C. A. 1904 FLEW, In re. FLEW, Ex parte. security for payment of not less that 7s. 6d. in the pound on all the unsecured debts provable against the debtors' estate." The debtors' application for the approval of the scheme was supported by sixty-seven creditors, whose debts amounted to 53157. 4s. 4d., out of a total of seventy-eight creditors whose debts amounted to 55057. 15s. 11d. The registrar refused to approve of the scheme on the grounds (1.) that the agreement of some creditors to stand by until a certain event as to certain debts had occurred and as to other debts to abstain from foreclosure for twelve months brought the case within the decision in In re Pilling (1); (2.) that the scheme was too speculative. At the close of his judgment the registrar said: "What the creditors will risk or lose is sufficiently clear. The whole of the assets will be put out of the reach of the Court, while the debtors through their trustee continue to carry on a speculation very like the speculation which the official receiver has already described as 'rash and hazardous' and as contributing to bring about their bankruptcy." The order refusing the approval of the Court stated that "the Court being satisfied that the case is not one in which the Court would be required, if the debtors were adjudged bankrupt, to refuse an order of discharge, and being satisfied that facts have been proved which would justify the Court in refusing, qualifying, or suspending an order of discharge, but that having regard to the nature of such facts and the Court being of opinion that such scheme of arrangement was too speculative and not reasonable or calculated to benefit the general body of their creditors," the application to approve the scheme was refused. The debtors appealed. (2) (1) [1903] 2 K. B. 50. (2) By s. 3 of the Bankruptcy Act, 1890, sub-s. 8, "If the Court is of opinion that the terms of the proposal are not reasonable, or are not calculated to benefit the general body of creditors, or in any case in which the Court is required where the debtor is adjudged bankrupt to refuse his discharge, the Court shall refuse to approve the proposal." Sub-s. 9: "If any facts are proved on proof of which the Court would be required either to refuse, suspend, or attach conditions to the debtor's discharge were he adjudged bankrupt, Muir Mackenzie, for the debtors. This question turns upon s. 3, sub-s. 9, of the Bankruptcy Act, 1890, which makes the approval by the Court of a scheme falling under that sub-section conditional upon the scheme providing reasonable security for the payment of not less than 7s. 6d. in the pound on all the unsecured debts. "Reasonable security" does not mean security upon which it would be reasonable that a prudent man should invest money; the words are satisfied if there is a reasonable commercial probability that at least that sum will be realized: In re Bottomley. (1) There being here a reasonable commercial probability that there will be enough to pay the unsecured creditors a great deal more than 7s. 6d. in the pound, the learned registrar erred in rejecting the scheme. [COZENS-HARDY L.J. Under this scheme the trustee could not disclaim onerous leases.] It is submitted that he could. For this purpose the trustee is in the same position as if he were the trustee in a bankruptcy Bankruptcy Act, 1890, s. 3, sub-ss. 16 and 17, and the Bankruptcy Act, 1883, s. 55. There being no reason of commercial morality why effect should not be given to this scheme, the Court ought not to refuse its sanction. Primâ facie, at any rate, the creditors themselves must be the best judges of what is for their benefit. Carrington, for the creditors. Sir R. B. Finlay, A.-G., and S. G. Lushington, for the official receiver, were not called upon. VAUGHAN WILLIAMS L.J. In my opinion this appeal must be dismissed. I base my judgment on one point and on one point only. [The Lord Justice read sub-s. 9 of s. 3 of the Bankruptcy Act, 1890, and continued :—] In my judgment this scheme provides no such security as is there mentioned. In my opinion this scheme is a very speculative one indeed, and does not provide reasonable security the Court shall refuse to approve the proposal, unless it provides reasonable security for payment of not less than (1) (1893) 10 seven shillings and sixpence in the pound on all the unsecured debts provable against the debtor's estate." Morr. 262, 273. C. A. 1904 FLEW, In re. FLEW, Ex parte. C. A. 1904 FLEW, In re. FLEW. Vaughan Williams L.J. for the payment of even 7s. 6d. in the pound. I am aware that the learned registrar in his judgment said that, as the proposal is to pay 20s. in the pound, it may be that he had not to decide what is the meaning of "unsecured debts provEx parte. able against a debtor's estate" in sub-s. 9. But, in my judgment, we are bound to consider, amongst other matters, what sort of security is afforded to the creditors. Generally speaking, and especially when there is an estate which may require a considerable expenditure of money in its realization, the Court would be reluctant to refuse to approve any scheme which had been passed by the creditors unanimously, or practically unanimously, because primâ facie the creditors are the persons most interested and best able to judge whether a scheme is or is not for their benefit. That is the course which the Court would generally adopt in such a case. But, as it seems to me, it is always open to the Court to consider whether the scheme is or is not for the benefit of the creditors, although, according to the general practice as I understand it, the Court is very reluctant to overrule the wishes of the creditors as regards an estate in the realization of which they and they alone are interested. The present case is obviously one to which, if the scheme had been for the payment of anything less than 20s. in the pound, sub-s. 9 of s. 3 of the Act of 1890 would necessarily have applied, and under these circumstances it seems to me that we ought to affirm the decision of the learned registrar and dismiss the appeal. Some other points were discussed in the judgment of the learned registrar, e.g., the effect of the conditional withdrawal of the claims of certain persons, mortgagees, and "family creditors." It is, to say the least, not very easy to obtain the approval of a scheme when the debtor himself is party to a conditional arrangement of this kind. The decision in In re Pilling (1) no doubt makes it difficult to do so, though I do not say that in no such case would it be possible for the Court to approve the scheme if it thought there had been full disclosure of all the facts and all the negotiations for the scheme. (1) [1903] 2 K. B. 50. For the reasons therefore which I have already given I think this appeal should be dismissed. ROMER L.J. I also think that this scheme (if it can be properly called a scheme) is one which the Court ought not to sanction. I say this for the reasons which have been given by my Lord, and also because I think there is a good deal of force in what the registrar said at the end of his very careful judgment, namely: "The whole of the assets will be put out of the reach of the Court, while the debtors through their trustee continue to carry on a speculation very like the speculation which the official receiver has already described as 'rash and hazardous' and as contributing to bring about their bankruptcy." COZENS-HARDY L.J. I agree. S. G. Lushington, for the official receiver, asked that an immediate adjudication of bankruptcy might be made against the debtors. The Court has power to do this under s. 20 of the Bankruptcy Act, 1883, and it was done in In re Burr. (1) Muir Mackenzie, for the debtors. In re Burr (1) was a very exceptional case. In In re Pilling (2) this Court refused to make an immediate adjudication. VAUGHAN WILLIAMS L.J. We think that such an order ought to be made only in the most exceptional circumstances. Appeal dismissed. Solicitors: T. Blanco White; Solicitor to Board of Trade. C. A. 1904 FLEW, In re. FLEW, Ex parte. 1904 Dec. 19. WESTHORPE, APPELLANT v. POWLEY, RESPONDENT. Navy-Enlistment-Naval Service-Royal Naval Reserve-Penalty for making Sect. 16 of the Naval Enlistment Act, 1853, which imposes a penalty on a person who on offering himself to enter the naval service of the Crown makes a false statement with intent to deceive any person "authorized to enter or enlist seamen or others in or for such naval service," has no application to a person who makes a false statement when seeking to enter the Royal Naval Reserve as established by the Royal Naval Reserve (Volunteers) Act, 1859. CASE stated by justices. The respondent was charged on information with making, on February 23, 1904, a false statement in writing on offering himself to enter the naval service of His Majesty, contrary to the Naval Enlistment Act, 1853, s. 16. The following facts were proved or admitted : The appellant was an officer in His Majesty's Customs, and was authorized by virtue of his appointment under the regulations hereinafter mentioned to enrol duly qualified applicants in the Royal Naval Reserve. The Royal Naval Reserve was established by the Royal Naval Reserve (Volunteers) Act, 1859, and is governed by regulations issued under that statute. On February 23, 1904, the respondent applied in person to the appellant to be enrolled in the Royal Naval Reserve, and signed a printed form, which was read over to him and which contained the statements-(a) that the respondent had not already made application to be enrolled in the Royal Naval Reserve at that or any other port, and (b) that his age was thirty-both of which statements were false. On behalf of the respondent it was contended upon the above facts that, as at the date of the passing of the Naval Enlistment Act, 1853, which created the offence, there was no force |