March 18, 1938

LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

There is no doubt about that.

Topic:   FARMERS' CREDITORS ARRANGEMENT ACT
Subtopic:   BOARDS OP REVIEW, TIME LIMIT FOR FILINO PROPOSALS, ETC.
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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

I think there is no doubt about it. And in the light of that sympathy, it may have created in the minds of some of us the idea that the law has not been strictly enforced; for the basis of the legislation, as I said in the house four years ago, and again to-night, was insolvency. Let there be no misunderstanding about that, because we could not be here at all if it were not for the fact that the basis of it is insolvency.

Look at the statute. The statute itself makes it perfectly clear in section 6, that it must be that. It states:

(1) A farmer who is unable to meet his liabilities as they become due may make a proposal for a composition, extension of time or scheme of arrangement either before or after an assignment has been made.

(2) Such proposal shall be filed with the official receiver who shall forthwith convene a meeting of the creditors and perform the duties and functions required by the bankruptcy act to be performed by a trustee in the case of a proposal for a composition, extension of time or scheme of arrangement.

And the chief justice of Canada, when this statute was before the court, summarized it as follows:

The provisions of the statute are made a part of the general system for the administration of the assets of bankrupts and insolvents established by the Bankruptcy Act, and they come into operation only where a farmer who is unable to meet his liabilities as they become due makes a proposal for a composition, extension of time or scheme of arrangement.

That is the language of the Supreme Court of Canada. Bearing in mind that that is the

basis of all these proposals, the basis of this legislation, can one for a single moment say that, as was said by the hon. member for York-Sunbury, these men were not insolvent? If they were not insolvent the board had no jurisdiction, and the courts of the country could issue a prohibition against them proceeding. But when you hear an hon. member of this house or elsewhere say that men were not insolvent, I say: Who has failed in the discharge of his duty? The board had no right to hear such cases. If they did so, that is not because the law is bad, but because it is administered badly. It is because those who had no right to hear have heard. But I am bound to say my examination led me to the conclusion that I have not yet been able to find a single case where an allegation was made that the man was not insolvent that the evidence did not disclose that he was hopelessly insolvent. How could he be otherwise? He files there a statement of his debts, and you see at once what they are.

Topic:   FARMERS' CREDITORS ARRANGEMENT ACT
Subtopic:   BOARDS OP REVIEW, TIME LIMIT FOR FILINO PROPOSALS, ETC.
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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

There are occasionally different cases.

Topic:   FARMERS' CREDITORS ARRANGEMENT ACT
Subtopic:   BOARDS OP REVIEW, TIME LIMIT FOR FILINO PROPOSALS, ETC.
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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

Yes, but those usually depend upon the question of arriving at values.

Topic:   FARMERS' CREDITORS ARRANGEMENT ACT
Subtopic:   BOARDS OP REVIEW, TIME LIMIT FOR FILINO PROPOSALS, ETC.
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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

No, in some cases in the absence of mortgage indebtedness.

Topic:   FARMERS' CREDITORS ARRANGEMENT ACT
Subtopic:   BOARDS OP REVIEW, TIME LIMIT FOR FILINO PROPOSALS, ETC.
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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

You can put it in that way if you wish. I agree that if there are no secured creditors the difficulty is greater than in dealing with cases where there are secured creditors, by way of mortgage or otherwise. There is no question about that, because you have the valuation placed upon the property at the time the mortgage was made that usually represents about sixty per cent of such appraised value-very often about fifty per cent.

There are some further . matters I desire to deal with, I am sorry to say, but-

Topic:   FARMERS' CREDITORS ARRANGEMENT ACT
Subtopic:   BOARDS OP REVIEW, TIME LIMIT FOR FILINO PROPOSALS, ETC.
Permalink
LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

We will permit the section to stand, if my right hon. friend wishes to speak.

Topic:   FARMERS' CREDITORS ARRANGEMENT ACT
Subtopic:   BOARDS OP REVIEW, TIME LIMIT FOR FILINO PROPOSALS, ETC.
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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

There are two or three things I should like to suggest should be done with this statute. I have in mind the case which arose in Alberta. I think it should be made abundantly clear that the statute is within itself a charter which controls and governs the whole administration, and that it should not be a question of any application being made under a bankruptcy act, which, of course, if applied, does not apply in the case that arose in Alberta, for the reasons given by the chief justice. I think we should deal with that.

C.N.R.-Shop Employees

Then, we should deal more broadly than has been done, with the question of who is a farmer, because we followed largely the definition in the Bankruptcy Act when we were dealing with that. We should deal with the case in which farmers are incorporated. For instance, many families have incorporated themselves as limited companies, those families living on the land. We should not deny them the benefit of this because they have studied the problem and have taken this form of conducting their business.

There are two or three other cases to which I should like to make reference, but it is now eleven o'clock.

Topic:   FARMERS' CREDITORS ARRANGEMENT ACT
Subtopic:   BOARDS OP REVIEW, TIME LIMIT FOR FILINO PROPOSALS, ETC.
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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

Before the committee

rises and reports progress I might say that following the discussions of this afternoon and this evening on various sections I want to have an opportunity of again consulting the law officers with regard to some suggestions which have been made. I do not intend to bring the bill into committee of the whole again without having a thorough examination made of all the suggestions which have been put forward this afternoon, including those summarized by the right hon. leader of the opposition in his closing remarks. When I come back I hope to be able to indicate finally the length to which the government is prepared to go in regard to all matters discussed to-day.

Section stands.

Progress reported.

On motion of Mr. Dunning the house adjourned at 11.05 p.m.

Monday, March 21, 1938

Topic:   FARMERS' CREDITORS ARRANGEMENT ACT
Subtopic:   BOARDS OP REVIEW, TIME LIMIT FOR FILINO PROPOSALS, ETC.
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March 18, 1938