HC Deb 26 October 1989 vol 158 cc1252-3

'.—(1) An Order in Council under paragraph 1(1)(b) of Schedule 1 to the Northern Ireland Act 1974 (legislation for Northern Ireland in the interim period) which contains a statement that it 'is only made for purposes corresponding to the purposes of provisions of this Act to which this section applies—

  1. (a) shall not be subject to paragraph 1(4) and (5) of that Schedule (affirmative resolution of both Houses of Parliament), but
  2. (b) shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(2) The provisions of this Act to which this section applies are—

  1. (a) Parts I to V, and
  2. (b) Part VII, except sections 146, 147 and 158 and Schedule 20.'.—[Mr. Redwood.]

Brought up, read the First and Second time, and added to the Bill.

Mr. Redwood

I beg to move amendment No. 256, in page 195, line 4, leave out clause 193.

Mr. Deputy Speaker

With this it will be convenient to discuss Government amendment No. 282.

Mr. Redwood

Some doubt has been expressed as whether debts that were not due and payable at the commencement of a bankruptcy could be incorporated in a set off under section 323 of the Insolvency Act 1986. A set-off is a device by which a creditor can add up all his credits and debits with an insolvent person and claim the net figure.

The doubt particularly concerns contingent creditors such as guarantors of the bankrupt's debt since the guarantor is often called upon after the commencement of the bankruptcy. The present clause seeks to deal with that perceived doubt by omitting the word "due". It has also been simplified in its construction. The clause may well have clarified the position of some contingent claims, but only by potentially widening the scope of those claims capable of being included in the set off. The extent of that widening could be considerable. It is desirable as far as possible to maintain the principle of pari passu or fair distribution in insolvency.

To avoid creating fresh uncertainty we have decided that it would be preferable to delete the clause from the Bill. In taking that decision we have borne in mind that the current law has not been fully tested in the courts. In all the circumstances it is sensible and desirable to delete the clause and allow the existing law to develop. British law thrives on cases and individual decisions—

Mr. Derek Foster (Bishop Auckland)

And lawyers.

Mr. Redwood

Yes, and lawyers, and it should be allowed to do so here.

Amendment No. 282 is consequential on the deletion of clause 193 and removes the Insolvency Act 1986 from the title of the Bill.

Question put and agreed to.

Forward to