CO129-415 - Governor Sir May - 1914 [12] — Page 73

HONGKONG LEGISLATIVE COUNCIL

in

Bill, Sir, provides a scheme for such winding up. Speaking generally, the scheme of the Bill is as follows:-In the first place, alien enemies, who are defined as persons whose sovereign or State is at war with his Majesty are prohibited from doing any business or disposing of any property without permission. Power is then given for you, Sir, to appoint such persons as you may think fit to wind up the business and personal affairs of any alien enemy who may have property or business in the Colony. These liquidators will have the same rights and powers as if the property and business of alien enemies whose affairs they are liquidating had been transferred to them, and as if the contracts made with alien enemies had been made with them. Of course liquidators, as provided in the Bill, will not be able to insist on the continuance of any contract of partner- ship, agency, or any contract of personal service. The Bill also provides that any proceedings which might, if this Bill were not passed, be brought against an alien enemy in respect of his trade, or respect of his personal affairs, or brought by him, may be brought by or against the liquidator, but to save the liquidator from personal liability it is laid down that he is to incur no personal liability by the winding up except for such things as would be criminal in the case of the natural person. It is also provided that he is to incur no liability whatever in respect of the winding up beyond the assets which may come to his hands. It is also laid down, Sir, that the winding up is to be carried out as for the benefit of persons who may be entitled to the profits of the trade or to the property dealt with as the case may be, and pro- ceeds resulting from the winding up are to be paid into a bank to await ultimate disposal thereof in accordance with any law provided for the purpose, or direction you may give. The Bill also provides, in case the assets of an alien enemy are not sufficient to cover his liabilities, they shall be distributed in a certain order which, to a considerable extent, almost entirely, follows the order of distribution in bankruptcy: first of all, secured creditors are to be paid up to the value of their respective securities.

any

HON. MR. HEWETT-I beg pardon, are you referring to sub-clause 11 of

clause 5?

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THE ATTORNEY - GENERAL Yes. Next, the

liquidator in expenses incurred by the

the course of winding

an alien

up are to be paid; also, the remunera- tion of the liquidator, which has been fixed at 21/2 per cent. of the total assets realised and brought to hand by clerk or servant in respect of services him. Next, the salary or wages of any

rendered, less any sum of money due by such clerk or servant to such alien enemy. Fifthly, all sums of money due to the Crown, and sixthly, all other liabilities rateably pari passu whether due to persons within or without the Colony. Clause 6 is intended to prevent the carrying on of a business formerly carried on by an alien enemy by a mere nominee or dummy figurehead on behalf of, and possibly under the direction of, an alien enemy. Without such prohibition it might possibly happen that enemy, expelled or interned, might find someone to deal with the old customers and carry on the old business for the benefit of the alien enemy, and the inten- tion of this Bill would be thereby frustrated. It is not intended, Sir, that this clause should prohibit in any way trade relations with any former customers any person who bonâ-fide establishes any of an alien enemy, or boná-fide obtains agencies formerly held by an alien enemy. In any case, Sir, you have power under the Bill to grant permission to anyone, if you think fit, to carry on the business formerly carried on by an alien enemy if it should be transferred to some person whom you approved, and it does not seem conceivable that any hard- ship will occur, or any undue interfer- ence will be made with any persons who should happen to deal with former customers or former principals of an alien enemy, assuming that they take it over bonâ-fide, and not for the benefit of the alien enemy. Powers are also given to inspect and search, and the usual penalty clause is inserted. Provision is place without the consent of the Attorney- also made that no prosecution shall take General, and the rights and remedies of persons as against alien enemies are not to be affected by the Bill. The Bill has been drafted, Sir, as you have said, at very short notice, the subject matter is novel, and the usual assistance received from previous legislation is almost entirely absent. Under those circum- stances, it is perhaps too much to hope that the Bill approaches anywhere near perfection, and, as your Excellency said,

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