48653-1916-Supplementary-Bills-read-a-first-time--Supplementary-Appropriation-Alien-Enemies-Winding-up-Amendment-Trading-with-the-Enemy-Amendment-Pharmacy-and-Poisons — Page 5

Clause 1 is formal.

224

Clause 2 has the effect of expressly including arbitrations among the proceedings which may not be begun without the permission of the Governor where the other party is an alien enemy or a liquidator.

Clause 3 makes the discretion of the Court to stay actions brought against liquidators somewhat wider than at present.

Clause 4, read with clause 2, gives the Court power to stay an arbitration to which an alien enemy is a party, and it widens the discretion of the Court to stay proceed- ings generally brought against alien enemies.

With regard to the two clauses last referred to, it must be pointed out that cases may conceivably arise in which justice could not be done during the war owing to the impossibility of obtaining instructions or evidence or for some similar reason. and it seems desirable that the decision of any such point should rest with a judicial tribunal and not with the executive. It is possible that the Court already has inherent jurisdiction in the matter.

Clause 5 is declaratory and has been drafted with reference to cases which have actually occurred,

Clause 6 is intended to allay any possible doubts as to the powers of the liquidators to pass the legal estate.

Clause 7 expressly provides that a liquidator's powers pass to his successors in office.

Clause 8 provides that liquidators shall be at liberty to distribute the assets in the first instance on the footing that no interest accrues on any debt after the commence- ment of the winding up. This provision has been borrowed from the law relating to bankruptcy. The clause does not take away the right of the creditor to interest, if his debt carries interest, and any surplus assets may be applied in payment of such interest. The rights of secured creditors

are saved.

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 bankruptey. 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.

Clause 11 provides machinery for compelling seenred creditors 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 applicatious 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.

Page 5Page 6