6th Parliament · 1st Session
The President took the chair at 3 p.m., andread prayers.
– I beg to inform the Senate that His Excellency the Governor-General has seen fit to alter the time for receiving the AddressinReply to a quarter past three o’clock on Thursday next.
– In consequence of the announcement made by the Leader of the Senate, honorable senators will understand that we cannot carry out the arrangement for presenting the Addressin -Reply to-day; therefore the announcement I made yesterday must be regarded as cancelled. I will give honorable senators timely notice next week of the hour when the Addrese-in-Reply will be received, and they can accompany me to present it.
– I wish to ask the Minister of Defence the following questions : -
– With regard to the first part of the question I will undertake to bring it under the notice of the General Officer Commanding at the first opportunity. As regards the other parts, I think that, as a practice has been laid down that Ministers are not called upon to give legal opinions, it should be extended so that I should not be called upon to give medical opinions. Therefore this covers those parts of the question.
– Can the Minister representing the Minister of Trade and Customs state when we may expect the Statute relating to coastal lights and buoys to be proclaimed ?
– I am not able to supply the information at the present time, but I will bring the matter under the notice of the Minister of Trade and Customs, and, perhaps, at a later stage to-day or to-morrow, I will be in a position to answer the question.
Mr. Teesdale Smith’s Contract
asked the Minister representing the Minister of Home Affairs, upon notice -
– The answers are -
asked the Minister representing the Postmaster-General, upon notice -
In view of the inconvenience caused to the public through the unusually early closing of mails, will the Postmaster-General endeavour to alter the time of departure of the Loongana from 3 p.m. daily to 4 p.m., and similarly extend the sailing time of the Oonah one hour from each port, so as to restore the conditions prevailing in last year’s Tasmanian summer mail-service time-table ?
– The answer is-
The time-table of the Loongana is dependent upon tides in the Tamar. ThePostmasterGeneral will, however, endeavour to arrange us suggested by the honorable member. Similar action will be taken as regards the Oonah’s time-table.
asked the Minister representing the Postmaster-General, upon notice -
– The answers are -
The principal new line construction works in Tasmania which it is proposed to proceed with, are as follow: -
Line renewal works in the Nugent and Saltwater River district, and the Geeveston-Ramsgate district.
Conduit works in Hobart.
These works will be proceeded with at once.
In addition to these, new trunk lines between Campbell Town and St. Mary’s, Moorina and St. Helens, and Sorell and Taranna, together with conduit and cable works in Launceston will probably be proceeded with at an early date.
asked the Minister representing the Minister of Home Affairs, upon notice -
– The answer is - 1 and 2. The Divisional Returning Officers will be paid (in accordance with theusual custom) immediately their election accounts are adjusted. The other officials engaged in connexion with the elections in the divisions of Darwin, Denison, and Franklin, have been paid. The information in regard to the divisions of Bass and Wilmot is not available, but is being obtained, and will be furnished as soon as practicable.
asked the Minister of Defence, upon notice -
– The answers are -
The number of exemptions from military service granted are -
– Were those exemptions granted because of ill-health?
– No; most of them were granted because of distance from the training centre.
asked the Minister representing the Treasurer, upon notice -
– The answers are -
Motion (by Senator Pearce) agreed to-
That, in accordance with the provisions of the Commonwealth Public Works Committee Act 1913, the following senators be appointed members of the Parliamentary Standing Committee on Public Works, viz. : - Senator Keating, Senator Lynch, Senator Story.
Motion (by Senator Pearce) agreed to-
That, in accordance with the provisions of the Committee of Public Accounts Act 1913, the following senators be appointed members of the Joint Committee of Public Accounts, viz.: - Senator Bakhap, Senator Blakey, Senator Stewart.
Bill received from the House of Representatives, and (on motion by Senator Russell) read a first time.
Bill received from the House of Representatives, and (on motion by Senator Gardiner) read a first time.
Bill received from the House of Representatives, and (on motion by Senator Gardiner) read a first time.
Debate resumed from 21st October (vide page 246), on motion by Senator Gardiner -
That this Bill be now read a second time.
– I think I should congratulate the Vice-President of the Executive Council upon having the opportunity of introducing this measure. It should have, and I believe it will have, a fairly easy passage through both Houses of the Parliament. When it has become the law of the Commonwealth we shall have made a very distinct legislative advance. It will be a piece of legislative work which will not only reflect credit upon the Parliament of the Commonwealth, but will redound very greatly indeed to the advantage of the whole community. As the Minister pointed out in moving the second reading of the Bill, each of the States has its own system of bankruptcy law more or less approximating to the principles of the English bankruptcy law, upon which, to a very large extent, they have been framed. On this subject, as on others where the legislation of the States has largely been modelled upon English precedents, slight deviations have been made from the original provisions, and as time has gone on, in each State the deviations from the original have become more marked. Should we allow the State bankruptcy laws to prevail, no matter how strong may be the desire of the State Parliaments to keep as closely as possible to the English model, we should still find the difference between the legislation in the several States accentuated. It is not merely because this difference would be accentuated that we in Australia would be handicapped by the situation. Under Federation we are one community for trading purposes, and creditors and debtors are not found boxed up, as it were, in separate compartments or States. Individuals and firms in the various States carry on the operations of trading throughout the Commonwealth, and the relation of debtor and creditor is consequently not a relation confined to the territorial limits of single States. When, therefore, a bankruptcy occurs in the case of an individual or of a corporation or trading firm, it is not merely the individual, firm, or trading corporation in the State of the defaulting individual or firm that is concerned, but the traders, corporations, and firms trading throughout the whole of the Commonwealth. For that reason, if for no other, it is eminently desirable that throughout the Commonwealth there should be a uniform bankruptcy law. In fact, the Bill will amount to a codification of the bankruptcy law, and for that purpose we have drawn largely in it upon the existing law in each of the States. I am especially pleased to be taking part in enacting the provisions of this Bill into Federal legislation. The Minister will pardon me for saying that it is now seven years since the original Bill to be submitted to Parliament was drafted. This was in 1907, when a great deal of time. care, and labour was expended in the preparation of this measure. It was recognised that it was not a party measure, but one to which all parties in both branches of the Parliament could apply themselves assiduously without any sense of party feeling, animated solely by the intention to put upon the statute-book a good Act that would be of practical benefit and utility to the trading community throughout the Commonwealth. At that time we, as a Government, had prepared a document, which I have here now, showing the divergencies in the law of the several States, and between these several systems of law and the English law upon which they, to a greater or lesser extent, had been moulded. Mr. Groom, the then Attorney-General, took a particularly interested part in formulating the original Bankruptcy Bill that was to have been submitted to Parliament, and of which this is the outcome. T had the honour and privilege of being very closely associated with him in the original collation of the different clauses of the measure, and putting it into form. It was not submitted to Parliament in 1907. There was a great crush of other legislation demanding more urgent consideration, and it was impossible to lick this Bill into final shape. It was too much to expect Parliament at that time to be able to give a measure such as this attention commensurate with its importance. In a later Government Mr. Glynn went through the Bill as he found it upon the stocks, and some time after its provisions had subsequently become public property delivered a very interesting and informative address in Adelaide before the South Australian Chamber of Commerce upon its main provisions and the general principles of bankruptcy law. It was not until December, 1912, that a subsequent Attorney-General, Mr. Hughes, brought the Bill out of the Ministerial office and tabled it in Parliament. It’ was not tabled with any ‘intention at the time of allowing it to pursue its course through Parliament, as the termination of the session was too near. Mr. Hughes very wisely and properly had the Bill read a first time in the other House, and circulated amongst members and allowed to get into circulation in the community. I saw at the time that so far as Tasmania was concerned those who had had practical experience of the working of the bankruptcy law - those in the legal profession, trustees, accountants, and those associated with the Courts in relation to bankruptcy proceedings - should have copies of the Bill. I invited their comments and suggestions in regard to it, the obvious intention of the Government at the time in having the Bill made public being that all interested might submit any suggestions they thought desirable to be taken into consideration before the Bill received final treatment by the Legislature. In June, 1913, there assembled in Sydney the annual conference of the Associated Chambers of Commerce of the Commonwealth, a body consisting of representatives from each Chamber of Commerce in all the States. I had the honour of being sent as one of the representatives from Tasmania by both the Launceston and Hobart Chambers. When the notice went out from the central body convening a meeting to be held in June of that year in Sydney, each Chamber of Commerce was notified that one matter to receive special consideration was the proposed bankruptcy law which Mr. Hughes had circulated in the previous December, and each Chamber was asked specifically to nominate either one of its ordinary delegates, or some person to represent it specially in connexion with that particular subject, which was to be gone into most carefully. I had the honour, on behalf of the Hobart and Launceston Chambers of Commerce, to be appointed as their representative at the Conference upon the special Committee that met to consider in detail the provisions of this bankruptcy measure. There were representatives from Victoria, Sydney and Newcastle in New South Wales, South Australia, and Western Australia, and several Chambers of Commerce in Queensland. We sat for several days as a separate Committee, going into every detail of the Bill, and the final paragraph of our report was -
We have considered the whole Bill in the light of the conditions obtaining in each State, and we believe that the Bill, with the amendments we have suggested, will, if passed into law, create a comprehensive and satisfactory code of bankruptcy, and one, undoubtedly, an improvement on any existing State system.
Several of those who had taken part in the consideration of the Bill by the Committee, including myself, added to that report verbally our opinions in regard to the Bill, and these went very much further than the qualified admiration I have quoted. The recommendations or suggestions of the Committee were printed and brought under the notice of the Government. I dare say they are upon record in the files relating to the measure, but no steps were taken last year by the Government to proceed with it. Senator Stewart took steps to introduce a Bill which, I believe, was, in the main, moulded upon this, but this is the first time, for really working purposes, that the Bill has been launched in Parliament, as it has been by the Vice-President of the Executive Council. I again congratulate him upon having the opportunity of so doing. He has disclaimed anything like an extensive knowledge of the subject of bankruptcy, or a detailed ‘ acquaintance with all the provisions of the measure. It was hardly necessary for him to do that ; and, in fact, it would have been hardly necessary for anybody even with a legal training, or with considerable experience in bankruptcy procedure, to have done it, because it is a highly technical subject, and the Minister can be fortified by the knowledge that the Bill in general form has run the gauntlet of three or four AttorneysGeneral, and of a most searching bond fide criticism on the part of the associated Chambers of Commerce of the Commonwealth. The amendments which. I have circulated are, to a large extent, the amendments that I, as one of the members of the special Committee, was a party to suggesting. In the Committee there were men of my own profession, such as Mr. McLachlan, of Adelaide, accountants of the high standing of Mr. E. B. Lemmon of Victoria, and Mr. Borchard of New South Wales, whose name is a household word throughout the Commonwealth in connexion with insolvency law and administration. There were also men who were qualified to judge of the value of the provisions of this Bill, not alone from the stand-point of the trading community, whose members are frequently represented as creditors, but from the point of view of the debtor. As the Vice-President of the Executive
Council remarked yesterday, it is not only necessary that there should, be expedition in dealing with the estates of bankrupts, but that some measure of punishment, not harsh, rigorous, or severe, but adequate, should be meted out to those who may default through neglect which was avoidable. At the same time, sympathy should be extended to those who have fallen by the way financially notwithstanding that their every effort has been bent in the direction of keeping their heads above water. We have to look after the interests of the man who becomes bankrupt through no fault of his own, and to see that be is not unduly penalized. We have also to guard the community generally against the consequence of the actions of those who, through their own wilful default, have embarrassed themselves financially, and have detrimentally affected a whole circle of persons with whom they have had trading relations. I was glad to hear the VicePresident of the Executive Council draw attention to the necessity which exists for holding the balance carefully between these two classes of debtors and the general community. I repeat that the men who comprised the Committee of which I have spoken were not those who could expect at all times to be interested in bankruptcy proceedings as creditors. They included others who frequently represent the interests of men who have recourse to bankruptcy, either in the nature of a composition or a liquidation, as the last resort. We know that sometimes individuals find themselves compelled at long last to take advantage of the procedure provided by the bankruptcy law to make some final arrangement with their creditors. Frequently they take that step in the full knowledge that they have done all that they possibly can to avoid it. Their interests have, therefore, to be safeguarded against creditors who might be too oppressive, and who might be disposed to press their advantage unduly. I have circulated a list of amendments which I intend to submit, and, with the Minister, I recognise that the Bill is chiefly one for consideration in Committee. When the Law officers, who will advise the Vice-President of the Executive Council, come to look into those amendments, I believe they will find that not one of them aims at destroying any vital principle of this Bill, or establishing any’ other system than that contemplated by it. Indeed, many of the proposals I have outlined are in the nature of drafting amendments, and, although some of them cover three or four pages of print, they comprise merely repeats. For instance, it will be found that I propose to substitute the words “ Official Receiver” for “Registrar, and vice versa. The amendments do not touch the framework of the Bill at all. There are two or three which contain new provisions, but the adoption of these will not alter the colour or texture of the measure. I had intended to circulate an amendment in regard to the definition of the word “bankrupt.” As the Vice-President of the Executive Council has pointed out, there are four methods of bankruptcy provided for in this Bill. These include bankruptcy under a sequestration order, deeds of arrangement, deeds of composition
– Will all these methods be equally bankruptcy in the eye of the law?
– That is the point. ‘ I had intended to circulate an amendment setting out that the definition of the word “bankrupt” should be extended so as to apply to a debtor who takes advantage of the provisions of this Bill to make a deed of arrangement or a composition with his creditors. The conditions which apply in the case of bankruptcy would .then apply in the case of a debtor who assigns his estate for the benefit of his creditors. The Bill provides that when a man’s estate is sequestrated there are certain debts, such as wages, for example, which have priority. I desire that when a man makes a deed of arrangement, a deed of assignment, or a deed of composition for the benefit of his creditors generally,- the same rule shall apply - that priority shall be given to the individual who is entitled to wages from that debtor. Then, too, when a man’s estate is sequestrated, certain restrictions are imposed upon an execution creditor. In other words, a creditor who may have obtained judgment against a bankrupt may not put in an execution and seize goods to tie detriment of creditors generally. I desire a similar provision to be made applicable to deeds of arrangement and deeds of composition under this Bill. Similarly, the restrictions which are im posed upon a landlord in distraining for rent against a bankrupt should be made applicable to cases in which men assign the whole of their estates for the benefit of their creditors generally. For this purpose I had intended to circulate an amendment, the effect of which would have been to make “ bankrupt “ include any debtor who takes advantage of the provisions of this Bill. But I am not unmindful of the fact that such action might entail other consequences which are not desirable, and, as I know the VicePresident of the Executive Council, following the usual practice, will postpone the consideration of the definition clause till the other provisions of the measure have been dealt with, I would like him to consult with his officers as to the best way of securing the results which I have indicated. I desire to see men who assign the whole of their estates for the benefit of their creditors placed in the same category as persons who become bankrupt.
– Would not the honorable senator be in favour of fixing a date with a view to safeguarding the interests of a creditor at a time when the bankrupt believed he was solvent?
– I do not understand the honorable senator.
– Suppose, for example, that a creditor in all good faith obtained an order against a person who became bankrupt a week or two later.
– If he had got in his execution before the date of the order of sequestration he would not be debarred from proceeding with it. If he had obtained judgment it would be only a matter of issuing a form or two, and the bailiff could be put in. But after the date of sequestration he would not be entitled, nor should he be, to proceed to execution if the debtor had assigned his estate generally to a trustee for the benefit of his creditors. I ask the Minister to consult with the Law officers before we reach the definition clause, in order to ascertain whether that result could be achieved by extending the definition of “bankruptcy,” or whether a special clause ought to be inserted, towards the end of the Bill, making certain provisions, contingent upon bankruptcy, apply also in the case of assignments and compositions.
– But the honorable senator would not class with an ordinary bankrupt, whose estate had been compulsorily sequestrated, a man who had entered into a satisfactory arrangement with bis creditors?
– For this purpose I certainly would do so. The object which a man has in view in making an assignment for the benefit of his creditors generally is to take care that the creditors shall obtain pro rata from his estate the greatest value that it is capable of realizing. If the estate could pay, say, 12s. in the £1, it would not be fair that an execution creditor should come in and get his 20s. in the £1, so lessening the value of the estate to the remaining creditors.
– But if a genuine creditor “got in early,” to use an everyday expression, or if he got in, in good faith, when he thought the debtor was solvent, would the honorable senator debar him?
– That is quite another matter. Proceedings taken against a debtor are, in many instances, the actual occasion of his insolvency.
– Would not the honorable senator secure the wages of a worker ?
– -I have said so.
– I understood the honorable senator to say that he should participate in the distribution of the estate.
– No; I said that it was one of the incidents of bankruptcy that wages due by a bankrupt over a certain period should have priority of claim upon his estate, and that I desired that that provision should apply also where a man assigns his estate for the benefit of his creditors.
– But, except for that purpose, you would not class a man who had assigned his estate with an ordinary bankrupt?
– No. I have given notice of my intention to move for the insertion of such words as “ or assignee “ in several clauses, in order 1 o secure the wages in such cases, and to restrict the execution creditor, or a landlord, from distraining for rent. One division of the Bill, which, I think, will be gratifying to all of us, is that relating to administration. We have also the assurance of the Vice-President of the Executive Council that, so far as is practicable, convenient, and consistent with the proper administration of this law, it is the intention of the Government, in exercising their power to constitute Courts, appoint officers, and so forth, to utilize the existing institutions and officers of the States, endowing them with the necessary powers and jurisdiction, and clothing them with the authority which the Bill purports to give officers under it.
– Would not a State Judge, who is largely engaged in insolvency work, become a Federal officer J
– His jurisdiction then would be Federal.
– The honorable senator does not desire any overlapping.
– There is no necessity for any. This Bill, when it becomes law, will supersede the State bankruptcy laws. It does not repeal the existing law, but as soon as it is passed the existing law will scarcely be worth the paper it is written on. Where we have been codifying the law in those matters which are not expressed ,to be within the exclusive jurisdiction of the Commonwealth, we have not proceeded to repeal any State Act; we have simply passed another Act which supersedes the State law. In like manner, this Bill will supersede the State Acts, and the jurisdiction of the State Judges under those State Bankruptcy Acts will cease.
– But many of the State bankruptcy officers have other duties to attend to. What will happen to them?
– I take it, as I have said, that, wherever practicable, the Commonwealth Government will invest them with a Federal jurisdiction corresponding to the State jurisdiction which they now exercise.
– But some insolvency officers have other duties to attend to.
– And their duties under this Act will be only part of their work.
– But they will be serving two masters.
– In many instances to-day, public servants are serving both State and Commonwealth. It is very desirable that these men, some of whom have had a lifelong experience in insolvency administration-1 - who not merely know the insolvency law governing the procedure in their own particular
State, but have a general grasp of the fundamental principles of insolvency law - should be invested, in the offices created by this Bill, with a jurisdiction corresponding with that which they now exercise. I should also like to see the Registrar under this Bill endowed with even greater powers than are specifically given to him; I should like him to be invested with the powers that are enjoyed by the Registrar in Bankruptcy in New South Wales. These, however, are matters more for consideration in Committee than for discussion here. I shall content myself by saying that some of the amendments of which I have given notice are aimed at investing the Registrar under this Bill with the powers at present possessed by the Registrar in Bankruptcy in New South Wales. I think that, in drafting this measure, there has been some little confusion regarding the functions of the Registrar in South Australia. That officer exercises functions that are not exercised by the Registrars in the larger States such as Victoria and New South Wales, and in several of the amendments of which 1 have given notice, special attention is drawn to the substitution of “Registrar” for “Official Receiver.” This happens so many times that it helps probably to swell the volume, if not the importance, of the sheaf of amendments that have been circulated. In most instances, these amendments will be determined by the decision of the Committee in regard to one, or, perhaps, two of them ; those following becoming merely consequential. There is one procedure which is not fully provided for under this Bill, and which, I think, ought to be. It is a procedure which prevails in South Australia. Even although it comes from that State, it may be said to be worthy of adoption. It is a long time since we heard South Australia referred to in the Senate as “ the model State.” It is time we revived that expression, and we can, to some extent, revive it in dealing with this Bill. The basis of the legislation there in relation to either a bankruptcy assignment or composition is that, as early as possible, there should be a meeting of creditors, who should have the power to decide what course is to be taken, namely, whether they should accept a composition and discharge the debtor, or whether they should refuse a composition and demand that the estate be sequestrated by order of the Court; and, in either case, whether they should appoint a trustee, and whom he should be, instead of the Official Receiver, to take over the whole of the assets of the bankrupt and administer them in behalf of the creditors. In other words, the creditors are invited into the fullest confidence, and are given the fullest measure of power to deal with what is, after all, only theirs.
– ls that not the procedure in the Bill before us!
– Not quite; it requires perfecting in that direction. That is very largely the South Australian system, and some of the amendments of which I have given notice aim at bringing the South Australian procedure into this Bill, and making it an unmistakable feature of the measure.
– The nearer you get to South Australian conditions the better.
– Another amendment I shall propose is that, when the creditors do assemble, if they refuse to accept a scheme of composition, they shall be able to nominate a trustee, who shall apply to the Court-f or an order of sequestration, and shall be sanctioned by the Court in taking over the whole of the property of the bankrupt, to be divided amongst the creditors, as provided by the general provisions of the Bill. In regard to clause 163, I have given a similar notice of amendment. It is not my intention to deal in detail with any of the proposed amendments at this stage; the proper time to do that will be when we are in Committee. But, speaking of them generally, I invite the serious assistance of honorable members in the incorporation of those provisions in this Bill. As I have said - and the Minister may be able to verify this, either by personal examination or by reference to his officers - they are not aimed in any way at interfering with the colour, form, or texture of the measure; their object is its perfection, and, in some instances, a variation of the drafting in order that the intention of the Legislature may be more unmistakably expressed than it is in the present terms of the Bill. There is one necessary provision of which I have not given notice; but, before we reach the final Committee stage, I hope to have an opportunity of drafting a clause. I had not the opportunity of consulting to-day the New South,
Wales and South Australian Statutes dealing with bankruptcy and insolvency, because, when I went to find the books, I discovered Senator Senior up to his eyebrows in them, and I anticipate that he will be assisting me with some of those provisions. One is, as in the New South Wales law, the ante-dating of the bankruptcy wherever necessary, and another provision is that, where the debtor happens to omit, either wilfully or otherwise, from his schedule or list of creditors the name of any single creditor, the creditor so omitted shall have reserved to him the right to sue the bankrupt, notwithstanding his bankruptcy, not for the debt itself, but for the amount of the dividend or dividends that are paid. If such a provision as that is not included, bankruptcy proceedings may be taken, and the name of a creditor may be omitted; and there are provisions that, when a discharge is obtained, it is final and conclusive as against everybody. Any creditor, whether declared so or otherwise, should be protected to the extent of the dividend, by having the right to sue the bankrupt.
– Is he not protected by the right to sue the trustee ?
– The trustee should not be personally responsible. The debtor has power to come in at any time, but he may not be aware of the bankruptcy, and the proceedings may terminate so quickly that the trustee is freed, and the estate is wound up, before the debtor has a chance to make his claim. It is for that reason that the debtor should have the opportunity reserved to him to sue the bankrupt for the amount of the dividend after the bankrupt has been discharged.
– Does not the dividend depend largely upon the proved debts ?
– Yes ; one could estimate what would have been the dividend by adding this particular debtor’s claims to the others, but, whether it is necessary to enter into the matter with that mathematical detail, I do not know. I would simply adopt the system of suing the bankrupt for the amount of the dividend. The omitted debts might make a fractional difference, but that would depend on whether the omitted creditor was a small or large ona*
– You would start the discharged bankrupt on a fair way to bankruptcy again.
– It would not be for the amount of the original debt that he would be sued,, but for the amount of the dividend. There is one matter in connexion with the Bill to which I would invite the consideration of the Government, and that is the total omission of Part XII. That part is really a work of. supererogation. It is a part that exists in the Victorian law; but Part XI. embraces all that is in Part XII., and more. It gives effect to what is in Part XII., and does it more efficiently. Therefore, there is no necessity for Part XII., and the Committee of which I have already spoken, after considering the matter, in all its bearings, said, in the report put before the associated Chambers of Commerce in June, 1913, that the whole of Part XII. should be eliminated. I think the only reason why Part XII. was included was that it is practically a transcript of the Victorian law, and it has been thought that those who are familiar with the working of the Victorian law would find themselves versed in it; but as Part XI. includes all that is in Part XII., and more, and brings the provisions up to date, it seems quite unnecessary to have the latter part in the Bill, because I do not think it will be availed of. Further than that, Mr. Lemmon, who is an accountant of high standing in Melbourne, and who had been deputed by the Chamber of Commerce to represent them on more than one occasion in bankruptcy matters, has indorsed the opinion that Part XII. is totally unnecessary. He is familiar with Part XII. through practising in Victoria, and he says that Part XI. embraces the whole of Part XII and is an immense improvement on it. That opinion indorses the report of the Committee that the whole of this part should be eliminated. Some of the members of that Committee, and I was one of them, seemed to think that there should be incorporated in the Bill a provision, which obtains in Queensland and Tasmania, for what is known as liquidation by arrangement. The proceedings are very simple, and I will explain them to honorable senators. A man finds that he is in financial difficulties. He is unable to meet all his creditors with 20s. in the £1, and he finds that his position is going from bad to worse. He does not wait to be declared a bankrupt. He lodges with the Registrar a petition for the liquidation of his affairs by arrangement or composition with the creditors. After that, or simultaneously, he lodges with the Registrar a list of creditors on a particular specified form, with a request to the Registrar to send to the enlisted creditors, at the enlisted addresses, the accompanying notice. The notice sets out that the debtor is calling a meeting of his creditors under sections so-and-sb of the Bankruptcy Act to deal with his affairs by way of liquidation, arrangement, or composition. It will be observed that he does not send the notices himself, nor does his solicitor send them; they must go through official channels. The solicitor acting for the debtor presents to the Registrar a list of creditors. If there are twenty-two creditors, he must send out twenty-two notices, each notice indicating the name of the debtor, and stating when and where it is proposed to hold the meeting. All must go through the Registrar. Each notice must bear the seal of the Registrar. The notices go through the post in the ordinary way. Then on the day of the meeting, when the creditors assemble, they may decide that the affairs of the debtor be liquidated by arrangement. Of course, the debtor, who is in attendance, is subject to questioning by any creditor. If the creditors are dissatisfied entirely with his answers, they may resolve on nothing, in which case the debtor stands where he stood before. If he asks the creditors to accept a composition of 5s., 6s., 8s., or any other sum in the fi, and the creditors resolve to accept it, another meeting, which must be held not less than fourteen, nor more than twenty-eight, days from the first meeting, is necessary to confirm’ the resolution.
– That is already provided for in the Bill.
– Yes ; but I am not dealing with that single phase of the matter. Instead of agreeing to a composition, the creditors may resolve that the affairs of the debtor be liquidated by arrangement, and they may, by resolution, appoint a trustee. Also at that meeting, or an adjourned meeting, they may resolve that the debtor be granted his discharge, or that he be granted a> conditional discharge, such as that he has disclosed to the trustee his affairs wholly and truly, or that the estate has realized so much in the £1, to which the trustee certifies. All resolutions and all proxies must be lodged with the Registrar within three days ; and if the trustee gives a certificate - which is a necessary condition of the discharge of the debtor - that certificate must be lodged with the Registrar. Except in the matter of his appointment, the trustee holds nothing. Everything must pass through the Registrar, and, in certain’ cases, bear his seal.
– Gould such a debtor be legally classed as a bankrupt?
– Though the affairs of the debtor are liquidated by arrangement, and not by rendering him bankrupt, the whole procedure comes, under the bankruptcy law. Under this system that I suggest, when the debtor gets his discharge, it is a discharge free from all his obligations existing on the date on which he has filed his petition.
– What is the advantage of that system over the regular procedure?
– For one thing, it has the advantage over a composition in that it obviates the necessity for two meetings. It also places everything in the hands of the creditors, and they can deal with the whole matter at one meeting, and put the debtor out of suspense at once. Further, it is a very inexpensive, as well as expeditious, method of dealing with the affairs of a debtor who is involved for an amount which is not very large.
– It is always easier to get an attendance at one meeting than at two meetings.
– Yes. In the case of a composition, it is necessary to’ hold another meeting within twenty-eight days of the first meeting, in order to confirm the resolution passed at the first meeting, and it is sometimes very difficult to get an attendance at that second meeting, so that the whole of the proceedings, may lapse.
– Does the decision of the majority of the creditors bind the rest ?
– A majority in number , of those present at the meeting or represented by proxy and representing three-fourths in value of the creditors is binding upon the other creditors.
– Does not Part XI. of the Bill, dealing with compositions and with assignments without bankruptcy, provide sufficiently for what the honorable senator suggests?
– No. That part of the Bill deals with direct assignments. The method I suggest provides for a simple resolution being passed to the effect that the debtor’s affairs be liquidated by arrangement, and not by bankruptcy. This resolution is filed with the Registrar, whereupon every part of the debtor’s property passes to the trustee. It is an inexpensive method, as the fees are very low, and it is expeditious. It has proved satisfactory in the States of Queensland and New South Wales to men who have become involved. They have not to be dragged on month after month with the knowledge that they are bankrupt, and cannot get a fresh start. I should like to see the Commonwealth adopt these provisions. They are practically the same in both States. We might adopt them instead of Part XII., which is, as I have said before, a work of supererogation. There are only one or two other matters upon which I should like to speak briefly before concluding. When we come to the part dealing with offences, I hope the Minister will consider the advisableness of making the “ punishment fit the crime.” Some of the penalties provided are grossly inadequate. There are provisions which make offences of certain conduct, which is nothing more nor less than downright swindling, yet the penalties are totally inadequate. I need not go into particulars now. When we come to that portion of the Bill in Committee, perhaps we can make the penalties a little more commensurate with the offences. There is one provision in the Bill which should be welcomed by honorable senators and the community generally - that is, that proceedings in bankruptcy will bind the Crown. Hitherto the Crown has claimed priority in payment of its debts. Very often, when a man has become involved in bankruptcy or has assigned his estate, the Crown has claimed in full, allowing the other creditors to receive dividends proportionately less. Clause 4 provides -
The provisions of this Act relating to the remedies against the property of a bankrupt, the priority of debts, the effect of a composition or scheme of arrangement, and the effect of an order of discharge, shall bind the Crown.
We must realize that we have now in existence in the Commonwealth an institution which we all know and hope will extend - I refer to the Commonwealth Bank - but which, unlike the preexisting State Savings Banks, carries ordinary trading accounts. In the case of a bankruptcy or assignment under this Bill of a trader who has an account with the Commonwealth Bank, it is questionable whether the bank could not claim payment in full, whereas in the case of a man having an account at another bank that bank would be bound by the bankruptcy proceedings. I think it is desirable, in the case of bankruptcy or assignment, that the Crown should stand as an ordinary creditor.
– Should not the Crown have priority in the case of taxes or rent?
– That is an oldestablished principle.
– It is, but there is a departure in this Bill. If a man is involved in his affairs, or so embarrassed that he is not able to pay his creditors 20s. in the £1, I think it is fair that the Crown should waive any right that existed under common law in the past to its full pound of flesh, thus compelling other creditors, individuals in the community, who can less bear the loss, to accept something less than the full amount.
– When we deal with that matter I shall be found intensely loyal.
– I presume that the honorable senator will stand by the Crown ?
– The trustee would be in a position to take over the debtor’s land for the benefit of the other creditors though the rent owing to the Crownmight not have been paid.
– I do not think that priority for the Crown, as claimed in the past, has been altogether a definite assertion on the part of the Crown. This has arisen from the fact that very little attempt has been made to call in question the justification for the procedure; and in a community such as ours the conditions are totally dissimilar in this regard from those in older countries like Great Britain. Here, the Crown carries on various functions that it does not carry on in other parts of the Empire; and I am pleased to see that the representatives of the Crown are quite prepared to stand in with the other creditors, and receive an amount proportionate to the debt. I again congratulate the Minister on the introduction of this Bill; and I sincerely hope that we shall make reasonable progress, and place it on the statute-book this session.
Question resolved in the affirmative.
Bill read a second time.
Clauses 1 to 4 agreed to.
Clause 5 postponed.
Clause 6 -
This Act shall not affect -
any provision in any State Bankruptcy or Insolvency Act relating to matters not dealt with in, or within the scope of, this Act ….
– I should like to know through the Minister whether this saving clause will abrogate, or continue in operation, the particular arrangement by liquidation, which obtains in Queensland and Tasmania, referred to by Senator Keating.
– I am not sure, but the question is what is meant by ‘ ‘ within the scope of this Act.” In any event, it is a point that cannot be cleared up in this clause.
– By way of illustration, I may point out that in a StateBankruptcy or Insolvency Act there may be provision for the disqualification of bankrupts for election to municipal councils or Parliament, andin such cases this Bill will have no bearing; such provisions would not come “ within the scope “ of this Bill.
– A State Act may provide a method of relief which is not provided in the Bill; and I desire to know whether that relief will remain available to debtors in the States which have been mentioned.
– If any such provision in a State Act is not inconsistent with the Bill, it will not be affected by the Bill.
Clause agreed to.
Clause 7 -
– I move -
That the word “ Governor-General “ be left out, with a view to insert in lieu thereof the words “ Justices of the High Court, or a majority of them.”
I intend subsequently to move that, after the word “ make,” the words “ annul or alter “ be inserted. The words relating to the Justices are taken from section 86 of the Judiciary Act, and section 33 of the High Court Procedure Act; and I think it is most desirable that the Justices should make the rules, considering that they deal with a highly technical subject. All the Justices have had personal experience of bankruptcy work in the different States of the Commonwealth ; and honorable senators who were here when we passed the two Acts I have mentioned will remember that we made provision enabling causes to be transferred from one State to another, or from one District Registry to another, and in other ways introduced provisions which, I believe, were novel, but necessary to meet the novel conditions of Australia with its extensive territory. This bankruptcy law will have relation to people severed by great distances; and the experience acquired by the Judges in judicially interpreting the law in the various States equips them better than perhaps any other authority could be, to approach a subject of the kind.
– I hope that the VicePresident of the Executive Council will stand by the provision in the Bill. I think that I voice the opinion of most honorable members of this Parliament when I say that the less we add to the powers of the Justices of the High Court the better. If we accept the proposal of Senator Keating, we shall be proceeding in a direction which recalls the old phrase about Judge-made laws.
– Surely the honorable senator does not regard the Justices of the High Court as superfluous ?
– Many of their decisions are superfluous. The people of Australia are almost unanimously of that opinion regarding a recent decision. The power to make rules under the Bill should be reserved to the Government of the day, which is responsible to Parliament; to give it to the High Court would be to take a false step. This is a highly technical Bill, one more for discussion by lawyers than by laymen. Being so technical, it is likely to prove highly profitable to the lawyers. Why is a measure of this kind introduced at the present juncture?
– If credit were abolished, there would be no need for such a Bill.
– We might understand the introduction at this juncture of a Bill similar to measures which have been introduced elsewhere for easing, rather than tightening, the bonds of the debtor.
– For generations past, the tenor of legislation has been to ease the position of the debtor.
– The question asked in regard to clause 6 shows that this Bill will not ease any one, though it may help the lawyers very much. I am afraid that we are adding another Bankruptcy Court to the six already in existence in Australia.
– When the Bill has become law, will the Bankruptcy Acts of the States be swept out of existence?
– I am not in a position to answer that question ; but I doubt that that will happen.
– I ask Senator Keating not to press his amendment. Rules made by the Governor-General will be drafted with all the skill and experience that the officers of the Attorney-General’s Department can bring to bear, and with the advice of the Justices of the High Court; they will be laid before Parliament, and will require the approval of Parliament. In the first instance, these rules may apply to Judges of State Courts given Federal jurisdiction. I do not think it would be wise to determine absolutely that the drafting of the rules must be done by the Justices of the High Court.
– Under the Rules Publication Act, rules made under any Statute, by any rulemaking authority, must be laid before both Houses of Parliament, and it is competent for either House to disallow any one of them. If the rules under this Bill, when it became law, were made by the Justices of the High Court, or by a majority of them, they would have to be laid before the Parliament. The words “ Governor-General “ are merely a phrase, meaning, in this case, the AttorneyGeneral’s Department. The Justices of the High Court are more familiar with procedure than are the officers of the AttorneyGeneral. It is recognised by the legal profession that the procedure of the High Court offers more facilities for the expeditious administration of justice than that of any other Court. It is at highwater mark.
– It has drowned a good many.
– Water will drown those who cannot swim.
– The strongest swimmers get drowned in the High Court.
– I register an emphatic protest against the flow of GovernorGeneralmade rules, under which we are likely to be submerged. One cannot go to his letter-box at any time without finding there a new batch of Finance and Allowance regulations made by the Governor-General under the Defence Act, and certified to by some one as having been brought into operation on account of urgency. If any one in the Commonwealth has all these regulations corrected and brought up to date, I should like to know who it is. The rule-making authority - the Governor-General - is at work night and day making rules under various Acts. As Senator de Largie has said, the Bankruptcy Bill is a highly technical measure, and the rules under it will have to be drawn by men of skill and experience in judicial procedure.
– Surely the legal Department of the Commonwealth is able to draw up these rules?
– We are deluged now by rules drawn up, under various Acts, in the name of the GovernorGeneral.
– The honorable senator would create a fresh authority, and thus bring about a still greater flow.
– Not at all. I venture to say that the rules which would be framed by the Justices would require very little alteration or variation.
– There would be additions.
– Under the Bill somebody will have to provide rules, and I submit that the most competent authority in the Commonwealth to do that work are the Justices of the High Court. In adopting my amendment we shall be following the procedure which has been adopted in the States, where the Judges of the Supreme Court frame the rules under an Act like the Bankruptcy Act, as they know what procedure is. I do not think that there is any procedure which has been so simplified as that of the High Court, and which has taken into consideration the necessity for expeditious administration of justice, and the vast area of the country. The rule-making authority that we already have in the AttorneyGeneral’s Department is a good one; but it is pressed with too much work. I am not blaming the rule-making authority for the constant alteration, for instance, of the financial and allowance regulations under the Defence Act. The administration or the officers of the Defence Department find that they have to alter the regulations, and, apparently, they are constantly instructing the Attorney-General’s Department to alter such-and-such a rule. Nobody could keep pace with the demands.
– If your amendment were accepted, on which of the Justices would this business fall?
– On a majority of the Justices.
– Would you have the full Bench sitting to make regulations for a measure of this kind?
– Would you delegate the work to some one Justice?
– My honorable friend does not quite understand the position. He will remember that the High Court Procedure Bill set out the proposed procedure of the High Court in what was, in fact, a schedule of orders. It was intimated to the Parliament that His
Honour the Chief Justice of the Commonwealth had drafted the orders, and that they met entirely with his approval. The Houses of the Parliament were quite prepared to accept what Sir Samuel Griffith had drafted, and boldly and bodily incorporated them as Statute law in the High Court Procedure Act. Not only have those orders stood the test of time, but they have been the marvel and the admiration of everybody connected with the legal profession for precision, clarity, and for provision for expedition in the administration of justice. Rule-making is special work. As the honorable senator himself admitted, this is a highly technical measure, and the Justices would apply themselves to the work. The Attorney-General’s Department has enough to do with the making of regulations under the ordinary general legislation. It is called upon to make regulations under a dozen or more Acts.
– And have the Justices of the High Court any spare time?
– The only argument which would appeal to me is as to whether the Justices would have the time. I believe that they would, because they would be able to take what are the rules governing procedure both in the Old Country and in the various States, and to harmonize them with this measure, and I think that every one would be assured and convinced that the rules would be in complete harmony with the Act. Of course, the High Court would have appellate jurisdiction with regard to anything which might be done under this measure. Then, as regards the second amendment of which I have given notice - the right to annul or alter - the Justices would be able, if occasion should arise, to deal with a rule, either by varying or by restricting, or by altering it. There is not very much in the principle, but I think that we ought to follow the wellestablished practice of the States. I believe that we shall get the best results if we ask the Justices of the High Court to do this work. Assuming that their Honours were too pressed for time to actually and literally draft the rules, there would be a certain course open to them. If the Attorney-General’s Department could do the work, the Justices might ask that Department to submit to them a draft of a code of rules, and their Honours might finally revise the rules, add to, or vary, or alter them, or approve of them, and issue them as the rules with their imprimatur. The rules would have to be presented to both Houses of the Parliament, and run the gauntlet, the same as they would have to do if they came from the Attorney-General’s Department under the name of the Governor-General. I would like to see the procedure under this measure brought into conformity with the practice obtaining in the States, and In England, because I believe that it would result in a distinct advantage. We shall have an Act which I hope will be the equal of any similar Act in any part of the British Dominions. Let us hope that the rules which, after all, will be the machinery through which the Act will work, will be co-ordinate with it, and that they will be up to the highest level of excellence. That, I believe, we shall get if we ask the Justices to take the responsibilitiy of issuing the rules, and we would have just the same powers of annulment or alteration as if the rules had been framed by any other authority.
– I wish to put a position to Senator Keating. Suppose that the Government of the day were asked to modify certain regulations made under this provision, and suppose that they were quite willing to concede a modification of the regulation, say, on the question of fees.
– A request from whom ?
– Suppose that a request of that kind were made to the Ministry of the day from the public, or from the Parliament.
– Would it be likely to come from any one but a member of the legal profession?
– Yes; a Chamber of Commerce, for instance, might request the Government to modify the regulation relating to fees. If the rule-making authority were in the hands of the Justices of the High Court, the Ministry might request a modification, but the High Court could turn down the request.
– Parliament could afterwards review the rules.
– It could by. amending the Act, and taking the rulemaking power out of the hands of the Justices. If we once gave to the High Court the power to make regulations as against the Governor-General, that is to say, the Cabinet-
– It is not as against the Governor-General - it must be with the concurrence.
– The position would be that only the High Court could initiate the regulations, and we would have to sit down and wait for the Justices to do that.
– That has not been the experience in the States where the Justices have drawn the rules.
– I am with Senator de Largie in this matter. I do not want to increase unduly the powers of the High Court.
– This is not a question of powers at all.
– I believe in the Government of the day being responsible for the initiation of regulations under this, or any other measure.
– I would like very much to be able to agree with Senator Keating, who has put his case before the Committee very clearly; but we must not overlook the fact that legislation is the function of the Parliament, and administration is the function of the Government. In accepting his amendment, we would relegate the function of the Executive to a body who might afterwards be called upon to adjudicate in connexion with their own work. If the rules are framed as expeditiously as we would like, a time might come when the Justices would have to deal with a case under rules which they themselves had framed.
– But they draw up the rules of procedure now in other matters.
– I am not acquainted with any measure where the Parliament has deliberately handed over to the Justices of the High Court the function of Parliament, or the function of the Executive.
– In all the States it has been done.
– That is the point with which I am concerned.
– The rules of procedure in all the Courts are drawn up by the Judges.
– Just so; and the amendment of Senator Keating, if adopted, would hand over to the Justices the right to take part in framing legisla- tion. It was never intended, I take it, that the Justices should have the right to frame rules under which they would subsequently be called upon to deliver verdicts.
– That is what we did in the case of the Judiciary Act and the High Court Procedure Act.
– My objection to the amendment is that the honorable senator asks us to hand over the powers of the Executive and of Parliament to the Judges of the High Court. Senator Keating has given notice of some amendments which I think should receive support, but I regard the amendment now before the Committee as a dangerous one, and trust that the Minister will not accept it.
– I am unable to indorse the views expressed by Senator Newlands, because I recognise that if there is any authority qualified to make the rules under which the insolvency law shall be administered if it is to work smoothly, it must be the Judiciary. Of course the term “ GovernorGeneral,” as used in the clause, means the Attorney-General, and I am not prepared to give him the power to make these rules when he will not be called to work under them.
– He is responsible to the people, who will have to work under them.
– That is so; but I remind the honorable senator that this Parliament will retain the power to disallow any rules that are made.
– But we shall have to wait until they are made.
– We shall not have to wait too long, since they cannot come into operation until they are made.
– They may come into operation before Parliament deals with them.
– No; it is only such rules as those we are now receiving, and which are certified to be of urgency, that operate before Parliament has time to consider them.
– The authority to. whom Senator Keating would intrust the making of these rules will know better than does the Attorney-General what rules are necessary. I consider that there is force in Senator Keating’s contention that at the present time the AttorneyGeneral’s Department is constantly engaged in making rules which ‘ find their way into our pigeon-holes. It is because we have been so much accustomed to the continuous flow of these rules and regulations from the same source that they escape the notice of honorable senators and become operative before Parliament considers them.
– The same thing would happen under the amendment.
– That is only an argument in support of the contention that the more there is expressed in an Act, and the less there is left to a regulation, the better it is in every case. These rules will deal with questions of procedure. There is, for instance, the summoning of meetings of creditors, and surely those who will have to deal with such meetings will know better than does the Attorney-General what the rules for dealing with them ought to be. The correct procedure in dealing with the proving of debts, and in connexion with fees and percentages, must be more familiar to the Judges than to any one else.
– Let the honorable senator refer to the last provision - “ prescribing all matters, forms, and conditions.”
– There could be no better authority than the Judges to deal with that.
– I agree with Senator Keating that no one is more competent to frame rules relating to such matters than are those who have them brought constantly under their notice. Senator Newlands, with his special knowledge of locomotives, is better qualified than a carpenter would be to say what ought to be done with a locomotive.
– The honorable senator does not claim that the officers of the Attorney-General’s Department are incapable.
– No; but I claim that there is as great a distinction between the functions of the AttorneyGeneral’s Department and those of the Judiciary as there is between those of an engineer and of a carpenter. There is also a wide distinction between legislative and judicial functions. It is one thing to enact the provisions of a law, and another to frame the rules best calculated to secure the smooth administration of that law. I have looked carefully through the provisions of this Bill, and as I believe that the amendment would be an improvement upon the measure, I am prepared to support it.
.- A certain measure of praise is due to Senator Keating for the diligent study which he has evidently made of this Bill, and I shall be prepared to support some of the amendments which the honorable senator has suggested. I feel constrained, however, to vote against the first he has submitted. I recognise the force of the argument that Senator Senior has used, but I am not prepared to support an amendment which, in my opinion, would whittle away the powers of this Parliament. I have not very much faith in the J Justices of the High Court after their recent decision in connexion with the tramways case.
– I am afraid that that is where the shoe pinches.
– I do not care where the shoe pinches. I must say what I believe to be correct, and I should prefer that all regulations which require to be framed under this measure should be kept within the control of the Parliament initiating this legislation. If the making of these rules is left to the Attorney-General, there will be nothing to prevent him consulting with the Justices of the High Court. Some honorable senators have said that regulations framed under Acts of the Parliament are always pigeonholed, but I know that there are members of the Senate who religiously read all the regulations sent to them.
– If the clause is passed as printed, will not the Federal law authorities still have the power, if they think it advisable, to consult any or all of the Justices of the High Court as to the best method of drawing up the procedure?
– This will not affect the powers of consultation.
– The only difference of opinion with regard to the amendment is as to handing over the powers of Parliament to some other body. As I read the amendment, nothing of the kind is contemplated. By accepting it, Parliament does not divest itself of one shred or tittle of its present power. It always controls the procedure in every Court, and if that is the ease, the only matter which ought to influence the minds of honorable senators is as to whether the Justices of the High Court or the Attorney-General are the better authority for framing the regulations. Our only interest is to get the work done in the best possible fashion. The next step is easy. Who are the men that know most about Court procedure? Of course, the Judges. They know how best a man’s case can be presented in the Courts, and how litigants can have the most ample opportunity of saying what they want to say. They are in the Courts every day, and know every in and out of legal procedure. Surely, then, they are very much more competent in the matters laid down under clause 7 than the AttorneyGeneral or the men in his office. Probably the man who would draw out these regulations, if the clause were passed as it stands, would be some one who has never practised in the Courts, knows nothing about Court procedure, and is an absolute tyro in these matters. Surely, then, we ought to have recourse to the very best talent at our disposal, and that is undoubtedly to be found in the men who sit on the Bench in the High Court. They not only sit in the Courts now, but have had life-long experience in them. They are experts.
– You have not always said that.
– I have. Because a Judge decides a particular case against my ideas of it, I do not say that he is biased or incompetent. I believe the Justices of the High Court are the best men to frame these regulations, and for that reason the duty ought to be imposed upon them. It has been objected that they will not have time. So far as I am able to gather, the only High Court Judge who is hard worked is the Judge of the Arbitration Court. It seems to me that the other Judges are playing about three-fourths of their time, and would be very usefully occupied in doing the work which Senator Keating proposes that they shall do. What does a man sitting in the Attorney-General’s office know about the practice and procedure of Courts? He can only know it, if he knows it at all, at second hand. He must go to some one who has had practice in the Courts. Why should we take this secondhand information, when we can go to the fountain head at once?.
– If the AttorneyGeneral can build the frame, surely he can put in the limbs?
– This does not deal only with procedure. It deals with the principles that govern the law of bankruptcy. We do not put the procedure in our Acts. The rules of procedure in our Courts, and in those of Great Britain, are drawn out, not by the civil authority, but by the Judges of the Courts, who are commonly recognised as being the most competent to do the work. They are appointed to do it, principally because they know more about it than any one else does, being brought into continual contact with it. Surely, then, the Government may accept the amendment. I know every Government wants to see its Bills passed without the alteration of a letter or word, or even a comma. That is one of the most unworthy ambitions that can animate either an individual or a body. If any proposal is capable of improvement, the man or the body who does not accept the improvement simply because it goes against some preconceived idea, is hardly worthy of a place in a civilized community. The summoning of meetings of creditors and regulating proceedings thereat are mentioned. I am sure that the Judges of the High Court would see that every creditor had ample opportunity of putting in his claim, and received notice of meetings.
– Do you think the Attorney-General would do anything detrimental to the interests of creditors?
– I do not think he would do anything detrimental to the interests of anybody if he knew he was doing it. I believe he and his officers would probably do the work well enough ; but I think the Judges of the High Court would do it better. They have plenty of time. They are not overburdened with work.
– Why not allow the Judges of the High Court and the AttorneyGeneral to act in conjunction?
– I think the Judges of the High Court would be much better pleased to act without the AttorneyGeneral’s officials, and that the Attorney-General’s office would be much better pleased to act without the High Court. The honorable senator has often heard the old adage that “ Too many cooks spoil the broth,” although there is another which says that “ In the multitude of counsellors there is safety.” Take which you like on the present occasion, but I prefer the one about too many cooks spoiling the broth. If I want a cook, I want one with some experienceIt has been urged that if we agree to the amendment we shall take power from the hands of this Parliament. But we shall do nothing of the kind. Parliament will still be at liberty to alter or annul every rule that may be framed, either by the office of the Attorney-General or by the Justices of the High Court.
– Parliament will, only be able to disallow them - it will not have power to amend them.
– But we can alter that provision of the Bill. Whether the Attorney-General does the work or whether the Justices of the High Court do it, is, to my mind, immaterial.
– If the High Court refused to amend rules of procedure prepared by its Justices, where should we be?
– Parliament could amend them.
– Not without an amending Bill.
– The Justices of the High Court would merely act as draftsmen. The rules would not be the rules of the High Court, but those of this Parliament. I am aware that some honorable senators are prejudiced against that Court, and I have no doubt that we should all be prejudiced against a Court if we happened to come off second best in a case in which we were engaged. But we ought to be above that.
– We ought to beabove attributing motives.
– One honorable senator has admitted that he is biased against the High Court.
– That is not correct. I gave the Justices of the High Court credit for their probity.
– But the honorable senator said that he did not want any more of their decisions.
– That was broadly hinted, I think. The Government are anxious that this measure should be as well administered as possible, and that the rules should be such as will facilitate the business of persons appearing before the Court. For that reason I intend to support the amendment.
– I have been very interested in this discussion, and the further it has proceeded the more I have been convinced of the wisdom of the provision which is contained in the Bill. I yield to no man in the high regard which I entertain for the Justices who constitute our High Court. The simple dignity with which the business of that tribunal is conducted must appeal to Australians. But because we have the advantage of the services of such excellent men, we ought not to hand over to them matters with which they are not concerned, and the dealing with which will encroach upon their time.
– We should get the benefit of their skilled knowledge and experience.
– I recognise their knowledge and experience, but I would deal with them in the same way as I would deal with persons in other avenues of life. If, for example, I required a man to chop wood, I would not advertise for a joiner. Similarly, if I desired a splinter to be extracted from my finger, I would not avail myself of the services of the highest specialist insurgery. Senator Keating proposes that the Justices of the High Court should be asked to frame rules for the guidance of Judges in bankruptcy. That is not a reasonable position to take up from the stand-point of the latter. Nor is it reasonable to requisition the services of the Justices of the High Court in order to deal with minor matters in relation to bankruptcy.
– The larger always includes the smaller.
– But if we specify that only the Justices of the High Court shall draft these rules, even the simplest of them will have to be drafted by those Justices. Senator Stewart has argued that the adoption of the amendment would not take away any power from Parliament. But if we decide that the Justices of the High Court shall draft these rules, we shall not have the right to amend them.
– We can take that right.
– We have not the power under the Bill, as it stands, to amend the rules drafted by these Judges. We have merely the power either to accept or reject them.
– We can alter the verbiage of the Bill if we so desire.
– We can do lots of things, it is true, but I am anxious to do only one thing, and to do it well. I do not think it can be seriously argued that we require the services of such wellinformed men as the Justices of the High Court to draft these rules, if afterwards we are to have the right to amend them.
– Would not the same circumstances operate if they were drafted by the Governor-General? Would they not require either to be accepted or rejected ?
– But the “ GovernorGeneral “ means the Executive. Suppose the Justices of the High Court were to disagree with the action of Parliament in rejecting their rules, and refused to frame any others, what would happen 1 There would be a division of authority which would necessitate the introduction of a new amending Bankruptcy Bill. Most of the rules which will have to be adopted will not require to be drafted by such highly paid men as the Justices of the High Court. As a matter of fact, they could be framed by any ordinary departmental draftsman. I do not believe in crowding upon the time of the Justices of the High Court matters of detail which will be repugnant to them, and which could be dealt with equally well by men whose services the AttorneyGeneral can command. I can clearly foresee difficulties in procedure which will result from the adoption of the amendment. I was sorry to hear Senator Stewart affirm that our High Court Justices have time to play. I venture to say that they have had no time to play in their settlement of the big questions which they have been called on to decide. They have had to deal with matters of far-reaching importance, and their work has undoubtedly been well done. I hope that Senator Keating will not press his amendment. Inconnexion with every Bill of which I have charge, I shall always be prepared to consider every amendment on its merits; but I fail to see why we should amend a Bill merely for the sake of alter- ing it. When there is a doubt as to the wisdom of an amendment, it is well to leave the Bill as it stands. Returning to the question of the preparation of these rules, I would point out that many trivial alterations in the method of procedure may be found necessary. A receiving officer, for instance, might require a new regulation, which could be framed in five minutes by any ordinary officer, no special draftsmanship being necessary; but, under Senator Keating ‘s amendment, it would be necessary to request the Justices of the High Court to draft it.
– It has boon argued that we shall have power to disallow any rules with which we do not agree, and that, if there is a failure to frame rules that we think necessary, we shall be able to amend the Act. Such a situation, however, would not be any improvement on that which now prevails. The principal objection that I see to the handing over of this work to the High Court Justices is that Parliament itself ought to exercise, as far as possible, all the functions it possesses in regard to the making of laws. There are occasions when certain powers must be delegated by the Parliament, but in this case the position is different. If we allow the clause to stand as it is, the work will be carried out by a member or an officer of the Government who is with us every day, and over whom we have some control; whereas, if it were handed over to the Justices of the High Court, we should have no control over them, and the only course open to us would be to disallow any rule to which we took exception. We have the power in our own hands at the present time, and we should retain it. Senator Stewart is not the Senator Stewart whom we knew in the last Parliament. He is a changed man. Prom the inception of Federation he has declined to part with a tittle of his powers as a legislator; but he now appears to be ready to hand over to Justices of the High Court the work of this Parliament. He says that the High Court Justices are better versed in legal matters than we are, and that we should, therefore, hand over this work to them. That is not like an utterance of the Senator Stewart of old. Why this change? The honorable senator stopped short when reading the matters in respect of which, under this Bill, rules will have to be drafted. I was following him, and wondered why he suddenly came to a halt. Why did he fail to read paragraph d, which refers to the making of rules, prescribing what fees, or percentages, charges, and so forth, shall be fixed? Imagine a Scotchman missing such a point.
– The High Court Justices now fix fees.
– If we leave this power in their hands, very little will remain for the poor creditors after the fees of the lawyers, the Court, and the Court officials have been provided for.
– The reference is to “fees,” not “costs.”
– Call it what you will, it means £ s. d.
– Fees are paid by the Government.
– But the cost of administering the Act will be defrayed by charges on the estates dealt with from time to time by the Court, and the more that is paid away in fees, the less there will be for the poor creditors. I hope that the Government will stand by the clause.
– It will be recognised th’at, even in the most prosperous community, there will be from time to time individuals who will, to use the expressive language of Senator Keating, “ fall by the way.” They will be subjected to the accidents of financial stress and chance, and I venture to say that, perhaps with the exception of the projected legislation to confer jurisdiction on Commonwealth Courts in respect of matrimonial causes, no Commonwealth measure will be so frequently operative as this will.be. The High Court will have the ultimate or appellate jurisdiction in these matters; that is to say, any litigation arising out of an application of the bankruptcy law. to fairly large estates which have been sequestrated, may reach the Commonwealth High Court. The Justices of the High Court have been vested with the power to prescribe the rules of procedure which shall govern the operations of their own tribunal.
– Only in some cases.
– The Judiciary Act clearly provides that, in all cases, the Justices of the High Court, or a majority of them, may make rules of Court for carrying out that Act, and so forth. The very Act which gives them jurisdiction gives them power to frame rules governing the procedure in their own Court - a Court, by the way, which, without exception, governs the decisions of every Australian Court. In the circumstances, therefore, is it not logical that they should also be asked to frame rules governing the application of such a freelyoperating law as that of bankruptcy? If the rules are drafted by some other authority, we may have the High Court declaring, as is frequently done, that certain of them are inconsistent with the Act; and, instead of people who have recourse to the Bankruptcy Court getting speedy relief, they may be involved in expensive litigious proceedings such as honorable senators desire shall be avoided. I am going to say somewhat reluctantly - for this is not a matter about which there should be any controversial statement - that I am sorry that, in the expressions that have fallen from the lips of certain honorable senators, I detected a scarcelyreiled hostility to the legal profession, ihe Justices of the High Court and some of their decisions, aud even to some features of the Commonwealth Constitution itself.
– The honorable sena<or has a very fertile imagination.
– That is the inference I am justified in drawing from ihe remarks of certain honorable senators who have addressed themselves to this suggested amendment. The legal profession is just as valuable to every unit of this community as is the medical profession.
– There is no comparison.
– A well selected lawyer will do just as much for the fortunes of a man as a well selected doctor will do for his health, and I speak from experience. I have had recourse to members of the legal profession who displayed nothing like the rapacity usually, and very often wrongly, attributed to them, and who, by giving me good advice at a comparatively small expense, have preserved my modest fortunes from absolute ruin at one or two crises of my life. I will say of Senator Keating, what I suppose he would not care to say of himself, that, in connexion with the consideration of any measures in this Chamber, he has at all times given advice which has not revealed any desire on his part to add to the intricacies of the law or to the expense of proceedings. He has always done his best to simplify legislation, and make it less expensive, and that, I may add, is also his reputation in the private practice of his profession. Therefore, if he advises us that it is highly desirable to permit the Judges of the High Court to formulate rules which will govern the application of this hoped-for salutary law, it would be wise to take his advice, and it is not derogatory to any Minister of any party, no matter how powerful, to accept advice such as has been given by Senator Keating. I do not hope to see the time when any Parliament will be able to dispense with the advice of members of the legal profession. I have knowledge of a party that did not include a member of the legal profession in its ranks, and I must say, with all due respect to the general ability of its members, that they often cut a very sorry figure in endeavouring to address themselves to the consideration of legislation of a very technical character.
– Legal members have not been missed by the Tasmanian Government.
– I can assure the honorable senator that the members of that Government were often glad of the assistance of the legal members now on the Opposition side in the framing of amendments which they desired to have inserted in their measures, and which we assisted them to insert.
– Are you, too, a lawyer?
– I am not a lawyer, and it is for that reason that I advise honorable senators not to neglect the opportunity held out to them, through the medium of this amendment, of making our legislation more simple and less liable to error than, perhaps, will be the case if the rules are drafted by an authority other than that which, in its ultimate power of appellate jurisdiction, will apply them. There is no doubt, as Senator Senior said, that the greater includes the less. The Justices of the High Court have been invested with the power to draft the rules which govern the administration of the Judiciary Act, and if they are given similar power in connexion with this measure there will be less likelihood of it being held that a particular rule is inconsistent with the principles of the Act, and that consequently an action does not lie. Do not honorable senators see the possibility of such a contingency if the Justices of the High Court are not given the power to draft the rules governing the application of an Act of so highly technical a character as this will be? There is a grave danger that if the rules are drafted by some extraneous authority they will ‘be found at variance with the principles of the Act itself when the Justices of the High Court, in their appellate jurisdiction, come to put them alongside the provisions of the Act. I would ask honorable senators to give earnest consideration to the amendment drafted by Senator Keating, who is not animated by any other desire than to make the measure a simple and workable one for those who seek relief in bankruptcy Courts.
– I hope the Government will stand to their measure. I do not know why honorable senators should want to alter the Bill in any way. “We are told that this is a highly technical Bill. But the proceedings under this Bill will be no more technical than those under the Arbitration Act, under which the President, with the approval of the GovernorGeneral, makes the rules, or under the Services and Execution of Processes Act, in connexion with which the making of the rules is left to the Judges of the Supreme Court. To all intents and purposes .this bankruptcy measure is going to follow the Services and Execution of Processes Act, because it, too, is to be applied by State officials.
– Exercising Federal jurisdiction.
– So they are under the other Act.
– No, they are not. They are exercising State jurisdiction in the State Court, and the Act empowers the execution of State processes outside the State.
– Putting that Act aside, I desire to build my argument more particularly on the Arbitration Act. The President of the Court, with the approval of the Governor-General, makes rules, and honorable senators forget that, under the Judiciary Act, we allow the Judges to make a rule to meet a particu lar case. When they find themselves in a corner, they make a rule for a particular case, and that rule need not be laid before Parliament for forty days.
– The honorable senator forgets that, in connexion with the Arbitration Act, it was argued for a time that there was no appeal from the Arbitration Court.
– I am speaking of the Judiciary Act. In order to overcome any particular difficulty, the High Court Justices can make a rule, and that rule may not be laid on the table of Parliament for forty days. Thus, though Parliament may see fit to annul the rule, there are forty days in which the High Court Justices can do as they like, without any control on the part of Parliament. I contend that when a rule is framed, it should be gazetted at once, and should have no validity until it is so gazetted. The whole system in regard to the making of rules and regulations needs revision. There should be some uniformity. We should not have a different method provided in every Statute.
– Does not the honorable senator see that, under this Bill, the rules will be made by the InspectorGeneral?
– In the case of rules being made by the High Court Justices, the probability is that they are drawn up by a clerk in the office, and merely have the supervision of some of the Justices - not all of them. The seven Justices cannot meet to decide on rules of procedure. Wo should trust our Crown Law officers to make the rules. Another point is that we have the AttorneyGeneral on the floor of Parliament, and can bring him to book for faulty rules. The Attorney-General is responsible to Parliament, and Parliament can deal with him. The High Court Judges cannot be dealt with in the same way. I hope we adhere to the principle of having rules and regulations framed by the Government.
Question - That the words proposed to be left out, be left out - put. The Committee divided.
Majority . . 15
Question so resolved in the negative.
.- Under section 33 of the Acts Interpretation Act, it is’ provided that the power “ to make “ includes the power “ to annul or void.” Therefore, I ask the honorable senator not to press his amendment.
– Very well.
– I move -
That after paragraph (c) the following new paragraph be inserted : -
Under this Bill, bankruptcy proceedings will be more extensive territorially than they are at present, and it may so happen that a creditor will be at a very considerable distance. For instance, the bankrupt may be in Perth, and the creditor in Brisbane or Rockhampton, and by the time the latter receives ‘notice of the proceedings, he may be unable to have his proxy forwarded in time by post. As one of the methods that might be adopted I suggest that a creditor should be able to sign a proxy form, lodge it with the Registrar, say, in Queensland, and have its contents, or their purport, telegraphed to the Registrar in Western Australia. As I said before, the High Court has power under the High Court Procedure Act to arrange for the transmission of certain documents by telegraph from registry to registry, and, doubtless, the necessary machinery could be provided for having proxies similarly transmitted. I had thought of inserting a simple provision that proxies might be sent by tele graph, but I prefer that power should be given simply to provide the necessary means of doing so under proper safeguards and provisions in the rules and regulations. It will be seen, therefore, that I do not propose to absolutely legislate for telegraphic proxies, but simply to afford an indication of the desirableness of providing the necessary machinery to meet such cases as I have suggested.
– I am quite in sympathy with the proposal of Senator Keating, butI am advised that there are difficulties surrounding the matter, and that it would be better to leave any arrangement of the kind to be made under the rules and regulations as provided for already in the Bill. If the Bill is allowed to go through without this amendment, I shall probably be able to arrange matters to the satisfaction of the honorable senator.
– My amendment would be an indication that the principle is approved of by Parliament.
– It might be interpreted as more than an indication; and, certainly, this is a matter that ought to be decided with full consideration. I am advised that the proposed amendment would not prove so effective as the provision that can be made under the statutory rules.
– The amendment merely gives power to make provision in the rules.
– But provision can be made under the clause as it stands.
– There is nothing expressly in the clause to cover the circumstances.
– What is sought can be obtained under the general power.
– So could seveneighths of the powers set forth; why specify anything?
– If we proceeded to specify all the powers that might be exercised, the Bill, big as it is, would be very much increased in size.
– I venture to say that the power I desire is not contained in the general powers, and that if a regulation were framed for telegraphic proxies under the clause as it stands, it could be successfully contested in the Courts as inconsistent with the
Bill. Proxies by telegraph are, I think, absolutely unknown to-day in legal procedure, and it is, in my opinion, a most audacious suggestion that the general power would cover such a novel procedure.
– I understand the VicePresident of the Executive Council to say that he is in favour of the principle of the amendment, and, considering the enormous geographical area of Australia, some provision of the kind is, in my opinion, very necessary. If telegraphic proxies are so novel as we have been told they are, we ought, I think, to adopt the amendment so as to make the matter perfectly clear; otherwise I quite believe such proxies could be successfully contested in the Courts.
– When I approved of the principle of the amendment, I meant what I said. I had no idea of using an “ audacious “ argument when I submitted that the clause already gave the necessary power. However, to show my willingness to meet Senator Keating, I am prepared to allow the amendment to pass. I may say, however, that I firmly and fully believed, when I spoke before, that the clause already gives the necessary power, though I am, of course, prepared to accept Senator Keating’s legal opinion. If, on further consideration, I consider the amendment unnecessary, and can show reasons for rescinding it, I think honorable senators will agree to that course.
Amendment agreed to.
Senator STEWART (Queensland) f 5.51]. - I move -
That the word “ thirty,” twice occurring in -sub-clause 2, be left out, with a view to insert in lieu thereof the word “ seven.”
If the amendment be agreed to, it will be necessary to lay all rules before Parliament within seven days after the making of them. Honorable senators have -complained that rules are sometimes in force for a considerable time before Parliament has an opportunity to consider them, and the adoption of my amendment will give less ground for that complaint. There must, of course, be some period during which rules will be in force before they have received parliamentary approval.
Senator GARDINER (New South Wales - Vice-President of the Executive
Council) [5.52]. - I hope that the honorable senator will not press the amendment. The period of thirty days has been allowed in all other Acts, and in the Acts Interpretation Act, and there is no reason for altering the procedure in this case. Unless it can be shown that ad- * vantage would be gained by laying these rules on the table earlier, I cannot accept the amendment.
– If the only argument in favour of the present procedure is that things should be left as they are, I hope that the amendment will be agreed to.
– Let me hear a good reason for altering the procedure.
– By the adoption of the proposed alteration, twenty-three days would be saved. Any course that is likely to expedite the transaction of public business should find favour with the Committee. There is now too much delay in matters of administration. If one writes to a Department, he does not get a reply until ten times as long a period has elapsed as would have been taken by a commercial house to answer his letter. Time is money nowadays.
.- Adopting the argument of Senator Mullan, we might alter the word “thirty” to “ one,” and thus save six days more. When there has been a change of Administration after a general election, the new Ministry may desire time to revise, or at least to consider, new rules and regulations, and for that reason alone we might well leave the provision as it stands.
– Why should the new rules be kept in cold storage for thirty days ?
– That is better than that there should be hasty legislation. No good reason has been advanced for reducing the period.
– Senator Stewart seems to have forgotten why we originally adopted the period of thirty days. It is not necessary that thirty days should elapse before rules are laid before Parliament; rules may be laid before Parliament the day after they have been framed.
– They are usually gazetted as soon as they are made.
– Yes. In adopting the period of thirty days, Parliament considered that it was necessary to enable persons living in distant parts of the Commonwealth to become acquainted with contemplated changes, so that they might, if necessary, state their objections to them to their parliamentary representatives, with a view to having those objections considered by Parliament. Thirty days is not too long a period, if these considerations have weight.
.- I move-
That in sub-clause 3 the words “ or amending “ be inserted after the word “ disallowing”
The sub-clause would then read -
If either House of the Parliament passes a resolution of which notice has been given at any time within fifteen sitting days after any such rules hare been laid before such House disallowing or amending any rule-
– Look at the consequence.
– If you amend you must accept.
– If the amendment is carried, I propose to insert a consequential amendment. I think that Parliament is shearing itself of a power which it ought to religiously conserve when it says that it may reject any particular rule, and may not amend.
– Do not forget that it is a power given to one House.
– It is a power given to either House, for either House may disallow, but may not amend. I submit that, in adopting this system, Parliament is deliberately hobbling itself.
– If you carry this amendment, you would have to recast the sub-clause.
– Why not?
– What would you do if one House amended a rule, and the other did not?
– Or if one House amended a rule, and the other disagreed.
– Or took no notice. If you disallow a rule, you indicate the nature of the amendment, which is required, and an amended one can be submitted.
– Or, if necessary, you may amend the law in that direction.
– I see that there may be some difficulty, and, therefore, I ask leave to withdraw my amendment.
Amendment, by leave, withdrawn.
Clause, as amended, agreed to.
Clauses 8 to1 1ageed to.
There shall be an Inspector-General in Bankruptcy, who shall perform such duties as are prescribed.
– I think that in all, or at least in some, legislation providing for the appointment of an official with such veryhigh duties as, I take it, the Inspector-General in Bankruptcy will have, it has been the rule to state the salary of the official. I ask the Minister to give the reason why that course has not been taken on this occasion.
.- I had intended to ask a similar question. This is a bald clause providing that there shall be an Inspector-General in Bankruptcy, who shall perform such duties as are prescribed. 1 would like the Minister to give us an indication as to whether a new official is to be appointed, or whether it is contemplated by the AttorneyGeneral that an officer who now supervises bankruptcy business in any one of the six States shall be appointed. Further, I should like to get an idea of the duties of the Inspector-General in Bankruptcy, and as to whether he will be paid a fair remuneration or otherwise.
– Senator Blakey can rest assured that the remuneration of an officer occupying a position of such great importance as that of Inspector-General in Bankruptcy will be commensurate with the duties he will have to perform. As regards the inquiry of Senator O’Keefe, I was rather surprised at such a question coming from him. I do not think that we have power to initiate expenditure in this branch of the Parliament, and probably a clause stating the amount of salary for this officer would be unconstitutional.
– That is only a reason for bringing in the Bill elsewhere.
– I may state that the position of Inspector-General in Bankruptcy is not being created for any person. I assure Senator Blakey that the most suitable man, whether he occupies a position at the present time or not, will receive the appointment. It will be a comparatively new position.
Clause agreed to.
Clauses 13 to 22 agreed to.
Clause 23 (Courts to aid each other).
.- Can the Minister give the Committee any information as to whether there is power under anylaw to bring officers of State Courts under the jurisdiction of Commonwealth Courts?
– That is provided for in the Constitution. The laws of the Commonwealth are binding on State Courts and their officers.
Clause agreed to.
Clause 24 agreed to.
– I propose to move for the insertion between clauses 24 and 25 of a new clause - 24a, which I have not yet had drafted. The purpose is to extend the powers of the Registrar up to the limits of the powers given to the Registrar inNew South Wales. I rise now only to ask the Minister in charge of the Bill if he will have any objection at a later stage, should it appear to me to be necessary, to have clause 24 recommitted for the purpose of making the amendment I suggest to extend the powers of the Registrar.
-i see no objection to that..
Clauses 25 to 42 agreed to.
Clause 43 (Gazette to be evidence).
– I should like to be quite clear as to whether the Gazette referred to in the clause is a State Government Gazette or the Commonwealth Gazette. If that is not made clear, it might lead to some confusion.
– The Commonwealth Gazette. That is made clear by the Acts Interpretation Act.
Clause agreed to.
Clauses 44 to 49 agreed to.
Trading with the Enemy Bill.
– In moving
That the Senate do now adjourn,
I desire to intimate that the Government wish the Trading with the Enemy Bill to be put through all itsstages to-morrow. There are certain actions which the Government desire to take as soon as possible under the Bill, which is one of several rendered necessary by the war.
Question resolved in the affirmative.
Senate adjourned at 6.22 p.m.
Cite as: Australia, Senate, Debates, 22 October 1914, viewed 22 October 2017, <http://historichansard.net/senate/1914/19141022_senate_6_75/>.