FRIDAY JULY 28, 1939.—PAGE 2
an order for the winding up of the local branch of the Company,
The second and third of Mr. Potter's grounds necessarily involve a consideration of the present rela- tions between China and Japan.
In July 1937 hostilities between these two countries broke out, and at this date are still raging.
As a result of these hostilities the
Sir Wilfred Greene's recourse tocares in which the lex loci con- Chiefoo is still subject to the juris- the touchstone of common sense tractus was also the proper law. diction of the Chinese courts. As fortides me in my conclusion, not The casual place of completion Lord Loreburn there said in del- only on the authorities which I cannot as a rule raise legal effects. ivering the judgment of the Judi-
war exists between
have cited but also on my inescap- "It is academic and Impract-ctal Committee: "The protection able knowledge of conditions on icable to suggest that a contract of a State does not cease merely▪ the China coast, that a state of must be regarded as a. nullity because the State forces for strate- Japan, and has existed at all times pens to have been made in a com- porarily withdrawn, so that the China". and | everywhere merely because it hap-gical or other reasons, are tem-
material to this application.
try by the law of which it is illegal. enemy for the time exercises the In January 1939 the local office But what is true is that if that rights of an army in occupation Japanese are in effective occupa of the Company was closed and its country is something more than on the contrary, when such terri- tion of Chefoc and the adjacent chinese employees departed from the locus contractus, if for in-tory reverts to the control or its country, and of all the maritime the Colony. On February 1,1939 stance"
of the parties is rightful sovereign wrongs done coast of the Republic of China. the Dairen Kisen Kabushiki Kai- resident there, or if the subject during the foreign occupation are The effect of Froclamatious of the sha purported to act as agents of matter of a contract of sale is contrable by the ordinary courts? the company in this Colony, situated there, then, even though In the third place, he maintains the law of that country is not the the contributories are the best proper law, nevertheless any im-Judges as to whether there is any ships under the Chinese dag to In these circumstances can it be perative provision by which it danger to the local assets of the trade in Chinese waters without said that the Company is still prohibits and legalises the con- company. Their considered view being subject to immediate seizure carrying on business in the Colony? tract will be recognised by the is shown by the fact that whereas – by the naval forces of Japan.
Imperial Japanese Government published in August and · Septem- ber 1937 is that it is impossible for
STATE OF WAR
CHINESE LAW
KIND
Mr. T. F. Lo, a well qualified and English Courts."
the petition is presented by con- acknowledged expert in Chinese,
tributories holding 1,500 shares it OPPOSITION'S CASE The question whether in these law, has fled a lengthy afidavit
is opposed by 50,000 in value, and Mr. Sheldon has submitted three it is a Yamiliar and settled prind- circumstances a state of war exists setting out in the clearest terms interesting. arguments in opposition ple that a court will not interfere between China and Japan has been the common law and statutory to the making of the order prayed with a domestic forum.. raised by Mr. Sheldon on behalf of provisions governing trading with those who oppose the petition. The an enemy of the Chinese Republic that the local branch of the Com- the majority of the contributories Firstly, he contends. the fact It is perhaps not surprising that various affidavits fled jon behalf of No counter amdaɣits have been the parties to this action are rea- filed and I therefore accept Mr. Pany is precluded by existing chr-resident either in the province of cumstances from carrying on bust- Shantung which is in Japanese sonably explicit on this question. Lo's statements as an accurateness in the Colony is not in itself occupation or to Dairen in Man The amdavit of June-ke Choy led opinion on the legal principles apa ground for making a winding-chukuo should desire to trade with on March 29 in support of the plicable to this case. According to up order, and he relies on the case the enemy. petition refers in paragraph 7 to Chinese law the action of the Com- of In re Middlesborough Assembly know be a profitable undertaking: It may, for aught I "the" outbreak of hostilities between pany in chartering ships to Japan Rooms Co. (1879) 14 Ch.D. 104 China and Japan"; his later ese interests and in appointing
it is in any event more profitable affidavit of April 3reters in para- Japanese agents is illegal and for building and letting assembly laid up in harbour or forcibly In that case a company formed than having the company's ships graph 17 to "the blockade of criminal and all such contracts are rooms resolved, owing to trade de seized by the Japanese forces. Japanese naval forces exercised not only void but illegal. - against all Chinese" vessels"; and Mr. Matsumoto in his affidavit of May 18 in opposition to the appll- cation likewise refers in paragraph 9 to the outbreak of hostilities between China and Japan.”
These considered statements on affidavit are entitled to, and must receive due weight, but fortunately for me sitting as a court of first: instance, the matter is concluded by two recent judgments.
Can It then be said that the Company is carrying on business in the Colony when its ostensible agents purport to act under a cop tract which is illegal by the law of China which is clearly the proper law? The answer must be no.
il
pression, to suspend work; for more than a year.
•
HIGH TREASON
tion for winding-up.
A shareholder presented a peti- It is clear however from Mr. T.
He supported by one-eighth in value ities of the company are by Chinese was F. Lo's affidavit that "these activ- of the shareholders whereas the law illegal, in fact treasonable and petition was opposed by four-fths I have not been referred to any fin value...
authority for the proposition that, In these circumstances the Court in order to meet the wishes of a NO REPRESENTATION
of Appeal held that a winding-up majority of shareholders. I should The parent company in China is order. ought not to be made. connive at and in fact facilitate in process of compulsory winding
In my opinion that case is easily high treason up and the local branch is without distinguishable. It was a petition friendly power.
by subjects of a lawful representation in the Colony. for the winding-up of an English. Mr. D'Almada, who followed Mr. What then is the position of this Company whereas here I have to Sheldon has advanced another Court?
consider a petition for the wind- argument.
+
In the local case of Ford v. Steinman and others, which is un- reported, the Full Court of this Colony in judgments delivered as Mr. Cheshire in his recent working-up of the local branch of a Assuming every argument put .early as December 1937 held that on Private International Law at p. foreign company which has al- forward by Mr. Potter, Mr. such a state of war existed as to 197 writes "It is axiomatic that a ready been wound up by order of D'Almada submits that the true justify sailors on peace-time art- contract that is illegal by its pro-a competent court. I know of no remedy is not a winding up order icles from refusing to serve on a per law cannot be enforced in authority for keeping alive a but an injunction to restrain the voyage into the coastal waters of England. The dearth of authority branch where the parent trimk is local branch from doing legal China or Japan. “
for this proposition is not surpris in process of dissolution.
acts. That submission"seems to me ing. for few would be bold enough Secondly, he argues, the Su- to disregard two facts; firstly, that More recently the Court of Ap-to sue on a contract that is prohl- preme Court of China has made an the company has been wound up peal in England have considered bited by the legal system to which order which is entirely nugatory in China and that we are concern the same question in the case of it properly belongs.".
The only assets within the furised here only with a branch, and, Kawasaki Kisen Kabushiki Kaisha or Kobe v. Hantham 8.8. Co. (1939)
In The Toral (1932) p. 78 at 88 ships based on Chefoo or Dairen. lng no representatives here except diction of that court are fourteen secondly, that, the company. hay- IAEA. 1819 where Str Wilfred Greer L. in considering the judg- Greene MR, in upholding the de- ments in the Court of Appeal in In and, notwithstanding the order of a Japanese corporation whose con cision of the arbitrator who found e Missouri Steamship Co. (42 the court these ships are still trad-tract of agency is legal by the that the owners were justined in Ch.D. 321) said: "I regard the de- This court will not make a laws of China, there is no one on useless ör ineffective decree Cer- whom an injunction could be cancelling a charter party which claian as meaning that if, in the contained the clause "Charterers country where. the contract was Suson vs. Wilson L.R. 2 Chancery served.
Having come to the conclusion and owners to have the liberty of made, the contract was illegal-not Appeals p.77).
which I have already reached on cancelling this charter party if war merely vold and unenforceable but
Mr. Potter's first ground, it is not breaks out involving Japan," spoke legal then the courts in this of his happiness to be able to avoid country "would recognise the ille- That argument is based on two strictly necessary for me to state coming to a conclusion which gality and act in accordance with fallacies. In the first place the my views on the second and third would violate all his feelings of the law of the country where the company has within the jurisdic grounds, but in case on appeal the tion of this court substantial assets Full Court holds that the arst and it has not been suggested that ground falls it will obviate the Mr. Cheshire puts it thus:t any order which I make will not necessity for a rehearing de novo has been suggested that a contract be immediately effective so far as I record that in my judgment which is illegal by the law of the these assets are concerned. In the the petition is one which should.. country where It is made cannot second place the fact that certain be granted on all the three grounds be enforced in England.
foreign nationals are in contempt advanced
common sense.
contract was made.”
TWO FALLACIES
Mr. Sheldon, has been driven to argue that the judgment in each of these cases has relation only to the facts of the particular case, That is true, but the point at issue In each of these cases was just the "Bold and sweeping statemerita of an order of a competent court is There will be an order for the one which I have to decide, and of this nature are seldon tenable in no reason why I should disregard winding up of the branch of the these judgmerits apply to the facts Private International Law, This that order or fall to treat is with company within the jurisdiction of of the case now before me as paritenlar one, at any rate, derives proper respect. The case of de this Court. There will be liberty cógently as they do to the facts of little confrmation from the deci- Jager vs. A.G. for Natal (1907) to appeal and the costs of the the cases in which they were stons usually cited in its favour, Appeal Cases 326 is direct authority petitioners will be paid from the delfvered.
since they were concerned with for the proposition company in local assets of the company.