Liabilities (War-Time Adjustment) Act 1944
| Jurisdiction | UK Non-devolved |
| Citation | 1944 c. 40 |
| Year | 1944 |
Liabilities (War-Time Adjustment) Act, 1944
(7 & 8 Geo. 6.) CHAPTER 40.
An Act to provide for the adjustment and settlement of debts and liabilities arising in certain areas and to amend the Liabilities (War-Time Adjustment) Act, 1941.
[26th October 1944]
B E it enacted by the King's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—
Adjustment and Settlement of Moratorium Debts.
1 Services of liabilities adjustment officers in settling moratorium debts and liabilities.
(1) Any person who—
(a ) owes any debt to which paragraph (1) of Regulation four of the Defence (Evacuated Areas) Regulations, 1940 (which grants a moratorium in respect of rents, rates and certain other liabilities of evacuated persons) applies or has applied;
(b ) is under any liability under which sums will fall due to which the said paragraph will apply so long as the evacuation period continues; or
(c ) is liable, or will become liable at the end of the evacuation period, under any contract of guarantee, indemnity or insurance entered into before the date of the said Regulations, in respect of any debt or liability referred to in the foregoing paragraphs;
may apply to a liabilities adjustment officer for advice and assistance in enabling him to arrive at an equitable and reasonable settlement of his debt or liability, and the liabilities adjustment officer shall give his services accordingly.
(2) Any settlement of any such debt or liability as aforesaid, whether arrived at before or after the passing of this Act and whether with the assistance of a liabilities adjustment officer or otherwise, shall be enforceable at law and shall not be void for want of consideration and, on the making of the settlement, the evacuation period shall, if it has not already ended, be deemed to have ended, so far as that debt or liability is concerned.
2 Powers of the court to settle moratorium debts and liabilities.
(1) Any person who owes any such debt or is under any such liability as is referred to in subsection (1) of the foregoing section, or the person to whom he is so indebted or liable, may apply to the court for the adjustment and settlement of the debt or liability and, where such an application is made by any person in respect of some but not all of his aforesaid debts and liabilities, the court may amend the application so as to relate to all those debts and liabilities.
(2) On any such application the court—
(a ) shall determine as respects any such debt or any sum which is due or will fall due under any such liability, whether it is to be paid in full or whether it is reasonable and equitable in all the circumstances of the case (including the relative degrees of hardship suffered by the parties) that it should be remitted or reduced and, if it is to be reduced, the extent of the reduction;
(b ) shall give directions as to the time and manner of payment of any such debt or sum, and, without prejudice to the generality of this provision, may postpone the payment thereof to such extent as the court thinks fit or may direct payment by instalments;
(c ) may give relief on such terms as the court thinks fit in respect of the forfeiture of any lease for the non-payment of any such debt;
and, on the determination of the application, the evacuation period shall, if it has not already ended, be deemed to have ended, so far as that debt or sum is concerned.
(3) The court, in exercising its powers under the last foregoing subsection—
(a ) shall not remit or reduce any principal sum charged on any premises and shall have regard, in considering whether any interest payable in respect of such a principal sum or any rent ought to be remitted or reduced, to the net annual value, or, as the case may be, lettable value of the premises during the relevant period;
(b ) shall not reopen any settlement unless it was arrived at before the passing of this Act and the court considers that it would be an exceptional hardship not to reopen it, and shall not in any case require any sum already paid to be refunded.
In this subsection the expression ‘principal sum’ means the sum actually lent and does not include any unpaid interest required by the terms of the charge to be added to that sum and charged on the premises.
(4) Where an application is made in respect of any liability under any contract of guarantee, indemnity or insurance—
(a ) the court shall, if no application has been made in respect of the principal debt, treat the application as an application in respect of the principal debt as well as in respect of the liability aforesaid, and shall require the principal debtor to be made a party to the proceedings;
(b ) the court shall not grant any greater relief in respect of the said liability than the relief granted in respect of the principal debt;
(c ) if the court requires the person liable in respect of the said liability to pay any part of the principal debt which the principal debtor is not required to pay, the amount so required to be paid shall not be recoverable from the principal debtor.
(5) Section eleven of the principal Act (which enables questions arising in liabilities adjustment proceedings to be referred to a liabilities adjustment officer for investigation and report) shall apply to applications under this section in like manner as it applies to liabilities adjustment proceedings.
(6) Where the affairs of any person who owes any such debt or is under any such liability as is referred to in subsection (1) of section one of this Act are the subject of liabilities adjustment proceedings, the powers conferred by this section may be exercised by the court in those proceedings.
(7) Where judgment has been given by any court for the payment of a debt to which this section and the last foregoing section would apply if the debt had not become merged in the judgment debt, and the judgment has not been satisfied, the said sections shall be deemed to apply to the judgment debt.
(8) Where this section and the last foregoing section would apply to any debt or sum but for the fact that an order has been made under paragraph (4) of Regulation four of the Defence (Evacuated Areas) Regulations, 1940, removing or modifying, in relation to that debt or sum, the restrictions imposed by the foregoing provisions of that Regulation, the said sections shall be deemed to apply to that debt or sum.
(9) Notwithstanding section fifteen of the principal Act (which in its application to companies provides for the application of that Act to private companies only) an application under this section or the last foregoing section may be made by any body corporate, and the proviso to section twenty of the principal Act (which provides for the exercise of jurisdiction, in a case where the debtor is a company, by the court or courts having jurisdiction to wind up the company) shall not apply to any application made under this section otherwise than in the course of liabilities adjustment proceedings.
3 Power to extend foregoing sections to additional areas.
3. Where it appears to the Lord Chancellor, as respects any area which has not been declared an evacuation area for the purposes of the Defence (Evacuated Areas) Regulations, 1940, that extensive and prolonged evacuation has taken place in the area as a result of war circumstances or that access to the area has been or was restricted for a prolonged period as a result of war circumstances, and that it is expedient that the foregoing sections of this Act should apply in relation to that area, he may by order provide for the application of the said sections to debts and liabilities to which they would apply if the area had been declared an evacuation area, and for the purposes of such an order the area shall be deemed to have been declared an evacuation area on a date specified in the order and the evacuation period for that area shall be deemed to have ended or to end on a date specified in that order or in a subsequent order made by the Lord Chancellor.
Amendments of Principal Act.
4 Amendment of section 3 of principal Act.
(1) The amendments specified in the following provisions of this section shall be made in subsections (1) and (6) of section three of the principal Act (which relates to an application for the adjustment of a debtor's affairs), and accordingly the said subsections shall have effect as set out in the First Schedule to this Act.
(2) For sub-paragraph (b ) of subsection (1) of the said section three there shall be substituted the following paragraph:—
‘(b ) is in such a position that, if he were required to pay his accrued debts and to meet, as they fall due, any such future liabilities as aforesaid, he would not have sufficient resources to enable him to preserve or recover his business or former means of livelihood or otherwise to make reasonable provision for the future maintenance of himself and his family;’
and paragraph (ii) of the said subsection (which allows creditors whose debts are affected by the Defence (Evacuated Areas) Regulations, 1940, to commence liabilities adjustment proceedings) shall be omitted; and for the words ‘the Courts (Emergency Powers) Act, 1939,’ there shall be substituted the words ‘the Courts (Emergency Powers) Act, 1943’.
(3) In subsection (6) of the said section three for the words ‘and shall also make an order, to be known as a 'liabilities adjustment order', providing for the adjustment and settlement of the debtor's affairs under this Part of this...
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