BANKRUPTCY BILL

Order for Third Reading read.

The Parliamentary Secretary to the Minister for Law (Assoc. Prof. Ho Peng Kee): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Third time."

Sir, the Select Committee on this Bill received 35 written representations and heard oral evidence from five representors. Except for one private organisation, all the representors were individual persons. They made several useful suggestions which have been adopted in the Bill.

The Report of the Select Committee was presented to this House on 7th March 1995. The Bill, as set out in Appendix I of the Report, incorporates the amendments made by the Select Committee. The reasons for these amendments are contained in Appendix VI of the Report. I do not propose to go into all the provisions of the amended Bill because Members would have read the Report of the Select Committee.

The representors generally welcomed the Bill. Most of the representations dealt with the scope of the provisions relating to voluntary arrangements, the bankruptcy proceedings and discharge from bankruptcy. The Select Committee adopted a balanced approach, taking into account the interests of both undischarged bankrupts and their creditors. It was also conscious of the wider public interest in maintaining an efficient bankruptcy administration without compromising commercial morality.

Sir, I thought I should mention that a number of representations were received, mostly from undischarged bankrupts, in favour of automatic discharges and raising the amount of $100,000 in clause 125 for the exercise of the Official Assignee's discretion in the discharge of a bankrupt. Many different criteria for automatic discharges were suggested by a number of representors. The Select Committee, however, felt that it would not be advisable to introduce the concept of automatic discharges in Singapore. Firstly, it would be difficult to arrive at a set of criteria for the introduction of an automatic discharge from bankruptcy that would satisfy all parties as demonstrated by the diverse suggestions received from representors. Secondly, automatic discharges would not encourage debtors to take their financial obligations seriously if they know that they would be automatically discharged from bankruptcy after a specific period of time. Thirdly, automatic discharges would not provide any incentive for bankrupts to cooperate with the Official Assignee in the administration of their bankruptcy affairs and to work towards a speedy discharge from bankruptcy.

Sir, as the Minister has stated in this House during the Second Reading of this Bill, those who have become bankrupt because of misfortune rather than malpractice and have provided every assistance to the Official Assignee in the administration of their affairs in bankruptcy will now be able to obtain their discharges more easily. In this regard, the Select Committee has further proposed an amendment to clause 124 of the Bill to permit speedier court discharges for such bankrupts. The Official Assignee will assist in all deserving cases.

As for the amount of $100,000 prescribed in clause 125 for the discharge by certificate of the Official Assignee, several representations were received from undischarged bankrupts for that amount to be increased. Creditors, however, suggested that it should be reduced to $50,000. Let me explain that the figure of $100,000 has been carefully arrived at. The number of undischarged bankrupts whose debts are below $100,000 and who would benefit from this scheme is already quite large - 71%. Further, under clause 125, the sum of $100,000 can be subsequently increased by order of the Minister, should the need arise. The Select Committee felt that the sum of $100,000 should be retained.

Sir, I do not propose to deal with the other amendments as they are technical in nature and are adequately explained in the Report.

In closing, Sir, let me add that the Bankruptcy Bill 1995 is a major step in the process of updating and reforming our laws.

Sir, I beg to move.

Question put, and agreed to.

Bill accordingly read a Third time and passed.