HC Deb 25 June 1860 vol 159 cc934-47

having brought up the Report adopted by the Committee of the whole House on the Bankruptcy and Insolvency Bill, with respect to salaries and compensations.


remarked that in the discussion which had taken place on this measure a question arose whether any portion of the Bill affected compensations; and he understood the Attorney General to reply distinctly that there was not a word about compensation in the Bill from beginning to end. He (Sir Henry Willoughby) must say that he had read the Bill very differently. In order to fix a compensation on the Con- solidated Fund it was necessary that they should pass a Resolution. The question now before the House was a Report on the Resolution; and he submitted to the House that it was not desirable to introduce the word "compensation" into the Resolution, which was worded very generally, because it affected any compensation in the Act passed in the present Parliament. Hon. Members would observe that a very large power of granting compensation was given by the Resolution, and the point he wished to submit to the House was this, that it was not desirable to increase the enormous amount of compensation which now rested on the Consolidated Fund—in other words, on the taxpayers of this country. The way in which compensations had increased of late years was something astounding. In one shape or another this country paid a million and a half in compensations, superannuations, and pensions; and there was nearly £300,000 under the single head of compensation and allowances. In 1856 a return was made to the House, from which it appeared that the Court of Chancery cost £171,000 a year, out of which £92,000 a year was paid in the shape of compensations. The expenses of the Court of Bankruptcy, with which they were more particularly engaged, amounted to £54,000, more than one-half of which was paid in compensation. That was a system which must be kept within some bounds. In 1846 Sir Robert Peel said, if the system was persisted in, no treasury could supply the funds, because they never could make an improvement of the law without appealing to the Consolidated Fund. He objected to compensation in bankruptcy being paid out of the Consolidated Fund. Bankruptcy compensations were ordered by statute to be paid out of a fund to be raised by fees; and what he wanted to know was what right the hon. Gentleman opposite had to transfer the charge for such fund to the Consolidated Fund. For his own part, he did not see why the original arrangement under which these salaries were made chargeable on fees should be departed from, more especially as it had been stated that when the revised scale of fees came into operation, an annual surplus of £15,000 was expected. Believing that upwards of £21,600 would be charged on the Consolidated Fund by the Bill as now framed, he begged to move the omission of the word "compensation."

First Resolution read 2°;—Amendment proposed in line 2, to leave out the words "and Compensations."


inquired whether it was the intention of Her Majesty's Government to fill up the vacant Commissionship of Insolvency while a probability or possibility existed of the Bankruptcy Bill being passed into law during the present Session.


said, it certainly was not the intention of Her Majesty's Government to fill up the vacancy. Provision had been made for the temporary discharge of the duties of the office until the period at which he trusted the Bill would come into operation, which he hoped would soon be the case. He was not surprised at the alarm which the hon. Baronet had exhibited at the amount of compensation already given. No doubt it was exceedingly large, but the House would perceive that it was the penalty which the country had to pay for former errors. The present Bill, as he had stated, did not contain one word in relation to new compensations. Those which were referred to had been granted in 1831, when the former system for the administration of bankruptcy was put an end to, and under the terms of their appointment compensation had to be provided for seven Commissioners, besides a number of other persons discharging duties in connection with that Court. The aggregate amount of compensation then granted exactly represented the compensation referred to in the present Bill. It was, he might add, anticipated at the time that the administration of the bankruptcy law would undergo great improvement, that a considerable addition would be made to the business of the Court, and it was accordingly provided that compensations should be made from the fee fund. Unfortunately, however, the law was so little in consonance with the wishes of the community that the business of the Court underwent an annual decrease. Under those circumstances, the Commission which had been appointed in 1854, had recommended as an act of justice, that the compensations in question should not be charged on the fee fund. The practical result was that the suitors in the Bankruptcy Court were compelled for all time to come—at least till the compensation should determine—to pay this amount. But with what justice could they demand that creditors or bankrupts should contribute to the payment of a sum which the improvidence of a former Par- liament had granted to others. It was an abuse arising out of the former administration of the law, but there was no justice in making the creditors who resorted to the Court of Bankruptcy pay for that abuse. In conformity with the recommendation of the Commission, therefore, the present Bill proposed to transfer the compensations mentioned in its 140th clause to the consolidated fund. Among the persons who received compensation he might mention Mr. Thurlow, the nephew of Lord Chancellor Thurlow, who for the loss of the office he held under the former system received a compensation of £5,700 a year. The former Commissioners of the Bankruptcy Court, and the clerk of the Hanaper Office, also received compensation. If these sums were paid out of the Consolidated Fund the Court of Bankruptcy would be relieved of a burden that was unjustly charged on it. The hon. Baronet (Sir Henry Willoughby) expressed a desire on a former occasion to have a more detailed account of the state of the finances of the Bankruptcy Court, and he might take the present opportunity of stating from the balance-sheet which he held in his hand, that there would be a surplus of very nearly £14,000 a year, to be derived from the balance of payments to be made in the administration of the law, and the sums received as fees during that administration. With respect to the balance-sheet as between the present Bill and the consolidated fund, the state of the case would be that for a short period of time—so long as the compensations and retiring annuities lasted—they would constitute a charge on the consolidated fund, but it should be borne in mind that those who were in receipt of those allowances had already passed the ordinary limit of human life, and that as they died off so would the charge on the consolidated fund be diminished. The benefit which he expected would accrue to the consolidated fund in consequence of the improvements which he hoped the Bill would effect, would be independent of other considerations that its enactment would enable the Government to carry out—that change in the fees in County Courts which had been long recommended, and which, under the operation of the Bill, might, he thought, be very easily accomplished without any imposition of any additional burden on the country. He trusted that alter that explanation the hon. Baronet would withdraw his Amendment.


said, that he hoped, on the contrary, that the hon. Baronet would divide the House on his Amendment. He had heard so much of compensations and retiring allowances that he was perfectly sick of the words, and he could not see on what principle the taxpayers of this country should be called on to submit to a burden which the framers of the Bill of 1831 had thrown upon the fee fund. If that fund were insolvent, of course the grant would cease, for the taxpayers were not bound to make it good. If the fund were not insolvent, if it was expected hereafter to yield the full amount, well and good; let the hon. and learned Gentleman pay the claimants with bills to be honoured when there should be funds in hand. But he saw no reason why the taxpayers should contribute to the compensation of persons whose offices, when they held them, were little better than sinecures, and he hoped that this further burden on the Consolidated Fund would be strenuously resisted.


said, he was of opinion that the House could scarcely be aware of the scope of the measure brought under their notice. Compensation had been given in a manner that he must characterize as most extraordinary, inasmuch as men in the prime of life had received compensation to the amount of three times their salaries. But he objected to the Bankruptcy Bill itself, and he wished to ask the House if they had read its provisions. It abolished the distinction between traders and non-traders, so that it would be in the power of a mortgagee to make his creditor a bankrupt, however large the estate might be on which the mortgage was held. It was said the Bill did not apply to Ireland, but though that was true in name it was not so in reality, for an Irish Gentleman contracting a debt in England would be subject to the operation of this law.


said, he did not agree with the hon. and gallant Gentleman who had just spoken with regard to the Bill, which, in his opinion, was one of the best measures of law reform which had been brought into that House for a long time. However, he had no sympathy with the persons whom it was proposed to compensate. Great credit was due to the hon. Baronet (Sir Henry Willoughby) for the care he bestowed on questions of the kind; and he (Mr. Hadfield) joined him in thinking that great injustice and wrong was done to the country by those enor- mous sinecures. There was one gentleman who had been in receipt of the large income of £7,500 a year from 1831; and how long he he had received the public money before, he did not know—probably for half a century. But the question was, whether the Consolidated Fund or the bankrupt assets should pay—in other words, whether the misfortune of these enormous sinecures should be inflicted on the country, which had connived at the wrong, or on the suffering creditors. He wished he could join with the hon. Baronet in this Amendment; but he would join with him if he were to bring in a Bill to-morrow to put an end to those sinecures.

Question put, "That the words 'and Compensation' stand part of the Resolution."

The House divided: Ayes 98; Noes 111: Majority 13.

Motion made, and Question proposed, That this House doth agree with the Committee in the said Resolution, so amended, 'That the Salaries, Allowances, Remunerations, and Retiring Annuities, which may become payable to certain persons appointed under or affected by any Act of the present Session for amending the Law relating to Bankruptcy and insolvency in England, shall be charged upon the Consolidated Fund of the United Kingdom of Great Britain and Ireland.'


The whole of the Bill is founded on the proposition that compensation shall be taken from the Consolidated Fund, and it will be impossible, therefore, for me to go on with the Bill which stands next on the paper (the Bankruptcy and Insolvency Bill).


I much regret the division which the House has thought proper to come to, but I think the hon. and learned Gentleman has taken the right course. Under the circumstances, it would neither be consistent with his own honour, his position, nor his duty to the country, after that decision, to proceed with the Bill, the principle of which was based on honour and justice I am quite satisfied that many hon. Members did not know for what they were voting. The question put to me since I came into the House most distinctly proved that to be so; and if hon. Gentlemen will take on themselves to decide questions vitally affecting the existence of a great measure—the introduction of which is a great honour to the Government—without taking the trouble of ascertaining what they are voting about, my hon. and learned Friend has no other course to pursue than to throw up the Bill.


The hon. and learned Gentleman brings a charge against hon. Members of this House, which, if true in this case, is undoubtedly true in many others. But there is a remarkable unanimity amongst one section of the House—I mean that section which is represented by the hon. and learned Gentleman. Now, I am willing to believe that the hon. and learned Attorney General has been rather sudden in the determination to which he has come. I have seen law officers before who have not been able to carry all their measures, and other distinguished Members of Government who have been in a like position, but they have not thought it necessary to say that the Bill having been founded on an intimate connection with this or that particular clause, they thought it incumbent on them to withdraw the Bill. I should, therefore, recommend the hon. and learned Gentleman to withdraw the statement which he has just made, and, at least, give himself a day's consideration before he intimates to the House that he will not go on any longer with his Bill. I believe there, is a strong wish on the part of those who are most concerned—the commercial community—that this Bill, with some Amendments, should pass. At the same time there is a very strong opinion that the Bill provides for persons who are superseded compensations and pensions very much more than is necessary; and that whilst the lawyers have been attempting to do a great service to the mercantile community, they have not forgotten to do a little for themselves. I do not rise for the sake of going into a discussion of what has been passed, but merely to suggest that the hon. and learned Gentleman who I presume speaks for the Government, should not conclude the matter to-night, but should give himself at least a day's consideration before he adds to the disasters of the Session the withdrawal of this Bill, and thus inflicts a great disappointment on a large portion of the community.


I venture to add my entreaties to those of the hon. Member for Birmingham, that the Attorney General will reconsider his decision in this matter. The hon. and learned Member for Wallingford (Mr. Malins) had accused hon. Members of voting for what they did not understand. I deny the accusation, so far as I am concerned; but I believe many voted in the majority who did not think the question material to the merits of the Bill. It will be trifling with this House and the public if, because we have expressed in an unmistakeable way our opinion against placing these compensations on the Consolidated Fund—a matter which touches only the fringe of the subject of bankruptcy—a Bill of so much interest to the mercantile community is to be withdrawn. If it had been true that there was no source except the Consolidated Fund, from which these compensations could be paid, then the public might have submitted to this charge in exchange for a great improvement of the law. But what is the simple fact? Why, that there is a large fund called "The Banker's Balance," belonging to the Court of Bankruptcy; that that fund amounts to a million and a half sterling, and that the interest upon it has for many years past met, and a great deal more than met, the cost of these compensations. The hon. Member for Evesham (Sir Henry Willoughby) only asked the House to say that they should be paid out of the fund from which they have been paid for thirty-five years, and I think the House has arrived at the right decision. I entreat the Government not to throw up in a pet, an important measure, which the commercial classes anxiously desire to see passed into law, merely because they have been defeated on a comparatively unimportant point.


As one of those who have been censured by the hon. and learned Attorney General and the learned Member for Wallingford, I beg leave to offer a few words to the House. I happen to be in the position of knowing perhaps more of the nature of these compensations than any other hon. Gentleman, except the hon. Baronet the Member for Stamford (Sir Stafford Northcote), and it is because I know the enormous charge inflicted on the Consolidated Fund to the extent of nearly £130,000 by the Attorney General and the learned Member for Wallingford, who, although sitting on opposite sides of the House, combined to fix a heavy charge on the public Revenue for a number of years—it is because I have seen the practical working of a system which saddles the Consolidated Fund with hundreds of thousands a year for the benefit of persons in the prime of life who are perfectly competent to discharge any duties which may be imposed upon them—it is because I have seen the difference between the returns of the per- sons who formerly received compensation to the income-tax, and their claims for compensation that I went into the same lobby with the majority on this occasion. I disclaim the ignorance of the subject which has been ascribed to us, and I shall repeat the vote I have given if the opinion of the House is again tested on this question.


Sir, I have not imputed ignorance of the subject to the hon. Gentleman. I have not opened my mouth to impugn the decision of the House, nor have I expressed any censure. If I give any censure at all, it will be to the inaccurate statement made by the hon. Member who spoke last. In the case of the former Bills of this kind I struggled against compensation. Who forced it upon me, and supported it on every division? Why, the hon. Member for Durham.


I beg to correct the hon. and learned Gentleman. I say he will not find my name among those who voted for compensation.


It was through the efforts made upon the hon. Member's side of the House, and in spite of the reluctance shown on this side, that compensation was conceded. But another inaccurate statement has been made by the hon. Member for Birmingham. He tells me that this Bill creates compensation, and that there is a feeling in the country against it. Now, not a single shilling of compensation is created by this Bill. Sir, I should be most unwilling to throw away the many months' labour which this measure has cost mo; but, unless the recommendation of the Commission be adopted, it will not be in my power to give to suitors in bankruptcy the remission of one farthing of the fees to which they are now subject. In the confidence that this unanimous Report would gain credit with the House, all the calculations and arrangements set forth in the measure have been made upon the footing of this recommendation; and, unless this charge be transferred, the whole Bill must be re-cast and the arrangements entirely re-considered. If the House will pardon the expression, I will give it an opportunity, by not immediately withdrawing the measure, of reviewing its decision. The question before the House is that the Resolution as amended be agreed to, and I propose, Sir, with the permission of the House, to take a division on that question. If that division be in accordance with the last, the result will be that the next Order of the Day must be withdrawn. That course I shall take reluctantly and mournfully—not out of any feeling of spleen or vexation. I have had no other object in framing the Bill but to meet the general wish of the mercantile community, who appear, I venture to say, to be almost unanimous in their approval of this measure. That was my single object, but if these arrangements are rejected by the House, I see no other alternative but to postpone the consideration of the Bill till a future Session, when I trust it may be re-introduced under happier auspices.

MR. ELLICE (Coventry)

I have heard with great regret the statement of my learned Friend, to whom the country is deeply indebted for the great labour he has bestowed on this Bill. But since I have had the honour of a seat in this House I have been particularly watchful of all encroachments on the Consolidated Fund. I have voted against the imposition of these charges on that fund in the case of the Ecclesiastical Courts Bill and other measures; and, following the same precedent, I have voted to-night with the majority, not desiring that the persons whom it is now proposed to compensate should be deprived of compensation, but thinking that the fund which has already been found ample to meet this charge should continue to be applied to that purpose. I regret to hear from my hon. and learned Friend that if we persevere in our endeavour to protect the public purse we must submit to be charged as parties to the loss of this Bill. That is a situation in which independent Members ought not to be placed. It is a matter of little importance whether the public should continue to pay £20,000 a year in the shape of fees or that the sum should be placed on the Consolidated Fund, but I am shocked to learn that if we vote independently on an incidental point of this kind the Government are to sacrifice a measure of the greatest and most serious importance to the public. Nevertheless, I shall claim the right to exercise my own independent vote, voting again as I voted before, throwing upon the Government the whole responsibility of withdrawing this Bill, upon a ground which I think is utterly untenable and un-justifiable.


I trust the House will bear in mind what is effected by its last vote. There is a charge amounting to £21,565, of which £9,000 is charged on a fee fund by the 1 & 2 of William IV., c. 127, and which always has been and will continue to be paid out of that fee fund. The other charge of £12,000 was also imposed by the 5 & 6 of Vict., on the fee fund. The House has not disturbed these arrangements, but has simply refused to transfer these charges from the fee fund to the Consolidated Fund. In taking that course it has done quite right, and I trust it will stand by its decision.


I hope the House will not be influenced by the threat to withdraw this Bill. In 1857 the hon. and learned Attorney General brought forward an important Bill relating to the probate of wills; and my hon. Friend the Member for York moved the Amendment of a clause giving a local jurisdiction limited to £1,500 by striking out the words of limitation. My hon. Friend was successful in carrying his Amendment. The Attorney General said if the Amendment were insisted upon he would be obliged to withdraw the Bill, but he would give the House one more opportunity of reconsidering its decision. The House, however, was not to be bullied into establishing a limited local jurisdiction in matters of probate; and accordingly, on dividing again, it decided by a majority of two that the jurisdiction of the local courts should be unlimited as to amount. The Attorney General then said he would not proceed with the measure, but would give the House another opportunity of rescinding its decision upon the question that the clause stand part of the Bill. The debate was adjourned till another day, when the Attorney General moved that the clause be rejected; but the noble Lord the Member for Tiverton (Viscount Palmerston) was fortunately in his place, and he said that the Bill was a valuable one, and that he did not think the particular alteration approved by the House at all inconsistent with its main principle. The Bill passed and became a most useful measure. I hope the House will act in the same spirit with regard to the present measure.


I can say with the most perfect confidence that the principle now struck at is one of the most essential principles of the Bill, because the one thing of all others sought by the commercial classes of this country is the diminution of the fees paid by suitors. I have no hesitation in saying that, as the principle was essential to the measure of last Session, which was introduced by the noble Lord the Member for London and myself, and which, but for certain circumstances, would have passed into law, so it is essential to that of this; and without that principle it is impossible that the Bill should be proceeded with. My right hon. Friend the Member for Coventry (Mr. Ellice) says that it is wrong of the Government to place private Members in the position that they must either accept the Resolution, or lose the Bill for the Amendment of the law of bankruptcy. It does seem so in the first instance, but it really is not so. The two principles are so totally and entirely at variance with each other that it is impossible that any Government should combine them; and, therefore, the House must take either one or the other, not from any desire upon the part of the Government to press the House, but because the two cannot possibly be united.


I rise to protest against the charges which have been made by my hon. and learned Friend (Mr. Malins) against the Members who voted in the majority. He charged them with two things: first, he accused the whole majority of being ignorant of what they were voting upon.


Not the whole majority. I said that the matter had gone off in such a hurry that many hon. Gentlemen did not know what they were to divide about.


My hon. and learned Friend followed it up by charging the majority with injustice. He does not intend to say that he did not use that term; indeed he employed a word which was stronger. I say he has no right to do that, because he would lead hon. Members who did not know what they divided about, if there be any such, to suppose that the majority want to take away compensation altogether. That would be an injustice, but no such matter was involved in the vote, which was merely to decide whether the sum required for its payment should continue to be provided from the source from which it is now raised, or whether the charge should be thrown upon the Consolidated Fund. The assertion that this change in the law of bankruptcy, in which it is said that the public is so much interested, is to depend, whether for good or evil, upon the question from which source a sum of £20,000 per annum is to be paid, is, to me, incredible. If the public is to derive such vast advantages from the change of system, the provision of a sum of £20,000 out of the fees raised upon this vast amount of business can hardly be fatal to the measure. I have voted as I believed to be right, and I shall vote in the same way again.


There is no doubt that the vote to which the House has just come has placed my hon. and learned Friend the Attorney General in a position of great difficulty as to the course which he should adopt with regard to the Bankruptcy Bill. Under these circumstances it is desirable that we should not be committed hastily upon a matter which requires some consideration. If the Resolution in its amended form should be absolutely negatived, that, after the vote which has been come to, would decide the salaries and charges of the Bill should be placed upon the Consolidated Fund. At the same time it is desirable that my hon. and learned Friend should, if upon consideration he feels in a position to do so, make some other proposal to the House which will enable him to remedy the serious inconvenience which has been inflicted by the vote of the House upon the future prospects of the Bankruptcy Bill. Under these circumstances I would suggest that this debate should be adjourned until Thursday, in order that my hon. and learned Friend should have time to consider the course which he will take with regard to the future progress of that measure. I move, Sir, that the debate be adjourned till Thursday.


After the proposal which has been made by the right hon. Baronet, to which I hope the House will agree, I should not think of taking up the time of the House with more than one observation. I do trust that upon consideration my hon. and learned Friend the Attorney General will not come to any conclusion which will lead him to abandon the measure for the Amendment of the law of bankruptcy. I think that a debt of gratitude is due to my hon. and learned Friend for the very great pains and trouble which he has taken with the measure which he has introduced into the House; and, speaking from experience, I can tell the House how much trouble and what care and anxiety is involved in dealing with the subject of bankruptcy. I speak quite sincerely when I say that, unless the House passes the present measure in some shape or other, I, for my own part, despair of ever seeing a Bankruptcy Bill become the law of the land. With regard to the point upon which the division of the House has been taken—at which division I regret that I was not present, because I should certainly have voted with my hon. and learned Friend—I must remind the House of a circumstance which I do not think has been stated. It is not very many years since a Royal Commission was appointed to consider the whole question of the law of bankruptcy. Upon that Commission were men of the greatest eminence, both in the legal and commercial world, and one of its recommendations was, that that should be done with regard to this £20,000 which my hon. and learned Friend has proposed. And although my right hon. Friend (Mr. Henley) says that £20,000 is not a large sum of money, I must remind the House that £20,000, when taken in relation to the other costs of bankruptcy proceedings, is by no means an insignificant sum. Besides that, I do think that a case of greater injustice than this was never found in the course of the administration of the law. Observe what is done. Several years ago, a generation ago almost, you thought it right to abolish certain judicial officers in bankruptcy. Of course they were entitled to compensation, and you are now making the unfortunate persons who are obliged to have recourse to the Court of Bankruptcy, the present suitors, pay a sum to the fixing and disposal of which they have not been concurring parties. Therefore, if the vote is to be taken again, I shall support the proposal of my hon. and learned Friend, which I believe is founded upon justice, and I am extremely glad that he has been able to prevail upon the right hon. Gentleman the Chancellor of the Exchequer to consent to the transfer of this sum to the fund upon which it ought always to have been placed. I trust that, whatever course my hon. and learned Friend may take, he will not abandon the Bankruptcy Bill, which I am quite sure may now become the law of the country, and which, if it does, will redound very much to his houour and to that of the Government of which he is a Member.

Debate adjourned till Thursday.

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