HL Deb 15 August 1832 vol 14 cc1384-93
The Lord Chancellor

.—I rise to redeem the promise which I made some time since, to state before the close of the present Session of Parliament, certain changes that I intend to propose, with the view of improving the administration of justice. By making this statement at the present moment, I afford the House and the public an opportunity of considering my propositions during the recess. Some of the changes which I propose to effect are comprised in the provisions of the Bill which I recently presented to this House, and therefore with respect to them it will be unnecessary for me to trouble your Lordships with a single observation. The plan which I have now to detail to your Lordships will, in the first place, provide for the abolition of the Report-office, by which a considerable saving will be effected. In the next place, it will provide for the regulation and change of the Registrar's-office, and in this department, also, a considerable saving will take place. My measure will then provide for changes in that great and most important department of the Court of Chancery,—I mean the Master's-office, to which I have on so many former occasions directed the attention of the House. I wish your Lordships to understand, that I consider the saving which will be effected by these changes, as the least important result which may be anticipated from them. It is right, however, that I should state what the amount of that saving will he. By the abolition of the Report-office, there will be a reduction of 4,000l.; by the changes in the Registrar's-office, a saving of 14,000l. will be effected; and by the alterations in the Master's-office, a reduction of 13,000l. will be made, producing a total saving of 31,000l. a year. This reduction, however, is, as I before observed, of infinitely less importance than the very great improvement which I humbly think will take place, more particularly in the Master's-office, by the changes in question. I have before stated, that these changes appear to me to be recommended on the grounds of expediency and necessity, and therefore I will not trouble your Lordships with a repetition of my observations upon that point, but will shortly state the nature of the changes themselves. By my plan, the worst branch of the system in the Master's department, which pays the Master by fees on work done, will be entirely abolished—I mean the copy money, which gives an interest to those persons belonging to the department to increase unduly,—and I may say, vexatiously—the expense of the suitors;—the expense being increased in an infinitely greater proportion than the sums actually raised by this bad mode of paying judicial persons. I also propose to abolish altogether that still worse system of abuse grafted on the former bad one,—I mean the payment of gratuities, the legality of which is only unquestionable because it has grown into a habit, which seems to have become permanent in that office. These changes will be important, considered with reference to economy, but incalculably more so when viewed as improvements in the administration of justice in this particular department. The Master will, in future, be paid by a salary instead of fees, by which a saving of at least 13,000l. will be made. There are some other changes proposed to be made in this department, to which I will not now allude, as I do not wish to enter into much detail on the present occasion. I have, for reasons already given, abstained from dealing with the Six Clerks' department, and that of the Subpœna-office, by the present measure. Those departments, together with one or two other branches of the system, will be more conveniently introduced into one or two other measures, which will be rendered necessary by the act which has this day received the royal assent. In addition to what I have already stated, I shall feel it my duty to submit to Parliament an important proposition, which, I trust, will be carried into effect—I mean the constitution of a Court of Appeal in Chancery. I propose that this Court shall he constituted of the heads of the equity jurisdiction in this country. This will be a great improvement upon the present system, by which a single head of a branch of equity constitutes a court of appeal from another branch. In addition to the three heads of the equity Courts, I will place in the Court of Appeal the Chief Baron of the Court of Exchequer. I must mention, that the judge whose decision is appealed against, will, during the hearing of the case affecting his judgment, be excluded from this Court. The appeal to this Court will not be peremptory, but by way of election; for the suitor may either come to the High Court of Parliament, or to the Court of Appeal; but it is part of my plan, that from that Court an appeal shall not come to Parliament in the last resort, unless there should exist a diversity of opinion amongst the judges. I likewise mean to add a provision, which I cannot help feeling to be of eminent importance, not only to the administration of justice, but to the proceedings of this House in the appellate jurisdiction. I mean to propose that your Lordships shall have the power (there is some doubt whether you have it not at the present moment,—if you have, my proviso will have only a declaratory effect; and if not, it will confer the power upon you by positive enactment) of calling on the judges in equity, as you now call on the judges in law, for the purpose of helping your Lordships to come to a correct decision in cases of appeal. I am perfectly aware, that if this proposal were to stop here, though a great improvement would be made, it would be felt that enough would not' have been done, for it is my fixed and deliberate opinion, by which I am desirous of being understood, to abide firmly, in spite of objections to which I understand that opinion has been exposed from quarters which are entitled to great respect, that a very great change indeed is absolutely necessary in the constitution of the high office which I undeservedly have the honour to fill. I think that we cannot much longer remain in this country with that great—I will not say that gross and grievous, but only with that great, signal, and striking anomaly, that the highest Judge in civil matters in the country, is a Minister of the Crown, and is removable at the pleasure of the Crown,—that to him is intrusted, sitting alone, and without control, the disposal of property of an immense amount, and of rights and interests still more dear to the parties than any rights of property however important. The Lord Chancellor is all this while removable at the pleasure of the Crown, and is also, whether he will or not, a political, as well as a judicial character. I am sure that it is only necessary to glance at this subject, in order to fill your Lordships' minds with the ideas which at present press upon mine. I am morally certain that much longer this anomaly cannot last. What, then, it will be asked, is to be done with this high office and this great public functionary? I propose merely to separate the great branch of the Lord Chancellor's judicial functions—I mean that branch in which he sits and acts as a judge alone.—from his political functions, and from the functions which he discharges as Speaker of this House, and from his function of adviser of the Crown, and also from that other function incident to the Speakership of this House—I mean the judicial function—not exercised by the Lord Chancellor alone, but in conjunction with, and if need be, under the control and superintendence of coadjutors of a judicial character. If these functions be no longer united—if the Lord Chancellor shall sit in this House under precisely the same circumstances as the other Judges, and in the Privy Council also—when that important branch of jurisdiction shall be new-modeled by Parliament, as by an Act passed this Session it is pledged to be, so as to be rendered a useful and efficient court, the great anomaly of which I complain will be removed, without any increase of patronage, and without a single shilling of additional burthen to the public; for my opinion is, that the provision which has been made by Parliament for the sustentation of the office of Keeper of the Great Seal is abundantly sufficient, if well applied, to maintain in due dignity the Lord Chancellor, both as an officer of State, and as a Judge irre-moveable at the pleasure of the Crown. In effecting the changes which I have described to your Lordships, it may be necessary to new-model the salaries of some of the judicial officers of this country, and to diminish their amount in some cases; but I should not be doing justice to a most useful and learned Judge, and, above all, to the office which he fills, if I did not say, that the keeping up of the salary of the Chief Justice of the Court of Common Pleas, so much higher than that of the Master of the Rolls, is, in my opinion, only tolerated by Parliament, on the supposition that the Master of the Rolls, who ranks higher in his profession than the Chief Justice of the Common Pleas, has the advantage of a residence, which the latter does not possess. I owe it to my learned friend, who fills the office of Master of the Rolls, to state that, with his usual disinterestedness, he has abandoned the advantage of his residence, by giving it up to the public service, for which sacrifice no compensation (most improperly as I think) has been granted, and consequently there exists an inequality between his remuneration and that of the Chief Justice of the Common Pleas, who is his inferior in rank, and by no possibility his superior in usefulness. I have at present merely glanced at this subject, which will come before your Lordships more fully upon a future occasion. I may as well observe here, that I alone am answerable for the measures which I am now suggesting, and that I must not be understood to speak in the name of my colleagues. The opinions which I have expressed in this House, and more fully elsewhere, not only remain unaltered, but the experience which I have had in office has incalculably increased their force. Before I conclude my address, I trust that I may be allowed to allude to a change which has been introduced on one or two occasions, not in this House, nor by any persons conversant with the finance department of the Court of Chancery, respecting the Suitors' Fund. Some persons, from the greatest ignorance on this subject, have stated that this fund has been dealt with, not by the Court of Chancery, but by the Parliament in an unfair manner. It has been dealt with as unfairly by the one as by the other. The only difference between the two cases is, that it has not been dealt with by the Court at all, because the Court cannot touch it to the extent of a single penny; but a part of it has been dealt with by Parliament in a usual and a fair manner. What, by a vague and general expression, is called the Suitors' Fund is composed of several branches. I will shortly and succinctly explain the nature of this fund. The suitors in Chancery are entitled to immense sums of money, amounting to several millions, which are, from time to time, paid into the hands of the Accountant-general, and entered to the credit of their respective suits. At any time during the progress of a suit, application can be made by the parties, to have these sums, thus paid into the Accountant-general's hands, invested in the public funds. It is at their option to do this, and it is their own fault if they omit it. The parties who are entitled to the principal, are also entitled to the dividends, and these continue to be carried to their credit, and added to the principal. This great bulk of the Suitors' Fund Parliament can not touch. There is another fund—the floating balance of cash in the Accountant-general's hand, called the Dead Fund, and so called only because it yields no interest. This balance remains in the hands of the Accountant-general, because no application is made to have it invested in the funds, so as to yield interest. This fund has from time to time been dealt with by Parliament for instance. Parliament has, by act, occasionally ordered a part of it to be applied in a particular manner. Your lordships will perceive that this cash balance is precisely of the same nature as a banker's balance. The Court of Chancery is to a certain degree a banker. The Court always has sufficient money to pay the suitors the uttermost farthing on demand; but as no hanker is expected to keep the whole of his balance in his shop every day and every hour, for the chance of his customers calling for it, so neither is the Court of Chancery bound to keep the whole of the fund in question in its hands, for the chance of being called upon to pay it. The banker always finds funds for the payment of every draught presented to him, and the Court of Chancery finds funds to satisfy every demand which may be made upon it. Parliament has, in several instances, directed a portion of this unappropriated fund to be invested in the public securities, so as to bear interest, which interest has, from time to time, been applied to various purposes, and sometimes to the payment of salaries. To this interest no individual has any claim. There may, by possibility—by a bare possibility—be a claim to the principal, for this fund is composed of small sums, which once belonged to persons who have ceased to exist. But if all the dead were to rise up and claim their money, they could be paid to half a farthing out of the principal. Their claim, however, must be confined to the principal. Claim on the interest they have none, for it was their own fault, and their own fault alone, that they did not have the principal invested in the public funds. The interest forms a surplus fund called the Interest Fund, on which no party can ever have any claim. This fund has been, from time to time invested in the public securities, and the interest goes on accumulating, and the Interest Fund is also, in common parlance, called the Suitors' Fund. This fund now amounts to 600,000l., for it has been swelled by the accumulation of the interest of interest of interest; and of this sum Parliament has an undoubted right to dispose of every farthing. The Dead Fund amounts to somewhat about 1,000,000l. It is just possible, but it is a possibility which man's mind can hardly conceive, that the whole or the greater part of this sum may be claimed. The fund, however, remains sacred; Parliament has never appropriated more than the interest. I need not detain the House longer upon this point. It is only necessary to state thus much, in order to sweep away—I hope, for ever—the charge that Parliament had done any thing which it had not a right to do with the Suitors' Fund. As I am on the subject of Law Reforms, perhaps your Lordships will allow me to state the results which have occurred during the last six or seven months, from the very great improvements which your Lordships adopted in the law of this country, in relation to the administration of bankupts' effects. The measure to which I allude has established a balance in the way of saving, after the payment of all the salaries of all the officers, including ten Commissioners (four of whom are Judges of the Court of Review), registrars, and clerks, of 36,000l. a year. The saving of expenses, however, is the least part of the benefit which has resulted from the change in question. The system has worked excellently in other respects. In one particular, and in one particular only, have I been disappointed, and, I may add, agreeably so. Your Lordships may recollect that I always contended that a smaller number of Commissioners than ten appointed by the new Act, would be sufficient to perform the business which had theretofore been done by seventy. As far as experience has hitherto gone, I think I am entitled to say that I was right in my opinion; and, though by struggling with my learned coadjutors, who assisted me in preparing the Bill, I was enabled to get the number of Commissioners and Judges reduced from fourteen to ten, I feel confident that we should not have furnished too little judicial assistance to the administration of affairs in bankruptcy, if we had carried the reduction still further. This remark does not apply to the Commissioners who, ordinarily and with so much advantage, work the commissions, but to the Court of Review, which, in my opinion, is considerably underworked, and I look forward with great satisfaction to the prospect of being enabled, at an early period of the next Session of Parliament, to throw on the learned and excellent persons who constitute that Court, and who are so well able to bear it, a very considerable, and, I hope, a very useful addition to their judicial labours by connecting their jurisdiction with that of the Insolvent Debtors' Court. By that arrangement, the duty imposed on these learned persons will not be too onerous, whilst the country will gain incalculably by having a greater number of circuits performed by the Insolvent Debtors' Court in all parts of the country, instead of, as at present, only four times during the year. I will take the liberty of stating one or two facts, to illustrate the working of the new system, which are so interesting in themselves, that I am sure I need not apologize to your Lordships for mentioning them. In two months, in 1831, the number of dividend meetings was 149 (this was the average number): yet, in the two months preceding the period when they came into operation—namely, November and December, 1831, on the prospect of a better mode of doing business, there were no less than 631 meetings of this description. Persons were all setting their houses in order, in the expectation that a more scrutinizing and efficient system would be adopted than that which has hitherto prevailed. I will show the House what effect has been produced by the exertions of the official assignees, whose appointment was a part of the system, the expediency of which was so much doubted by many persons, for whose wisdom and practical information I feel the greatest respect. A Commissioner having looked into the arrear accounts of an old assignee, found that there was a considerable sum due, and with the assistance, of an official assignee, he actually got funds into his possession to the amount of more than 51,355l. This was done by one Commissioner only. I could state other facts, which must strike your Lordships with equal force, and satisfy you of the success which has attended the working of the new system. In the bankruptcy of James Rose, a decree of the Court of Chancery, in 1823, directed the sum of 5,213l. to be paid to the assignees who never applied for it. The matter slept and was totally forgotten, until the official assignee discovered some trace of the transaction in the old assignee's books, and recovered the money. The system pursued by the accountants, under the old system, is illustrated by the fact which I will now mention to your Lordships: Robert Wilkinson, an accountant, became a bankrupt in April last. His accounts, on being investigated by an official assignee, show that he had assets of different bankrupts' estates in his hands at the time of his bankruptcy, amounting to 7,000l. This item also appeared in his balance sheet—" profits including professional earnings as accountant and balance remaining, after declaring final dividends—38,000l." I will detain your Lordships only by stating one or two other facts. A commission was issued against Hurst and Robinson in 1826. The official assignee, when appointed, found 11,012l. 11s. 10d. lying dead in a banker's hands, and 2,191l. in their hands, which he immediately recovered, and vested in Exchequer-bills, for the benefit of the creditors. A person, named Applegath, became a bankrupt in 1826, and the solicitor had absconded with his books, yet the official assignee succeeded in fixing the old assignees with various sums amounting to 5,000l., which were totally overlooked upon several audits had before the old Commissioners. In 1817, Hadley became a bankrupt, and his father proved a debt of 7,000l., and got himself appointed assignee. No assets were produced, nor any dividend paid. The father had died, but the official assignee detected so many of his frauds, that his executors consented to abandon his proof of the debt, and paid back the 7,000l., by which means the creditors obtained 20s. in the pound. This is a remarkable illustration of the benefits resulting from the new system. There are several other cases of this character, some equally strong and applicable, others, of course, somewhat less so, but all converging towards that point, which most strikingly illustrates the salutary tendency of the system of official assignees, and which most strikingly testifies the general satisfaction—I will not say universal, but the general satisfaction—which its workings have already afforded the trading interest of the city of London. Nor is the source of this satisfaction confined to the mere saving of money; the beneficial operation of the system extends to the saving of time. For example, more progress was made in the matter of Duckett's bankruptcy in four months, under the official assignees, than was made in eleven months, in the case of Fry and Co., and twelve months in the case of Marsh and Co.; and before twelve months, a final settlement will be effected in the case of Duckett, while four or five years have elapsed without a final settlement of the two others. I cannot avoid, now that I am touching upon the official assignees, to bear testimony to the cordial support and zealous co-operation with which gentlemen, connected with the city of London, have assisted my views—opposed as they were in some cases to their long standing prejudices—in others, to their interests, as bankers and merchants. When I mention the fact, that three or four of the most respectable bankers in London have assisted, not only In the choosing of eligible persons to act as official assignees, but have actually assisted in carrying the system into effect, at a personal sacrifice, in one instance, of not less than 2,000l. a-year (the profit on balances and sums which otherwise would have been deposited in his hands), your Lordships will admit that too much praise cannot be bestowed upon those gentlemen for their patriotism and liberality, and honourable disregard of mere self-aggrandizement. I will conclude with repeating, that the zeal and ability, and consequent public advantage, of the bankers and merchants of London, and of the Judges and official assignees in the Bankruptey Courts, are justly entitled to my warmest commendations, und to the gratitude of the public. His Lordship concluded by laying on the Table, a bill for effecting certain reforms in the Court of Chancery, which was read a first time.