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Wednesday, 18 November 1914

Senator SENIOR (South Australia) .- The Vice-President of the Executive Council is fearful that Senator Keating's amendment would give the trustee a power which is not covered, or should not be covered, by the clause. I point out to the honorable senator that in section 137 of the South Australian Act which is referred to in the marginal note the power is not a restricted, but an absolute, power. The section reads -

All powers vested in any insolvent which he might legally exercise for his own benefit may be exercised by the trustee for the benefit of the creditors in such manner as the insolvent might have exercised the same.

It will be seen that under that section, which is referred to in the marginal note to this clause, absolute authority is given to the trustee to exercise the powers which the insolvent might have exercised prior to insolvency. Let us take a case in point. Suppose that an insolvency occurs 300 or 400 miles from the place where the creditors are doing business. They are not acquainted with the customers of the insolvent. They are not conversant with the ability of the customers to pay up. They are not acquainted with any of the things which are foremost in the mind of the insolvent. Yet, under this clause, the trustee cannot employ the insolvent, even although he may see that it would be to the best interests of the creditors to take that course, simply because he is a bankrupt. The first consideration should be to study the interests of the creditors, and the next consideration is what power should be conferred upon a trustee to enable him to exercise his judgment for the benefit of the creditors. If a trustee may sell a part of the estate at very much less than its real worth, without consulting the creditors, surely he ought to be at liberty to employ the bankrupt, seeing that the trustee is there to study the interests of the creditors. He is their safeguard. He will have to administer the estate largely without consulting them.

Senator Mullan - He will not always be a good man to preserve the interests of the creditors.

Senator SENIOR - In certain circumstances, he may be the best man. If at the first meeting the creditors specify that the bankrupt shall not be employed, it will meet the case. The bankrupt cannot be employed then, because the trustee will be the servant of the creditors. Section 141 of the South Australian Act reads -

The trustee may, with the approbation of the Court, appoint the insolvent to superintend the management of the estate, or to carry on the insolvent's trade or business, and otherwise to aid him in administering the insolvent's estate and effects in such manner and on such terms as he may think best for the benefit of the creditors.

That provision is almost identical with clause 98 of this Bill. Although it will be seen that absolute power is given to a trustee to employ the bankrupt, yet the Minister hesitates to accept the principle. What I do not like is that the man who could be most useful and beneficial is singled out as the one man who is not to be employed by the trustee. I ask the Minister to accept the amendment. In South Australia I have known of dozens of cases where the best man for the creditors to employ was the bankrupt himself. Where he is so employed, he is a servant under a master, and not a master superintending the business which he brought to ruin. The amendment, in my opinion, will make the clause more effective and useful. The Minister has remarked that it is contrary to practice to employ the bankrupt; but in South Australia I have known the bankrupt tobe employed in dozens of cases by the official assignee to superintend the stocktaking and the collection of debts, and very often to supervize the transfer of the stock to the successful tenderer.

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