PUBLIC RECORD
OFFICE
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Reference :-
885/5 PUBLIC RECORD OFFICE, LONDON
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-
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There is also authority for saying that the same rule will apply after the claim has been established in favour of the claimant.
This rule does not extend to realty.
ii. The idea on which Rule i. rests seems to be a recognition of that part of the foreign bankruptcy law which vests all the property of the insolvent in the assignee, i.e., all the property wherever situate. The assignce is at least authorised to collect all the debtor's property on which he can lay his hands.
This authority also extends to realty by the law of many countries (e.g., English Bankruptcy Act of 1883, s. 44); but the principle of the lex loci rei sita seems to
override it.
iii. If an Englishman recover a debt abroad during the pending of bankruptcy proceedings in England, he will be held to have recovered to the use of the English
trustee.
This rule cannot be extended to a foreigner; but if a foreigner has recovered under similar circumstances, he will not be allowed to prove in the bankruptcy until he has brought into the common fund any money he may have received abroad.
iv. Prima facie the existence of foreign bankruptcy proceedings is a reason for declining to make an adjudication here. but the Court has a discretion in the matter. It will, however, appoint an auxiliary trustee. (In re Matheson & Co., 51 L.T. III., there was an order made in England to wind up the company after a similar order had been made in New Zealand, in order, it was said, to secure the assets here until the New Zealand liquidator took proceedings to obtain them, and so to make them available for the English creditors pari passu with the New Zealand creditors.)
This rule applies only to proceedings which would be of equal degree with the foreign proceedings: e.g., the fact that a firm were in bankruptcy in New South Walos would not prevent the bankruptcy of one of the partners being proceeded with in England; but-
. Where two bankruptcies of unequal degree are proceeding concurrently, the relative rights of the two assignees seem to be determined by the rule of priority. The rule of priority would seem also to apply where the concurrent proceedings are of equal degree.
vi. Where presumably the same firm carries on business in England as well as abroad, the question as to whether Rule iv. is to be applied depends on whether the facts reveal an identity between the two houses of business.
They may be identical although the two businesses are carried on under different styles.
vii. A foreign discharge in bankruptcy is only recognised to the extent of dis- charging obligations contracted in the country where the discharge is given.
viii. Where the discharge is created by the legislature or laws of a country which has paramount jurisdiction over another country in which the debtor's liability arose, such a discharge may be effectual in both countries."
ix. The personal status of a bankrupt is not recognised internationally.
I venture also to add the following remarks to elucidate this complicated subject:—
Bankruptcy jurisdiction is three-sided; it affects —
(1.) The bankrupt himself.
(2.) The bankrupt's debtors.
(3.) The bankrupt's creditors.
Scientifically, bankruptcy should be either absolutely local or universal. The position which the question has assumed in the present day may be summarised as follows:-
(a.) It has been found impossible for obvious reasons to limit the jurisdiction to declare people bankrupt to people who are resident within the jurisdiction.
If it were possible to adopt identical rules for England and the Colonies as to what persons may be declared bankrupt (e.g., English Act of 1883, s. 6. (1.) (a.) ), many of the difficulties would disappear.
The same remark applies to the question as to what constitutes an Act of
Bankruptcy (e.g., English Act of 1883, §. 4. (1.)).
(b.) No country ever confines an assignee's power of recovering debts to those owing from persons within the jurisdiction.
(c.) No country rigidly excludes creditors living abroad from proving for debts due
to them. Double proof alone is rigidly guarded against.
(d) The extra-territorial operation of the discharge is almost universally denied (except where the creditor has proved, or where the discharge is given by the Courts of the country where the obligation was entered into).
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Thus (a), (b), and (c) tend towards the universal principle of bankruptcy; (d) tonds towards the local principle, and logically conflicts with (a), (b), and (c).
A purely local bankruptcy may create a case of hardship such as the following: The bulk of an estate may be within the jurisdiction, the bulk of the creditors without it. The few creditors at home would be paid in full to the exclusion of the many abroad, and the debtor would keep the balance.
Universal bankruptcy involves four positions-
(i.) The duty to recover all debts.
(ii) Compulsory payment of all debts.
These two affect debtors to the estate.
(iii.) The duty to admit all proofs.
(iv.) Compulsory proof.
These two affect creditors of the estate.
If these are conceded the universal recognition of the discharge, irrespective of the question where the obligation arose, follows as a logical consequence. It will be seen that the imposition of the duties (i) and (iii) rests with the country in which the bankruptcy is proceeding; and the imposition of the duties (ii) and (iv) rests with
other countries.
The Act should provide for power to stay actions pending bankruptcy in the Colonies (sec. 10 (2) of English Act of 1883).
The personal discharge of the bankrupt, .., his personal status, should presumably be dealt with in each country in which there are principal or auxiliary proceedings according to its own laws.
2, Dr. Johnson's Buildings, Temple, April 1887.
No. 18.
BANKRUPTCY.
F. T. PIGGOTT.
SUGGESTED RULES, by SIR S. W. GRIFFITH, Q.C. (QUEENSLAND),
1. The term "bankrupt " includes" insolvent," when the latter term is used by the Legislature of the part of Her Majesty's dominions in question in the same sense in which the term "bankrupt" is used in England.
2. This Act shall be in force in all Her Majesty's dominions (those parts only of Her Majesty's dominions as to which it shall be declared by Order in Council to be in force).
3. A debtor may be lawfully adjudged bankrupt by-
(a.) The Court having jurisdiction in bankruptcy in the part of Her Majesty's
dominions in which he ordinarily resides.
(b.) The Court having jurisdiction in bankruptcy in any part of Her Majesty's
dominions in which he carries on business or has property. Provided that in either case an act of bankruptcy, as defined by the laws of that part of Her Majesty's dominions in which the adjudication is made, has been com- mitted by or with regard to the debtor himself, either within or without that part of Her Majesty's dominions, or has been committed in respect of property of the debtor situated or being within that part.
4. When a debtor is liable to be adjudged bankrupt by the Courts of two or mor parts of Her Majesty's dominions, and adjudication of bankruptcy is made against him by two or more such Courts, the following rules shall have effect:-
I. The property of the debtor situated or being within the jurisdiction of each
Court shall be administered by that Court.
II. Such property shall be applied in the first place in satisfaction of the debts of the debtor contracted in that part of Her Majesty's dominions in priority to all other debts of the debtor.
III. The property, real and personal, of the debtor situated or being within any part of Her Majesty's dominions in which no adjudication of bankruptcy is made against the debtor shall pass to and vest in the proper officer appointed under the laws of the part of Her Majesty's dominions in which the first adjudication was made.
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