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Wednesday, 11 November 1914

Senator KEATING (Tasmania) . - In accordance with notice, I move -

That the following new paragraphs be inserted after paragraph (a) : - (aa) Property included in a bill of sale, or stock mortgage, or lien on wool or crops, executed and given by the bankrupt and duly registered and valid according to the laws for the time being of any State; (aaa) Life assurance policies so far as exempted by the laws of the State applicable to the same.

The object is to exclude from the property divisible amongst the creditors property such as is described. If, before becoming bankrupt, a man gives an effectual mortgage over certain property, and the mortgage is registered, registration being notice to his creditors and the whole world, it is obvious that that property should not then be included amongst the property divisible amongst his creditors.

Senator Senior - Would not that lend to give a preference over other creditors?

Senator KEATING - Not an unjust preference. Where a mortgage has been effected and registered, the property of which the debtor is in apparent possession is not really his own. The mortgagee has become the real owner by paying out his good cash. As soon as the mortgagor becomes bankrupt, he cannot hand over to the creditors his real estate which he has mortgaged, nor should he be able to hand over to them, his personal estate in respect of which he has obtained money, and which he has transferred by way of mortgage, called bill of sale in the case of personal property, or lien in the case of wool or crops. . With regard to life assurance policies, the law in several States provides that up to a limited amount they shall not go to a trustee in bankruptcy. I ask by this amendment that they shall be exempted from the property divisible amongst creditors only so far as they are exempted by State laws.

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