§ Commons' Reasons for disagreeing to certain of the Amendments made by the Lords considered (according to Order).
THE LORD CHANCELLOR
I rise, my Lords, in the hope I shall be able to show good reasons why your Lordships should concur in the course the House of Commons has adopted with regard to the Bankruptcy and Insolvency Bill. Your Lordships are aware that the House of Commons has attached great value to this measure; and, with some few and inconsiderable exceptions, it has disagreed to the alterations made in it by this House. Your Lordships made very great and extensive changes in this measure, and I have no doubt that powerful reasons can be given in support of those alterations. But I deeply regret that we are not aware of those reasons. In the House of Commons this measure was debated in the face of the public, that watched the course of the debate from day to day; it took great interest in the proceedings of the Committee, and those who took part in the argument received from time to time from the public out of doors very valuable suggestions with regard to the alterations made; the House of Commons sent this Bill up to your Lordships as the fruit of that full discussion. And I regret deeply, though I do not presume to censure, the course your Lordships thought proper to take with regard to it. You took this Bill upstairs into a Select Committee, and for reasons we know not you altered almost entirely its character and effect. I repeat again, I know not why or where- 1580 fore these alterations were made; and the course your Lordships adopted has excited surprise as well as regret, because in the House of Commons the support given to the Bill was almost unanimous. From the Gentlemen who sit on what is called the Opposition side of the House I received the most generous and sincere support. In fact, if I wanted to carry any portion of the Bill that had excited discussion I was almost sure to receive the support of those Gentlemen who generally act with the noble Earl who may be called the head of Her Majesty's Opposition. But I was very much surprised by the difference between the opinions of those Members of the House of Commons and those who lead the Opposition in this House. And, it will be admitted, there was reason for this surprise, because I never heard that great party charged with want of unity in its course of action. How was it that the Bill received the cordial support of the Conservatives in the House of Commons, and rejection and condemnation from the Conservatives in the House of Lords? When it was sent down again to the House of Commons it was most desirable that the course to be adopted should be one altogether free from party influence. The alterations were debated on their own merits, and the result has been that upon the first series of Amendments—those relating to the constitution of the Court—a large majority uninfluenced by party motives has altogether departed from the views taken by this House. In reconsidering the question, I will venture to hope that your Lordships will bring to the discussion minds uninfluenced by anything but a wish to secure a proper administration of justice. I should be sorry if a question so great and so important as the administration of justice should be influenced by political feelings. If your Lordships believe that the administration of justice does not require this measure, you ought to reject it; but if you determine to reject it merely because you are bidden to do so; if you are gathered together at a season of the year when it is not usual to see so large a number of Peers on the Opposition benches to pronounce judgment on a measure that has never been debated in this House, then I should come to the conclusion that your Lordships have decided on other grounds than regard for the administration of justice. My Lords, I have observed with some pain the altered tone and language of some Members 1581 of the House of Commons with regard to this measure—of some who formerly acted with me with the utmost cordiality. I have found with pain that some of those who agreed with me have been obliged to adopt language which, while it shows there is no alteration in their real opinions, proves that something has led them to abandon the sentiments they previously professed. Let me give an example. I was encouraged by the support of such men as the Members for the University of Cambridge, and the Solicitor General to the late Government. ["Oh, oh!"] Surely, my Lords, there is no impropriety in speaking of what has taken place in the discussions on this subject. Those right hon. Gentlemen admitted the absolute necessity of this measure. And let me also remind your Lordships that I was indebted for the idea of appointing a Chief Judge of the Court to the Attorney General of the late Government. The Chief Judgeship is an idea not of the present Government, but of the past. It was the law officers of the Administration of the noble Earl who first introduced this as a necessary measure, though I am afraid the noble Earl is likely to be insensible to the paternity. But I was adverting to the change of language on this question in the House of Commons. Those who formerly concurred with the measure now say they think it better to wait till the next Session, and try the Bill in its present form. Well now, my Lords, I am about to ask your Lordships to pass on with me to the consideration of those topics which have been relied on in the discussion of this measure. Of course, I am unaware of what took place in the Select Committee of your Lordships' House; but I will advert to the principal grounds on which your Lordships' objections are understood to have been based, and I ask your indulgence while I do so, as this is the first time that those points have been discussed in this House. First, I must observe that, in the short public discussions which took place when the Bill was before your Lordships, the proposal to appoint a Chief Judge was designated by one or perhaps more of your Lordships as "a job." If it is a job it is one to be imputed to me alone. I arrived at the conclusion to which my noble and learned Friend to whom I have already adverted had previously come as to the necessity of having a head to this tribunal. Her Majesty's Government adopted my suggestion on the subject; but I must entirely disclaim having been in- 1582 fluenced in that conclusion by any other consideration whatever than that such a head was absolutely necessary for the proper administration of the law. It is undoubtedly true—and I will confess it to the noble Earl—that I did meditate a little bit of political delinquency against him, because, my Lords, you are aware that the administration of justice in Bankruptcy had been always united to the administration of justice in Chancery; and, therefore, if the Government had to make a selection for this office there was a probability of their being obliged to go to the ranks of the supporters of the noble Earl. It was thus brought to my mind that I was labouring for the benefit of the noble Earl, though probably I should be compelled to deprive him of one of his political supporters. This proposition of the Bill has been objected to on the ground that it entailed an unnecessary expense. I could, my Lords, go into details, and show you that this measure will result in a saving to the public; but I do not think that the question of expense is one on which any solid argument can be founded, and I shall, therefore, pass from this preliminary consideration—only observing that the five Commissioners of Bankrupts who receive salaries amounting to £10,000 a year, that there are Commissioners of the Insolvent Courts, and official assignees, the whole of whom will be either at once or gradually abolished; and that the saving in official salaries will be £12,000 or £15,000 a year, while the whole charge thrown upon the Consolidated Fund will be a single £5,000 a year. I shall, with your Lordships' permission, make a short statement with reference to the present system, and then explain to you why this change has been introduced—why some change is necessary—and what are the means by which we propose to effect the desirable alterations. My Lords, from a very early period the complaint respecting the Bankruptcy Court has been one directed against the mode of administering justice, and not against the rules themselves. The rules of administration are exceedingly simple; but the mode of administering justice has always been found most difficult, or, at all events, has been constantly subject to much complaint. I think the great difficulty in the administration of justice in Bankruptcy hitherto has been the complete confusion between the administrative and the judicial duties. They have been confounded; there has been no 1583 provision for their distinction and separation; and the result has been that the judicial part has been performed in an unsatisfactory manner, and that the administrative part has been also performed with a less amount of prudence and skill than ordinary commercial intelligence, if applied to the subject, would secure. From the earliest times to about thirty years ago the administration of the Bankruptcy law throughout the country was carried on by seventy Commissioners, who were ordinarily called "the Lord Chancellor's Septuagint." It had been found utterly impossible to submit that system to any effective control, and it was broken up by my noble and learned Friend Lord Brougham in 1831. Changes have been, made since then, and under the existing system there are several Commissioners, but they are without any controlling head. Each exercises a separate and independent jurisdiction and pronounces his own orders, and each comprehends in himself administrative and judicial functions. The result is this—that if you go into the Court of a Commissioner you will perhaps find a meeting of creditors going on, and at the same time the Commissioner is transacting something approaching to judicial business. There is no effective control over the Commissioner—no controlling power to which an appeal may be made speedily and economically for the purpose of setting at rest the numerous questions that will arise in so large a field as the administration of Bankruptcy and Insolvency. That is one of the evils which suggested the necessity of efficiently controlling all those tribunals till it was possible to substitute for them a uniform administration of justice in one single Judge, who should combine dignity, rank, and that satisfaction which the Judges of England give to the people when justice is meted out by persons filling high stations. That is one of the first evils which it is desirable to suppress by the appointment of this Judge, whose functions are intended to be of a threefold character. First, he is to superintend all the administrative part of the business; and then he is to exercise a jurisdiction of a double character—partly original and partly appellate. In the superintendence of the administrative business questions constantly arise—with regard to the collection and distribution of the property of bankrupts—on which a speedy and satisfactory decision is highly desirable. What we desire is to unite simplicity and uni- 1584 formity. Questions arising in all parts of the country will be brought before this Judge without any of the forms usually required in courts of justice; and at an expense of a few shillings an immediate decision will be had on the question which the parties may wish to have determined. All who are conversant with the mode in which the great mass of the ordinary business is transacted, both in the courts of law and equity, are aware that it is performed by a Judge in chambers. It is done most competently, most efficiently, and most cheaply. But it can easily be believed that in the whole of England, throughout an area where so many bankruptcies and insolvencies occur, cases will perpetually arise which cannot be satisfactorily settled by a single Commissioner —who, by the way, is hardly ever at his office, except on state occasions. But these will be settled by establishing a tribunal in London to which there will be constant reference; and this tribunal is only to be attained by the appointment of a Judge with rank and duties such as are described in the provisions of this Bill. One of the great evils incident to our administration of the law of bankruptcy has been that the Court was always one of limited jurisdiction, exercising power only among the creditors themselves. Its jurisdiction was such that it could not avail itself of the ordinary appliances of justice. For example, a Bankruptcy Court or a Bankruptcy Judge had no power of acting against any person who was a stranger to the suit. He had no power of trying a question by means of a jury, nor had he any power of administering justice upon any of the principles or rights of a court of equity. This was a great evil which manifested itself in this way. Questions continually arose which the Judge found himself unable to determine; to-day he was obliged to send parties to a court of law, and to-morrow to a court of equity. Suitors, or rather creditors in bankruptcy, being brought within a limited forum, were compelled to have recourse to other tribunals to obtain that justice and determination which the Bankruptcy Court itself was not competent to give. In the preparation of this Bill I accordingly directed my attention to rendering the Court of Bankruptcy self-sufficient. I armed it with all the powers exercised either by courts of law or equity; and those who come into it for relief will no longer be danced about and sent at one time to one 1585 side of Westminster Hall, and at another to a different side of Westminster Hall; but the Court itself, possessing all the requisite powers, will be enabled to administer justice finally, fully, and without seeking the aid of any ancillary tribunal. But this could not be accomplished without putting at the head of the Court a Judge equal in rank, dignity, and standing, in experience and education, to any of the Judges of the courts of law or equity; and that is another great object which I desire to accomplish by this Bill; for your Lordships are all sufficiently versed in the state of the law to know that we in England suffer under evils which have grown up from the fact that a great portion of justice is administered by one tribunal, and another equal or larger portion of justice is administered by another; the two tribunals being frequently antagonistic and opposed to each other—so that, in point of fact, justice is constantly elaborated by a system of counter processes. This anomalous state of the law would speedily bring it into discredit if it were not that in this country the manner in which justice is administered is so satisfactory that it atones for a great part of the evils of the system. These are the evils and these the mischievous operations which I desire to remedy by this Bill; but it is impossible that I can remove them unless I put at the head of the new jurisdiction a Judge equal to its conduct in every particular. I would fain hope that on fuller acquaintance with the provisions of this Bill your Lordships will support them, because I feel assured that if you had known and understood them you never would have been parties to depriving England of the benefit that would result from the establishment, for the first time in this country, of an all-sufficient tribunal that would be able to administer justice in all its branches, and would set the example of a Court competent to discharge its duty without dancing the suitor to and fro to enable him to get a fragment of justice in one place and another fragment elsewhere. We come, in the next place, to the appellate jurisdiction of the Court. Remember that you have scattered over the country a great variety of local tribunals and local Judges, charged with the duty of administering this law of bankruptcy each within a limited area. Is it not desirable to establish with regard to them the efficient superintendence of a centralauthority, 1586 which by its rightful exercise of power, shall secure uniformity of principle, unity in the administration of justice, and consistency and care in every part of the system? And that is the function with which the Judge will be invested in his character of an appellate tribunal. Your Lordships, perhaps, will pardon me if I transgress the ordinary rules in referring to proceedings in Committee, but I have been informed that the Judge was then regarded merely in his character of an appellate Judge. The Committee was told—no doubt by very great authority—that the existing tribunals sufficed abundantly for all the exigencies of appeal, and that a Judge invested with such functions would be a perfect superfluity. If that was the ground on which the Committee proceeded, I am not surprised at their Report; but I am greatly surprised that even in ordinary perusal of this Bill should not have conveyed to the least technically-informed mind on the Committee conclusions utterly at variance with the limited view taken of the functions of the Judge. But I am not afraid of perilling this measure by putting it again on the question of the necessity of a Judge of appeal. This Bill, for the first time, throws down the wall of partition that has grown up or been established either by accident or by design, or by that which has originated so much in our jurisprudence, per incuriam, between the administration of the law of bankruptcy for the trader and of insolvency for the non-trader. I stay not to explain the reasons why that partition should no longer exist—you have determined both in this and the other House of Parliament that it shall not do so. But what is the consequence? You add to the Court of Bankruptcy more than double its antecedent jurisdiction. For years past the jurisdiction of the Court of Bankruptcy has not very much exceeded 1,000 commissions or fiats annually. The petitions in the Insolvent Debtors' Court amount to considerably more than 2,000 per annum. Therefore, in considering the exigencies for an appellate tribunal, and the duties which will belong to it, it would be the most idle thing in the world to proceed, as I am told, with great respect, the Committee of the House did, upon the statement of what the number of appeals in bankruptcy has hitherto been. But it does not stop here. The practical operation of the evil administration of the law of bankruptcy, the result of the cumbrous 1587 system which was established originally, afterwards reproduced in 1831, and again reproduced with slight alterations in 1848, has been to drive the Queen's subjects out of her courts and to compel the people of this country to abandon the legal highway of public justice, and to seek relief in byroads of administration by which they may get that which they cannot obtain in the courts of the Sovereign. And the practical result has been that, by reason of your having an unsatisfactory law of bankruptcy, the private administrations of insolvent estates have multiplied to such an extent that they now exceed in number by more than ten times the ordinary commissions of bankruptcy. While for many years the commissions of bankruptcy—I use the old phrase—have scarcely exceeded in number 1,000 or 1,100 per annum, the number of compositions with creditors, assignments for the benefit of creditors, and inspectorship deeds has averaged annually between 10,000 and 11,000. Can anything be a more complete proof of the unsatisfactory administration of the bankrupt law than the fact that people prefer private arrangement to public administration? Because these private arrangements are carried on at great disadvantage. In the present state of the law if any question arose under one of these deeds, there is no relief for the party except by a suit in Chancery; and although I am bound to say that relief is now obtained in that Court at a much less expense than formerly, yet a suit for the benefit of a number of persons interested in a trust deed is still a proceeding attended with much delay and necessarily with much expense. Yet, notwithstanding all these evils, the country has for years preferred this imperfect justice to that which was obtainable in the Queen's Court of Bankruptcy. One of the objects of this Bill is to distribute to the country the stream of law and equity in bankruptcy in the same manner in which they obtain it from the other Courts in Westminster Hall; and accordingly it compels all persons interested under these trust deeds to resort to the Court of Bankruptcy, and it gives them power to go to the Chief Judge with the same facility and readiness—and even with more than the same facility and readiness—with which an individual would go to his solicitor or his counsel, and to have determined promptly and economically any question which may arise in the administration of property under 1588 these deeds. Now, every noble Lord will at once observe that after enlarging the jurisdiction of this Court, first, by pouring into it all the business now done by the Insolvent Debtors' Court, and then adding to it all the enormous mass of property rights, trusts, and engagements which are dealt with in the 10,000 or 11,000 trust deeds which are annually manufactured, you will, in point of fact, have a Court crammed with business, instead of, as now, one which is deserted and neglected, and which is visited only by those who are compelled to resort to it to expose some fraud or to overcome some difficulty in the administration of an estate. How does this bear upon the appellate jurisdiction? In this way:—First of all the Judge will be the first person consulted to solve all questions which arise under these trustees, and in the next all such questions, when decided elsewhere, will, if necessary, come before him in his appellate capacity. Is it possible for any noble Lord to doubt the necessity of having such a head, or will it be possible any longer to listen to the suggestion which has been made that the present appellate tribunal in bankruptcy is perfectly equal to all that will be required? I think I have shown to all who have listened to me that it would be most fallacious to derive arguments from the business now transacted by the Court of Bankruptcy, and to apply them to the extended area which will belong to the tribunal constituted by this Bill. It has been repeatedly mentioned that some persons who are engaged in trade in different places have expressed an opinion that the present tribunal of appeal in bankruptcy is equal to the exigencies of the case; and in a petition signed by certain merchants of Manchester I find it is said—That your petitioners are of opinion that the appointment of a Chief Judge would be a useless expenditure of public money. The Lords Justices discharge their duties in a satisfactory manner, and have ample time at their disposal.Yet the very gentlemen who signed that document presented an earlier petition, in which they said—With a view to the amendment of the Bankruptcy Law your petitioners consider that the strength and character of the Courts ought to be improved, and that uniformity in the administration of the law ought to be secured.How are you to improve the standing of the Judge, except as this Bill proposes? How are you to secure uniformity in the 1589 administration of justice except by establishing a culminating point to which all these petty tribunals may at once yield? I listen to the opinion of mercantile men with great respect and attention when it is expressed with reference to evils of which they are sensible, or to matters connected with the more ready collection, management, and conversion of estates; but matters of legislation and of the administration of justice belong to legislators and not to merchants; they belong to men who have spent their lives in courts of justice and in the examination of their procedure—and I cannot for a moment imagine that the opinions of commercial men upon questions of that nature will hare the weight with your Lordships which would deservedly attach to them upon matters within their experience and the extent of their proper observations. These are the principal objects which it is proposed to effect by the Bill with regard to the enlargement of the jurisdiction of the Court; but in the enumeration of the objects of the Bill I have omitted one of the most important. There is nothing which has for a long period of time caused greater reproach to the administration of the bankrupt law, or more injuriously affected the commercial interests of the kingdom, than the manner in which a bankrupt's conduct as a trader has been examined and the principles which have been applied to his discharge from his liabilities. I am sorry to say that there have been exhibited in England during the last few years instances of looseness of commercial morality which it has been painful to witness, and which have been most injurious to the credit of the community. A great number of these have been brought to light through the instrumentality of the Courts of Bankruptcy, but I am sorry to say that the Courts of Bankruptcy as at present constituted have differed from each other in a most wonderful manner as to the punishment which ought to be applied to this delinquency when discovered. Some years ago your Lordships attended to this subject, and those who framed the Bill which then became law, thought that they had made a useful discovery in classifying bankrupt debtors, and dividing them according to their certificates into three classes. A certificate of the first-class evidences that the bankruptcy was due to unforeseen circumstances alone. The second class includes those cases in which bank-ruptcy has been caused partly by unfore- 1590 seen accidents and partly by improvidence; and the third class those in which bankruptcy has been entirely owing to the bankrupt's own want of providence and improper conduct of his business. Now, my Lords, I would wish, with all humility, to impress on your mind that it is very little matter what rules you lay down, unless you provide corresponding machinery that shall insure the efficient administration of those rules according to the spirit in which they have been conceived. I would recall to your memory the old saw which asserts as a general principle that "whatever is best administered is best." The application of the rules as to classification has been left to a number of Commissioners, who differ so greatly in the estimation of commercial delinquency that where one would award a first-class certificate another would refuse a certificate altogether. Upon an analysis which I presented to the other House it was shown that in 100 cases one Commissioner had given 13 first-class certificates, where another had given 50 or 60. The consequence is that the classification in bankruptcy has been frittered away in its application until it has become useless and absurd. I desire to restore its efficacy by establishing one head and one hand to administer the rules, and to give uniformity and consistency to their application. Accordingly this Bill proposes that in all cases of disputed discharge, which form the great proportion of the cases of appeal, the Chief Judge should be immediately resorted to, and should determine the extent to which the bankrupt is entitled to a discharge, and the measure of delinquency which is to be stamped upon him. Moreover, there is, as your Lordships are aware, a different rule with regard to future property in cases of insolvency and of bankruptcy. When a man is discharged in the Insolvent Debtors' Court his future property is left liable to his creditors, while in the Bankruptcy Court, as a general rule, a bankrupt's future property is not exposed to the same liability. In throwing down that distinction it appeared right to the House of Commons, and your Lordships have concurred, to give to the tribunal that granted the discharge the power of determining, where the circumstances required it, that the future property of the bankrupt, although discharged, should still be liable. That is a very grave discretionary power, I and ought only to be intrusted to a Judge 1591 of high position and authority. That is one of the points on which I am sanguine enough to hope that the provisions of the Bill will be a great improvement of the present law. But that hope is completely strangled and destroyed by your refusal to acknowledge the hand by which alone these benefits can be secured. We have been told, apparently on authority, that the tribunal of the Lords Justices is adequate to all exigencies of the appellate jurisdiction. I venture to say that there are no Judges who are more fully or more advantageously employed at this moment than the Lords Justices; and it is impossible, without materially interfering with their utility, to add anything to the burdens which they already have to bear. The extent of the appellate tribunal in this House compels the Lord Chancellor to be here about five days in every week, except when Parliament is not sitting, and during that period it is of course impossible for him to attend in the Court of Chancery. A great part of the administration of the appellate tribunal in Chancery consequently devolves on the Lords Justices. A great addition of business also has lately fallen on the Privy Council. The Lords Justices sit in the Privy Council a great number of days in the year, and I feel assured that the business of that Court will go on increasing, and that the demands which will be made in that respect on the Lords Justices will thus be yearly augmented. Those who profess that the Lords Justices are sufficient for the work must know perfectly well that they will be sufficient only till next March or April, when perhaps they hope to see a change of circumstances which may alter their view. I maintain that the Lords Justices have not time, or anything like time, to discharge the appellate jurisdiction constituted by this Bill. There may be some few cases in which appeals will still go from the Chief Judge to the Lords Justices, but the control and superintendence of the subordinate officers and the great mass of the appellate business will be borne by the former. I hope, if this Bill passes, that the public administration of the business of the Bankruptcy Court will be placed on the same footing as the administration of probate and divorce, which is now discharged by a single Judge, with the aid of registrars throughout the country; it is a tribunal which works with the utmost effect and simplicity, and the cost of the Court, I am happy to say, is not a fifteenth or sixteenth part 1592 of the old testamentary jurisdiction. It is my hope that to introduce a similar simplicity of jurisdiction into bankruptcy; and accordingly power is taken in the Bill not to fill up the vacancies which may occur among the Commissioners of Bankrupts; and there are many other topics, my Lords, to which I would willingly refer, but I must not trespass too long upon your kind and patient attention. I venture to think that no one will read this Bill and observe its working without concurring with me in acknowledging the necessity of the appointment of a Chief Judge. Therefore, in an earnest desire to promote the sacred interests of truth and justice, I humbly request you to agree with the House of Commons in their rejection of your Amendments, as far as they relate to the appointment of a Chief Judge. I believe that by so doing you will most effectually promote the great cause of reform in the administration of justice in this country. The noble and learned Lord then moved, not to insist on the Amendments made by this House relating to the Office, Powers, and Duties of the Chief Judge of the Court of Bankruptcy, to which the Commons have disagreed.
§ LORD CRANWORTH
said, there was one part of the able speech of his noble and learned Friend in which he fully concurred, and that was the part in which his noble and learned Friend expressed his regret that this was the first time the question had been discussed in their Lordships' House; but he could not agree that this circumstance was attributable to those who considered the creation of a Chief Judge unnecessary. When the Bill was read a second time, he gave his late lamented Friend who then occupied the Woolsack distinct warning that he considered the appointment of a Chief Judge unnecessary and mischievous, and that he should oppose that part of the Bill. The noble and learned Lord (the Lord Chancellor) regretted that the discussion on this measure should have taken place in what he called a Secret Committee. It was in a Select Committee, which in that sense was a Secret Committee. But why was the Bill sent to a Select Committee? He (Lord Cranworth) pointed out to his late lamented Friend so many objections on points not, perhaps separately of great importance, but absolutely necessary to be corrected, that it was impossible to deal with them in a Committee of the Whole House, and his late noble Friend con- 1593 curred in its being referred to a Select Committee, but expressly stated that it should be open to any Member to oppose any alterations when the Bill came to be discussed in Committee of the Whole House. When the Bill was before their Lordships again, he expected to hear from his late noble and lamented Friend the reasons upon which the proposal to appoint a Chief Judge was made; but they only heard him say that he was satisfied that without a Chief Judge the Bill could not work. Whose fault, then, was it that they were now driven to discuss the propriety of their most important feature of the Bill in the most inconvenient mode of objecting to Amendments by the other House? Certainly it was not the fault of those who raised objections to the proposal, but of those who never condescended to give the reasons which induced them to propose it at a more legitimate stage of the Bill. His noble and learned Friend on the Woolsack had stated a great number of abstract propositions from which no one dissented. No one doubted that it was important that justice should be uniformly administered, or that Parliament would not grudge the cost of a Chief Judge. But what he complained J of was that his noble and learned Friend had given the go-by to the real question, which was whether the enactments of the Bill pointed out any necessity for the officer whom it proposed to appoint. No one could come to a correct conclusion who did not bear in mind what the duties administered in bankruptcy were, and how this Bill proposed to deal with them? What did the statement that a man had become bankrupt mean? That a person was I in debt, and that he had committed an overt act of insolvency. Those points established the law took possession of his property, and distributed it rateably among his creditors. In order to make a man bankrupt it must be proved that the person making him a bankrupt was a creditor, and that he had committed an act of bankruptcy. It was a simple proceeding, and the machinery by which it was now effected consisted of five Commissioners in London and seven or eight in the most populous places in the country. If the person against whom proceedings were taken disputed the adjudication, the matter was investigated; but in a very large proportion of cases he was adjudged bankrupt. Generally the proceedings were of a merely formal character; and indeed that was the 1594 view of the noble and learned Lord who anticipated that the greater part of the future proceedings in bankruptcy would be taken before the registrars. All his property then became vested in a public officer; and then came the tug of war. The claims of persons to be creditors were investigated in undisputed cases before the registrar, and in disputed cases before the Commissioner. The question whether a man was a creditor or not did not depend on any peculiar law conected with bankruptcy, but on the ordinary law of the land. The list of creditors having been settled, the property of the bankrupt was got in, and distribution was made rateably among his creditors. Those were the simple functions which the Commissioners had to discharge, and to state gravely that the gentlemen who at present held those appointments were incapable of performing such duties seemed to him to be drawing upon the credulity of their Lordships to an extent hardly conceivable. He need not name the present Commissioners, but among them he could point out men who for integrity, honour, and knowledge of law stood as high in the estimation of the profession as any functionary that could be selected. Lord Brougham, in 1831, constituted a Chief Judge and three pusine Judges as a Court of Appeal from the decisions of the Commissioners. His noble and learned Friend had been sneered at for having created a tribunal which was unnecessary, but he thought his noble and learned Friend was at that time well justified in supposing that a great deal of business would come to the Court of Review. The appeals in bankruptcy used to be from the old Commissioners to the Lord Chancellor, and in Lord Eldon's day a large portion of the time of the Lord Chancellor was occupied with bankruptcy questions. But by a superior class of Commissioners being appointed, and by amendments in the law, which took away four-fifths of the subject matter of litigation, the Court of Review had really nothing to do. The consequence was that the Court fell to the ground, and in 1847 the whole business was transferred to one of the Vice-Chancellors, and in 1851 to the Lords Justices, and from that time to the present that system prevailed. The complaint which he had originally made when the Bill was introduced was that it did not at the outset define the jurisdiction of the Chief Judge. His jurisdiction had to be picked out from the various clauses of 1595 the Bill. It was very easy to state generalities and truisms about Courts of Appeal and the necessity of keeping Judges in uniformity; but what the House wished to have explained to it was what the Judge had to do, and how the duties placed upon him would carry out those generalities. There was an old adage—"Dolus latet in generalibus," and without accusing his noble and learned Friend of being dolosus, he did accuse him of having misled their Lordships in his zeal for the Bill by not condescending to particulars. He had looked through the Bill carefully several times with a view of ascertaining what the jurisdiction of the Chief Judge was. With regard, first, to his original jurisdiction, Clause 18 gave him power to review bills of costs; Clause 43 gave him power to regulate certain payments made for coals, stationery, &c.; and Clause 52 transferred to him certain powers to make general orders and regulations. By Clause 60 he was enabled, along with the Commissioner, to assign uncontested business to the administration of the Registrars; and Clause 61 gave the parties in those uncontested proceedings liberty to take his opinion on any point which might arise in the course of them. Clause 63 gave him power to order any person who might refuse to answer before the Registrar to pay the costs; and Clause 64 enabled the parties to any proceeding by agreement to take his opinion at any stage by submitting a special case. With regard to Clauses 67 and 68 persons who were actuated by a feeling of hostility towards the Bill might almost say that they had been introduced for the purpose of making it appear to the public that something had been done, when, in fact, nothing was done. They gave power to the Chief Judge to try issues by a jury; but he was perfectly certain that such a power never would be used. When the Court of Review was established he remembered Sir George Rose saying that the power of trying by jury never would be used, for there were no questions which required to be solved by a jury. In order that there might be no doubt on the point, he (Lord Cranworth) had written to Mr. Erskine to ask him what number of issues had been tried by a jury during the seven he years had presided in the Court, and his answer was that he believed that three had been tried, or set down for trial, but only one had ended in a verdict. Passing on to Clause 99 it merely gave authority to 1596 transfer certain cases from the Chief Judge to other courts. Clause 112 referred to the provisions that enabled pauper insolvents to be adjudicated bankrupts. Clause 142 was more important; it provided, in case of any dispute between the creditors and assignee, or creditors and a trustee, that the question in dispute might be referred to the Chief Judge. A similar power now exists of referring to a Commissioner. But, in fact, there had been very few such references, as such questions did not arise. The 164th Clause gave the Chief Judge the power of refusing or suspending orders of discharge, or in other words of giving or refusing the certificate. But that was not a new proposition, there was a similar provision in the 229th section of the old Bankruptcy Act, though he admitted that this clause went further in this respect than the old Act, and was so far an improvement. That was a new jurisdiction and an important one; but it was for their Lordships to say whether it was important enough to render the appointment of a Chief Judge necessary. In the country this jurisdiction was entrusted to the Commissioners alone. Were they such superior men that the same functions could not be given to the London Commissioners? Even by this Bill this power in many cases was given to the Judges of the County Courts. Could it, then, be said that this function rendered a Chief Judge necessary? No doubt it was proper that this power should be entrusted to the Chief Judge, supposing it to be conceded that a Chief Judge was necessary. But nothing appeared in the Bill which showed it to be necessary that a high legal functionary ranking with the Judges of the land should be appointed to perform the functions he had pointed out, and which were at present executed by functionaries of a lower rank. Besides, he would appeal to his noble and learned Friends to say whether anything was said in the Committee of these different functions that were to render a Chief Judge necessary. All that was said was that he would be more accessible as a Judge of Appeal than the Lords Justices.
THE LORD CHANCELLOR
explained that there would still remain many cases that would go to the Chief Judge.
§ LORD CRANWORTH
said, that was the way in which they had been misled. They had been led to suppose that nothing would go to the Chief Judge but appeals from the Commissioners. Where was the clause 1597 which took away the power of appealing from the Commissioners to the Lords Justices? Noble Lords who were on the Committee would correct him if he was wrong in stating that the question had been put several times, and that the answer had been that there was no intention to take that appeal away. The jurisdiction of the Lords Justices in those cases was now existing, and could not be taken away without express words. It had, however, been urged that the Chief Judge would be more accessible—that appeals would be brought before him readily and cheaply. He would take the liberty of pointing out to their Lordships that appeals now came before the Lords Justices by "motion, petition, or special cause," and those were the very words introduced into this Bill. in reference to appeals to the Chief Judge. How, then, was it proposed to make appeals come before the Chief Judge more readily and in a cheaper manner than they now did before the Lords Justices? Surely it could not be intended to frame a different scale of fees for the Chief Judge's Court of Appeal to induce suitors to give it the preference. Many persons, however, I believe most, would prefer to have the decision of the Lords Justices to that of the Chief Judge, and they would still have the power of carrying their cases before them. He did not doubt that appeals might be heard more rapidly by the Chief Judge, for he feared that that learned functionary would have nothing to do. If their Lordships were anxious to constitute a functionary who should have nothing to do but hear imaginary appeals there might be a very good reason for appointing this Chief Judge. A Return presented to their Lordships showed that in a space of between thirteen and fourteen years, since 1847, the Lords Justices had heard bankruptcy appeals on 215 days, or about fifteen days in each year. But their Lordships must not imagine that the whole of those fifteen days were spent in the discharge of that duty. It often happened that two or three of those appeals were put at the head of the paper, and that, when they were disposed of, the Lords Justices proceeded to other business. But, even supposing that the whole fifteen days were, spent in hearing these appeals, surely they would not want another Judge for that. His noble and learned Friend on the Woolsack said that the Lords Justices were fully occupied. He admitted it; but they get through the whole of their business 1598 —including the bankruptcy appeals— within the year. He now submitted to their Lordships that a constitutional question of the gravest importance was raised; by the 23rd Clause, and the interpretation which his noble and learned Friend on the Woolsack put on that clause. If the object of that clause was to give power to the Government, having regard to the state of business in the Court, not to fill up vacancies, it was a very proper one; but if it was meant that, not having regard to the state of business, the Government should have the power of not filling up the vacancies, with the view of creating another form of tribunal—namely, a Chief Judge without Commissioners — then he said that the power was not one which it was proper to vest in any authority save the Legislature. On the present occasion he was only taking the course which he had intimated to his noble and learned Friend the late Lord Chancellor that he would follow in respect to this Bill. He believed that the appointment of the Chief Judge was not necessary; and that not being necessary it was objectionable and mischievous. He could assure his noble and learned Friend that his only object was to act in this matter according to his honest convictions, and in every law reform his noble and learned Friend might rest assured that he would find no more cordial supporter than himself.
§ LORD CHELMSFORD
My Lords, no one can for a moment question the motive which has actuated my noble and learned Friend in the admirable speech which he has just delivered; and, my Lords, I feel gratified that my noble and learned Friend has pursued the course which he has, because, I think, it furnishes a most complete refutation to the insinuation of my noble and learned Friend on the Woolsack, that the opposition to this Bill was on political grounds. My noble and learned Friend has also endeavoured to insinuate that even the Committee which decided this question was improperly biassed in the division to which they came, and he has stigmatized the Committee by calling it a "Secret Committee," with very considerable emphasis. Now, my Lords, I must say for that Committee that, though the majority of the noble Lords who composed it were supporters of the Government, I believe there was not a Member of it who did not try to perform his duty faithfully, and make the Bill as perfect and complete as it could be made, and 1599 who did not give his undivided attention to this important subject. My noble and learned Friend on the Woolsack has desired particularly to know what were the grounds which influenced the Select Committee in coming to the conclusion against the establishment of a Chief Judge. I think the unanswerable speech of my noble and learned Friend who has just spoken will gratify his curiosity. My noble and learned Friend, by his dissection of all the clauses of the Bill, has so completely exposed the groundlessness of the principle on which it is alleged the Chief Judge ought to be established, that I do not wonder that no noble Lord who disagrees with him has risen to reply to his argument, but that they have rather chosen to have the answer—if answer there can be given—to my noble and learned Friend on the Woolsack. My noble and learned Friend, in a tone which we have been unaccustomed to hear, insinuated that in consequence of the decision of the Select Committee, the votes in the other House have been influenced, and that Members of that House who had given their support to him have been induced to change their opinions; and my noble and learned Friend, complimenting those who had supported him generally, stated that the suggestion of the Chief Judge came from an hon. and learned Member who was Attorney General under the late Government. I do not think my noble Friend (the Earl of Derby) or any one of his Government is answerable for the opinions entertained on the subject of bankruptcy by my hon. and learned Friend Sir FitzRoy Kelly. The Government of my noble Friend brought in a Bill in the year 1859; but that Bill makes no provision for a Chief Judge, nor for any alteration in the existing establishment. My noble and learned Friend has addressed your Lordships with considerable ingenuity and ability. He naturally feels great solicitude for his own offspring, for it has been the result of long and painful labour. My noble and learned Friend will see nothing but symmetry in its limbs, and is displeased if anybody can discover anything like deformity or irregularity in them. But, as he has laid his offspring at the door of the public, we must be excused if we examine it a little before we determine whether it is worth taking up and adopting. The question you are called on to determine is, not whether the present system ought to be abolished, and in its place a high Court established, with a 1600 Judge exercising important judicial functions, and with subordinate functionaries, to whom administrative duties alone are to be given. That was partially, at least, the scheme of my noble and learned Friend during the last Session of Parliament, because he then introduced a Bill into the House of Commons by which he proposed to get rid of the London Commissioners altogether, and to establish in their place a Chief Judge. But the question is this—are you of opinion that, retaining the present system, you should superadd a Judge of high rank and with large salary, to perform duties which, I will satisfy your Lordships, are now adequately and efficiently performed by those to whom they are intrusted? In looking at these subjects a very narrow view is often taken. We are apt to look at things round us, and to forget those which are far off. We turn our attention exclusively to the London district, and we omit from our recollection the fact that there are such places as Manchester, Birmingham, Liverpool, and other great commercial towns, where trade is carried on as extensively, where bankruptcies are as numerous, and where the estates to be distributed are as large as in the Metropolis. I am very much disposed to agree with my noble and learned Friend that matters in bankruptcy are not of such importance as to require the intervention of a functionary of this description, and that proceedings in that Court ought not to be so dignified. I stated on a former occasion that of the bankruptcies which take place annually 85 per cent are estates under £1,000, and the great majority are estates of less than £300. The duties of this great Judge, therefore, will be confined, in the first place, to 15 per cent of the bankruptcies in the metropolitan district only—for the cases throughout the country will derive no benefit from the "dignity" of the Judge, on which the Mercantile Law Amendment Society lay such stress. The other functionaries in different parts of England must shine with their own dim light, for they will not have the slightest lustre reflected upon them from the rays of the dignity of the metropolitan Court. Both my noble and learned Friend and the House of Commons in the Reasons which they give for adhering to their own opinion say that it is most desirable to establish consistency and uniformity of decision. To accomplish so desirable an end there is no necessary sacrifice which ought to be refused. 1601 It could be accomplished in one of two ways—either by vesting the jurisdiction in a single person, or by an appellate tribunal checking and controlling the proceedings of a multiplicity of Judges. From the Reasons assigned by the House of Commons any one not informed on the subject would believe that this was the first time that a court of appeal had been suggested. But it is stated that there is already a most admirable court of appeal, which performs its duties most satisfactorily and efficiently. It is impossible to praise too highly the character and ability of the Lords Justices, who practically form the court of appeal, whose powers it is proposed to transfer to the new Judge. My noble and learned Friend says they are overburdened with work, and that they will be unable to perform, not merely their new, but their present duties. With regard to their attendance at the Privy Council my noble and learned Friend knows that the time which they devote to that part of their business is the very time at which the Court of Chancery is not sitting. Nor is he more correct in saying that they have no time to give to the duties of a court of appeal in Bankruptcy. I take last year as an illustration, and I find that the forty-two cases which constituted the whole of the business in that Court were settled in the course of fifteen days. It has been said that there is delay; but, in my opinion, it is merely imaginary. No delay was ever complained of—ever suggested—till it became necessary to establish some ground for transferring their jurisdiction to the new functionary. If any delay has taken place it has been, I believe, on the part of the suitor, and not of the Judge. Whether it be a petition, motion, or special case, if it is put down on Monday or Tuesday, it will be heard on the Friday following. Another ground on which the change is advocated is the costliness of appeal. My hon. and learned Friend the Attorney General stated that it would be impossible any appeal could take place from the Lords Justices at a cost of less than £60. That amount rather startled me; but I should like to know how it will be in the slightest degree diminished by any of the provisions of this Bill. Nay, it appears to me extremely probable that the expense will be very considerably increased. There may be an appeal to the Chief Judge, and there may also be an appeal from his ruling to the court of appeal in Chancery, providing the Judge gives 1602 permission for that appeal to take place. I do not know who is the Great Unknown on this occasion. From something which fell from my noble and learned Friend I am led to suppose that he has desired not to commit the Government to a hasty choice; but that he has some one in his mind whom he appeared to be considering in the course of his speech. But for a considerable time the Chief Judge, whoever he may be, will not be likely to have the experience of the present London Commissioners, and if he has the becoming diffidence which I expect he will have, and the feeling which every Judge ought to have, that in doubtful cases his decision should not be final, he will not, when reversing the decisions of the Commissioners, refuse the parties permission to appeal; and thus, instead of diminishing the cost of appeals, you will probably double it, because in many cases there will be a double appeal. My noble and learned Friend admits that the existing business is not sufficient to justify the appointment of a Chief Judge; but he says that insolvency and bankruptcy are to be united, and that there will be such an influx of business arising from that union that it will be quite impossible for the Lords Justices to get rid of it. I believe that that supposition is as imaginary as many others with which he has favoured your Lordships. The insolvent business is, as regards value, generally of a very insignificant character. Very few insolvencies would bear the expense of an appeal, and we who have had experience in courts of justice know that there is very little encouragement to enter an appeal when there are no funds to maintain it. But let us suppose—and it is a good deal to suppose—that this union of the two kinds of business will double the number of appeals; that, instead of there being forty-two appeals in a year, there will be eighty-four, and instead of fifteen days being required for disposing of them thirty will be needed—is any case made out for appointing a new Judge to discharge these duties? My noble and learned Friend felt this difficulty, and he, therefore, cast about to see how he could find some original jurisdiction to be exercised by him. I remember that when we were in Committee my noble and learned Friend opposite (Lord Cranworth) asked the late Lord Chancellor to define what would be the duties of the Chief Judge. The noble and learned Lord did not give any satisfactory explanation; but, quoting 1603 the words of my noble and learned Friend on the Woolsack, he said that the Judge was the keystone of the arch; upon which I ventured to say to some one near me that £5,000 a year was a great deal to pay for a metaphor. Let us come now to this general jurisdiction. My noble and learned Friend opposite has so completely anatomized the provisions of the Bill upon this subject that it is unnecessary for me to go through the different clauses. I may state generally that the only exclusive original jurisdiction which the Chief Judge is to exercise is that with respect to opposed discharges of bankrupts, and the reason given for confiding to him this jurisdiction is that it is desirable to obtain uniformity of decision. It is said that there is great contradiction in the opinions of the Commissioners, and it is for the sake of getting rid of their contradictory decisions that the Chief Judge is to be invested with this original jurisdiction. There is a great deal of misapprehension, not to say misrepresentation, with regard to the contrariety of the decisions of the Commissioners. There is no conflict whatever in their decisions founded on the Bankruptcy law‐the contrariety has arisen only in the decisions upon applications for certificates. There are three classes of certificates, and the class of certificate which a bankrupt receives depends upon the view which the Commissioner takes of his conduct. There is no settled or fixed principle involved in that. One Commissioner may take a sterner and another a more lenient view of the conduct of a bankrupt, and no principle is violated. But, with regard to all the great principles of law which enter into questions of bankruptcy, such as those relating to reputed ownership, fraudulent preferences, and so on, there have been no contradictory decisions. But how will the appointment of a Chief Judge get rid of contradiction in the measure of commercial morality in various cases? The 164th section of this Bill points out so clearly that he who runs may read what are the grounds upon which the Commissioner or Judge is to proceed with regard to granting, suspending, or refusing orders of discharge; and it is impossible that there can be any mistake except with regard to the facts which constitute the particular courses of conduct which are pointed out by the section. The clause enacts that the Judge shall give the order unless he finds that the bankrupt has been living extravagantly; incurring debts without a 1604 prospect of paying them; falsifying books, or things of that kind. Is not that as much as can be provided for uniformity, and how can the Judge fix any uniform settled principles on which the orders shall proceed?—because every case must turn upon its own facts. Why are not the Commissioners, who are men of the greatest experience, competent to be intrusted with the performance of these simple duties? So much for the uniformity which is to be obtained within the metropolitan district by the appointment of the Chief Judge. But how is uniformity to be secured with regard to the decisions of the nine country Commissioners, and the sixty County Court Judges? Is it not trifling with the House to pretend that this is the ground on which you will establish a new Judge with this high salary? As to the power to be given to the new Judge to try issues of fact, my noble and learned Friend opposite has pointed out very justly that a question of fact is not likely to arise within his jurisdiction once in ten years. The questions which occur in bankruptcy are generally between persons over whom the Court has no jurisdiction—such questions, I mean, as fraudulent references, disputed ownership, and so on, which must be decided, as at present, by the courts of law. In fact, this is only another of the points on which a great parade has been made of the duties to be performed by the new Judge in order to justify his appointment and make people believe it is absolutely necessary. My noble and learned Friend on the Woolsack spoke of the enormous influx of deeds of arrangement to be expected under the Bill; but I think his argument in that respect was somewhat inconsistent. He pointed to the frequency of deeds of arrangement as a proof that the present Court of Bankruptcy is unpopular; and yet he inserts clauses in the Bill for the express purpose of inviting creditors and bankrupts to effect deeds of arrangement. My own opinion is that these clauses are the most valuable in the Bill, for I am satisfied that such deeds are the very best mode which can be resorted to for the purpose of arranging the affairs of a bankrupt in the first instance. I would have your Lordships observe, also, that it is only deeds of arrangement within the metropolitan district which will fall within the province of the Chief Judge, for the Commissioners are to exercise the same authority in the country. Again, the circumstance that the new Judge is 1605 to sit in chambers has been made a great deal of without much reason. I very much doubt whether it will prove so satisfactory an arrangement as has been represented. The Commissioners are joined with the Chief Judge in these sittings, and I should suppose would be able to dispose of the business without him. There are many other points upon which I would like to touch, but the clock warns me not to exhaust your Lordships' patience. I have endeavoured to distinguish as far as I could the appellate and the original jurisdiction of the Chief Judge. I have shown in regard to the first that there is no necessity for the creation of a new Judge to discharge the duties, as they are most efficiently and satisfactorily performed by the present court of appeal, and as there is not the slightest chance of any increase of business arising which the Lords Justices could not overtake. I have also shown that the original jurisdiction is nothing but a pretence for making a new appointment; that the business can be done perfectly well by the five Commissioners; and that the idea of procuring by those means greater uniformity of decision than at present is a delusion. I hope, therefore, your Lordships will adhere to the Amendments which you have introduced on the subject—and which were agreed to in the Select Committee without a division—and spare the public purse the expense of this most unnecessary appointment.
§ LORD WENSLEYDALE
said, that lie entirely concurred in the views that had been expressed by his noble and learned Friend. The law of bankruptcy required no great amount of legal learning, and he really did not see, therefore, what necessity there was for a Judge of the rank and with the salary proposed by the Bill as it originally stood. This particular question had been very carefully considered by the Committee, which was composed of noble Lords of all shades of politics, who were animated, in his opinion, by only one desire, namely, to pass a measure which should lead to the proper administration of justice in regard to bankruptcy. That Committee had thought fit to make this Amendment, and he had heard nothing which tended in any degree to shake his opinion that the decision of the Committee was a sound one. He was surprised that, after what had passed in Committee, his noble and learned Friend should persist in opposing the Amendments which had been made in the Bill.
THE LORD CHANCELLOR
, in reply, said, the kind attention which your Lordships gave me at the outset would be most ungratefully repaid if I were to trespass on you long in reply, and yet I must beg your attention for a few moments. I have listened with great attention and with all the respect which is due to the two noble and learned Lords who spoke after me. I regret deeply that I was unable to hear one word of my noble and learned Friend who spoke last. I say so not for the purpose of exciting a laugh, but to express my sincere regret that I am not able to advert to his observations. But I am indebted to the two noble and learned Lords who spoke before him for a great discovery—namely, how your Lordships' Select Committee arrived at their conclusion; for now I see perfectly that, if they had no further information before them as to the contents of the Bill than the knowledge of the subject, and of the subject of bankruptcy generally, which has been exhibited by my two noble and learned Friends, I have no right to be at all surprised at that conclusion; and when I consider the irresistible effect of the witticisms with which their lucubrations ended, I may assume that in the Committee solvuntur tabulœ risu, and so the Chief Judge was dismissed. I beg your Lordships to follow me one moment while I justify the observation, which if I had time I would redeem to the letter, that from beginning to end not one word is correct of all you have heard from these two noble and learned Lords. First, I will take the last observation of the noble and learned Lord who spoke last but one. He talked of deeds of arrangement as if it were desired that they should be excluded by this Bill.
THE LOKR CHANCELLOR
They are encouraged by this Bill, and so the noble and learned Lord said; but he seemed to think that because you encouraged them they would not supply material for the occupation of the Chief Judge. Now, they will supply most abundant material, and they will supply it in this way—that all questions arising under them will have to be disposed of by the Chief Judge, and if one question for judical decision arises in twenty deeds, with 10,500 deeds there must be several hundred questions to come annually before the Chief Judge. Then, in the next place, my noble and learned 1607 Friend and his coadjutors were very eloquent on the subject of the costs of appeal. My noble and learned Friend on my right thought he had discovered a very great failure in the Bill in its leaving the possibility of appeals to the Lords Justices, and he told us that he asked in Committee how that was met, but got no answer. I am very sorry that my noble and learned Friend should not have read the Bill, as it might have superseded the necessity of asking the question. If my noble and learned Friend had only condescended to inform himself how the appeal court was vested in the Lords Justices—how it was originally created by the Consolidation Act, and transferred to the Lords Justices—and if he had looked at the schedule and observed that the clause in the Consolidation Act was repealed, he need never have asked with wondering anxiety to find an answer to the objection that appeals to the Lords Justices were continued. The sections of the Act giving the right of appeal, which was ultimately transferred to the Lords Justices, are repealed by the Bill.
THE LORD CHANCELLOR
That only shows my noble and learned Friend's want of apprehension. The Act to which he has alluded is an Act transferring an existing jurisdiction; the Act which is repealed is the Act which created the jurisdiction so transferred, and if the jurisdiction which is transferred is repealed, nothing is left upon which the transfer can operate. My noble and learned Friend talked a great deal about the costs of appeal, and wondered how the Bill would effectuate any diminution of that expense. Does the noble and learned Lord know what constitute the principal costs of appeal? I apprehend not. But I will tell him. The great cost of appeals is produced in this way—that before the Lords Justices new evidence is received Parties come before the Lords Justices with a mass of new affidavits; these affidavits create new issues; and in that way the cost of appeals is indefinitely augmented If he had condescended first to read the Bill he would have found a section which enacts specifically that on the hearing of appeals before the Chief Judge no new matter shall be received without leave of the Chief Judge; and if he had looked into the evidence given before the Commission which sat in 1854, he would have found the evi- 1608 dence of two of the most extensive practitioners in bankruptcy, and whose names may be seen every day in the newspapers. Those two gentlemen, whose names are Mr. Lawrance and Mr. Linklater, concur in pointing out the evils of the present system, and they state that the present form of appeal to the Lords Justices amounts to a denial of justice. Had he not better have been a little more informed upon the subject before he ventured on these criticisms? This only shows an utter want of understanding the subject; and this is the way your Lordships are brought here. ["Order, order!"] I do not know why exception should be taken to that statement. Do not noble Lords attend here out of anxiety on the subject? You do, and therefore I am quite sure you will give me your ears, and decide not on any antecedent instructions, but according to what in your consciences you believe the interests of justice require. I will turn again to what is much more acceptable—the exposure of the errors which I find have been made. The expenses of the appeals, according to the evidence which I have quoted to you, are so great as to amount, in fact, to a denial of justice, but I have struck at the root of the evil by laying down as a principle that no new evidence shall be received, and I have so regulated the appeal that I expect that the expenses of the appeal will not amount to more than one-tenth of what they are at present. My noble and learned Friend who spoke last but one (Lord Chelmsford) said that I had represented the Lords Justices as not having time for their present work. But I said no such thing. What I said was that they would not have time for the additional work which would be cast upon them by the augmentation of the business of the Bankruptcy Court which would be produced by this Bill. My noble and learned Friend, who spoke immediately after me (Lord Cranworth), went through the Bill, picking out here and there various administrative functions of the Chief Judge, which he seemed to wish to represent to be those for which alone the Chief Judge had been created: but it is quite evident that when the jurisdiction of the Court is enlarged as I have described, the functions of the Judge will also be enlarged to the same extent. The whole Court, in fact, emanates from him, and it is he who regulates all its proceedings. My noble and learned Friend spoke of the absurdity of trying questions of 1609 fact in the Bankruptcy Court, and referred to former experience; but he forgets that at that time of day the jurisdiction of the Court was limited. Observe how this appeal to the Chief Judge will work. An estate is brought into the Court, creditors come in and assert that the bankrupt is indebted to them; then questions arise as to the extent of the debt, the constitution of the debt, and the present liability—all these are points which at present are decided by the Commissioners, because the bankrupt will not incur the expense of an appeal, but which the Chief Judge under this Bill will at once decide.
THE LORD CHANCELLOR
Yes, and in the country, too. If I had only had half an hour's conversation with the noble Earl over the Table of that Select Committee, I will lay my life that I could have converted him to my opinion. I will pay that tribute to the noble Earl's legal knowledge, to his apprehension, and to his candour. Suppose, now, that a creditor has a claim against a debtor of £500 or £600; the dividend, say, is not more than 4s. or 5s. in the pound, which brings the sum he has to receive to some £150 or £160. Suppose his claim is rejected by the Commissioner. The expenses of an appeal are about £60 aside, according to the evidence of the gentleman I mentioned before, and a creditor, therefore, will naturally think it a very unwise thing to buy a ticket in the lottery of litigation at the certain expense of £60. Though there may be a mistake made by the Commissioner, it cannot be set right without the creditors having to pay the expenses. Quicquid delirunt reges—the Commissioner being the reges here—plectuntur Achivi—the suitors are mulcted. But under this Bill if a Commissioner—in the country say—rejects a proof, the creditor may send his affidavit up to London by the same night's post, and a few shillings will probably suffice to set right the error committed by the Court below. Have my two noble and learned Friends ever attended the proceedings in bankruptcy? I will just give your Lordships another instance of the inconsiderate manner in which the Select Committee dealt with this Bill. There was a provision in this Bill originally that the Court below should employ a shorthand writer. Without a shorthand writer, when evidence is taken before a 1610 Court in London or the country, the examination is taken down, question and answer, by the clerk; and not only is the process of examination dragged out to an indefinite extent, but nothing like cross-examination is possible. Whenever your Lordships sit here judicially, you employ a shorthand writer; but though the practice is recommended by your usage the Select Committee struck the clause out of the Bill. I am obliged to speak strongly on these points, because I have a very strong opinion in regard to them. I have no object to serve in the establishment of this Chief Judge—indeed, what object should I have? My noble and learned Friend said that I had occupied myself with generalities. What I endeavoured to do was to give your Lordships accurately the facts and statistics on which my conclusions were founded. My noble and learned Friend who spoke second in this debate seemed to be under a very erroneous impression as to the amount of duty which would have to be performed by the Chief Judge. Surely he cannot be aware of the number of suits in Chancery arising out of bankruptcy cases; nor that one of the two Commissioners of the Insolvent Debtors' Court, which is to be swept away by this Bill, sat for 150 days in a single year, while the other Commissioner sat for a very considerable number of days to despatch a large amount of business. I shall not trespass further on your Lordships' attention, but leave the matter entirely in your hands. The first question which I think it will be expedient to put to your Lordships for your decision, if it meets with your approbation, will be whether you will insist on your Amendments relating to the office, duties, and power of the Chief Judge. I believe that will be the most convenient form of putting the question, because it will comprehend a whole class of Amendments in one Vote.
§ LORD CRANWORTH
My Lords, before the Question is put I claim the indulgence of your Lordships while I briefly explain. The noble and learned Lord on the Woolsack has brought against me what, as affecting one who has occupied the position now filled by the noble and learned Lord, was certainly a grave charge — namely, that I had attempted to mislead your Lordships on the important question, whether there did or did not exist an appeal to the Lords Justices. The noble and learned Lord referred to the enact- 1611 ments originally creating the appellate jurisdiction, and also to those which transferred that jurisdiction to the Lords Justices, and he then stated, as a proposition of law, that inasmuch as the clauses in the first Act were repealed by the schedule to the present Bill the jurisdiction vested in the Lords Justices by the subsequent Act was also repealed. If that had been the state of the law I should have incorrectly represented the result. In this House we are always in the habit of looking to the occupant of the Woolsack as pre-eminently the authority to declare to us what the law is. Now, I say that that would not in point of law have been the effect, even if the clauses in the original Act had been repealed. But, as a matter of fact, neither the clauses in the original Act nor those in the subsequent Act are touched by the schedule. I must, therefore, venture, in answer to the reproof which the noble and learned Lord, in not very courteous language addressed to me, to say that he was neither correct in his law, nor accurate in his facts.
§ On Question, "Whether to insist? their Lordships divided:—Contents 80; Not-Contents 46. Majority 34.
|Beaufort, D.||Romney, E.|
|Cleveland, D.||Shrewsbury, E.|
|Marlborough, D.||Stradbroke, E.|
|Northumberland, D.||Tankerville, E.|
|Rutland, D.||Verulam, E.|
|Ailsa, M.||Dungannon, V.|
|Bath, M.||Exmouth, V.|
|Exeter, M.||Hardinge, V.|
|Normanby, M.||Lifford, V.|
|Salisbury, M.||Melville, V.|
|Winchester, M.||Strathallan, V.|
|Amherst, E.||Abinger, L.|
|Bathurst, E.||Bagot, L.|
|Beauchamp, E.||Bateman, L.|
|Cardigan, E.||Berners, L.|
|Carnarvon, E.||Boston, L.|
|Dartmouth, E.||Calthorpe, L.|
|De La Warr, E.||Chelmsford, L.|
|Derby, E.||Churston, L.|
|Devon, E.||Colchester, L.|
|Doncaster, E. (D. of Buccleuch & Queensberry.)||Colville of Culross, L. [Teller.]|
|Hardwicke, E.||Cranworth, L.|
|Lonsdale, E.||Delamere, L.|
|Malmesbury, E.||Denman, L.|
|Manvers, E.||Dinevor, L.|
|Mayo, E.||Egerton, L.|
|Nelson, E.||Gage, L. (V. Gage.)|
|Orkney, E.||Grantley, L.|
|Pomfret, E.||Heytesbury, L.|
|Powis, E.||Kingsdown, L.|
|Leconfield, L.||Sondes, L.|
|Monteagle of Brandon, L.||Southampton, L.|
|Stewart of Garlies, L.|
|Polwarth, L.||(E. Galloway.)|
|Raglan, L.||St. John of Bletsoe, L.|
|Ravensworth, L.||Tenterden, L.|
|Redesdale, L.||Tredegar, L.|
|Saltoun, L.||Tyrone, L. (M. Waterford.)|
|Sheffield, L. (E. Sheffield.)||Walsingham, L.|
|Silchester, L. (E. Longford.)||Wensleydale, L.|
|Wynford, L. [Teller.]|
|Westbury, L. (L. Chancellor.)||Belper, L.|
|Somerset, D.||Dartrey, L. (L. Cremorne.)|
|Sutherland, D.||De Tabley, L.|
|Ailesbury, M.||Elgin, L. (E. Elgin and Kincardine.)|
|Bristol, M.||Foley, L. [Teller.]|
|Airlie, E.||Fortescue, L. (V. Ebrington.)|
|Clarendon, E.||Hamilton, L. (L. Belhaven and Slenton.)|
|De Grey, E.||Harris, L.|
|Ducie, E.||Llanover, L.|
|Effingham, E.||Manners, L.|
|Granville, E.||Methuen, L.|
|Harrington, E.||Poltimore, L.|
|Harrowby, E.||Ponsonby, L. (E. Bessborough.)|
|Saint German's, E.||Portman, L.|
|Eversley, V.||Rossie, L.(L. Kinnaird.)|
|Falmouth, V.||Sandys, L.|
|Sydney, V.||Saye and Sele, L.|
|Torrington, V. [Teller.]||Stanley of Alderley, L.|
|Sundridge, L. (D. Argyll.)|
|London, Bp.||Wodehouse, L.|
§ Their Lordships' Amendments relating to the Chief Judge were, therefore, adhered to.
§ Resolved in the Affirmative.
THE LORD CHANCELLOR
said, the next class of Amendments referred to the official assignees and the creditors' assignees. With the permission of their Lordships, he would, without detaining them with any further argument, put the next Motion in a similar form to the last.
Then it was moved not to insist on the Amendments relating to Office and Duties of the Official and Creditors' Assignees, to which the Commons have disagreed.
§ LORD CHELMSFORD
said, it was not his intention to divide their Lordships on this point. It was one of eminent importance to the commercial community; but one on which opinion was more divided than any other. Some desired that the official assignee should have absolute con- 1613 trol over the administration of the bankrupt's estate; others that the creditors' assignee should be allowed a very considerable authority over it. The official assignees were first appointed by the Bill of Lord Brougham in 1831; and when originally appointed they were officers of great importance. He believed that for many years their time was principally occupied in making creditors' assignees refund the money they had received. He believed that the official assignee would have been popular had it not been that they were paid by a percentage on the value of the estates, and this, of course, was a heavy charge on the assets. The consequence was a desire to give the creditors' assignees increased powers. He had given much consideration to this matter; and he had come to the conclusion that it was desirable, as much as possible, to facilitate arrangements out of Court. That was done by this Bill. But when parties were brought into the Bankrupt Court he thought it necessary there should be some controlling authority. There was a strong opinion in the mercantile world in favour of the creditors' assignee; and the Bill was originally framed according to that view. At present when a person was declared bankrupt, the whole of the estate vested in the official assignee, who at once commenced the collection of the assets. That duty, he believed, the official assignees had discharged most faithfully. But by the Bill it was proposed to take away a considerable part of the duty they had to perform, and to give the creditors' assignees more power than they possessed at present. The mode resorted to was this—when a creditors' assignee was appointed the estate originally vested in the official assignee became vested in the creditors' and the official assignee jointly. It was now proposed that the estate vested in the official assignee at the time of the declaration of bankruptcy, when the creditors' assignee is appointed shall become vested in the creditors' assignee solely. There would be considerable inconvenience in this bandying about of the bankrupt estate, and some of the clauses, he thought, could not possibly work. As to the provision that the creditors' assignee, when appointed, should "forthwith" make a return of the debts and assets of the estate, to make a balance-sheet of a large concern might require weeks, or even months; and to enable the assignee to begin to collect the debts at the same time it would be neces- 1614 sary to have two sets of books, one for the creditors, the other for the official assignee. This was impossible. He thought the official assignee should be the principal administrator of the bankrupt's estate; but opinion was divided on the point, and he did not think the question was so completely settled as to justify them in resisting the desire of the House of Commons by insisting on their own Amendments.
THE LORD CHANCELLOR
said, he thought their Lordships would agree with him that the most prudent course in reference to a Bill relating to the interests of the public, would be to leave the question to the decision of the trading community itself. The official assignee was introduced into the administration of the bankrupt law in order to secure the proper realization and distribution of the assets. That remedy, however, went beyond what was necessary. The proper function of the official assignee, in his opinion, was to act as an auditor and check on the creditors' assignee's accounts. As to the appellate jurisdiction, by the 75th Clause it was provided that if no appeal were presented within twenty-eight days from the date of the decision of the Court, such decision or order should be considered to be final; but the clause regarding appeal depended upon the enactment in Clause 244, which declared that all Acts, or parts of Acts, inconsistent with the above provision should be repealed.
§ LORD CRANWORTH
I am at issue with my noble and learned Friend, and say that the existing appeal is not repealed by those clauses.
§ On Question, Whether to insist?
§ Resolved in the Negative.
§ LORD CHELMSFORD
said, that the 118th Clause of the original Bill gave a discretion to a majority of the creditors as to whether anything or nothing should be allowed to the bankrupt out of his estate until he passed his last examination. This power their Lordships had amended, giving this power to the Court. The Commons, however, had rejected their Lordships' Amendment. He thought it would be unfair to leave the bankrupt so completely at the mercy of his creditors, who might be influenced by angry feelings towards him, to deprive him of the smallest means of support.
§ EARL GRANVILLE
said, the property belonged to the creditors, and not to the bankrupt. It was, therefore, only fair 1615 that they should have the option in this matter.
THE LORD CHANCELLOR
thought that this matter were better left to the creditors.
Then it was moved not to insist on the remaining Amendments to which the Commons have disagreed.
§ LORD KINGSDOWN
said, there was one Amendment on which he thought their Lordships should insist. One of the effects of this Bill was to abolish the distinction which had hitherto existed between traders and non-traders. He did not want to go into a discussion on the propriety of establishing such a principle as that, but he wished to direct their Lordships' attention to what might occur if the clause stood as it had left the Commons. In abolishing this distinction their Lordships had introduced a qualification which he thought a very just one. Immediately on the declaration of bankruptcy, the whole estate of the bankrupt was to be sold. Their Lordships' Amendment provided that the reversionary interests of the son of a tenant for life should not be sold without the consent of the Judge. It was evident that the greatest hardship would be worked by a strict application of the rule. The value of such a reversion had been valued by actuaries at no more than two and a half years' purchase.
THE LORD CHANCELLOR
said, these interests were at present saleable in the Insolvent Court. But he was willing to agree, if it would meet the objection of his noble and learned Friend, that the sale of the reversionary interest ought not to take place without the consent of the Judge.
§ THE EARL OF DERBY
saw no objection to the proposed modification, but doubted whether it was competent to their Lordships to amend a clause which they had already sent down to the House of Commons, and which was objected to by them.
THE LORD CHANCELLOR
thought that the provisions of the Bill would be found to be sufficient as they stood.
THE LORD CHANCELLOR
thought that the employment of a shorthand writer would in many cases be found both convenient and economical. Shorthand writers were employed when their Lordships were sitting on judicial business, and with- 1616 out their assistance cross-examination would be difficult—almost impossible.
On Question, Whether to insist? Resolved in the Negative.
THE LORD CHANCELLOR
informed their Lordships that the Bill had come from the House of Commons with some additional Amendments which had been made by that House. Those Amendments were all of them, he thought, either verbal or in harmony with the Amendments which had been made by their Lordships.
Then it was moved to agree to the additional Amendments made by the Commons.
§ Motion agreed to.
§ THE EARL OF DERBY
belived that, according to the forms of the House, it was necessary that a Committee should be appointed to prepare a statement of the Reasons why their Lordships insisted on their Amendments, and moved accordingly.
§ Motion agreed to.
§ Committee appointed to prepare Reasons to be offered to the Commons for the Lords insisting on certain of their Amendments to the said Bill to which the Commons disagree; the Committee to meet on Monday next, at half-past Four o'clock.