6. This consideration must have largely contributed to the retention in the Colony of the almost obsolete imprisonment for debt. The circumstances under which business is conducted in the Colony point to the fact that execution of judgments in China is the proper and convenient remedy. That it seems to have been so considered from the first is shewn by the fact that the subject is dealt with by Article 23 of the Treaty of Tientsin. This Article runs as follows:-
XXIII.-Should natives of China who may repair to Hongkong to trade incur debts there, the recovery of such debts must be arranged for by the English Courts on the spot; but should the Chinese debtor abscond, and be known to have property, real or personal, within the Chinese territory, it shall be the duty of the Chinese authorities, on application by, and in concert with the British Consul, to do their utmost to see justice done between the parties. This Article is vague and clumsily drafted, and so far as I can gather, it fails altogether of its intended effect.
7. I annex three memoranda with have been prepared at my request by officers of the Court.
(1)-From the Registrar of the Court.
He points out that although there are a great number of judgments which could be executed in China, probably with good results, yet the applications for I understand that the necessary scaled copies of judgments are very few. procedure for obtaining the benefit of the Treaty must begin in the Colonial Secretary's Office, and there may be records there which would show accurately how many applications have been made.
What the Registrar says, however, is common knowledge: that there are many cases in which the Treaty might afford relief, but that judgment creditors shrink from proceeding under it, because the procedure is cumbersome and expen- sive, and the result doubtful. It would seein that this is not due entirely to the inaction of the Chinese Government, but also in some measure to the apparent absence of any specific instructions to the Consuls.
The suggestion made by the Registrar that the procedure should issue from the Court is a good one; and I have no doubt that were the whole question taken in hand, this is one of the improvements which would be introduced,
(2). From the Deputy Registrar.
This officer has had some experience as Official Liquidator in winding up companies, and it will be seen from his report that the deficiencies of the existing system throw serious impediments in the way of winding up commercial enter- prises satisfactorily. The suggestion that formal judgments should be against all the contributories, so as to bring them within the Treaty of Tientsin, would result in little unless the Treaty were itself amende l as I propose.
(3).-From the Official Receiver in Bankruptcy.
The first part of this memorandum deals with the difficulties the Receiver experiences in consequence of the Chinese system of partnerships. This is a matter which I believe has already been under consideration, and I do not propose to touch upon it now. The point in the memorandum to which I desire to call special attention is that he receives little or no assistance from the Chinese Authorities in realizing the debtor's estate in China, and that therefore the Treaty in its present form is useless in bankruptcy proceedings.
It
Another important aspect of the question is referred to in this report. would appear that the Consuls of other countries are apt to step in to obtaiu possession of property belonging to the debror for the benefit of their nationals. By so doing foreign merchants, although carrying on business in Hongkong and so subject to the bankruptcy laws of the Colony, obtain an unfair advantage over British creditors.
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8. I annex also a letter from Mr. WILKINSON, a Solicitor in large practice in the Colony, dealing generally with the subject, but drawing attention to another lacuna in the existing system. It appears that Chinese judgment creditors cannot obtain any assistance under the Treaty. Undoubtedly, if the intention of Article 23 of the Treaty is to secure the assistance of the Chinese authorities in executing the judgments of the Court of the Colony, Chinese plaintiff's should not be excluded.
I gather that in the case of judgment creditors of other nationalities, they seek the assistance of their own Consuls.
9. I have not elaborated the points at issue at any length, deeming it sufficient for the present to point out in brief outline the salient defects of the existing state of things. I think however I have said enough to show that there is urgent. need of revising the 23rd Article of the Treaty, and putting matters on a more satisfactory footing. I shall be happy to go into the question at greater detail should Your Excellency wish me to do so.
I have, &c.,
Enclosure 1 in No. 1.
F. T. PIGGOTT,
Chief Justice.
MEMORANDUM BY THE REGISTRAR, SUPREME COURT.
Supreme Court, Hongkong, 7th July, 1905.
1. It is not possible to ascertain from our records how many applications have been made to the Chinese Authorities under Article 23 of the Tientsia Treaty for enforcing the Judgments of this Court; but I believe very few-proba- bly not more than half a dozen in the course of a year.
2. As these applications have invariably to be made through the Govern-
ment, the Colonial Secretary's Office will have a record.
3. I am informed by the Solicitors and by the Official Receiver in Bank- ruptcy that British Consuls in China in many instances decline to enforce Article 23 of the Treaty unless the Plaintiff is a British subject.
4. Although few applications have been made yet there are many Judgments that could be effectually executed in China if the litigants had facilities given to them to recover their claims,
5. I have reason to believe that if the procedure were facilitated by a simple Request from this Court, and if a clear understanding were come to with the Con- suls that the provisions of the Treaty is intended to apply to all litigants before the Court, more advantage would be taken of the Article in the Treaty.
6. The present procedure is both cumbersome and expensive entailing, as it does, continuous correspondence between the Solicitors concerned and the Government.
Enclosure 2 in No. 1.
A. SETH.
MEMORANDUM BY THE DEPUTY REGISTRAR, SUPREME COURT.
Supreme Court, Hongkong, 7th July, 1905.
1. Companies are very seldom placed in the hands of an Official Liquidator for the purpose of settling their affairs. Usually limited liability companies go into voluntary liquidation--of which our records shew 124: while in cases of ex- ceptional difficulty an Official Liquidator is employed. Our records only shew five such instances, and my experience extends to two.
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