HL Deb 11 August 1913 vol 14 cc1827-33

Order of the Day for the House to be put into Committee, read.

Moved, That the House do now resolve itself into Committee.—(Earl Beauchamp.)

On Question, Motion agreed to.

House in Committee accordingly.

[The EARL OF DONOUGHMORE in the Chair.]

Clause 1:

Power to prosecute offences summarily.

32 &33 Vict. c. 62.

1.—(1) Any offence under, or which may be dealt with as if it were an offence under, the Debtors Act, 1869, alleged to have been committed by a person who has been adjudged bankrupt, or in respect of whose estate a receiving order has been made, may be prosecuted summarily, and if so prosecuted references in the enactments creating those offences to the jury shall be construed as references to a court of summary jurisdiction:

Provided that—

  1. (a) the maximum term of imprisonment, with or without hard labour, which may be awarded by a court of summary jurisdiction for any such offence shall be six months; and
  2. (b) summary proceedings in respect of any such offence shall not be instituted after one year from the first discovery thereof either by the Official Receiver or by the trustee in the bankruptcy, nor in any case shall they be instituted after three years from the commission of the offence.

(2) Where the prosecution of a person for any such offence is ordered by the court, and the order of the court is made on the application of the Official Receiver and based on his report, the Board of Trade may, notwithstanding anything in section one hundred and sixty-six of the Bankruptcy Act, 1883 (herein-after referred to as "the principal Act"), themselves or through the Official Receiver institute the prosecution and carry on the proceedings, if or so long as those proceedings are conducted before a court of summary jurisdiction, unless in the course thereof circumstances arise which, in the opinion of such court or of the Board, render it desirable that the remainder of the proceedings should be carried on by the Director of Public Prosecutions.

EARL BEAUCHAMP

Paragraph (b), which I propose to amend, deals with the time limit. As the paragraph stands at the present moment it only refers to the Official Receiver or to the trustee in the bankruptcy, but there is yet a third party who occasionally does take proceedings, and that is the creditor. It is desirable that the limitation should apply to the creditor as well as the other parties concerned.

Amendment moved— Page 1, line 22, after ("bankruptcy") insert ("or, in the case of proceedings instituted by a creditor, by the creditor").—(Earl Beauchamp.)

On Question, Amendment agreed to.

Clause 1, as amended, agreed to.

Clauses 2 to 10 agreed to.

Clause 11:

Dealings with undischarged bankrupt.

11.—(1) All transactions by a bankrupt with any person dealing with him bonâfide and for value and without knowledge of his bankruptcy, in respect of property, whether real or personal, acquired by the bankrupt after the adjudication shall, if completed before any intervention by the trustee, be valid against the trustee, and any estate or interest in such property which by virtue of the enactments relating to bankruptcy is vested in the trustee shall determine and pass in such manner and to such extent as may be required for giving effect to any such transaction, and, where any such transaction is a transaction in the course of any trade or business carried on by the bankrupt, it shall be valid against the trustee, whether or not the person dealing with the bankrupt had knowledge of the bankruptcy. This subsection shall apply to transactions with respect to real property completed before the commencement of this Act in any case where there has not been any intervention by the trustee before that date. For the purposes of this subsection the receipt of any money, security, or negotiable instrument from, or by the order or direction of, a bankrupt by his banker, and any payment made to, or by the order or direction of, a bankrupt by his banker, shall be deemed to be a transaction by the bankrupt with such banker dealing with him for value.

(2) Where a banker has ascertained that a person having an account with him is an undischarged bankrupt then, unless the banker is satisfied that the account is on behalf of some other person, it shall be his duty forthwith to inform the trustee in bankruptcy or the Board of Trade of the existence of the account, and thereafter he shall not make any payments out of the account except under an order of the court or in accordance with instructions from the trustee in bankruptcy, unless by the expiration of one month from the date of giving the information no instructions have been received from the trustee.

(3) In the event of a second or subsequent receiving order being made against a bankrupt, any property acquired by him since he was last adjudged bankrupt which at the date when the subsequent petition was presented had not been distributed amongst the creditors in such last preceding bankruptcy, shall (subject to any disposition thereof made by the official receiver or trustee in that bankruptcy, without knowledge of the presentation of the subsequent petition and subject to the provisions of subsection (1) of this section) vest in the trustee in the subsequent bankruptcy, but any unsatisfied balance of the debts provable under the last preceding bankruptcy may be proved in the subsequent bankruptcy by the trustee in the last preceding bankruptcy.

(4) Where the trustee in any bankruptcy receives notice of a subsequent petition in bankruptcy against the bankrupt, he shall hold any property then in his possession which has been acquired by the bankrupt since he was adjudged bankrupt until the subsequent petition has been disposed of, and if on the subsequent petition an order of adjudication is made he shall transfer all such property or the proceeds thereof (after deducting his costs and expenses) to the trustee in the subsequent bankruptcy.

(5) Where a person has been adjudged bankrupt, nothing in any enactment relating to bankruptcy shall affect the rights of any person making title in good faith and for valuable consideration, and without knowledge of the trustee's title, through or under a person who has acquired from the bankrupt property which the bankrupt himself acquired after he was adjudged bankrupt.

EARL BEAUCHAMP moved to omit from the beginning of subsection (1) the words "and without knowledge of his bankruptcy." The noble Earl said: This is rather a complicated point affecting the protection of persons who are dealing with an undischarged bankrupt. It Ls the result of a good many negotiations which were entered into with various interested parties; and inasmuch as the Amendment which I move will put the Bill in the form in which it was recommended by a Departmental Committee which went into this question, we venture to think it will probably meet with the approval of your Lordships' House. The Bill as originally proposed, and as originally introduced, did not protect persons dealing with the bankrupt if such persons had knowledge of the bankruptcy, unless the transactions were in the course of the bankrupts trade or business. During the Report stage in the other House it was urged that persons so dealing with a bankrupt ought to have protection whether they knew about it or not, and in the result it was decided that that view should be agreed to. The first Amendment gives the protection accordingly in such cases, and the second one is merely consequential.

Amendment moved— Page 7, line 9, leave out from ("value") to ("in") in line 10.—(Earl Beauchamp.)

THE MARQUESS OF SALISBURY

I understand that these Amendments are additions to the Bill since your Lordships had it under consideration?

EARL BEAUCHAMP

Yes; that is so.

On Question, Amendment agreed to.

EARL BEAUCHAMP moved to omit from subsection (1) the words "and, where any such transaction is a transaction in the course of any trade or business carried on by the bankrupt, it shall be valid against the trustee, whether or not the person dealing with the bankrupt had knowledge of the bankruptcy."

Amendment moved— Page 7, line 16, leave out from ("transaction") to ("This") in line 20.—(Earl Beauchamp.)

On Question, Amendment agreed to.

EARL BEAUCHAMP

The next is a drafting Amendment suggested by the Institute of Bankers, to which we are glad to agree.

Amendment moved— Page 7, line 2E, after ("payment"), where that word last occurs in subsection (1), insert ("and any delivery of any security or negotiable instrument").—(Earl Beauchamp.)

On Question, Amendment agreed to.

EARL BEAUCHAMP

We propose to leave out subsection (5), which is consequential on the preceding Amendment. As the person dealing with a bankrupt will be protected by the Amendment to which your Lordships have already agreed, the subsection becomes unnecessary.

Amendment moved— Page 8, lines 20 to 26, leave out subsection (5) —(Earl Beauchamp.)

On Question, Amendment agreed to.

Clause 11, as amended, agreed to.

Clauses 12 to 14 agreed to.

Clause 15:

Protection, of sheriff, &c., selling goods under execution without notice of claim, by third party.

15. Where any goods in the possession of an execution debtor at the time of seizure by a sheriff, high bailiff, or other officer charged with the enforcement of a writ, warrant, or other process of execution, are sold by such sheriff, high bailiff, or other officer, without any claim having been made to the same, the purchaser of the goods so sold shall acquire a good title to the goods so sold, and no person shall be entitled to recover against the sheriff, high bailiff, or other officer, or anyone lawfully acting under the authority of either of them, except as provided by the Bankruptcy Acts, 1883 and 1890, for any sale of such goods or for paying over the proceeds thereof, prior to the receipt of a claim to the said goods: Provided that nothing in this section contained shall affect the right of any claimant who may prove that at the time of sale he had a title to any goods so seized and sold to any remedy to which he may be entitled against any person other than such sheriff, high bailiff, or other officer as aforesaid.

EARL BEAUCHAMP

This is really a drafting Amendment. It was never intended to protect the sheriff or other officer who acted negligently.

Amendment moved— Clause 15, page 11, line 4, after ("goods"), immediately before the Proviso, insert ("unless it is proved that the person from whom recovery is sought had notice, or might by making reasonable inquiry have ascertained that the goods were not the property of the execution debtor"). —(Earl Beauchamp.)

On Question, Amendment agreed to.

Clause 15, as amended, agreed to.

Clauses 16 to 27 agreed to.

Clause 28:

Application of Part I where receiving order made under s. 103 (5) of principal Act.

28. Where a receiving order is made against a debtor under subsection (5) of section one hundred and three of the principal Act, this Part of this Act shall apply as if for references to the presentation of a petition by or against a person there were substituted references to the making of such a receiving order.

EARL BEAUCHAMP

Your Lordships will see that although I move to leave out Clause 28 I move to put in as a new clause after Clause 40 the words set out. As it stands at the present moment this clause would only apply to the first part of the Bill, but we are anxious that it should apply to the rest of the Bill as well.

Amendment moved— Page 16, lines 21 to 25, leave out Clause 28.— (Earl Beauchamp.)

On Question, Amendment agreed to.

Clause 28, as amended, agreed to.

Clauses 29 to 34 agreed to.

THE DUKE OF DEVONSHIRE

I understand the new clause standing in my name is an agreed clause, but owing to a technicality could not be moved in the House of Commons. I beg to move.

Amendment moved—

After Clause 34, to insert the following new clause:

"Preferential payment to creditor an offence.

".If a trustee under a deed of arrangement pays to any creditor out of the debtor's property a sum larger in proportion to the creditor's claim than that paid to other creditors entitled to the benefit of the deed, then, unless the deed authorises him to do so, or unless such payments are either made to a creditor entitled to enforce his claim by distress or are such as would be lawful in a bankruptcy, he shall be guilty of a misdemeanour." —(The Duke of Devonshire.)

On Question, Amendment agreed to.

Clauses 35 to 40 agreed to.

EARL BEAUCHAMP

This is the new clause to which I have already referred. I beg to move.

Amendment moved—

After Clause 40 insert as a new clause (to form part of Part III):

"Application of Act when receiving order made under 46 &47 Vict. c. 52, s. 103 (5).

" . When a receiving order is made against the debtor under subsection five of section one hundred and three of the principal Act, this Act shall apply as if for references to the presentation of a petition by or against a person there were substituted references to the making of such a receiving order."—(Earl Beauchamp.)

On Question, Amendment agreed to.

Clause 41:

Short title, commencement, and interpretation.

41.—(1) This Act may be cited as the Bankruptcy and Deeds of Arrangement Act, 1913, and Part I of this Act shall be construed with the Bankruptcy Acts, 1883 and 1890, and may be cited with those Acts as the Bankruptcy Acts, 1883 to 1913, and Part II of this Act shall be construed with the Deeds of Arrangement Act, 1887, and may be cited with that Act and the Deeds of Arrangement Amendment Act, 1890, as the Deeds of Arrangement Acts, 1887 to 1913:

Provided that, notwithstanding that Part II of this Act is to be construed with the Deeds of Arrangement Act, 1887, no part of this Act shall extend to Ireland.

(2) This Act shall come into operation on the first day of January nineteen hundred and fourteen.

(3) In this Act, unless the context otherwise requires, the expression "the Debtors Act, 1869," means that Act as amended by the Bankruptcy Acts, 1883 to 1890, and any other enactment, including this Act.

EARL BEAUCHAMP

This Amendment is in order to give more time for making the necessary regulations, as there are a good many to be made.

Amendment moved— Page 22, line 24, leave out ("January") in subsection (2) and insert ("April").—(Earl Beauchamp.)

On Question, Amendment agreed to.

Clause 41, as amended, agreed to.

First Schedule agreed to.

Second Schedule:

EARL BEAUCHAMP

This is obviously a drafting Amendment.

Amendment moved— Page 26, line 33, after ("shall") insert ("where those words last occur").—(Earl Beauchamp.)

On Question, Amendment agreed to.

Second Schedule, as amended, agreed to.

The Report of Amendments to be received To-morrow, and Bill to be printed as amended. (No. 175.)