BANKRUPT LAW (SCOTLAND) AMENDMENT BILL.—SECOND READING. (Hansard, 8 May 1860)

THE LORD CHANCELLOR
, in moving the second reading of this Bill, said its object was to remedy a flagrant abuse which had existed for some years in the administration of the bankruptcy and insolvency law, and which had brought great discredit upon both England and Scotland. By the law of Scotland any person who had been resident there for forty days was domiciled so far that he might sue and be sued in the Courts as a domiciled subject of her Majesty in that part of the United Kingdom, and he might have a commission of bankruptcy, or a sequestration, as it was called, issued against him, which, if he succeeded, discharged him from all obligation in respect of debts, enabling him to begin the world anew. This provision of the law had been taken advantage of to an extent of which their Lordships probably had no idea. A vast number of bankrupts and insolvents had gone from England to Scotland, and, having lived there for forty days, amusing themselves, perhaps with deer stalking and grouse shooting, got a sequestration sued out against themselves at their own request. It was true that an advertisement was published informing the creditors of what was about to be done, but it called upon them to appear at Aberdeen or Inverness, or some other remote part of Scotland. Happening to be at Tobermory, in the Western Islands, about eighteen months ago, he was told, that an English colony had established themselves there, consisting of English bankrupts and insolvents, and that their object was to get themselves "whitewashed" or discharged from their 835 engagements. The Scotch Courts were ashamed of the advantage thus taken of their law, but upon repeated attempts it was found that they had no power to remedy the evil. The object of the present Bill was to put an end to that practice. It enabled the Courts in Scotland, on petition, showing that a majority in number and value of the creditors resided in England, to recall the sequestration, and compel the bankrupt or insolvent to appear before an English Court where justice could be done.

LORD BROUGHAM
said, he quite agreed as to the absolute necessity of putting an end to the abuse which his hon. and learned Friend had just stated to the House. Nothing could be conceived more worthy of reprobation than the conduct of parties removing to Scotland in order to defeat the just claims of their creditors in England, and taking advantage, behind the hacks of their creditors, of the entirely different law which was administered in Scotland. He highly approved the present Bill, as forming part of that more general measure for the improvement of the bankruptcy and insolvency laws which had been introduced into the other House by his hon. and learned Friend the Attorney General, and which he hoped would be passed in the present Session; for the measure was the result of experience, carrying further the principle and provisions of the measures introduced by him (Lord Brougham) in 1831, with the subsequent improvements of 1842 and 1849, and not the rash destruction of existing systems in order to set up a new and untried system in their place, which was a wrong mode of attempting the Amendment of the law. He trusted that that measure would receive due consideration from the wisdom of the lower House, and would, with such Amendments as might be deemed necessary, receive their Lordships' assent.

§ LORD CHELMSFORD
, while admitting that the Bill would effect a salutary change in the law, took exception to the retrospective operation of the first clause, and to the provision that the Court should order the recall of the sequestration on the petition of any single creditor. This was giving too great a power to any one creditor, and he trusted this and the previous clause would be reconsidered by his noble and learned Friend before the Bill went into Committee.

THE LORD CHANCELLOR
said, he 836 was not apprehensive of any danger arising of the nature first suggested of his noble and learned Friend; and with respect to the second, every petition would be duly considered on its own merits by the Court before it proceeded to grant the application.