§ (1) Where any firm or person by this Act required to furnish a statement of particulars or of any change in particulars shall have made default in so doing, then the rights of that defaulter under or arising out of any contract or other dealing made or entered into by or on behalf of such defaulter at any time while he is in default shall not be enforceable by action or other legal proceeding either in the business name or otherwise:
§ Provided always as follows:—
- (a) The defaulter may apply to the Court for relief against the disability imposed by this Section, and the Court, on being satisfied that the default was accidental, or due to inadvertence, or some other sufficient cause, or that on other grounds it is just and equitable to grant relief, grant such relief either generally, or as respects any particular contracts or dealings, on condition of the costs of the application being paid by the defaulter, unless the Court otherwise orders, and on such other conditions (if any) as the Court may impose, but such relief shall not be granted except on such service and such publication of notice of the application as the Court may order, nor shall relief be given in respect of any contract or dealing if any party to the contract or dealing proves to the satisfaction of the Court that, if this Act had been complied with, he would not have entered into the contract or dealing;
- (b) Nothing herein contained shall prejudice the rights of any other parties as against the defaulters in respect of such contract or other dealing as aforesaid;
- (c) If any action or proceeding shall be commenced by any other party against the defaulter to enforce the-rights of such party in respect of such contract or other dealing, nothing herein contained shall preclude the defaulter from enforcing in that action or proceeding, by way of counterclaim set off or otherwise, such rights as he may have against that party in respect of such contract or dealing.
§ (2) In this Section the expression "Court" means the "High Court":
§ Provided that if any proceeding to enforce any contract is commenced by a defaulter in a County Court, the County Court may, as respects that contract, grant such relief as aforesaid.
§ Amendments made: In Sub-section (1) leave out the words "or other dealing."
§ After the word "defaulter," insert the words "in relation to the business in respect to the carrying on of which particulars were required to be furnished."
§ In paragraph (a), after the word "relief"["grant relief"], insert the word "may."
§ Leave out the words "or dealings" ["contracts or dealings"].
§ Leave out the words "or dealing" ["or dealing if"].
§ Leave out the words "or dealing" ["or dealing proves"].
§ Leave out the words "or dealing" at end of paragraph.
§ In paragraph (b) leave out the words "or other dealing."
§ In paragraph (c) leave out the words "other dealing."
§ Leave out the words "or dealing."—[Mr. Pretyman.]
§ Mr. KINGI beg to move in Sub-section (2), after the word "that," to insert the words "without prejudice to the power of the High Court to grant such relief as aforesaid."
This is the first of two Amendments which reserve the right of appeal to the High Court. I hope that they may be accepted.
§ Mr. PRETYMANI accept this Amendment, which may possibly be an improvement. The second Amendment, I think, is not necessary.
§ Amendment agreed to.
1491§ Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill."
§ Sir J. HARMOOD-BANNEROn behalf of the hon. Member for Aberdeen, I desire to raise a question under this Clause. It seems to me that we are creating quite a new offence. Hitherto when a penalty has been applied the penalty has been the punishment. But in this particular case there is not only the penalty, but there is also the fact that there is power to cancel a contract. As the hon. Member for Aberdeen pointed out, it is quite possible in very important dealings in cotton, corn or other merchandise to cancel a contract. This seems to be quite a new position. In the case of a limited company, of course, it does not apply. A limited company make default and are fined for breach of the Act, but the contract holds good, but in this particular case the contract does not hold good to the end of the period, and, owing to a small fault, the contract may be called off. The contract may be for an enormous amount, and this penalty may be incurred for some small breach of this description. A limited company pays a fine In accordance with the nature of the offence committed, but here the offender not only pays the fine, but the contract is cancelled. This is a most serious thing to a firm conducting its business, and I hope that some way will be found of remedying it. It is quite true that there is this provision, that a defaulter may apply to the Court, but that is a rather serious matter, and there ought to be some other relief.
§ Sir G. CAVEI agree with the hon. Member that this Clause is very important and somewhat new. The effect of it is that anyone who does not register is disabled from enforcing his contract tin relation to the business in respect of which he ought to have registered. It is, I agree, a serions matter, and the reason for it has been considered in another place. It is assumed that when a man does not register, but makes default, persons contracting with him may contract under a misapprehension, not knowing who the partners are, the names of whom they are entitled to know by law. It is thought advisable to impose what I agree is a somewhat stringent penalty upon those who make default. We have express power in the Clause enabling the Court to grant relief in certain cases. Where the Court finds that the default is accidental or due 1492 to inadvertence, or some other sufficient cause, or that on other grounds it is just and equitable to grant relief, the Court may grant such relief. I am quite sure that when a Court was informed that a party to the contract had been lying by waiting for the default and waiting until the last moment before calling attention to what would vitiate his contract, any Court would grant relief in such a case. I think that paragraph (a) in the Clause meets many of my hon. Friend's points.
§ Mr. R. MCNEILLI regard this Clause as one of the most valuable parts of this Bill. It would be a very great loss if it were not included. Certainly it is an innovation which we ought to welcome. There is far too much facility in various parts of our commercial legislation for offences to be committed and for the trader to be able to take advantage of those offences. I think the value of an innovation like this is that it strikes at the title of any person who does not comply with the terms of the Act. I am extremely glad that the Government have introduced the principle of saying that so far as this Act is concerned the defaulter shall be not merely liable for the formal penalty for breach of the law, but that he shall at the same time be deprived of the opportunity of taking advantage of his default in the civil Court.
§ Question put, and agreed to.