faithfully to report the evidence, and a transcript of the shorthand writer’s notes certified by him to be correct shall be admitted to prove the oral evidence of the witnesses, in the same manner as depositions signed by them may be admitted.
I understand that this provision is in conformity with the usual practice in most of, if not all, the Courts.
.. - I understand the Minister to say that the principle proposed in this clause is operative at the present time in some Courts.
– In most Courts.
– In cases where large sums were involved, shorthand notes would probably be taken, but in other instances it would handicap a creditor or trustee if he were called upon to pay the charges for a shorthand report.
– The matter is at the discretion of the Court; it will have to be satisfied aa to the reasonableness of the request.
– The cost will have to be borne by the trustee or creditor who makes the application ?
– If there are good grounds for the application, the cost will be paid out of the estate.
– Sub-clause 1 distinctly states that the work is to be don& “ at the expense, in the first instance, of the party making the application.”’ Is it in the first or last instance that thecosts have to be borne by the trustees or the creditor?
-The costs will be borne by the person making application. Later it will be seen whether there were sufficient grounds for making the application. If there were, the costs may be paid out of the estate-. ^
Proposed new clause agreed to.
Clause 50 -
A debtor commits an act of bankruptcy in each of the following cases: -
If execution against him has been levied . . . and the goods have been either sold or held by the sheriff for seven days . . . (/) If a creditor has obtained a final judgment . and the debtor does, not, within seven days . . .
– I move -
That after the word “ days “, paragraph e, the words “ or if any such execution has beenissued against him and has been returned unsatisfied” be inserted.
This is already contained in some of the State Acts, notably in the South Australian Insolvency Act, and is considered in that State to be a very useful provision.
Amendment agreed to. Senator CRAWFORD (Queensland - Honorary Minister) [3.34]. - I move -
That after the word “days”, paragraph (/), the words “ or such time, as is prescribed “ beinserted.
This amendment will facilitate the administration of insolvency. Under it extra time may be given a creditor tocomply with requirements of the clause,, as seven days, in- many cases, .may be insufficient for this purpose.
Amendment agreed to.
Clause, as amended, agreed to.
Clause 59 - (1.) In the event of a second or subsequent sequestration order being made against an undischarged bankrupt, any property acquired1 by him since the making of the former sequestration order . . . shall (subject to any disposition thereof made by the official receiver or trustee in that ‘bankruptcy without knowledge of the presentation of the subsequent petition, and subject to the provisions of section ninetysix of this Act) vest in the trustee . . .
Amendment (by- Senator Crawford) agreed to: -
That after the word “ petition “, line 8, the words “ and subject to any order made under paragraph (c) of sub-section 10 of section sixty-seven of this Act “ be inserted.
Clause, as amended, agreed to. Clause (53 -
Notice of every sequestration order . . . shall be published in the Gazette and in such other manner as is prescribed and shall be lodged in the office of the Registrar of Titles of each State.
Amendment (by Senator Crawford) agreed to: -
That the words “ of each State “, be left out, with a view to insert in lieu thereof the words “ or Registrar-General or other proper officer of each State and in such other places as are prescribed”.
Clause, as amended, agreed to. Clause 64 - (1.) Where a sequestration order is made against a debtor, he shall make out and file with the Registrar, and furnish to the official receiver a copy of a statement of his affairs in the prescribed form verified by affidavit, and showing -
Amendments (by Senator Crawford) agreed to: -
That after the word “liabilities”, paragraph a, the words “and losses (if any);” be inserted:
That the following new (paragraph be inserted - “ (aa) the causes of his ‘bankruptcy;”
That after the word “ creditors “, paragraph (b), the words “and debtors “be inserted:
Clause, as amended, agreed to. Clause 66- (1.) Where the Court makes a sequestration order, it may, within such time thereafter as it directs, hold a sitting, on a- day to be appointed by the Court, for the examination of the bankrupt, and the bankrupt shall attend thereat, and shall he examined as to his conduct, trade dealings, property and affairs. (2.) The examination shall be held in public . . . (5.) The official receiver shall take part in the examination of the bankrupt, and for’ that purpose, if specially authorized by the Registrar; may employ a barrister, solicitor, or attorney. . . .
– I move -
That after the word “ examination subclause 2, the words “ (if any)” be inserted.
This provides for cases where no examination is considered necessary.
Amendment agreed to.
– I move -
That the word ‘’ shall “, sub-clause 5, be left out, with a view to insert in lieu thereof the- word “ may “.
This is to provide for cases where it is unnecessary for the Official Receiver to take part in the examination of the bankrupt. As the clause stands, it is compulsory for him to take part, and in many cases this would cause unnecessary expense’.
.- Those responsible for drafting the Bill no doubt knew what they intended by the word “ shall.” The word ‘’ shall “ is mandatory, but in this clause “ may “ does not necessarily mean “ shall.” If the amendment is made, it will be optional for the official receiver to take part in the examination of the bankrupt. Will that be in accordance with the provisions of the Bankruptcy Acts’ of the different States? If so, there cannot be much objection to it, but, if not, I would like to be assured that it will be in- the interests of all concerned.
.. - When bankruptcy proceedings reach a certain stage the trustee comes in and, in most case’s, takes part in the examination of the bankrupt. Unnecessary and’ costly duplication would result if the clause were passed in its present form. The official receiver, even if th’e amendment is agreed to, will have authority to take part in the proceedings, but if it is not necessary, he need not do so.
– Is it compulsory for official receivers in the States- to take part in bankruptcy proceedings ?
-It is not.
Amendment agreed to.
Clause, as amended, agreed to.
Claus© 67- (I.) If, within the prescribed time after sequestration, the bankrupt has not obtained a discharge, the Court may, on the application of the official receiver, hold a public sitting on n day to be appointed by the’ Court for the- further examination of the bankrupt as to his conduct, trade dealings, property and affairs. (4.) The official receiver or trustee shall take part in the examination. (9.) Such notes of the examination us the Court thinks proper shall he taken down in writing, and, after being read over either to or by the bankrupt and signed by him, may be used in evidence against him, and shall be open to the inspection of any person at all reasonable times.
Amendments (by Senator Crawford) agreed to -
That after the word “ receiver,” sub-clause 1, the words “ or trustee “ be inserted.
That after the words “ appointed by the Court for the “, sub-clause 1, the following words be inserted : - “ examination (if the debtor has not previously been examined) or (if he has previously been examined) the “.
Amendment (by Senator Crawford) proposed -
That the word “shall”, sub-clause 4, be left out with a view to insert in lieu thereof the word “ may “.
.- I suggest that some reason for the proposed alteration should be advanced by the Minister. Why is it considered necessary ?
– The clause refers to cases in which the bankrupt has not, within the prescribed time after sequestration, obtained his discharge, and is further examined by the Court regarding his conduct, trade dealings, property, and affairs. The proceedings may take place a considerable time after the sequestration, and the official receiver or trustee, if it is deemed necessary, may take part in them.
– And may employ barristers, solicitors, and attorneys.
– They may do those things, but as the Bill waa originally drafted, they would have to do them whether it was considered necessary or not.
Amendment agreed to. Amendment (by Senator Crawford) proposed -
That the following words be added to subclause 4 : - “ and the official receiver,’ for that purpose, if specially authorized by the Registrar, may employ a barrister, solicitor, or attorney.”
– Surely the Minister will give the Senate some explanation- why this alteration is considered necessary.
– The alteration is to meet difficult cases. Honorable senators will recognize that the Bankruptcy Courts, and the officers of those Courts, are called upon to deal with a great variety of cases. Some cases are very simple; others are extremely difficult. Where the cases are difficult, authority is given for the Registrar to allow legal assistance to be obtained.
Amendment agreed to.
Amendment (by Senator Crawford) proposed -
That the words “ to the inspection of any person at all reasonable times “, sub-clause 9, be left out, with a view to insert in lieu thereof the words “ at all reasonable times, to the inspection of any creditor, or the agent of any creditor, without fee, and to the inspection of any other person on payment of the prescribed fee “.
– Will any person on the payment of the prescribed fee be in a position to inspect documents in the Bankruptcy Court?
– Yes. Bankruptcy is quite a public matter; the examinations are held in open court.
– There are many cases of bankruptcy of little or no interest to the general public.
– In such cases no one would pay a fee to inspect the documents.
– But there are some inquisitorial persons, like Paul Pry, who would, if the fee were nominal, go to the Bankruptcy Court and pry into matters in. which they were not concerned. I would like to know if this provision is embodied in the bankruptcy legislation of tie States?
– The amendment serves to bring the Bankruptcy Court practice into line with the actual practice in all other courts. If the honorable senator is anxious to inspect any document . filed in a case in the Supreme Court, he can do so. If a member of the press wishes to ascertain the position of any case, he can pay a fee and see for himself what has been done. Once documents are lodged in a court, they become public property, and are available to the public for investigation, and no reason can be advanced for putting bankruptcy proceedings on a different footing from all other matters that come before the courts.
Amendment agreed to.
Amendment (by Senator Crawford) propose( -
That the following new sub-clause be inserted: - “ (9a.) Any person who, by ^untruthfully stating that he is a creditor “or the agent of a creditor, inspects the notes of the examination without- payment of the prescribed fee, shall be guilty of an offence.
Penalty: Five pounds.”
– I fail to see the necessity for this addition. A person who is not directly interested in any proceedings can, on payment of a fee, inspect any document, and now it is proposed that if he goes to the custodian of the document and makes an untruthful statement in order to dodge the payment of a nominal fee, he shall be liable to a penalty. To my mind this is unnecessary.
Amendment agreed to.
Clause, as amended, agreed to.
Clause 74- (1.) Every bankrupt shall ….
Amendment, (by Senator Crawford) agreed to -
That after the word “receiver”, paragraph b, the words “ or trustee “ be inserted.
Clause, as amended, agreed to. Clause 82 - (1.) Subject to the next succeeding subsection, sections 91, 110, and 120 of this Act, the trustee shall apply the estate of the bankrupt in the following order of priority : -
Amendment (by Senator Crawford) agreed to -
That after the word “ Firstly”, paragraph a, the words “ where a deed of assignment under Fart XI. of this Act or” be inserted.
– I move -
That the following new paragraph be inserted : - (ea) Sixthly, in payment of all amounts, not exceeding in any individual case Two hundred pounds, due in respect of compensation under any Act or State Act or law of a Territory relating to the payment of compensation where in any employment personal injury by accident arising out of, and in the course of, the employment, is caused to any workman, the liability where for accrued before the date of the order of sequestration :
Provided that where the employer hag entered into a contract with insurers in respect of any liability under any such Act or State Act or law of a Territory to any workman this paragraph shall not apply.
This new paragraph gives priority to amounts due to a workman for compensation under any Commonwealth or State Act.
Amendment agreed to.
Amendment (by Senator Crawford) agreed to -
That the following new paragraph be inserted : - (fa) Eighthly, in payment of all muni cipal or other local rates due from the bankrupt at the date of the order of sequestration and having become due and payable within twelve months next preceding that date; and all assessed land tax and income tax, assessed under any Act or State Act prior to the date of the order of sequestration and not exceeding in the whole one year’s assessment; and in repayment of any advance made to the bankrupt, or in payment of any amount owing by the bankrupt for goods supplied to him, under any Act or State Act or law of a Territory relating to or providing for the improvement, development or settlement of land :
Provided that, if the bankrupt has given security for the payment or repayment of the amount due, this paragraph shall only apply to the balance due after deducting the net amount realized from the security;
Clause also verbally amended, and, as amended, agreed to.
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) proposed -
That paragraph b be left out with a view to insert in lieu thereof the following new paragraph : -
– I must confess that I cannot see the object of the proposed amendment. I prefer the original paragraph rather than that now proposed. It will be noted that the amendment excludes from the property of a bankrupt life assurance policies, which, I think, is correct, but it includes the amount paid by way of premiums during the preceding two years. What is to happen to the policy ? It may lapse. We should retain the original paragraph, which limits to £2,000 in the aggregate the total amount upon which a person may have paid premiums, otherwise the policy is to go to the creditors. It seems a much better provision than the one proposed, which apparently places in jeopardy the policy which it is the intention of the Government to protect. Apparently any amounts paid by way of premiums within two years of sequestration are to be recovered from the insurance company. If so, what is to happen to the policy ? I intend to oppose the amendment.
– I am inclined to agree with Senator Drake-Brockman. I should like to know what the Government have in mind in this regard, and what is to become of the payments. The practice in bankruptcy administration is to protect life assurance policies; they are to be in a particularly favored position. Under this amendment it seems that a life assurance policy will be a less valuable security than it would be if the original paragraph were retained. This deals with the surrender value.
– Does the honorable senator prefer the old sub-clause?
– Yes, it seems much better.
– We do not regard the amendment as vital.
Amendment negatived.
Amendment (by Senator Crawford) agreed to -
That the words “ and which do not provide for payment of an annuity of more than One hundred and four pounds in the aggregate “, paragraph c, be left out, with a view to insert in lieu thereof the words “ to the extent to which they do not provide for payment of an annuity of more than Two hundred and eight pounds in the aggregate “.
Amendment (by Senator Crawford) agreed to -
That after the words “ goods hired under a”, paragraph e, the word “ valid” be inserted.
Clause, as amended, agreed to.
Clause 93 - (1.) Subject to the next succeeding section every conveyance or transfer of property, or charge thereon made, every payment made, every obligation incurred” . . . shall if the debtor becomes bankrupt on a bankruptcy petition presented within six . months thereafter be void as against the trustees in bankruptcy. (2.) Nothing in this section shall affect the rights of any person making title in good faith, and for valuable consideration through or under a creditor of the bankrupt.
Amendments (by Senator Crawford) agreed to -
That the words “ Subject to the next succeeding section “, sub-clause 1, be left out.
That after the word “affect”, sub-clause 2, the letter “ (a) ” be inserted.
That after the word “bankrupt”, sub-clause 2, the following words be inserted : - “ or (b) the rights of a purchaser, payee, or encumbrancer in good faith and for valuable consideration and in the ordinary course of business.”
Amendment (by Senator Crawford) proposed -
That the following new sub-clause be inserted : - (3.) The burden of proving that the provisions of the last preceding sub-section have been complied with snail lie upon the person who releis upon their having been complied with.
.- Will the Minister state whether this principle is contained in the State Bankruptcy Acts, and, if so, why it is only now being inserted in this Bill ?
– A similar provision is to be found in the Bankruptcy Act of every State, and honorable senators must see how reasonable it is.
– I am not finding fault with the provision, “but if it is already embodied in Bankruptcy Acts throughout the Commonwealth, it seems extraordinary that no such provision was included ir. the original Bill. This measure has been before Parliament for a decade:
– This is not a new provision. It is found in the English Act and in the Victorian Act, and the same provision, in principle, is embodied in every Bankruptcy Act in Australia. The amendment makes clear that a principle already recognized is contained in the Bill. It makes the purpose of the Bil] clearer than it formerly was.
Amendment agreed to.
Clause, as amended, agreed to.
Clause 94 - (1.) Subject to the foregoing provisions of this Act with respect to the effect of bankruptcy on an execution or attachment, and with respect to the avoidance of certain settlements, nothing in this Act shall invalidate, in the case of a bankruptcy -
Amendment (by Senator Crawford) agreed to -
That after the word “settlements”, subclause 1, the words “ and preferences “ be inserted.
Amendment agreed to. Clause, as amended, agreed to.
– I move -
That the following new clause be inserted : - 95. Any payment of money or delivery of any security or negotiable instrument made to or by the order or direction of a bankrupt by his banker in good faith and without knowledge on the part of the banker of the order of sequestration made against the bankrupt shall be valid as against the trustee.
I am sure honorable senators will realize the fairness of the provision. It protects the banker where payment is made in good faith after an order of sequestration has been made.
– The clause is certainly a great improvement on the provision originally presented to the Senate. It embodies a principle which I placed before the Attorney-General, and whichhe accepted. His Department has drafted the clause before us, but it does not go as far as I personally think it ought to go. I move -
That the word “ bankrupt “, first occurring, be left out with a view to insert in lieu thereof” the word “ debtor “.
All bankrupts are essentially debtors.
– The honorable senator desires to make the provision a littlemore comprehensive.
– BROCKMAN.Yes. It should apply to all debtors, as well as io debtors who are in fact bankrupt.
– Does the provision mean that the moneys in question shall be recoverable from the trustee]
– No. If an act of bankruptcy has been committed,, .and the man does not become bankrupt for some months - up to six months under this Bill - the Act relates back to the time when he committed the act of bankruptcy, and consequently any funds at his disposal at that time may be seized by the trustee. Let me give an illustration : A debtor, in a country place in . New South Wales, recently committed an act of bankruptcy in respect to his business, which was carried on in Sydney. He had at the time money to his credit in a country bank. The head office of the bank ‘knew of the act of bankruptcy, but the branch bank was not aware of it. In order to proceed to Sydney to settle his affairs he drew money from the country bank, and when he reached Sydney he was made bankrupt. Although he had credit at his country bank, the trustee insisted that the money he had drawn from it should be paid again by the bank to the trustee, because of the doctrine of relation back, which would sti’l -obtain under the clause as now before the Committee. I desire to amend the . clause to prevent such an occurrence. All the- banks are interested in the matter, and the institution mostly concerned is the Commonwealth Bank, which has some 3,000 branches. What ia meant by “notice” to a bank? If it were held that notice to the head office of’ the bank in Sydney was notice to the whole of its branches, then payment by a branch, say, in Wyndham, under such circumstances as I have related, would place the bank in the unfortunate position I have indicated. T do not intend to insist on the substitution of the word “ debtor “ for the word “ bankrupt “, but I do say that it is the better term. I also desire to insert after the words “ in good faith “ the words “ before the making or “, the word “ and “ immediately following to be left out. These amendments, from the point of view of the banks, are very important. At present the banker is protected after sequestration is made, but he is not protected before it.
– And the notice should apply to the branch where the payment is made, rather than to the head office?
– Yes. I shall deal with that matter later on by proposing a new sub-clause, as follows: - (2.) In this Act “ banker “ includes any corporation carrying on the business of a bank, and for the purpose of this section shall be deemed to be a banker at his office where the payment is made.
– I support the amendment, and I hope that the Government Will adopt it. If we provide against an order for sequestration, and the consequences thereof , we should not mulct the banker for the benefit of the trustee. The strong case mentioned by Senator Drake-Brockman shows that if the wheels of commerce and industry are to be kept running by our bankers, we should give them the utmost protection.
– I regret that I cannot accept the amendment moved by Senator Drake-Brockman, as bankers, in common with all others, are protected by clause 94.
– This particular amendment does not touch that point.
-It gives special protection to bankers respecting something which takes place after sequestration. Before sequestration bankers are protected, just as others are, by clause 94. Under clause 95 now proposed, they will have special protection respecting certain acts which may be done after sequestration. I ask the Committee to vote against the proposed amendment.
– I do not think that clause 94 gives, in all cases, general protection to a banker. It states that “ subject to the foregoing provisions,” nothing in this Act shall invalidate, in the case of a bankruptcy - (a) any payment by the bankrupt to any of his creditors, and (6) any payment or delivery to the bankrupt. These two paragraphs do not touch a banker.
– The bank may cash his cheque.
– But the cheque may be passed on to some one else. Clause 94 refers to the bankrupt only, and does not protect the banker. I certainly need more evidence than the Minister has produced to convince me that my view is incorrect. The new clause, in the form I suggest, was settled on behalf of the bankers by senior counsel in Melbourne, who took into consideration clause 94. The advice given by a leading King’s Counsel in this city to the bankers was that unless the amendments I now suggest were inserted, they would not be protected under clause 94. I personally prefer to accept the advice of this senior King’s Counsel, who has considered this matter most carefully, rather than the statement made by the Minister (Senator Crawford) without much consideration.
– I do not wish to intervene in a matter affecting the actual law of bankruptcy, of which I know very little, but I do know something about banking. I can see that a banker in the ordinary transactions of business would, under clause 94, be very seriously handicapped. ‘ It would necessarily lead to undesirable restrictions on business. To facilitate business a banker should, as long as there is money lying to the customer’s credit, be able to pay it out without fear or question. If, before money can be paid out, he has to satisfy himself as to whether it is possible that the customer may have committed an act of bankruptcy, it will make it difficult for business to be conducted.
– The banker is protected respecting anything that he does in good faith, and without knowledge of the order of sequestration.
– The Minister has been informed by his legal advisers that the banks are fully protected under clause 94. Senator Drake-Brockman says that the lawyers advising the bankers are satisfied that they are not. We should make certain that the banker is fully and reasonably protected, not because he is entitled to any greater consideration than anybody else, but because he does an entirely different class of business. As the holder of money on behalf of his client he is in a position entirely different from that of any other person doing business with the same individual. For that reason it is highly desirable that this point should be satisfactorily and definitely settled. Senator Drake-Brockman asked what was meant by “ notice to a banker.” The head office of a bank may know that a particular individual has become bankrupt, but it may not know that he has an account with any one of its branches. The head office of a bank has not a record of the individual accounts held by its branches. Take, for instance, the case of ‘the Commonwealth Bank. Is it suggested that if the management is satisfied that a person has become insolvent, it shall immediately notify the 3,000 odd branches in any one of which an account may possibly be held by the bankrupt? Such a thing would be impracticable, and would give rise to all sorts of trouble. If there is any doubt on the point, as apparently there is, we should definitely settle it, and make perfectly certain that a bank, so long as it has money lying to the credit of a customer, shall be able to pay it out without fear or question, and that “ notice “ shall be notice to the branch of the bank at which the account is kept, and not necessarily to the bank simply as a corporate body.
– I take it that we do not want to put a bank in a position of privilege as against any other business, except in so far as it is necessary to make allowance for the difference between a banking business and that carried on by others. To do anything more may cause an injustice to other creditors. To clear the position, we have first to look at the two terms “ debtor “ and “ bankrupt.” The definition clause states that “ bankrupt “ means any person in respect of whose estate a sequestration order has been made, and that “ debtor “ includes any person, whether a British subject or not, who, at the time when any act df bankruptcy was done or suffered by him, was personally present in Australia, or ordinarily resided or had a place of residence in Australia, &c. The words “ at the time when any act of bankruptcy was done “ apply before the order of sequestration is made. There is an important difference between those definitions and the amendment Senator Drake-Brockman wishes to introduce. As a result of Senator DrakeBrockman’s representation, clause 95 in the Bill as introduced was struck out, because it did not go far enough. The Crown Law authorities, to meet the representations, have drafted the proposed new clause, which Senator Drake-Brockman admits is better than the original one, and which, therefore, affords a greater measure of protection to the banker than does the State bankruptcy laws.
Senator Needham. - Which Senator Drake-Brockman wants to improve.
– The Government does not admit that the suggested amendment would . be an improvement. If it were accepted, the banker would be placed in a position of privilege which is not enjoyed by any other business of a like character. Senator Greene raised a pertinent point about the question of notice. He asked whether notice to the head office was notice to al] its branches. Luckily, the law on that point has been distinctly laid down both in England and in Australia. The doctrine of notice, however inconvenient and impracticable it may be for the bank, is that notice to a bank is notice to all its branches, allowing time for the course of post. This was laid down in the case of Willis v. Bank of England, 1835; Morris v. National Bank of Australasia, N.S.W., L.R. 93. I am hiding nothing from honorable senators. The banks of Australia are not the only institutions that have head offices in capital cities and various branches throughout the Commonwealth. Such firms as Dalgety and Company and the New Zealand Loan and Mercantile Agency Company carry on business similar, to a certain extent, to that of a bank.
They make advances, such as those on produce, and are naturally liable, in the ordinary course of their business, to make advances like in character to those made by a bank when cashing cheques-. That being so, would the Committee be justified in putting the banks in an advantageous position by bringing the acts of debtors within the province of the clause, while protecting other firms in regard only to the acts of bankruptcy? I suggest to the Committee that to go to the length proposed by Senator DrakeBrockman would be dangerous. It would be putting the banks in a position of privilege. I have no doubt that they would wish this amendment to be made. It would save them from the necessity of informing all their branches when an act of bankruptcy had been committed. It. would save them from an onerous duty which, in the Bill, is placed upon creditors as well as them. The duty would be quite as onerous for other firms as for banks. While we might please the banks by making the alteration proposed, there would soon be an outcry from many other traders, who would want to know why they could not have the same privileges extended to them.
– Would the obligation of serving the notices rest on the head office of the bank?
– Certain ly . The notice would be served on the head office of the bank, but it would have to notify its branches. Time is allowed for the notices sent out by the head office to reach the branches through the post. Anything done before there had been sufficient time for the notices to reach the branch banks would be a bona fide transaction, and would be recognized.
– How many bankrupts were there last year ?
– I would like to ask for notice of that question.
– The Minister in charge of the Bill ought to have figures of that kind ready.
– I am not in charge of the Bill. I cannot see that the question arises under this clause. However onerous it may be for the banks to send out notices, it would be just as onerous for Dalgety and Company or any other firm with numerous branches. Ministers have given very careful consideration to the representations made by Senator Drake-Brockman, and I cannot take the responsibility of advising the
Committee to go further than the Government’s proposal. The proposed new clause meets the> case of the banks more than does any State Bankruptcy Act.
– The Minister for Home and Territories (Senator Pearce) has. advanced a strong argument in favour of the abolition of the doctrine of relation back. We have not abolished it, but have accepted it, and it is in this Bill. Banks are different from Dalgety and Company and other trading companies, in that they carry on the business of banking. Suppose a branch of a bank had knowledge that a man had committed an act of bankruptcy, but was not bankrupt. Suppose that, knowing what he had done, it refused to cash a cheque for him, although there was money to his credit. If he did not subsequently become bankrupt, what would be the position of the bank? There would be, I should imagine, an excellent ground for an action for damages. But if the individual, knowing that he had committed an act of bankruptcy, cashed a cheque and subsequently went bankrupt, he would have to hand the money back to the trustee.
– The bank would be protected under clause 94.
– I submit that it would not be protected under clause 94. That is my view, and I am supported by counsel’s opinion, which the- banks have obtained.
– Then English does not mean what it says.
– English very often does not mean what the layman thinks it means. Counsel says that under the conditions I hav-s outlined, clause 94 does not protect the banks. Messrs. Dalgety and Company and similar firms do not carry on the business of banking. Banking is carried on exclusively by bankers. Curiously enough, there is no definition at the present moment of a banker. It is a term that is used in this Bill, but there is no definition of it in the Bill or in the Acts Interpretation Act.
– We ought to recommit the definition clause.
– There is no need to do that. I shall supply a sub-clause to meet the case. I. contend that the proposal will not place the- banks in an unduly favorable position. Their business cannot be compared with any other class of business. I urge the Committee to accept my amendment.
Question - that the word proposed to be left out (Senator Drake-Brockman’s amendment) be left out - put. The Committee divided.
AYES: 15
NOES: 8
Majority … 7
AYES
NOES
Question so resolved in the affirmative.
Amendment agreed to.
Amendment (by Senator DrakeBrockman) proposed -
That the word “and”, line 4, be left out, with a view to insert in lieu thereof the words “ before the making or”.
Senator PEARCE (Western Aus tralia. - Minister for Home and Territories) [5.1). - These words are quite unnecessary, because if the transaction took place after the order of sequestration, the person would be a bankrupt, and not a debtor. The definition of the two terms shows clearly that a debtor is a person by whom an act of bankruptcy has been committed, but before an order of sequestration has been made. After the order of sequestration has been made he becomes a bankrupt. The Government has registered its objection to the proposal, and acceptance by it of the amendment must not be regarded as acquiescence in it.
Amendment agreed to.
Amendments (by Senator DrakeBrockman) agreed to -
That after the words “ the banker of “ the words “ the making of “ be inserted.
That the word “ bankrupt,” second occurring, be left out with a view to insert in lieu thereof the word “ debtor “.
Senator DRAKE-BROCKMAN (Western
Australia) [5.5]. - I move -
That the following new sub-clause be added to the proposednew clause : - (2.) In this Act “ banker “ includes any corporation carrying on the business of banking, and for the purpose of this section shall be deemed to be the banker at his office where the payment or delivery is made.
This proposed new sub-clause covers the point that was touched upon by Senator Greene. There is no definition in this Bill or in the Acts Interpretation Act of “ banker.” In other legislation, particularly the Bills of Exchange Act, that has passed this Parliament, it has been found necessary to insert such a definition where any reference is made to bankers. Similarly there should be a definition of “ banker “ in this Bill.
– The Government cannot accept the amendment. The banks are seeking to become a privileged class under this Bill. If the Committee agrees to the proposal of Senator Drake-Brockman, head offices of banks will be under no obligation to advise their tranches with regard to sequestration orders, and so long as the branches have not received advice of a bankruptcy they will be in a position to cash cheques and hand over valuable securities in which the creditors of a bankrupt may have an interest quite equalto the banks themselves. That is a privilege which the banks have no right to expect.
– If the head office of a bank fails to notify its branches, what happens ?
– If the amendment is agreed to there will be no need for the head office to send notice to the branches. They will be protected. As the Bill stands, notice of bankruptcy must be sent out and the law allows sufficient time for a notification to reach each branch through the post.
.- First of all we have a definite statement by a legal gentleman who is supporting the Government as to the purport of his amendment, and then we have an explanation from the Honorary Minister (Senator Crawford), stating clearly that that amendment will not place those who are interested in bankruptcy proceedings in the position in which the Bill intends them to be placed. This is not a party measure. Honorable senators of the Opposition are just as anxious as the Government to protect the community against persons who commit fraud, and if the amendment, as opposed to the provisions submitted by the Minister, will not afford sufficient protection to the community in this direction, I cannot, without further explanation of its object, support it.
– I have already stated one of the reasons for inserting in the Bill a definition of the term “ banker,” which is used in the proposed new clause. It has been found necessary in other legislation containing references to bankers, and particularly in the Bills of Exchange Act, to have such a definition. But this Bill contains none. Neither is any definition of “ banker “ to be found in the Acts Interpretation Act. What is a banker ? A corporation acting under charter to carry on banking in the British Empire, or an individual, may be so described. In view of the vagueness of the term, this Bill should contain a proper definition.
– That is all right, if that is as far as the honorable senator’s amendment goes.
– I am asking the Committee to provide that for the purpose of this clause a banker shall be deemed to be a banker at his office where the payment or delivery is made, and since that stupid doctrine of relation back has been retained in this Bill - I have not been able to shift the Government in that regard - it is absolutely essential that the banks should be afforded some protection. They do not ask for any special privilege which this Parliament should not give, but as they are public institutions they ask to be afforded a certain amount of protection, to enable them to carry on the business of banking, which is a very necessary function in the community. Senator Greene has just pointed out many disabilities which the banks will suffer under this legislation. Take, for example, the Commonwealth Bank, with its 3,000 branches. If notice is given to the head office in Sydney, none of the branches outside Sydney, except perhaps the head “offices in each State, will hear anything about the several acts of bankruptcy that may occur in Perth, Fremantle, Brisbane,
Sydney, or Darwin, but if all of the 3,000 branches do not get notice of these acts nf bankruptcy and certain money is paid out by any of them, the bank will be called upon to make refunds to the several trustees.
– Very few business people bank with the Savings Bank.
– A great many business people deal with savings banks because there are no other banks with which they can deal.
– The Commonwealth Bank has a branch at every post office in Australia.
– Quite recently a banker with whom I was discussing this matter told me that if this protection I seek to give to the banks is not afforded, every banking institution in Australia will be obliged to reconsider all its overdrafts.
– What protection have the banks under State legislation?
– They have every protection under the Victorian Act. Indeed they have more under that Act than I am proposing to give them.
– Does this definition of “ banker “ appear in the Victorian Act?
– No. But in effect it is in that Act.
, - I am surprised that Senator Drake-Brockman has not been frank enough to tell the Committee that he proposes, by his amendment, to do more than simply define the word “ banker.”
– Of course I do.
– The proposed nev.’ clause as already amended and as proposed to be further amended would read as follows: -
Any payment of money or delivery of any security or negotiable instrument made to or by the order or direction of a debtor by his banker in good faith before the making or without knowledge on the part of the banker of the making of the order of sequestration made against the debtor shall be valid a» against the trustee. In this Act “ banker “ includes any corporation carrying on the business of banking and for the purpose -of thissection shall be ‘ deemed to be the banker at his office where the payment or delivery ismade.
No other form of business would enjoy the privilege proposed to be given to the banks. A loan company such as the New Zealand Loan and Mercantile Agency, or a company which makes advances against produce such as Dalgety and Company, would not enjoy this privilege.
– Those companies are covered by clause 94.
– And so are the banks. They are all covered to the extent to which the Bill goes, but Senator Drake-Brockman wants to take one section of them a little further. They are all covered, but when a man becomes bankrupt their protection ceases. Senator Drake-Brockman wants to give protection, not to the other firms, but only to the banks for what takes place before a man becomes a bankrupt, that is to say, when he is a debtor, and would enable a bankrupt acting with the connivance and consent of a bank, to defeat his creditors and protect the bank. We must give the banks every facility to enable them to carry on their business, but at the same time we cannot prefer them to other creditors. As Senator DrakeBrockman’s further amendment opens up a new principle, and is a further extension of what the Government already consider undesirable, we must ask the Committee to reject it.
Question - That the new sub-clause proposed to be added (Senator DrakeBrockman’s amendment of the amendment) be so added - put. The Committee divided.
AYES: 8
NOES: 10
Majority … … 2
AYES
NOES
Question so resolved in the negative.
Proposed new sub-clause negatived.
Proposed new clause, as amended, agreed to.
Clause 96- (2.) No claim shall be made, after the expiration of twenty years from the date of the sequestration of the estate of a bankrupt, by the trustee of the estate, to any estate or interest in any land belonging to the bankrupt…..
Amendment (by Senator Crawford) agreed to -
That sub-clause 2 be left out with a view to insert in lieu thereof the following : - “ (2.) After the expiration of twenty years after the date of the sequestration of the estate of a bankrupt, no claim shall be made by the trustee of the estate, to any estate or interest in any land belonging to the bankrupt, and that estate or interest shall, subject to the rights (if any) of any person in possession of the land, be deemed to be vested in the bankrupt or any person claiming through or under him, as the case may be.”
Clause, as amended, agreed to.
Clause 97- (3.) 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.
Amendment (by Senator Crawford) agreed to -
That after the word “ accounts “, line 4, the words “ or to any trade dealings “ be inserted.
Clause, as amended, agreed to.
Clause 117 - (7.) The facts referred to in the last preceding sub-section are - . .
Senator Sir THOMAS GLASGOW (Queensland) [5.26].- On behalf of Senator Thompson, I move -
That after the word “ transactions “, line 7, thewords “ (including money received and paid out, and goods bought and sold) “ be inserted.
The amendment is desired in order to make quite clear what the debtor’s books of account should disclose. It is thought that the time has arrived when all business people should keep proper books of account.
– The Government cannot accept the amendment because it would impose upon persons who may become bankrupt an obligation which, would be very difficult to carry out. As the paragraph at present stands, such books of account as are usual and proper have to be kept, but, if the amendment were carried K it would be necessary for a record to be kept of every transaction, however small.
– It involves only a simple method of bookkeeping to record the money received and paid, and goods bought and sold.
– The paragraph is very comprehensive, and provides that proper books of account shall be kept. Under another clause drastic action can be taken in the case of persons who have been bankrupt before ; but this paragraph covers those who have not previously been before a Bankruptcy Court. In view of this, I ask the Committee to negative the amendment.
Amendment negatived.
Clause agreed to.
Clause 319-
An order of discharge shall not - (ri) unless the Treasurer certify in writing his consent to the bankrupt being reIeased therefrom -
– I move -
That after the word “ Treasurer “ the words “(in the case of a debt to the Commonwealth) or the Treasurer of a State (in the case of a debt to a State)” be inserted.
This is to give the States the same standing as the Commonwealth under this clause.
Amendment agreed to.
Clause, as amended, agreed to.
Clause 12.1- (3.) Notice of all orders of discharge granted under this section or section one hundred and nineteen of this Act shall be published in the Gazette and iii such other manner as is prescribed ; and shall be lodged in the Office of the Registrar of Titles in each State.
Amendment (by Senator CRAWFORD agreed to -
That the words “ in each State “ be left out with a view to insert in lieu thereof the words “ or Registrar -General or other proper officer of each State and in such other places as are prescribed “. “ , * i “ ,*
Clause, as amended, agreed to.
Clause 122- (3.) Notice of the order annulling a sequestration order shall be forthwith published in the Gazette.
Amendment (by Senator Crawford) agreed to -
That after the word “ Gazette “, sub-clause- 3, the following words be inserted: - “’ and in such other manner as is prescribed, and shall be lodged in the Office of the Registrar of Titles or Registrar-General or other proper officer of each State and in such other places as are prescribed “.
Clause, as amended, agreed to.
Clause 131 - (1.) Where the creditors appoint any person other than the official receiver to be trusteeof a bankrupt’s estate, his remuneration (if any) shall from time to time be fixed by a. resolution of the creditors, or if the creditors, so resolve, by the committee of inspection,, and shall be in the nature of a commission or percentage on the net amount of the estaterealized by the trustee after the deduction of the expenses of realization . . .
– I move -
That the words “ or percentage on the net amount of the estate realized ‘by the trustee after the deduction of the expenses of realization “ be left out with a view to insert in lieu thereof the words “not exceeding Five pounds ‘ per centum on the amount realized by the trustee after the deduction of the expenses of realization, but the creditors may, by resolution, fix a higher commission on the collection of book debts.”
The object is to limit the commission which may be paid on the realization of an estate, but to give the creditors power to increase the remuneration for the collection of book debts. It is very often difficult to collect debts of this kind, and it is quite reasonable to . allow thecreditors to fix the rate, of remuneration.
Senator Sir THOMAS GLASGOW (Queensland) [5.36]. - I move -
That the amendment be amended by adding,, after the word “ debts “, the words “ and a commission not exceeding One pound per centum on turnover, where, in the interest of the creditors, a business is carried on with a view to its better sale as a going concern.”
It is frequently found necessary and desirable for a trustee to carry on a business for some time as a going concern, with a view to better ultimate realizationin the interests of both creditors and’ debtor alike, in which case it is highly desirable to fix the trustee’s remuneration; or commission on the turnover. It would obviously be wrong to allow him the same rate on the turnover as on the amount of assets realized. This method has been put into practice with good results in Queensland, and the rate usually allowed is 1 per cent. on the turnover.
– I cannot accept the honorable senator’s proposal. It would introduce an undesirable principle. If it is necessary to carry on a business, the trustees may appoint a manager on salary, and it is considered that this would be more in the interests of the creditors, and more in conformity with the general principles of the Bill, than to allow the trustee to carry on the business and receive a commission on the turnover. If the latter course were adopted, the trustee would be interested only in obtaining a large turnover. Under the Bill, the trustee will receive remuneration in the form of a commission on the assets realized and the book debts collected.
– I am disposed to think that. Senator Glasgow’s amendment of the amendment would conflict with the Minister’s proposal. Estates are not wound up at a moment’s notice. Could not a business still be carried on even if we rejected the amendment by Senator Glasgow ?
– But this would enable the trustee to carry on.
– It would tie the hands of the creditors.
– There is no occa- sion to realize on an estate immediately.
– No.
– The means for carrying it on are already in the Bill.
– Yes. If the amendment by Senator Glasgow were accepted, the whole clause would have to be altered.
– It could even be arranged that the debtor should carry on the business.
Amendment of the amendment negatived.
Amendment agreed to.
Clause, as amended, agreed to.
Clause 134-
(1.) All bills and charges of solicitors, managers, accountants, auctioneers, brokers, and other persons not being trustees, shall be taxed by the prescribed officer, and no payments in respect thereof shall be allowed in the trustee’s accounts, without proof of the taxation having been made.
Provided that it shall not be necessary to taxbills and charges amounting to less than Five pounds.
– I move -
That the word “ managers “, sub-clause 1, be left out.
The purpose of the amendment is to save cost and trouble in practice, without any fear of excessive charges. It is considered unnecessary to have the accounts of ordinary employees taxed.
– Will the Minister also move to delete the word “ solicitors “ ?
– In every court the charges of solicitors and other lawyers are subject to taxation. I cannot see any reason why these charges should not be taxed. If the word “ solicitors “ were struck out their charges could not be reviewed.
– I do not like having dealings with lawyers and doctors. I prefer butchers, bakers, &c. The less we have to do with lawyers the better. I propose to move -
That the word “ solicitors “, sub-clause 1, be left out.
– The honorable senator’s proposal would not affect lawyers in the way he desires. It would merely remove their charges from the supervision of the taxing officer.
– Then I shall not press it.
Amendment agreed to.
Amendment (by Senator Crawford) agreed to -
That after the word “ auctioneers “ the word “ and “ be inserted.
– I move -
That the words “ and other persons not being trustees “, sub-clause 1, be left out.
– The clause enables a debtor to ensure that the charges made against him by solicitors, accountants, &c., are liable to taxation by a competent authority. What is the reason for the deletion of the words “ and other persons not being trustees”?
– A manager would be employed at a salary, and so would other persons who might be engaged before an estate was wound up. They would be paid weekly or fortnightly, and it is proposed that such payments should not be subject to taxation.
Amendment agreed to. Amendment (by Senator Crawford) agreed to -
That the word ‘* Five “, line 10, be left out, with a view to insert in lieu thereof the word ‘ Ten “.
Clause, as amended, agreed to. Clause 149 - (1.) When the trustee -
Amendment (by Senator Crawford) proposed -
That the word “ shall “, line 3, be left out, with a view to insert in lieu thereof the word “ may “.
– I wish to know the Minister’s reason for leaving out the word “ shall,” and inserting in its place the word “ may.” In legislation, generally, the word “ may “ is, I understand, to be considered mandatory. The word “ shall,” of course, is mandatory.
– Every application to the Court entails expense, and the amendment leaves the trustee in certain cases the option of applying to the Court for an order.
– What would be the effect oh a bankrupt ?
– Neither he nor the estate will be affected at all, because the trustee may apply for an order of release after he has realized all the property of the bankrupt, or so much thereof as can, in his -opinion, be realized without needlessly protracting the trusteeship. - Amendment agreed to.
Clause, as amended, agreed to.
Clause 152 - (1.) Where a sequestration order is made against a debtor, if the Court is satisfied by affidavit or otherwise, or if the official receiver reports to the Court that neither the assets nor the liabilities of debtor are likely to exceed in value Three hundred pounds, the Court, may make an order that the debtor’s estate” be administered in a summary manner…..
Amendment (by Senator Crawford) agreed to -
That before the word “ debtor “, second occurring, sub-clause 1, the word “ the “ be inserted.
Clause, as amended, agreed to. Clause 155 - (1.) A meeting of creditors under this Part may be called …. by circulars . . . twenty-one days before the day of meeting ….
– I move -
That the following words be added to subclause 1: - “and by advertisement as is prescribed “.
This provides that all meetings shall be advertised as well as notified through the post.
Amendment agreed to.t Clause, as amended, agreed to.
Senator CRAWFORD (QueenslandHonorary Minister) [5.551. - I move -
That the following new clause be inserted : - “ 155a. If a meeting of creditors is held under this Part in relation to the affairs of a debtor no proceedings in relation to his affairs shall be taken under Part XII. of this Act.”
The object of this new clause is” to confine the proceedings to either Part XI. or Part XII.
Proposed new clause agreed to. Clause 156 - (1.) The Court may …. either before or after the meeting . . . order a stay of proceedings in any action, execution, distress for rent, or other legal process. . .
– I move -
That after the word “execution,” sub-clause 1, the words “writ of fieri facias affecting land “ be inserted.
The amendment makes it clear that execution includes writ of fieri facias respecting land. A doubt concerning this has caused trouble in some of the States, particularly South Australia and Western Australia.
Amendment agreed to.
Clause, as amended, agreed to.
Clause 157 -
The following provisions shall be observed at all meetings of creditors held under this Part :- (tj) A creditor may vote either in person, or by attorney appointed by deed, or by proxy appointed by instrument in j , . writing signed by the creditor and attested.
Amendment (by Senator Crawford) proposed -
That after the word “ attested “, paragraph (g), the words “ or authorized by telegram as is prescribed “ be inserted.
– This is a new proposal, and in a measure is understandable. We are dealing with a Bankruptcy Bill affecting every State of the Commonwealth. Under a State Act it is, of course, possible, by correspondence, to get into touch with persons affected or interested, but apparently it will not be possible to do so under the Commonwealth Act.
– A meeting may be held in Melbourne, and a creditor may be in Queensland or the Northern Territory.
– I understand that, but is it safe to provide for this authority being given by telegram? A man’s signature cannot be obtained by telegram.
– The telegram might provide for confirmation.
Amendment agreed to. Clause, as amended, agreed to. Clause 159- (1.) The creditors may …. resolve that the debtor execute a deed of assignment under’ this Part to a trustee to be named in the resolution.
Senator CRAWFORD (Queensland-
Honorary Minister) [6.1]. - I moveThat after the word “ resolution,” sub-clause 1, the words “ who shall be a person registered under Part VIII. of this Act as qualified to act as a trustee “ be inserted.
This makes it clear that no one but a qualified trustee shall be appointed.
Amendment agreed to.
Clause, as amended, agreed to.
Clause 160- (1.) Every such deed shall comply with the following provisions : -
[g) The deed shall be assented to by three-fourths in value and one-half in number of the creditors, every creditor for under Five pounds being reckoned in value only;
Amendment (by Senator Crawford) agreed to -
That the word “ Five,” paragraph (g), be left out, with a view to insert in lieu thereof the word “ Ten.”
Clause, as amended, agreed to. Clause 172- (1.) The trustee of every deed shall -
Senator CRAWFORD (Queensland -
Honorary Minister) [6.2]. - I moye -
That after the word “ months “, paragraph (c), the words “ or at the prescribed times “ be inserted.
The object of this amendment is to give more latitude in the administration of estates.
Amendment agreed to.
Senator CRAWFORD (Queensland-
Honorary Minister) [6.3]. - I move -
That the words “ Official Receiver “, subclause 2, be left out, with a view to insert in lieu thereof the word “ Registrar”.
The moneys referred to in this sub-clause will thus be under the control of the Registrar, and not that of the Official Receiver.
.- What would be the position of a person purchasing from the bankrupt, after insolvency, property registered under the Transfer of Land Act? I notice that in the clause there is no duty cast on the trustee to register himself as the owner of the land.
– Does this question relate to the clause now before the Committee ?
– The duties of the trustee are set out in the clause. The trustee should certainly register under the Act as soon as possible, to protect innocent persons who in good faith have dealings with a bankrupt.
– Has the honorable senator read the provisions of clause 94 relating to people who deal innocently with debtors?
– That clause relates to events before the date of sequestration.
– I rise to a point of order. The honorable senator is discussing a matter upon which the Committee has already voted. The Committee has already dealt with the question of bankers.
-(Senator Newland). - I did . not know what Senator Elliott was leading up to. I cannot allow him to go back to clause 94 or 95 at this stage.
– I do not thinK clause 9^4 j .affects the question, for it refers to.- transactions …before the, date of sequestration.
– The liability of bankers was discussed and determined earlier this afternoon.
– Very full consideration has been given to the point raised by the honorable senator, and the -opinion of the Commonwealth legal advisers is that there are in the Bill provisions covering it.
– I have endeavoured to find those provisions, but have failed. The absence of- them is causing anxiety to a number of people in the State of Victoria. A clause which lays -down the duties of a trustee should at least impress upon him the necessity of registering as early as possible any land which is under the Act, and in respect of which the State -law purports to protect innocent persons. The provision in the Bill is new, and it may upset the whole legal system.
Amendment agreed to. Clause, as amended, agreed to.
Clause 180 verbally amended and as amended 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.
– I move -
That the words “ a sum of money or percentage as is allowed by the Court or fixed by the deed “ be left out, with a view to insert in lieu thereof the words “ commission as is fixed by the creditors, the ‘ commission not to exceed five pounds per centum on the amount realized by the trustee after the deduction of the expenses of realization, but the creditors may fix a higher commission on the collection of book debts.”
This amendment is consequential, and makes provision in this clause similar to that which the Committee made in a previous clause.
– The wording of clause 131 is not the same as that of the amendment now proposed.
– The words may not be identical, but the effect is the same.
Amendment agreed to. Clause, as amended, agreed to. Clause 187 - (1.) This Part shall apply to every deed of arrangement as defined in this section, except that it shall not apply to a composition or scheme df arrangement under Division 5 of
Part IV. of this Act or to a deed of assign- . ment under Part XI. of this Act.
Amendment (by Senator Crawford) agreed to -
That after the word “ or,” second occurring, sub-clause 1, the following words be inserted : - “to a composition or scheme of arrangement or”.
Clause, as amended, agreed to. Amendment (by Senator Crawford) agreed to -
That the following new clause be inserted : - 187a. If a deed of arrangement is made under this Part in respect of the affairs of a debtor no proceedings in relation to his affairs shall be taken under Part XI. of this Act.
Clause 188- (1.) A deed or arrangement to which this Part applies shall be absolutely inoperative and invalid unless -
– I” move -
That the word “ fourteen,” sub-clause 1, paragraph (a), be left out, with a view to insert in lieu thereof the words “ twentyeight “.
As the Bill will probably apply to the Mandated Territories and Papua, as well as to the Commonwealth of Australia, it is necessary that the time allowed in this clause should be extended to 28 days.
Amendment agreed to.
Clause, as amended, agreed to.
– I move -
That the following new clause be inserted : - 188a.- (1.) The form in the first part of the Third Schedule to this Act may be used for any deed under this Part of this Act and when so used shall be of the same effect as if it were in the form of a deed in the second part of that schedule. (2.) Every such deed shall comply with the following conditions : -
It shall contain in the First Schedule annexed a true and particular account of all the property of which the debtor or any person in trust for him is possessed, or to which he or any such person is entitled legally or equitably in possession, reversion, remainder or expectancy, so far ‘ as’ the debtor can set it forth, except such articles of household furniture, wearing apparel of the debtor and his family, tools or implements of his trade and other like necessaries not .exceeding in the whole the value of Fifty pounds as the debtor selects, and “such other household furniture as a majority of the creditors may by resolution determine ; (6) It shall contain in the Second Schedule, annexed, the names of the several creditors of the debtor and the several amounts due or supposed to be due to them respectively ;
A declaration by the debtor in the prescribed form verifying the contents of the schedule shall be attached to the deed. ‘ (3.) Every creditor for the purpose of this section shall be accounted a creditor for value for such sum only as, upon an account fairly stated, after allowing the value of securities or liens held by him and the amount of any debt or set off owing by him to the debtor, appears to be the. balance due to him. (4.) Notwithstanding anything contained in the last preceding section, the Court may, after the execution of such a deed, on the application of the trustee, subject to such ‘ conditions (if any”) as the Court thinks fit to impose, order a stay of proceedings in any action, execution, distress for rent or other legal process, in respect of any debt or liability which would be provable in the bankruptcy if a sequestration order were made against the debtor, and may at any time in its discretion set aside the order. (5.) The order while in force shall have the effect of staying the proceedings pending the registration of the deed, which, aFter it has received the assent of the creditors and has been registered as provided in this Part of this Act shall become binding on the creditors. (6.) Notwithstanding anything contained in this Act, sections one hundred and sixty-one and one hundred and sixty-three of this Act shall apply to every deed under this Part (7.) Subject to this Part, every such deed after registration shall vest in the trustee all the property of the debtor (except such necessaries as are mentioned in sub-section (2.) of this section) upon the trusts and for the purpose of the deed; and the trustee may recover the property, including things in action, in his own name as trustee for the estate of the debtor in like manner as a trustee in bankruptcy.
The purpose of this new clause is to provide a form of deed of arrangement similar to that provided in Part XL It will be very useful in practice. The proposed new clause summarizes the conditions with which the deed must comply, and introduces ,no new features.
Proposed new clause agreed to.
Clause 194- (2.) The provisions, so far as. applicable, of Part V. of this Act shall apply to every deed of arrangement registered under this Part, in respect to the control over the person and property of the debtor and to the wife of the debtor and to any person supposed to be indebted to the debtor or to have in his possession any of his estate or effects or to be able to give information respecting his dealings or property.
Amendment (by Senator Crawford) agreed to -
That after the word “ wife;” sub-clause 2, the following words be inserted : - “ or, where the debtor is a married woman, the husband.”
Clause, as amended, agreed to. Clause 195 - (Trustee not to encumber property until certain time.)
– This clause is not necessary. The conduct of a trustee who is charged with the winding up of an estate is. provided for in Part VIII.
Clause negatived.
Clause 199 - (Security by trustees.)
– As the provisions in this clause are already covered by clause 124, it is unnecessary.
Clause negatived.
Clause 200- (1.) The remuneration of a trustee of a deed of arrangement shall from time to time be fixed as determined by the creditors, and shall be in the nature of a commission on the net amount realized by the trustee and available for distribution.
– I move -
That the words “ on the net amount realized by the trustee and available for distribution “, sub-clause 1, be left out with a view to insert in lieu thereof the words “ the commission not to exceed five pounds per centum on the amount realized by the trustee after the deduction of the expenses of realization, but the creditors may fix a higher commission on the collection of book debts.”
The object of this amendment is to make the clause uniform with other clauses. . ‘
. - If the Minister is anxious to secure uniformity, he should employ the language used in clause’. 131, where the words used are: “ In the nature of a commission not exceeding five pounds per centum.” In this clause the same phrase reads, “ In the nature of a commission the commission not to exceed five pounds per centum.”-
– Tlie language may not be the same, but the effect is the same.
– Surely the same language should be used to convey the same meaning.
Amendment agreed to.
Clause, as amended, agreed to. .
Clause 202 - (Transmission of accounts to Registrar.)
– As this clause and clause 203 (Audit of Accounts) are both covered by clause 194, they are unnecessary.
Clause negatived.
Clause 203 negatived.
Clause 207- (1.) Where the trustee, under any bankruptcy, composition or scheme or deed of arrangement or deed of assignment, has under his control : -
– I move -
That sub-clause 2 be left out.
The object of this amendment is to exclude from payment into the Commonwealth Treasury moneys collected under a State Bankruptcy Act and in the hands of a State.
Amendment agreed to.
Amendment (by Senator Crawford) agreed to -
That, before the word “ official,” sub-clause 3, the words “ Registrar or “ be inserted.
Clause, as amended, agreed to.
Third Schedule - (Form of deed of assignment and deed of arrangement.)
– I move -
That the Third Schedule be left out with a view to insert in lieu thereof the- following new schedule : -
page 776
This Deed, made the day of , 19 , in pursuance of Part XI. (or Part XII. as the case may be) of the Bankruptcy Act 1924, between of , in the State of of the one part, and of in the said State of the other part : Witnesseth that the said doth hereby convey and assign all his real and personal estate except so much thereof as is retained by the debtor in pursuance of Part XI. (or Part XII. as the case may be) of the Bankruptcy Act 1924 to the said , his heirs, executors, administrators; and assigns upon trusts for the benefit of the creditors of the said , the trustee’s remuneration to be (1) £ per centum on the amount realized by the trustee after the deduction of the expenses’ of realization and (2) £ per centum on the amount collected in respect of book debts.
In witness whereof the said parties to these presents have hereunto set their hands and seals the day and year first before-written.
Signed, sealed, and delivered by the said this ( day *of i 19 , in the presence of / j
Signed, sealed, and delivered ) by ‘tlie said this I day of I 19 , in the presence of ‘
This Deed, made the day of
One thousand nine hundred and , in pursuance of Part XI. (or Part XII. as the case may be) of the Bankruptcy Act 1924, between , of . in the State of , of the one part, and , of , in the said State of the other part : Witnesseth that in consideration of the release hereinafter contained, ‘ the said (assignor) doth by these presents grant and assign unto the said (trustee) his heirs, executors, administrators, and assigns, who and every other’ trustee or trustees for the time being hereof are hereinafter called “ the said trustee,” all the real and personal property and estate, of which the said (assignor) is possessed, or of which any person or persons in trust for him is or are possessed, or to which he or any such person or persons is or are entitled legally or equitably in possession, reversion, remainder, or expectancy, and which are more particularly described, so far as the said (assignor) is able to set forth the same, in the First Schedule hereto annexed, except such articles of household furniture and wearing apparel of the said (assignor) and his family, and other like necessaries, not exceeding in the whole the value of Fifty Pounds, and such other household properties as a majority of the creditors may by resolution determine to the intent that the real and personal property and estate hereinbefore granted and assigned shall fee held by the said trustee by virtue hereof and subject to the provisions of Part XI. (or Part XII., as the case may be) of the Bankruptcy Act 1924: And to the further intent that the said (assignor) shall bc and he is hereby released from all debts and liabilities which, under the said Act, would have been provable under his bankruptcy he had been adjudicated ‘bankrupt on the day of the date of these presents: And it is hereby declared and agreed subject to the said Act that in addition to and without any revocation, limitation, or restriction whatsoever of the powers and authorities conferred upon the said trustee by virtue of the said Bankruptcy Act 1924, it shall and may be lawful for the said trustee, when and as to him shall seem best, to sell and dispose of the said estate and premises hereby conveyed and assigned, or intended so to be, to any person or ‘persons whomsoever, either by public auction or private contract, or by both such methods, and either together or in lots, aB to the said trustee shall seem most advantageous, and subject to any special or other conditions, and in such manner in all respects as the said trustee may think proper, with full power to buy in or to rescind any contract for sale, and to resell -without being responsible for any loss occasioned thereby, and to do, make, sign, execute, and deliver any act, thing, deed, or instrument whatsoever that may be necessary for completing any such Bale or contract, and for vesting the property sold in the purchaser or purchasers respectively. And it is declared that the receipt or receipts of the said trustee for the property sold, or any part thereof, shall effectually discharge the purchaser or purchasers .paying the some therefrom and from being concerned as to the disposition or application thereof in any way whatsoever. And it shall also be lawful for the said trustee, as soon as conveniently may be, to collect, get in, and receive all outstanding debts and sums of money whatsoever, and to make, sign, and give all necessary receipts and discharges for all moneys paid to him by any person or persons whatsoever; and to pay all costs, charges, and expenses of the said (assignor), and of tho said trustee of and preparatory and incidental to thu making, preparation and completion of these presents, and all other costs, charges and expenses, touching, relating to, or concerning the execution of the powers contained in these presents or conferred by the said Bankruptcy Act 1924, or otherwise: And it shall also be lawful for the said trustee to retain for his own remuneration a commission as fixed by the creditors in accordance with Part XI. (or Part XII. as the case may be) of the Bankruptcy Act 1924 and after full payment of all such charges, expenses, and commission as aforesaid, the said trustee shall apply and apportion the residue of the moneys arising from the sale, disposition, and getting in of the said premises hereinbefore respectively conveyed and assigned, and other the moneys coming to his hands hereunder in manner directed in the said Part XI. (or Part XII. as the case may be) of the Bankruptcy Act 1024 : And it is hereby declared that in case the moneys arising from the sole and getting in of the estate hereby conveyed and assigned shall be more than sufficient to satisfy the several debts and liabilities of the said (assignor), together with all CoSts charges, expenses, and commission whatsoever of or incidental to the execution of the trusts hereof or payable hereunder, the said trustee shall pay the surplus, if any, unto the said (assignor), his executors, administrators, or assigns.
In witness whereof the said parties to these presents have hereunto set their hands and seals the day and year first before-written.
Signed, sealed and delivered by the > said I the day of , 19 > in the presence of )
Signed, sealed, and delivered by the said the day of ,18 , f in the presence of ‘
As a few drafting amendments were necessary, the schedule has been re-cast. No new principle has been introduced.
Amendment agreed to.
Bill reported with further amendments.
Standing and Sessional Orders suspended.
Reports adopted.
Bill read a third time.
page 777
Motion (by Senator Pearce) agreed to-
That the Senate, at its rising, adjourn until 3 p.m. on Wednesday, 11th June.
page 777
– I move -
That the Senate do now adjourn.
I wish to inform Senator Kingsmill that the Commonwealth Shipping Board was requested by urgent telegram on the 16th May to advise in regard to the steamer Fordsdale, that a further telegram was sent on Tuesday last requesting a reply, and that another telegram was sent today to the same end. No reply has yet been received, but upon receipt of the information desired by the honorable senator it will be forwarded to him.
Question resolved in the affirmative. Senate adjourned at B.34 p.m.
Cite as: Australia, Senate, Debates, 21 May 1924, viewed 22 October 2017, <http://historichansard.net/senate/1924/19240521_senate_9_106/>.