is, whether the registrar has a discretion. I own when I first read section 3, sub-section 6, of the Act of 1890, I certainly thought there was a direct legislative enactment that an application to the court to approve a proposal for a composition after it had been agreed to by the creditors should not be heard until after the conclusion of the public examination of the debtor. I thought that was a direct legislative enactment prohibiting this being done until the public examination had been concluded, but it was pointed out that by section 104 of the Act of 1883 the court has jurisdiction to "review, rescind. or vary any order made by it under bankruptcy jurisdiction,' and it was said that under that general power there was jurisdiction in the registrar to rescind the receiving order, and that it was a matter of discretion whether he should do so or not. I agree with the contention of the debtor's counsel that, although the 3rd section of the Bankruptcy Act, 1890, differs somewhat in its terms from section 18 of the Act of 1883, they are substantially the same as regards the present point. When I take the cases which have been decided from the year 1884 down to 1894 I do not find any doubt expressed as to there being a discretion in such a matter.

Now comes the question whether or not that discretion has been wrongly exercised. It is said it is wrongly exercised because the authorities show that it should not be exercised unless twenty shillings in the pound have been paid, or unless the receiving order ought not to have been made; and that it is only upon those two grounds that the discretion should be exercised. I do not find that laid down hard and fast in the cases at all. I do find, no doubt, in Ex parte Leslie, such a rule laid down, but when I come to the other authorities I find that those are not the only grounds. I take first the case of In re Hester, decided in 1889 under the old Act. Lord Esher there says: "But I think that in that case (Dixon and Cardus) the court also said that, if the proposed arrangement is equivalent to a scheme under section 18, and the court can see that it may with perfect safety be sanctioned, they would not decide that such a proposition must be at once rejected merely because the formalities imposed by section 18 have not been complied with." Again, Fry, L.J., also says: "In my judgment in In re Dixon and Cardus I agreed with the Master of the Rolls that we should not lay down that no arrangement with creditors could have effect given to it unless it proceeded under section 18. I will not say that now." It seems to me those two learned judges not only decided there was discretion in a matter like this, but they would not decide that that discretion could not be exercised except in the case of payment of twenty shillings in the pound, or where a receiving order ought not to be made.

The next case which I refer to is In re Flatau, in which Lord Esher, M.R., clearly shows that discretion may be exercised, and he points out in what cases it ought to be exercised. He points out that in that case the registrar had only the fact before him that the creditors assented, and that was not sufficient. The debtor "then went before the registrar with an application to rescind the receiving order, which, as it then stood, was a good and valid order. He did not produce any affidavit, but he satisfied the registrar that he had the consent of the petitioning creditor; and I think the appeal must be decided on the assumption that that fact was proved to the registrar, but that fact alone. He had the consent of the petitioning creditor; he had paid him and satisfied him. But there were, or might be, other creditors, and they were not there, and the circumstances were not known to the registrar. Could the registrar

COURT OF APPEAL.

properly on that, and that alone, rescind the receiving order without entering upon a consideration of all the circumstances of the debtor's insolvency-how it came about, what had been the conduct of the debtor when he incurred the debts, what had been his conduct after the debts were incurred, and what was the position of things at the time?" This case shows that other matters were to be taken into consideration when the registrar was determining whether he would rescind the receiving order; and if other matters may be taken into consideration it seems to me there is nothing against the debtor in the way he carried on his business or kept his books, or any offence against the Bankruptcy Act. In my judgment it shows there was discretion in the registrar to rescind the receiving order. In the present case it seems to me these matters have all been considered by the registrar, and what is more, the official receiver is at the elbow of the registrar, and is informing him what the matters

were.

The last case is In re Davidson, which was decided as late as the 23rd of November, 1894, and in this case the registrar refused to rescind because he thought there were matters which ought to be investigated. Here in this case the registrar has rescinded because he says it is a special case, and I agree with him. In In re Davidson the court affirmed the decision. They said that "the registrar had a discretion, and had to take into consideration all the circumstances of the case; and when he had exercised his discretion it would require a very strong case to authorize or to induce the Court of Appeal to interfere." It seems that is applicable to the present case, although in that case the registrar had refused to rescind and in the present case, having taken all the circumstances into consideration, he has rescinded.

For these reasons I think this is a very exceptional case, and I cannot bring myself to say the registrar has exercised his discretion wrongly.

RIGBY, L.J.-I feel it my duty to dissent from the judgment which has been given, and I do so on several grounds. I do not question for a moment that under the Act, and under certain conditions, the registrar-that is to say, the court-has authority and discretion to rescind the order. Certainly I do not pretend to lay down such a proposition, but the Act shows plainly, to my mind, that that discretion must be limited in certain cases, and I say that this is one of those cases. We all know that one of the grave evils which the bankruptcy laws in recent years were intended to remedy, was a settlement with creditors by private arrangement. It seems to me, for reasons effectually guarded against this; but I think if a that I will presently give, that the Act has very general discretion is supposed to exist with regard to rescinding a receiving order, that will very materially tion. Now let us see what has been decided. detract from the beneficial effect of the recent legislanot quite take the view that Smith, L.J., has taken. Undoubtedly section 18 of the Act of 1883 was very much on the same lines as section 3 of the Act of 1890, but it did not in terms say an application for approval of a scheme of arrangement should not be heard until after the conclusion of the public examination of the debtor. There are a series of cases which, I think, ought to guide us in all these matters, whether there has been a scheme within section 18 or not. In re Hester is the leading case. I think the learned judges expressly refused to determine whether or not there was a discretion, though certain sentences, picked out here and there, may, no doubt, lead to a different conclusion, but as the judges in those cases were affirming the decision not to rescind the receiving order, it was not necessary for them to decide the point. They expressly

I do

declined to decide whether or not in cases of arrangement with creditors, when a receiving order had been made the debtor was bound to proceed in accordance with section 18. Then came the Act of 1890. I think we ought to give effect to some of the changes which the Legislature introduced when they repealed section 18 of the Act of 1883, and in place of it put section 3 of the Act of 1890. One of the most important is that, until after the conclusion of the public examination no application can be made to the court at all about the sanctioning of a scheme. There was some mctive I suppose. It was not a mere capricious variation of the language. What appears to me to be a reasonable motive, was to put an end to the doubt which had been raised in some cases as to whether in the case of a scheme of arrangement with creditors there was a discretion or not to rescind the receiving order. The language of sub-section 6 of section 3, I agree, does not absolutely cover the case of an application to rescind, but it is perfectly plain to my mind-though it is not to my lords, and therefore I say it with diffidence -that it was never intended that the main ground of an application to rescind should be founded on a private arrangement with creditors, which was one of the principal objects of the Act to render illegal and impossible in cases of bankruptcy. That being so, I come to the question, What is there special in this case? A debtor voluntarily places himself under the bankruptcy laws. It may or may not be that he intended to have his estate administered under the bankruptcy law, but in fact advantage has been taken of the filing of the petition to get a respite against the claims of the creditors and to enable negotiations to be prosecuted to a successful conclusion for a private arrangement with the creditors. That seems to me to be against the entire spirit and meaning of the Act, and I cannot conceive that the discretion is properly exercised in rescinding the receiving order. If such discretion exists in law, as to which I have some doubt, but which I do not decide, I think the exercise of it in this case ought to be overruled. In fact, the only basis of reason was a private arrangement with the creditors, and it seems to me to be entirely departing from anything the Act says if we say that that can be the groundwork of an application to rescind a receiving order.

Then we come to the question about which there is a great deal to be said-namely, whether, where you have got an application to rescind a receiving order, you ought to look to the Act of 1883 and see what are the grounds upon which you can annul an adjudication. I cannot see any distinction between the two cases at all. One is a step further than the other, but it is a step which would naturally be taken after the other. My view is, the court ought to look to section 35 of the Act of 1883 when there is an application to rescind the order. There we find that there are two grounds-one, that the debtor ought not to have been adjudged bankrupt; the other, a payment in full of all the debts. There are no reasons to show the receiving order could not be made in the present case. It is perfectly plain the receiving order was a right order to make, and it is plain the creditors have not been paid in full and that they have only been paid ten shillings in the pound. Now, should not that analogy be applied as against the debtor in this case? He is not strictly a bankrupt, but a receiving order has been made against him. He has brought himself under the jurisdiction of the bankruptcy law. There are two ways in which he can get rid of the bankruptcy proceedings. One is by the annulling of the adjudication under section 35, or, if there has only been a receiving order, by the rescission of the order by analogy to that section; the other is, not

COURT OF APPEAL.

by a scheme of private arrangement with creditors, but by means of a legal scheme of arrangement under the Act with all the safeguards provided by section 3 of the Act of 1890. I see no reason in this case why the debtor should be allowed otherwise to escape from the operation of the bankruptcy law.

What took place here? The receiver consentedwhether rightly or wrongly I will not enquire-to the postponement of the proceedings under the receiving order upon certain terms. It is said the terms show the reliance that the receiver placed in this debtor. I do not see there is any ground for saying that. That seems to me to be a very natural order in the case of a man where the official receiver knows nothing about him, but I cannot allow that it is proved that the official receiver has approved of his conduct and has represented his conduct to the registrar as being in all respects regular. I think the official receiver would be very wrong if he had made such a statement when he had not exhausted all the means which are prescribed in the Act for ascertaining whether the conduct of a bankrupt is regular or is not regular. But at any rate he did not do so. Then came the rescinding order. The utmost that can be said is that the order was not opposed by the official receiver. The order made by the registrar cannot be said, in my opinion, to have been made with the consent of the official receiver. On these grounds I think that this order ought to be discharged and the appeal allowed.

COLLINS, L.J.-I agree with the opinion of Smith, L.J., in this case. As there is a difference of opinion on the part of my brother Rigby, I will add a few words.

The first and chief point appears to me to be whether there is jurisdiction in the registrar to set aside a receiving order. Now, the argument against that was that by virtue of sub-section 6 of section 3 of the Act of 1890 there could be no such jurisdiction until after the conclusion of the public examination of the debtor. But when that section is examined it is quite clear it relates only to an application for approval of a scheme of arrangement by the court and nothing else. The application there referred to is the application for approval of that which is dealt with in the preceding subsections-namely, a scheme proposed by the debtor; so that it comes to this-is the proposal and the approval of such a scheme a condition precedent to the right of the registrar to rescind the adjudication? Now, it seems to me, that that has been concluded by authority. There is an independent sectionsection 104 of the Act of 1883, under which the court is given a general right to review or rescind any order made by it. Now, is it a condition precedent to the right to exercise the discretion given by that section that there should have been an approval by the court as in section 3 of the Act of 1890? The headnote in In re Hester, which was decided in 1889, under the earlier Act, is this: "The court has jurisdiction to rescind the receiving order even though no scheme of arrangement or composition has been proposed by the debtor under the provisions of section 18 of the Bankruptcy Act, 1883." It is suggested there is some difference on this point between the Act of 1883 and the Act of 1890, but when one examines the provisions it appears to me that they are exactly the same in their result, and that in both of them the public examination is a condition precedent to the application for approval of the scheme. In the earlier Act you had two meetings, and interposed between those meetings was a public examination of the debtor, and no scheme could be approved by the creditors until the

an

writers and others interested, and the crews and passengers of such vessels, and the Admiralty Court would be liberal in its awards in respect of services rendered by salvage steamers, even though the awards might fall somewhat heavily on individual owners. He accordingly awarded the sum of £19,000 to the owners, masters, and crews of The Hermes and Newa in equal moieties to each ship. The defendants appealed, and contended that the award was excessive. Sir R. T. Reid, Q.C., Aspinall, Q.C., and Butler Aspinall, for the defendants.

F. W. Raikes, Q.C., and Dawson Miller, for the plaintiffs.

The following authorities were referred to: The Thetis, 2 Kuapp 390; The Scindia, L. R. 1 P. C. 241, 14 W. R. P. Č. Dig. 6; The True Blue, 1 P. C. 250, 15 W. R. P. C. Dig. 7; The Glenduror, L. R. 3 P. C. 589, 19 W. R. P. C. Dig. 19; The Amérique, 23 W. R. 488, L. R. 6 P. C. 468; The William Beckford, 3 C. Rob. 355; The Accomac, [1891] P. 349, 40 W. R. Dig. 5.

A. L. SMITH, L.J.-My mind has fluctuated during the argument, but in the result I have come to the conclusion that this award, large though it undoubtedly is, must stand. It was said that this case constituted a new departure, because the case of salvage vessels, constructed and maintained for the sole purpose of rendering salvage services, had never before come before the Court of Admiralty. Large expense is incurred in keeping these salvage steamers at Gibraltar. Though the sea was smooth at the time when the salvage services were rendered, The Glengyle was in such a moribund state that if the salvage vessels had not come alongside of her she would inevitably have been lost with her cargo. The salvage vessels also incurred considerable risk in getting The Glengyle on to the shore, and their crews were exposed to considerable danger. Our assessors so advise us. There was therefore imminent danger to and probable loss of The Glengyle, and danger to and possible loss of the salvage vessels. If this had been the case of an ordinary tug or an ordinary steamer, speaking for myself I should have said, upon the authorities, that the award of £19,000 would have been too large. But these salvage vessels are kept at great expense solely for salvage purposes, and I cannot shut my eyes to this, that, unless those two vessels had been kept at Gibraltar for that purpose, The Glengyle, with her cargo and freight, would have been lost. Taking also into consideration the danger which the salvage vessels ran, I cannot say that the learned judge, who took all the circumstances into account, awarded too much.

CHITTY, L.J.-I am of the same opinion. The question is not whether we should have arrived at the same figure, but whether we are satisfied that the sum is in excess, and largely in excess, of what should be awarded. There is no new departure in the principle upon which this case should be decided. There is merely an important new factor in this case. These two salvage vessels, valued at £42,000, were equipped and maintained solely for salvage purposes. It is, to my mind, a matter of high importance to encourage persons to keep at a port like Gibraltar vessels of this kind. These salvage vessels were properly equipped for the purpose, and had divers and crews specially skilled. These circumstances do not constitute a new departure; they give rise to a new element to be taken into consideration, to which Barnes, J., has not attached too much importance. We have also been assisted by our assessors with regard to the danger incurred by the three vessels. In the circumstances I cannot say that the award is excessive.

GUARDIANS OF DORKING UNION v. GUARDIANS OF ST. SAVIOUR'S UNION. (a.)

Poor law-Settlement-Divided parish-Local Government Act, 1894 (56 & 57 Vict. c. 73), ss. 1 (3), 67, 68.

A poor law settlement gained by birth is a settlement in a particular parish. Consequently the settlement is destroyed on the division of the original parish under section 1, sub-section 3, of the Local Government Act, 1894, as the parish in which it was acquired thereby

ceased to exist.

This was

an appeal by the guardians of St. Saviour's Union from an order of a Divisional Court consisting of Collins, L.J. (then Collins, J.), and Ridley, J., and raised a question as to the result, for purposes of pauper settlement law, of the division of a parish under the Local Government Act, 1894.

A special case was stated by a court of quarter sessions for the County of London which had quashed an order of justices, dated the 18th of August, 1896, adjudging the settlement of one Albert Edward Bridger, a pauper, to be in the parish of Dorking, in the county of Surrey, in the Dorking Union, and ordering his removal from the St. Saviour's Union, in the county of London, to the Dorking Union.

The facts were as follows: The pauper was born in 1879 at Westcott, a hamlet then forming part of the parish of Dorking, and in the Dorking Union. He never acquired a settlement elsewhere. In August, 1896, he became chargeable to St. Saviour's Union. At the time of the passing of the Local Government Act, 1894, the parish of Dorking was situate partly within and partly without the Dorking rural sanitary district. It had one set of overseers, and one poor rate was made and levied for the entire parish. By the operation of section 1 (3) of the Local Government Act, 1894, the part of the parish which was within the rural sanitary district, and the part which was without, were constituted and became two separate parishes, called Dorking and Dorking Rural, and the old parish of Dorking ceased to exist. Since that date separate overseers have been appointed and separate rates levied for each of the two new parishes, and overseers have ceased to be appointed and a poor rate has ceased to be made for the old parish of Dorking. It was contended by the guardians of Dorking Union (1) that, as the hamlet of Westcott was within the parish of Dorking Rural and not the parish of Dorking, the order of the justices was bad, inasmuch as the pauper, if settled at all in any parish of Dorking Union, was settled in the parish of Dorking Rural, not in Dorking; that, there being no evidence before the justices who made the order that the old parish of Dorking had been divided as aforesaid and that the new parish of Dorking Rural had been formed and was in existence, the said order

(a.) Reported by J. I. STIRLING, Esq., Barrister

at-Law.