HC Deb 14 February 1861 vol 161 cc418-31

Order for the Second Reading read.


said, that upon the occasion of the introduction of the Bill such universal admiration was accorded to the hon. and learned Attorney General that no one had dared to raise a voice in opposition to what had been said. But it appeared to him (Mr. Roebuck) that the hon. and learned Gentleman had entirely failed in this matter. The House had been told some time ago that they were going to have a Bill which would entirely settle the question. Now, what was it that they had got? The hon. and learned Attorney General had first complained that there was a want of uniformity in the decisions of the Courts of Bankruptcy under the present system; next, that the proceedings were attended with great expenses; and, thirdly, that a distinction was made between bankruptcy and insolvency which alone rendered the present system an opprobrium to the English law. But how had the hon. and learned Attorney General attempted to remedy these admitted defects? There were five Commissioners, he said, who could each give different decisions on matters coming before them; but he forgot to state that an appeal lay from these decisions to the Lords justices. The remedy which the hon. and learned Gentleman proposed was to appoint a Chief Judge. But first, with regard to the want of uniformity in the decisions of the five existing Commissioners, that there was an appeal from them to the Lords Justices, and he had proposed to appoint a Chief Judge. But what would the Chief Judge do that was not already done by the Lords Justices? Was he to be a superior lawyer? It was impossible. Was he to be a man of superior attainments? It was equally impossible. Therefore, the fact was that the appointment of this Chief Judge was merely an extra expense without a concomitant benefit, for it could not in any way secure a greater uniformity of decision than that which at present existed. Then with regard to the expense:—The great cause of the expense at present was one on which the learned Attorney General had not put his finger—namely, that fees were payable which did not go to any officer of the Court, but were paid into a fund belonging to it. The hon. and learned Gentleman did not in any way diminish the fees that were now payable. Then, as to the third point, the distinction between trader and non-trader, the hon. and learned Attorney General, although he had complained of it as a distinction that ought not to be permitted any longer, did nothing in the present Bill to abolish it. It remained the same as ever; for that which constituted an act of bankruptcy on the part of a trader was not an act of bankruptcy on the part of a non-trader. Therefore, all that was done by the new Bill was to alter the law. Alteration was not necessarily reform. Alteration by itself was a mischief, and, unless advantageous in a greater degree than it was mischievous, it should never be adopted. No good, therefore, was obtainable by the present Bill; but, on the contrary, he would venture to prophesy—although wise men rarely did so —that the Bill would, if passed into law, increase the expense of the administration of the bankruptcy law even beyond what it was at present. The Bill, in fact, was an attorney's Bill—not an Attorney General's Bill, but an attorney's Bill, and all it would do would be to advance the interests of attorneys. Beyond this it was merely a return to a system which had already been found inefficient and objectionable, and would take out of the hands of the official assignee that control which was one of the principal benefits conferred by the Bill introduced by Lord Brougham in the year 1831.


said, he wholly differed from the hon. and learned Gentleman who had just sat down. Instead of increasing expense and creating delay, the object of the Bill was to diminish expense and to simplify the proceedings in bankruptcy. The Bill of Lord Brougham was an utter and disgraceful failure, and was admitted on all hands to be so. [Mr. ROEBUCK: No, it is not!] He maintained that it had failed in every part of the country. Nine-tenths of those whose circumstances became embarrassed shunned and repudiated the Court of Bankruptcy. The right of appeal to the Lords Justices, on which the hon. Member laid such stress, was costly and cumbrous in its exercise, and was rarely made use of. As to the expense caused by the appointment of the Chief Judge, that was to be thrown on the Consolidated Fund, and would in no way, therefore, increase the expense of the administration of the law as far as the estates of bankrupts were concerned, and on the first and largest item of expense a reduction of 50 per cent was made by the Bill. But while he thus differed from the hon. and learned Gentleman in the view which he took of the measure, he was bound to say that it did not promise all those advantages in the reduction and simplification of offices for which the commercial public had hoped. He wished, therefore, it should be understood that, in agreeing to the Bill being read a second time, and admitting thereby its principles, he was not pledging himself in any manner to its details. There were grave exceptions to be taken to it as a whole. It contained, for instance, a power of selling the goodwill and book debts of a bankrupt, but not until after twelve months from the date of the petition had expired. But at that period what would he the value of the goodwill and book debts? Then the Bill proposed that every case of misconduct on the part of the bankrupt should be heard before the Chief Judge, assisted by a Commissioner. That would inevitably bring about the same state of things that now existed in the Divorce Court, and the appointment of additional Judges would soon be required. Then, in Section 189, he found that the services of the Accountant General were invoked; but that in Section 17 his office was abolished. Then—and with regard to this part of the Bill he wondered much that the hon. and learned Member for Sheffield (Mr. Roebuck) had not made it the subject of remark—the Bill proposed to enact that a wife should be compelled to give evidence in cases where the husband was charged with fraud, concealment, or misconduct. That was so entirely inconsistent with the spirit and constitution of the English law, and so repulsive to every Englishman's notion of propriety and justice that he hoped it would not, under any circumstances, be permitted to remain part and parcel of the Bills. But, notwithstanding these defects, no one could help being struck in looking over the Bill, with the great care and ability displayed in the drawing of it, and at the comprehensive skill with which this important subject had been treated. The mercantile community must feel under great obligation to the Attorney General for the introduction of the measure.


said, he bore willing testimony to the exertions of his hon. and learned Friend the Attorney General in this matter. No law officer of the Government had ever devoted more time and intelligence to any subject than the Attorney General had bestowed on this question of bankruptcy. Still, he could not wholly agree with the Bill before the House. The result of many months thought and labour was the Bill of last Session, which comprised a complete consolidation of the law, and which did honour to the name of the hon. and learned Gentleman. The country, and the mercantile community especially, had a right, therefore, to expect that after the recess a measure as complete, if not more perfect, should have been proposed—particularly when the subject had been put forward so prominently in the Speech from the Throne, and in the answer to the Address. At the present period the Government had no other great measures to propose, and he had heard no reason assigned why the Bill this year should not have been as complete and comprehensive as that which was laid before the House in the last Session. In introducing the measure the hon. and learned Gentleman was apologetic in his tone. "Fragmentary" was the title he gave to it, and any one who had read the Bill would see how exactly the term applied. It touched upon almost every point of the bankruptcy law, and introduced amendments upon almost every one—yet practically and substantially it left the old law in force—and the result would be to add another Act of 250 clauses to the statute book, which would have to be read, not instead of, but along with, the other Acts already existing. The Bill drawn up, as was understood, mainly by the right hon. and learned Member for Newcastle (Mr. Headlam), and introduced by the noble Lord the Member for London, was also a complete consolidating measure—so that the Attorney General had plenty of materials if he had persevered in his original intention of consolidation. He should be sorry to bear the appearance even of opposing the second reading, but there were several points in the Bill deserving of attention. The hon. and learned Attorney General, in introducing the measure, had first remarked upon the confusion between the judicial and administrative functions in bankruptcy. One would have thought, therefore, that, admitting the inconveniences resulting from such a system, some attempt would have been made by the hon. and learned Gentleman to introduce a remedy, but such was not the case. The Bill proposed to continue precisely the same system. It preserved the Commissioners precisely as they were, with precisely the same confusion between the two functions exercised by them. And what was the establishment of a Chief Judge in bankruptcy but the restoration of a system which had been before tried, had failed, and had been abolished by Act of Parliament? He alluded to the Court of Review, established by the measure of 1831, introduced by Lord Brougham. That was a Court which at first bad four Judges—Judges of ability and of high judicial position. But the system failed, the Judges gradually dwindled from four down to two; and then, because of its increasing inefficiency, the Court was abolished altogether by Act of Parliament. As a substitute, a Vice-Chancellor was deputed to perform the duties of Judge of Appeal, but that experiment met the same fate, and was abolished. The next attempt at improvement was the establishment of an appellate jurisdiction in the Lords Justices. That system still existed, and a more satisfactory or complete tribunal for the decision of all legal questions arising in the Court could not have been devised. It was a matter for serious consideration whether the House would appoint a new Chief Judge at a salary of £5,000 a year in place of a tribunal which now worked well. In the Bill of last year, which abolished the Commissioners, there might have been some reason for appointing a Chief Judge; but this Bill, whilst providing for a Chief Judge also retained the Commissioners at their present salaries, with all their staff. Why retain the Commissioners if, on the completion of the new Court their offices became unnecessary, as was alleged last year. He must presume that this proposal had been forced upon his hon. and learned Friend. The only reason that he had heard his hon. and learned Friend give for retaining the Commissioners was the difficulty that would be experienced in that House in obtaining for them pensions charged on the Consolidated Fund. But was that a reason to be entertained by the House for the retention on full salary of Commissioners whose offices were admitted to be useless if a Chief Judge was to be appointed? On the ground that the Government could not get for them a retiring allowance charged on the Consolidated Fund, the country was to be saddled in perpetuity with the expense incurred by the existence of the whole body of Commissioners, unless the Lord Chancellor should think fit on a vacancy occurring to reduce their number. If they began with a body of five Commissioners, the new system would accommodate itself to the staff, and hereafter there would be no means of getting rid of them. But, not only were the Commissioners to be retained, but the whole of their officers likewise. The registrars were still to be attached to the Court, and at their present salaries. Then came another class of officers. He had understood his hon. and learned Friend to be of opinion that there was no necessity for the messengers, and by his Bill of last year he proposed to abolish them altogether. However, it was now found that all the messengers were to be retained, and that they were to have salaries not exceeding £500 a year; so that all the mischiefs connected with that department of the existing system were to continue. Then the officers of the official assignees were to be maintained, and power was to be taken to add to their number if necessary. From all this it would appear that, as regarded the constitution of the Court and its officers, there was to be no alteration at ail, except that there was to be the addition of a Chief Judge with a salary of £5,000 a year, to perform the duties now so ably and satisfactorily discharged by the Lords Justices. So much for the general administration; and now for other matters. Complaints had been made of the expense of collecting the assets of bankrupts, and the unsatisfactory result to the creditors. What had the old plan been? To appoint creditors' assignees. A creditor's assignee had some advantage in the way of patronage. He appointed a solicitor. That was sometimes an inducement to a creditor to act, and sometimes persons acted because they were large creditors; but it was said that difficulties had arisen in consequence of the apathy of creditors in this matter. So much had that been felt that the collection of the assets was transferred in 1831 from the creditors' assignees to the official assignees. After some time complaints arose of the latter; they did not give satisfaction. His hon. and learned Friend, however, proposed to retain them, and to divide the responsibility of collection of the assets between the creditors' assignees and the official assignees. It was proposed by the Bill of his hon. and learned Friend that the official assignee should act in the first instance and up to the appointment of the creditors' assignee. He was then to hand over his accounts to the latter, who was to audit them. From that time the creditors' assignee was to collect all debts over £10, and the official assignee all debts under that amount. His hon. and learned Friend said that the official assignees discharged that duty with great efficiency. Why was that? It was because, being paid by commission, they were well remunerated for the collection of large sums, and were able to afford the time and labour of their clerks for the realization of small accounts; but the collection of the larger debts was to be taken from them under this Bill. There was an audit provided for all sums above £10 received by the creditors' assignee, and the audit was to be made by the official assignee. If they substituted creditors' assignees for official assignees, they would be reverting to the old system, and would bring up again all the inconveniences that had been experienced when that old system was in operation. Again, there were clauses in the Bill which would be so stringent on the creditors' assignee that he ventured to think no one would ever think of becoming a creditors' assignee if his so doing were to expose him to such provisions. He threw out these suggestions, because he thought it of importance that such matters should be carefully considered. There wore many valuable clauses in the Bill. Among them was one giving creditors the power to appoint a manager. They had seen that such a plan had succeeded very well in the Court of Chancery; but, as a whole, the system now proposed seemed to be reverting to what had been done before rather than a scheme such as that brought forward by his hon. and learned Friend last Session, which was one for sweeping away an old system and substituting an entirely new one in its stead. He (Mr. Bovill) could not help thinking with his hon. and learned Friend the Member for Sheffield (Mr. Roebuck), that if this Bill were to pass within the present year they would soon have the same complaints from the mercantile community, and that all the old evils against which they were now called on to legislate would arise again. Among the many valuable provisions contained in the measure, he would instance that which would give validity to arrangements between debtor and creditor. If the Bill contained nothing more, that provision would entitle his hon. and learned Friend the Attorney General to the thanks of the country; but, when a Bill like this was brought forward as the great measure of the Session, and was introduced at a period that secured ample time for the consideration of its details, the House had a right to expect a full and comprehensive measure. There were many matters in connection with the Bill which deserved the most serious consideration on the part of the Members of that House, and be should not have risen to say a word on the second reading were it not that, on the introduction of the measure, most of those hon. Gentlemen who spoke seemed to think it perfect. While ready to admit the many excellent provisions which the Bill contained, he was not satisfied that it should go forth to the country that a Bill of so fragmentary a character was one which the House and the mercantile community had a right to expect, not simply from his hon. and learned Friend the Attorney General, but from the Government.


said, he was no lawyer, and, therefore, did not intend to enter into the various legal details; be rose only to express his opinion that the mercantile community highly approved of the Bill, and hoped that it would be carried as soon as possible.


said, he preferred to look at the measure in its practical and commercial, rather than in its legal bearing. Indeed, it appeared to him that the former failures to which reference had been made had arisen from the subject having been considered in too forensic a manner, and that the excellence of the present Bill consisted in the fact that that feature had, to a considerable extent, been departed from. The law intruded too much into the com- mercial affairs of this country, and they ought to look to administrative measures rather than to legal proceedings in cases of bankruptcy. There was an analogy in this respect to the old Poor Law, which was treated throughout in a legal spirit, and the consequence was that thousands of pounds were spent in litigation. A change then took place; the poor law had been changed mainly to a system of administration with great benefit to the country. It was mainly in that point of view that he thought the Bill defective. It was proposed to appoint a Chief Judge at a high salary to adjudicate upon disputed matters in bankruptcy; but 19–20ths of the bankruptcy business arose out of the collection and distribution of the estate. He would, therefore, suggest that the functions of the Chief Judge should he increased by intrusting him with a general supervision over the administrative business of bankruptcy, or, if the two functions were thought incompatible, one of the Commissioners should have this duty confided to him, and should take into consideration all inquiries and representations made by the creditors when they supposed that any delay occurred in administering the bankrupt's estate. Such an officer, thus rendered responsible for whatever neglect took place in collecting and distributing the assets, would be a most useful one.


observed, that matters of detail might be disposed of in Committee. It should be remembered by those who objected to the measure that this Bill did not represent the full intentions of the hon. and learned Attorney General. List year he produced a measure which embodied his own views, but the House of Commons would not allow him to carry out those views; and he was now, therefore, acting to some extent under restraint. Still the Bill now proposed would he very acceptable to the country at large. He (Mr. Hadfield) had consulted many authorities, who were unanimously in its favour; and he was, therefore, surprised at the speech of his hon. and learned Colleague (Mr. Roebuck) which reminded him of the often quoted instructions given to the barrister—"Having no case, abuse the Attorney." The object of the Attorney General was to encourage private arrangements between debtors and creditors, and to assist the parties in administering the estate with the least possible cost and delay. This was a most desirable object, and the commercial community were deeply indebted to the hon. and learned Gentleman for the attention which he had given to the subject.


said, he did not know a more instructive passage of ancient fable than that which warned them against the attempt to please everybody. Last year he brought in a Bill which consolidated the whole bankrupt law. Thereupon it was said, "What a huge production! Who can examine it? Who can expect that it will be accurately estimated or understood?" This Session he had brought in a measure which indeed did not embody the old law in its provisions, but in which was incorporated in an improved and amended form every suggestion, every novelty, every alteration contained in the measure of last year. Inasmuch, however, as he had, with perhaps unnecessary candour, described it as in some sense fragmentary—because it could not be read and thoroughly understood unless the reader possessed a knowledge of the old law— hon. Gentlemen now said "See how very imperfect it is, and how it differs from the old measure!" Now, he should like those hon. Gentlemen to explain, if they could, how the Bill differed from its predecessor? The difference consisted merely in this,— that the present Bill did not re-enact the provisions in the statute law. He confessed the main reason he had given up the task of codification was, that when in Committee last year he found that each section, though it might only embody the existing law, was challenged, discussed, and became the subject of keen controversy. But, if every part of the old law was thus to be brought again to the test of inquiry and discussion, it appeared hopeless ever to expect to arrive at any definite conclusion, or to pass any Bill at all. From necessity, therefore, in order that the House might have a measure which it would be in their power to investigate, and which they might reasonably hope to pass during the present Session, he had carefully extracted from the old Bill all that was new, all its improvements, and had put them in a Bill which, so far from being of less, was, in his judgment, of much greater value than the measure of last year. He should be unfortunate, indeed, if it were not of greater value, for then he should have thrown away weeks and months of labour. There could be no doubt that the hon. and learned Gentleman (Mr. Roebuck) spoke out of the abundance of his well-known good nature, and his speech flowed over with the milk of human kindness for which he was so eminently distinguished. Then, he had only one thing to say, and he said it with regret, that whatever objections the hon. and learned Member might state to the Bill, it was very evident that he knew nothing about it. The hon. and learned Gentleman spoke of the fees put into the public fund; but if he had read the Bill he would have found that the greater part of the fees to which he referred were utterly abolished. He would have found, had he read the Bill, that the stamp duties were reduced one-half, and that the fees to be taken were so small and insignificant that, were it not for the fees expected to be derived through the registrars, it would be absolutely necessary to provide some additional income to carry on the business of the Court. Indeed, he had carried the principles of reduction to the very verge of rashness; but in spite of all he had done in the way of retrenchment—reducing the stamp duties one-half, taking away the fees for the building fund, the fees for public sittings, and leaving almost no fees to be levied—the hon. and learned Member charged him with having neglected the abolition of impolitic duties. Then, when the hon. and learned Member spoke of the Chief Judge, and the distinction between the administrative and judicial duties of the Court, did he mean to say that the Judges who were to sit in this particular Court and administer its business would not give an immediate and practical application of the law in all questions that came before them? —while the Chief Judge, sitting in Chambers, would ever be ready for the discharge of the duties intrusted to him, reserving the more important questions for the open Court. The hon. and learned Gentleman objected to the Commissioners being retained. In the Bill of last year it was proposed to do away with the services of the Commissioners, and to give them compensation. That was objected to, and he thought he would hardly be doing his duty if he was to deal otherwise with them than he now proposed in the Bill. It was undoubtedly true that the five Commissioners now in existence were to remain to perform the duty appertaining to their offices, but a smaller number was to be the permanent number of Commissioners. He must say that he had heard the hon. and learned Member for Guildford (Mr. Bovill) with astonishment, and could not help wondering how he had contrived to make so good a speech with such slender information. The material was, indeed, far inferior to the workmanship. The hon. and learned Gentleman talked of the official assignees. Had he read the clause reducing them to five? The hon. and learned Gentleman complained of all the registrars being continued. Had he read the important provisions of the Bill by which the registrars would carry their courts to the door of the creditors, there to administer justice — saving that great reproach which now existed of creditors being compelled to come to London? With regard to the office of the Chief Judge, the hon. and learned Gentleman said that the right of appeal was given now to the Lords Justices. Did not the hon. and learned Gentleman know that the Commissioners in their admirable report spoke of that right of appeal as one of the greatest inconveniences of the existing system, and did he not know that a question could not be carried to the Lords Justices for less than £60? Very frequently it was twice £60? Was there no necessity for altering that? The hon. and learned Member for Sheffield had designated this as an attorney's Bill. Well, it was a Bill demanded by the mercantile part of the community, and by none more than by the constituents of the hon. and learned Member for Sheffield. One of its leading principles was to give the creditors the power of looking after their own affairs; and, as the property of the bankrupt belonged to the creditor, be was entitled to have it under his control. The hon. and learned Gentleman spoke of the Bill bringing about a restoration of the old state of things prior to 1831, and he specially pointed at the provision respecting creditors' assignees. But if he examined the Bill he would find that all the benefits now derived from official assignees were to be continued. No money or property would be allowed to remain in the hands of creditors unappropriated; for it would be the duty of the official assignee to see that every farthing of money or property was appropriated to its right ends. He had now adverted to some of the topics referred to by the hon. and learned Gentlemen, but they were all topics that could be more legitimately discussed in Committee. He frankly admitted that when they got into Committee there were a great number of things in the Bill on which a difference of opinion might arise. When they arrived at that stage he would be most happy to receive the criticisms of his learned Friends, and of all those hon. Gentlemen who took an interest in the important matters embraced in the Bill. He would only add that it would be a great reproach to the House of Commons if it allowed this Session to pass without enacting a law on this subject—a law that was most urgently demanded by the whole mercantile community of this country.


said, that when the Bill was introduced the understanding was that the Committee would not be put for an early day. He could not understand bow his hon. and learned Friend the Member for Guildford (Mr. Bovill) had been able to master the details of the measure in so short a time. He had not himself been as yet able to give any time to the consideration of them. He did not suppose that the hon. and learned Member would admit the assertion of the Attorney General that he was ignorant of the provisions of the Bill. [Mr. BOVILL: Certainly not.] It was clear from what had passed that it would be disadvantageous to discuss the general policy of the measure before time was given for fully considering it. He believed it was intended to take the Committee on Monday next.


said, he only intended to take the first fifty clauses of the Bill on Monday. They were clauses that were generally accepted last Session. He wished to bring the Bill to the point at which it was then left, but not to go one step beyond it.


said, he would not object to that course, as he approved all those clauses. But it was evident, from the speeches made that evening, that the right hon. and learned Gentleman must he prepared for considerable discussion, even on some of the provisions that were passed last year. Some of those who last year acquiesced in the appointment of a Chief Judge were not prepared now to continue that acquiescence. It would be better not to take the Committee till Monday week; that would give ample time to all the Members interested in the measure to look at the Bill, which certainly had the great advantage over the measure of last year of being only half its length.


trusted the hon. and learned Attorney General would not yield to the suggestion of the hon. and learned Gentleman and assent to any delay. The first fifty clauses had been conceded last Session, and the Attorney General, with the greatest fairness and candour, had in- vited them to discuss the details in Committee. He trusted, therefore, that the House would allow the Committee to be fixed for Monday next.


said, he hoped the hon. and learned Attorney General would press the Bill; Monday next would be the most convenient for the Committee, as in the following week many hon. Members would be absent on the circuits.


said, the first fifty clauses of the Bill involved the whole important question of compensation to the superseded officers of the Court of Bankruptcy. Last year a considerable majority in the Committee objected to placing any charge for that purpose on the Consolidated Fund. The proposal had been changed in the present Bill. The offices were to be maintained out of the funds of the Court; but that fund was to be reimbursed by a grant of money from that House, made from year to year. That was equally a charge on the public purse; it was only obtained in a different way. Still, it raised the main question, of the policy of throwing new charges on the public funds.

Bill read 2°; and committed for Monday next.