CLAUSE 13.—(Power to continue adjustment proceedings in relation to estate of deceased debtor.) (Hansard, 8 May 1941)

§ The Attorney-General
I beg to move, in page 13, line 37, to leave out "if it," and to insert "Provided that, if the court."
This is the Clause which deals with the continuation of adjustment proceedings if the original debtor has died. It provided, as the Committee will remember, that the proceedings should continue if the court was satisfied that the estate would accrue wholly or mainly to members of the debtor's family. I think that it was obviously a sensible provision. It has been pointed out to us that it might be some time before that could finally be ascertained. This Amendment and the two following Amendments, therefore, put the thing round the other way. They entitle the court to continue unless it is satisfied that the benefits are going to people other than the debtor's family. It will prevent a certain amount of delay. In the ordinary case inquiries will be made apparently, and it will be clear whether the estate comes within the Clause or not, and I think it improves the Clause to put it in this way.

§ Sir A. Maitland
I beg to move, in page 14, line 13, after "bankruptcy," to insert: 1028 (except the provisions with respect to the priorities of debts and liabilities). I can put the purpose of this Amendment very briefly. The effect of paragraph (a) of Sub-section (3), as I understand it, is to deprive those persons where the estate is insolvent of the right to have their debts paid in priority. I raise this question because, although I understand there has been some correspondence between the Association of Municipal Corporations and the Attorney-General, there is still some doubt in the minds of local authorities as to whether they are in fact deprived of that right in the case of people coming under this Clause. If we could have an assurance that they are under some misapprehension, I should at once be able to withdraw the Amendment.

§ The Attorney-General
This Clause provides that in certain cases, if a debtor dies, proceedings shall continue. The proceedings which are to continue are, of course, based on the principles of this Measure, and it is, therefore, necessary to provide, as is done under Sub-section (2, a), that if an estate is insolvent, Section 34 of the Administration of Estates Act shall not apply. If that were not done, it would be dealt with according to ordinary insolvency principles regarding a bankruptcy estate. My hon. Friend and those with him are afraid that that will mean that priorities in which they are interested will not apply. They are wrong about that, because if my hon. Friend will look at Clause 9, he will find that the priority of debts which he has in mind is a very important principle of this Bill. It shows that priorities under Section 3 of the Bankruptcy Act, which are the ones he has in mind concerning local authorities' rates and taxes, are one of the principles of this Bill. That principle will apply to the estate of the deceased debtor, because the court is enjoined to continue to deal with the estate under this Bill. Having already got the priorities provided for under the Bill, it would be wrong to do what the Amendment proposes to do—to have them in the second time under insolvency proceedings.

§ Sir A. Maitland
I am much obliged for that assurance, and I beg to ask leave to withdraw the Amendment.

§ Mr. Douglas
There is a point on this Clause which I should like to put to the Attorney-General. As I understand it, the Clause applies only in the case where a person dies during the course of liabilities adjustment proceedings, that is, where there is something before the court, but there does not appear to be any provision for a case in which action has been taken by the liabilities adjustment officer under Clause 1 of the Bill. I would like the Attorney-General to consider whether there is not a gap which ought to be filled so as to cover the case where the debtor dies before the scheme made by the liabilities adjustment officer has been brought to fruition.

§ The Attorney-General
I will look into that case and make sure. What the hon. Gentleman has put to me is a case where the; scheme is operative, but if there is anything we have overlooked in providing for what should happen when death follows the scheme, I will look into it.