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Wednesday, 18 November 1914


Senator LYNCH (Western Australia) . - It would appear that if this amendment is accepted it will entirely remove from the creditors any safeguard -which otherwise they would have. As Senator Keating has pointed out, the creditors in an estate will not be consulted before the bankrupt is employed. "The amendment is a very sweeping proposal. It gives the bankrupt unlimited power in the management of his own estate


Senator Keating - No; it gives power to the trustee to employ the bankrupt.


Senator LYNCH - Do I understand that the amendment is submitted with the object of still leaving it to the trustee of an estate to say whether or not the bankrupt shall be employed ?


Senator Keating - Other than is provided for in clause 98.


Senator LYNCH - The proposed new paragraph reads -

Employ the bankrupt to do any business necessary to carry on the business of the bankrupt.

It is a drag-net provision, which excludes nothing on which the bankrupt may not be employed, even the management of the business. It will empower a trustee, in defiance of the expressed wish of creditors to employ a bankrupt, to manage hi3 own estate.


Senator Keating - He could not do that.


Senator Bakhap - In ninety-nine cases out of one hundred it is necessary for the trustee to retain the services of the bankrupt.


Senator LYNCH - Clause 98 provides that the creditor shall be consulted before the bankrupt is employed to again run his business. But the amendment empowers the trustee to appoint the bankrupt to act in any capacity, even to again superintend his own estate, without the creditors being consulted. It appears to me to be an attempt to get round clause 98 by not giving the creditors a say in the question of employing a bankrupt.


Senator Senior - If your argument has any weight, it is infinitely stronger against clause 98.


Senator LYNCH - What could be less sweeping than the powers conferred upon a trustee by the amendment? He could employ the bankrupt to do any business, including the superintendence of the estate.


Senator Keating - If so, clause 98 would come into operation.


Senator LYNCH - Would not the amendment clash directly with clause 98, seeing that it deprives shareholders of the right to say that the bankrupt shall'iiot be employed again?


Senator Gardiner - I think it would clash.


Senator LYNCH - I am afraid that it would. If clause 98 is sufficient for practical purposes, I see no necessity to overload the Bill with superfluous words.


Senator Keating - Clause 98 empowers the trustee in certain circumstances to employ the bankrupt for superintendence. There is no provision in the Bill to employ the bankrupt for anything less than superintendence or management.


Senator LYNCH - It is a maxim, I think, that where two provisions of an Act are contradictory, the former prevails over the latter.


Senator Keating - There is no contradiction.


Senator Lt Colonel Sir Albert Gould - You have to try to read the provisions together, in order to see if they really aro in conflict.


Senator LYNCH - I remember a decision given by a Supreme Court Judge that when two sections of an Act clash clearly with each other, the first is always supreme. I think that the amendment of Senator Keating would clash straight away with clause 98. I do not feel inclined to seriously resist the amendment, but if it will not improve the Bill why should it be made?

Senator Lt.-Colonel Sir ALBERTGOULD (New South Wales) [4.52].- The idea of Senator Keating is not to cause difficulties, but rather to ease difficulties which otherwise might arise. The amendment does not go so far as clause 98 does. It enables the trustee to employ the bankrupt, possibly to collect debts or to report as to the solvency of different persons. It confers a limited power, and the exercise of the power is always subject to the control of the trustee. It confers upon the trustee no powers greater than those which are conferred by the clause in paragraphs e and g. Under paragraph g he may use his own discretion in the management of the estate and its distribution amongst the creditors. Could honorable senators place a wider power in the hands of a trustee than this power ? The amendment only makes clear the power which the trustee would have to employ the bankrupt in certain circumstances and for limited periods. In framing a law under which wide interests will be involved, we cannot afford, for the sake of terseness, to leave in doubt anything which can be made clear by a few words. I urge upon the Minister that it is desirable to adopt an amendment of this character. It is clearly in the power of a trustee to play ducks and drakes with an estate if he is unwise or incapable, bub surely it will be assumed that every trustee will be a man of integrity and ability, who will be quite capable of discharging the duties of the position. It will not derogate from the protection of creditors to give this limited power. If the amendment is made, and a trustee discovers sufficient cause, he can always remove the bankrupt without consulting the creditors. If honorable senators think it is undesirable that a bankrupt should have anything to do with the administration of his estate, do not confer the power to employ him on the trustee. But we know that there have been innumerable cases where the estate of a bankrupt has been successfully administered by reason of his employment. It must be recognised clearly that in that capacity he cannot do just as he did when he was running his business on his own account. A man running his own business is his own master, and unwise speculations may land him in bankruptcy. Under a trustee he may make a success of the business, because he will not be allowed to make risky experiments.


Senator Turley - Could not a receiver act in the same capacity?


Senator Lt Colonel Sir ALBERT GOULD .- Exactly. He has the whole control, subject to a supreme authority. The Minister would be well advised to take the matter in hand. It is difficult for him without a knowledge of bankruptcy practice to handle a Bill of this kind, and a little deference might be paid to the opinions of lawyers engaged in actual practice, whose whole object is to smooth matters and apply a little lubrication where otherwise it might be necessary to go to Court and incur a good deal of expenditure that might be saved.







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