§ Order of the Day for the Second Reading read.
THE LORD CHANCELLOR
, in moving that the Bill be now read the second time, said, that its provisions had become absolutely necessary in consequence of the great increase of business in chambers that had been thrown on the Equity Judges. When the Masters in Chancery were abolished in 1852, the Master of the Rolls and the three Vice Chancellors were each empowered to appoint a Chief Clerk at a salary of £1,200, to be gradually raised to £1,500; a Junior Clerk at a salary of £250, to be raised after five years to £300. In a short time it was found that a larger staff was required, and by the 18 & 19 Vict., the Equity Judges were empowered to appoint an additional Junior Clerk in each of the chambers. It was also found that useful assistance might be obtained by appointing officers less skilled in the business of chambers; and accordingly Assistant Clerks were appointed, under an Act of 3 & 4 Vict., which enabled the Lord Chancellor, as well as the Master of the Rolls, to appoint clerks and officers to the present or any future officers of the Court of Chancery. Some doubts had arisen respecting the validity of these appointments. Under the Act of 23 & 24 Vict., the Master of the Rolls was empowered to appoint an additional Chief Clerk in Chambers, and the Lord Chancellor was authorized to transfer this Chief Clerk to any other of the Chancery Judges. Shortly after the framing of this Act the Chief Clerk of the Master of the Rolls was transferred to Vice Chancellor Kindersley; and to supply the vacancy the Master of the Rolls, under the authority of 3 & 4 Vict., appointed Mr. Hawkins to be the temporary Chief Clerk, and this appointment was afterwards confirmed by Act of Parliament. But after the appointment of the Chief Clerk the Master of the Rolls also appointed an Assistant Clerk to a Junior Clerk, and some doubt had arisen, in consequence of the resignation of Mr. Hawkins, whether these appointments were still valid. Those appointments were necessary, as would be shown by the Returns presented since November, 1865. It was clear that there should be some means of rendering assistance 493 in the different offices of the Court of Chancery. He believed that a Bill had been introduced in the other House to transfer the business of winding up insolvent railway companies from the Board of Trade to the Court of Chancery. That was an additional reason for these appointments. The present Bill provided for the appointment by the Lord Chancellor and Vice Chancellors of a number of additional Chief Clerks, Junior Clerks, and Assistant Clerks, and confirming appointments already made. It also gave a power to transfer the Clerks of one Judge's chamber to the chamber of another Judge, with the consent of the Judges. It also gave a power to appoint an additional Registrar.
§ Moved, "That the Bill be now read 2a."—(The Lord Chancellor.)
§ LORD CRANWORTH
said, he approved generally of the provision of the Bill, but he would venture to suggest some Amendments in Committee.
§ LORD ROMILLY
said, that no doubt some such provisions as those made in the Bill were necessary; but he doubted whether they were sufficient to satisfy the demands arising from the great accumulation of business created by the winding up of companies. He thought that some additional powers were required in respect of the winding-up of companies. For instance, the Court had no power of choosing the person who should act as official liquidator of a company, except from the two or three persons put forward by the parties; and in many cases only one person was nominated. It was true, that security was required from these persons; but that was no test of their integrity, because they seldom gave security of their own; it was either made up for them, or obtained from an association, and, having to be paid for, the expense in the end would fall on the estate. He had known instances in which security had been given for only £100,000, when it would afterwards appear that as much as £1,000,000 had passed through the liquidator's hands. He was afraid that very improper arrangements were sometimes made between the parties proposed for liquidators and the petitioners and solicitors—not at all to the advantage of creditors and shareholders. He should suggest that some ten or twelve persons should be nominated official liquidators, and that the Court should select one of these to wind up any particular company. 494 By some such mode a remedy might, he believed, be found for the evil. Some advantage, too, might be found in attaching more responsibility to those engaged in the management of those companies. He had thought it necessary to make these observations because he believed that unless some steps were taken to secure the appointment of men in whose integrity perfect reliance could be placed, the present system would sooner or later be attended by great failure and loss of property.
§ LORD WESTBURY
thought that some of the evils complained of might be met by a direction that the liquidators should pay the monies they received into the Bank of England daily. The whole subject of administration by the Courts of Chancery ought to be carefully inquired into. He thought it was never intended that Chief Clerks should perform judicial duties, but that all questions should be disposed of by the Judges themselves.
§ LORD ROMILLY
said, that his noble and learned Friend was quite in error in supposing that the Chief Clerks performed judicial duties; for their duties were purely ministerial, and that whenever a legal question arose before them it was referred to the Judge sitting in chambers.
§ LORD CAIRNS
said, that no question required more consideration than the arrangements under which the business of the official liquidators was conducted. The sums of money that came into their hands were of startling amount, and the extreme difficulty of providing for the safety of this money must have forced itself on the attention of every one who was acquainted with the present system. He thought that the suggestion of the noble and learned Lord (Lord Westbury), that the sums received by the official liquidators should be paid daily into the Bank of England was to be preferred to the appointment of a select body of persons as official liquidators. In the latter case, if any abuse were to arise, the persons interested might turn round and blame not themselves but the Court that compelled them to choose a liquidator from a certain number of officials. It was hardly possible to have such a select body without the members of it in time becoming possessed with the idea—as in the case of bankruptcy—that they had vested rights, and were entitled to compensation if their offices were abolished. He quite approved of the proposal that any increase in the staff of Clerks should be 495 accompanied by an engagement to reduce them after the present pressure of business in Chancery had been got rid of. The winding-up business had interfered with the regular business of the Courts, and had led to serious public inconvenience. The present staff of the Court of Chancery was amply sufficient to discharge all the ordinary duties of the Court and to prevent any arrears occurring; but at present, notwithstanding that the two appellate Courts had been sitting, there was an arrear of nearly 100 appeals; while there were something like 50 Motions unheard, every one of which was as important as a cause. Such a state of things was productive of the greatest possible inconvenience. All the regular business of the Court of Chancery was interrupted in order that cases arising under the Winding-up Acts, which he admitted were most urgent and important, might be taken. When there were arrears in the appellate business the consequence was a great multiplication of appeals; because many a suitor, who, if he knew his appeal would be heard and determined within a week or two, would never think of appealing at all if he thought it would be delayed for a year, or perhaps two years, would deem it well worth his while to go the expense of the appeal, and to risk the loss of it, merely for the sake of the year or two's delay which it would give him. He trusted that the state of things to which he referred would pass away as the winding-up cases diminished; but he was sorry to say that up to the present time he saw but little prospect of such a diminution. He would ask their Lordships to consider at the proper time the propriety, in any alterations which they might make, of making them in such a form as that the establishment might be reduced in case the business hereafter should be diminished.
THE LORD CHANCELLOR
said, that some difficulties had occurred with regard to the mode of payment of those who had been engaged to assist in the discharge of the largely increased business of the Court of Chancery. No rule had as yet been decided upon as to how they were to be paid. The question of the appointment and remuneration of the official liquidator was one of immense difficulty. He was unwilling at the present time to discuss the proposition of the noble and learned Lord the Master of the Rolls for the appointment of a staff of liquidators, from which choice could be made when necessary 496 —not because he was afraid of the responsibility, but because he did not think the plan a good one, for the reasons given by the noble and learned Lord who had just sat down. It was absolutely necessary that the appointments now proposed should be made at once.
§ Motion agreed to: Bill read 2a accordingly, and committed to a Committee of the Whole House on Friday next.