LORDS CHELMSFOEDsaid, he had put upon the paper a notice of his intention to ask his noble and learned Friend the Lord Chancellor a question with reference to the non-payment of the salaries, &c, of the Officers of the late Insolvent Debtors Court who have been transferred to the London Court of Bankruptcy under the Bankruptcy Act of last Session; and had done so in order to call the attention of his noble and learned Friend to the subject, and that he might give such an explanation as the case deserved, it being one of very great hardship and injustice to the officers referred to. By the Act of last Session the distinction between bankruptcy and insolvency was abolished, and consequently the Insolvent Debtors Court was also abolished. By one clause in that Act—namely, the 22nd—the chief clerk, clerks, and taxing officer of the Insolvent Court were transferred to the Court of Bankruptcy; and by another clause, the 26th, all monies, Government securities, and funds belonging to the Insolvent Court, were to be transferred to the Court of Bankruptcy; and it was provided that those funds were to be applicable "in like manner as at present," among other things towards the defraying of the salaries of the clerks and other officers of the Insolvent Debtors Court. The 30th Section also provided that the full amount of their salaries, remuneration, allowances, and compensation should be paid to the officers so transferred. No one could doubt that it was the intention of the Legislature to secure to those transferred officers the amount of salaries, allowances, remuneration, and compensation which they had previously been receiving. But he learnt with surprise, that although several weeks—he had almost said months;—had elapsed since the 425 first quarterly payment became due, they yet remained unpaid. This must manifestly cause much inconvenience, not to say suffering, to the parties and their families, especially to those officers who received very small salaries, which formed their sole means of support. Two instances had been brought under his notice. In one case an officer of the Insolvent Court had undertaken to discharge a debt by instalments, the means of doing so being by the receipt of his salary; but, not receiving it, he had been unable to meet the last instalment. The creditor could not believe that the official salary had not been paid, and thought the excuse was a dishonest means of evading the liability. He therefore put the law in force, and had levied an execution upon his debtor's goods. In the other case, one of the officers had insured his life for the benefit of his family to a small amount, but one of importance to per sons in his station; and not being able to pay the last premium, in consequence of his salary being unpaid, the policy had lapsed. These facts evidenced a most extraordinary state of things, and therefore he could not help calling upon his noble and learned Friend to give some explanation. It was clear that these persons were entitled to be paid for their services. There were certain funds applicable for the payment of their salaries; but the salaries were absolutely to be paid, and he did not expect that his noble and learned Friend would reply that, if from any circumstance the particular fund had run dry, therefore these officers were to be deprived of their salaries. He was satisfied that their Lordships would feel that the case of these persons was entitled to consideration.
THE LORD CHANCELLORsaid, he was obliged to the noble and learned Lord for affording him an opportunity of making a statement upon this subject. He could say with sincerity that nothing had occurred since the passing of that Act of Parliament which had caused him so much vexation and given him so much pain as to find the unfortunate position in which the officers of the Insolvent Debtors Court had been placed. That position had arisen from the circumstance that words had been used in the Bankruptcy Act to express one particular result, which had been taken, and not unnaturally taken, by the clerks in the Insolvent Debtors Court as expressing another view, and having a different construction; and consequently 426 the interpretation which they had placed upon these words had given rise to expectations which, unfortunately, he had; no means of satisfying. The difficulty arose in this way. The officers of the Insolvent Debtors Court were paid partly by salaries, and partly by fees. The salaries were paid from an annual grant voted by Parliament; but the amount of the salaries was very inconsiderable as compared with the emoluments which the clerks represented that they had received from fees. The money voted by Parliament was a vote expressed to be for the purpose of discharging "salaries, certain allowances, and certain compensations," and the 30th section the Act provided that the Court of Bankruptcy should have the benefit of that vote upon the officers of the Insolvent Court being transferred to it. The language of the 30th section was very extensive at the commencement. It gave to the clerks of the Insolvent Court the full amount of the salaries, remuneration, compensations, and allowances which they had been receiving; but, unfortunately, those words were limited in a manner inconsistent with their ordinary meaning by other words, which provided that they were to be paid "as nearly as may be, out of the same funds and payable in the same manner in all respects as if the Bankruptcy Act had not been passed; and for such purpose the annual sums now payable out of the monies voted by Parliament for the use and purposes of the; Court for the Relief of Insolvent Debtors and the officers thereof, shall be paid in future to the credit of the Chief Registrar's account in Bankruptcy." The unfortunate effect, therefore, was that those salaries, allowances, and remunerations were to be paid out of a particular fund; which was itself limited to salaries properly so called, and to allowances and compensations. Now, the difference between the; amount of the salaries and remuneration asked for and the amount of the funds out of which they were to be paid was very great, the sum annually voted by Parliament being about£6,000, while the amount now claimed by the officers of the Insolvent Debtors Court was nearly £20,000 a I year. It was a painful thing if those gentlemen had relied upon the clause he had referred to as giving them a perpetual annuity to the full amount of the salaries and fees they were at that time respectively in receipt of; but it was impossible that such could have been intended, be- 427 cause it was quite at variance with all previous legislation to continue to the officers of abolished courts the amount of their fees in the shape of perpetual annuities. If that had been intended, an average of the amount of emoluments would have been ascertained, and compensation thereupon would have been allowed. These officers, however, claimed to receive amounts equal to their salaries and fees which they were receiving at the time of the passing of the Bankruptcy Act. That would give them a very extraordinary amount of salary, and one which varied considerably from a return that had been previously made. All that he could do was to apply the monies voted by Parliament and to make them applicable to the salaries of the clerks. He regretted exceedingly that he had no other power, because he admitted, that if the operation of the clause he had referred to had been such as was represented, the officers of the Insolvent Debtors Court might, while the Bill was before Parliament, have made some claim for compensation; and if he had understood, what he did not at the time know, that those officers were paid by fees, and not wholly by salaries, he should undoubtedly have thought it right to provide some means of compensation. With the imperfect understanding of the facts the clause had been passed, and the result was, that although there were sufficient funds to pay the salaries, properly so called, they were not sufficient to provide for salaries at all equal to those which from these various sources they were in receipt of when the Act came into operation. There was another clause concerning which he ought to give some explanation. The 26th clause provided that certain funds in the possession of the Insolvent. Debtors Court should be transferred to the Court of Bankruptcy, and the Lord Chancellor was empowered to apply those funds to three several purposes, one of which was to defraying the salaries of the clerks and other persons transferred. The monies thus transferred had accumulated from unclaimed dividends. They represented sums which might be claimed at any time, but the interest of which monies until claimed had always been treated by Parliament as applicable in part-payment of salaries; and accordingly, although £6,176 only was voted last year for the purposes of the Insolvent Debtors Court, it was reduced to that amount from the larger sum that would have been 428 required by deducting the probable amount of interest upon Exchequer Bills that had been purchased with monies arising from unclaimed dividends. The annual Vote had always been worded in this way—
£6,176 is voted for payment of salaries, and for payment of certain allowances and certain compensations; but it is reduced to that sum by deducting from a larger sum that would be the amount of the salaries, the probable amount of the interest on Exchequer Bills, purchased with unclaimed monies, and applicable under a particular statute in part-payment of salaries.What was intended to be done by the 26th section was this:—It was necessary to transfer the funds to the Court of Bankruptcy, because the creditors whose dividends had remained unclaimed would, after the abolition of the Insolvent Debtors Court, necessarily have to apply to the Bankruptcy Court for them. Then power was given to apply to these purposes the dividends, the amount of which had previously been deducted from the sum voted by Parliament for the payment of these salaries. Now these gentlemen had appealed to him—and he did not at all wonder at their appeal—to pay them out of the principal fund that amount of £14,000 a year which the annual Parliamentary vote would be insufficient to meet. It was, however, impossible that he could do anything of that kind; because the principal fund was the property of creditors who might claim it any day, and the utmost he could do would be to apply, in eking out the sum annually granted by Parliament, a proportionate amount of the dividend. The matter had occasioned him the greatest anxiety, and he had directed the opinion of the law officers to be taken, in the hope of discovering some means of affording these persons redress. But the law officers thought it utterly impossible to hold, from any part of the statute, that these clerks were entitled to receive out of the funds in bankruptcy such annual sums of money as were equal to the aggregate of the fees and salaries receivable by them at the time of the Bankruptcy Act coming into operation. They added, however—and it was a feeling in which he entirely sympathized—that the case was such that these gentlemen possessed a strong moral claim upon the consideration of Parliament. He had done the utmost in his power towards relieving some portion of their distress when he offered them salaries very considerably exceeding those which they had been in 429 the habit of enjoying, but not equal to the total amount of their salaries and the fees which they represented themselves to have been receiving—for he had no means whatever of making up the deficiency of £14,000. He therefore saw but two alternatives open to them under the circumstances—namely, these gentlemen should either accept that offer, or else a further appeal might be made to the House of Commons for that compensation which they would probably have obtained if their ease had been rightly understood, or if they had put forward their claim, which they did not do, depending, perhaps, on a construction of the 30th section which now turned out to have been erroneous.
§ LORD CRANWORTHsaid, he had heard the result of his noble and learned Friend's speech with the deepest regret; but, after the statement just made, they must all admit that it was impossible for his noble and learned Friend to have done more. The opinion of the law officers of the Crown had been taken, and it appeared, from the mode in which the Act had been framed, that the noble and learned Lord had no power to give these gentlemen that to which they had not only a moral right, but that which it would be a disgrace to Parliament if they did not fully receive. This very question was mooted in the Select Committee on the Bankruptcy Bill, and the noble and learned Lord then on the Woolsack told them it was perfectly clear that these officers were provided for by the measure. It did not occur to any of the Members of the Committee then to look very minutely into the clause. The Act provided that the officers of the Insolvent Court should be transferred bodily to the new Court, that they should hold their offices during good behaviour, and that they should continue to receive the full amount of the salaries, remuneration, allowances, and compensation which they had previously received. It was true it was declared that these should be paid as nearly as might be, out of the same funds as those from which they were formerly derived; but no doubt had been entertained that they would actually be paid them. Certainly, as one Member of the Select Committee, he should feel it a sort of humiliation upon them if the result should be that a numerous body of persons, some of them in a humble position of life, and dependent for the support of themselves and their families upon their salaries, should now be deprived of that to 430 which they were justly entitled, although it had been stated at the time, by the highest legal authority, that they had been amply and securely provided for.
§ THE EARL OF DERBYsaid, that having been a Member of the Select Committee, he could bear his testimony to the accuracy of what had been stated by the noble and learned Lord who had last spoken. He perfectly recollected its having been pointed out in the Committee that these officers received a very small and insignificant part of their remuneration in the shape of salary, and that the greater portion of their emoluments arose from fees paid in the Insolvent Court; that, as that Court was to be done away with, the source from which they derived their emoluments would be done away with at the same time, and that consequently they might be placed in very great difficulty. Thereupon the noble and learned Lord who then sat upon the Woolsack (Lord Campbell) said that ample words had been inserted in the Bill to meet the case, and that he thought them quite sufficient for their purpose.
§ LORD CHELMSFORDsaid, that this was not the case of officers who, on their places being abolished, had a claim to compensation. These gentlemen were active and efficient officers who had been transferred from the Insolvent Court to the Court of Bankruptcy, and were entitled to the remuneration contemplated by the Act. The 30th section said that the chief clerks and other persons employed in the Insolvent Debtors Court, upon being in the manner therein provided transferred to the Court of Bankruptcy, should "severally continue to receive the full amount of the salary, remuneration, allowances, and compensations which they now respectively receive." Could there be a doubt that it was the intention of the Legislature by these words to place them in the Bankruptcy Court in precisely the same position they had occupied as officers of the Insolvent Court? The language of the clause went on to say-that they should receive these emoluments, "as nearly as may be, out of the same funds, and payable in the same manner in all respects, as if this Act had not been passed." He could confirm what his noble and learned Friend (Lord Cranworth) and his noble Friend near him had said as to what passed in the Select Committee relative to these last words. It was suggested that, as the Insolvent Debtors Court was to be abolished, and the fees payable in it would be abolished with it, 431 there might be no funds out of which to defray these salaries and the amount of these fees. The noble and learned Lord then on the Woolsack said it was impossible to put that construction upon the Act, and the objection was withdrawn, it being then little thought that these words would be urged against the claims of these persons by a future Lord Chancellor.
§ LORD CHELMSFORDThe Legislature clearly intended that these officers should receive their full salaries and emoluments, and it would be most unjust to deprive them of them. The right construction of the Act, he submitted, was that they were to receive their full salaries and emoluments at all events, although, for the sake of convenience, it was provided that they should be paid, as nearly as might be, from the same funds and in the same manner as if the Act had not been passed. If, however, the interpretation of the law officers of the Crown was the true one, no time ought to be lost in introducing a Bill in the other House of Parliament to remedy this grievance.
THE LORD CHANCELLORsaid, that he had never intended to do anything of the kind which had been suggested in reference to these unfortunate men; and, in fact, he had simply stated the grounds upon which the law officers of the Crown had come to their conclusion. So far as argument was concerned, he should have been exceedingly happy if the construction put upon the Act by the noble and learned Lord who had just sat down were the true legal construction. He disclaimed any intention to press the language of the Act against these gentlemen, and, indeed, he thought that the language used quite evidenced an intention to give them the fullest possible remuneration, the only difficulty being that the words were used without an adequate understanding of the case. Upon the other subject which had been mentioned he might say that he had never from the commencement had any doubt about the propriety of giving these gentlemen full remuneration; but he had no means of doing so. This matter had been discussed again and again, and he thought that these gentlemen must undoubtedly be left to the proper mode of seeking for redress. He hoped that their Lordships would agree that with his limited power he could not have made a more liberal offer than that of giving them 432 the appointments in the Bankruptcy Court at increased salaries. All payments in the Bankruptcy Court, however, must be made by salaries, and not by fees; there had been misapprehension upon that matter, but that ought not to operate unjustly, and he should be exceedingly happy if the House of Commons should adopt the same view; and, as far as he was concerned, he should be glad to promote any measure which would give these gentlemen the redress to Which they were entitled.
§ LORD CHELMSFORDexplained, that what he had meant to say was that his noble and learned Friend had urged the words in the statute as the ground of his inability to give these officers the remuneration to which they were entitled.