Hugh Havelock MCLEAN

MCLEAN, The Hon. Hugh Havelock, K.C.

Personal Data

Party
Unionist
Constituency
Royal (New Brunswick)
Birth Date
March 22, 1854
Deceased Date
November 22, 1938
Website
http://en.wikipedia.org/wiki/Hugh_Havelock_McLean
PARLINFO
http://www.parl.gc.ca/parlinfo/Files/Parliamentarian.aspx?Item=8dfefd55-ad19-4012-a2c9-b6c83a73227a&Language=E&Section=ALL
Profession
lawyer

Parliamentary Career

October 26, 1908 - July 29, 1911
LIB
  Sunbury--Queen's (New Brunswick)
September 21, 1911 - October 6, 1917
LIB
  Sunbury--Queen's (New Brunswick)
December 17, 1917 - October 4, 1921
UNION
  Royal (New Brunswick)

Most Recent Speeches (Page 7 of 19)


April 25, 1919

Mr. H. H. McLEAN:

I understand that, first, official assignees are to be appointed on personal application, stating their qualifications, and then security is to be given in the sum of $10,000. I under-

10 p.m. stand also that only these official assignees can be appointed trustees of the estate. Section 15 says that "a majority in number of the creditors who hold half or more in amount of the proved debts," and so on, may, at their discretion, substitute any other authorized trustee for the trustee named in the receiving order. I do not understand why only official trustees appointed by the Governor in Council can be appointed as trustees of the estate. Take a big fishing business like that conducted by the hon. member for Northumberland (Mr. Loggie)-this is merely an illustration -it would require a man conversant with that particular business to take charge oi that estate and successfully wind it up. But they can only appoint an official trustee from that district, and a man who might have special qualifications for the position could not be appointed by the creditors. The same thing applies to shipbuilding concerns and lumbering industries, which require men with special knowledge. I do not see why the creditors' power of appointment is taken away. In England, and under our own Insolvency Act of 1869 and 1875, the creditors have the power of appointment. I would like the minister to explain 126

why the majority of creditors, over 50 per cent, should not have the right to select the assignee of the estate, subject to the approval of the court, and why the choice should be limited to a particular class appointed by the Governor in Council. A certain number of people will apply and give securities and bonds, but in connection with large estates the creditors might not wish to have them, owing to lack of the particular qualification.

Topic:   BANKRUPTCY ACT.
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April 25, 1919

Mr. H. H. McLEAN:

You say that the creditors may appoint as manager whomever they think fit. Why not go farther in principle and let the creditors have control of the estate if they desire it? Insist on a majority of three-fourths of them if you wish. Why should you not allow the creditors to take control of the estate and appoint as trustee whomever they may want to appoint?

* Mr. GUTHRIE: The largest creditor

bodies of this country, the Canadian wholesalers, the Canadian Manufacturers' Association and the retailers have all passed favourably upon this clause; in fact, it is drafted very largely in accordance with their views. They do not approve of appointing any one as a trustee or of anything that might open the door to the appointment of the friends of any man or set of men as trustees or of anything of that kind which is not in accordance with the interest of the creditors. Under this you get a high class of trustees, men who are experienced accountants-although not necessarily accountants because there is no [DOT]limitation of that kind in the Act. If you [DOT]allow these men to do this work and to become familiar with the procedure, you will find it will work out to the interest of the creditors, and they are the ones chiefly concerned in the amount of their dividends. Cases have come within my own knowledge [DOT]where at a meeting of creditors this man, or the other man, is appointed assignee of the estate because he is broke and needs the money. We have been trying to avoid that by appointing men of high standing who do not need the money or who are not in an impecunious state. Many of the old assignees were so, and as a result there was a great deal of discontent with the administration of the Act.

i Mr. COCKSHUTT: As a member of the special committee that had to do with this *Act, I sympathize very much with the views expressed by the hon. member for Royal (Mr. McLean) but I want to say that the principal proposal that he has made should be made in regard to the very small estates, il think I would be within the mark in saying that fully fifty per cent of the failures that take place in Canada are for amounts under $1,000. Therefore, it becomes necessary to keep down expenditure in dividing up the estate. Otherwise the result will be that even though a bankrupt might be able to pay fifty cents on the dollar if the estate was well managed, in the final

'analysis, the heavy expense will eat up the estate and you will have nothing to *distribute to the creditors. The hon. member for Royal (Mr. McLean) is absolutely *right in his contention with regard to small estates in the country, if the local creditors can appoint a man who is on the spot. The official trustee will have to travel anywhere *from two hundred to four hundred miles, ihe will have to live at a hotel and his general expenses will run the liquidation cost away beyond the amount that would be incurred by a local man. *Under these conditions the suggestion of my hon. friend is a satisfactory one. But it must be remembered that these estates will run anywhere from $1,000, or $2,000 up into millions and what is thought fit or proper for a million-dollar or five-million-dollar estate will be very unfit for a thousand-dollar or five-hundred-dollar estate. It must be remembered that as a rule the creditors are scattered all over the country and that many of them are in foreign countries and are unable to be represented at the meeting. I have had some experience in regard to small estates, as I dare say the hon. member for Eoyal has. If he has had the same experience as I have had he will know that after one or two meetings have been called with regard to an estate running from $1,000 to $5,000 and a statement has been presented showing that the estate is hopelessly involved, the final meetings of the creditors will be attended by five or ten per cent of the creditors at the outside. The others say it is hopeless, that there is no use of throwing good money after bad, and they do not attend the meeting at all. Their interest is lost in the estate if they think it is not going to produce any dividend. The winding up of a small estate with expensive machinery will mean that very little will come out of it. As I say, I have been at a good many creditors' meetings myself, being mostly there in the capacity of a man who had sold goods, and my experience has been that the number of those present is infinitesimal in comparison with the number of those who are entitled to be present. The British and United States creditors are usually unrepresented. Of course, you may say: Let them look after themselves. But the credit of Canada suffers if there is not an equal distribution of the estate. As the Solicitor-General has said, we have considered this Bill in Committee. We stayed with it for weeks, and the member for George Etienne Cartier (Mr. Jacobs) 126}

will bear testimony, I think, that the Committee worked as faithfully on this measure as on any Bill that has been dealt with in the House in recent years. For weeks and weeks we sat three and four times a week, and we heard all sorts of evidence.

I was one who held just about the same notion that my hon. friend here has expressed, when I went to that Committee.

I thought that the man on the spot was the cheapest to act as trustee, and he might often be a most efficient man, but then there was the question of security, and in large estates that is an absolute necessity, because if a man is going to get possession of money that he does not distribute there is going to be the dickens to pay. That is where the estate has been entrusted to a man and he is not paying up as lie should. Now the inequalities in the size of estates, the situation of the town or city in which the estate is-all these things-have to be taken into account. I somewhat reluctantly assented to the proposition embodied in the Bill as being perhaps, after all, the best solution of a very difficult job, but I quite agree that the creditors are the men first concerned, and the most concerned, and they should have a good deal to say as to the trustee and how the estate shall be handled, and perhaps should decide whether or not it should be retained for a time or whether it should be sold off. There is a variety of things to consider, but the average estate has to be wound up, or ought to be wound up, and an accountant is necessary-a man who knows how to keep accounts and who will give an account of the money received and the money disposed of. He is hedged about in this Bill as far as we can hedge him as to his expenditures, and is held down to what we thought was the minimum. I do not say the clause is absolutely perfect by any means, or absolutely just in every respect, but taking it altogether it may be the best solution. As to the objection of my hon. friend from Royal, there is difficulty in appointing a man on the spot; often the place where the estate is is very small or it is in a very ouhof-the-way district. As regards large estates, you need a machinery that can handle it, as well as the smaller estates, though I think this is expensive for the small estates and I do not favour a trustee going a distance of two or three hundred miles if it can be avoided. However, the Bill provides for the creation of districts, if I remember well, and probably a trustee will not have to go that far. In my opinion the machinery that has been provided has been well thought out, and

I hope it will be found by the House on [DOT] examination that the course provided is as safe and wise as could be adopted under -the circumstances.

Topic:   BANKRUPTCY ACT.
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April 25, 1919

Mr. H. H. McLEAN:

I have no objection so long as the 'Solicitor General will take

the matter in.to consideration, but I would like to see an amendment drafted embodying the views which I have expressed. 1 have gone over the Bill carefully and if 1 can assist him in the drafting I will be very glad to do so.

Topic:   BANKRUPTCY ACT.
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April 25, 1919

Mr. McLEAN:

We can have a similar

provision in this case.

Topic:   BANKRUPTCY ACT.
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April 25, 1919

Mr. H. H. McLEAN:

I can remember very well, under the old Insolvent Act, when an assignee was appointed there were always inspectors appointed. We know that

Topic:   BANKRUPTCY ACT.
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