Important Judgment Given by Full Court at. Hongkong: Position of the Soviet Government, of the former Chief Henry Gollan) regarding the isposal of $300,000 surplus in th liquidation of the Rosso-Asiatic Bank, in the Court of Appeal fon August 18, when judgment was delivered affirming the findings of the Court below. The appeal was heard in the Full Court before Sir Peter Grain, Sir Joseph Kemp and Me. Justice Wood.
Sir Peter Grain, having returned to Shanghai, his judgment was read by Sir Joseph Kemp, who expressed his agreement with it, and Mr. Justice Wood read his own Judg-and that the surplus should be handed over to the Paris Liquidator.
I say "a new argument as far as they are concerned" because the point does appear to have been touched upon by others according to the Judge's notes and his judgment. Mr. Jenkin, on behalf of the London Creditors, said "no principle liquidation. " All: are branch Tiquidations," and Mz. Al behalf of the Official Receiver, sai "Paris branch completed—liquid The learned Chief Justice in his judgment said "it is stated in the "petition. that the head office of the bank was transferred appeal, Mr. Eldon Pot together with Mr. H. G, Sheldon, was for the Shanghai creditors; Mr. C, G, Alabaster, x.c, Hon. Attorney General, was'for the Ofi-Liquidator of Hongkong, and F.C, Jenkin represented the sudan creditors.
The appeal is fully explained in the judgments which are append Sir Joseph Kemp said:—This peal against the judgment of Sir Henry Gollan, Chief Justice, in the matter of the liquidation of the Russo-Asiatic Bank of St. Petersburg.
The parties represented in the Court below were the Shanghai Liquidators, the London creditors of the. London branch of the Bank, and the Official Receiver of Hongkong. The same parties are represented on the appeal now before us.
the Court below it was held that the Russo-Asiatic Bank had not been discovered. That finding has not been disputed in this appeal.
Tt was argued in the Court below That branches of the bank in the Far East had formed themselves into an Eastern Group of which Shanghai was the head office and that the surplus now in the hands of the Hongkong Official Receiver ought to be handed over to the Shanghai jaters for distribution.
The Court below found that according to the ordi procedure, the ion of the branches of the East should be an-to the liquidation of the bank in St. Petersburg, but that under the exceptional circumstances of the case, namely the Soviet decrees concerning the confiscation of property in Russia, it was impossible to hand over the surplus in question to the bank in Russia.
The winding-up order was published in the "Hongkong Government Gazette" in October, 1926, and other Hongkong papers but no attempt to take part in these proceedings has been made either by the bank in Russia or the Soviet Gov-
The learned Chief Justice in the'
Court below found against the contention of the Shanghai Liquidators, namely that the surplus should be handed over to them, as Shanghai was the head branch of the Eastern Group, and finally, the learned Chief Justice ruled that the London Liquidator was entitled to put in proofs in Hongkong of the London creditors he represented and Teave to do so was given.
On the arguments before this Court, on behalf of the Shanghai Liquidators, they appear to have acjeepted the ruling that they cannot have the surplus paid to them, but Jcontest the ruling that the London creditors should be allowed to be refit by the surplus. The Shanghai Liquidors, in the hearing now before us, have practically discarded all their previous arguments and ntrodueed, as far as they are concerned, an entirely new argument, namely that Paris is the head office to Paris in 1917 but no evidence hi been placed before mic...... nor have I been able to discover any' legal authority for the proceeding."
But the arguments put forward by Mr. Totter, on behalf of the Shanghai Liquidators, were _in-rectly a repudiation of the suggestion that Paris was the head office. T again refer to the Judge's notes on Mr. Potter's argument before him—"Shanghai is the prineiple liquidation. I shall prove... that (Far Eastern Group) is sep: rate from London, St. Petersburg. and Paris. Only solution of the problem.is to treat Shanghai as head office."
It is now argued on behalf of the Shanghai Liquidators that there is Sufficient evidence on the file for this Court to find that Paris is) the head office, and it is further suggested that this Court, on its initiative, adjourns this hear-Jing and invites the Paris branch' to place before this Court any information they may desire in order: to support the suggestion that Paris is the head office, and that the surplus should be handed over to them, Tam extremely doubtful whether the Shanghai Liquidators have any Locus standi to put in a plea for} party which has had an opportunity of being represented at both hearings but has refrained from doing so. Iam inclined to think it jx an argument that we need not have listened to as coming from the Shanghai Liquidators, because what.
comes to The Shanghai fquidators say "we accept the de-of the learned judge below fairist ourselves, but we do not like the London creditors touching the surplus, so we will say word for our friend and see if that can stop the London cre-tors putting in proofs and paring in the surplus." I prefer to decide this case on other grounds, Now what is the evidence on the file that is the head office?
First of all there is the creditor's petition dated September 28, 1026, of Mr. An Fung-chow, who says in paragraph two that "the head office was transferred to Paris in 1917."
A bald statement with nothing to support it. Mr. Candlin's affidavit of March 22, 1927, paragraph four—"certain of the Directors escaped from Petrograd to Paris and sumed control of the branches of the bank in Paris and London." This statement is ambiguous and far from definite, as it may mean that some Directors assumed trot of Paris and some of London.
Mr. Candlin further says "the Hongkong branch has never been mat controlled by the Paris branch," and Mr. Candlin represents the Shanghai branch which is now suggesting that Paris is the head office.
Mr. Fleming, chartered accountant of Hongkong, states, in affidavit of January 17,1927, that he has examined the books and refords. of the Hongkong branch satisfied that neither Paris nor London "directed or controlled" ithe French Conce: jon, was brought} 3 before Judge Feng in the Shanghai Special Distric court on August 25] connection with the motor accident in Dixwell Road on Saturday afternoon in which Miss Marguerite Castro, a 19-year old Portuguese girl of 76 Dixwell Road, was killed.
Judge Feng ordered that accused should be detained as a material] witness pending a verdict at the inquest over the body of Miss Castro.
Tne accident occurred in Dixwell }Road on. Saturday afternoon,.dejeeased's ricsha, being _overtursed daring a. collision; with secosed's SOT ahs 5 ele "els branch.
'A letter, March 2, 1927, from the Judicial "Administrator in Paris} Hates: "Liquid: Asiatic Bank, Paris, is entirely tinct from the liquidation of the Far Eastern branches." This is an answer to a letter of Mr. Fleming, in which 2 suggestion of ce-ordination is thrown out between. Hongkong. land Paris, but Paris will have nothing todo with it and emphatically. cut themselves adrift from the Far Eastern branches.
"The Paris branch have had notice of the winding-up proceedings of the bank in Hongkong which gave Paris ah opportunity of saying that they, cof making any suggestion they. eheze, The. only answer that. Paris gave, was to repudiate any connexion with. the Far Eastern Group. It instruc, as Mr. Potter states, that they have received no notice of the surplus, but as they have already stated that they are "entirely distinct from the Hiquidation in the Rast?" it is hardly to be expected that they could have turned round and say "Oh, you have got a surplus, have you? Well, we, are not so entirely distinct as we thought we were." The Pari branch have never appeared in any of the proceedings and they have not suggested that they should, have now dealt with-the evidence on the file as regards the argument' that Paris is the head office, except statements made in certain pleadings in an action which was withdrawn by mutual consent of the parties. 1 consider that little reliance can be put upon statements of facts in pleadings. They may have been drawn up upon wrong, instructions, or they may sometimes be an unintentional misrepresentation of the facts placed before Counsel. The whole of the evidence on the file, in my opinion,, not only does not support the contention but definitely rejects 'As regards the farther suggestion that this Court should, of its own initiative, adjourn' this appeal in order that Paris may be invited to appear with evidence in support of their being the head office, or to supply information on the' subject, Lam of opinion that it is not with= in the duties of this Court to do 80, and the definite repudiation of aby connexion with the Eastern Group. by the Paris office would justify us not doing 80.
It appears to me that there have been no serious arguments against the London creditors being allowed to put in their proofs here, beyond the argument that Pariy is the head office. I therefore have no reason to disagree with the finding of the earned Chief Justice in the Court Iyelow on this point. I therefore am in agreement with the finding the Court below and am of opinion that this appeal should be dismissed with costs. should like to add that in ray. opinion the creditors of the other branches of the Russo-Asiatic Bank have an equal right to put in proofs of their dims ax regards the Hongkong surplus.
With regard to the question of costs in the Court below, am of opinion that, the decisions in "New, Bew" (1899) 2 ch, 467, and "Hare good pham v Shi dock" 19 ch, D. 215, prevent this Court from interfering with the discretion of the learned Judge in the Court below, therefore the ruling as to costs inthe Court below must stand and the appeal against that ruling be dismissed.
It appears that a formal order sas not drawn up on the judgment in the Court below, but I consider that a formal order should be drawn up on the judgment of this Court and that that order should be approved by a Judge of this Court, His Lordship continued:—I agree generally with the judgment 1 have Gust read, and also with the judg ment which is about to be delivered learned brother.
The judgment of the Puisne Judge, Mr. Justice J. R, Wood was These proceedings arise in cone nexion with the liquidation of the local branch of the Russo-Asiatic Bank, foreign corporation. After payment of the local creditors a surplus remains in the hands of the Official Liquidator, who applied to the Court for diveetions to its disposal, The Court dirt_ the liquidators of the Shanghai should be notify ed of the summons for directions. They were represented at the hearing of the summons, The liquidator fof the branch in London, who was permitted to represent creditors: of the bank in London, was a party to the proceedings." The Official Liquidator adopted a neutral position, Te was admitted for the Shang~ hai liquidators that the Russo-Asiatic Bank, which. had been. incorporated in Russia, had also been distalved by State action in Russi that subsequently its Directors had continued operations of the bank in other places through branches which were formed into mutually independent but ce-operative units, one of which was a Far Eastern Group, with. the Shanghai branch as its head ¢ffce, and,, consequently, that the proper disposal of this surplus
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