HL Deb 18 June 1861 vol 163 cc1217-26

Order of the Day for the Third Reading read.

Moved, That the Bill be now read 3a.


said, that though the Bill might not contain all that some people might wish to find still it would be a most valuable measure. He expressed his earnest hope, and, indeed, his confident expectation, that, whatever difference of opinion might exist on the subject, the Amendments which had been made in the Bill would be accepted by the other House.


My Lords, I also hope that a Bill upon this important subject, so long desired by the great body of the commercial community, may pass into law in the present year. This Bill undoubtedly has received very considerable attention on the part of Members of the House of Commons, and I think it will be admitted by the noble and learned Lord on the Woolsack, although he may not approve all the Amendments which were made in the Select Committee, that that Committee devoted the most earnest attention to the details of the measure, and that no clause and no Amendment was decided upon by them hastily and without due consideration. The Bill has come back from the Select Committee with considerable alterations, but without any interference with what I look upon as its main principles. Those principles I take to be, in the first place, the amalgamation of bankruptcy and insolvency; in the next place, the question—much discussed elsewhere, but not disputed in the Committee—of doing away generally with the distinction between traders and non-traders; and, thirdly, though I cannot help thinking this a measure of doubtful policy—the extension of bankruptcy jurisdiction to County Courts. In all these three material points the Bill has come back from the Committee without alteration. Undoubtedly, as I said, there are many points on which it has received alterations and, as I think, Amendments. In the first place the Committee objected to that which appeared to them a very unnecessary and useless expenditure—the appointment of a Chief Judge. That proposal was struck out by the Committee; as were also some provisions with regard to the relative duties of the official and creditors' assignees, and other provisions which were calculated to lead to much additional expense—such as the employment of short- handwriters. In some few minor points other Amendments were introduced, and, with regard to all the Amendments, I think I may say that they were made by a considerable majority, and, in some cases, without even a division of voices in the Committee. Now, I cannot but hope that the consideration which the Bill has thus received from a Committee so constituted may not be without weight with the Members of the other House. When the Bill came back from the Select Committee the noble Earl opposite (Earl Granville), on the part of the Government, professed his readiness to accept the Amendments of the Committee, and did not raise any question with regard to those Amendments—though it is true that a clause of great importance was in this House inserted in the Bill, preventing the retrospective operation of the law upon non-traders, who are now for the first time made subject to the bankruptcy law. But it is said that in regard to the Bill as it now stands ominous words have dropped from a Member of the other House, which make me somewhat apprehensive of the reception which these Amendments may, meet with there. Now, as this is a Government Bill, and as the Government have accepted in this House every Amendment made by the Select Committee, I think I am entitled to ask whether it is the intention of Her Majesty's Government to use the influence which undoubtedly they possess with their colleagues in the other House, and to secure their support and acceptance of the Amendments which have been introduced in this House? I should not ask this question if the Bill were not introduced by the Government and upon the responsibility of the Government, and if I did not hope that the Government had made up their minds, having accepted the Amendments here, to support them in the other House. If, however, the noble Earl is not able to give me this assurance, I hope he will state that the objections of the House of Commons to any of these Amendments shall be sent up to this House in time to give us an opportunity for the full consideration of any such changes. I have looked at the state of business in the other House, and though there appears to be a considerable number of Bills in progress there are not many of them which will be likely to lead to protracted discussion; and, therefore, it is of the more importance that questions upon which you have felt it necessary to introduce important Amendments in the Bill should, if again altered in the other House, be brought up here in time to allow of ample consideration. I am quite sure there are many of your Lordships who felt a strong objection to abolish the distinction now existing between traders and non-traders they acceded to that proposal, however, although they felt it was an experiment of doubtful policy, being mainly influenced by the clause which deprived that portion of the Bill of any retrospective effect. That being so, I do not think it would be fair to this House, if, after the Government have allowed the Bill to pass here without an objection, it should be suffered to remain a considerable time in the House of Commons, and then be returned to us at a period when your Lordships' House is but thinly attended, and when the Government may think they can carry any Amendments. I do not wish to anticipate that that it is the intention of the Government; but I hope the noble Earl will be able to say that the Government will accept the Bill as it stands, and will recommend the acceptance of it by the House of Commons, so as thereby to terminate this discussion by the passing of a measure which in the main will, I believe, be very acceptable to all classes of the mercantile community, though there may be a difference of opinion with regard to some of its provisions.


said, that what the noble Earl had stated in reference to the proceeedings of the Select Committee were in the main accurate—the Amendments certainly were not agreed to until after much difference of opinion and long discussion. But he (Earl Granville) was not at all converted from his original opinion that in no one way would there be any great advantage in referring the Bill to a Select Committee. By discussing the measure in the House their Lordships would have enjoyed all the advantages derived from its consideration before a Select Committee, with this further and great advantage—namely, that the public would have been made aware of the arguments which were urged on either side. In point of order, too, there would have been the additional advantage, that whereas in the Select Committee four or five noble Lords were sometimes stating their views at once, here only one noble Lord would have spoken at a time. He admitted fully that the Committee had paid an earnest and anxious attention to the Bill according to their respective views of its provisions, and he admitted also as to most of the divisions which had taken place that they were not purely party divisions, but that noble Lords on the same side of the House voted in different ways, and that on the whole the Committee dealt with the Bill in a spirit of impartiality and fairness. He did not think it necessary to go through the different points on which alterations had been introduced. The noble Earl had asked him for so many assurances with regard to the Bill that he could not remember them all.


I only asked for one assurance, and in the alternative for one other.


said, the noble Earl had asked him to assure the House that the Government would adopt the Bill as it now stood, and would press its acceptance upon the House of Commons, and if any alterations were made in the other House that the Bill should be sent back to this House at an early period, Now, it was quite impossible for him to give such an assurance. The noble Earl said that the Government had accepted the alterations made in this House. They had certainly accepted them to this extent—that they had not abandoned the Bill owing to their having been made. When a Bill of this sort was referred to a Select Committee, although it was perfectly competent for any one to re-open the questions decided upon by that Committee, it was the general practice to accept their decision with regard to the details. There was a majority in the Committee in favour of the Amendments which were adopted, and when the Bill came again before the House there seemed to be the same majority there, BO that it would have been idle to endeavour to reverse that decision. No one could be more anxious than the Government were that a Bill should be passed in the course of the present Session on this important question:—with regard, however, to the assurance which he had been asked for he could not say more than that the Government would carefully consider the altered state of the Bill; that they would accept it if they deemed it for the public advantage to do so, and that if alterations in it were made by the House of Commons they would endeavour to send it back to this House as quickly as was consistent with the due course of public business.


My Lords, I am desirous to say a few words on the present occasion, because I concurred in almost every alteration made by the Committee in the Bill, which in its further progress I earnestly hope will have the real and cordial support of the Government, I am the more anxious to express my feelings with regard to this Bill, because previous to the reference of the Bill to the Select Committee the duty was imposed on me of presenting several petitions, signed by many influential parties connected with the mercantile and trading world, not only in this Metropolis; but in various parts of the kingdom; all these parties expressing some apprehensions more or less distinct of the danger to which the Bill would be subjected from alteration in the Select Committee, But, having attended that Committee regularly, and watched its proceedings with great attention and anxiety, I am bound to say thus publicly, that in my opinion the members of that Committee, to whatever political party they belonged, discussed the Bill with perfect good faith, and with the determination to apply themselves diligently to correct many real defects and render it a practical and really valuable measure. I agree with the noble Earl (Earl Granville) in regretting in some respects that the discussion in the Committee was not taken in a more public manner; had that been so the public would have been made more fully aware of the strong, and I think, unanswerable reasons on which the decision of the Committee was founded. It appeared to the Committee that the creation of a new Judge was unnecessary; that it would only substitute an inferior tribunal of appeal for a better one now existing; that it would create a new officer with a large salary, whose appointment would not be attended by any adequate results; and that, after the first impression of novelty had worn off, tile appointment would assume the appearance of what is called a job. The rejection of this new judgeship was, therefore, most wisely and judiciously decided upon; indeed, it received more general approval in the Committee than any other alteration. There are some other modifications, but those I will not now discuss. I will simply say that, in my opinion, by the changes made by the Select Committee, the measure has been materially improved; and, from what I have been able to ascertain of the feeling of the country on the subject, I may venture to say that a large proportion of the community are prepared to accept the Bill in its present form as a satisfactory measure, from which they may expect to derive many, if not all, of the beneficial results they are anxious to obtain; and if the Bill should miscarry in the other House of Parliament, through want of faithful support from the Government, I think it will be a great calamity, and will cause very general disappointment.


said he was aware that his opinion in the law did not deserve much weight with their Lordships, but he had attended the meetings of the Committee very regularly, and although he had entered it under the impression that the Bill was perfect, he had come out convinced that, by some of the alterations adopted, it had been greatly improved. He regretted to observe the disposition of the Government to depart from the recommendation of the Committee to dispense with the Chief Judge. He had every wish to support the Government on this point; but having listened to the matter fairly, he must say that not the shadow of an argument was adduced in favour of creating such an officer. It was not simply a majority of the Committee that so decided; there was, in fact, a real unanimity upon the subject; and he thought it was one of those things in reference to which the House of Commons would hardly venture to say that they were prepared to be; more extravagant than the House of Lords. True, the Commons had been dealing rather extravagantly of late with the public money; but, seeing that not even the law Lords—to say nothing of the lay Lords—had an argument to advance in favour of the new judgeship, he thought it would be an outrageous act if the House of Commons were to attempt to restore the clause. He hoped, at least, the Government would not lend their aid to such an act on the part of the House.


said, that his silence must not necessarily be considered as an acquiescence in what had just fallen from his two noble Friends, for he conscientiously believed that by doing away with the Chief Judgeship the Bill was mutilated and deteriorated. He was sorry that the arguments which he had used had made such small impression upon the Committee, but his opinion was that there were functions assigned to the Chief Judge which could not be supplied by any other means; that the Bill would not work beneficially without an increase of judicial power, and that there was much reason to regret that that portion of the Bill had been struck out. He believed it was no part of the noble Earl's intention to move the destruction of the Chief Judgeship Indeed, the noble Earl (the Earl of Derby) took the merit to himself that neither he nor his Friends had proposed the Motion which had so mutilated the Bill, and, in al probability, if it were not for a Motion emanating from a totally different quarter but for which he had sincere respect, the Chief Judge would have passed triumphantly through the Select Committee. The noble Earl had asked him, before voting against the chief judgeship, whether he was prepared to say that the Government would not go on with the Bill that Motion were carried; and he (the Lord Chancellor) replied, with perfect sincerity, that he was not prepared for such a Motion being made; that he had no authority from the Government for stating that they would not go on; but he believed that without the Chief Judge the Bill would not work beneficially, and there was great reason to doubt its success. That opinion he still retained; and he believed that it would be a very great improvement of the Bill if the Chief Judge were restored. He repeated, however, what he had stated on a former occasion, that he was satisfied the Committee had acted fairly and conscientiously, and with the single aim of making the measure as perfect as possible.


said, that he had taken pains to point out to the Committee all the functions which the new Chief Judge would have to perform, both in substitution for the present Courts of Appeal and de novo, and certainly all that he was required to do de novo was infinitesimally small. There was no opposition to the abolition of the judgeship in the sense of a division. His noble and learned friend had stated to the Committee very nearly what he had just said; but he did not then give more reasons for the appointment than he had given now. After investigating the question narrowly, he had himself come to the conclusion that there was no necessity for such a functionary, and the Committee were of the same opinion. On other alterations proposed there were divisions, but on this there was none. He was very glad that this short discussion had taken place; he hoped it would remove an impression he was sorry to see had taken root in some quarters—that their Lordships had a sort of normal function of opposing what the rest of the community wished and desired. He was sure that those who witnessed the course taken by the Committee would admit that it could not have come to any other conclusion than that there was nothing of a party character in the Committee's discussions. With regard to the Assignees' clauses, it had been made a question how far the mercantile interest ought to preponderate; but this ought not to guide the decision. He thought it far from desirable that three-fourths of the creditors should decide what the other fourth were to do. It was because this was thought a dangerous provision that the Committee introduced the only substantial alteration in principle in the Bill. It was this—that the management and collection of the funds of the creditors should be placed, or rather remain, in the hands of the official assignees, and should not be in the hands of the creditors assignees. He considered that it was a most beneficial change to make in the Bill, to entrust the administration of the estate to a person who had no interest in concealing anything, and who would expose alike the delinquencies of the creditor and of the debtor. This was the only alteration in substance that had been made by the Committee, for the chief judgeship was a question of the machinery only. There had been a great fallacy prevalent in treating the creditors of an estate as though they were a corporation, whereas, in fact, each had his own individual interests. Why should a creditor for £100 be told that he must leave another creditor, whose debt wag £300, to decide in what way the liquidation should take place? He believed that the old system was the best, and that it was for the public interest that there should be some independent functionary to see that justice was done. The alteration which had been introduced by his noble and learned Friend (Lord Brougham) thirty years ago, whereby official assignees were substituted for creditors' assignees, had produced most beneficial results, one of which was the recovery of a sum of between £2,000,000 and £3,000,000, which, after lying idle for years, was divided among the creditors who were entitled to it. He, therefore, trusted that when the Bill was returned to the other House it would not be supposed there that their Lordships had been merely intending to obstruct a Bill which would be beneficial to the mercantile community; but that it would be agreed hat they had been endeavouring to render it as fit as possible for the objects which it was designed to carry out.


bore testimony to the unwearied attention that had been devoted by the Select Committee to the consideration of this Bill. He had concurred in the alteration that had been made by striking out the Chief Judge, for the thought that the arguments of his noble and learned Friend (the Lord Chancellor) were quite insufficient, and that never before had there been a proposal to create so unnecessary an office. The business which that functionary would have had to dispose of would be only that which the Vice-Chancellor formerly, and now the Lords Justices had to deal with, and he found that the bankruptcy appeals in Chancery only occupied an average of fifteen days a year. It was monstrous to suppose that to dispose of that business a Judge was required of equal rank and with higher salary than the common law Judges, whose whole time was devoted to the performance of public duties.

Motion agreed to.

Bill read 3a accordingly, with the Amendments; further Amendments made.

On Question that the Bill do pass,


rose to confirm the statement of his noble and learned Friend (Lord Cranworth) as to the great and beneficial change that had been made in taking the management of estates out of the hands of creditors' assignees and transferring them to official assignees. When he proposed that alteration thirty years ago he was assured by a member of the banking firm of Smith, Payne, & Co., that that house would lose between £3,000 and £4,000 a year by the change, being the amount of interest upon sums of money belonging to various estates which lay idle and unprofitable—as far as the creditors were concerned—in their hands. At the time he referred to a sum of between £2,000,000 and £3,000,000 was recovered by the official assignees which had been neglected by the creditors' assignees, and dividends were paid; in some cases the debts were fully satisfied and the bankruptcies annulled. The Bill as it now stood contained some very valuable principles, and would, he hoped, be deemed acceptable by the other House.


said, it might be supposed from that conversation that this Bill as it originally stood wholly dispensed with the official assignees. That, however, was an entire mistake. Great benefits had resulted from the labours of the official assignees, but those benefits would be preserved and made even more effectual by this measure. It was the almost unanimous desire of the commercial world that there should be a creditor's assignee appointed by those who had an interest in the debtor's estate, and also superintended by them, and that he should be carefully watched over by the official assignee, who in turn should, likewise, be carefully watched over by the creditors' assignee. As originally framed, the provisions of the Bill in this respect would, he believed, have worked most advantageously.

Bill passed, and sent to the Commons.