DEBTOR AND CREDITOR (OCCUPATION PERIOD) ORDINANCE

DEBTOR AND CREDITOR (OCCUPATION PERIOD) ORDINANCE

CHAPTER 250.

DEBTOR AND CREDITOR (OCCUPATION PERIOD).

To determine the degree of validity to be accorded to inoney
payments viade and debts incurred during the period of
enemy occupation of the Colony and matters related
thereto.

[18th June, 1948.]

1. This Ordinance may be cited as the Debtor and
Creditor (Occupation Period) Ordinance.

2. (1) In this Ordinance-
'absent' means absent from territory under the sovereignty
or in the occupation of the occupying power, and a body
corporate shall be deemed to have been so absent while
its registered office was not in any such territory;
'agent', in relation to the occupation period, includes a
person deemed to have been an agent in accordance with
the provisions of subsection (2) ;
'bank' means any person, partnership or corporation carry-
ing on the business of banking;
'custodian' means the person or persons appointed by the
occupying power as custodian of enemy property or
to receive rentals due to enemies of the occupying power
but does not include a liquidator;
'debt' means any sum of money payable by virtue of a
legal obligation and recoverable when due by process
of law;
'duress or coercion' includes any act of informing or threat
to inform an official of the occupying power of the
refusal of a creditor or his agent to accept payment of
a debt in occupation currency;
'Hong Kong currency' means the dollar currency in
circulation and constituting legal tender in the Colony
before the occupation period or after the ist day of
May, 1946;
'liquidator' means an person appointed by the occupying
power and acting as liquidator of any corporation, corn-
pany, firm or other commercial undertaking and includes
the custodian if acting as such liquidator;





'occupation currency' means any, currency issued by the
occupying power and in circulation during the occupation
period, but does not include Hong Kong currency;
'occupation period' means, in relation to the Colony, the
period between the 25th day of December, 1941, and
the ist day of September, 1945, and includes any part
of such period;
'occupying power' means the power exercising during the
occupation period the functions of government in the
Colony or any part thereof;
'property' includes any thing in action and any interest ill
property movable or immovable;
'restraint' means confinement by or under the authority of
the occupying power but does not include a sentence of
imprisonment awarded by a competent court for a
criminal offence.

(2) For the purpose of this Ordinance any person who,
immediately prior to the commencement of the occupation
period, had authority (hereinafter referred to as his former
authority) to act as agent for another (hereinafter referred
to as his former principal) shall be deemed to have been the
agent of his former principal to the extent that he continued,
during the occupation period and while his former principal
was absent or under restraint, to act on behalf of his former
principal in any matter which would have been within the
scope of his former authority notwithstanding that his former
authority had been determined upon the commencement of
or during the occupation period and while his former prin-
cipal was absent or under restraint in any of the following,
ways, that is to say-
(a)by operation of law as a result of the occupation of
the Colony by the occupying power;
(b)by the expiration of the period of the agency of such
person except where such agency was for'the pur-
pose of a particular transaction only;
(c)in any other way unless such person had notice of
the fact or facts which so determined his former
authority.

3. (1) Where any payment was niade during. the.
occupation period in Hong Kong currency or occupation
currency by a debtor or by his agent or by a custodian or a
liquidator acting or purporting to act on behalf of such





debtor to a creditor or to his agent or to a custodian or a
liquidator acting or purporting to act on behalf of such
creditor and such payment was made in respect of a debt-
(a)payable by virtue of an obligation incurred prior
to the commencement of the occupation period;
and
(b) accruing due either prior to or after the commence-
ment of the occupation period,
such payment shall subject to the provisions of subsection
(2) be a valid discharge of such debt-
(i) to the extent of the face ,alue of such payment
if made in Hong Kong currency; or
(ii) at the official rate prescribed by the. occupying
power if payment made in occupation Currency; or
(iii) at the rate agreed by the parties concerned.
(2) In any case-
(a)where the acceptance of such payment in occupation
currency was obtained by duress or coercion, or
(b)whcre such payment VVIls rnade in occupation cur-
reticy in respect of a pre-occupation capital debt
which-
(i) was not clue at the time of such payrnent;
or
(ii) if due was not demanded by the creditor or
by his agent on his behalf and was not payable
tinder a contract the parties to which expressly
stipulated thal it should be of the essence Of such
contract that payment should be made on a date
certain ; or
(iii) if due and demanded was not made within
three months of such demand,
such payment shall be revalued in accordance with the scale
contained in and in the manner prescribed in the Schedule
and shall be a valid discharge of such debt only to the extent
of such revaluation.
(3) In subsection 2) pre-occupation capital debt
means any such debt as is referred to In subsection (i),
includinga sum payable as interest but not including a sum
payable as rent and accruing due after the commencement
of the occupation period.

4. Any payment made during the occupation period
by a debtor or his agent to a creditor or his agent in respect
of a debt payable by virtue of an obligation incurred during





the occupation period and accruing due before on or after
the commencement of this Ordinance-
(a)shall, if made in a currency in which the debt was
incurred, be a valid discharge of the debt to the
extent of the face value of the payment; and
(b)shall, if made in occupation currency in respect of
a debt incurred in Hong Kong currency, or if made
in Hong Kong currency in respect of a debt incurred
in occuparion currency, be a valid discharge of the
debt to the extent of the face value of the equi-valent
amount in Hong Kong currency or in occupation
currency, as the case may be, caicialated at the
official rate of exchange prescribed by the occupy-
ing power or, where another rate was agreed by the
parties concerned, at that rate.

(i) Save as provided in section 6 and subject to the
provisions of subsection (2) any debt or any part of a debt
payable by virtue of an obligation incurred during the
occupation period and accruing due before on or after the
commencement of this Ordinance which still remains unpaid
at the commencement of this Ordinance shall unJess such
debt was expressly made payable otherwise than in occupa-
tion currency be revalued in accordance with the scale
contained in and in the manner prescribed in the Schedule
and shall be payable to the extent determined by such
(2) The provisions of subsection (i) shall not apply in
respect of any debt or part of a debt which represents interest
on a principal sum but any interest payable on the principal
sum where the principal surn is revalued in accordance with
the provisions of this section, shall, if the interest is due but
unpaid at the commencement of this Ordinance or if it
becornes due thereafter, be payable only on the amount of
the principal sum as so revalued.
(3) No action shall be brought on any debt expressed
in occupation currency Unless it is revalued in dollars under
the provisions of this Ordinance.

6. Notwithstanding any other provision of this Ordin-
ance, the liability of a bank to a customer as at the end of
the occupation period on any bank account shall not in any
case exceed-
(a)the amount (if any) which stood to the credit of such
customer in such account immediately prior to the





commencement of the occupation period together
with the amount of any deposit made in Hong Kong
currency during the occupation period less any
withdrawals in Hong Kong currency,
less-
(b) the excess of withdrawals made in occupation cur-
rency over deposits made in occupation currency
converted at the rate of exchange prescribed by the
occupying power which for the purposes of this
section shall be deemed to be four dollars Hong
Kong currency to one military yen.

7. For the purposes of sections 3, 4 and 5-
(a)any payment made by or on behalf of any person
into any bank account during the occupation period
shall be deemed to have been applied first to any
debit balance or part thereof which arose during the
occupation period and was still outstanding against
such person in such account at the time when such
payment was made; and
(b) any withdrawal made by or on behalf of any person
from any bank account during the occupation period
shall be deemed to have been applied first to any
credit balance or part thereof which arose during the
ocupation period and was still outstanding in favour
of such person at the tinie when such withdrawal
was made. [8

8. For the purposes of this Ordinance a copy of an
entry in a banker's book shall in all proceedings be received
as prima facie evidence of such entry and of the matters,
transactions and accounts therein recorded notwithstanding
that such book was during the occupation period in the
custody and control of a custodian or a liquidator. [9

9. (1) Any interest in respect of the occupation period
on a debt (whether accrued due or not) payable by virtue of
an obligation incurred prior to the commencement of the
occupation period being interest at a rate provided for by
agreement or statute or otherwise (hereinafter called the due
rate) and unpaid at the commencement of this Ordinance
shall be payable at such rate as is provided by this section.





(2) If the due rate is higher than four per cent Per
annum such interest shall be payable at the rate of four per
cent Per annum :
Provided that-
(a)any person to whom the interest is payable may
apply to the Supreine Court by originatin- sum-
mons for an order that the interest shall be payable
at a rate higher than four per cent per awnum and
the Supreme Court may, on the hearing of such
summons, make an order that the interest shall be
payable at Such rate higher than four per cent per
annum but riot exceeding the due rate as to the court
shall seem fit;
(b) any person by whom the interest is payable may,
apply to the Supreme Court by originating sum-
inons for an order that the interest shall be payable
at a rate lower than four per cent per and
the Supreme Court may on the hearing of such
summons make an order that the interest shall be
payable at such rate lower than four Per cent per
annum as to the court shall seem fit.

(3) If the due rate is four per cent per annum or lower
such interest shall be payable at the due rate : Provided
that any person by whorn the interest is payable may apply
to the Suprerne Court by originating summons for an order
that the interest shall be payable at a rate lower than the due
rate and, on the hearing of such summons, the Suprenic
Court may make an order that the interest shall be payable
at such rate lower than the due rate as to the court shall seem
fit.

(4) In deciding whether to make any such order as
aforesaid the Supreme Court shall have regard to all the
circumstances of the case and in particular to the value of
any advantage which the debtor enjoyed up to the date of
the commencement of this Ordinance from the existence of
the debt and froin the enJoyment of an), property acquired
by him by virtue of the transaction whereby the debt was
incurred.

(5) On the hearing of any such summons as aforesaid
the Supreme Court may whether or not it orders an increase
or decrease in the rate of interest, prescribe the time within
which the interest shall be paid.





(6) If the debt is payable by virtue of an obligation
incurred by an enemy the provisions of this section with
regard to the payment of interest at a rate other than the
due rate shall not apply and interest shall be payable at the
due rate. For the purposes of this subsection enemy
means-
(a)any state or sovereign of a state which was at any
time during the occupation period at war with His
Majesty;
(b)any body of persons constituted in or incorporated
in or under the laws of any such state; and
(c) any individual who possessed during the occupation
period the nationality of any such state and has
not since divested himself thereof. [10

10. (1) In any case where a debt purporting to have
been discharged in whole or in part by payment in occupation
currency is by virtue of the provisions of this Ordinance
deemed to be wholly or partly undischarged at the com-
mencement of this Ordinance and where the payment of such
debt before such purported discharge as aforesaid was secured
by any mortgage charge lien guarantee indemnity or other
form of security the rights of the creditor in relation to such
mortgage charge lien guarantee indemnity or other form of
security shall be deemed not to have been extinguished or
diminished by such purported discharge.
(2) Where the rights of a creditor in respect of a security
have been deemed by virtue of subsection (i) not to have
been extinguished or diminished-
(a)the creditor may give notice in writing of not less
than one month calling upon the debtor and any
third party who furnished the security to reinstate
or replace such security and to execute all documents
and do all acts necessary for that purpose ; atid in
default of compliance therewith the Supreme Court
may, on application by the creditor on an originat-
ing summons, make such order as to the court
shall seem fit to reinstate the security or replace
it with other equivalent security and to execute all
documents and do all acts necessary for that
purpose
(b) where any person neglects or refuses to comply, with
an order under paragraph (a) directing him to
execute any such documents or to do any such acts





the court may on such terms and conditions if any
as may be just nominate any person to execute such
documents and to do such acts and any document,
so executed or act so done shall operate for all
purposes as if it had been executed or done by the
person originally directed to execute or do the same;
(c) the creditor may give notice in writing to any com-
pany the stock share bonds or debenture of which
were subject to any charge to such creditor by way
of a security as aforesaid and upon the receipt of
such notice such company shall not permit or record
any transfer of such security until the debtor or any
third party who has furnished the security has
reinstated or replaced such security, or in default
thereof the Supreme Court has made an order under
paragraph (a).

11. Nothing in this Ordinance shall affect any agree-
ment made between a debtor and a creditor at any time after
the end of the occupation period for the purpose of-
(a) valuing any payment made during the occupation
period in respect of a debt (whether accrued due or
not) payable by virtue of an obligation incurred prior
to or after the commencement of the occupation
period; or
(b) providing for the payment or other settlement of any
debt or part of a debt (whether accrued clue or not)
payable by virtue of an obligation incurred during
the occupation period and still unpaid at the com-
mencement of this Ordinance; or
(c) determining a rate for the payment of any such
interest as is referred to in subsection (i) of section
io. [12

SCHEDULE. [ss. 3 (2) & 5.]

1. Where any such payment as is mentioned in subsection (2)
of section 3 of the Ordinance was made in occupation currency
during any month or any period set out in the first column of
paragraph 3 of this Schedule, such payment shall be revalued by
taking the number of dollars in Hong Kong currency set out
opposite such month or period in the second column of paragraph
3 of this Schedule as equivalent to one thousand military yen.





2. In the case of a debt incurred during the occupation period
which falls to be revalued under section 5 of this Ordinance, if
the whole or any part thereof remains unsatisfied such whole or
part shall be revalued as in the month or period in which the debt
was incurred by taking the number of dollars in Honk Kong
currency set out opposite such month or period in the second
column of paragraph 3 of this Schedule as equivalent to one
thousand military yen.
24 of 1948. 24 of 1950. Short title. Interpretation. [s. 2 cont.] Discharge during occupation period of pre-occupation debts. Schedule. Discharge during occupation period of debts incurred during such period. [s. 4 cont.] Unsatisfied occupation debts to be revalued. Schedule. Liability of banks to customers. Application of payments to and withdrawals form banks during occupation period. Evidence of payments. Banker's book. Interest. [s. 9 cont.] Re-instatement of securities. [s. 10 cont.] Saving of agreements for payment or settlement.

24 of 1948. 24 of 1950. Short title. Interpretation. [s. 2 cont.] Discharge during occupation period of pre-occupation debts. Schedule. Discharge during occupation period of debts incurred during such period. [s. 4 cont.] Unsatisfied occupation debts to be revalued. Schedule. Liability of banks to customers. Application of payments to and withdrawals form banks during occupation period. Evidence of payments. Banker's book. Interest. [s. 9 cont.] Re-instatement of securities. [s. 10 cont.] Saving of agreements for payment or settlement.

https://oelawhk.lib.hku.hk/items/show/2104

1950

v6

250

9