Could I raise at this stage a query as to why the period for fraudulent preferences is being extended from 3 months to 6 months in this section, whereas in Sections 288 and 289 the extension is for the old period of the 3 months to 12 months ?
SECTION 286.
Question proposed : " That Section 286 stand part of the Bill."
The reason is that floating charges are in a special category and the opportunities and the temptations to do improper things with floating charges are so great that it is desirable to have a long period like 12 months. It would be too much to make the period 12 months in the case of Section 286. The history of Section 288 is that in Britain they extended the three months period in the Act of 1908 to six months in 1928 and they found that even that was not enough because directors were able to stave off winding up until the time had expired. So, the Cohen Committee recommended in 1945 that it should be made 12 months. The same committee dealt also with fraudulent preferences and recommended a period of 6 months in that case.
To what extent is Section 286 new ?
In relation to the difference between three months and six months.
Does subsection (2) mean that we are legislating retrospectively ?
No. It recognises that in respect of things made or done before the operative date, the old period of three months will continue.
That is what I wanted to know.
I notice, not in relation to Section 286, but in relation to most of the sections that we are coming to now, that they are all new. Are they taken from some of the British Acts ?
Many of them were recommended by the Bankruptcy Committee that was set up in the late twenties.
I see. We have got no report yet from the present committee ?
No.
Question put and agreed to.