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Wednesday, 23 March 1966

Mr SNEDDEN (Bruce) (AttorneyGeneral) . - The point raised by the honorable member for Wilmot (Mr. Duthie) tonight in this debate is one to which I have given a great deal of consideration. It was raised by him with me and also, to the best of my recollection, raised directly by a person who was concerned with the matter in Launceston. I gave very close consideration to the matter, and in particular I paid special attention to the recommendations of the Committee in this respect. There seemed to be two problems. One problem was whether the existing arrangements outside of bankruptcy which were conducted by debt collection agencies in Launceston could continue notwithstanding the provisions of the new Bill, and the other one was in respect of what should be the provisions in relation to a general standard for all those people who are insolvent.

Let me say first and foremost that the present arrangements which occur in Launceston will not be prohibited by the new Act. What it does mean is that those arrangements can continue just as they are now, but they will not fall within the umbrella of the Bankruptcy Act. The fact that they will not fall within the umbrella of the Bankruptcy Act will bring about two consequences. One is that it could act to the detriment of the debtor and the other is that it could act to the detriment of the creditors. I think for the convenience of the House I should put the facts in " Hansard ". The specialist Committee which has experience in bankruptcy administration recommended this scheme contained in Part X of the Bill. The scheme is intended to ensure that a debtor does not act without receiving independent and expert advice; that before he can come to an arrangement with his creditors he must first have consulted a solicitor or a registered trustee; that the interests of all creditors are protected by having a solicitor or a registered trustee call the meeting of creditors, by ensuring that the creditors are given full information as to the debtor's affairs and by requiring the appointment of a trustee to administer the composition; and that the deed or composition is competently administered by having the person administering it responsible to the Court.

I recognise that there may be cases in which matters would run smoothly without the appointment of a registered trustee. In most cases proper supervision of the composition is necessary. The Bill provides a general rule for all persons to whom Part X procedures may be applied. One of the purposes of appointing a trustee is to safeguard the interests of creditors; otherwise, if a majority of the creditors resolved not to appoint a trustee there would be a possibility that the interests of an individual creditor or a minority of the creditors might not be properly looked after.

I repeat that the new scheme does not prohibit the arrangements which now exist; but on the other hand, if there is a subsequent act of bankruptcy, it could result in the arrangements which have been made constituting preferences under the Act.

Clauses, as amended, agreed to.

Clause 190. (2.) Where a registered trustee consents to exercise the powers conferred on him by such an authority, he is, by force of this section, empowered -

(a)   to take immediate control of the debtor's property and affairs',

(b)   to make such inquiries and investigations in connexion with the debtor's property and affairs as the trustee considers necessary;

(c)   to carry on a business of the debtor if, in the opinion of the trustee, it will be in the interests of the creditors to do so; and

(d)   to deal with the debtor's property in any way that will, in the opinion of the trustee, be in the interests of the creditors. (3.) The power of the trustee to deal with the debtor's property conferred by the last preceding sub-section includes power to sell the property or any part of it.

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