CO129-567-10 Companies Amendment Ordinance- draft bill 15-9-1938 - 28-9-1938 — Page 77

ditions: if he did not entirely blow up he would probably

decide that it would be expedient to be just!

77

The Liquidator too would be in an embarrassing position

for the initiative appears to lie with him alone and though,

to bring the section into operation, he must be appointed in

the Colony there would appear to be no reason why he should

not be appointed on the petition of a creditor in respect of

a debt not contracted within the Colony, in which case he

would have to deal with a conflict of interest between the

petitioning and other outside creditors and the local

creditors.

I regret to note that there was an error on this

question of initiative in my Minute of the 7th August last.

In this Minute also I did not refer to the Court's discretion

which it can exercise on the ground of justice and expediency.

The position appears to be that in deciding whether there shall be a local self contained liquidation the Court has unfettered discretion which it would, no doubt, exercise on the basis of justice and equity, but that it may on the ground of justice and expediency wholly or partly remove the ring fence round the Colony.

It would seem from the reason adduced by the Colonial Office in support of its suggestion that the Englisn "practice" should not be followed in Hong Kong and that it is mainly

concerned with the position of Chinese Banks. If this is

so would it not be, at any rate, less objectionable, if this proposed legislation were confined to the liquidation of Banks, provided, of course, that someone could produce a satisfactory definition of "Bank" or "Banking"!

To sum up this and my Minute of the 7th August last, in my opinion the following are objectionable in the proposed legislation:-

1. The power to eliminate the principle of equality of dis-

tribution

2.

The giving of discretion on this subject to the Court