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5. That paragraph and two others giving priority to certain wages, were repealed and replaced by three new paragraphs which were enacted by section 5 of Ordinance No. 29 of 1933.
6. The reason
for that amendment was to make the priorities of debts in the case of companies in liquidation coincide with those provided by section 38 (1) of the Bank- ruptcy Ordinance, No. 10 of 1931, for ordinary bankruptcies, amendment to this effect having been suggested by the Secretary of State in the final paragraph of his despatch to the Governor of the 1st June, 1933.
7. Consequently for the paragraph relating to local rates there was substituted a paragraph giving a priority to all debts due from the Company to the Crown at the relevant date, and having become due and payable within twelve months next before that date.
8. In this Colony rates are levied by the Government as representing the Crown and paid into the general revenues of the Colony. Provision for parochial and other local rates was therefore considered unnecessary.
9. It has been pointed out recently by His Majesty's Consular representatives at Shanghai that the 1933 amendment has had the effect of depriving the Municipal Council of the International Settlement of its claim to legal priority in respect of rates due by China Companies in liquidation although that Council receives preferential treatment where winding up takes place under the jurisdiction of the Belgian, French and Netherlands Authorities.
10. The object of clause 3 of this Bill is to add a further paragraph which will restore the former priority of local rates in the case of China Companies and Hong Kong China Companies, which are defined in section 348 of the principal Ordinance.
11. This special provision is limited to China Companies and Hong Kong China Companies. Such companies, though registered in Hong Kong, carry on their business within the limits of the China Orders in Council and. for reasons of jurisdiction and otherwise, receive special treatment under the Companies Ordinance.
12. It is not considered necessary to extend the special priority to companies generally or to ordinary bankruptcies, as it does not appear to be in accordance with the general policy of English law, on which the law of the Colony is founded, to afford special facilities for the enforcement of rates imposed by foreign municipalities for their domestic purposes (See Municipal Council of Sydney ". Bull 1909 I K.B 7 and 6 Hailsham's Halsbury page 198, para. 241).
13. The introduction of a clause to this effect has been approved by the Secretary of State in his despatch No. 5 of the 8th January, 1936.
1
February, 1936.
C. G. ALABASTER,
Attorney General.