The Acting Assistant Secretary to the Treasury has forwarded for advice the following memorandum:

I would invite your attention to clause 5 (3) of the Bill for an Act relating to Bankruptcy, which reads:

Except as otherwise expressly provided in this Act, the provisions of this Act relating to the remedies against the property of a debtor, the priorities of debts, the effect of a composition or scheme of arrangement, and the effect of an order of discharge, shall bind the Crown.⁽¹⁾

In this connection I would quote section 34a of the Commonwealth Bank Act 1911-1914 as follows:

Notwithstanding anything contained in any Act or State Act relating to bankruptcy or insolvency, debts due to the Bank by any corporation carrying on the business of banking shall have the same priority as debts due to the Commonwealth.

I have by direction to ask that you will kindly furnish an opinion as to whether section 5 (3) of the proposed Bankruptcy Act would override section 34A of the Commonwealth Bank Act 1911-1914.

In my opinion clause 5 (3) of the Bankruptcy Bill if in operation would not override section 34a of the Commonwealth Bank Act, but section 34a would be of little value as the Commonwealth would have no priority.

[Vol. 19, p. 283]

(1) Enacted as section 5 (3) of the Bankruptcy Act 1924, with the addition, after 'shall bind the Crown', of the words 'as representing the Commonwealth or any State'.