XN000022-1983-12-07 — Page 8

WEDNESDAY, DECEMBER 7, 1983

COURT DECISION ON JAILING OF DEBTORS PROPOSED

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THE ESSENTIAL PRINCIPLE CONTAINED IN THE DEBTORS (ARREST AND IMPRISONMENT) BILL 1983 IS THAT IN THE FUTURE NO CIVIL DEBTOR WILL BE IMPRISONED WITHOUT A COURT ORDER, THE ATTORNEY GENERAL THE HON MICHAEL THOMAS, SAID IN THE LEGISLATIVE COUNCIL TODAY.

MOVING THE SECOND READING OF THE BILL, MR THOMAS SAID:

+ BELIEVE STRONGLY THAT IT IS FUNDAMENTALLY WRONG THAT DEBTORS SHOULD BE SENT TO PRISON AT THE MERE BEHEST OF JUDGMENT CREDITORS.+

MR THOMAS SAID THAT DEVELOPMENTS AND LEGAL UNCERTAINTIES THAT HAVE BEEN AIRED IN THE COURTS MADE IT URGENT THAT FRESH LEGISLATION BE BROUGHT FORWARD.

+THE FIGURES SHOW THAT ABOUT HALF THE DEBTORS WHO GO TO PRISON ARE THERE FOR BETWEEN TWO WEEKS AND TWO MONTHS. ALTHOUGH THE COURT MAY RELEASE THEM IF THE JUDGMENT CREDITOR IS UNABLE TO SHOW THAT THE DEBTOR'S INABILITY TO PAY IS ATTRIBUTABLE TO UNJUSTIFIABLE EXTRAVAGANCE, WILFUL CONCEALMENT OR REMOVAL OF HIS PROPERTIES OR OTHER ACT OF BAD FAITH, THERE ARE SERIOUS DELAYS IN PRACTICE IN OBTAINING A RELEASE AND THERE ARE PUNITIVE ELEMENTS IN THIS PROCEDURE WHICH ARE INAPPROPRIATE IN THIS CONTEXT, HE SAID.

MR THOMAS SAID THAT THE PROCEDURES PROPOSED IN THE CASE OF JUDGMENT DEBTORS WILL ENABLE JUDGMENT CREDITORS TO OBTAIN A SUMMONS OR, IN APPROPRIATE CASES, AN ORDER FOR THE ARREST OF A CIVIL DEBTOR TO SECURE HIS ATTENDANCE BEFORE A JUDGE FOR AN EXAMINATION. AT THAT HEARING THE DEBTOR WILL BE REQUIRED TO DISCLOSE HIS ASSETS AND EXPLAIN HIS CIRCUMSTANCES, GIVE FULL DISCOVERY OF HIS FINANCIAL DOCUMENTS, AND ANSWER ALL RELEVANT QUESTIONS.

IF THE JUDGE IS SATISFIED AFTER HEARING THE JUDGMENT CREDITOR THAT THE DEBTOR IS, IN EFFECT, ABLE TO MAKE SOME PAYMENT, OR IS DELIBERATELY AVOIDING HIS OBLIGATION, HE MAY ORDER HIS IMPRISONMENT FOR NO LONGER THAN THREE MONTHS.

+AT PRESENT, THE LIMIT IS ONE YEAR, SAID MR THOMAS.

+BUT THIS IS FAR TOO LONG AND CAN ONLY BE PUNITIVE. AS AN ALTERNATIVE TO IMPRISONMENT, THE JUDGE MAY ORDER HIM TO SATISFY THE JUDGMENT AND, THEREAFTER, IF HE FAILS TO DO SO, WITHOUT GOOD CAUSE, ORDER HIS IMPRISONMENT. THE COURT WILL HAVE THE POWER TO SUSPEND OR VARY ITS ORDERS AND MAKE THEM SUBJECT TO CONDITIONS.+

NOTE HAS ALSO BEEN TAKEN OF JUDICIAL CRITICISM OF THE PROCEDURE UNDER ORDER 44A OF THE RULES OF COURT BY WHICH A PERSON CLAIMING HE IS OWED MONEY CAN ARREST THE ALLEGED DEBTOR IF HE APPEARS LIKELY TO LEAVE HONG KONG. THIS HAS ITS USES, AND MAY NOT BE UNFAIR TO THOSE WHO LIVE OR CARRY ON BUSINESS HERE, AT ANY RATE WHERE LIABILITY FOR THE DEBT IS BEYOND DISPUTE. BUT, IN THE LIGHT OF TRENCHANT JUDICIAL COMMENTS, SAID MR THOMAS, THE BILL PROPOSES IT SHOULD NO LONGER BE AVAILABLE AGAINST VISITING FOREIGNERS. MOST COUNTRIES HAD SATISFACTORY PROCEDURES FOR SUING DEBTORS IN THE IR COURTS AND FOR ENFORCING A HONG KONG JUDGMENT, HE SAID.

/MR THOMAS