48624-1916-Supplementary-Alien-Enemies-Winding-up-Amendment-Bill — Page 5

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Clause 9 provides that unsecured debts payable to non- enemy creditors shall take priority over unsecured debts payable to creditors who are enemies. This clause is based on sub-section (3) of section 1 of the Trading with the Enemy Amendment Act, 1916.

Clause 10 introduces a power of disclaimer, modelled on the power of disclaimer in bankruptcy. Any person injured by the disclaimer will be treated as a creditor of an alien enemy to the extent of such injury, and a right to obtain the decision of the Court on the amount of damage suffered is recognised.

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Clause 11 provides machinery for compelling secured ereditors to realise their securities. On such realisation the secured creditor is to retain the amount to which he is entitled under the terms of the security and is to pay the balance to the liquidator. In case of dispute as to the amount to which the secured creditor is entitled the latter has a right to a decision of the Court on the point. It is of course possible that in some cases, owing to contingent liabilities, it will not be possible at present to define exactly the amount to which the secured creditor is entitled, and in such cases it may be necessary that the total proceeds should continue to be held by the securel creditor, if the total liability, ascertained and contingent, exceeds the amount of the proceeds.

Clause 12 provides for the enforcement of orders made by the Court on applications for directions.

Clause 13 provides that the validity of acts done by liquidators is not to be questioned on the ground that at the time when the act was done the person whose affairs are being wound up was not an alien enemy, or had died, or, in the case of a corporate body, had ceased to exist. A somewhat similar provision appears in section 9 of the Trading with the Enemy Amendment Act, 1916.

Clause 14 provides that no legal proceeding of any kind shall be brought against any liquidator or public officer, except with the permission of the Governor, in respect of any act or omission connected with any winding up under the Alien Enemies (Winding up) Ordinances.

Clause 15 provides for the continuance of the Governor's and the liquidators' powers for such period after the con- clusion of the war as may seem proper to the Governor in Council. The object of the clause is to provide an interval during which the whole position, both here and in other parts of the Empire and in enemy countries, may be con- sidered before the liquidators' control of the estates comes to an end, and it may also be that on the conclusion of the war various questions as to the liabilities of firms which are being wound up will still be unsettled.

Clause 16 repeals a section which will be rendered unnecessary by clause 13 of this bill,

J. H. KEMP,

Attorney General.

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