Senate
3 May 1966

25th Parliament · 1st Session



The PRESIDENT (Senator the Hon. Sir Alister McMullin) took the chair at 3 p.m., and read prayers.

page 689

AIR NAVIGATION (BUILDING CONTROL) REGULATIONS

Senator WILLESEE:
Western Australia

-I give notice that on Tuesday, 10th May next, I shall move -

That the Air Navigation (Building Control) Regulations as contained in Statutory Rule 1966 No. 6 made under the Air Navigation Act 1920-63 be disallowed.

For the information of honorable senators, let me say that I expect that either I or Senator Wood will this evening table the report in connection with this matter.

page 689

QUESTION

BORE CASINGS

Senator DRAKE-BROCKMAN:
WESTERN AUSTRALIA

– I ask the Minister for Customs and Excise whether he is aware of periodic shortages of bore casing in Western Australia and the devastating effect that these shortages have on the development plans of farmers, graziers and boring contractors. Will the Minister make adequate provision for bylaw entry of this essential material and, if so, will he take the necessary steps to ensure that when by-law entry is no longer necessary the by-law concession will apply to stocks already firmly ordered overseas, as distinct from landed stocks, as is the case at present?

Senator ANDERSON:
Minister for Customs and Excise · NEW SOUTH WALES · LP

– It has recently been brought to my notice that a shortage of bore casing could exist in Western Australia. My Department is at present examining a request for concessional tariff treatment of such cases. It will, of course, first be necessary to make inquiries to establish the extent to which bore casing is in short supply before’ I can make any decision on this matter. The customs by-law at this moment makes provision for the admission of certain water bore casings of not less than 8 inches external diameter free of duty at a preferential rate of 7½ per cent. ad valorem under the general rate. I am not able to comment on the question of intransit provisions until the results of the current inquiry are known.

page 689

QUESTION

EDUCATION

Senator BISHOP:
SOUTH AUSTRALIA

– I direct a question to the Minister in Charge of Commonwealth Activities in Education and Research. Is it a fact, as reported in today’s Press, that the Minister said at a Liberal and Country League convention in South Australia that the South Australian Government was in a very weak position to be claiming more funds for educational projects? When he made this statement, was he aware that the publication “ Education News “ of April 1966, issued by his Department - the Commonwealth Office of Education - establishes different proportions of budget expenditure as between South Australia and Victoria from those which were used by him, and that the publication referred to different accounting procedures which made it necessary for such calculations to be carefully examined? I also ask the Minister why he made this public criticism in South Australia instead of consulting the South Australian Minister for Education on these matters.

Senator GORTON:
Minister for Works · VICTORIA · LP

– Yes, it is perfectly true that I made the statement - which is also perfectly true - that the present Government of South Australia contributes less proportionately of its revenue budget to education than does any other State on the Australian mainland; that means, less than any other State in Australia except Tasmania. That is, in fact, the position. Victoria contributes some 32 per cent.; New South Wales, 31 per cent.; Queensland, about 24 per cent. and South Australia, 22.7 per cent. Only Tasmania contributes less. It is also a fact that the proportion of the revenue budget contributed to education by the present South Australian Government has dropped since that Government came into office, and is now lower than the proportion of the revenue budget contributed to education by the previous Government in South Australia.

It is entirely open to the State Government to decide its priorities and what it will give to education and other activities; but facts are facts and it is for the South Australian Government, and not me, to explain why it arrives at its decisions. There is no reason whatever why I should consult the South Australian Government as to the priorities it decides upon and which are its responsibility. There is no reason either why 1 should offer the South Australian Government advice but if requests are made for assistance from the Commonwealth Government, there is every reason why we should point out what is the present position.

page 690

QUESTION

VIETNAM

Senator SIM:
WESTERN AUSTRALIA

– I ask the Minister representing the Minister for External Affairs whether he has seen an article prepared by Marshal Lin Piao, Defence Minister and Vice-Premier of Communist China, in which foe outlined Peking’s intentions and concluded by saying -

Win Asia, Africa and Latin America through wars of national liberation and the United States and ils Western allies will be surrounded - will be encircled - will be overwhelmed. And where is this all to begin? lt has already begun and the place in which it has begun is Vietnam.

I ask the Minister: Does this statement further vindicate the Government’s assessment of the situation in Vietnam?

Senator GORTON:
LP

-In my opinion and in my belief the statement does further vindicate the position taken by the Australian Government regarding Vietnam.

page 690

QUESTION

THAILAND

Senator MULVIHILL:
NEW SOUTH WALES

– I direct a question to the Minister representing the Minister for External Affairs. Has the Minister seen a statement by Father Boningue, Professor of Literature at Bangkok National University, who is visiting Australia, expressing the view that the tempo of social development in Thailand is too slow and has a resemblance to Vietnam of six years ago? Can we have an assurance that the Australian Government, mindful of the lessons of the ill fated hamlet programme in South Vietnam, will ensure that these mistakes are avoided in future economic aid to Thailand?

Senator GORTON:
LP

– I have not seen the article to which the honorable senator has referred but it does not seem to me to follow that our economic aid to Thailand has produced any mistakes. That did not come clearly out of the question that was asked. It is not our prerogative as a Government to refer to the tempo of progress in Thailand but I would hope that outside powers would not seek to launch armed aggression on Thailand merely because they did not agree with its social progress.

page 690

QUESTION

EDUCATION

Senator DAVIDSON:
SOUTH AUSTRALIA

– I direct a question to the Minister in Charge of Commonwealth Activities in Education and Research. Will the Minister confirm his statement reported to have been made in South Australia yesterday that a committee or section of the Australian Labour Party had asked another body to conduct a survey of independent schools in order to discover for itself the areas in which State aid or Government aid would be of most value to those schools? Did the Minister express his gratification at these signs that the Labour Party was preparing to follow the lead of the Government in this matter? If so, does the Minister still feel gratification in view of the attitude of the Opposition’s advisory committee on education which, according to the “ Sydney Morning Herald “ today, has turned down any proposals for assistance to these schools?

Senator GORTON:
LP

– I based the statement to which the honorable senator has referred on the facts that some or all - I do not know which - of the members of the Australian Labour Party’s Education Committee had approached the New South Wales Association for Educational Freedom and had asked that Association to circularise independent schools throughout Australia to discover the areas in which financial assistance could be given with most effect, that approximately 2,500 Roman Catholic schools and approximately 200 non-Roman Catholic schools were so circularised, and that the information obtained had gone to the members of the Labour Party’s Education Committee; I had hoped that this indicated that the Labour Party no longer opposed and was now at least preparing to follow the Government’s lead in this matter. That was a source of some gratification to me. However, I must. admit that it appears from the report in today’s “ Sydney Morning Herald “ that those hopes will be dashed. The report, if it is correct, indicates that the Labour Party’s Education Committee has rejected all thoughts of, and all proposals for, direct assistance to independent schools.’ -

page 690

QUESTION

WHEAT

Senator McMANUS:
VICTORIA

– My . question is addressed to the Minister representing the Minister for Primary -Industry. In view of contradictory statements which I have seen in the Press, I ask: What is the purpose of the visit of Or. Callaghan, the Chairman of the Australian Wheat Board, and other representatives of the Board to Communist China?

Senator MCKELLAR:
Minister for Repatriation · NEW SOUTH WALES · CP

– I am not in a position to answer the question, ‘but I shall refer it to the Minister for Primary Industry and see whether I can obtain a reply for the honorable senator.

page 691

QUESTION

CIVIL AVIATION

Senator FITZGERALD:
NEW SOUTH WALES

– I direct my question to the Minister representing the Minister for Civil Aviation. In view of the great responsibilities that are entrusted to highly efficient, trained Australian air personnel, can the Minister state when we may expect settlement of outstanding industrial matters relating to hours of duty, salaries and fatigue duties, some of which have been the subject of inquiries which go back for years, in respect of all sections of air crew personnel employed by Qantas Empire Airways Ltd. and all other airlines, both Government and private? Is the Minister aware that industrial relations between air crew and management are at an all-time low? In view of the many difficulties that exist in this important industry, will the Minister for Civil Aviation direct that outstanding issues affecting air crews be dealt with as matters of great urgency?

Senator ANDERSON:
LP

– I think that the Senate as a whole would agree with the preamble to the question in which Senator Fitzgerald stressed the importance of the heavy responsibility that air crew personnel carry. I am not competent to answer that part of the question which relates to alleged current industrial trouble. I shall draw the attention of the Minister for Civil Aviation to the question. If he is in a position to give me some information, I shall certainly convey it to the honorable senator.

page 691

QUESTION

AUSTRALIAN BIRTH RATE

Senator CAVANAGH:
SOUTH AUSTRALIA

– I address this question to the Minister representing the Prime Minister: Is the Government concerned about the decline in the Australian birth rate? If so, has it any plans to arrest this decline? Does the Government think that one of the contributing factors could be an economic one? If so, will it make representations to the Commonwealth Conciliation and Arbitration Commission, which is now in session, for a wage that would make it unnecessary for wives to have to go to work to supplement family budgets?

Senator GORTON:
LP

– I do not think the Government believes that the decline in the Australian birth rate is a result of economic pressures, but naturally any significant decline must be of concern, not only to the Government, but also to Australians generally.

page 691

QUESTION

AUSTRALIAN NATIONAL UNIVERSITY JOURNAL

Senator WHEELDON:
WESTERN AUSTRALIA

– I refer the Minister representing the PostmasterGeneral to the action recently taken by the Postmaster-General in declaring obscene an issue of “ Woroni “, the Australian National University’s journal, which contained an article on Vietnam by Professor Arndt, and refusing postal facilities to the journal. Does the Government intend to take further action against the publishers of “ Woroni “ or Professor Arndt?

Senator ANDERSON:
LP

– Certain elements of the honorable senator’s question border on the absurd and I do not think they require an answer from me as the representative of the Postmaster-General. The honorable senator asked a question relating to the action taken against the publishers of a journal. The action taken was pursuant to the regulations under the Post and Telegraph Act, relating to the transit through the mails of matter which is considered to be objectionable.

page 691

QUESTION

NATIONAL DEVELOPMENT

Senator DITTMER:
QUEENSLAND

– I preface my question to the Minister representing the Minister for National Development by drawing to his attention the suggestion that Ministers have avoided answering questions. I do not think that is so. I think Ministers do not know how to answer them or will not answer them fully.

The PRESIDENT:

– Order! That is not a preface which can be permitted.

Senator DITTMER:

– Will the Government have a representative or an observer at the Conference of the National Council for Balanced Development to be held at Loxton in South Australia on 5th, 6th and 7th May as Sir Douglas Copland, an extraordinarily competent authority, has said - and justifiably se-that in the absence of any intention of the Government to plan, the National Council for Balanced Development will seek expert opinion which, in my view, the Government does not possess, and a commonsense approach on the formation of a draft 10-year plan for balanced development?

Senator MCKELLAR:
CP

– I am advised that the Department of National Development has just been made aware of the conference to which the honorable senator has referred and is sending to it an officer as an observer.

page 692

QUESTION

TELEPHONE SERVICES

Senator MURPHY:
NEW SOUTH WALES

– I ask the Minister representing the Postmaster-General: What is the explanation of the notorious general deterioration in the quality of the service given on trunk line and automatic telephone systems throughout Australia? What remedial action has the Government taken?

Senator ANDERSON:
LP

– The honorable senator has made a categorial statement which he did not justify in any way. Therefore he cannot expect me to answer it. Quite clearly, there have been some Press comments in recent times about the telephone services, consequent upon the extraordinarily heavy rain which fell last week in Sydney. It caused some dislocation of telephone services in certain areas, but that is in the nature of things that happen. It is true to say that the Postmaster-General’s Department has been working at tremendous pressure to bring the affected telephone services back into operation. I do not accept the honorable senator’s statement about the deterioration of telephone services. The Postmaster-General’s Department is a colossal department which is providing a magnificent service throughout Australia. I suggest that the telephone services across this huge continent, having regard to our size and population, are probably unequalled in the world.

page 692

QUESTION

CIVIL AVIATION

Senator FITZGERALD:

– My question is directed to the Minister representing the Minister for Civil Aviation. In view of the serious shortage of experienced pilots which has developed in Australia, will .the Minister consider the appointment of a committee to inquire into and make recommendations on the recruitment and selection of professional pilots for civil aviation services, and the facilities for and standards of training?

Senator ANDERSON:
LP

– 1 will refer the honorable senator’s question to the Minister for Civil Aviation. Frankly, I imagine that nobody is more competent to evaluate and undertake recruiting than the Department itself. Therefore, to suggest that an outside committee should be created for that purpose in respect of what is a highly technical and skilled profession, as an earlier question of the honorable senator’s indicated, seems to me to be a little out of balance. However, I will refer the honorable senator’s question to the Minister.

page 692

QUESTION

AUSTRALIAN BIRTH RATE

Senator CAVANAGH:

– I desire to ask the Minister representing the Prime Minister a question which arises out of his answer to my question earlier today. The Minister has informed me that the Government, is concerned with the decline in the Australian birth rate. I ask: As the Government considers the reasons for this decline are not economic, will the Government state its belief as to what these reasons are? Has the Government any plans to rectify the decline in the Australian birth rate?

Senator GORTON:
LP

– I do not propose to answer that question with a statement which purports to be a statement of Government opinion. But I would think that most people would answer the question by saying that the range of contraceptives and the ease with which they can be procured now are one reason why the Australian birth rate has declined. Allied with that fact is the desire on the part of the population generally to have a freer life, if that is the correct word-

Senator Dittmer:

– Is that the Minister’s idea of a freer life?

Senator GORTON:

– Let me finish. I said: “ If that is the correct word “.

Senator Dittmer:

– Is that the Minister’s idea of a freer life?

The PRESIDENT:

– Order!

Senator GORTON:

– I repeat: Allied with that fact is the desire on the part of the population generally to have a freer life, if that is the correct word, in the early years of marriage and not to have to devote time to children, as people previously had to do. In reply to the interjection from Senator Dittmer, I am not suggesting that that is my idea of a freer life at all. I am merely endeavouring to say how I think most .people in Australia would answer the question I was asked. J think they would answer it in the way I have answered it.

page 693

QUESTION

QUESTION UPON NOTICE

Senator BISHOP:

– I direct a question to the Minister representing the Minister for the Army. Is the Minister for the Army in a position to answer my question of 23rd March in connection with statements made by an ex-Minister for the Army that 50 per cent, of employer organisations were placing obstacles in the way of employees volunteering for service in the Citizen Military Forces?

Senator McKELLAR:
CP

– I will bring to the notice of the Minister, for the Army again the fact that this question remains unanswered.

page 693

QUESTION

AUSTRALIAN NATIONAL SOCIALIST PARTY

Senator COHEN:
VICTORIA

– I ask the Minister representing the Acting Attorney-General a question. I refer to reports of an incident on the Yarra Bank in Melbourne on Sunday last when members of the Australian National Socialist Party appeared in Nazi uniforms in a demonstration against the May Day parade. I did ask the Minister a question on the subject of this group last year. Is the Minister able to tell the Senate whether any investigation has been undertaken by the Commonwealth to see whether any breach of the law has been committed by this Nazi group?

Senator GORTON:
LP

– I cannot tell the honorable senator whether this is so at the moment. But I ask faim to put his question on notice so that the Acting AttorneyGeneral can provide him with an answer to it.

page 693

QUESTION

ROADS

(Question No. 764.)

Senator HENDRICKSON:
through Senator O’Byrne

asked the Minister representing the Prime Minister, upon notice -

  1. Has the Prime Minister had an opportunity to study the address delivered by Mr. Devitt, the President of the Australian Automobile Association at the 38th Annual Conference in Perth in November 1965, in which, referring to the activities of the Department of Shipping and Transport, he contends that shipping takes pride of place, that land transport in all its aspects is a “ poor relation “ and that this situation is dangerous and intolerable?
  2. If the Prime Minister has not seen or studied the reported address of Mr. Devitt, will he endeavour to do so and state whether the Government considers that a Department of Lund Transport should be established which would be responsible, at the Commonwealth level, for all forms of land transport, road and rail, and the Commonwealth Bureau of Roads, road safety, formulation of draft uniform traffic laws, motor vehicle standards, etc?
  3. fs it a fact that already the Australian Road Safety Council, Australian Road Traffic Code Committee, and the Australian Motor Vehicle Standards Committee come under the portfolio of the Minister for Shipping and Transport but the Government is not giving much attention to roads, road safety with all its implications, and kindred matters?
Senator GORTON:
LP

– The Prime Minister has supplied me with the following answers to the honorable senator’s questions - 1 and 2. As land transport outside the Territories comes within the constitutional responsibility of the State Governments, the Commonwealth’s role is largely restricted to the provision of financial assistance. The Commonwealth’s interests in land transport are appropriately included among the responsibilities of the Minister for Shipping and Transport and I see no reason for altering this arrangement, which has, of course, the added advantage of enabling the Minister to consider related problems of land and sea transport together.

  1. The Australian Road Safety Council, the Australian Road Traffic Code Committee and the Australian Motor Vehicles Standards Committee are specialised bodies established under the Australian Transport Advisory Council, which is a body of Commonwealth and State Ministers operating under the chairmanship of the Minister for Shipping and Transport. The Commonwealth Government, within its constitutional responsibilities, is giving most careful attention to roads and allied matters, and is providing considerable amounts of money by way of financial assistance to the Stales to enable them to carry out their responsibilities in these matters. Commonwealth expenditure and financial assistance to the States tor road works currently amount to more than one third of the total public authority expenditure under this heading. Commonwealth aid road grants amounting to $750 million are being provided over the five year period .1964-65 to 1968-69 inclusive. The Commonwealth Bureau of Reads has been established specifically for the purpose of investigating and reporting to the Commonwealth on matters relating to roads and road transport. Road safety is an essential part of virtually all aspects of road design, construction and administration, but in addition to the Commonwealth’s financial assistance to the States for roads generally, the Commonwealth is providing annual amounts of $300,000 towards the promotion of road safety practices. Of these annual amounts, $100,000 is in the form of financial assistance to the States towards their individual expenditures on road safety publicity and the remaining $200,000 is expended on road safety publicity at the national level.

page 694

QUESTION

OFFSHORE LIMITS

(Question No. 845.)

Senator MURPHY:

asked the Minister representing the Prime Minister, upon notice -

In order to protect the integrity of Australia, as well as the areas in our immediate vicinity and our fishing and other offshore industries, will the. Government give consideration to declaring a territorial limit more in keeping with the needs of this continent than any supposed three mile limit?

Senator GORTON:
LP

– The Prime Minister has supplied the following answer -

No extension of the breadth of Australia’s territorial sea is contemplated. Australia, together with Britain, the United States, Canada, New Zealand and a number of other countries, continues to maintain a territorial sea of three miles. Australia’s position in relation to the resources of the continental shelf beyond territorial limits is fully protected internationally without any extension of the territorial sea. Australia is a party to the Conven-tion on the Continental Shelf which recognises that a coastal country has sovereign rights over its continental shelf for the purpose of exploring and exploiting its natural resources, including petroleum and certain living resources such as pearl shell. Australian legislation exercising those’ rights in relation to pearling has been in force since 1953. Comprehensive Commonwealth and State legislation relating to offshore petroleum is in course of preparation.

With regard to fishing, the Government- is considering the question of extending from three to twelve miles the zone within which Australia may exercise exclusive jurisdiction over fisheries. In recent years, Britain, Canada and New Zealand, among other countries, have extended their fishing limits.

page 694

TARIFF BOARD

Reports on Items. Senator ANDERSON (New South Wales - Minister for Customs and Excise). - I present the report by the Tariff Board on the following subjectCollapsible sun lounges (Dumping and Subsidies Act).

This does not call for any legislative action.

Pursuant to statute, I also present the report by the Special Advisory Authority on -

Stainless Steel.

page 694

UNITED NATIONS FORCE IN CYPRUS

Ministerial Statement. Senator GORTON (Victoria - Minister for Works). - by leave - I. wish to inform the Senate that the Secretary-General of .the United Nations is being advised that. Australia will once again accede to his request for continuation of an Australian police element in the United Nations force in Cyprus.

This will be the third group of Australian police to serve with the United Nations force in Cyprus. The Senate will recall that Australia provided 40 police in response to the inital appeal of the Secretary-General in 1964. They were made available through the active co-operation of the State Governments and they served in Cyprus for 12 months from 25th May 1964. The second group is drawing to the end of ils 12 month tour of duty and the Government’s decision will mean that it will be returned to Australia late in May this year and a new contingent sent in its place. The AttorneyGeneral (Mr. Snedden) has begun the necessary negotiations with State Governments to this end and it is hoped that there will be no break in the continuity of an Australian contingent in Cyprus.

The role of the United Nations force in Cyprus was laid down by the Security Council on 4th March 1964. In the interests of preserving international peace and security, the force was directed “ to use its best efforts to prevent a recurrence of fighting and, as necessary, to contribute to the maintenance and restoration of law. and order and a return to normal conditions “.

The United Nations force is a mixed one which includes some 5,000 troops from 7 countries and 175 police from 5 countries.

One of the important functions of the force is concerned with police duties and it is appropriate that they should be carried out by civil policemen who are trained to such duties, rather than by military personnel. The Australian members, as in the past two years, will perform liaison functions between the United Nations force and the Cyprus police and local authorities. They will undertake joint patrols with Cyprus police, establish joint checking posts and police posts to control and protect civilians. They will assist in the investigation of incidents and will undertake special investigations as necessary.

The Australian police in Cyprus have performed their duties with distinction. This has been recognised not only by United Nations officials but by the Cypriot authorities and others who have been concerned with the situation in Cyprus. There has been a widespread desire for Australian police to continue to serve in the United Nations force.

It is a matter of regret that the problems which have beset Cyprus have not yet been settled. While the situation has been relatively calm for some time, due no doubt mainly to the continued presence of the United Nations force, there is still a need for constant vigilance. I have no doubt that the third Australian contingent which will go to Cyprus will in discharge of its delicate task maintain the high standards which have been set by its predecessors.

The Australian Government has agreed to meet the cost of salaries and allowances and transport to and from Cyprus for members of its police contingent and in addition has so far contributed $US786,875 towards the cost of the United Nations force in Cyprus.

page 695

ASSENT TO BILLS

Assent to the following bills reported -

Loan (Housing) Bill 1966.

Post and Telegraph Bill 1966.

page 695

QUARANTINE BILL 1966

Bill received from the House of Representatives.

Standing Orders suspended.

Bill (on motion by Senator Dame Annabelle Rankin) read a first time.

Second Reading

Senator Dame ANNABELLE RANKIN:
Minister for Housing · Queensland · LP

[3.34]. - I move -

That the Bill be now read a second time.

The purpose of this Bill to amend the Quarantine Act is to provide measures of quarantine under which new arrivals in Australia, who cannot satisfy the quarantine officer that they are not suffering from active pulmonary tuberculosis, may be required to undergo medical examination. This measure, and the administrative machinery that will accompany it, will further strengthen the arrangements that have been developed by the Menzies Government in co-operation with the State Governments to reduce the incidence of tuberculosis in Australia.

The joint Commonwealth and States tuberculosis campaign is commonly regarded as having been very successful and I would be surprised if any honorable senator disagrees with this view. The very effective liaison that exists between the Commonwealth and the States in conducting the campaign, coupled with the willing co-operation of the man in the street, has produced a situation in which tuberculosis in this country, although still serious, is ceasing to be a major health risk. Indeed it is precisely because the incidence of tuberculosis in Australia has been significantly reduced that, to make the campaign even more effective, it has been necessary to give increased attention to sources of infection from other countries.

Under existing immigration procedures, all migrants coming to Australia under Government assisted passage schemes and all non-British migrants travelling as full fare passengers are already required, before embarkation, to show by undergoing X-ray examination that they are not suffering from pulmonary tuberculosis. Up to the present, however, full fare passengers of British nationality have not been required to have a chest X-ray or medical examination. These new arrivals to this country could be. suffering from tuberculosis and constitute a potential source of tuberculous infection to the Australian peeople.

Arrangements are being made, therefore, for all British subjects, with some exceptions which I shall mention later, wishing to remain in Australia permanently or for longer than 12 months, to have chest X-ray examinations and obtain certificates indicating they are not suffering from active pulmonary tuberculosis before embarkation. No matter how efficient such arrangements are, some persons, intentionally or otherwise, will not have had a chest X-ray before arriving in Australia, and it is proposed to seek the power, by this Bill, to require persons, who cannot produce evidence that they are not suffering from active pulmonary tuberculosis, to undergo medical examination following their arrival in Australia. It is also proposed to require these persons, if found to be suffering from tuberculosis, to undergo quarantine. They can then be treated for the disease. It is not intended to apply these arrangements to specific classes of people who will be exempted under the regulations to the Quarantine Act. These classes include such persons as arrivals from New Zealand, where an acceptable anti-tuberculosis scheme exists, short-term visitors, children under 12 years of age, who are not normally submitted to X-ray examinations, and members of the armed forces of the Crown entering on duty.

The purpose behind this Bill is in keeping with the public health and quarantine principles that have been developed in Australia, aimed at keeping Australia one of the healthiest countries in the world. By the end of this financial year, over $200 million will have been spent by the Commonwealth since 1949 in the attack on tuberculosis. This is in addition to expenditure by the State Governments. 1 for one regard this expenditure, along with other expenditure directed at improving the health of the nation, as being well worthwhile. The amendment to the Quarantine Act will assist lis to get greater value for the money that has been spent by making the national tuberculosis campaign more effective. I commend the Bill to honorable senators.

Debate (on motion by Senator 0’Byrne adjourned.

page 696

HOUSING AGREEMENT BILL 1966

Motion (by Senator Dame Annabelle Rankin) - by leave - agreed to -

That leave be given to introduce a Bill for an Act relating to financial assistance to the States for the purpose of housing.

Bill presented, and read a first time. Standing Orders suspended.

Second Reading

Senator Dame ANNABELLE RANKIN:
Minister for Housing · Queensland · LP

[3.39], - I move -

That the Bill be now read a second time.

Mr. President, authority to make advances under the existing Commonwealth State Housing Agreement expires on 30th June this year. The purpose of this Bill is to pave the way for the Commonwealth to continue to make housing advances to the States at a concessional rate of interest for a further period of five years from 1st July next. For this purpose, the Bill seeks the approval of the Parliament for the Commonwealth to execute an agreement with the States, substantially in accordance with the form contained in the Schedule to the Bill, and authority for the Treasurer to make housing advances to the States in accordance with the terms and conditions of the executed agreement.

The terms and conditions on which the advances would be made under the new agreement, are basically the same as those that now apply under the existing agreement. The new agreement has been drafted in the form of a five year extension of the existing agreement - with certain amend. ments. This form is preferred by the States for administrative reasons. Indeed, the existing agreement is itself an extension of the 1966 Agreement as amended in 1961. I have been advised by the State Housing Ministers that the substance of the agreement annexed to this Bill is acceptable to them and that they propose recommending its acceptance by their Governments.

To assist honorable senators and to avoid any misunderstanding, I shall refer here? after to the new Agreement that is annexed to the Bill as the “ annexed Agreement “ and to the 1956-61 Agreement, a copy of which I have circulated to each honorable senator, as the “ existing Agreement “. The proposed amendments do not disturb the basic principles of the 1956 Agreement. It is worthy of note that these principles have endured the test of time and have recently been affirmed by the present Government after a most searching review of the Commonwealth’s role in the important field of housing.

Mr. President, it is of more than historical Interest to compare the principles introduced into the 1956 Agreement by the Menzies Government with those of the 1945 Housing Agreement for which the then Labour Government was responsible. The differences are as wide as the gulf between the political philosophies of the present Government and the Opposition. Whereas the 1945 Agreement imposed conditions that discouraged the purchase of government-built houses, the 1956 Agreement facilitated such purchases in consonance with this Government’s policy of home-ownership. During the first nine years of the operation of the 1945 Agreement, only 3,629 houses were sold. In the first, nine years of the operation of the 1956- 1961 Agreement, a total of almost 40,000 houses were sold.

But the 1956 Agreement went much further in encouraging home-ownership. It inaugurated the Home Builders’ Account arrangements to assist the development of the building society movement and to encourage the erection and acquisition of privately-built homes. Between 1st July 1956 and 30th June 1965, more than 40,000 private dwellings were financed by building societies and other approved institutions with funds advanced from the Home Builders’ Accounts. Obviously, the Home Builders’ Account arrangements have been tremendously popular. The great bulk of our people seeking homes wish to live in privately-built homes of their own choice. Advances made through the Home Builders’ Account provide many home seekers with this freedom of choice by making available loans on very reasonable terms and conditions. The Government has every reason to be proud of the part it is playing through its housing agreements in making Australia a country with one of the highest ratios of home ownership in the world today.

A further vital difference between the Agreements of 1945 and 1956 was in the method of assisting the States to meet the cost of rental rebates granted in respect of dwellings occupied by families and persons who could not afford to pay full economic rents. The 1945 Agreement contains a detailed formula for determining the losses incurred by the States in the administration of their rental housing projects. Under the formula a State has to demonstrate that it has complied with certain conditions. The Commonwealth meets 60 per cent, of the losses so determined. The Menzies Government preferred not to impose onerous conditions and detailed supervision on the States. The 1956 Agreement provided that the Commonwealth would make advances to the States at a concessional rate of interest, in practice 1 per cent, below the long-term Commonwealth bond rate. It is left to the States themselves to decide how the interest concessions may best be used to meet the cost of rental rebates to needy families, and assist the financing of home sales. From time to time honorable senators opposite would have us believe that the States are worse off in this respect than under the 1945 Agreement. The fact is that, in recent years, only Western Australia and Queensland have been able to meet the conditions for loss sharing under the 1945 Agreement. The difficulties in its practical application are such as to deny most States the full benefits it purports to confer.

There is one matter I do wish to make clear to all honorable senators. The Housing Agreement, important as it is, is not the sole means by which the Commonwealth provides housing assistance to families and persons living in the States. In addition to the home savings grant and housing loans insurance schemes, we offer housing assistance under the War Service Homes and Aged Persons Homes Acts. Moreover, I am continuing to give consideration to the needs of aged persons for adequate minimum hous-ing at reasonable rentals, and the problems that arise from re-housing those living under slum conditions. These matters are currently under examination by my Department.

Mr. President, the Government’s political opponents have often claimed that the Housing Agreement does not go far enough towards solving Australia’s housing problems. It was never intended to solve all these problems. The Housing Agreement is designed primarily to assist families, including aged persons, of low or moderate means to obtain adequate housing at a reasonable price. Dwellings built by the States under the Housing Agreement account for less than 20 per cent, of all dwellings built in Australia. The vast majority of our people ure able, and prefer, to set about obtaining a privately-built home.

Let me now explain the amendments that the annexed Agreement would make to the existing Agreement. Clause 2 of the annexed Agreement provides for the extension of the definition in the existing Agreement of “ member of the forces “, in respect of whom the States are required to grant a measure of priority in the allocation of homes. The effect of the amendment would be to include those persons who, whilst members of the defence forces, served on special service in South Vietnam or Malaysia, or in any other area that may subsequently be declared by regulation under the Repatriation (Special Overseas Service) Act to be a special area for the purposes of repatriation and war service homes benefits. Apart from the amendments necessary to extend the operation of the existing Agreement for the further five years, there is the amendment, set out in clause 7 of the annexed Agreement, which would delete sub-clause (2.) of clause 11 of the existing Agreement. Sub-clause (2.) of clause 11 provides that, unless the Commonwealth and the appropriate State Minister agree, advances may not be used by a State to erect, outside the inner metropolitan area, a block of flats exceeding three stories in height above the main entrance level. The purpose of this sub-clause was to ensure that a sizable investment was not made in large blocks of flats in a particular area without due and proper regard being paid to overall environmental factors in that area. However, the States consider this provision to be unduly restrictive and that it should be deleted. We have agreed to this request. Clause 8 of the annexed Agreement proposes a further amendment of the existing Agreement. Clause 1 3 of the existing Agreement would be amended by replacing the existing sub-clause (2.) with a new provision.

The moneys used for the erection of the Service dwellings consist of amounts set aside by the States pursuant to clause 7 (1.) of the existing Agreement and the amounts of matching and additional advances provided by the Commonwealth under Service votes in accordance with the provisions of clause 7 (2.). During the operation of the 1956-1961 Agreement, the Commonwealth had advanced, up to 30th June last, a total of almost $33£ million as matching and additional advances towards the provision of nearly 8,000 dwellings for serving members of the armed forces. The dwellings cost more than $58 million. Unlike the civilian population, Service tenants normally occupy the dwellings they are allotted for limited periods only, as they are subject to frequent transfers in accordance with Service needs. Servicemen’s families may therefore be faced with the recurring problem of having to provide and install semi-fixed items such as fly-screens, blinds, linoleum and the like, not normally provided in a government home. In addition, because of his transient circumstances, the serviceman tenant frequently has a covered storage problem that is not catered for in the standard type dwelling. These items are listed in the scales and standards for married quarters approved by the Minister for Defence. Under the existing Agreement there is some doubt whether the States may use advances to erect Service dwellings in accordance with these approved scales and standards. Sub-clause (2.) of clause 13 says service dwellings shall be of a size and standard normally erected by the State under the Agreement. The proposed amendment would remove , such doubts. Although there would be no compulsion on the States to provide dwellings of the Services’ approved scales and standards, I am extremely hopeful that the States will see their way clear to do so. I am confident that the Commonwealth and the States will co-operate to ensure that servicemen’s families are housed itv a manner adequate to their special circumstances.

The final amendment proposed to the existing Agreement is found in clause 9 of the annexed Agreement. It involves- the insertion in the existing clause 16 of a new sub-clause (3aa) and of a new sub-paragraph (ca) to sub-clause (3 b.), and consequential changes in that clause. The amendment is designed to improve the lot of rural workers and other people in rural areas who are often deprived of the benefits of the Home” Builders’ Account provisions because there are no building or housing societies operating in their areas. We must not overlook the needs of such people. In keeping with the majority of Australians, they should have the opportunity to borrow on reasonable terms and conditions to buy or build their own homes in the villages and towns within reasonable distance of their place of employment. If they cannot, they will inevitably swell the ranks of those moving from the country to our already overcrowded cities.

Both Government and Opposition senators have on many occasions deplored the social and economic implications of the continued shift of population to the cities, and I am confident that the amendment that the Government proposes will be welcomed by all honorable senators.

The proposed amendment would permit a State to allocate during each of the next five years a portion of the moneys available in the Home Builders’ Account to a government lending institution for lending to persons seeking to buy or build homes in rural areas. For this purpose, a rural area would be regarded as an area in which there is no building society and in which it would be difficult to form one and administer it efficiently.

Under the existing Agreement, a State is required each financial year to obtain the approval of the Commonwealth Minister to the allocation of a portion of the moneys available in the Home Builders’ Account to an institution other than a registered building or housing society. The proposed amendment would do away with annual approvals for allocations to institutions wishing to make loans in rural areas. A State would simply seek the necessary approvals of the Commonwealth to an- arrangement, consistent with the amended provision, that would apply to advances for the next five years. It is envisaged that the terms of the approvals would permit the State to allocate up to JO per cent, of the moneys available in the Home Builders’ Account in any financial year to an appropriate government bank or other, acceptable lending institution for housing advances in rural areas.

Mr. President, the existing housing Agreement has been of tremendous benefit to many young families, aged persons and newcomers to Australia seeking to buy or build homes with the asssistance of loans on reasonable terms and conditions, or- to lease homes at rentals they can afford to pay. Acceptance of the proposed new Agreement will mean that these benefits will continue to be available for a further five years, and (he proposed amendments are intended to extend the scope of these benefits, especially to servicemen’s families and persons living outside our capital cities. I commend the Bill to the Senate.

Debate (on motion by Senator McKenna) adjourned.

page 699

BANKRUPTCY BILL 1966

Second Reading

Debate resumed from 28th April (vide page 685), on motion by Senator Gorton -

That the Bill be now read a second time.

Senator COHEN:
Victoria

.- When the debate was adjourned, 1 had been stating the attitude of the Opposition to this Bill. In brief, I said the Opposition welcomed the comprehensive redrafting of the Bankruptcy Act but was dissatisfied with certain aspects of the Bill. I informed the Senate that the Opposition would move certain amendment in the Committee stage. I dealt with some aspects of the Bill which represented an acceptable advance on the existing provisions. In particular I referred to the proposal to raise the amount of indebtedness necessary to found a creditor’s petition from $100 to $500. I mentioned that the existing provision of $100 had stood since it had been taken over from an English statute of 1869. lt is high time that these amounts were brought up to date. A similar adjustment has been made in several other respects. I referred to the reallocation of priorities that have to be followed on the distribution of a bankrupt’s estate, as set out in clause 109 of the Bill. We welcome the fact that for the first time there is to be a separate priority in respect of amounts due to employees for long service leave, annual leave, sick leave and so on. We welcome also the fact that the amount to be afforded priority for ordinary salary and wages in respect of any one employee has been increased from $100 to $600. The fact that the increase is so large indicates just how much the Bill is overdue in these respects. One might have hoped that the amount stated for priority would be larger. It is clear that the Government has to take a substantial step to make these amounts mean anything in contemporary money terms.

The amount to be afforded priority for workers’ compensation is to be increased from $400 to $2,000. Again, that increase is long overdue. At the Committee stage we will be moving an amendment to clause 109(l.)(g), which deals with workers’ compensation. In the view of the Opposition, the words “ by accident “ should be deleted. It is not my purpose at this stage to go into the reasons for the amendment. Suffice it to say that since the Bankruptcy Act was first passed many years ago there have been substantial changes in the conditions under which workers’ compensation has been payable, not only in the Commonwealth sphere, but also in several of the States. It will be our purpose to draw attention to the anomalous position that has been created by amendments in the States and to the inadequate protection that will be afforded to injured workmen by the clause in its present form. As I .said earlier, I shall deal with that matter at the Committee stage. The proposed increases in all these amounts will be an acceptable advance.

In clause 1 16, which deals with certain matters that are to be excepted from property that will be available for division amongst the bankrupt’s creditors, some recognition has been given to the need for a workman to keep his tools of trade. At the Committee stage in another place, the Attorney-General (Mr. Snedden) accepted an amendment to the original Bill that was introduced by him in May 1965, so that ordinary tools of trade, plant and equipment, professional instruments and reference books not exceeding in the aggregate $500 in value may be retained.

Senator Wright:

– What unfortunate persons are indicated by the term “ reference books “?

Senator COHEN:

– I do not know.

Senator Wright:

– Do you not think that some kindly thought has been shown for the legal practitioner?

Senator COHEN:

– That may be so. Per- . haps the term “ tools of trade “ is not the proper way in which to describe the equipment which a legal practitioner uses in his work. Incidentally, I direct attention to the fact that in the circulated copy of the second reading speech that was delivered by the Minister for Works (Senator Gorton) it was stated that the Bill seeks to raise from $100 to $600 the value of tools of trade that may be retained by a bankrupt without reference to the creditors or the Court. The Bill states $500.

Senator Gorton:

– I advise the honorable senator to follow the Bill.

Senator COHEN:

– May we take it that it is correctly stated in the Bill?

Senator Gorton:

– I would think so. I shall find out whether a misprint has occurred in the Bill.

Senator COHEN:

– I shall assume that it is correctly $500. Beyond that, of course, there is still an opportunity for a bankrupt to persuade a trustee that an amount beyond $500 should be set aside from property available to the creditors, but there is no entitlement as of right beyond $500. Those matters are all acceptable amendments to the present legislation.

I wish now to deal wilh one or two matters in respect of which we believe that the present Bill will be retrograde in its operation. First, clause 39 seriously interferes with the present right of appeal in bankruptcy matters. Prior to the introduction of this legislation, section 26 of the Act provided for an appeal to the High Court in any bankruptcy matter.

Senator Wright:

– As of right.

Senator COHEN:

– As of right. I do not know why the Attorney-General should have found it necessary to limit the right of appeal. When the Bill was introduced in another place, the only appeal as of right was from a sequestration order. As a result of representations made to the AttorneyGeneral and stressed during the course of the debate at the Committee stage in another place, he agreed to add to those matters in respect of which appeals could be lodged as of right, any sentence imposed by a court in a criminal matter.

Senator Wright:

– But only on a question of law.

Senator COHEN:

– That is so. Apart from those limited areas in which an appeal remains, no appeal will now lie except by leave of the High Court.

Senator Wright:

– It is very important, because a judge has power to convict here on certain offences where there is no entitlement to a jury.

Senator COHEN:

– -That is perfectly correct. Offences are created by this Bill which may be determined by a judge; indeed, by a court of summary jurisdiction other than the Bankruptcy Court. I invite the attention of honorable senators to the provision which distinguishes between matters triable by a court of summary jurisdiction and matters triable by the Bankruptcy Court. In any event, during the course of the debate at the Committee stage, the Opposition will be moving to guarantee to any person who is in jeopardy of imprisonment for any offence against this legislation his right to a trial by jury, if he so elects. On our reading of this Bill, he has no such right and it is left to the court dealing with the matter to determine whether it is an appropriate case to dispose of summarily, or whether a defendant should be committed for trial. As Senator Wright has said, the absence of a right to trial by jury operates in the context of a very limited area in which appeals to the High Court can be made as of right. We can see no justification for cutting down the right of appeal. It exists in other cases where there is a final order and the amount of property is $3,000 or more. We can see no reason why a person involved in the bankruptcy jurisdiction should not have the same right of appeal. We will be pressing that matter very strongly during the debate at the Committee stage.

We do hot propose to move amendments in respect of some matters in the Bill which, however, I think call for comment. The Minister for Works, who represents the Attorney-General in the Senate, in his second reading speech when dealing with the increase in the amount of indebtedness necessary to found a creditor’s petition from $100 to $500, said that the raising of the indebtedness will lessen the opportunity to use the bankruptcy procedures as mere debt collecting machinery. That is a statement of intention with which I think we can all agree, but it seems to me to be doubtful whether the Bill will have that effect, because an essential ingredient in any Bankruptcy Act is that it should not be used as an ordinary debt collecting process. The Attorney-General seems to wish that approach well, but he was referring only to the raising of the sum of indebtedness from $100 to $500. The process of the bankruptcy notice is not tied to a particular sum. As I understand the Act, it can relate to any amount either below or above $500. I invite honorable senators’ attention to clause 40 which deals with acts of bankruptcy.

Senator Gorton:

– 1 think the honorable senator is looking for clause 40(l.)(d).

Senator COHEN:

– No. It is clause 40 (1.) (g), which relates to a debtor’s failure to comply with a bankruptcy notice. It is not specified that the amount of the debt has to be a minimum of $500, which is required to found a creditor’s petition. In other words, a bankruptcy notice can be served for £50 alleging that that is the amount of the judgment debt and requiring compliance with it. It is not necessary to have a minimum amount specified in the bankruptcy notice. If a debtor fails to pay up in response to a bankruptcy notice, there can be no further proceeding - there can be no process for a sequestration order on a creditor’s petition, unless the amount involved is $500 or more. I am subject to correction, but I have always understood that to be the position.

Senator Gorton:

– I am told that it is possible to have an execution - if that is the correct word - for a smaller amount, but not to make a man bankrupt for that amount.

Senator COHEN:

– It is not possible to get a sequestration order.

Senator Wright:

– That is because the petitioning creditor must have a debt of $250, but can issue a bankruptcy notice for $100. If there is a debt of $600, he can issue a petition on it. Does not the creditor who issues the bankruptcy notice have to be the petitioning creditor?

Senator COHEN:

– I believe so.

Senator Wright:

– Would that not make the requirement of $250 essential for the bankruptcy notice?

Senator COHEN:

– I am merely saying that the requirement is not specified in the Act. One always runs the danger of creditors wanting to use the processes of the Bankruptcy Act as mere debt collecting machinery. The Clyne Committee dealt with this subject matter at some length. Indeed, the Committee had before it a suggestion from the Organisation and Methods Section of the Commonwealth Public Service Board recommending in substance the abolition, of the act of bankruptcy based on a failure to comply with the bankruptcy notice. According to the Committee’s estimates, some 95 per cent, of all the creditors’ petitions presented were based on that particular act of bankruptcy. Apparently the Canadian legislation does not have this provision. The Clyne Committee did not accept die recommendation of the Organisation and Methods Section and indicated that a similar recommendation had not been accepted in the United Kingdom. Nevertheless, it is important to be on guard against using the bankruptcy provisions merely for the convenience of creditors in collecting debts.

Senator Wright:

– What was the interest of the Organisation and Methods Section in this matter?

Senator COHEN:

– I am not quite sure how the interest arose, but this is referred to in Sections 54 to 63 of the report of the Committee appointed by the AttorneyGeneral of the Commonwealth to Review the Bankruptcy Law of the Commonwealth.

I wish to say one or two things more about this legislation. First, the AttorneyGeneral said that it is one of the lengthiest pieces of legislation ever to be introduced into this Parliament. That is undoubtedly true. As a matter of interest, I mention that this Bill is much longer than any comparable statute in any of the countries and jurisdictions to which one might want to make reference. The Canadian Act of 1949, which is regarded by many as a model act, runs to 172 sections only. The English Act has 169 sections and the Deeds of Arrangements Act in England, which is separate from the Bankruptcy Act, runs to a further 32 sections, making a total of 201 sections.

Senator Wright:

– But surely Canberra cannot take second place in either the length or complexities of legislation?

Senator COHEN:

– I am coming to this point. The South African Act runs to 159 sections. The Bill now before the Senate will increase the number of sections in the Bankruptcy Act from 223 to 315. I suppose that we can contemplate that in due course bankruptcy rules will have to be promulgated. Some 481 such rules are to be found under the existing legislation. It is obvious that although in many respects this is a welcome attempt to streamline the legislation we are not necessarily going to obtain simplified legislation. We may get more complicated legislation out of this Bill in the long run.

The other matter to which I wish to refer is this: There does seem to be in the Bill rather too much emphasis on the proliferation of offences. New offences are created under this Bill. Increased sentences for certain existing offences are provided. With relation to new offences, I refer honorable senators particularly to the offence created by clause 185 and clause 265 (8.), and also clause 271. These are new offences which deal with gambling or hazardous speculations by a bankrupt. I do not know whether the “hear, hear” I just heard was to spur the bankrupt on or to welcome the addition of heavier penalties. But it seems to me that we are getting back a little bit to the attitude of mind to be found in the early history of bankruptcy legislation when the main object was to punish the offender. The purpose of a modern bankruptcy statute I think, is to provide for the orderly distribution of the property of a bankrupt amongst his creditors on a pari passu, subject of course, to the privileged claims, and to permit a bankrupt to receive eventually a complete discharge of his debts in order that he may be able to integrate himself into the business life of the country as a useful citizen, free from the crushing burden of debt.

I agree that it is proper in the right case to punish people who have been guilty of fraud upon their creditors where that fraud can be established. But there seems to be a tendency in this proposed Act to multiply the number of cases where penalties can be incurred by persons involved in bankruptcy. The Opposition intends, in the Committee stage, to move an amendment which would have a sobering effect - I do not use that word offensively - a steadying effect, on prosecutions. We believe that, under the present system which in some cases involves a judge of the Bankruptcy Court being able to recommend or to order that a bankrupt be prosecuted for his offence, there is the unhappy suggestion of the judge who will eventually try the case ordering that the defendant be prosecuted. If that is to be replaced by the proposed system, we think that it is proper that no prosecution should be commenced without the consent of the AttorneyGeneral. There was not a huge number of prosecutions under this legislation last year. In fact, there was a comparatively small number. Some 14 offences were reported by the Attorney-General in the Thirty Seventh Annual Report on Bankruptcy in respect of the year July 1964 to June 1965. We do not think it would be a serious administrative difficulty for the Attorney-General to be required to give his written approval to any prosecution under the Act.

Those are the main matters that I wanted to discuss in the second reading debate. The Opposition will support the Bill at this stage but will move amendments to the Bill in Committee.

Senator WRIGHT:
Tasmania

.- The Senate is being given the opportunity now to- discuss a consolidated Bankruptcy Bill which is the product of the consideration of bankruptcy by an external body known as the Clyne Committee. This investigation commenced in 1956. That Committee supplied to the Attorney-General (Mr. Snedden), who in turn supplied to the Parliament, a report which came before us in 1962. 1 am bound to say at the beginning of the remarks that I wish to make to the Senate that I regard the report as a most valuable document revealing as it does in my judgment erudition and industry in this field of legal study that are of great value to the Parliament. I wish to express a deep sense of indebtedness to that Committee for the study of the subject that the report reveals.

IN the second place, I am bound to say that the delay in the Committee’s procedures from 1956 to 1962 indicates to mc that study of the subject was interrupted by a need to meet many other obligations. Therefore, it is apparent that all the recommendations in the report cannot be regarded as having the force of the unanimous opinion of the Committee. Furthermore, it would be a commonsense inference to me that many of the opinions expressed in the report are disadvantaged by disjointed consideration. This is not a case of study being purposefully and exclusively pursued for a period.

I am bound also to say that the delay from 1962 to 1966 has perhaps occurred because of consultations between the AttorneyGeneral and interested sections of the community and that, if this is so, it has not been referred to sufficiently in the second reading speech. Because the Parliament has the final responsibility to formulate this measure, I would have wished that the Parliament itself would have adopted some committee procedure so that either House of the Parliament, or the two together, could have made a general review of the subject and so that intricate matters of bankruptcy law and their impact upon the community could have been considered in a way more conducive to resultant clarity than is the speech making that goes on in general committee. However, no such special committee has been set up, and I shall not discharge my responsibility if I abstain from the Committee debate. I am greatly interested in what Senator Cohen has said as an indication of his Party’s proposals for that debate. I have circulated some amendments on my own account and I hope that if we proceed to the Bill in the ordinary way by general Committee consideration they will all receive ample consideration by the Committee. So much by way of preliminary.

I now turn to the annual reports which have to be submitted to the Parliament by the Attorney-General under the existing legislation. It is sufficient if I refer to the Attorney-General’s Thirty-Seventh Annual Report on Bankruptcy for the year 1st July 1964 to 30th June 1965. I notice that in that year the total number of bankruptcies and schemes or deeds of arrangement was 2,704. The total number of sequestration orders and orders in respect of deceased persons’ estates was 2,453. I will not cite all the figures.” I shall only point out that in 1956-57 the total number was 1,200, in 1949-50 it was 333, in 1946-47 it was 114, in 1929-30 it was 1,425 and in 1928-29 it was 1,089. The figures must be related to the growth of population since 1928-29 but there should be real concern that in 1964-45 bankruptcies were at the all time record of 2,453. In 1930-31, in the depth of the depression, there were only 1,846 bankruptcies. This is of some significance when we relate it to the growth of. population, lt my be that the inordinate number of bankruptcies last year was due in some way to the failure to bring this legislation up to date and to reserve to the operation of the bankruptcy law only those cases in which the liabilities are of such a size as to warrant a declaration of bankruptcy.

Senator Webster:

– The honorable senator stated that there were 2,453 bankruptcies in the year ended 30th June 1965. Did he mean 2,704?

Senator WRIGHT:

– I did say there were 2,704 bankruptcies and deeds of arrangement and composition, but then I took the list of figures which related to bankruptcies only, including sequestration orders in relation to deceased persons’ estates. Forgive me if I ignore the other slight item. In my view, the point to be noticed about the operation of the present bankruptcy law is the occupations followed by traders who have gone bankrupt. I will deal with those classes where the number exceeds 100.

Senator Webster:

– Will the honorable senator deal with the building industry first?

Senator WRIGHT:

– I will state them in the order in which they appear in the report and hope that I will not incommode Senator Webster by adopting that procedure. The first group is general storekeepers. For the year in question there were 131 bankruptcies compared with 139 in the previous year. In 1964-65, 266 labourers were declared bankrupt, compared with 241 in the previous year. For the year in question 101 miscellaneous metal workers were declared bankrupt, compared with 75 for the previous year. Carriers, carters and the like declared bankrupt in 1964-65 numbered 210, compared with 1 89 in the previous year, whereas the number of builders who were declared bankrupt fell from 133 in 1963-64 to 96 in the year under review. It is of interest to note that the labourer class yielded the greatest number of bankruptcies, followed by general storekeepers, builders and miscellaneous metal workers. That factor needs to be borne in mind when we are considering the credit load of the economy upon sections of the community.In my mind, that has relevance to such things as the priority of debts - the class of creditors who should have priority in a case of bankruptcy.

The other matter, to which I wish to refer, that emerges from the AttorneyGeneral’s report is that for the year ended 30th June 1965 the Official Receivers’ Estates Account in the various bankruptcy districts amounted in the aggregate to approximately £2.9 million. The AttorneyGeneral’s report states -

The amount at credit in this account has increased steadily over recent years on account of higher realisations in the numerous estates handled, the increased business involved and on account of shorgage of experienced staff resulting in inability to distribute moneys at quickly as desirable. Extra staff has been made available, and efforts are being made to speed up the distribution of funds.

That paragraph has some relation to a matter which I mentioned by way of interjection when Senator Cohen was speaking. I refer to the desperate complexity of this piece of legislation, which involves complications and prevents the orderly and speedy distribution of funds. The amount in the Official Receivers’ Estates Account for the year ended 30th June 1964 was £2.6 million and for the year ended 30th June 1965 it had increased to approximately £2.9 million. As the report states, it is on the increase.

This is a matter of concern. It is a disadvantage to creditors if they cannot get their dividends after the bankruptcy process partly yields dividends. They have to wait to get their money, on account of shortage of experienced staff. What happens to the money in the meantime? It is put to the credit of a fund, and the interest on that fund is earned and used for the purposes of the Bankruptcy Suitors Fund. In other words, under the terms of the Act, if I understand them correctly, where inquiries and investigations are to be made of a legal character, the Attorney-General uses the interest earned in that fund to finance the inquiries and investigations. This, in my view, is simply an incidental purpose to the administration. It is really an appropriation of the interest to administer the Bankruptcy Suitors Fund.

The next matter of a general nature to which I wish to refer is the constitutional responsibility of this Parliament in this field. We have undoubted power under the Constitution to legislate for bankruptcy. That is plain. Therefore, the Parliament in 1924 legislated for bankruptcy as a whole. But it referred only to the insolvent condition of individual members of the community. It did not refer to the insolvent condition of incorporated companies in the community. The extent of insolvency of incorporated companies in the economy today is as important, if not more important, than is the insolvent condition of individuals. I believe that this legislation must be considered, not merely from the point of view of its detailed provisions but also from the point of view of general good faith in dealing, and I say this especially to Senator

Cohen, having regard to his comments upon offences involving gambling with creditors’ money.

The bankruptcy legislation is designed to impress upon the- credit community the necessity for good faith in dealing. Anybody - who departs from the proper standards of good faith should not merely be able to file his list of assets in the registry and say: “ I will take my discharge ‘ now, Mr. Registrar; I have only threepence in the till “, and then tell his creditors: “ I am very sorry”. I think that the purpose of enacting bankruptcy law is to maintain that degree of credit confidence in the community which was, until the last war, a byword in British and Australian trade. Therefore I think that if the Federal Parliament, having this responsibility, ignores that standard in relation to company transactions, it is, perhaps, not discharging its proper duty.

I remind the Senate that the same Constitution that conferred upon us undoubted power regarding bankruptcy also conferred upon the Commonwealth Parliament the power to legislate in respect of foreign corporations and trading or financial corporations formed within the limits of the Commonwealth. I remind the Senate that as far back as 1908 or 1909, in Moorehead’s case the High Court so muddied tip that provision that nobody has dared to offer any confident view as to what is the content and meaning of the power. This Parliament constituted a committee consisting of representatives of all parties in the Parliament. I believe that it laboured under the presidency of the AttorneyGeneral of the day and that it had some guidance from the government of the day. It produced a report to the effect that constitutional power with regard to companies should be made plain. But no attempt has been made to bring our constitutional power in that respect to anything like the amplitude we have in respect of bankruptcy of individuals.

The unhappy fact remains that committees of Attorneys-General from the six States have met from time to time and have produced what is euphemistically referred to as uniform State legislation. Of course, it is anything but uniform. We in the Commonwealth Parliament have our own separate’ responsibility for these matters but it is confined only to. the Territories. It has recently been decided by the High Court - and for this information I am indebted to a memorandum which was kindly made available to me by the Acting Attorney-General (Mr. Freeth) following a request that I made last Thursday to am officer advising Senator Gorton - that none of the State legislatures has power to impinge upon any right of priority that is claimed for a Commonwealth debt. If one looks at the provisions in relation to State company legislation, one can see differences in the treatment of transactions antecedent to liquidation and the fruits of an execution against a company before the commencement of its winding up.

All of these things must be of very great disadvantage to a trading community. Today I can be an individual trader subject to Commonwealth bankruptcy laws. But pur company law is in such a state that tomorrow I can walk along to any Registrar of Companies, file two sheets of foolscap, tender a fee - I do not know whether it is 5s. or £5 because I cannot keep up with the changes in rates and currency, but most of us would be able to pay the prescribed fee - and become a new personality known as Wright Pty. Ltd. Then I can go on trading for 12 months as Wright Pty. Ltd., and my poor creditors in respect of that trading have to seek their remedies under State company law. I raise this matter because I believe that when we are dealing with the subject of bankruptcy we ought to take into account the scope of the impact of legislation such as this on the trading community and its general implications.

Here I interpolate something with regard to the arrears of Commonwealth responsibility in respect of company law. Only four years ago we celebrated the centenary of the passing of the first real joint stock legislation in England in 1862. As far as I know, except for the uniform State Acts, there has been no attempt generally to revise the principle of limited liability of the private company. If I have a trading creditor I have to surrender to him the assets that the Bankruptcy Act requires me to surrender to him; but, if I file the two sheets of paper to which I have referred and become a proprietary company and trade as such, nothing but the capital of that company can be resorted to by my creditors. That is a principle that almost crept into 100 years of joint stock legislation per curiam. When joint stock legislation was first introduced just over a century ago, nobody envisaged that there would be facilities such as I have mentioned for people to evade their creditors. It was only by reason of the decision of the House of Lords in Salomon’s case in 1897, which many of my colleagues in the Senate will recall, that the completely separate entity of the company was insisted upon.

Trading creditors have recourse only to the separate entity, and a private company consists of such capital as the promoter of the company puts into the kitty. In our company legislation there is no requirement that a person must put into his company any specified amount of capital. There is no requirement that he have a certificate from the Board of Trade, or its corresponding agency in Australia, to show that there is a bona fide purpose to which the principle of limited liability is appropriate. There is no requirement that the incorporation of the company should be preceded by the issue of a certificate that the real purpose of the proliferation of subsidiary companies is not to juggle with taxation. In my view, all of these matters impose a responsibility upon this Parliament if it is ever to take into account the purpose which undoubtedly it now has, namely, promoting the economy on the basis of a - unified outlook.

I refer now to one or two reflections made by students of this matter. In the “ Modern Law Review “ in 1 944, Professor Kahn-Freund said -

This state of affairs would not necessarily call for reform, if it were not for the fact that the courts have failed to give that protection to the business creditors which should be the corollary of the privilege of limited liability . . . The flexibility of the law governing this topic contrasts with the complete failure of the courts to mitigate, through the mechanism of the law of agency, the rigidities of the “ folklore “ of corporate entity in favour of the legitimate interests of the company’s creditors. As it is, the company has often become a means of evading liabilities and of concealing the real interests behind the business.

He went on to say -

At the present moment, it is almost unbelievably easy and even more unbelievably cheap to form a company in this country.

Without detaining the Senate for much longer, I point out that he went on to consider a few of the matters to which I have made but passing reference. So that it will not be considered that this matter is entirely academic, 1 refer now to an observation made by His Honour, Mr. Justice Windeyer, in the High Court of Australia as recently as December 1965, in, curiously enough, the case of “ Gorton and others v. the Commissioner of Taxation of the Commonwealth “.

Senator Gorton:

– It was not I.

Senator WRIGHT:

– No. His Honour was considering whether a company transaction amounted to a gift and, as reported at page 347 of 39 Australian Law Journal Reports, he made the following remarks which are relevant to this matter -

What occurred on the afternoon of 19th May shows’ up the unreality and formalism into which the decision in Salomon’s Case, [1897] A.C. 22, has led the law. The utterance of the right ritualistic phrases in their proper sequence, the signing of documents prepared in advance to record that this was done was, if one ignores the transient transmutations theoretically involved, merely an elaborately occult means of making a gift.

It is quite obvious that His Honour was reflecting upon the unrealities and formalisms of the law derived from Salomon’s case. I believe that when the Parliament takes proper power in regard to company law in this field it will be necessary for it to consider modification of those ‘unrealities and formalisms. In my view, all of this is important when we consider the enormous size of the credit debt in Australian business today. With the enormous growth of hire purchase trading, the credit debt’ is increasing.

I shall proceed to address myself in .a little more detail to- some of the more important provisions of this long and complex measure. I hope that nobody will take that as a threat, because I intend to make my references to each of those provisions as brief as possible. If the amounts of money that we devote simply to the official administration of government departments are examined, it will be seen that, by any standard, administration in this field is very costly, and, if I may say so in hushed tones, very wasteful- in many instances. I interjected during Senator Cohen’s .speech and asked him what the Organisation and Methods Branch of the Public Service Board was doing with regard to making recommendations in relation to the laws of bankruptcy. I would earnestly invite that agency’s attention to some of the officers in the Bankruptcy administration and urge it to consider whether the ordinary staff there is not superfluous.

The Federal Bankruptcy Act of 1924 adopted the English Act of 1914. I have not checked the date, but I expect that the English Act was passed after 4th August 1914. 1 do not know how the English legislature found time to deal with that matter in 1914, even if the Act was not passed after 4th August of that year, having regard to the home rule situation then. In 1914 England for the first time adopted official administration in bankruptcy. Before then, and since 1870, she had adopted administration by means of private trustees under the control of creditors or committees appointed by creditors. Apparently that produced too many anomalies. We now prefer official administration. I do not intend to oppose that at this late day. It would be very much of a rearguard action if I attempted to do so.

The outstanding thing about this legislation in practical terms is that when it is passed a creditor, before he can make a debtor bankrupt, will have to show that a sum exceeding $500 is owing to him by the debtor. Under the present law the amount is only $100. It is my view that the great number of bankruptcies in recent years can perhaps be explained by the fact that a creditor’s petition can be entertained even for a matter of £50. I do not know how many creditors’ petitions were contributed by the Commissioner of Taxation, but until a few years ago the number was disproportionately large. It is, therefore, a matter of great satisfaction to me that at long last this situation is to be remedied. I think I would be in order and not open to censure if I mentioned that Senator Laught, who is now absent, asked as long ago as 1962 that the. matter be remedied and that other honorable senators followed him in that request. A great injustice can be done by leaving debtors exposed to bankruptcy for too small an amount of money, and it is a great pleasure to me to see that one of the things that this legislation will do is to raise the amount of the debt to £250.

It is also a great pleasure to see that this measure will bind the Crown in the Com monwealth field. 1 will refer specially to the later provisions of the legislation in regard to Commonwealth debts and the priorities that they should have in the administration of a bankrupt’s money, but I understand that this measure will have the effect of placing the Crown, in the Commonwealth sense, in the same position as the subject in relation to invalidating all transactions which take place in the six months prior to the commencement of a bankruptcy. If the Commonwealth, by a transaction, has got a preference during that time, then, as I understand, except for one provision that seeks to preserve the Commonwealth’s position if there have been deductions from wages or dividends, the Commonwealth will be in the same position as a subject and will be liable to have its transactions set aside on the same grounds as in the case of the subject. I heartily approve of that.

I refer next to appeals. Senator Cohen referred to this subject. As I understand it, under the present legislation there is an appeal as of right by a person who is aggrieved by an order made by the Bankruptcy Court, but under the Bill as submitted to us it is proposed to make alt appeals capable only by special leave. Then it is provided that there should be an appeal as of right from an actual sequestration order, or, on a question of law, from an order of the Court convicting a person of an offence against the new Act. In my view, it would be going too wide to say that the High Court should be troubled with appeals on any convictions, as Senator Cohen’s amendment proposes. I do not intend to debate that at this stage, but I think an indication of view during the second reading debate is helpful to the proper consideration of proposed amendments.

Senator Cohen:

– That is the present position, under section 26 of the Act.

Senator WRIGHT:

– I understand that. I think I said that my understanding is that there is an appeal to the High Court from any order made by the Bankruptcy Court.

Senator Cohen:

– That is the present situation, and this Bill will change it.

Senator WRIGHT:

– Yes. We should know that the Attorney-General has for several years had under consideration the re-organisation of the Commonwealth judiciary, one of the purposes being not to have the highest tribunal in the country - a tribunal that is exceedingly hard worked and that is adjudicating often on great political issues between the States and the Commonwealth in regard to constitutional questions - dealing with minor matters. It is a proper purpose to disencumber that Court of minor litigation if justice can be done elsewhere. I suggest that the appeal should not be abrogated to the extent suggested by the Bill, but that there should be an appeal as of right from a sequestration order, or, in the case of an offence, in respect of an offence where the penalty is £1,500 or more or where the imprisonment ordered is of the order of six months or more. Thirdly, I go on to suggest that, as at the present time there is an appeal as of right from State Supreme Courts to the High Court in any case which involves property or a civil right exceeding £1,500, any order of the Bankruptcy Court which adjudicates upon a property right or a civil right exceeding £1,500 should be appealable as of right. I shall be offering argument in Committee as to why incorporation of the Committee’s views would be an improvement to the Bill.

I wish to refer next to the acts of bankruptcy that have been provided under this Bill. First, 1 notice that, to avoid the imbroglio we got into by reason of the fact that an order for sequestration on a debtor’s petition was deemed to be part of the judicial power and created trouble in that way, it is now provided that merely upon the presentation of the debtor’s petition the debtor is bankrupt. That is a very good solution. I have already commented upon the requirement of £250 or $500 as the amount of a debt before a creditor can make the debtor bankrupt. I want, though, to refer to the act of bankruptcy that arises out of the issue of execution. Under clause 40(l.)(d) it is made an act of bankruptcy by a debtor if - . . execution has been issued against him under process of a court and any of his property has, in consequence, either been sold by the sheriff or held by the sheriff for twenty-one days; or execution has been issued against him under process of a court and has been returned unsatisfied.

According to my reading of the Bill at present - and if I have not detected the relevant provision I would be most obliged for help - that position applies even if the execution is only for £10.

Senator Gorton:

– I am told not.

Senator WRIGHT:

– If it is the position that execution, however small the amount, affords a ground for an act of bankruptcy, it is my view that this requires further attention, because in this case - perhaps differently from the case of the bankruptcy notice - I should think that if Smith issued execution today against his debtor, Jones, Jones tomorrow could make that the subject of his bankruptcy petition.

Senator Gorton:

– I am informed that this execution can be issued for less than $500 and that would be, in fact, under the terms of this Bill, an act of bankruptcy, but equally, under the terms of this Bill, no action could be taken to make the person bankrupt because of, 1 gather, clause 44.

Senator WRIGHT:

– I should like that matter to be further considered. While the Minister was kind enough to consider the further question that I put, I was just saying that whereas, in the case of a bankruptcy notice, if Smith issues a bankruptcy notice against a debtor, it is only Smith who can petition, though I am not sure of this. But if Smith issues execution against a debtor, it is the commonest procedure for Brown to file a bankruptcy petition because he wants to prevent Smith from getting the fruits of his execution. Therefore,’ Smith can make an execution on a debt of £10. The debtor has probably overlooked it. When the bailiff comes along, the debtor will say - with reference to all the dollar notes that he has in his pocket with the modern currency: “ Take one or two. I can afford a tenner, at any rate.” He has committed an act of bankruptcy at that low level and if he has another creditor to whom he owes £400 or £250, that other creditor can make him bankrupt tomorrow.

Senator Gorton:

– If the total debts of the two creditors are more than $500.

Senator WRIGHT:

– -Yes. The creditor would have to show at the time of the petition that there was a debt of £250. To me it is wrong that execution, irrespective of the amount, should constitute an act of bankruptcy. Next, under the heading of acts of bankruptcy, I refer to bankruptcy notices, a subject to which Senator Cohen referred. It is a matter of great interest to me to notice in the Committee’s report that 95 per cent, of the bankruptcy petitions at the time when the Committee was operating were filed on this act of bankruptcy. Here again, J notice that in the existing legislation the provision as to a bankruptcy notice is specifically for any amount. It is not made necessary that a bankruptcy notice be for an amount in excess of £250. But having regard to the use of the bankruptcy notice and having regard to the fact that the Committee reported that there was a suggestion from the Organisation and Methods Section of the Public Service Board that the act of bankruptcy based on failure to comply with a bankruptcy notice should be abolished, I suggest that even at this stage it is probably a sound view that the provisions as to act of bankruptcy on a bankruptcy notice should be tightened up and that the act of bankruptcy should be made possible only if the bankruptcy notice refers to a debt of more than £250. That matter will be considered further in Committee.

There is another matter to which I wish to refer in relation to acts of bankruptcy, but first let me mention in passing clause 40 (3.) (d), which provides that for purposes of a bankruptcy notice -

  1. . a person who is for the time being entitled to enforce a final judgment or final order for the payment of money shall be deemed to be a creditor who has obtained a final judgment or final order.

That is explained by reference to the Committee’s report, which informs us that in the case Opie v. Opie the High Court held that, although New South Wales legislation provided that an order in the maintenance court for arrears of maintenance for women or children, once transmitted to the Supreme Court for action, was enforceable as a final judgment, it was not a final judgment. Here the view has been taken that it is. In my understanding of the position, a discharge in bankruptcy does not discharge the debtor from liability for maintenance arrears. I hope that I shall be corrected if I am wrong. 1 am throwing out this view, because the more ample I can make any remedy to enforce women and children’s maintenance, the happier I shall be. I shall be bringing to the attention of the Senate the continued neglect in this field and in the State field of proper enforcement of women and children’s maintenance, which costs the public revenue annually between $3 million and $5 million in deserted wives’ pensions. I just raise here the question of whether or not we have completely thought out the application of this provision in paragraph (d) to the release that is obtained and the provability of such a debt in bankruptcy.

I proceed now to the next subject and that is the order in which the bankrupt’s property should be payable among his creeditors. Here I notice that the Opposition finds itself incapable of escaping from class consciousness. I regret to notice that in relation to this Bill the pressures of the employee class on the Opposition have been too great to be withstood. I would fi ad difficulty in finding fault with the provision in the Act that the wages or salary of a clerk should be paid with a proper degree of priority since that provision excluded near relatives of the bankrupt and limited the salary and wages to four months. Rut in clause 109(l.)(f) of the Bill we find that the relative amounts are unlimited, the time is unlimited and the provision extends to any amount payable by way of allowance or reimbursement under a contract of employment or under an award or agreement regulating conditions of employment. This clause provides for a limit of $600 due to or in respect of any employee of the bankrupt irrespective of the period of employment and whether the employee is remunerated by salary, wages, commission or otherwise in respect of services rendered to the bankrupt.

Recently, in the debate on another matter, I found myself at great variance with the Senate and had the support of only the two honorable senators representing the Australian Democratic Labour Party. In the measure under discussion then, partners were dealt with almost as odious creatures. But apparently the attitude is different in relation to trade. It appears that I could enter into trade and designate my wife as my manager. No matter what salary I paid her or recorded in the books as payable to her, and whatever degree of authority I gave her, any amount I deferred paying to her would become a preferred payment under this bankruptcy measure. I might give my wife a managing role almost equivalent to a partner’s authority. She might be indistinguishable from a manager and she might use that authority while 1 was whiling my time away in the Senate. But if the business fell on evil times and she said: “ My dear, I will defer my arrears of salary and you can pay me whatever you like for the next 12 months “, so long as she deferred payment up to an amount of $600, it would be a preferred payment. I think that provision is a little overdone.

Let me interpolate one observation here for those who would feel dissatisfied if they did not relish the full measure of this new preference: The Bill does remove rent owing to a landlord from any preferential claim. I do not gainsay that; but do not let us go to one extreme and abolish all preference for capital while making the preference for labour unlimited. There will be some who will say that I have no appreciation of the employee class. I claim to have a most sympathetic and admirable outlook on pay for service but I am not considering this matter in relation to entitlements. I am considering it in relation to three other sections of creditors and it is in this respect that the propriety of this preference should be considered.

Senator Webster:

– Can the honorable senator point out to me the difference between existing law and the proposition in the Bill?

Senator WRIGHT:

– I have read the proposition in the Bill.

Senator Webster:

– The honorable senator did not read it in full. 1 point out that under clause 109 (1.) (f), amounts in respect of long service leave, annual leave, recreation leave or sick leave are excluded.

Senator WRIGHT:

– That is only because they are brought in under the eighth preference in paragraph (h) over the page in the Bill as printed. They are still related to the preferential creditor and 1 was about to deal with them. As Senator Webster has had his attention drawn to that provision, perhaps he will permit me to proceed.

Senator Webster:

– I was merely trying to help.

Senator WRIGHT:

– And I was obliged for the help. I remind the Senate that I interjected last week when Senator Cohen was speaking and had claimed great virtue for the fact that the Bill provided that long service leave, recreation leave, sick leave and annual leave could ali be paid before the butcher, the baker, the grocer and the milkman. I find now that I anticipated some reaction or perhaps it was an echo of what I had read in the report of the Committee appointed by the Attorney-General to review the bankruptcy law of the Commonwealth. It stated at paragraph 128 -

The Committee considers that some fair adjustment must be made between competing claims of employees and other creditors: for example, claims of unsecured creditors who have supplied a bankrupt and his family with food and clothing should not be forgotten.

If a farmer has been working to provide four tons of potatoes to this unhappy bankrupt, 1 think it is preposterous that the employee in the city merchant’s office where he went bankrupt should get long service leave, recreation leave and sick leave, as well as annual leave, unqualified by any limit on the amount of money involved.

Senator Cavanagh:

– He sweated and slaved for it.

Senator WRIGHT:

– Some do: some do not. Senator Cavanagh lying back in luxury, simulating a sympathy with the man who sweats and slaves, does not impress me. I pass on to the next preferential creditor in the proper order of priority. I refer to income tax. It was good for British readers to read the robust criticism of the Committee which reviewed the bankruptcy law, reproving the Commonwealth Government for the exploitation of bankrupts, which has continued up to the present time, for the. purposes of recovering income tax as a priority irrespective of when it was assessed’ and irrespective of the amount. The Committee stated that this provision should be repealed. As I understand the Bill, it seeks to give to the Commissioner of Taxation priority only in respect of income tax which is the subject of an assessment issued before the date of the bankruptcy petition. Or does it relate to the date of the commencement of the bankruptcy? Or does the priority relate to income tax that is still to be assessed? The Bill limits the priority to one year’s assessment. I ask to be informed at the Committee stage whether that is the last year’s assessment. If payment is outstanding in respect of assessments for three years, one being for £100j another for £2,000 and one for the year- before that for £3,000, can the Commissioner select the year which he wishes to make the subject of his preference?

Senator Webster:

– It is very clear.

Senator WRIGHT:

– It is not very clear to me. I suggest that it is a problem which we need to clarify. 1 have referred to rent. As I see the position, the landlord can properly be deprived of any preference in relation to rent.

I come now to the property that is to be divisible among creditors. As I understand the situation under the present law, any property of which a bankrupt is in possession, even though it does not belong to him, in such circumstances that he is the reputed owner of it - that is, any property of which he is in possession in such a way as to allow himself to appear creditworthy - is subject to distribution among the creditors. (Extension of time granted). I am most obliged to the Senate for granting me an extension of time. The Bill does not repeat the present provision in the law. The way in which the commercial mind is now working is indeed curious. In 1890 the current provision would have been thought to be a cardinal principle of bankruptcy law. It was the principle upon which the whole of our bills of sale legislation was based. If you wanted security over any property that was not in your possession, you had to execute a document and register it in a public register so that every person interested in giving you security would know whether the property was encumbered. But hire purchase business has completely revolutionised that outlook until today possession of property is not regarded as being in any way a badge of ownership.

The Clyne Committee said that nobody thinks for a moment that a fellow who rides down Pitt Street in a Cadillac car owns it. In modern times opulence consists in the fact that one leases such an article so that he may have the whole of his instalment payments deducted for income tax purposes. If one does not lease it, then one takes it out on hire purchase. Even though, one has an equity of only £100 in the article, one may assume all the appearance of wealth; but some day, whether one’s name is H. G. Palmer or otherwise, one’s creditors will turn up and bc disappointed. I do not say that in disparagement of H. G.

Palmer personally. I say it only in respect of his undertaking, which has proved to be of great disappointment to creditors. I make no reference to the transactions in the matter, because I do not know what they are. I just instance that as a case in which terrific injustice has accrued through somebody’s default. Any machinery that leads to the giving of a false appearance of creditworthiness should be avoided. However, I do not intend to oppose the deletion of the current provision, because other arguments may be advanced. I am not prepared to make an issue of the matter.

The next kind of property divisible amongst creditors to which I refer is that of life policies. I am quite unenamoured of the drawing of a distinction between policies that have been taken out within the last two years before bankruptcy and those that have been taken out prior to that period. The Bill seeks to bring into the pool all policies that have been effected within the last two years and to exclude those taken out prior to that period. I think the present position is much better. At present policies are exempt, subject to a charge in favour of the creditors for any premiums that have been expended in the last two years. A bankrupt who took out a policy for £1,000 a year before bankruptcy may now be dead. He may have taken it out at a cost of £100. Unless that policy was taken out to defeat his creditors or to line his nest and thus defraud the creditors, his widow should enjoy the balance of £900. If he had taken out the policy two years and one month before his bankruptcy, under the arbitrary line that is now to be drawn the sum payable would be completely exempt even though the person concerned took out the policy with a knowledge of his bankrupt circumstances or even though he overspent on life policies. This matter requires some attention.

I come now to clause 116(2.)(g), which deals with damages recovered for wrong doing. This is an entirely new exclusion of property. I assume this provision is finding its way into the law because most of the State legislation between 1924 and 1966 has allowed actions for wrong to survive for the benefit of persons wronged. It should be made plain that this provision will not permit the exclusion of any damages or compensation awardable at the time of bankruptcy to a debtor for economic loss. The books contain the case of the manager of an engineering firm who was injured in a motor car accident and was awarded £10,000 for personal pain and suffering. He was awarded also £80,000 for loss of earning power during the period of his disability. What is the difference between that sum of £80,000 and savings which might have accrued from his life’s work? At any rate, I raise the question.

Senator Gorton:

– I am not sure of the honorable senator’s point. What is the honorable senator suggesting is wrong with the proposition?

Senator WRIGHT:

– I am not suggesting it is wrong to exclude damages for personal injury, pain and suffering and the loss of the amenities of life. But an amount of £10,000 may be awarded after a car collision for pain and suffering. This does not appear in the final judgment. It appears in the judge’s reasons. Then something is awarded for the loss of the amenities of life - say £2,000 - and say £80,000 is awarded in respect of future earning capacity. That is in the future. If it had been obtained in the past, it would be savings. In the form of savings, it is available for distribution among the creditors. Simply because it is awarded by a court order as compensation for failure to earn savings in the future, why should it not be available to creditors?

I turn now to consider executions issued against a debtor. Under the provisions of this Bill, if a creditor issues an execution against his debtor, the whole of the money paid to that creditor comes into any bank.rutcy that supervenes within six months. I know that it is very difficult for a man who issues execution against his debtor today to escape committing an act of bankruptcy which of itself would constitute the commencement of the bankruptcy back to which the bankruptcy would relate; but in my view, where an execution is completed and moneys are paid over according to law, the creditor who receives that payment should continue to enjoy the fruits of his execution.

I wish to deal now with the vexed question of relation back in bankruptcy. That gives rise to many complicated problems upon which everybody in business must be very anxious. I have noticed in the

Committee’s reports references to the anxiety of banks. In some respects, I entertain the most cautious outlook with re.gard to banks and scrutinise their activities; for instance, in relation to lease terms that enjoyed immunity from the recent income tax legislation. I would give banks no quarter in that respect, but in this instance they are the means of carrying on trade. To a person who is unable to pay his debts as they become due, a bank may accord accommodation. A bank manager may say: “ Yes, I will increase your overdraft by £1,000.” If that occurs within six months of a bankruptcy and a debtor gives that bank sufficient security, the bank has to yield up the security to the creditor and prove for a dividend in relation to that amount of £1,000.

A solicitor may be asked for assistance by a debtor whom the solicitor suspects cannot pay his debts. The debtor may say: “ Look, I am up against it. I need £2,000 to pay my debts. I want to mortgage my home. It is worth £10,000. If you help, I have a fair chance of pulling out. The solicitor agrees, and in five months time the debtor goes bankrupt. It is my view that under the provisions of this legislation the solicitor yields up the security and has to prove for the £2,000. Difficulties arise in relation to this matter, not only for the creditor but also for the surety. 1 hesitate to refer to these matters, but they are real causes of concern in respect of the continuity of trading and for the purpose of lenders. My friend, the honorable member for Mitchell (Mr. Irwin), referred to lenders in a debate in another place recently. He said that a lender, by lending in a proper case, makes a borrower a friend for life. Where that does not eventuate and a borrower goes bankrupt, these transactions need to be dealt with on a basis of fairness.

Needless to say, I speak from no personal interest. 1 instance solicitors’ and bankers’ securities only because merchants take securities in the ordinary course of business but they may have a suspicion that a debtor is unable to pay his debts as they become due. I suggest to Senator Cohen thai in this respect it was the Canadian legislation that abolished altogether the relation back. I may be wrong. I put the matter before -he Senate because in my view it is worthy of consideration.

I have referred to the main matters to which I wish to refer. I wish now to refer to composition. Under a subsequent part of the Act, compositions include an ordinary arrangement, maybe in a small bankruptcy, whereby a debtor makes arrangements to pay his creditors by instalments. I think it would be an improvement if such a case could have an exemption from the paraphernalia of the Bill. In the light of matters which I referred to at the commencement of my speech, I want to compliment very heartily the Committee that has studied this legislation and to say that in general I approve the Bill, subject to the criticisms I have raised.

Senator GORTON:
Minister for Works · Victoria · LP

– in reply - I think most honorable senators will agree that Senator Cohen and Senator Wright have made extremely interesting contributions to this debate. There seems to be no doubt whatever that the argument in regard to this Bill is quite clearly a Committee argument. There is no opposition to the principle of the Bill from anyone in this chamber, nor is there opposition to the thought that there is a need for this legislation to be introduced. Discussion has occurred because of differences of opinion and interpretation regarding particular clauses of the Bill. It seems to me now that the proper method of proceeding is to enter the Committee stage and to discuss those clauses which attract the attention of honorable senators on both sides of the chamber.

Question resolved in the affirmative

Bill read a second time.

In Committee.

Clauses 1 to 22 - by leave - taken together, and agreed to.

Clause 23.

A person is not eligibleto be appointed to be a Judge of the Federal Court of Bankruptcy unless -

  1. he is, or has been, a Judge of a federal court or of the Supreme Court of a State; or
  2. he is, or has been, a practising barrister or solicitor of the High Court or of the Supreme Court of a State of not less than five years’ standing.
Senator WRIGHT:
Tasmania

– I wish to mention this clause as a postscript to our debate last week on the Judiciary Bill 1966. Clause 23 provides -

A person is not eligible to be appointed to be a Judge of the Federal Court of Bankruptcy unless -

he is, or has been, a Judge of a federal court or of the Supreme Court of a State; or

he is, or has been, a practising barrister or solicitor of the High Court or of the Supreme Court of a State of not less than five years’ standing.

I move -

That in paragraph (b) after the word “ State “ insert the words “ or of a Territory “.

I suggest that a barrister or solicitor of the High Court or a Supreme Court of a State or the Supreme Court of a Territory should be eligible. It may be that my amendment is unnecessary. If it is, and if the Minister for Works (Senator Gorton), who is in charge of the Bill, so indicates, I will not proceed with it. But I do wish to indicate that the debate we had on the Judiciary Bill 1966 was not designed to bring about anything other than a complete parallel between members of the profession practising in the Supreme Court of a State or Territory.

Senator GORTON:
Minister for Works · Victoria · LP

– Looking into the future, I would not say that the amendment moved by the honorable senator is unnecessary. At the present time, as the honorable senator will remember, anyone who is a practising barrister or solicitor of the High Court is entitled to practise in the Supreme Court of a Territory. Therefore I think the situation is covered at the moment. On the other hand, I believe that without any doubt at some stage in the future people will be practising in the Supreme Courts of the Territories. The Territories have their own methods of admission to these Courts as distinct from the role of the States. Therefore, while I think the amendment is not necessary to cover the present position, I am quite prepared to accept it as covering a future position which is quite likely to arise and which, if it did arise, would require at that stage some amendment. The Government is prepared to accept the honorable senator’s amendment.

Senator WRIGHT:
Tasmania

.- I am most obliged for that information. I rise to say that it is my view that there are some 60 practitioners practising in this Territory. In the circumstances I can imagine there will be many people who will be admitted to the Supreme Court of the Australian Capital Territory who will not bother to be practitioners elsewhere. It is that class of person who I think should be made eligible for this appointment without any discrimination with regard to Supreme Court or type of practitioner.

Senator Gorton:

– I am accepting the honorable senator’s amendment.

Senator WRIGHT:

– Quite so. I just wish to put forward the basis on which I moved it.

Senator COHEN:
Victoria

.- I wish to inquire whether the amendment is acceptable to the Minister. My attention was diverted momentarily from the discussion.

Senator Gorton:

– Yes.

Senator COHEN:

– The amendment is acceptable to the Opposition.

Amendment agreed to.

Clause, as amended, agreed to.

Clauses 24 to 38 - by leave - taken together, and agreed to.

Sitting suspended from 5.45 to 8 p.m.

Clause 39. (1.) Notwithstanding anything contained in any other Act, but subject to the next succeeding subsection, an appeal does not lie to the High Court from a judgment, order or sentence of the Court given, made or pronounced under this Act except by leave of the Court or of the High Court. (2.) An appeal lies to the High Court from an order of the Court being a sequestration order or, on a question of law, from an order of the Court convicting a person of an offence against this Act. (3.) Notice of an appeal or application for leave to appeal shall be filed in the office of the Registrar for the District in which the judgment, order or sentence was given, made or pronounced within seven days after notice of the appeal or application for leave to appeal has been filed in the High Court or other Court.

Senator COHEN:
Victoria

.- I move -

Leave out the clause, insert: - “ 39. - An order of the Court in a bankruptcy matter shall, at the instance of the Official Receiver or trustee or any person aggrieved, be subject to appeal to the High Court.”

The effect of the proposed amendment is to substitute the substantive part of the existing section for the amendment proposed by clause 39 of the Bill. In effect, I am moving to insert present section 26 (2.). The Government is proposing to limit very substantially the area in which appeals will lie as of right from the Bankruptcy Court to the High Court. As I have said, the effect of my proposed amendment is to restore the position.

In the form in which this Bill was introduced originally into another place in May of last year, the only occasion for an appeal as of right was in respect of sequestration orders. Following representations made when the matter came before the Committee in another place recently, the Attorney-General agreed to add to that limited right of appeal from a sequestration order an appeal in cases where the Bankruptcy Court had made an order convicting a person of an offence against this Act, but on a question of law only. In such a case, there could be no rehearing; there could be no full appeal in the ordinary sense. All that is granted by the present clause is an appeal as of right from a sequestration order or an appeal from a conviction under the Act, limited to a question of law.

In the view of the Opposition there is no real justification for cutting down the right of appeal which has existed since the Bankruptcy Act was first enacted. If the present clause is persisted in and is passed, it will mean that there will be an appeal only by leave in relation to any other matter. One only has to look at the scope of the Court’s jurisdiction, at the type of matter it can deal with and. at the type of order it can make to see that there will be many aspects of the law of bankruptcy in respect of which there will be no appeal now except by leave. Clause 30 (1 . ) of the Bill states -

The Court-

has full power to decide all questions, whether of law or of fact, in any case of bankruptcy or any matter under Part X. or Part XI. coming within the cognizance of the Court; and

may make such orders (including declaratory orders and orders granting injunctions or other equitable remedies) as the Court considers necessary for the purposes of carrying out or giving effect to this Act in any such case or matter.

It is plain that the Court has very wide powers to deal with all questions arising in a case of bankruptcy. If honorable senators look at clause 31 they will see the many matters which the Court is required to hear and determine in open court in exercising its jurisdiction over the Bankruptcy Act. They include creditors’ petitions, examinations under the Act, applications for orders of discharge or annulment of bankruptcy, applications to approve compositions or schemes of arrangement under Division 6 of Part IV., applications to set aside or avoid settlements, dispositions, conveyances, transfers, securities or payment, applications to declare for or against the titles of the trusteees to any property, applications for the committal of persons to prison or for the release from prison of persons committed to prison, appeals against the rejection of proofs of debt, and so on. Also covered are applications under Part X. for orders declaring deeds, of assignment or deeds of arrangement or compositions to be void and other orders of that kind. All those are matters that are required to be heard in open court. Many of them involve difficult and sophisticated questions of law, and in none of them will there now be an appeal as of right except in relation to a sequestration order or an appeal from a conviction, limited to a question of law lt is not as though the High Court is currently overburdened with appeals from the Bankruptcy Court. According to the Attorney-General’s report on bankruptcy covering the year 1964-65, to. which I referred in another context during the second reading debate, as at 30th June 1964 there were 6 appeals pending and 1 1 appeals to the High Court were instituted during the year. Of those 17 appeals, 2 were allowed, 2 were withdrawn, 6 were dismissed and 7 are still pending. Ten appeals were disposed of in the manner that I have indicated. That is not an extraordinarily large number of appeals under this statute to be heard in the course of a year and it is plain that, as the High Court entertained a number of appeals .and allowed two of them, substantial matters were involved.

For these reasons, we can see no justification for limiting this right. of appeal. The law of bankruptcy involves some very important questions for individuals. Sometimes very substantial amounts of money are involved and the rights of a number of people have to be determined judicially.

The ordinary litigant can invoke the appellate jurisdiction of the High Court, under section 35 of the Judiciary Act, where the amount involved is £1,500, now $3,000, or more. In the ordinary type of case there can be an appeal from a judgment of the Supreme Court of a State to the High Court where the amount at issue is £1,500 or more. In such matters there is a clear right to invoke the appellate jurisdiction of the High Court.

Senator Wright:

– On questions both of law and fact.

Senator COHEN:

– That is right. There is no limiting of the scope of any appeal. If an appeal lies, then it is dealt with according to the procedure of the High Court. Questions of fact and Jaw, inferences from fact and the legal consequences that follow are within the jurisdiction of the High Court. Subject to the amount involved, $3,000 or more, there is no attempt to limit the powers of the High Court on appeal. lt seems to us that there is good reason for retaining the position as it is under the existing Act. I would need to be shown very solid grounds before retreating from the view, which 1 am now putting on behalf of the Opposition, that we should not adopt this limited approach of the present Bill, but should say. “ Here is an appeal that has existed and it is being taken away in the great majority of cases. Why is that happening?” Unless the Government can show that some cogent and compelling circumstances have led it to the view that appeals henceforth should be limited, then we would certainly propose to press this amendment because it tests the position, not necessarily of bankrupts alone, but of any person affected by an order of the Court of Bankruptcy. The clause clearly limits and cuts down the existing position. For those reasons I have moved the amendment.

Senator WRIGHT:
Tasmania

.- I would like to make a submission on this matter before the Minister puts his view. I submit to the Committee that the proposal of Senator Cohen is, perhaps, too wide, but I certainly submit that the Bill as printed is altogether too restrictive in the appeal that it gives to a litigant. If the Committee adverts particularly to clause 39 it will find that sub-clause (1 .) states -

Notwithstanding anything contained in any other

Act, an appeal does not lie to the High Court from a judgment, order (not being a sequestration order) or sentence of the Court given, made or pronounced under this Act except by leave of the Court or of the High Court.

The words “ the Court “ mean the court having jurisdiction in bankruptcy under the Act. If one turns to clause 27 one finds that the courts having jurisdiction in bankruptcy are the Federal Court of Bankruptcy and the Supreme Courts of all the States. So that the words “ the Court “ in clause 39 mean the Federal Court of Bankruptcy or any of the Supreme Courts of the States which are invested with bankruptcy jurisdiction.

Under the Constitution, as I understand it, the High Court has been erected as the final court of appeal so that all Australians and all States in Australia may have adjudicated, not only their constitutional issues, but their issues in law, with such exceptions and subject to such regulations as Parliament prescribes, so far as the Supreme Courts of the States are concerned. 1 accept that leave of appeal to the Court or the High Court is an exception that has been engrafted on to the jurisdiction of the Supreme Courts of the States by section 73 of the Constitution which provides that an appeal may be made to the High Court. But it is necessary to understand that anybody who attempts to limit the right of appeal that a litigant has from a State Supreme Court to the High Court has to justify an exception or restriction. I submit that any litigant has a prima facie constitutional right to have access to the High Court for the final determination of his appeal.

Generally speaking, under the Judiciary Act as it has been revised within recent years, a litigant involved in a decision of the Supreme Court of a State concerning civil property or a civil question where the value of the property exceeds £1,500,- has an unristricted right of appeal to the High Court, on both questions of law and of fact. The right of appeal on a question of fact in bankruptcy is most important. It may involve, as in Trautwein’s case, investigation of a huge mass of documents concerning years of transactions which amounted, as was considered in those years, to an immense sum of money - hundreds of thousands of pounds. Everything depends upon the conclusion of the judge at the end of the consideration of those facts as to whether, say, the bankrupt had an intention to defraud his creditors. It may be that the Court of Bankruptcy has decided that the property, “ Blackacre “, which might be worth £40,000, should go to the bankrupt’s wife and remain her property. But if the conclusion is a conclusion of fact, under this legislation there is no right of appeal, except with leave of the court or the High Court.

There are many cases in which the High Court is disinclined to grant leave where complicated facts are involved. On a question of law, the Court may be disinclined to grant leave where it is a question of licensing law or gaming law or something of that kind which is not in the wide stream of jurisprudence. Assume that all the State Supreme Courts are exercising jurisdiction in the bankruptcy field. If in their general discharge of justice a litigant in a civil issue is entitled to an appeal to the High Court as of right on grounds, whether they be of law or of fact, and if that civil right involves £1,500, why should not the litigant, whether he be the Official Receiver, a creditor or a person who claims an interest in property of which he has been deprived in favour of the Official Receiver, have an appeal as of right to the High Court, in the same way as he would from an ordinary decision of a Supreme Court pronounced in another jurisdiction?

We then come to the question, not of a civil right, but of a decision of the Court of Bankruptcy or of the Supreme Court of the State discharging bankruptcy jurisdiction in criminal matters where it adjudicates upon offences. I suggest that it is going too far to say that in the case of every offence the party concerned should have the right of appeal to the High Court. I know that was the provision in the old section 26, but a person has not that right of appeal generally from criminal decisions in the State Supreme Courts. He has to get special leave in every case. That is why 1 suggest to the Committee that the position would be met by saying that an appeal lies to the High Court from an order of the Court being (a) a sequestration order, (b) an order convicting a person of an offence against this Act involving a fine exceeding £1 ,500 or imprisonment for six months, or (c) an order involving a civil right or property exceeding in value £3,000. I suggest that that is the appropriate way in which clause 39 should be amended.

Senator GORTON:
Minister for Works · Victoria · LP

.- I think I should say, first of all, that I do not believe that there is any quarrel between Senator Cohen and me on the facts, although there is on the action that should be taken on the facts. The Bill does provide for an appeal to the High Court as of right against a sequestration order. It does provide for an appeal to the High Court as of right against conviction, but that is limited to appeals on points of law. The Bill does nor provide for an appeal as of right against conviction on matters of fact. Nor does it provide for an appeal as of right on points of law in cases that do not involve conviction. 1 believe that that is common ground. The Government believes that this is the proper way for the Bill to stand.

The Committee should understand that we are talking only of an appeal as of right. On all of these matters a person is able to appeal to the High Court by leave either of the courts mentioned by Senator Wright or of the High Court. I suggest that this would mean that, in any of the cases raised as possibilities - of course, there are cases which would be possibilities and which would involve significant sums of money or points of law of some substance - the person feeling aggrieved could first seek from the Supreme Court or the Federal Court of Bankruptcy leave to appeal to the High Court. I suggest that it would . be unlikely that a court of that calibre would refuse to grant such leave in a matter involving a substantial point of law or really significant amounts of property. But, if the Supreme Court or the Federal Court of Bankruptcy did refuse leave to appeal to the High Court in those circumstances,- that would not be the end of the matter for the litigant. He could still approach the High Court and seek the leave of that Court to appeal.

In fact, what we are doing is, in the first instance, leaving to the Supreme Court or the Federal Court of Bankruptcy the judgment as to whether a point is of sufficient substance to warrant an appeal. If the Court says that it is, the appeal automatically goes forward. On the other hand, if the Court says that it is noi, we are giving the litigant the right to go to the High Court and we are leaving it to the latter Court to decide whether the matters involved or the points of law involved, in its judgment, in its assessment of justice and in its approach to the administration of the law, are of sufficient importance for it to give leave for an appeal to proceed before it. So, the facts are common ground; but the action that should be taken on those facts appears to be a subject on which the views of the Government and the Opposition diverge and one for judgment by the Committee.

Senator COHEN:
Victoria

.- The Minister has been properly frank about the differences of approach and the absence of difference on the facts between the Government and the Opposition. However, I still have not heard from him any explanation of why the Government has thought it necessary to limit a right of appeal that has existed up to date. After all, we are not fashioning a bankruptcy law for the first time. We are considering a very substantial overhaul of the bankruptcy law. When something has existed for 40 years and more, I submit that the Minister should say, at least, what kind of considerations led to the change. Has it been thought that there are too many appeals to the High Court? Is a dozen in the course of a year too many? Has it been thought that there is something clumsy or unfair, something impractical or wrong in principle about the general right of appeal that has existed up to date? I cannot see that that is so. Nothing has come from the Minister to indicate any sound basis of reasoning for this change. In our view, it is a retrograde step to act on the basis that a right of appeal which previously existed under the legislation should now be taken away, except in a limited number of cases or in limited circumstances.

Senator Wright has circulated some proposed amendments. Let me deal with the one that relates to this clause. It seems to me that, although in some respects his proposal is an improvement on the clause in the Bill, in one respect it is less liberal; that is, his proposal would seem to depend largely on quantum - on whether an amount of $3,000 or more is involved. A person might be convicted of an offence and fined less than $3,000 or imprisoned for less than six months; but he may have a very substantial point of law. However, he would not have an appeal as of right under Senator Wright’s proposal. That is being less liberal with the right of appeal than the Government is in its Bill. In that respect, at any rate, there would be less to commend that proposal than the clause in the Bill.

Senator Wright:

– In that respect.

Senator COHEN:

– Yes.

Senator Gorton:

– There. would still be a right of appeal by leave. I did not understand Senator Wright’s proposed amendment to remove the right of appeal by leave.

Senator COHEN:

– That is so. But the Bill, if it were passed in its present form, would grant an appeal as of right from a sequestration order on all questions, and would grant an appeal as of right on a question of law in the case of a conviction. Senator Wright’s proposed amendment would give no appeal as of right on any question, whether of law or of fact, unless the amount involved was $3,000 or more.

Senator Wright:

– In relation to an offence.

Senator COHEN:

– Yes. But the present Bill gives a man who is fined a small amount but who has a substantial question of law an appeal as of right. Senator Wright’s proposal would deprive that man of that right of appeal, except if the amount involved were $3,000 or more. For the reasons that I have indicated, we will press our amendment.

Senator WRIGHT:
Tasmania

.- I am grateful to the Minister and Senator Cohen for any criticism that has been made of my proposal. I have no fixity of mind on, or inalienable love for, any amendment that I have circulated. My proposed amendment to this clause was prompted by certain considerations. When I saw the Bill 1 thought: What in the name of fortune is the merit in giving to X.Y., who has been convicted and fined £10 for not disclosing a cash book, an appeal as of right to the High Court on a question of law, when a man who has been adjudged guilty by a court because, five years ago when he transferred property worth £40,000 to his wife, he intended to defraud his creditors, has no appeal as of right and neither has his wife? If the decision of the court was that the property remained in the wife and if the trustee of the estate was aggrieved, although the amount- involved was £40,000 there would be no appeal as of right on a question of fact. I could not believe that there had been responsibility behind a decision to include, as one of the issues for an appeal as of right, a question of law involved in any offence - it might be the most trivial offence, yet, on a question of law, the Bill provides for automatic appeal, or appeal as of right, to the High Court - and to exclude an appeal as of right on a question of fact in a civil matter even if it involves a significant sum of money. That seems to me to be irrational.

I am disposed to keep appeals open rather than to restrict them. I am disposed not to have litigation concluded by one primary decision. If a judge in bankruptcy, whether in the Federal Bankruptcy Court or the Supreme Court of a State, comes to the conclusion, after a seven day or 21 day hearing of a case involving 20 transactions and property worth £100,000, that there ‘has been a voidable transaction and, on a question of fact, he voids it, I think it is a gross dental of justice if any litigant involved in that matter does not have a right of appeal to the High Court. I would press that view to the extent of moulding the Opposition’s amendment to some acceptable form, or even of supporting it, rather than accept the Bill in its present form. The Opposition’s amendment would give an appeal as of right on any civil matter, however small.

I mention these matters because I hope that those who are advising the Minister will see what I am doing as an attempt to bring appeals under this legislation to a position of parity with appeals generally, under the Judiciary Act, from decisions of the Supreme Courts of States in other jurisdictions. If we can have that, I will vote against the Opposition’s amendment. I will vote against it in the first place for the purpose of having the other amendment put to the Committee, in the hope that the Opposition will accept the other amendment. If neither amendment succeeds, I will move for a recommittal of the clause and try to make the right of appeal as wide as the winds, rather than have a litigant denied a right of appeal in the circumstances that 1 have put. No responsible legal opinion would deny, in the bankruptcy jurisdiction, the appeal as of right that is enjoyed by litigants in the ordinary jurisdiction of the Supreme Courts.

Senator GORTON:
Minister for Works · Victoria · LP

– We may be in a little difficulty here. The only amendment before the Committee now is that moved by Senator Cohen, yet the attitude which Senator Wright will adopt must depend to some extent on an indication of what will be the view on the amendment which is not yet before us. I must, therefore, refer to that second amendment so that honorable senators can make up their minds on how they will vote on Senator Cohen’s amendment. 1 have little to add to what I have already said, except that it is the Government’s view, and the Attorney-General (Mr. Snedden) informs me that it is generally believed, that the High Court could well be overburdened if, on any matter, however small, there was an appeal as of right to the High Court.

Senator Cant:

– Has it been overburdened previously?

Senator GORTON:

– It has not necessarily been overburdened in this jurisdiction, but this is not the only jurisdiction in which it is involved.. Cases are put before us by people versed in the law. They seek to suggest that their view is the right one, and they put forward propositions which could be true but which would not necessarily be true except in unusual circumstances. I put a proposition which 1 believe can be true and will be true. If there are appeals as of right to the High Court on minor questions of fact and of law, it is very likely that that Court will be overburdened. There is nothing inherently wrong in leaving that Court to make the final decision on whether something is of sufficient legal importance or involves sufficient property to warrant leave to appeal being given. After all, we place a great deal of reliance on our higher courts such as the Supreme Courts and the Bankruptcy Court. It does not seem to me to be unreasonable to give them on minor matters - not matters relating to convictions where the law may be in doubt, or on sequestration orders, but on things which they consider to be minor matters - the right to winnow out through two processes, the Supreme Court and the High Court, those cases which should properly be subject to a right of appeal. Therefore, we do not wish to accept Senator Cohen’s amendment. I must say, also, even if this means that- that amendment will have Senator Wright’s support, that we do not wish to accept his amendment, if in fact it is to be proceeded with. At this stage I do not know whether it is or not. 1 suggest that he change the sum from $3,000 to $500, because $500 is the highest fine that can be imposed under the Bill. That would bring the amendment more in keeping with the provisions of the Bill.

We think this law will work better in the form in which it is presented in the Bill and will make the High Court more able to cope with the business before it. We see nothing wrong with leaving to the courts I have mentioned the right to winnow out the cases they consider to be of not sufficient importance. After all, we place enormous reliance upon them for the administration of justice, and I think we can place reliance on them in this matter.

The CHAIRMAN:

-(Senator DrakeBrockman) - Senator Wright has stated his intention to move an amendment. I crave the indulgence of the Committee to point out that two amendments to clause 39 have been circulated, one by Senator Cohen and one by Senator Wright. If the question in relation to Senator Cohen’s amendment is stated in the usual way, it will be: “ That the words proposed to be left out be left out “. If that question is resolved in the negative, the Committee will then have decided that the words be not left out. That would preclude Senator Wright from moving his amendment, which seeks to leave out subclause (2.) and insert a new subclause in its place. In order that Senator Wright will not be precluded from moving his amendment, I suggest to the Committee that the question on Senator Cohen’s amendment be put in this form: “ That the amendment be agreed to “. If that question is resolved in the negative, it will still be in order for Senator Wright to move his amendment. Is it the wish of the Committee that this procedure be followed? There being no objection, that will be done.

Question put -

That the amendment (Senator Cohen’s) be agreed to. .

The Committee divided. (The Chairman - Senator T. C. Drake-Brockman.)

AYES: 19

NOES: 25

Majority…… 6

AYES

NOES

Question so resolved in the negative.

Senator WRIGHT:
Tasmania

.- I move -

Leave out sub-clause (2.), insert the following sub-clause: - “ (2.) An appeal lies to the High Court from an order of the Court, being -

a sequestration order;

an order convicting a person of an offence against this Act involving a fine exceeding $500 or imprisonment of six months, or on a question of law, any offence; or

an order involving a civil right or property exceeding in value $3,000.”

The amendment would have the effect of preserving the appeals that are given by the present clause of the Bill, enabling an order to be appealed from on a question of fact, where the conviction shall carry a fine exceeding$500 or imprisonment of six months, and enabling an appeal as of right from an order involving a civil right or property exceeding $3,000 in value. There is no need for me to restate the argument. I put the amendment in that form so as to accommodate some of the views that are held in the chamber. I should have preferred proposed paragraph (b) to cover appeal from an order convicting a person of an offence involving a fine exceeding $500 or imprisonment of six months, but some honorable senators consider that, on a question of law, there should be an appeal to the High Court irrespective of the amount of the fine. I have included words to accommodate that point of view. I suggest that, seeing that the Supreme Courts so largely occupy this field in respect of their jurisdiction in the ordinary course of things there is an appeal as of right in respect of any civil matter involving $3,000. I submit that it ought to be accepted automatically that an appeal as of right from an order in bankruptcy jurisdiction be allowed on the same basis.

Senator GORTON:
Minister for Works · Victoria · LP

Senator Wright may bear with me and, realising that I am not a lawyer, still be prepared to takeone or two suggestions. The amendment as it is now before me, as I understand it, reads -

An appeal lies to the High Court from an order of the Court, being -

a sequestration order;

an order convicting a person of an offence against this Act involving a fine exceeding $500. …

May I say that there cannot be a fine exceeding $500, because $500 is the greatest sum that can be fined, so there would need to be some alteration in the text there.

Senator Wright:

– I misunderstood the Minister when he referred earlier to $500. I was trying to accommodate what he previously told me.

Senator GORTON:

– It needs some alteration. Then, as I understood it, the amendment continued - or, on a question of law, any offence; . . .

That would be any offence involving a conviction. I do not know whether that is included, but that is what is meant. The honorable senator is a legal practitioner and I am not. It could be an offence, perhaps, that did not involve a conviction. I think the honorable senator is seeking an appeal against conviction. I have put in those two minor amendments for the sake of clarity. Now we have the proposition that there should be an appeal as of right to the High Court from an order of the Bankruptcy Court against a sequestration order.In this respect, the amendment would make no difference because that provision is in the Bill as it stands. Secondly, we have a proposal for an appeal, as of right, to the High Court on a question of law when a person has been convicted. That amendment would make no difference to the Bill as presented either because it is in the Bill. What would be added is that there should also be as of right of appeal to the High Court against a conviction on matters other than points of law if a fine of $500 or a term of imprisonment for six months is imposed. That is an addition to the Bill as it stands. The third proposition is that there should be an appeal as of right if an order involves property exceeding $3,000, and a civil right. Frankly I do not understand what is meant by a civil right and perhaps Senator Wright could explain it by way of interjection.

Senator Wright:

– I am adopting the language of the Judiciary Act. This is an expression used in that Act and it applies to a contract.

Senator GORTON:

– I see. An appeal would then be made. Again, this is a matter on which honorable senators must make up their own minds. As I have said, this adds the right of appeal as of right when a person is convicted on matters other than of law if the penalties imposed are of a certain sum, and it involves a right of appeal as of right on matters involving a contract or property exceeding $500. The Government would prefer to leave the clause as it stands because it believes it can rely, first, on the Supreme Court and, secondly, on the High Court of Australia as two bastions of justice. We think it can be left to them to decide whether a case is of sufficient significance to an individual or upon a point of law, to warrant leave being given to appeal to that Court. This must be a matter of judgment.

Senator COHEN:
Victoria

.- The Opposition will support Senator Wright’s amendment. Substantially, it meets the point of view we have put forward in the course of the debate on this clause in committee.

However, a point occurs to me and it is that raised by the Minister as to the amount of the fine.

Senator Wright:

– It is $200.

Senator COHEN:

– I would be content to support an amendment in that form.

Senator WRIGHT:
Tasmania

.- I want to advert to a statement by the Minister as to the dependence that can be placed upon the courts to do justice. It is the cardinal point of our judiciary that the judges do justice not according to their individual idea of justice but according to law. We write the law here. There is all the difference in the world between applying to a court for leave to appeal and going before the court and saying: “ Hear my appeal “. The first is discretionary, and even though it is discretionary on the part of a judge, the British nation was not built by making its citizens dependent on judicial decision. Those of a previous generation would have abhorred the idea of making citizens dependent upon executive or ministerial discretions as they proliferate here. It is no real safeguard to make a citizen dependent upon a judicial decision. What the citizen wants is a law providing a right to appeal to the court and it is on that view that we, as a legislature, should write the law. No doubt, the law will be faithfully interpreted by the judges according to the ideas of justice, with the law before them.

So that the language will be literally in a form to express the point of view I have been putting to the Committee,I have made a few changes in the amendment and with the leave of the Committee, I shall move the following amendment in place of the amendment I moved originally -

Leave out sub-clause (2.), insert the following sub-clause: - “(2.) An appeal lies to the High Court from an order of the Court, being -

a sequestration order;

an order convicting a person of an offence against this Act -

on a question of fact involving a fine exceeding $200 or imprisonment of six months;

on a question of law; or

an order involving a civil right or property amounting to or of the value of $3,000.

That gives expression. I believe, to the point of view that has been expressed. It allows an unrestricted appeal irrespective of amount on a question of law. I have adopted the language in the amendment to make it the same as the Judiciary Act. 1 ask for leave to move the amendment in that form.

The CHAIRMAN:

– There being no objection, leave is granted.

Senator COHEN:
Victoria

.- Senator Wright has put his finger on the important point in this issue by underlining the difference between an appeal as of right and an appeal by leave. There is all the difference in the world between having to approach a court for the exercise of its discretion to permit an appeal to go forward and the assertion of a right granted by statute of which the litigant can take proper advantage. My colleague Senator Murphy reminds me of another important consideration which should weigh with the Committee when one comes to consider the difference beween an appeal as of right and an appeal by leave, and that is the question of expense. An initial approach to the court is necessary. If a party is going to the court from which he is appealing, he needs to approach that court, and he is involved in the expense of that approach. If leave should be refused and it is sought to go to the High Court to appeal against the refusal of leave in a proper case, he may be involved in an appeal from refusal to grant leave. He would have two proceedings prior to the argument on the point of substance if leave was eventually granted. All that can put the litigant to a great deal of expense, and often it does so. If the right of appeal exists, then much of the preliminary proceedings can be done away with and the litigant may assert his right.

As Senator Murphy has just reminded me. this sort of thing is to be avoided in the bankruptcy jurisdiction in particular. Here we are dealing with cases involving men who are unable to meet their debts in full. It is extremely important that there should be relatively inexpensive procedures. Otherwise, the result will be a frittering away of what is in the bankrupt estate. An operation can be extremely successful as a matter of legal technique, but the patient may not survive. With a system of applications for leave to appeal and appeals, much of the substance of the bankrupt estate may be eaten away. We believe that Senator Wright has accurately described the issues of principle, and we are prepared to support his amendment.

Senator GORTON:
Minister for Works · Victoria · LP

– I am not convinced on the arguments that have been put forward by Senator Wright and Senator Cohen. I do not intend to comment on Senator Cohen’s point that an estate can be frittered away through litigation, except to say that I daresay there is a good deal of substance in that suggestion. I believe there would be just as much substance, indeed more substance, in the suggestion that that would be more likely to happen if there were an unrestricted right of appeal than if an appeal lay only on grounds which people of the calibre of justices of the High Court believed merited an appeal. One must make up one’s mind about whether it is reasonable for the High Court to decide whether an appeal has sufficient merit. I am told that there is no appeal as of right from a Supreme Court to the High Court in criminal cases. I understand that in this sphere, where things go to the very heart of a man’s liberty, an appeal from a Supreme Court is by leave.

Senator Wright:

– I said that in my first speech.

Senator GORTON:

– It could have been forgotten. It is a point I want to make, because I suggest that it is relevant to the argument.

Senator Wright:

– It is not even by leave; it is by special leave.

Senator GORTON:

– Very well, it is by special leave.

Senator Wright:

– That makes the Minister’s argument stronger.

Senator GORTON:

– it makes it stronger. Sometimes I myself fall into the trap of interjecting. Sometimes an interjection prevents a point from being presented as clearly as it would otherwise have been presented, and sometimes it prevents it from being understood as clearly as would otherwise have been the case. The point I want to make is that there is no appeal as of right from a Supreme Court to the High Court in relation -to a criminal conviction. Any appeal is by special leave. That is similar to the proposal which is advanced in this Bill. I “speak subject to correction by my legal colleagues when I say that there is no appeal as of right to the High Court from a Supreme Court in a civil case which involves a sum of less than £1,500. The principle there is the same as in the Bill. Therefore, it seems quite reasonable to me to say that we should allow appeals to the High Court only if the Supreme Court thinks that property of sufficient significance or something of sufficient judicial importance is involved, and that we should give a litigant the further guarantee that, even if his application is refused, he may still seek leave from the High Court. By adopting this approach we can ensure that there will come before the High Court only cases of substance and not minor cases such as would come before it in large numbers if the amendment were accepted.

Sena;or WRIGHT (Tasmania) [9.5].- I regret that I feel obliged to rise again. If the Minister says that there is no appeal from a Supreme Court to the High Court in u civil matter involving less than £1,500 or S3, 000, and that that is the principle involved in this Bill, surely that is a distortion of the fact. There is an appeal to the High Court from a Supreme Court in a civil issue where the sum involved is £1,500, of $3,000, or more. That is a principle that 1 seek to have incorporated in moving this amendment. That is the purpose of paragraph (c) of the amendment.

Having advanced that argument against the Minister, there occurs to my mind an argument which I should put to the Committee to complete my presentation and which perhaps weighs against what I have already said. If I am wrong in what I am about to say, I may be corrected by the Minister’s advisers or anybody else in the chamber. When Supreme Courts exercise bankruptcy jurisdiction, they adjudicate on civil issues involving property or civil rights of a value much in excess of £1,500. I believe that the ordinary right of appeal to the Full Court under State jurisdiction still obtains, even though the order is made in bankruptcy jurisdiction. If that is so, I want to put it before the Committee for consideration. If that right of appeal exists, my resentment at the terms of the Bill in relation to bankruptcy decisions given by State Supreme Courts will be considerably modified. If that is the position, it brings into marked relief the difference between orders of State Supreme Courts sitting in bankruptcy jursidiction and orders of the Federal Bankruptcy Court. In the Tasmanian Supreme Court we would have a right of appeal in relation to a question of fact in a civil issue even though the amount involved was not anything like £1,500.

All I am struggling to get is one right of appeal to some superior court on a question of fact in a civil issue. If we have a right of appeal to the Full court, then in relation to bankruptcy decisions given by State Supreme Courts I shall not b; as concerned or as anxious as I was. But any attempt to make final the first decision of a court on a question of fact in a civil issue involving an amount of more than £1,500 intensifies my regret. I submit that that is a position that cannot be justified. On a question of fact there must be one right of appeal from a primary judge. A right of appeal to three judges of the Commonwealth Industrial Court would satisfy me. But until that right of appeal from a decision of a Federal judge is given, I submit that we must have this right of appeal to the High Court.

The Minister has referred to the criminal jurisdiction. 1 seek to make it plain that an appeal to the High Court from a Supreme Court sitting in criminal jurisdiction is only by special leave. However, the Supreme Courts exercise their criminal jurisdictions only as advisers to juries. In the Supreme Courts of the States it is juries who decide, whereas in the Federal Court of Bankruptcy it is a judge who decides a criminal offence. With any knowledge or instinct of our traditions, that should be overwhelmingly sufficient to distinguish the criminal jurisdiction vested in the Federal Court of Bankruptcy from the jurisdictions vested in the State Supreme Courts. These arguments seem to me to compel one to the acceptance of the amendment in the form 1 have mentioned.

Senator GORTON:
Minister for Works · Victoria · LP

.- I believe I should advert to the point made by Senator Wright concerning the possibility of an appeal from a single Supreme Court justice to a full Supreme Court. I much regret to say that my advisers tell me that they cannot confirm that this is in fact the case. They cannot confirm Senator Wright’s belief that an appeal does in fact lie. They rather think that it does not, but they are not quite sure. I thought I should make that clear.

Question put -

That the words proposed to be left out (Senator Wright’s amendment) be left out.

The Committee divided. (The Chairman - Senator T. C. Drake-Brockman.)

AYES: 22

NOES: 21

Majority…… 1

AYES

NOES

Question so resolved in the affirmative.

That the words proposed to be inserted, be inserted.

Question resolved in the affirmative.

Clause, as amended, agreed to.

Clause 40. (1.) A debtor commits an act of bankruptcy in each of the following cases: -

  1. if, with intent to defeat or delay his creditors -

    1. he departs or remains out of Australia;
    2. he departs from his dwellinghouse or usual place of business;
    3. he otherwise absents himself; or
    4. he begins to keep house;
  2. if-

    1. execution has been issued against him under process of a court and any of his properly has, in consequence, either been sold by the sheriff or held by the sheriff for twentyone days; or
    2. execution has been issued against him under process of a court and has been returned unsatisfied; (3.) For the purpose of paragraph (g) of subsection (1.) of this section -
  3. a person who is for the time being emitted to enforce a final judgment or final order for the payment of money shall be deemed to be a creditor who has obtained a final judgment or final order.

Senator COHEN:
Victoria

– I have circulated an amendment in relation to the provision contained in clause 40(l.)(c). It states that a debtor commits an act of bankruptcy if, with intent to defeat or delay his creditors, he begins to keep house. In the course of my speech in the second reading debateI pointed out that we regarded the expression “ begins to keep house “ as archaic and a survival from mediaeval bankruptcy law. It is difficult to know what the expression means. It is virtually impossible for any layman not carrying with him the learning of mediaeval law to understand the expression or to know whether he was committing an offence or was on the point of committing an offence.

I do not propose formally to move this amendment. But I do invite the Minister to give some sort of explanation of what the Government thinks the expression means, why it is necessary to retain this archaic expression, and whether it is beyond the bounds of the ingenuity of the Parliamentary Draftsman’s technique to redraw this expression so that it will be given some contemporary twentieth century meaning.I would be grateful if the Minister would turn his mind to this point. As I have said, I am not moving an amendment. I merely remark that, although this Bill of 315 clauses is the result of so many years of studious attention from experts, we are still left with a clause which is meaningless, I suppose, to the great majority of citizens, and probably to many lawyers, too.

Senator GORTON:
Minister for Works · Victoria · LP

– I am advised that the provision that the debtor commits an act of bankruptcy if he begins to keep house is distinct from the other acts of bankruptcy specified in paragraph (c) of clause 40(1.). This ground - he begins to keep house - covers situations such as the case where a debtor keeps to his house during the day and goes out only at night, or where he orders that admission be denied to all comers and admission is denied in fact to one person. These circumstances are not covered by other grounds specified in paragraph (c). It might be possible as a matter of philosophical approach - I myself would not know - to get some other words to cover this requirement. Whether they would be any more effective in the end than these words are would be a matter of judgment. But these words seem to have a well established legal meaning and cover the point.

Senator Cohen:

– Was any attempt made to obtain any formulation?

Senator GORTON:

– I do not think so. I do not know of any such attempt.

Senator WRIGHT:
Tasmania

.- I congratulate the Parliamentary Draftsman on retaining a traditional expression which by interpretation has received a simple meaning.I congratulate the Draftsman on abstaining from the temptation to indulge in complexities of the modern type.

I wish to move an amendment to paragraph (d) of sub-clause (1.). I adverted to this in my second reading speech. This clause refers to acts of bankruptcy. Clause 40 (1.) provides -

A debtor commits an act of bankruptcy in each of the following cases: -

if-

execution has been issued against him under process of a court and any of his property has, in consequence, either been sold by the sheriff, or held by the sheriff for twentyone days; or

execution has been issued against him under process of a court and has been returned unsatisfied;

I move -

That in sub-paragraphs (i) and (ii) of paragraph (d) of sub-clause (1.), after the word “execution “ insert the words “for a sum exceeding $500”.

Let me explain my amendment. A later clause of the Bill makes it a condition of any successful petition for bankruptcy that the petitioning creditor or the joint petitioning creditors should have a debt of$500 or debts which in the aggregate amount to $500.I think I am correct in so stating the position. Quite commonly, I suppose, in respect of this and all bankruptcy where execution is issued against a debtor, execution creditor Smith issues the execution and he gets an amount of his execution £50 or £100. Another creditor hears of this. To prevent creditor Smith from getting the benefit of that execution, he will present a petition for bankruptcy basedupon the fact that execution has been issued against a debtor by another creditor. I suggest that it should not be an act of bankruptcy just because a trivial execution has been levied against a debtor, and that it should only be an act of bankruptcy for an execution for a significant amount. I have chosen the amount of $500, which is the qualification of a petitioning creditor. In modern language, I suggest that execution only in excess of $500 should be an act of bankruptcy if it is issued against a debtor.

Senator GORTON:
Minister for Works · Victoria · LP

– As I understood the argument of Senator Wright, and as I understand the Bill, this execution can be issued against a man for a small amount of debt. Again, as I understand it - and everything I say is subject to correction - execution is distraint - going and getting goods somehow or other; getting from him his possessions to the value of the small debt owed to the person taking execution. This would not allow some other creditor successfully to petition for bankruptcy unless that other creditor was owed by the man being executed against a sum of money which, taken together with the sum of money for which execution was issued, was more than $500. In that case, the man concerned would have been owing more than $500 and would have been subject to ordinary bankruptcy proceedings as opposed to execution had the two creditors got together. I am not quite clear why Senator Wright pleads this case for greater protection to the man concerned. I hope the honorable senator will develop his argument further, because I cannot see it

Senator WRIGHT:
Tasmania

.- I rise again to point out this: We come later to provisions of the bankruptcy law which say that once a sequestration order has been issued a state of bankruptcy exists. That bankruptcy relates back not to the time that the petition was presented to the court but to the first available act of bankruptcy within six months from that date. The effect of that bankruptcy relating back to the first available act of bankruptcy is to invalidate or make void all transactions by the debtor in the interim unless the person in the transaction in the interim has acquired property from the debtor in good faith for a valuable consideration and in the ordinary course of business. He cannot acquire it in good faith, in the language of this Bill, if at the time he conducts the transaction he either knows of the previous act of bankruptcy or he has reason to suspect that the debtor cannot pay his debts as they become due.

The point is that when an act on the part of a debtor is made an act of bankruptcy, the debtor is marked as having committed an act of bankruptcy and as from that time he is rendered incapable of carrying on his business and intervening transactions are invalidated. If an execution for £10 is made an act of bankruptcy, it has the effect of relating the bankruptcy back to the time when that execution was issued and the sale took place, or when the execution was issued and remained unsatisfied for 21 days. That will obviously place a serious disqualification upon the debtor. Therefore, one does not lightly stigmatise as acts of bankruptcy matters which ought not to be so stigmatised. If S500 is selected as the qualifying amount for a petitioning creditor, I suggest that execution, which constitutes an act of bankruptcy, should be for a similar amount. It is altogether too trivial to allow a debtor to be considered as having committed an act of bankruptcy, back to which the commencement of his bankruptcy may be related, if the execution is only for a very small amount - that is to say, less than $500.

Senator COHEN:
Victoria

.- I indicate that the Opposition supports Senator Wright’s proposed amendment.

Senator GORTON:
Minister for Works · Victoria · LP

.- We do not wish to accept, this amendment. Legal suggestions have been made to me on the points of law involved in this matter which tend to disagree with the legal suggestions made by Senator Wright. I am told that we do not want to pick out acts of execution from other acts and put a limit of $500 on those thus, when all the other acts of bankruptcy are in the same position. My advice seems to be wrong there, because they would be in a different position if we put $500 on this. 1 do not quite see why this is necessary. As the Bill now stands, a man is not prevented from carrying on his business in the normal way by an execution being taken out against him, even if this is regarded as an act of bankruptcy, until, so I am told, a petition is made and he is in fact rendered bankrupt.

Senator Wright:

– But if a creditor suspects that the man cannot pay his debts as they become due, or if a creditor has knowledge of this execution, the man is prevented from carrying on his business.

Senator GORTON:

– Is the honorable senator suggesting that because execution has been levied against the man and that is known, quite apart from it being an act of bankruptcy-

Senator Wright:

– No, it is an act of bankruptcy to which the possible bankruptcy could relate back. If he came to me for a mortgage I would not give it to him because if a bankruptcy supervened my mortgage would be invalidated.

Senator GORTON:

– This suggested amendment would indicate that execution is taken in lieu of a petition of bankruptcy. A petition of bankruptcy will lie if a man owes $500. An ordinary petition of bankruptcy can be presented if he owes $500. By inserting words relating to execution for a sum in excess of $500, the clause will mean really that execution is an alternative, under the same conditions, to a petition of bankruptcy, because in each case he owes the same amount. I see that Senator Wright is shaking his head and I should like to hear from him on that point.

Senator WRIGHT:
Tasmania

.- I am obliged to the Minister for that invitation because I have some inhibitions - not many, but some - about talking too much. When one seeks to make a debtor bankrupt one has to prove, first, an act of bankruptcy, and secondly, that one is a creditor. Under this Bill, one will have to prove that he is a creditor for more than $500. One may prove that an act of bankruptcy occurred last week or five months ago. If one proves an act of bankruptcy, a sequestration order will be made. If a sequestration order is made today and an act of bankruptcy is proved to have occurred within six months, irrespective of whether it is the one upon which the petition was lodged and the sequestration order was made, the commencement of the bankruptcy relates back to that. Prima facie, any transaction of property by the debtor after that available act of bankruptcy is voided unless it is justified by sections 95 or 96 in the old Act. The person who takes under that transaction has the onus upon him to show that he did not have knowledge of an available act of bankruptcy.

Suppose he knew that an execution had been issued against his debtor for £10. Under my amendment, he would not know that an act of bankruptcy had been committed. Suppose he knew that an execution hud been issued against his debtor for $700. Under my amendment, he would know that an act of bankruptcy had been committed. In the first case, I do not want the intervening transaction to be invalidated. In the second case, I do. It is only a question of keeping some perspective in regard to what constitutes this disabling act of bankruptcy. lt is just as important in the definition of the act of bankruptcy as it is in the definition of the qualification of the petitioning creditor.

Senator GORTON:
Minister for Works · Victoria · LP

– I do not propose to prolong the discussion. The Government would not want the proposed words inserted in this clause because they would single out this particular act of bankruptcy from all the others. According to this clause, a debtor commits an act of bankruptcy in each of a number of cases. The first case is if in Australia or elsewhere he makes a conveyance or an assignment of his property. No sum of money is mentioned in relation to the value of the conveyance or the assignment of that property.

Senator Wright:

– If he became a bankrupt that would be void against the trustee.

Senator GORTON:

– If he makes a conveyance, transfer, settlement or other disposition of his property or of any part of his property; if he creates a charge on his property or on any part of his property; if he makes a payment; or if he incurs an obligation, that would, if he became a bankrupt, be void as against the trustee. No sum of money is mentioned there. A debtor commits an act of bankruptcy if, with intent to defeat or delay his creditors, he departs out of Australia or departs from his dwelling house or does any of the things which we see printed in the clause. I suggest that again it is a matter of which legal interpretation the Senate is prepared to adopt.

Question put -

That the words proposed to be inserted (Senator Wright’s amendment) be inserted.

The Committee divided. (The Chairman - Senator T. C. Drake-Brockman.)

AYES: 20

NOES: 23

Majority . . . . 3

AYES

NOES

Question so resolved in the negative.

Senator WRIGHT:
Tasmania

.- I move -

In sub-clause (3.) leave out paragraph (d).

This paragraph is contained in a long series of provisions dealing with a bankruptcy notice. Paragraph (g) in clause 40 (1.) provides that an act of bankruptcy is committed if a creditor obtains against a debtor a final judgment or final order and has served on the debtor a bankruptcy notice which is not complied with. Sub-clause (3.) provides -

For the purposes of paragraph (g) of sub-section (I.) of this section -

a person who is for the time being entitled to enforce a final judgment or final order for the payment of money shall bc deemed to be a creditor who has obtained a final judgment or final order.

An explanation of that cryptic paragraph appears in the report of (he Committee which was appointed by the AttorneyGeneral to review the bankruptcy law of the Commonwealth. At page 21 the Committee states - . . the Committee recommends that, for the purposes of this paragraph, a judgment or order that is enforceable as, or in the same manner as, a final judgment obtained in an action should be. deemed to be a final judgment so obtained and that the proceeding in which, or in consequence of which, the judgment or order was obtained should be deemed to be the action in which it was obtained. Such a provision will have the effect of altering the law as declared in the case of Opie v. Opie. in which :t judgment entered in the Supreme Court of New South Wales upon the filing of a certificate granted under section 13a of the Deserted Wives and Children Act of that Slate (which was enforceable under Slate law as a final judgment obtained in an action) was held by the High Court not to be a judgment in an action for the purposes of the Bankruptcy Act and that a bankruptcy notice issued on the basis of the judgment must therefore be set aside. The Committee takes the view that, if State law provides that a judgment is to be enforceable as a final judgment in an action, the Bankruptcy law should treat the judgment similarly.

On the face of it I would be disposed to accept that, but my difficulty in accepting it is concerned with my conception of the position regarding arrears of maintenance. Let us assume that a wife has obtained a maintenance order from a court and that the arrears amount to $1,000. Unless there is a provision, such as that which exists in New South Wales, enabling a court maintenance order to be transferred to the Supreme Court where it has the effect of a final judgment in an action, my understanding is that arrears of maintenance are not a debt that are provable in a man’s bankruptcy. My understanding is that arreas of maintenance are not a debt from which a discharge from bankruptcy releases a bankrupt. Therefore, there seems to me to be some lack of symmetry in enabling a bankruptcy notice to invoke such an order as the basis of an act of bankruptcy on the ground that it is a final judgment, when it is not a provable debt and not an obligation from which a discharge from bankruptcy releases a bankrupt. If 1 am in error on any of those conclusions, I shall be genuinely thankful for correction.

Senator GORTON:
Minister for Works · Victoria · LP

– I rise probably not o conclude this discussion but to give Senator Wright a further opportunity to speak a little later while I obtain further advice. L am informed that the part of the Committee’s report to which the honorable senator referred relates not to clause 40 (3.) (d) but to clause 40 (3.) (b). Clause 40 (3.) (d), which prompted this discussion, is in the Bill for the purpose of enabling a person to whom a judgment debt has been assigned to issue a bankruptcy notice in respect of that debt.

Senator Wright:

– I am obliged to the Minister, but he will see that the language in paragraphs (b) and (d) makes even those people whose tongues are nimble unable readily to distinguish (b) from (d).

Senator GORTON:

– At this lime of night my tongue is far from nimble, but I. will let it stumble on. If this provision were not in the Bill, a person to whom a judgment debt had been assigned would not be able to issue a bankruptcy notice in. respect of that debt.

Senator Wright:

– I would like the Committee to take my observations as being directed to paragraph (b), which seeks to make non-compliance with maintenance orders an act of bankruptcy.

Senator GORTON:

– Before the honorable senator expounds his argument a little further, I point out that the Bill does provide, as he said, that the discharge of a bankrupt from a bankruptcy does not release the bankrupt from liability under a maintenance order, except to such extent and subject to such conditions as the Court orders. That is made quite clear in clause 153 (2.) (c) of the Bill.

Senator Wright:

– I think I am also correct in saying that arrears of maintenance are not provable as a debt in bankruptcy, am I not?

Senator GORTON:

– Yes, the honorable senator is correct.

Senator WRIGHT:
Tasmania

.- I am afraid that, having read the report of the Committee, in following the Bill through I saw paragraph (d). At the moment, for the life of me I cannot see the difference, in substance and effect, between paragraphs (b) and (d). I would ask another member of the Committee to be good enough to point out that difference at a later stage. At this stage, I do not want to be tendentious on that matter. There is no point in it. My amendment is designed to leave out paragraph (b), now that 1 am told that the report of the Committee relates to that paragraph.

The CHAIRMAN:

– The honorable senator’s amendment is to leave out paragraph (d).

Senator WRIGHT:

– Well. (b)/(d). if you like.

Senator Gorton:

– In fact, the honorable senator’s amendment is to leave out paragraph (d). Now he wants to change it.

Senator WRIGHT:

– My amendment, as circulated, related to paragraph (d). 1 do not think I actually moved it. Anyhow, whether 1 did or not, I should like to address myself to paragraphs (b) and (d). 1 want my amendment to be understood to be designed to leave out paragraph (b).

This is the dilemma: A wife has a maintenance order, the arrears on which are $1,000. Her husband will not pay. The Commonwealth will not enable its legislation lo be amended in order to make the order readily enforceable. The States are dilatory and disconnected. One cannot get enforcement through the State courts. We scream out for enforcement. Nobody should be in doubt about my desire to get enforcement of the payment of arrears of maintenance. However, I question the correctness of thinking that says that, when payments under a maintenance order are in arrears and under State law the order is transmissible to a court of civil jurisdiction, is to be considered as a civil judgment and is to be enforceable as a judgment in an action, that is capable of being the basis of a bankruptcy notice and if the bankruptcy notice is not complied with the husband can be made bankrupt; but the wife cannot prove in the bankruptcy and receive a dividend, and the husband when discharged from bankruptcy remains liable for the arrears of maintenance.

That seems to me to present an incongruous lack of symmetry, lt says that failure to meet an obligation to pay maintenance in those circumstances constitutes an act of bankruptcy but does not enable the wife to take a dividend out of the bankrupt’s property and does not enable him to take a discharge from his obligation after he has gone through all the disqualifications of bankruptcy. I am not advocating that he should get a discharge per medium of bankruptcy; but I am bound to put before (he Committee the view that there is no logic in the proposition that seeks to make failure to pay arrears of maintenance in these circumstances an act of bankruptcy when the wife to whom the arrears are payable cannot prove in the bankruptcy and the bankrupt cannot get a discharge from the obligation after he has suffered bankruptcy. I do not intend to put the amendment to a division on my own initiative. I wished to provoke a discussion in the Committee to see whether or not my outlook on this mat’er was unsound.

Senator Cohen:

– I invite Senator Wright to say what the effect of deleting this paragraph would be, in his view.

Senator WRIGHT:

– The effect would be to prevent a person to whom arrears of maintenance were payable from petitioning in bankruptcy. As the wife cannot prove in the bankruptcy and as the husband cannot get a discharge from his obligation by means of his discharge from bankruptcy, it seems to me to be entirely incongruous to say that arrears of maintenance should constitute a debt in respect of which a bankruptcy notice can be issued.

Senator Gorton:

– Would not the wife have to issue a bankruptcy notice?

Senator WRIGHT:

– Of course.

Senator Gorton:

– Would she do that?

Senator WRIGHT:

– You tell me.

Amendment negatived.

Clause agreed to.

Clauses 41 to 108 - by leave - taken together, and agreed to.

Clause 109. (1.) Subject to this Act and to sections 221p and 22iyu of the Income Tax Assessment Act 1936-1965, the trustee shall, before applying the proceeds of the property of the bankrupt in making any other payments, apply those proceeds in the following order: -

  1. sixth, in payment of amounts (including amounts payable by way of allowance or reimbursement under a contract of employment or under an award or agreement regulating conditions of employment, but not including amounts in respect of long service leave, annual leave, recreation leave or sick leave), not exceeding in the case of any one employee the sum of Six hundred dollars, due to or in respect of any employee of the bankrupt, whether remunerated by salary, wages, commission or otherwise, in respect of services rendered to or for the bankrupt before the date of the bankruptcy;
  2. seventh, in payment of amounts, not exceeding in any individual case Two thousand dollars, in respect of compensation, being compensation the liability for which accrued before the date of the bankruptcy, under any Act or State Act or Ordinance of a Territory of the Commonwealth providing for compensation for personal injury by accident arising out of, or in the course of, employment;
  3. eighth, all amounts due to or in respect of any employee of the bankrupt, whether remunerated by salary, wages, commission or otherwise, in respect of long service leave, annual leave, recreation leave or sick leave in respect of a period before the date of the bankruptcy;
Senator WRIGHT:
Tasmania

.- I want to draw the attention of the Committee to paragraph (f) of sub-clause (1.), where the Bill is concerned with priorities of payments. I do not know whether any honorable senator has examined the languagewith which the clause begins, which is -

Subject to this Act and to sections 22 lp and 22iyu of the Income Tax and Social Services Contribution Assessment Act . . .

I put the Committee on caution as to that. The clause then goes on to state - the trustee shall, before applying the proceeds of the property of the bankrupt in making any other payments, apply those proceeds in the following order: -

Paragraphs (a), (b). (c), (d) and (e) are all concerned with administrative expenses and the like, or, in the case of the estate of the deceased person, with funeral and testamentary expenses. Paragraph (f) is the first paragraph to deal with priority in respect of debts owing by the bankrupt. It provides for priority dividends - in payment of amounts . . . not exceeding in the case of any one employee the sum of six hundred dollars, due to or in respect of any employee of the bankrupt, whether remunerated by salary, wages, commission or otherwise, in respect of services rendered to or for the bankrupt before the date of the bankruptcy,

I seek to delete that provision and I move -

In sub-clause (1.), leave out paragraph (f). insert the following paragraph: - “ (f) Sixth, in payment of all wages or salary of any clerk, servant, labourer or workman (not being the wife, husband, child, parent, brother or sister of the bankrupt) not exceeding $500 whether payable per time or piecework in respect of services rendered to the bankrupt within 4 months before the date of the sequestration order;”.

I will not take issue on the sum of $500 if $600 is preferred. What I propose is a re-enactment of the present provision. The first thing that should be noted is that my proposal is limited to wages or salary, to the bread and butter remuneration of the employee. It does not cover commission or piece work payments. People who take on piece work are contractors, not employees in the ordinary sense of the term. For the purposes of many awards, they are not employees.

Senator Murphy:

– They are for the purposes of the rubber worker’s award and all sorts of other awards.

Senator WRIGHT:

– I said “for the purposes of many awards “. Is the commission of an estate agent who renders service to the bankrupt by selling his property to be preferred? Is a lawyer to gel preference because of service rendered to or for the bankrupt before the date of the bankruptcy?

Senator Gorton:

-I am informed that a lawyer or a commission agent would not be an employee.

Senator Murphy:

– That is right. A lawyer is not an employee. He is not subject to direction or control.

Senator WRIGHT:

– Where is the definition of “ employee “?

Senator Murphy:

– A lawyer is not an employee of his client.

Senator WRIGHT:

– There is real merit in what the honorable senator says, andI will concede that for the purposes of this argument. Take the case of a wife, who. as I put it this afternoon, is in effect a partner but who for this purpose is called an employee. She is paid an inordinately high salary and is really the manager in the absence of her husband. Is she not an employee? One cannot get a taxation deduction for the services of a relative unless the remuneration is reasonable. There is nothing in this clause about reasonable remuneration.

Suppose there are two persons who have been associated in business for 50 years and have never bothered to make their relationship one of partnership. The principal of the business regularly hands out a bonus at the end of the year, so that, in effect, the other man is a partner in the business. What merit is there in giving him a preference over and above other creditors? Take the case of an accountant who has the financial management of a business and receives a high rate of remuneration. He is an employee of the business. I am not referring to a public accountant employed on a professional basis. Many accountants are employed in businesses in the way I have suggested. It is ridiculous to give this priority to anybody except an employee who is in a relationship of dependence which differentiates him from other creditors. The original legislation was wise in referring to “ clerk, servant, labourer or workman “. Make no mistake. If, in the case of a bankrupt builder, the accountant, or manager or wife had priority in the circumstances I have mentioned that would simply be chiselling the clerk, servant, labourer or workman out of what was due to him. This would allow all of those people to come in, not only pari passu with the clerk or servant or labourer or workman, but also in priority to the butcher, the baker, the milkman and the other people who serve the household with food and clothing. There is no merit at all in this extension from clerk, servant, labourer or workman to employee generally. Then, in the amount, the limit is to be $600. Under the income tax legislation, in the case of a near relative, the limit is to a reasonable amount. Here there is nothing to prevent the people who are near to the bankrupt from being given a great rate of remuneration over a short period to absorb the $600. Therefore, I submit that we would be much wiser to retain the old provision.

Under my amendment, it has to be shown that the accruals arose in the last four months. What merit is there in allowing to come in against servants who, in trying to keep the undertaking going, have been serving the bankrupt right up to the disaster, those who left him six months earlier because they saw that it was a sinking ship? With arrears up to $600, they come in in competition with the men who have been serving the business right up to the bankruptcy. There must be a period to prescribe the accruals, otherwise the real purpose of this priority will be defeated.

With the concurrence of honorable senators, I amend the amendment by substituting the amount of $600 for the amount of $500. The paragraph proposed for insertion will then read - “ (f) Sixth, in payment of all wages or salary of any clerk, servant, labourer or workman (not being the wife, husband, child, parent, brother or sister of the bankrupt) not exceeding $600 whether payable per time or piecework in respect of services rendered to the bankrupt within 4 months before the date of the sequestration order; “

Senator CANT:
Western Australia

– I think that Senator Wright’s proposed amendment does not go quite far enough. He has, in fact, two amendments. The second, which we have yet to consider, is to leave out paragraph (h), which makes provision for payments in respect of long service leave, sick leave, annual leave and so on. If the two amendments are carried, accumulation of long service leave will be over a period of only four months. A worker may work for an employer for 10 years and accumulate a right to payment for six and a half weeks long service leave, but under the proposed amendments he would be entitled only to payment for the long service leave that accrued over four months. As a matter a fact, he would be entitled to payment of about £5 instead of £170.

Senator Wright:

– This would nol coven long service leave at all. Il covers only wages or salaries.

Senator Cohen:

– Does the honorable senator say that the worker would not get any long service leave under this?

Senator Wright:

– No, nor would he under the paragraph in the Bill. That comes under a later paragraph.

Senator CANT:

– The law has laid down that holidays are deemed to be payments for services rendered and that they are included as part of wages. With all due respect to Senator Wright, 1 would, contest what he has said. It is true, qf course, that the paragraph is wide enough to allow some of the people of whom Senator Wright speaks to come within it. but included in the part that Senator Wright did not read is the provision - including amounts payable by way of allowances

Or reimbursements under a contract of employment or under an award or agreement regulating conditions of employment.

The provision proceeds to exclude long service leave, annual leave, recreation leave and sick leave. The provision should not be restricted in the way that Senator Wright seeks, particularly in the face of the report of the Committee set up by the AttorneyGeneral, which advised the Government that restriction of the period of accumulation to four months in respect of this priority should not be continued. The Committee’s final statement is -

In making this recommendation, the Committee considers that it is unlikely that an employee will continue working for a debtor without remuneration for any considerable time.

To place a restriction of four months in the legislation would in fact be of no advantage, because a worker would not continue to work for an employer when he had not received payment for four months. Nothing is to be gained by including the period of four months. I was inclined to agree that remuneration of relatives of the bankrupt should not be included. I agree with the argument presented by Senator Wright in respect of this. However, the Australian Labour Party has not seen fit to do that. We agree with this particular subclause but I urge the Committee not to support Senator Wright’s amendment, because it goes back to a provision that has existed since 1924, which the Committee of review sought to improve. I think that that Committee’s recommendation should be accepted.

Senator GORTON:
Minister for Works · Victoria · LP

.- Speaking on behalf of the Government, I would not wish to accept the amendment, for a variety of reasons. In the first place, the amendment seeks to exclude from any chance of being paid for their services relatives of the bankrupt - wife, husband, child, parent, brother or sister. There are many, many cases where sons and wives quite legitimately work, and work as hard as or harder than a labourer for persons who own properties, and they are entitled to wages in exactly the same way as they would be if they were employed by somebody else. 1 can think, for example, of dairy farms. On farm A, a son is assisting his father. On farm B, a son is assisting his father. Under this proposal they would be excluded from receiving this remuneration, whereas if the son of farmer A were employed by farmer B and the son of farmer B were employed by farmer A they would not be excluded. I do not see why this sort of thing should occur. While, of course, anything can be abused, there are many proper cases where relatives are working and should be entitled to the same sort of wages as they would get if they were employees. Nor would I like the words in the Bill as to payment under a contract of employment by commission, for example, to be cut out because there are many salesmen who are employed on a retainer plus commission. That is a part of the remuneration which, by agreement with their employers, they have accepted and should, 1 think, be covered by the Bill. I agree with Senator Cant as to the time limit. I would prefer that the clause stand as printed.

Senator MURPHY:
New South Wales

– I intervene only to indicate that in my opinion there are some defects in what Senator Wright has put to the Committee. At the same time, there are some commendable features. First, the matter as to the relatives of the bankrupt being excluded is not to be judged on the basis on which it was put by the Minister. He has spoken as though the relatives would be excluded from payment. That is not what is dealt with in Senator Wright’s amendment. The exclusion to which Senator Wright referred, and which was included in the Act as it now stands, is the exclusion from priority in payment. There is all the difference in the world between the two. The question is whether such persons should be preferred to persons such as those entitled to compensation, long service leave, and so on.

Senator Gorton:

– If the honorable senator referred to priority I would advance exactly the same argument.

Senator MURPHY:

– The ground for this sort of thing is not merely that the persons would not be bona fide employees, lt is an important consideration that often persons who are genuine employees at arms length might have to share in the distribution at a certain level, or even be deferred if they were claiming by way of long service leave or something of that kind. That is one aspect. The other aspect is that those persons who are the relatives are often in a better position to know what is the real situation. That being so, one would not think that they should be preferred to persons who were at arms length to the bankrupt.

That is a consideration in favour of what Senator Wright was putting. On the other hand, his amendment deals with the date from which the entitlement should accrue. As I understand it, he bases that on the four months limitation before the sequestration order. That was the position previously and it has the defect that instead of a person being able to judge his situation, so that he is unaware of bankruptcy, he may choose not to work on. This would happen in the period before the bankruptcy when he was working and was unaware of the situation. An act of bankruptcy would occur - and there are many ways in which it may occur. In substance, that is the position under the Bill as it stands.

Senator Wright seeks to substitute for that the old provision which was that the entitlement dated from four months prior to the sequestration order. The workmen and the other persons have no control over when a sequestration order is made. One does not know what may happen with adjournments before the court. There may be a series of things outside the control of the persons concerned. There is good sense in saying that the entitlement should date backwards from the act of bankruptcy, this being something that persons might not always be able to ascertain or have some notice of. But it does not seem fair that persons who were otherwise entitled might be disentitled because the sequestration order is not made for some time. For that reason - and there might be others which occur to Senator Cohen - Senator Wright’s amendment ought not to be adopted as it stands.

Senator COHEN:
Victoria

.- I want to support some of the propositions made by Senator Murphy. In our opinion, the amendment moved by Senator Wright is retrospective. In the preparation of this Bill, the Government has seen fit to extend the period in which the remuneration of employees can be considered.

Senator Wright:

– It has cut out any period at all.

Senator COHEN:

– That is right. It has cut out the rather artificial limitation and very restrictive scope of this priority and has given it full blooded operation. We welcome that and for that reason we cannot support Senator Wright’s amendment. Indeed, we strongly oppose it. However, one or two points he made in support of his amendment are worthy of consideration, in our opinion. One is the exclusion in the present Bill of reference to the wife, husband, child, parent, brother or sister of the bankrupt. One can appreciate the reasons he has advanced in support of that part of his amendment because it deals with the possibility of evasion and of subterfuges to defeat the claims of others claiming priority, including bona fide workers or employees.

Senator Wright:

– What about highly salaried executives?

Senator COHEN:

– If it is a fictitious arrangement or an arrangement lacking in essential bona fides, it is obviously attracting the objections the honorable senator has made. In any event, there is a limit of $600. I wanted to indicate that we would oppose Senator Wright’s amendment. If in his wisdom he sees fit to separate out that other portion, we will have to give serious consideration to it because some of the arguments he advanced, but not all of them, appealed to us.

Senator WRIGHT:
Tasmania

.- In these circumstances, it is highly desirable that we should not proceed before the clock strikes 10.30 p.m. I say that in a spirit designed to relieve the tension because I do not treat this matter lightly. I abhor an avalanche of ill-considered legislation. I have demonstrated something to those who have a genuine interest in the underdog employee. I refer to the fellow who has not the privilege of being a highly salaried executive of the bankrupt or a very preferred employee of the bankrupt such as a member of his family. I have demonstrated the unsoundness, in their view, of the degree of priority that is properly given to a clerk or servant, labourer or workman. As to the question of the time limit, I put it to the Committee that it is just ridiculous to suggest that an employee can come along and get preference in a bankruptcy for a claim six years old.

Consideration interrupted.

The CHAIRMAN:

– Order! In conformity with the sessional order relating to the adjournment of the Senate, I formally put the question -

That the Chairman do now leave the chair and report to the Senate.

Question resolved in the affirmative. (The Chairman having reported accordingly)

page 734

ADJOURNMENT

Regulations and Ordinances Committee

The PRESIDENT:

– Order! In conformity with the sessional order relating to the adjournment of the Senate, I formally put the question -

That the Senate do now adjourn.

Senator WILLESEE:
Western Australia

– by leave - I present the twenty-first report of the Standing Committee on Regulations and Ordinances, together with the minutes of evidence.

Ordered to be printed.

Question resolved in the affirmative.

Senate adjourned at 10.31 p.m.

Cite as: Australia, Senate, Debates, 3 May 1966, viewed 22 October 2017, <http://historichansard.net/senate/1966/19660503_senate_25_s31/>.