Fairbrother Russell: Insolvency Law Reform Bill — First Reading 
Fairbrother Russell: Insolvency Law Reform Bill — First Reading 
[Volume:629;Page:1331] 
RUSSELL FAIRBROTHER (Labour) 
: 
 I will not tarry long in my call. I welcome this bill and as someone who has accepted instructions both reluctantly to prosecute bankruptcies and more enthusiastically to defend them I welcome the retention of the normal tests for defence of a bankruptcy and the move away from the punitive interpretation of bankruptcy. It must be remembered always that a bankruptcy is not an act of punishment of a debtor; it is a decision made by a court as to what is safe for the commercial community. It is an effort to strike a balance between someone who is having trouble paying the bills and the threat to the commercial community of that person’s continuing in business. I welcome indeed to the legislation four new bankruptcy provisions. 
In my address today I do not intend to speak on company insolvency; others have concentrated on that. I want to go back to the personal bankruptcy provisions—a most important part of this bill. Clause 66 is significant even though it is brief. It is a direction that a court may order the non-advertising by an assignee of an adjudication if that matter is under appeal. One of the areas of adjudication in acting for people who have been placed into bankruptcy in a disputed circumstance is that the damage has often been done because the matter has proceeded to advertisement even though a later annulment may occur. So I welcome clause 66 which follows the move away from a strictly punitive interpretation of our bankruptcy laws. 
Clause 102 is an interesting addition to the legislation and I hope it is one the select committee will spend some time on. It deals with after-acquired property. This is property that comes to a bankrupt person not by virtue of his or her estate but by other matters. Currently the bankrupt can deal in that property until it becomes a matter of interest for the official assignee. Under clause 102 all after-acquired property automatically comes under the jurisdiction of the official assignee as it should do. 
Clause 117 deals with onerous property. It gives the assignee the ability to put other parties on notice that any interest they have in what they claim to be an asset no longer exists. There is a provision to dispute that with speed and with some responsibility attaching to it. The interesting new addition to the legislation which should not be too onerous on anybody is clause 155 which enables the assignee to require a bank to search its records for any business involving the name of the adjudicated person. That is a sensible addition in today’s modern society. 
Clause 156 is an enlightened alteration to the present law. It brings in the right to retain a motor vehicle up to $5000 and gives the right to have that amount increased. But interestingly instead of having the arbitrary maximum-value figures that a bankrupt person could retain for tools of trade and personal property those limits have been removed and it becomes a matter of discretion for the assignee. I have to say that in practice the assignees have probably been applying a discretion rather than a strict interpretation of maximum values. This puts the practice as I glean it to be on to a sensible footing so that the assignee can in fact appraise the bankrupt’s position and leave the bankrupt with minimal but necessary assets to live his or her life and to go about whatever lawful business he or she can pursue. 
So with those few words I want to direct my thoughts towards the bankruptcy provisions of this bill. I reject my friend Mr Finlayson’s criticism of the speed. I note that in 1993 the insolvency provisions were touched on in what has now been proven to have been an inadequate way but of course that was the under the National Government. This is a complete comprehensive omnibus bill which means the Companies Act rewrites the bankruptcy laws and is in some respects much more invasive. It has taken a long time in gestation as it should do. Let us hope that the select committee can work through the submissions with expedition and satisfy Mr Finlayson’s concerns.