| 1 | 2 | 3 | 4 |
BANKRUPTCY ORDINANCE

BANKRUPTCY ORDINANCE 59 s. 33 U. K.] 39. Preferential claims in case of apprenticeship (1) Where at the time of the presentation of the bankruptcy petition any person is apprenticed or is a trainee solicitor to the bankrupt, the adjudication of bankruptcy shall, if either the bankrupt or the apprentice or trainee solicitor gives notice in writing to the trustee to that effect, be a complete discharge of the indenture of apprenticeship or trainee solicitor contract; and if any money has been paid by or on behalf of the apprentice or trainee solicitor to the bankrupt as a fee, the trustee may, on the application of the apprentice or trainee solicitor or of some person on his behalf, pay such sum as the trustee, subject to an appeal to the court, thinks reasonable, out of the bankrupt's property, to or for the use of the apprentice or trainee solicitor, regard being had to the amount paid by him or on his behalf and to the time during which he served with the bankrupt under the indenture or trainee solicitor contract before the commencement of the bankruptcy and to the other circumstances of the case.

(2) Where it appears expedient to a trustee, he may, on the application of any apprentice or trainee solicitor to the bankrupt or any person acting on behalf of such apprentice or trainee solicitor, instead of acting under the provisions of subsection (1), transfer the indenture of apprenticeship or trainee solicitor contract to some other person.

(Amended 70 of 1991 s. 14) [cf. 1914 c. 59 s. 34 U. K.] 40. Landlord's power of distress The Landlord or other person to whom any rent is due from the bankrupt may, subject to the provisions of Part III of the Landlord and Tenant (Consolidation) Ordinance (Cap. 7), at any time either before or after the commencement of the bankruptcy, distrain upon the goods or effects of the bankrupt for the rent due to him from the bankrupt, with this limitation, that if such distress for rent be levied after the commencement of the bankruptcy, it shall be available only for 6 months' rent accrued due prior to the date of the order of adjudication and shall not be available for rent payable in respect of any period subsequent to the date when the distress was levied, but the landlord or other person to whom the rent may be due from the bankrupt may prove under the bankruptcy for the surplus due for which the distress may not have been available.

[cf. 1914 c. 59 s. 35 U. K.] 41. Postponement of husband's and wife's claims (1) Where a married woman has been adjudged bankrupt, her husband shall not be entitled to claim any dividend as a creditor in respect of any money or other estate lent or entrusted by him to her until all claims of the other creditors of his wife for valuable consideration in money or money's worth have been satisfied.

(2) Where a debtor has been adjudged bankrupt, any money or other estate of his wife lent or entrusted by her to him shall be treated as assets of his estate, and the wife shall not be entitled to claim any dividend as a creditor in respect of any such money or other estate until all claims of the other creditors of the debtor for valuable consideration in money or money's worth have been satisfied.

(3) In this section "married woman" and "wife" include "concubine".

[cf. 1914 c. 59 s. 36 U. K.] Property available for payment of debts 42. Relation back of trustee's title The bankruptcy of a debtor, whether it takes place on the debtor's own petition or upon that of a creditor or creditors, shall be deemed to have relation back to, and to commence at, the time of the act of bankruptcy being committed on which a receiving order is made against him, or, if the bankrupt is proved to have committed more acts of bankruptcy than one, to have relation back to, and to commence at, the time of the first of the acts of bankruptcy proved to have been committed by the bankrupt within 3 months next preceding the date of the presentation of the bankruptcy petition, but no bankruptcy petition, receiving order or adjudication shall be rendered invalid by reason of any act of bankruptcy anterior to the debt of the petitioning creditor. [cf. 1914 c. 59 s. 37 U. K.] 43. Description of bankrupt's property divisible amongst creditors The property of the bankrupt divisible amongst his creditors, and in this Ordinance referred to as the property of the bankrupt, shall not comprise the following particulars- (a) property held by the bankrupt on trust for any other person; (b) the tools (if any) of his trade and the necessary wearing apparel and bedding of himself and his family dependent on and residing with him, to a value, inclusive of tools and apparel and bedding, not exceeding $3,000 in the whole: (Amended 37 of 1950 Schedule; 65 of 1976 s. 4) But it shall comprise the following particulars- (i) all such property as may belong to or be vested in the bankrupt at the commencement of the bankruptcy or may be acquired by or devolve on him before his discharge; (ii) the capacity to exercise and to take proceedings for exercising all such powers in or over or in respect of property as might have been exercised by the bankrupt for his own benefit at the commencement of his bankruptcy or before his discharge; (iii) all goods being at the commencement of the bankruptcy in the possession, order or disposition of the bankrupt, in his trade or business, by the consent and permission of the true owner, under such circumstances that he is the reputed owner thereof: Provided that things in action other than debts due or growing due to the bankrupt in the course of his trade or business shall not be deemed goods within the meaning of this section. (Amended 33 of 1939; G.

N. 840 of 1940 Supp. Schedule; 20 of 1948 s. 4) [cf. 1914 c. 59 s. 38 (1) U. K.] 44. Provisions as to second bankruptcy (1) Where a second or subsequent receiving order is made against a bankrupt, or where an order is made for the administration in bankruptcy of the estate of a deceased bankrupt, then for the purposes of any proceedings consequent upon any such order the trustee in the last preceding bankruptcy shall be deemed to be a creditor in respect of any unsatisfied balance of the debts provable against the property of the bankrupt in that bankruptcy.

(2) In the event of a second or subsequent receiving order made against a bankrupt being followed by an order adjudging him bankrupt, or in the event of an order being made for the administration in bankruptcy of the estate of a deceased bankrupt, any property acquired by him since he was last adjudged bankrupt, which at the date when the subsequent petition was presented had not been distributed amongst the creditors in such last preceding bankruptcy, shall subject to any disposition thereof made by the Official Receiver or trustee in that bankruptcy, without knowledge of the presentation of the subsequent petition, and subject to the provisions of section 52, vest in the trustee in the subsequent bankruptcy or administration in bankruptcy as the case may be.

(3) Where the trustee in any bankruptcy receives notice of a subsequent petition in bankruptcy against the bankrupt or after his decease of a petition for the administration of his estate in bankruptcy, the trustee shall hold any property then in his possession which has been acquired by the bankrupt since he was adjudged bankrupt until the subsequent petition has been disposed of, and if on the subsequent petition an order of adjudication or an order for the administration of the estate in bankruptcy is made, he shall transfer all such property or the proceeds thereof (after deducting his costs and expenses) to the trustee in the subsequent bankruptcy or administration in bankruptcy, as the case may be.

[cf. 1926 c. 7 s. 3 U. K.] Effect of bankruptcy on antecedent and other transactions 45. Restriction of rights of creditor under execution or attachment (1) Where a creditor has issued execution against the property of a debtor or has attached any debt due to him, he shall not be entitled to retain the benefit of the execution or attachment against the trustee in bankruptcy of the debtor unless he had completed the execution or attachment before the date of the receiving order and before notice of the presentation of any bankruptcy petition by or against the debtor, or of the commission of any available act of bankruptcy by the debtor.

(2) For the purposes of this Ordinance- (a) an execution against goods is completed by seizure and sale or by the making of a charging order under section 20 of the Supreme Court Ordinance (Cap. 4); (b) an attachment of a debt is completed by the receipt of the debt; and (c) an execution against land is completed by seizure, by the appointment of a receiver, or by the making of a charging order under the said section 20. (Replaced 52 of 1987 s. 44) (3) An execution completed as aforesaid is not invalid by reason only of its being an act of bankruptcy, and a person who purchases the goods in good faith under a sale by the bailiff shall in all cases acquire a good title to them against the trustee in bankruptcy.

(4) The rights conferred by this section on the trustee in relation to executions against the property of the debtor and attachment of debts due to the debtor may be set aside by the court in favour of the creditor to such extent and subject to such terms as the court may think fit. (Added 47 of 1984 s. 6) [cf. 1914 c. 59 s. 40 U. K.] 46. Duties of bailiff as to goods taken in execution (1) Where any movable property or negotiable instruments or money of a debtor are taken in execution, and before the receipt or recovery by the judgment creditor of the full amount of the levy, notice is served on the bailiff that a receiving order has been made against the debtor, the bailiff shall on request deliver the movable property, negotiable instruments or money, or any money received in satisfaction or part satisfaction of the execution, to the Official Receiver, but the costs of the execution shall be a first charge on the property so delivered and the Official Receiver or trustee may sell the movable property or negotiable instruments, or an adequate part thereof, or apply the money, for the purpose of satisfying the charge.

(2) Where, under an execution in respect of a judgment for a sum exceeding $100, the property of a debtor is sold or money is paid in order to avoid sale, the bailiff shall deduct his costs of the execution from the proceeds of sale or the money paid and pay the balance into court, and if within 14 clear days of such sale or payment as aforesaid a bankruptcy petition is presented by or against the debtor, the said balance shall remain in court and if the debtor is adjudged bankrupt the balance shall be paid out to the trustee in the bankruptcy, who shall be entitled to retain the same as against the execution creditor, but otherwise it shall be dealt with as if no bankruptcy petition had been presented.

(3) The rights conferred by this section on the Official Receiver or trustee in relation to executions against any movable property or negotiable instruments or money of the debtor may be set aside by the court in favour of the creditor to such extent and subject to such terms as the court may think fit. (Added 47 of 1984 s. 7) [cf. 1914 c. 59 s. 41 (1) U. K.] 47. Avoidance of certain settlements (1) Any settlement of property, not being a settlement made before and in consideration of marriage, or made in favour of a purchaser or incumbrancer in good faith and for valuable consideration, or a settlement made on or for the wife or children of the settlor of property which has accrued to the settlor after marriage in right of his wife, shall, if the settlor becomes bankrupt within 2 years after the date of the settlement, be void against the trustee in the bankruptcy, and shall, if the settlor becomes bankrupt at any subsequent time within 10 years after the date of the settlement, be void against the trustee in the bankruptcy, unless the parties claiming under the settlement can prove that the settlor was at the time of making the settlement able to pay all his debts without the aid of the property comprised in the settlement and that the interest of the settlor in such property passed to the trustee of such settlement on the execution thereof.

(2) Any covenant or contract made by any person (hereinafter called the settlor) in consideration of his or her marriage, either for the future payment of money for the benefit of the settlor's wife or husband or children or for the future settlement on or for the settlor's wife or husband or children of property, wherein the settlor had not at the date of the marriage any estate or interest, whether vested or contingent, in possession or remainder, and not being money or property in right of the settlor's wife or husband, shall if the settlor is adjudged bankrupt and the covenant or contract has not been executed at the date of the commencement of his bankruptcy, be void against the trustee in the bankruptcy except so far as it enables the persons entitled under the covenant or contract to claim for dividend in the settlor's bankruptcy under or in respect of the covenant or contract, but any such claim to dividend shall be postponed until all claims of the other creditors for valuable consideration in money or money's worth have been satisfied.

(3) Any payment of money (not being payment of premiums on a policy of life assurance), or any transfer of property made by the settlor in pursuance of such a covenant or contract as aforesaid, shall be void against the trustee in the settlor's bankruptcy unless the persons to whom the payment or transfer was made prove- (a) that the payment or transfer was made more than 2 years before the date of the commencement of the bankruptcy; or (b) that at the date of the payment or transfer the settlor was able to pay all his debts without the aid of the money so paid or the property so transferred; or (c) that the payment or transfer was made in pursuance of a covenant or contract to pay or transfer money or property expected to come to the settlor from or on the death of a particular person named in the covenant or contract and was made within 3 months after the money or property came into the possession or under the control of the settlor; but, in the event of any such payment or transfer being declared void, the persons to whom it was made shall be entitled to claim for dividend under or in respect of the covenant or contract in like manner as if it had not been executed at the commencement of the bankruptcy.

(4) For the purposes of this section, "settlement" includes any conveyance or transfer of property.

[cf. 1914 c. 59 s. 42 U. K.] 48. Avoidance of general assignments of book debts unless registered (1) Where a person engaged in any trade or business makes an assignment to any other person of his existing or future book debts or any class thereof and is subsequently adjudicated bankrupt, the assignment shall be void against the trustee as regards any book debts which have not been paid at the commencement of the bankruptcy, unless the assignment has been registered with the Registrar in a register to be kept by him for that purpose: Provided that nothing in this section shall have effect so as to render void any assignment of book debts due at the date of the assignment from specified debtors, or of debts growing due under specified contracts, or any assignment of book debts included in a transfer of a business made bona fide and for value, or in any assignment of assets for the benefit of creditors generally.

(2) For the purposes of this section, "assignment" includes assignment by way of security and other charges on book debts.

[cf. 1914 c. 59 s. 43 U. K.] 49. Avoidance of preference in certain cases (1) Every conveyance or transfer of property, or charge thereon made, every payment made, every obligation incurred and every judicial proceeding taken or suffered by any person unable to pay his debts as they become due from his own money in favour of any creditor or of any person in trust for any creditor, with a view to giving such creditor, or any surety or guarantor for the debt due to such creditor, a preference over the other creditors, shall, if the person making, taking, paying or suffering the same is adjudged bankrupt on a bankruptcy petition presented within 6 months, or in relation to anything made, taken, paid or suffered before the commencement * of the Bankruptcy (Amendment) Ordinance 1984 (47 of 1984) 3 months, after the date of making, taking, paying or suffering the same, be deemed fraudulent and void as against the trustee in the bankruptcy. (Amended 47 of 1984 s. 8) (2) This section shall not affect the rights of any person making title in good faith and for valuable consideration through or under a creditor of the bankrupt. [cf. 1914 c. 59 s. 44 U. K.] 49A. Liabilities and rights of certain fraudulently preferred persons (1) Where anything made or done after the commencement of the Bankruptcy (Amendment) Ordinance 1984 (47 of 1984) is void under section 49 as a fraudulent preference of a person interested in property mortgaged or charged to secure the debt, then (without prejudice to any rights or liabilities arising apart from this provision) the person preferred shall be subject to the same liabilities, and shall have the same rights, as if he had undertaken to be personally liable as surety for the debt to the extent of the charge on the property or the value of his interest, whichever is the less.

(2) The value of the said person's interest shall be determined as at the date of the transaction constituting the fraudulent preference, and shall be determined as if the interest were free of all incumbrances other than those to which the charge for the bankrupt's debt was then subject.

(3) On any application made to the court with respect to any payment on the ground that the payment was a fraudulent preference of a surety or guarantor, the court shall have jurisdiction to determine any questions with respect to the payment arising between the person to whom payment was made and the surety or guarantor and to grant relief in respect thereof, notwithstanding that it is not necessary so to do in respect of the bankruptcy and for that purpose may give leave to bring in the surety or guarantor as a third party as in the case of an action for the recovery of the sum paid.

(4) Subsection (3) shall apply, with the necessary modifications, in relation to transactions other than the payment of money as it applies in relation to payments. (Added 47 of 1984 s. 9) 50. Effects of lack of notice (1) Subject to the provisions of this Ordinance with respect to the effect of bankruptcy on an execution or attachment and with respect to the avoidance of certain settlements, assignments and preferences, nothing in this Ordinance shall invalidate, in the case of a bankruptcy- (a) any payment by the bankrupt to any of his creditors; (b) any payment or delivery to the bankrupt; (c) any conveyance or assignment by the bankrupt for valuable consideration; (d) any contract, dealing or transaction by or with the bankrupt for valuable consideration: Provided that both the following conditions are complied with, namely- (i)that the payment, delivery, conveyance, assignment, contract, dealing or transaction, as the case may be, takes place before the date of the receiving order; and (ii) that the person (other than the debtor) to, by or with whom the payment, delivery, conveyance, assignment, contract, dealing or transaction was made, executed or entered into has not at the time of the payment, delivery, conveyance, assignment, contract, dealing or transaction notice of any available act of bankruptcy committed by the bankrupt before that time.

[cf. 1914 c. 59 s. 45 U. K.] (2) Where any money or property of a bankrupt has, on or after the date of the receiving order but before notice thereof has been gazetted in the prescribed manner, been paid or transferred by a person having possession of it to some other person, and the payment or transfer is under the provisions of this Ordinance void as against the trustee in the bankruptcy, then if the person by whom the payment or transfer was made proves that when it was made he had not had notice of the receiving order, any right of recovery which the trustee may have against him in respect of the money or property shall not be enforced by any legal proceedings except where and in so far as the court is satisfied that it is not reasonably practicable for the trustee to recover in respect of the money or property or of some part thereof from the person to whom it was paid or transferred. [cf. 1926 c. 7 s. 4 U. K.] 51. Validity of certain payments to bankrupt and assignee A payment of money or delivery of property to a person subsequently adjudged bankrupt or to a person claiming by assignment from him shall, notwithstanding anything in this Ordinance, be a good discharge to the person paying the money or delivering the property if the payment or delivery is made before the actual date on which the receiving order is made and without notice of the presentation of a bankruptcy petition, and is either pursuant to the ordinary course of business or otherwise bona fide.

[cf. 1914 c. 59 s. 46 U. K.] 52. Dealings with undischarged bankrupt (1) All transactions by a bankrupt with any person dealing with him bona fide and for value, in respect of property, whether leasehold or pure personality, acquired by the bankrupt after the adjudication, shall, if completed before any intervention by the trustee, be valid against the trustee, and any estate or interest in such property which by virtue of this Ordinance is vested in the trustee shall determine and pass in such manner and to such extent as may be required for giving effect to any such transaction. For the purposes of this subsection, the receipt of any money, security or negotiable instrument from or by the order or direction of a bankrupt by his banker, and any payment and any delivery of any security or negotiable instrument made to or by the order or direction of a bankrupt by his banker, shall be deemed to be a transaction by the bankrupt with such banker dealing with him for value. (Amended 33 of 1939; G. N. 840 of 1940 Supp. Schedule) (2) Where any individual, company or firm has ascertained that a person having a deposit, whether a deposit in respect of capital or not, or a credit balance, with such individual, company or firm is an undischarged bankrupt, then it shall be the duty of such individual, company or firm forthwith to inform the Official Receiver and the trustee in the bankruptcy of the existence of the deposit or credit balance, and such individual, company or firm shall not make any payment out of or in respect of the deposit or credit balance except under an order of the court or in accordance with instructions from the Official Receiver or the trustee in the bankruptcy.

(3) In case of any contravention of the provisions of subsection (2) the individual, or the directors and officers of the company, or the partners and manager of the firm, as the case may be, shall be liable on summary conviction to a fine of $1,000 and to imprisonment for 6 months.

[cf. 1914 c. 59 s. 47 U. K.] Realization of property 53. Possession of property by trustee (1) The trustee shall as soon as may be take possession of the deeds, books and documents of the bankrupt and all other parts of his property capable of manual delivery.

(2) The trustee shall, in relation to and for the purpose of acquiring or retaining possession of the property of the bankrupt, be in the same position as if he were a receiver of the property appointed by the court, and the court may on his application enforce such acquisition or retention accordingly.

(3) Where any part of the property of the bankrupt consists of stock, shares in ships, shares, or any other property transferable in the books of any company, office or person, the trustee may exercise the right to transfer the property to the same extent as the bankrupt might have exercised it if he had not become bankrupt.

(4) Where any part of the property of the bankrupt consists of things in action, such things shall be deemed to have been duly assigned to the trustee.

(5) Subject to the provisions of this Ordinance with respect to property acquired by a bankrupt after adjudication, any treasurer or other officer, or any banker, attorney, clerk, servant, comprador, employer or agent, of a bankrupt, shall pay and deliver to the trustee all money and securities in his possession or power, which he is not by law entitled to retain as against the bankrupt or the trustee. If he does not, he shall be guilty of a contempt of court and may be punished accordingly on the application of the trustee. (See Forms 100, 103) [cf. 1914 c. 59 s. 48 U. K.] 54. Seizure of property of bankrupt Any person acting under warrant of the court may seize any part of the property of a bankrupt, or of a debtor against whom a receiving order has been made, in the custody or possession of the bankrupt or the debtor or of any other person, and with a view to such seizure may break open any house, building or room of the bankrupt or the debtor where the bankrupt or the debtor is supposed to be, or any building or receptacle of the bankrupt or the debtor where any of his property is supposed to be; and where the court is satisfied that there is reason to believe that property of a bankrupt, or of a debtor against whom a receiving order has been made, is concealed in a house or place not belonging to him, the court may if it thinks fit grant a search warrant to any constable or officer of the court, who may execute it according to its tenor. (See Form 108) [cf. 1914 c. 59 s. 49 U. K.] 55. Sale of property out of Hong Kong Where the bankrupt is possessed of any property out of Hong Kong, the trustee shall require him to join in selling the same for the benefit of the creditors and to sign all necessary authorities, powers, deeds and documents for the purpose, and if and so often as the bankrupt refuses to do so he may be punished for a contempt of court. (Amended 47 of 1984 s.

16) 56. Appropriation of portion of pay, etc. to creditors (1) Where a bankrupt is an officer of the navy, army or air force, or an officer or clerk or otherwise employed or engaged in the civil service of the Crown, or where a bankrupt is in receipt of any pay or pension from the Government or is entitled to any allowance or compensation granted by the Government, the trustee shall receive for distribution among the creditors so much of the bankrupt's pay, salary, pension, allowance or compensation as the court, with the consent of the Governor, on the application of the trustee, may direct. (See Forms 118, 120) (Amended 33 of 1939; G. N. 840 of 1940 Supp. Schedule) (2) Where a bankrupt is in receipt of a salary or income other than as aforesaid, the court, on the application of the trustee, may from time to time make such order as it thinks just for the payment of the salary or income or of any part thereof to the trustee, to be applied by him in such manner as the court may direct. (See Form 121) (3) Nothing in this section shall take away or abridge any power to dismiss a bankrupt or to declare the pay, pension, allowance, compensation, salary or income of any bankrupt to be forfeited.

[cf. 1914 c. 59 s. 51 U. K.] 57. (Repealed 27 of 1971 s. 15) 58. Vesting and transfer of property (1) Until a trustee is appointed the Official Receiver shall be the trustee for the purposes of this Ordinance, and immediately on a debtor being adjudged bankrupt the property of the bankrupt shall vest in the trustee.

(2) On the appointment of a trustee the property shall forthwith pass to and vest in the trustee appointed.

(3) The property of the bankrupt shall pass from trustee to trustee, including under that term the Official Receiver when he fills the office of trustee, and shall vest in the trustee for the time being during his continuance in office, without any conveyance, assignment or transfer whatever.

[cf. 1914 c. 59 s. 53 U. K.] 59. Disclaimer of onerous property (1) Where any part of the property of the bankrupt consists of land of any tenure burdened with onerous covenants, of shares or stock in companies, of unprofitable contracts, or of any other property that is unsaleable, or not readily saleable, by reason of its binding the possessor thereof to the performance of any onerous act or to the payment of any sum of money, the trustee, notwithstanding that he has endeavoured to sell or has taken possession of the property or exercised any act of ownership in relation thereto, but subject to the provisions of this section, may, by writing signed by him, at any time within 12 months after the first appointment of a trustee or such extended period as may be allowed by the court, disclaim the property: Provided that, where any such property has not come to the knowledge of the trustee within 1 month after such appointment, he may disclaim such property at any time within 12 months after he has become aware thereof or such extended period as may be allowed by the court.

(2) The disclaimer shall operate to determine, as from the date of disclaimer, the rights, interests and liabilities of the bankrupt and his property in or in respect of the property disclaimed, and shall also discharge the trustee from all personal liability in respect of the property disclaimed as from the date when the property vested in him, but shall not, except so far as is necessary for the purpose of releasing the bankrupt and his property and the trustee from liability, affect the rights or liabilities of any other person.

(3) A trustee shall not be entitled to disclaim a lease without the leave of the court, except in any cases which may be prescribed by general rules, and the court may, before or on granting such leave, require such notices to be given to persons interested, and impose such terms as a condition of granting leave, and make such orders with respect to fixtures, tenant's improvements and other matters arising out of the tenancy, as the court thinks just.

(4) The trustee shall not be entitled to disclaim any property in pursuance of this section in any case where an application in writing has been made to the trustee by any person interested in the property requiring him to decide whether he will disclaim or not and the trustee has for a period of 28 days after the receipt of the application, or such extended period as may be allowed by the court, declined or neglected to give notice whether he disclaims the property or not; and in the case of a contract, if the trustee after such application as aforesaid does not within the said period or extended period disclaim the contract, he shall be deemed to have adopted it.

(5) The court may, on the application of any person who is, as against the trustee, entitled to the benefit or subject to the burden of a contract made with the bankrupt, make an order rescinding the contract on such terms as to payment by or to either party of damages for the non- performance of the contract, or otherwise, as to the court may seem equitable, and any damages payable under the order to any such person may be proved by him as a debt under the bankruptcy.

(6) The court may, on application by any person claiming either to have any interest in any disclaimed property or to be under any liability not discharged by this Ordinance in respect of any disclaimed property, and on hearing such persons as it thinks fit, make an order for the vesting of the property in or delivery thereof to any person entitled thereto, or to whom it may seem just that the same should be delivered by way of compensation for such liability as aforesaid, or a trustee for him, and on such terms as the court thinks just; and on any such vesting order being made, the property comprised therein shall vest accordingly in the person therein named in that behalf without any conveyance or assignment for the purpose: Provided that where the property disclaimed is of a leasehold nature the court shall not make a vesting order in favour of any person claiming under the bankrupt, whether as under-lessee or as a person entitled to a mortgage except upon the terms of making that person- (a) subject to the same liabilities and obligations as the bankrupt was subject to under the lease in respect of the property at the date when the bankruptcy petition was filed; or (b) if the court thinks fit, subject only to the same liabilities and obligations as if the lease had been assigned to that person at that date, and in either event (if the case so requires) subject only to the same liabilities and obligations as if the lease had comprised only the property comprised in the vesting order; and any under-lessee or person entitled to a mortgage who declines to accept a vesting order upon such terms shall be excluded from all interest in and security upon the property, and if there is no person claiming under the bankrupt who is willing to accept an order upon such terms, the court shall have power to vest the bankrupt's estate and interest in the property in any person liable either personally or in a representative character and either alone or jointly with the bankrupt to perform the lessee's covenants in the lease, freed and discharged from all estates, incumbrances and interests created therein by the bankrupt. (Amended 47 of 1984 s. 10) (7) Where on the release, removal, resignation or death of a trustee in bankruptcy the Official Receiver is acting as trustee, he may disclaim any property which might be disclaimed by a trustee under the foregoing provisions, notwithstanding that the time prescribed by this section for such disclaimer has expired, but such power of disclaimer shall be exercisable only within 12 months after the Official Receiver has become trustee in the circumstances aforesaid or has become aware of the existence of such property, whichever period may last expire.

(8) Any person injured by the operation of a disclaimer under this section shall be deemed to be a creditor of the bankrupt to the extent of the injury and may accordingly prove the same as a debt under the bankruptcy.

(See Forms 123 to 130) [cf. 1914 c. 59 s. 54 U. K.] 60. Powers of trustee to deal with property Subject to the provisions of this Ordinance and to any order of the court, the trustee may do all or any of the following things- (a) sell all or any part of the property of the bankrupt (including the goodwill of the business, if any, and the book debts due or growing due to the bankrupt), by public auction or private contract, with power to transfer the whole thereof to any person or company, or to sell the same in parcels, and any transfer of a business of a bankrupt by the Official Receiver or trustee shall be deemed to be exempted from the provisions of the Transfer of Businesses (Protection of Creditors) Ordinance (Cap. 49); (b) give receipts for any money received by him, which receipts shall effectually discharge the person paying the money from all responsibility in respect of the application thereof; (c) prove, rank, claim and draw a dividend in respect of any debt due to the bankrupt; (d) exercise any powers the capacity to exercise which is vested in the trustee under this Ordinance and execute any powers of attorney, deeds and other instruments for the purpose of carrying into effect the provisions of this Ordinance. (Amended 33 of 1939; G. N. 840 of 1940 Supp. Schedule; 20 of 1948 s. 4) [cf. 1914 c. 59 s. 55 U. K.] 61. Powers exercisable by trustee with permission of committee of inspection The trustee may, with the permission of the committee of inspection, do all or any of the following things- (a) carry on the business of the bankrupt so far as may be necessary for the beneficial winding up of the same; (b) bring, institute or defend any action or other legal proceeding relating to the property of the bankrupt; (c) employ a solicitor or other agent to take any proceedings or do any business which may be sanctioned by the committee of inspection; (d) accept as the consideration for the sale of any property of the bankrupt a sum of money payable at a future time subject to such stipulations as to security and otherwise as the committee think fit; (e) mortgage or pledge any part of the property of the bankrupt for the purpose of raising money for the payment of his debts; (f) refer any dispute to arbitration, or compromise any debts, claims and liabilities, whether present or future, certain or contingent, liquidated or unliquidated, subsisting or supposed to subsist between the bankrupt and any person who may have incurred any liability to the bankrupt, on the receipt of such sums, payable at such times and generally on such terms as may be agreed on; (g) make such compromise or other arrangement as may be thought expedient with creditors or persons claiming to be creditors in respect of any debts provable under the bankruptcy; (h) make such compromise or other arrangement as may be thought expedient with respect to any claim arising out of or incidental to the property of the bankrupt, made or capable of being made on the trustee by any person or by the trustee on any person; (i) divide in its existing form amongst the creditors, according to its estimated value, any property which from its peculiar nature or other special circumstances cannot be readily or advantageously sold.

The permission given for the purposes of this section shall not be a general permission to do all or any of the above-mentioned things but shall only be a permission to do the particular thing or things for which permission is sought in the specified case or cases.

(Amended 33 of 1939; G. N. 840 of 1940 Supp. Schedule; 20 of 1948 s. 4) [cf. 1914 c. 59 s. 56 U. K.] 62. Power to allow bankrupt to manage property The trustee, with the permission of the committee of inspection, may appoint the bankrupt himself to superintend the management of the property of the bankrupt or of any part thereof, or to carry on the trade (if any) of the bankrupt for the benefit of his creditors, and in any other respect to aid in administering the property, in such manner and on such terms as the trustee may direct.

[cf. 1914 c. 59 s. 57 U. K.] 63. Allowance to bankrupt for maintenance or service The trustee may from time to time, with the permission of the committee of inspection, make such allowance as he may think just to the bankrupt out of his property for the support of the bankrupt and his family, or in consideration of his services if he is engaged in winding up his estate, but any such allowance may be reduced by the court. [cf. 1914 c. 59 s. 58 U. K.] 64. Right of trustee to inspect goods pawned, etc.

Where any goods of a debtor against whom a receiving order has been made are held by any person by way of pledge, pawn or other security, it shall be lawful for the Official Receiver or trustee, after giving notice in writing of his intention to do so, to inspect the goods, and where such notice has been given, such person as aforesaid shall not be entitled to realize his security until he has given the trustee a reasonable opportunity of inspecting the goods and of exercising his right of redemption if he thinks fit to do so.

[cf. 1914 c. 59 s. 59 U. K.] 65. Limitation of trustee's powers in relation to copyright Where the property of a bankrupt comprises the copyright in any work or any interest in such copyright and he is liable to pay to the author of the work royalties or a share of the profits in respect thereof, the trustee shall not be entitled to sell or authorize the sale of any copies of the work, or to perform or authorize the performance of the work, except on the terms of paying to the author such sums by way of royalty or share of the profits as would have been payable by the bankrupt, nor shall he, without the consent of the author or of the court, be entitled to assign the right or transfer the interest or to grant any interest in the right by licence, except upon terms which will secure to the author payments by way of royalty or share of the profits at a rate not less than that which the bankrupt was liable to pay.

[cf. 1914 c. 59 s. 60 U. K.] 66. Protection of Official Receiver and trustee from personal liability in certain cases Where the Official Receiver or trustee has seized or disposed of any goods, chattels, property or other effects in the possession or on the premises or under the control of a debtor against whom a receiving order has been made and it is thereafter made to appear that the said goods, chattels, property or other effects were not at the date of the receiving order the property of the debtor, the Official Receiver or trustee shall not be personally liable for any loss or damage arising from such seizure or disposal sustained by any person claiming such property nor for the costs of any proceedings taken to establish a claim thereto, unless the court is of opinion that the Official Receiver or trustee has been guilty of mala fides or of gross negligence in respect of the same.

[cf. 1914 c. 59 s. 61 U. K.] Distribution of property 67. Declaration and distribution of dividends (1) Subject to the retention of such sums as may be necessary for the costs of administration, or otherwise, the trustee shall with all convenient speed declare and distribute dividends amongst the creditors who have proved their debts.

(2) The first dividend, if any, shall be declared and distributed within 4 months after the conclusion of the first meeting of creditors, unless the trustee satisfies the court that there is sufficient reason for postponing the declaration to a later date.

(3) Subsequent dividends shall, in the absence of sufficient reason to the contrary, be declared and distributed at intervals of not more than 6 months.

(4) Before declaring a dividend, the trustee shall cause notice of his intention to do so to be gazetted and shall also send reasonable notice thereof to each creditor mentioned in the bankrupt's statement who has not proved his debt.

(5) When the trustee has declared a dividend he shall cause to be gazetted and shall send to each creditor who has proved a notice showing the amount of the dividend and when and how it is payable.

(See Forms 138, 139, 141) [cf. 1914 c. 59 s. 62 U. K.] 68. Joint and separate dividends (1) Where one partner of a firm is adjudged bankrupt, a creditor to whom the bankrupt is indebted jointly with the other partners of the firm, or any of them, shall not receive any dividend out of the separate property of the bankrupt until all the separate creditors have received the full amount of their respective debts.

(2) Where joint and separate properties are being administered, dividends of the joint and separate properties shall, unless otherwise directed by the court on the application of any person interested, be declared together and the expenses of and incidental to such dividends shall be fairly apportioned by the trustee between the joint and separate properties, regard being had to the work done for and the benefit received by each property.

[cf. 1914 c. 59 s. 63 U. K.] 69. Provision for creditors residing at a distance, etc.

(1) In the calculation and distribution of a dividend the trustee shall make provision for debts provable in bankruptcy appearing from the bankrupt's statements, or otherwise, to be due to persons resident in places so distant from Hong Kong that in the ordinary course of communication they have not had sufficient time to tender their proofs or to establish them if disputed, and also for debts provable in bankruptcy the subject of claims not yet determined.

(Amended 47 of 1984 s. 16) (2) He shall also make provision for any disputed proofs or claims, and for the expenses necessary for the administration of the estate or otherwise.

(3) Subject to the foregoing provisions, he shall distribute as dividend all money in hand.

[cf. 1914 c. 59 s. 64 U. K.] 70. Right of creditor who has not proved debt before declaration of a dividend Any creditor who has not proved his debt before the declaration of any dividend or dividends shall be entitled to be paid out of any money for the time being in the hands of the trustee any dividend or dividends he may have failed to receive before that money is applied to the payment of any future dividend or dividends, but he shall not be entitled to disturb the distribution of any dividend declared before his debt was proved by reason that he has not participated therein.

[cf. 1914 c. 59 s. 65 U. K.] 71. Interest on debts (1) Where a debt has been proved and the debt includes interest or any pecuniary consideration in lieu of interest, such interest or consideration shall, for the purposes of dividend, be calculated at a rate not exceeding 8 per cent per annum and be calculated only up to the date of the receiving order, without prejudice to the right of a creditor to receive out of the estate any higher rate of interest to which he may be entitled after all the debts proved in the estate have been paid in full.

(2) In dealing with the proof of the debt the following rules shall be observed- (a) any account settled between the debtor and the creditor within 3 years preceding the date of the receiving order may be examined, and if it appears that the settlement of the account forms substantially one transaction with any debt alleged to be due out of the debtor's estate (whether in the form of renewal of a loan or capitalization of interest or ascertainment of loans or otherwise), the account may be reopened and the whole transaction treated as one; (b) any payments made by the debtor to the creditor before the receiving order, whether by way of bonus or otherwise, and any sums received by the creditor before the receiving order from the realization of any security for the debt shall, notwithstanding any agreement to the contrary, be appropriated to principal and interest in the proportion that the principal bears to the sum payable as interest at the agreed rate; (c) where the debt due is secured and the security is realized after the receiving order, or the value thereof is assessed in the proof, the amount realized or assessed shall be appropriated to the satisfaction of principal and interest in the proportion that the principal bears to the sum payable as interest at the agreed rate. [cf. 1914 c. 59 s. 66 U. K.] 72. Final dividend (1) When the trustee has realized all the property of the bankrupt, or so much thereof as can be realized without needlessly protracting the trusteeship, he shall declare a final dividend, but before so doing he shall give notice in manner prescribed to the persons whose claims to be creditors have been notified to him, but not established to his satisfaction, that if they do not establish their claims to the satisfaction of the court within a time limited by the notice, he will proceed to make a final dividend without regard to their claims.

(2) After the expiration of the time so limited or if the court on application by any such claimant grants him further time for establishing his claim, then on the expiration of such further time, the property of the bankrupt shall be divided among the creditors who have proved their debts, without regard to the claims of any other persons. [cf. 1914 c. 59 s. 67 U. K.] 73. No action for dividend No action for a dividend shall lie against the trustee, but if the trustee refuses to pay any dividend the court may, if it thinks fit, order him to pay it and also to pay out of his own money interest thereon for the time that it is withheld and the costs of the application.

[cf. 1914 c. 59 s. 68 U. K.] 74. Right of bankrupt to surplus The bankrupt shall be entitled to any surplus remaining after payment in full of his creditors, with interest, as by this Ordinance provided, and of the costs, charges and expenses of the proceedings under the bankruptcy petition.

[cf. 1914 c. 59 s. 69 U. K.] PART IIIA CRIMINAL BANKRUPTCY Interpretation 74A. Interpretation In this Part and in Schedule 1- "criminal bankruptcy administration petition" means a petition under section 112 presented by virtue of Schedule 1; "criminal bankruptcy order" means an order made under section 84A of the Criminal Procedure Ordinance (Cap. 221); "criminal bankruptcy petition" means a bankruptcy petition presented by virtue of Schedule 1.

(Amended 39 of 1992 s. 2) Official Petitioner 74B. Office and functions of Official Petitioner (1) For the purposes of discharging, in relation to cases in which a criminal bankruptcy order is made, the functions mentioned in subsection (2), there shall be an officer known as the Official Petitioner; and the Attorney General shall, by virtue of his office, be the Official Petitioner.

(2) The functions of the Official Petitioner shall be- (a) to consider whether, in a case where a criminal bankruptcy order is made, it is in the public interest that he should himself present a criminal bankruptcy petition; (b) to present a criminal bankruptcy petition in any such case where he determines it is in the public interest for him to do so; (c) to make payments, in such cases as he may determine, towards expenses incurred by other persons in connexion with proceedings pursuant to a criminal bankruptcy petition or a criminal bankruptcy administration petition; (d) to exercise, so far as he considers it to be in the public interest to do so, any of the powers conferred on him by Schedule 1. (Amended 39 of 1992 s. 2) (3) Neither the Official Petitioner nor any person acting under his authority shall be liable to any action or proceeding in respect of anything done or omitted in the discharge, or purported discharge, of the functions of the Official Petitioner under or by virtue of this Ordinance.

(4) Any functions of the Official Petitioner under this Ordinance may be discharged on his behalf by any person acting with his authority.

[cf. 1972 c. 71 s. 9 U. K.] General 74C. Effect of criminal bankruptcy order Schedule 1 shall apply to give effect to the operation of this Ordinance in a case where a criminal bankruptcy order has been made and to supplement this Ordinance in relation to dispositions made by a person against whom such an order has been made. (Amended 39 of 1992 s. 2) (Part IIIA added 21 of 1979 s. 2) PART IV OFFICIAL RECEIVER 75. Appointment of Official Receiver and other officers (1) The Governor may appoint an Official Receiver and such other officers to hold any of the offices specified in Schedule 2 as may be required to assist the Official Receiver in the performance of his duties.

(2) No person shall be appointed Official Receiver or to any of the offices specified in Part I of Schedule 2 unless on the date of such appointment he is qualified to practise as a legal practitioner in Hong Kong, the United Kingdom or in a jurisdiction listed in Schedule 1 to the Legal Practitioners Ordinance (Cap. 159).

(3) The Official Receiver and the holder of an office specified in Part I of Schedule 2 shall be deemed to be legal officers for the purpose of the Legal Officers Ordinance (Cap. 87) and shall have all rights conferred upon legal officers by that Ordinance.

(4) The holder of an office specified in Schedule 2 may, subject to subsection (5) and any instructions of the Official Receiver, exercise the powers or perform the duties of the office of the Official Receiver.

(5) The holder of an office specified in Part II of Schedule 2 shall not exercise any right conferred by subsection (3) on the holder of an office specified in Part I of Schedule 2.

(6) The Official Receiver shall act under the general authority and direction of the Governor and shall also be an officer of the court.

(7) The Governor may, by order published in the Gazette, amend Schedule 2.

(Replaced 39 of 1992 s. 3) 76. Status of Official Receiver (1) The duties of the Official Receiver shall have relation both to the conduct of the debtor and to the administration of his estate.

(2) The Official Receiver and the holder of an office specified in Schedule 2 may take any affidavit required by any Ordinance to be made before or produced or delivered to or filed with the Official Receiver or the holder of an office specified in Schedule 2 notwithstanding any Ordinance requiring the taking of such affidavit by or before any other person.

(Replaced 39 of 1992 s. 4) (3) All provisions in this or any other Ordinance referring to the trustee in a bankruptcy shall, unless the context otherwise requires or the Ordinance otherwise provides, include the Official Receiver when acting as trustee.

(4) The trustee shall supply the Official Receiver with such information, and give him such access to and facilities for inspecting the bankrupt's books and documents, and generally shall give him such aid, as may be requisite for enabling the Official Receiver to perform his duties under this Ordinance.

[cf. 1914 c. 59 s. 72. U. K.] 76A. Transitional provision (1) Any thing done before the commencement of the Bankruptcy (Amendment) Ordinance 1992 (39 of 1992) by the Registrar General in the capacity of Official Receiver shall be regarded as having been done by the Official Receiver at the time when the thing was done.

(2) Any document which contains a reference to the Registrar General in the capacity of Official Receiver shall have effect on and after the commencement of the Bankruptcy (Amendment) Ordinance 1992 (39 of 1992) with the substitution for such reference of a reference to the Official Receiver.

(3) In any legal proceedings pending on the commencement of the Bankruptcy (Amendment) Ordinance 1992 (39 of 1992) to which the Registrar General in the capacity of Official Receiver is a party, the Official Receiver shall as from such commencement be substituted as a party thereto in lieu of the Registrar General and the proceedings shall continue as if the Official Receiver had always been that party.

(4) It this section, "Registrar General" means the Registrar General appointed under section 2 (1) of the Registrar General (Establishment) Ordinance (Cap. 100). (Added 39 of 1990 s. 5) 77. Duties of Official Receiver as regards the debtor's conduct As regards the debtor, it shall be the duty of the Official Receiver- (a) to investigate the conduct of the debtor and to report to the court, stating whether there is reason to believe that the debtor has committed any act which constitutes an indictable offence under this Ordinance or which would justify the court in refusing, suspending or qualifying an order for his discharge; (Amended 33 of 1939; G. N. 840 of 1940 Supp.

Schedule; 50 of 1991 s. 4) (b) to conduct the public examination of the debtor; (c) to take such part and give such assistance in relation to the prosecution of any fraudulent debtor as the Attorney General may direct.

(Amended 33 of 1939; G. N. 840 of 1940 Supp. Schedule; 20 of 1948 s. 4) [cf. 1914 c. 59 s. 73 U. K.] 78. Duties of Official Receiver as to debtor's estate (1) As regards the estate of a debtor, it shall be the duty of the Official Receiver- (a) pending the appointment of a trustee, to act as interim receiver of the debtor's estate, and where a special manager is not appointed, as manager thereof; (b) to raise money in any case where in the interests of the creditors it appears necessary so to do; (c) to summon and preside at the first meeting of creditors; (d) to issue forms of proxy for use at the meetings of creditors; (See Forms 50, 51) (e) to report to the creditors as to any proposal which the debtor may have made with respect to the mode of liquidating his affairs; (f) to advertise the receiving order, the date of the creditors' first meeting and of the debtor's public examination, and such other matters as it may be necessary to advertise; (See Form 27) (g) to act as trustee during any vacancy in the office of trustee; (h) to assist the debtor in preparing his statement of affairs in case the debtor has no solicitor acting for him and is unable properly to prepare it himself, and for this purpose he may employ at the expense of the estate any person or persons to assist in its preparation.

(2) For the purpose of his duties as interim receiver or manager the Official Receiver shall have the same powers as if he were a receiver and manager appointed by the court, but shall, as far as practicable, consult the wishes of the creditors with respect to the management of the debtor's property, and may for that purpose, if he thinks it advisable, summon meetings of the persons claiming to be creditors, and shall not, unless the court otherwise orders, incur any expense beyond such as is requisite for the protection of the debtor's property or the disposing of perishable goods.

(3) The Official Receiver shall account to the court and pay over all moneys and deal with all securities in such manner as the court from time to time directs. [cf. 1914 c. 59 s. 74 U. K.] PART V TRUSTEES IN BANKRUPTCY Official name 79. Official name of trustee The official name of a trustee in bankruptcy shall be "the trustee of the property of a bankrupt" (inserting the name of the bankrupt), and by that name the trustee may hold property of every description, make contracts, sue and be sued, enter into any engagements binding on himself and his successors in office, and do all other acts necessary or expedient to be done in the execution of his office.

[cf. 1914 c. 59 s. 76 U. K.] Appointment 79A. Disqualification for appointment as trustee No person being an undischarged bankrupt and no body corporate shall be qualified for appointment to the office of trustee, and- (a) any appointment made in contravention of this section shall be void; and (b) where any such person or any body corporate acts as trustee, such person or body corporate shall be liable to a fine of $5,000.

(Added 47 of 1984 s. 11) 79B. Corrupt inducement affecting appointment as trustee Any person who gives or agrees or offers to give to any creditor of a debtor or bankrupt any valuable consideration with a view to securing his own appointment or nomination, or to securing or preventing the appointment or nomination of some person other than himself, as the trustee shall be liable to a fine of $5,000.

(Added 47 of 1984 s. 11) 80. Power to appoint joint or successive trustees (1) The creditors may, if they think fit, appoint more persons than one to the office of trustee and, when more persons than one are appointed, shall declare whether any act required or authorized to be done by the trustee is to be done by all or any one or more of such persons, but all such persons are in this Ordinance included under the term "trustee" and shall be joint tenants of the property of the bankrupt.

(2) The creditors may also appoint persons to act as trustees in succession in the event of one or more of the persons first named declining to accept the office of trustee or failing to give security, or of the appointment of any such person not being approved by the court.

[cf. 1914 c. 59 s. 77 U. K.] 81. Proceedings in case of vacancy in office of trustee (1) If a vacancy occurs in the office of a trustee the creditors in general meeting may appoint a person to fill the vacancy and thereupon the same proceedings shall be taken as in the case of a first appointment.

(2) The Official Receiver shall, on the requisition of any creditor, summon a meeting for the purpose of filling any such vacancy.

(3) If the creditors do not within 3 weeks after the occurrence of a vacancy appoint a person to fill the vacancy, the Official Receiver shall report the matter to the court, and the court may appoint a trustee.

(4) During any vacancy in the office of trustee the Official Receiver shall act as trustee.

[cf. 1914 c. 59 s. 78 U. K.] Control over trustee 82. Discretionary powers of trustee and control thereof (1) Subject to the provisions of this Ordinance, the trustee shall, in the administration of the property of the bankrupt and in the distribution thereof amongst his creditors, have regard to any directions that may be given by resolution of the creditors at any general meeting or by the committee of inspection, and any directions so given by the creditors at any general meeting shall, in case of conflict, be deemed to override any directions given by the committee of inspection.

(2) The trustee may from time to time summon general meetings of the creditors for the purpose of ascertaining their wishes, and it shall be his duty to summon meetings at such times as the creditors, by resolution, either at the meeting appointing the trustee or otherwise may direct, and it shall be lawful for any creditor, with the concurrence of one-fourth in value of the creditors (including himself), at any time to request the trustee or Official Receiver to call a meeting of the creditors, and the trustee or Official Receiver shall call such meeting accordingly within 14 days: Provided that the person at whose instance the meeting is summoned shall, if so required, deposit with the trustee or the Official Receiver, as the case may be, a sum sufficient to pay the costs of summoning the meeting, such sum to be repaid to him out of the estate if the court so directs.

(3) The trustee may apply to the court in manner prescribed for directions in relation to any particular matter arising under the bankruptcy. (See Forms 131, 132) (4) Subject to the provisions of this Ordinance the trustee shall use his discretion in the management of the estate and its distribution among the creditors. [cf. 1914 c. 59 s. 79 U. K.] 83. Appeal to court against trustee If the bankrupt or any of the creditors or any other person is aggrieved by any act or decision of the trustee, he may apply to the court, and the court may confirm, reverse or modify the act or decision complained of, and make such order in the premises as it thinks just.

[cf. 1914 c. 59 s. 80 U. K.] 84. Control of court over trustee (1) The court shall take cognizance of the conduct of trustees, and in the event of any trustee not faithfully performing his duties and duly observing all the requirements imposed on him by Ordinance, rules or otherwise with respect to the performance of his duties, or in the event of any complaint being made to the court by any creditor in regard thereto by notice duly served on the trustee at least 8 clear days before the date of hearing, the court shall inquire into the matter and take such action thereon as may be deemed expedient.

(2) The court may either of its own motion or on the application of the Official Receiver at any time require any trustee to answer any inquiry made by it or him in relation to any bankruptcy in which the trustee is engaged and may examine on oath the trustee or any other person concerning the bankruptcy.

(3) The court may also direct an investigation to be made of the books and vouchers of the trustee.

[cf. 1914 c. 59 s. 81 U. K.] Remuneration and costs 85. Remuneration of trustee (1) Where the creditors appoint any person to be trustee of a debtor's estate, his remuneration (if any) shall be fixed by an ordinary resolution of the creditors, or, if the creditors so resolve, by the committee of inspection.

(2) Where the remuneration of the trustee is to be a commission upon the amount received by the trustee, then one part shall be payable on the amount realized by the trustee, after deducting any sums paid to secured creditors out of the proceeds of their securities, and the other part on the amount distributed in dividend.

(3) If one-fourth in number or value of the creditors apply to the Official Receiver or the Official Receiver is of the opinion that the remuneration of a trustee should be reviewed, the Official Receiver may apply to the court and thereupon the court may confirm, increase or reduce the remuneration of the trustee.

(4) The resolution or the committee of inspection, as the case may be, shall specify the expenses which the remuneration is to cover, and no liability shall attach to the bankrupt's estate, or to the creditors, in respect of any such expenses.

(5) Where a trustee acts without remuneration he shall be allowed out of the bankrupt's estate such proper expenses incurred by him in or about the proceedings of the bankruptcy as the court may approve.

(6) A trustee shall not under any circumstances whatever make any arrangement for or accept from the bankrupt, or any solicitor, auctioneer or any other person who may be employed about a bankruptcy, any gift, remuneration or pecuniary or other consideration or benefit whatever beyond his said remuneration payable out of the estate, nor shall he make any arrangement for giving up, or give up, any part of his remuneration, whether as receiver, manager or trustee, to the bankrupt or any solicitor or other person who may be employed about a bankruptcy.

(Replaced 26 of 1985 s. 2) 86. Allowance and taxation of costs (1) Where a trustee or manager receives remuneration for his services as such, no payment shall be allowed in his accounts in respect of the performance by any other person of the ordinary duties which are required by Ordinance or rules to be performed by himself.

(2) Where the trustee is a solicitor he may contract that the remuneration for his services as trustee shall include all professional services.

(3) All bills and charges of solicitors, managers, accountants, auctioneers, brokers and other persons, not being trustees, shall be taxed by the Registrar and no payments in respect thereof shall be allowed in the trustee's accounts without proof of such taxation having been made.

The Registrar shall satisfy himself before passing such bills and charges that the employment of such solicitors and other persons, in respect of the particular matters out of which such charges arise, has been duly sanctioned. The sanction must be obtained before the employment, except in cases of urgency, and in such cases it must be shown that no undue delay took place in obtaining the sanction.

(4) Every such person shall, on request by the trustee (which request the trustee shall make a sufficient time before declaring a dividend), deliver his bill of costs or charges to the Registrar for taxation, and if he fails to do so within 7 days after receipt of the request or such further time as the court on application may grant, the trustee shall declare and distribute the dividend without regard to any claim by him, and thereupon any such claim shall be forfeited as well against the trustee personally as against the estate.

[cf. 1914 c. 59 s. 83 U. K.] Receipts, payments, accounts, audit 87. Trustee to furnish list of creditors The trustee or Official Receiver shall, whenever required by any creditor so to do, furnish and transmit to him by post a list of the creditors showing the amount of the debt due to each creditor, and shall be entitled to charge for such list the sum of 25 cents per folio of 72 words.

[cf. 1914 c. 59 s. 84 U. K.] 88. Trustee to furnish statement of accounts It shall be lawful for any creditor, with the concurrence of one-fourth of the creditors (including himself), at any time to call upon the trustee or Official Receiver to furnish and transmit to the creditors a statement of the accounts up to the date of such notice, and the trustee shall upon receipt of such notice furnish and transmit such statement of the accounts: (See Form 150) Provided that the person at whose instance the accounts are furnished shall, if so required, deposit with the trustee or Official Receiver, as the case may be, a sum sufficient to pay the costs of furnishing and transmitting the accounts, which sum shall be repaid to him out of the estate if the court so directs.

[cf. 1914 c. 59 s. 85 U. K.] 89. Annual statement of proceedings (1) Every trustee in a bankruptcy shall from time to time, as may be prescribed, and not less than once in every year during the continuance of the bankruptcy, transmit to the Official Receiver a statement showing the proceedings in the bankruptcy up to the date of the statement, containing the prescribed particulars and made out in the prescribed form.

(2) The Official Receiver shall cause the statements so transmitted to be examined, and shall call the trustee to account for any misfeasance, neglect or omission which may appear on the said statements or in his accounts or otherwise, and may apply to the court for an order that the trustee do make good any loss which the estate of the bankrupt may have sustained by the misfeasance, neglect or omission. [cf. 1914 c. 59 s. 87 U. K.] 90. Trustee not to pay into private account No trustee in a bankruptcy or under any composition or scheme of arrangement shall pay any sums received by him as trustee into his private banking account or use them otherwise than in the administration of the estate.

[cf. 1914 c. 59 s. 88 U. K.] 91. Payment of moneys into bank (1) The Official Receiver shall open in his name as Official Receiver an account at a bank approved by the Governor and shall pay to the credit thereof all sums received by him as such Official Receiver or as trustee, and every trustee in a bankruptcy, other than the Official Receiver, receiving money as such trustee shall open an account at such bank in the name of the debtor's estate and shall pay to the credit of such account all sums which may from time to time be received by him as such trustee: Provided that the Official Receiver may, on the application of the committee of inspection, authorize any other trustee to make his payments into and out of any other bank specified by the committee in such application, and those payments shall be made in the prescribed manner.

(Added 47 of 1984 s. 12) (2) If a trustee at any time retains for more than 10 days a sum exceeding $2,000, or such other amount as the Official Receiver in any particular case may authorize him to retain, then unless he explains the retention to the satisfaction of the Official Receiver, he shall pay interest on the amount so retained in excess at the rate of 20 per cent per annum, and shall have no claim to remuneration, and may be removed from his office by the Official Receiver and shall be liable to pay any expenses occasioned by reason of his default.

(Amended 47 of 1984 s. 12) [cf. 1914 c. 59 s. 89 (5) U. K.] (3) Any trustee paying money into his private banking account or using it otherwise than in the administration of the estate may without prejudice to any other liability be dismissed from office without remuneration and may be ordered by the court to make good all losses and expenses which the creditors may suffer in consequence of his conduct.

92. Record and account to be kept by trustee (1) The trustee shall keep a record in writing in which he shall enter a minute of all proceedings had and resolutions passed at any meeting of creditors or of the committee of inspection and a statement of all negotiations and proceedings necessary to give a correct view of the management of the bankrupt's property. Such record if in Chinese shall be supplemented by a correct English translation thereof and shall be produced for inspection to the Official Receiver at any time on demand.

(2) The trustee shall also keep an account, to be called the estate account, in the form of an ordinary debtor and creditor account, in which he shall enter from day to day all his receipts and payments as trustee.

(3) The trustee shall produce at every meeting of creditors and at every meeting of the committee of inspection the record and account above mentioned and also the pass-book of the estate's bank account, and such documents shall be open to the inspection of any creditor at all reasonable times.

93. Audit of trustee's accounts (1) Every trustee other than the Official Receiver shall, at such times as may be prescribed but not less than once in each year during his tenure of office, send to the Official Receiver an account of his receipts and payments as such trustee.

(2) The account shall be in a prescribed form, shall be made in duplicate and shall be verified by an affidavit in the prescribed form. (See Form 146) (Amended 13 of 1966 Schedule) (3) The trustee shall furnish the Official Receiver with such vouchers and information relating to the account as he requires, and the Official Receiver may at any time require the production of, and inspect, any books or accounts kept by the trustee. (Replaced 39 of 1987 s. 3) (3A) The Official Receiver may at any time cause the account to be audited. (Added 39 of 1987 s. 3) (4) When any such account has been audited (or, as the case may be, forthwith if the Official Receiver decides that the account need not be audited) one copy thereof shall be filed and kept by the Official Receiver, and the other copy shall be delivered to the court for filing, and each copy shall be open on payment of the prescribed fee to the inspection of any creditor or of the bankrupt or of any person interested.

(Amended 39 of 1987 s. 3) (4A) Notwithstanding the fact that unaudited copies of an account have already been filed, the Official Receiver may subsequently cause that account to be audited, and in that event a copy of the audited account shall be filed and kept by the Official Receiver, and a further copy shall be delivered to the court for filing, and each copy shall be open, upon payment of the prescribed fee, to the inspection of any creditor or of the bankrupt or of any person interested. (Added 39 of 1987 s. 3) (5) The court may if it so desires examine the trustee and, after hearing the explanation, if any, of the trustee, make such order as it may think just for compelling the trustee to make good any loss to the estate which may appear to the court to have been occasioned by any misfeasance, neglect or improper conduct or omission of the trustee. (Amended 39 of 1987 s. 3) [cf. 1914 c. 59 s. 92 U. K.] Vacation of office by trustee 94. Release of trustee (1) When the trustee has realized all the property of the bankrupt or so much thereof as can, in his opinion, be realized without needlessly protracting the trusteeship, and distributed a final dividend, if any, or has ceased to act by reason of a composition having been approved, or has resigned or has been removed from his office, he shall apply to the court for his release, and if all the requirements of the court with respect to accounts and with respect to any order of the court against the trustee have been fulfilled, the court may make an order for release accordingly.

(See Forms 137, 152, 153) (2) Where the release of a trustee is withheld the court may, on the application of any creditor or person interested, make such order as it thinks just, charging the trustee with the consequences of any act or default he may have done or made contrary to his duty.

(3) An order of the court releasing the trustee shall discharge him from all liability in respect of any act done or default made by him in the administration of the affairs of the bankrupt, or otherwise in relation to his conduct as trustee, but any such order may be revoked on proof that it was obtained by fraud or by suppression or concealment of any material fact.

(4) The provisions of subsections (1), (2) and (3) shall apply to the Official Receiver when he is or is acting as trustee, and when the Official Receiver has been released under this section or any previous similar enactment he shall continue to act as trustee for any subsequent purposes of the administration of the debtor's estate but no liability shall attach to him personally by reason of his so continuing in respect of any act done, default made or liability incurred before his release.

(5) Where the trustee has not previously resigned or been removed, his release shall operate as a removal of him from his office, and thereupon the Official Receiver shall be the trustee.

(6) Where on the release of a trustee the Official Receiver is or is acting as trustee, no liability shall attach to him personally in respect of any act done or default made or liability incurred by any prior trustee.

[cf. 1914 c. 59 s. 93 U. K.] 95. Office of trustee vacated by insolvency If a receiving order is made against a trustee he shall thereby vacate his office of trustee.

[cf. 1914 c. 59 s. 94 U. K.] 96. Removal of trustee (1) The creditors may by ordinary resolution, at a meeting specially called for that purpose of which 7 days' notice has been given, remove a trustee, other than the Official Receiver, appointed by them, and may at the same or any subsequent meeting appoint another person to fill the vacancy as provided in case of a vacancy in the office of trustee.

(2) If the court is of opinion- (a) that a trustee appointed by the creditors is guilty of misconduct or fails to perform his duties under this Ordinance; or (b) that his trusteeship is being needlessly protracted without any probable advantage to the creditors; or (c) that he is by reason of lunacy or continued sickness or absence incapable of performing his duties; or (d) that his connexion with or relation to the bankrupt or his estate or any particular creditor might make it difficult for him to act with impartiality in the interest of the creditors generally; or (e) that the interests of the creditors require it, the court may remove him from his office and appoint another person in his place.

[cf. 1914 c. 59 s. 95 U. K.] PART VI CONSTITUTION, PROCEDURE AND POWERS OF COURT Jurisdiction 97. General power of court (1) Subject to the provisions of this Ordinance, the court shall have full power to decide all questions of priorities and all other questions whatsoever, whether of law or fact, which may arise in any case of bankruptcy coming within the cognizance of the court or which the court may deem it expedient or necessary to decide for the purpose of doing complete justice or making a complete distribution of property in any such case.

(2) If in any proceeding in bankruptcy there arises any question of fact which either of the parties desires to be tried before a jury instead of by the court itself or which the court thinks ought to be tried by a jury, the court may, if it thinks fit, direct the trial to be had with a jury and the trial may be had accordingly. (See Form 133) [cf. 1914 c. 59 s.

105 U. K.] Review and appeals 98. Review and appeals in bankruptcy (1) The court or the Registrar may review, rescind or vary any order made by it or him, as the case may be, under its or his bankruptcy jurisdiction. (Replaced 78 of 1991 s. 2) (2) Every order of the court or the Registrar shall be subject to appeal to the Court of Appeal. The appeal shall be commenced within 21 days from the time when the decision appealed against is pronounced or made.

(Amended 92 of 1975 s. 59; 78 of 1991 s. 2) [cf. 1914 c. 59 s. 108 U. K.] Procedure 99. General rules of procedure (1) The rules and practice of the Supreme Court for the time being for regulating the ordinary civil procedure of the court shall, so far as the same may be applicable and not inconsistent with the provisions of this Ordinance, be applied to bankruptcy proceedings, and every order of the court made in connexion with bankruptcy proceedings may be enforced in the same way as a judgment of the court made in respect of any other civil proceedings may be enforced.

(2) The Registrar shall in cases of urgency have power to make interim orders and to hear and determine unopposed or ex parte applications and any order so made shall, subject to an appeal to the court, be deemed to be an order of the court.

(3) Subject to rules made under section 113 limiting the power conferred by this subsection, the Registrar sitting in open court shall have power to hear and determine- (a) unopposed bankruptcy petitions and to make receiving orders thereon; (b) applications to rescind receiving orders or to annul an adjudication; (c) applications to approve compositions or schemes of arrangement; and (d) applications for orders of discharge.

(Replaced 78 of 1991 s. 3) 99A. Jurisdiction of Registrar (1) Unless otherwise ordered by the court in a particular case, the Registrar may exercise and perform the powers and duties conferred or imposed upon the court by sections 19 and 29.

(2) The Registrar may, if he exercises the jurisdiction conferred on him by subsection (1) or section 99 (3) - (Amended 78 of 1991 s. 4) (a) refer any matter for the decision or direction of a judge; and (b) at any time adjourn an examination for further hearing before a judge.

(3) A judge may, if a matter is referred to him under subsection (2) (a), dispose of it himself or refer it back to the Registrar with such directions as he thinks fit.

(4) A judge may, if an examination is adjourned under subsection (2) (b) for further hearing before a judge- (a) continue the examination; (b) at any time direct that the examination be continued before the Registrar; and (c) make such other order and give such directions as he may consider proper.

(5) Any reference in this Ordinance to the court shall include a reference to the Registrar exercising the jurisdiction conferred on him by this section.

(6) Not with standing subsection (5), the Registrar, when exercising the jurisdiction conferred by this section, shall not have power to make an order for the committal of a person for contempt of court.

(7) In this section- "Registrar" means- (a) the Registrar of the Supreme Court; (b) any Deputy Registrar of the Supreme Court; and (c) any Assistant Registrar of the Supreme Court appointed by the Chief Justice for the purposes of this section. (Added 50 of 1970 s. 2) 100. Discretionary powers of court (1) Subject to the provisions of this Ordinance and to general rules, the costs of and incidental to any proceeding in court under this Ordinance shall be in the discretion of the court: Provided that, where any issue is tried by a jury, the costs shall follow the event unless, upon application made at the trial, for good cause shown, the judge before whom such issue is tried otherwise orders.

(2) The court may at any time adjourn any proceedings before it upon terms, if any, as it may think fit to impose.

(3) The court may at any time amend any written process or proceeding under this Ordinance upon such terms, if any, as it may think fit to impose.

(4) Where by this Ordinance or by general rules the time for doing any act or thing is limited, the court may extend the time either before or after the expiration thereof upon such terms, if any, as the court may think fit to impose.

(5) Subject to general rules, the court may in any matter take the whole or any part of the evidence viva voce or by interrogatories or upon affidavit or, out of Hong Kong, by commission. (Amended 47 of 1984 s. 16) [cf. 1914 c. 59 s. 109 U. K.] 100A. Court may make a regulating order (1) Where it appears to the court on application being made by the Official Receiver or by any creditor at any time after the presentation of a bankruptcy petition, whether presented before or after the commencement of the Bankruptcy (Amendment) Ordinance 1965 (21 of 1965), that by reason of the large number of creditors or for any other reason the interest of the creditors so requires, it may, on or after the making of a receiving order, order that the bankruptcy proceedings shall be regulated specially by the court, and such order shall be known as a regulating order.

(2) A regulating order shall be published in such manner as the court may direct, and sections 100B to 100H inclusive shall apply to the bankruptcy proceedings where a regulating order has been made but not otherwise.

(3) Where a regulating order is made the Bankruptcy Rules (Cap. 6 sub.

leg.) shall apply mutatis mutandis to the Official Receiver, trustee and committee of inspection appointed or acting after the making of a regulating order, and to the conduct of any ballot or other proceedings ordered by the court under section 100B or 100F.

(4) Where any order made under sections 100B to 100G inclusive prescribes any procedure it shall be deemed to be in substitution for the procedure which would be required by this Ordinance but for the making of such order, and in particular where any such order prescribes a procedure for doing something which would otherwise be done at a meeting of creditors no such meeting shall be required to be held.

(Added 21 of 1965 s. 2) 100B. First meeting and composition (1) The court may on the application of the Official Receiver by order dispense with the summoning of the first meeting of creditors required under section 17.

(2) The court may order that the wishes of creditors be ascertained for the purpose of accepting or rejecting any composition in such manner as it may direct without the holding of meetings under section 20 or 25, and for such purpose may direct the manner in which any composition be communicated to such creditors.

(3) Without derogating from the generality of subsection (2) the court may direct the holding of a ballot and the use of voting letters.

(4) Notwithstanding anything in section 20 or 25, where a majority in number and three-fourths in value of all the creditors who have proved their debt, or who by virtue of section 100H are deemed for voting purposes to have proved a debt exceeding $100, agree to accept a composition, the composition shall be deemed to be duly accepted by the creditors, and when approved by the court shall be binding on all the creditors.

(5) For the purposes of this section and section 100C, "composition" means any proposal for a composition in satisfaction of the debts of the debtor or for any scheme of arrangement of the affairs of the debtor.

(Added 21 of 1965 s. 2) 100C. Adjudication (1) The court shall on application being made by the Official Receiver adjudge the debtor bankrupt unless- (a) within 1 month of the date of the receiving order the debtor submits a proposal under section 20 which- (i) in the opinion of the Official Receiver appears to be reasonable and calculated to benefit the general body of creditors; and (ii) is one which the court is not bound to refuse to approve; and (b) the court approves the composition.

(2) On the adjudication the property of the bankrupt shall become divisible among his creditors and shall vest in a trustee.

(3) The provisions of this section shall be in substitution for section 22 (1). (Added 21 of 1965 s. 2) 100D. Trustee (1) The court may on application being made by the Official Receiver by order appoint the Official Receiver or such other person recommended by him trustee of the property of the bankrupt, remove any trustee and fill any vacancy. Upon making any order for the appointment or removal of a trustee or for filling any vacancy the provisions of section 23 (1) and (4), 81 (1), (2) and (3) or 96 (1), as the case may be, shall cease to apply to the bankruptcy and any action taken under such provisions in respect of any appointment or removal of a trustee or filling of any vacancy shall cease to have effect.

(2) The court may by order give such directions to a trustee as it shall think fit. Such directions shall be deemed to be the directions of creditors for the purposes of section 82. Neither a trustee not the Official Receiver shall be required to summon any meetings of creditors save where the court so orders.

(Added 21 of 1965 s. 2) 100E. Committee of inspection (1) The court may on application being made by the Official Receiver or trustee by order appoint such qualified persons as it thinks fit as a committee of inspection for the purpose of superintending the administration of the property of the bankrupt by the trustee, remove any member thereof and fill any vacancy therein.

(2) The continuing members of the committee, provided there be not less than 2 such continuing members, may act notwithstanding any vacancy in their body.

(3) Upon the making of any order for such appointment, removal or filling of a vacancy the provisions of section 24 (1), (7), (8) or (9), as the case may be, shall cease to apply to the bankruptcy and any action taken under such provisions in respect of any appointment of a committee of inspection, any removal of any member thereof or the filling of any vacancy therein shall cease to have effect.

(Added 21 of 1965 s. 2) 100F. Informing creditors and ascertaining their wishes The court may by order give such directions to the Official Receiver or trustee as it shall think fit for the purpose of keeping creditors informed of any matter relating to the bankruptcy and for ascertaining their wishes, and may require the Official Receiver or trustee to make such reports to the court as it may specify.

(Added 21 of 1965 s. 2) 100G. Creditors to give notice of intention to take part in public examination (1) The court may order that any creditor wishing to exercise his right to question the debtor on his public examination under section 19 (4) shall give notice in writing of such intention to the Official Receiver, and may direct that no creditor may exercise such right unless notice is received by the Official Receiver within such time as may be specified.

(2) For the purpose of this section the court may direct that notice of the public examination of a debtor shall be published in such manner as it may specify, and notice of such examination or of adjourned hearings thereof shall not be required to be sent to creditors individually.

(Added 21 of 1965 s. 2) 100H. Proof of debts in the case of banks (1) Where the bankrupt was carrying on the business of a bank, any creditor who is a depositor, whether on current, savings, deposit, fixed deposit or other account, shall, unless and until the Official Receiver by notice in writing requires him to make a formal proof of debt, be deemed to have proved his debt- (a) for voting purposes, for the net balance to his credit in the books of the bank on all his accounts taken together, at the date of the receiving order: Provided that if the said balance does not exceed $100 he shall not be deemed to have proved his debt for the purposes of sections 20 (2) and (4), 25 (1) and 100B (4); and (b) for dividend purposes, for the said balance plus or minus, as the case may be, the net amount of interest accrued due by or to the bank on the said accounts at the date of the receiving order.

(2) Any debt which is deemed to have been proved by virtue of subsection (1) shall be treated as if a proof thereof had been duly lodged in due time with the Official Receiver or trustee and had been admitted for voting and dividend purposes respectively for the said amounts stated in subsection (1).

(Added 21 of 1965 s. 2) 101. Consolidation of petitions Where 2 or more bankruptcy petitions are presented against the same debtor or against joint debtors the court may consolidate the proceedings or any of them on such terms as the court thinks fit.

[cf. 1914 c. 59 s. 110 U. K.] 102. Power to change carriage of proceedings Where the petitioner does not proceed with due diligence on his petition the court may either dismiss the petition or substitute as petitioner any other creditor to whom the debtor may be indebted in the amount required by this Ordinance in the place of the petitioning creditor.

[cf. 1914 c. 59 s. 111 U. K.] 103. Continuance of proceedings on death of debtor If a debtor by or against whom a bankruptcy petition has been presented dies, the proceedings in the matter shall, unless the court otherwise orders, be continued as if he were alive.

[cf. 1914 c. 59 S. 112 U. K.] 104. Power to stay proceedings The court may at any time, for sufficient reason, make an order staying the proceedings under a bankruptcy petition, either altogether or for a limited time, on such terms and subject to such conditions as the court may think just.

[cf. 1914 c. 59 s. 113 U. K.] 105. Power to present petition against one partner Any creditors whose debt is sufficient to entitle him to present a bankruptcy petition against all the partners of a firm may present a petition against any one or more partners of the firm without including the others.
| 1 | 2 | 3 | 4 |