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9. The question of judgments recovered by foreigners or by persons of Chinese race, not British subjects, is a difficult one to deal with, and I do not think that any advantage would result if I were now to add anything to what I have already said, leaving it to be considered after a decision has been come to on the main question. I have however been informed by a Solicitor in large practice that it is the custom, when a judgment has been obtained by a foreign client in Hongkong. for the Solicitar to address the foreign Consul direct, and to obtain the assistance of the Chinese Authorities through him. It may be that this practice points to the solution of the difficulty: subject only to this, that the action of the foreign Consuls should be made dependent où international arrangement.
10. BANKRUPTCY.-It remains to be seen whether any legislative steps can be taken to bring the practice in Bankruptcy into line with the suggested civil procedure-para. 9 of Your Excellency's letter-so as to enable the Official Receiver to recover property belonging to the bankrupt in China.
The debtor's property may be roughly divided into two classes: 1st, that actually belonging to the debtor, and 2nd, debts due to the debtor by other people. I think that a paragraph on the following lines, added to Section 19 (1) of the Bankruptcy Ordinance, No. 7 of 1891, will be sufficient for all purposes:--
"And for the more efficient recovery of the bankrupt's property in China for "this purpose the Court shall, on the motion of the Trustee, enter judgment "against the bankrupt for the collective amount of the debts proved or provable in the bankruptcy and such judgment shall in all respects, whether in regard to "execution or to any other matter, be of the same effect as a judgment entered in "a civil action: and the Trustee shall further be entitled to move for judgment against the several debtors to the estate on proof of the bankrupt's claim against "them, subject however to the right of such debtors to move for leave to set aside "such judgment and to come in to defend, within such time as the Court may "allow."
11. WINDING UP OF COMPANIES.--A paragraph on the following lines, if added to Section 149 () of the Companies Ordinance, No. 1 of 1865, will in like manner meet the case of the contributories to companies, dealt with in paragraph 10 of Your Excellency's letter:-
"Such order (e., an order for winding up a company) shall be made in the "form of a judgment, and shall in all respects be equivalent to and executable as a judgment of the Court in civil matters: and for this purpose the judgment may be given against any number of contributories, but shall be effective only against each contributory for the amount set opposite his name.
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In connexion with this amendment, and in order to meet at once a criticism which may
be advanced against it--that it does away with the necessity of bring. ing an action against a contributory abroad (under section 42 of the Code of Civil Procedure) which the English Courts have insisted upon-I should point out that this question is concluded by Article 4 of the McKay Treaty, which settles against the contributory any question which he might raise as to the cause of action not falling within the terms of that section. (See p. 24 of my Memo- randum of 26th Angust, 1905.)
12. Before concluding this letter, there are two points which have been suggested to me which it is desirable to notice. First:Article 23 of the Treaty requires the Chinese Authorities in concert with the British Consul "to see justice done between the parties". The suggestion is that the enquiries by the Consul even when a judgment has been obtained may perhaps be justified on the ground that justice may require them to be made. I do not think it is necessary to say more than this: Where judgment has been obtained in the Courts of Hongkong it is not admissible to suppose that the interests of justice would be furthered by a subsequent non-judicial enquiry by the Consul. I have specially referred to this point in the suggested instructions to the Consuls.
Secondly-It has been suggested that possibly Article 22 of the Treaty, either by itself, or with a slight modification, might meet the case.
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Article 22 is as follows:-"Should any Chinese subject fail to discharge debts incurred to a British subject, or should he fraudulently abscond, the Chinese "Authorities will do their utmost to effect his arrest and enforce recovery of the "debts. The British Authorities will likewise do their utmost to bring to justice "any British subject fraudulently absconding or failing to discharge debts "incurred by him to a Chinese subject ".
From the position of this Article, immediately before the one dealing with Chinese repairing to Hongkong and incurring debts there, I am disposed to think that, so far as debts incurred by Chinese subjects are concerned, it relates ex- elusively to Chinese subjects in China who incur debts to British subjects in China. If however the Article has a wider scope, it would be better that the instructions
I have suggested should be stated to be issued under Articles 22 and 23.
13. I venture to think that the case is now ripe for considered action.
I have, &c.,
F. T. PIGGOTT.
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