THE BANKRUPTCY ACT, 1883. (46 & 47 VICT. CH. 52.) An Act to amend and consolidate the Law of A.D. 1883. Bankruptcy, [25th August, 1883.] BE E it enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows: PRELIMINARY. 1. This Act may be cited as the Bankruptcy Act, 1883. Short title. 2. This Act shall not, except so far as is expressly Extent of provided, extend to Scotland or Ireland. The Act extends only to Scotland and Ireland for incidental purposes. There was much discussion whether or no it should apply to Ireland generally, and ultimately it was determined to postpone the question until another session. Section 32 is an instance of the "express provision." Examinations may be held in Ireland or Scotland by sec. 27 (b), and orders and warrants of Court are enforcible in those parts of the United Kingdom by sections 117-119. Act. 3. This Act shall, except as by this Act otherwise pro- Commencevided, commence and come into operation from and ment of Act. immediately after the thirty-first day of December, one thousand eight hundred and eighty-three. Several important provisions came into operation on the passing of the Act, that is, from the beginning of the day when it received the Royal Assent. Of these particular mention may here be made of the following, namely: Section 127, which relates to the making of general rules; sections 128 and 129, referring to fees and salaries section 112, relating to unclaimed and undistributed dividends or funds under this and former Acts; and section 170, referring to composition and liquidation under the Act of 1869. Acts of PART I. PROCEEDINGS FROM ACT OF BANKRUPTCY TO ACTS OF BANKRUPTCY. 4. (1.) A debtor commits an act of bankruptcy in each bankruptcy of the following cases :— (a.) If in England or elsewhere he makes a conveyance or assignment of his property to a trustee or trustees for the benefit of his creditors generally: (b.) If in England or elsewhere he makes a fraudulent conveyance, gift, delivery, or transfer of his property, or of any part thereof: (c.) If in England or elsewhere he makes any convey (d.) If with intent to defeat or delay his creditors he (f.) If he files in the Court a declaration of his inability (g.) If a creditor has obtained a final judgment against him for any amount, and execution thereon not having been stayed, has served on him in England, or, by leave of the Court, elsewhere, a bankruptcy notice under this Act, requiring him to pay the judgment debt in accordance with the terms of the judgment, or to secure or compound for it to the satisfaction of the creditor or the Court, and he does not, within seven days after service of the notice, in case the service is effected in England, and in case the service is effected elsewhere, then within the time limited in that behalf by the order giving leave to effect the service, either comply with the requirements of the notice, or satisfy the Court that he has a counter-claim set off or cross demand which equals or exceeds the amount of the judgment debt, and which he could not set up in the action in which the judgment was obtained: (h.) If the debtor gives notice to any of his creditors that he has suspended, or that he is about to suspend, payment of his debts. hinges on which the They first appear in present Act of 1883 These so-called Acts of Bankruptcy are the law relating to insolvent debtors really turns. astatute of the 13th year of Elizabeth. This is the first of our bankruptcy statutes which applies the law equally to traders and non-traders alike, and in enumerating these "Acts of Bankruptcy," it will be observed that the distinction which appeared in the Act of 1869 is not found in this. The principle which runs through the provision of these sub-sections (with the exception of the last (h), is that the "Act" is done with intent to defeat and delay the creditors, although this intention is only formally expressed in one clause (d); and these provisions appear of sufficient importance to justify a few remarks on each. As to the paragraphs marked (a) and (b) the wording of which is practically identical with the corresponding clause in the Bankruptcy Act, 1869 (s 6) it will be noticed that the former speaks of 'his property' and the latter of 'his property or any part thereof,' and this leads to the conclusion that paragraph (a) refers only to a conveyance or assigment of all his property.' Paragraph (c) has no equivalent in the old law of Bankruptcy; it was inserted in the bill at a late period of its history, and does not appear to be very clearly worded; its apparent object is to incorporate a large number of judicial decisions, but if this is so it would have been preferable to have scheduled the decisions referred to; as it now stands the para. graph will no doubt require a considerable amount of judicial interpretation. Paragraph (d). The essence of the five "things here mentioned is that the "intent to defeat and delay." A debtor who makes a journey bond fide for the object of improving his property does not really commit any act of bankruptcy. As to the second "thing," it may be said that it does not apply to a foreigner domiciled abroad. A "departing from his dwelling-house," used to be confined to traders, but the distinction is now abolished; the facts connected with the debtor's departure must be such as to permit of an inference of "intent." A debtor may otherwise absent himself by doing almost any act for the purpose of avoiding a creditor. Beginning to keep house," the last of the five "things" includes a denial to a creditor who calls for money, and the house in question may be any house; so that a banker who closes the doors of his bank is included therein. Outlawry no longer exists, or it would be no doubt mentioned here as it was in the corresponding place (section 6) of the Act of 1869, the wording of which is closely reproduced. In paragraph (2) it will be seen that execution for any amount is intended; in the corresponding clause of the Act of 1869, it was limited to a sum "not less than £50." This is an important alteration in the law. So much of paragraph (ƒ) as relates to a debtor who presents a bankruptcy petition against himself is new; the idea was, no doubt, suggested by the procedure under the French commercial code. It may be remarked, too on this paragraph that the declaration of inability to pay need not be made in any prescribed form. Paragraph (g) provides a process in lieu of that on a debtor's summons, which is abolished; non-compliance with a bankruptcy notice under this sub-section will now be an available act of bank. ruptcy. Paragraph (h) is another provision which was not in the old Act. It is likely that some discussion will arise as to what is or is not a notice to a creditor of the fact that the debtor has suspended payment, or is about to do so. The doubts which arise on this point, and on paragraph (c) are somewhat inconvenient, for it is of the utmost importance to the public to know exactly what are acts of bankruptcy. This will be apparent to anyone who refers to the terms of the following sections of this Act: Sec. 37 (2), sec 38, sec. 49 (2), sec. 52 (1); in all of which a creditor will be at a dis. advantage if, having notice of an act of bankruptcy, he does not take advantage of it. It does not necessarily follow that a man is cognisant of an act of bankruptcy because he has legal "notice" of it; this will occur when a man is ignorant of the law. And the hardship is apparent where the law is uncertain. It must also be remarked here, that at sec. 103 (5), an act of bankruptcy is referred to which is not mentioned in the section now under discussion. For a definition of the word "property," mentioned in the earlier paragraphs of this sub-section, see section 168, where also an "available act of bankruptcy" is defined. (2.) A bankruptcy notice under this Act shall be in the prescribed form, and shall state the consequences of noncompliance therewith, and shall be served in the prescribed manner. This subsection refers to paragraph (ƒ) of the preceding sub section. It is the first place in the Act in which the word "prescribed' occurs. It may be stated at once that "prescribed" means prescribed by general rules, and that power to make general rules is conferred by section 127-one of the sections which came into operation at the passing of the Act and not on the 1st January, 1884. RECEIVING ORDER. to make 5. Subject to the conditions herein-after specified, if a Jurisdiction debtor commits an act of bankruptcy the Court may, on a receiving bankruptcy petition being presented either by a creditor or order. by the debtor, make an order, in this Act called a receiving order, for the protection of the estate. The receiving order here mentioned is one of the chief features of this Act. It will be observed that it is an order of the Court to be made on the presentation of a properly substantiated bankruptcy petition; in all probability it will be found that the hearing rather than the presentation of the petition would have been a more convenient time for making the order, for the two are by no means identical. As a mere matter of drafting, this clause (with the exception of the opening words, which refer to the next section) would have been better inserted immediately before section 9. It may also be observed that the "protection of the estate" is not the interim protection thereof only. This order can be annulled under sec. 14. 6. (1.) A creditor shall not be entitled to present a conditions bankruptcy petition against a debtor unless on which creditors petition. (a.) The debt owing by the debtor to the petitioning mi (d.) The debtor is domiciled in England, or, within a This sub-section corresponds with the concluding words of section 6 of the Act of 1869; but there are some important differences. |