CHAN CHOI HAR IVY v. DADRA INC.

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Press Summary (Chinese)

FACV No. 4 of 2025

[2025] HKCFA 25

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FINAL APPEAL NO. 4 OF 2025 (CIVIL)

(ON APPEAL FROM CACV NO. 74 OF 2023)

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JUDGMENT

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Chief Justice Cheung:

1.  I agree with the judgment of Mr Justice Fok PJ.

Mr Justice Fok PJ:

2.  This appeal raises a question of law (set out at [15] below) as to the jurisdiction of a High Court Master to make an order for imprisonment following the examination of a judgment debtor.  It involves consideration of the provisions of O.49B rr.1A and 1B of the Rules of the High Court (Cap.4A, Sub.Leg.) (“RHC”) and s.12 of the Bankruptcy Ordinance (Cap.6) (“BO”).  These provisions were also considered by this Court in V Capital Ltd v Margaret Chiu (邱美琪) [1] but in relation to a different question to that raised here.

A.     Background

3.  In September 2019, Dadra Inc. (“Dadra”), respondent in this appeal, commenced an action against the appellant, Chan Choi Har Ivy (“Chan”), for the sum of HK$90 million, being the amount of a dishonoured cheque she had drawn in its favour.  In March 2021, summary judgment was entered in favour of Dadra for the amount of the cheque together with interest and costs.

4.  Chan failed to satisfy the judgment debt and, on 2 July 2021, Dadra obtained an order from Master Rita So for Chan to attend in court to be orally examined pursuant to O.49B r.1A. 

5.  At the first hearing of that examination, which was adjourned, Master Dick Ho ordered Chan to disclose 8 categories of documents within a specified time before the resumed hearing (“the 13 September 2021 Order”).  Chan disclosed some bank statements, being part of the documents covered by the 13 September 2021 Order, but failed to make full disclosure as required by that order.

6.  The oral examination of Chan resumed on 13 May 2022.  It was again adjourned and the Master made a further order to require Chan to disclose the documents she had failed to disclose under the 13 September 2021 Order as well as some additional documents and information (“the 13 May 2022 Order”).  Chan failed to make any disclosure as required by the 13 May 2022 Order.

7.  On 15 August 2022, a bankruptcy order was made against Chan (in HCB 989/2022) on the petition of another judgment creditor.

8.  On 10 October 2022, Master Jack Wong made an order (“the Order to Proceed”) granting Dadra leave to proceed with the oral examination of Chan notwithstanding her bankruptcy in the following terms:

“1. Notwithstanding the Bankruptcy Order made against Chan Choi Har Ivy (‘the Bankrupt’) on 15 August 2022, leave be granted to [Dadra] as the judgment creditor in High Court Action No.1756 of 2019 (‘the HCA Proceedings’) to proceed with the proceedings of Oral Examination against the Bankrupt as the judgment debtor in the HCA Proceedings pursuant to Order 49B, Rules of the High Court (Cap.4A);

2. No Judgment or Order obtained by [Dadra] as the judgment creditor in the HCA Proceedings shall be enforced against the Bankrupt without leave of the Court;

3. [Dadra] shall not apply for any order for costs personally against the Official Receiver or the Provisional Trustee in Bankruptcy or the Trustee in Bankruptcy in the HCA Proceedings …”.

9.  The oral examination resumed on 14 October 2022, by which time Chan had still failed to make disclosure in compliance with the 13 September 2021 Order or the 13 May 2022 Order.  Dadra issued a summons dated 28 October 2022 seeking an order that Chan be imprisoned under O.49B r.1B. Chan filed two affirmations in opposition to that application.

10.  The application for an imprisonment order was heard by Master Phoebe Man on 27 February 2023.  In her written decision dated 10 March 2023,[2] the Master found beyond reasonable doubt that Chan had acted contrary to O.49B r.1B(1)(c) and made an order (“the Imprisonment Order”) that she be imprisoned for 6 weeks and that she pay Dadra’s costs of the application on an indemnity basis.

11.  On Chan’s undertaking to take out an urgent inter partes summons before the Court of Appeal for a stay of execution, the Master granted an interim stay of the Imprisonment Order pending the determination of the stay application.

12.  On 13 March 2023, Chan filed a Notice of Appeal against the Imprisonment Order.  On 9 June 2023, the Court of Appeal (Au and Chow JJA) granted a stay of execution of the Imprisonment Order pending the determination of the appeal.

13.  The Court of Appeal heard Chan’s appeal in July 2024 and gave judgment dismissing her appeal on 16 August 2024.[3]  There were four grounds of appeal, only one of which is relevant to this appeal, namely the contention that the Master erred in failing to recognise that the court had no jurisdiction to proceed with an O.49B examination, or make an order of imprisonment of Chan, after she had been adjudged bankrupt (described in the CA Judgment as “the Jurisdiction Ground”).[4]

B.     Leave to appeal

14.  Chan applied unsuccessfully to the Court of Appeal for leave to appeal to this Court on a question of law arising from the Jurisdiction Ground.[5]

15.  On her renewed application for leave to appeal, the Appeal Committee granted Chan leave to appeal in respect of the following question of law:

“Whether a High Court Master would only have the jurisdiction to make an order for the imprisonment of a judgment debtor who has been adjudged [bankrupt] under Order 49B rule 1B(1)(c) of the Rules of the High Court (Cap 4A) (‘RHC’) on the ground that he has wilfully failed to make full disclosure as required under Order 49B rule 1A(2) of the RHC if leave has been expressly sought and granted under section 12(1) of the Bankruptcy Ordinance (Cap 6) for the judgment creditor to proceed with or commence an application for an order for the imprisonment of such debtor under Order 49B rule 1B(1)(c) of the RHC.”[6]

16.  In granting leave, the Appeal Committee noted that this would permit the Court “to examine the Court of Appeal’s approach to the jurisdiction issue which focused on the construction of the order giving leave to proceed; to consider the true construction of the applicable statutory provisions; and to address concerns regarding the impact of the order for imprisonment on personal liberty”.[7] The Appeal Committee also extended, until the hearing of the appeal, an interim stay of the Imprisonment Order which Mr Justice Lam PJ, as a single permanent judge, had granted Chan until the hearing of the leave application.[8]

C.     The Court of Appeal’s approach

17.  In rejecting the Jurisdiction Ground, the Court of Appeal held that leave to proceed was required under BO s.12 but held that such leave had been obtained by Dadra under the Order to Proceed made by Master Jack Wong on 10 October 2022.  The reasoning leading to that holding was explained in the CA Leave Judgment in these terms:

“The Court held, based on the true construction of the Order to Proceed considered in the light of the relevant surrounding circumstances and other relevant provisions of Order 49B (see §§35-40 of the CA Judgment), that the Order to Proceed covered not only the Plaintiff’s application for the oral examination of the Defendant, but also its application for an order of imprisonment of the Defendant.”[9]

18.  Thus, in the CA Judgment itself, this reasoning of the Court of Appeal is reflected in the following passages:

“The critical question in the present case is whether the Order to Proceed made by Master J Wong on 10 October 2022 covered the Imprisonment Application made by the Plaintiff on 31 October 2022. The answer to that question depends on the true construction of the Order to Proceed.”[10]

“We do not consider that the contents of the post-Order to Proceed correspondence between the Plaintiff and the Official Receiver are helpful for determining the true construction of the Order to Proceed.”[11]

“… the answer to the question of whether the Plaintiff had been granted leave to proceed with the Imprisonment Application depends on the true construction of the Order to Proceed made by Master J Wong …”.[12]

19.  There is a risk, arising from the way the Court of Appeal expressed its reasoning in the above passages, that the CA Judgment might be understood as holding that jurisdiction to proceed with the application for an order for imprisonment depended solely on the true construction of the Order to Proceed.  This understanding might be further suggested by the Court of Appeal’s reference to what Master Jack Wong may have subjectively appreciated when he made the Order to Proceed.[13]  It certainly seems to have been the understanding of Chan’s legal representatives as reflected in the written Case for the Appellant.[14]  If so, with respect, that approach would be wrong.

20.  Whether the Order to Proceed was sufficient to found jurisdiction to make the Imprisonment Order does not turn solely on the construction of the Order to Proceed since jurisdiction does not derive merely from the way a court order is worded.  Thus, it would be unsound to reason that, had the Order to Proceed made it textually clear that the leave granted to Dadra to conduct an oral examination included the words “and, if appropriate, to seek an order of imprisonment for wilful non-disclosure”, there would have been jurisdiction for the Master to make an order for imprisonment following the examination, but that there would not be such jurisdiction unless the order were construed to convey the meaning indicated by those words.

21.  Instead, the correct analysis is that the question of what acts Dadra was required to obtain leave for depends on the true construction of the relevant statutory provisions, rather than the Order to Proceed.  The Order to Proceed was the exercise of jurisdiction by the Master.  That order might have restricted or limited the scope of the acts for which Dadra was given leave.  Or it might have encompassed any and all acts consequential to that for which leave was expressly granted.

22.  The question of what acts leave was required for therefore turns on the statutory provisions themselves.  As posed in the question for which leave to appeal was granted, did those provisions make it necessary to apply separately and expressly for leave to commence or continue proceedings seeking an order for imprisonment?  Or, was an order granting leave to proceed with an examination under O.49B sufficient to include subsequent parts of that process, including a possible order for imprisonment within that scheme?

D.     The relevant statutory provisions

D.1    The O.49B enforcement scheme

23.  Jurisdiction to order the arrest or imprisonment of a person in respect of a civil claim for the payment of money is conferred by s.21A of the High Court Ordinance (Cap.4) (“HCO”).  The enactment of this provision and how it is given effect in the procedure governed by O.49B of the RHC are addressed in this Court’s judgment in V Capital.[15]  As there explained, s.21A(1) materially provides that “a person shall not be arrested or imprisoned to enforce, secure or pursue a civil claim for the payment of money or damages except under an order of Court” and jurisdiction to make such an order is limited to “arrest or imprisonment only to enforce, secure or pursue a judgment for the payment of a specified sum of money”.

24.  In the RHC, O.45 r.1(1) provides that a judgment or order for the payment of money may be enforced by various means including “(g) an order of imprisonment made under Order 49B.”

25.  The procedure governed by O.49B is headed “Execution and Enforcement of Judgment for Money by Imprisonment” and was generally described in V Capital.[16] The scheme includes the following features:

(1)     Under O.49B r.1, the court is empowered to order the judgment debtor to attend before it for examination under O.49B r.1A, if necessary, by ordering his arrest or prohibiting him from leaving Hong Kong.  The application for examination is initiated ex parte by the judgment creditor.

(2)     O.49B r.1A provides for the examination of the debtor under oath and requires the debtor to “make a full disclosure of all his assets, liabilities, income and expenditure and of the disposal of any assets or income” and to “answer all questions put to him”.  On adjournment of the examination, the court has power to prohibit the debtor from leaving Hong Kong or, if it believes he may not appear at the resumption of the examination, may order that he be imprisoned until that resumption.

(3)     O.49B r.1B(1) sets out the powers of the court following an examination, including the power of imprisonment, in these terms:

“Where the Court is satisfied, following the examination conducted under rule 1A …, that the judgment debtor —

(a) is able to satisfy the judgment, wholly or partly; or

(b) has disposed of assets with a view to avoiding satisfaction of the judgment or the liability which is the subject of the judgment, wholly or partly; or

(c) has wilfully failed to make a full disclosure as required under rule 1A(2) … or to answer any question as provided under that rule …,

it may, in its discretion, order the imprisonment of the judgment debtor for a period not exceeding 3 months.”

(4)     If, following the examination, the court is satisfied that the judgment debtor is or will be able to satisfy the judgment, it may also order him to satisfy it in such manner as it thinks fit: O.49B r.1B(2).  If the judgment debtor then fails to comply, the court may, unless the judgment debtor shows good cause, order him to be imprisoned for a period not exceeding 3 months: O.49B r.1B(3)(a).  In such a case, the court may make an order for imprisonment on each occasion of a failure to comply with its order or more than once in respect of a continuing failure to comply: O.49B r.1B(3)(b).  This latter power is notwithstanding the general rule, in O.49B r.7, that a person imprisoned in execution of a judgment shall not, once discharged, be imprisoned again on account of the same judgment.

(5)     O.49B r.4 provides that a person arrested or imprisoned in execution of a judgment shall be released at any time on the judgment being fully satisfied.

26.  Thus, O.49B establishes a mechanism by which a recalcitrant judgment debtor may be subjected to examination in order to ascertain what means he might have to satisfy the judgment debt.  That information may help the judgment creditor take appropriate measures to enforce the judgment, such as those under O.45 r.1(1) which, in addition to an order for imprisonment under O.49B, include a writ of fieri facias, garnishee proceedings, a charging order, the appointment of a receiver, an order of committal and a writ of sequestration.

27.  The above summary serves to demonstrate that O.49B constitutes a holistic, coherent scheme for execution and enforcement of a money judgment in which the court is empowered to make compulsory orders before, during and after the oral examination, supplemented at each stage by coercive sanctions including arrest, imprisonment and prohibition from leaving Hong Kong.  This cohesive process was recognised in V Capital where the Court held:

“The whole process under O.49B is accordingly properly characterised as being in the nature of execution and enforcement of the judgment debt”.[17]

“Construed purposively and in context, O.49B r.1B(1)(c) is properly to be regarded as a constituent component of an overall process of execution and enforcement. The fact that BO s.12 adds a further requirement of leave before a particular step in that execution and enforcement process can be taken in a bankruptcy does not alter the fact that pursuit of an order for imprisonment for wilful failure to disclose is part of that process.”[18]

28.  It is to be noted that the enforcement process initiated pursuant to O.49B r.1(1) is commenced by an ex parte application to the court by the judgment creditor for an examination of the judgment debtor.  Thereafter, further orders may be made as appropriate, including possible orders of arrest, prohibition from leaving Hong Kong or imprisonment.  Subject to the court’s practice (referred to in Section F below), there is no express requirement in the O.49B scheme for separate applications to be made for any such subsequent further orders.

29.  Thus, focusing on the part of the process relevant to this appeal, O.49B r.1B(1)(c) (quoted above) gives the court a discretion to make an order for imprisonment following the oral examination of a judgment debtor, if satisfied that he has wilfully failed to make full disclosure as required.  The rules contemplate the making of such an order at that point in the process, without stipulating any requirement for a separate application.  As will be seen in Section F below, though, the court’s practice seeks to ensure that the procedure adopted where a judgment creditor seeks an order of imprisonment is consistent with the fundamental rights of the judgment debtor.

D.2    The effect of a bankruptcy order and BO s.12

30.  Upon the making of a bankruptcy order, the bankrupt’s property vests in the Official Receiver (“OR”).[19]  Thereafter, any rights of action against the bankrupt are restricted and regulated by the BO, including s.12(1), which reads:

“On the making of a bankruptcy order, the Official Receiver shall thereby become the provisional trustee of the property of the bankrupt, and thereafter, except as directed by this Ordinance, no creditor to whom the bankrupt is indebted in respect of any debt provable in bankruptcy shall have any remedy against the property or person of the bankrupt in respect of the debt, nor shall proceed with or commence any action or other legal proceedings, unless with the leave of the court and on such terms as the court may impose.”

31.  The construction of BO s.12 fell to be considered by this Court in V Capital.  That case concerned the question of whether leave to pursue an application for an order of imprisonment under O.49B r.1B(1)(c) was required under BO s.12(1) in respect of a bankrupt judgment debtor.  The Court answered that question in the affirmative and construed the requirement for leave under BO s.12 as embracing an order for imprisonment of a debtor for wilful non-disclosure under that rule.[20]

32.  In V Capital, the Court noted:

“… BO s.12 is not a complete bar to the bringing of all proceedings against a bankrupt but, where a bankrupt is indebted to a creditor in respect of a debt provable in bankruptcy, the creditor cannot pursue any remedy against the property or person of the bankrupt, or commence an action or other legal proceeding against him, without the leave of the court.” [21]

33.  BO s.12 must be construed consistently with the bankruptcy regime of which it forms a part.  In this regard, it was held in V Capital that:

“… the bankruptcy regime serves various purposes, including: (1) to protect the debtor from his creditors by affording the debtor an opportunity to become discharged from his debts; (2) to protect the creditors by providing mechanisms for investigating the affairs of the debtor to avoid the latter hiding his assets, escaping the jurisdiction of the court or fraudulently preferring particular creditors; and (3) to protect the creditors from each other by preventing any particular creditor stealing a march over the others by proceeding independently against the bankrupt instead of sharing proportionately (pari passu) in the realisable assets of the bankrupt.”[22]

34.  It was also held that guidance in the construction of BO s.12 was to be found in Lord Jauncey of Tullichettle’s speech in Smith (a Bankrupt) v Braintree District Council where he held that:

“… The purpose of section 285 is to protect the estate for the whole body of creditors and to prevent unsecured creditors, after the initiation of bankruptcy proceedings, from taking steps by putting pressure on the debtor to obtain advantages over other creditors.”[23]

35.  BO s.12 therefore prevents a creditor of a bankrupt from proceeding with or commencing any legal proceedings in respect of the debt without the leave of the court and on such terms as the court may impose.  This leave requirement serves the purposes of: protecting the creditors of the bankrupt as a whole by achieving an orderly administration of the bankrupt’s assets, with a view to their pari passu distribution to the creditors; protecting individual creditors from other creditors gaining an unfair advantage by pursuing the bankrupt without court supervision and control; and protecting the bankrupt himself from being harassed by improper pressure from individual creditors seeking to gain an unfair advantage over other creditors.

D.3    Construing BO s.12 in the context of enforcement proceedings

36.  In requiring that leave of the court be obtained to commence or proceed with any relevant legal proceedings in respect of a debt provable in bankruptcy, BO s.12 enables the bankruptcy court to exercise its supervisory jurisdiction over the administration of the bankrupt’s estate for the purposes identified above.  The leave requirement ensures that the bankruptcy court is informed, and maintains oversight, of proceedings that may affect the administration of that estate and affords the court the opportunity to decide if such proceedings should be commenced or proceed and, if so, whether any conditions should be imposed.

37.  In V Capital, leave had not been obtained under BO s.12 for an application for an order for imprisonment for wilful non-disclosure under O.49B r.1B(1)(c).  It was unsuccessfully sought to be argued that leave under BO s.12 was not required since such an application was not in the nature of enforcement of a judgment and was therefore not a “remedy against the … person of the bankrupt in respect of the debt” or in the nature of “other legal proceedings” in respect of the debt.  To the contrary, this Court held that judgment enforcement proceedings under O.49B, including an order for imprisonment for wilful non-disclosure under O.49B r.1B(1)(c), fell within the ambit of those words in BO s.12, so that leave to proceed was required.[24]

38.  The Court noted in V Capital that the BO s.12 leave procedure serves a different purpose to that under O.49B and the two procedures should not be conflated.  The Court observed:

“… There are plainly cases in which O.49B will be invoked which do not concern debtors who are bankrupt. Construed purposively and in context, O.49B r.1B(1)(c) is properly to be regarded as a constituent component of an overall process of execution and enforcement. The fact that BO s.12 adds a further requirement of leave before a particular step in that execution and enforcement process can be taken in a bankruptcy does not alter the fact that pursuit of an order for imprisonment for wilful failure to disclose is part of that process. Equally, the converse argument that O.49B already imposes an exercise of discretion by a Master before ordering the examination or imprisonment of a judgment debtor does not render redundant the requirement of leave under BO s.12 since the exercise of discretion to grant leave to proceed under the latter section depends on different factors.” [25]

39.  The CA Judgment was cited to the Court in argument in V Capital but the Court noted that itdid not address the issue with which V Capital was concerned. [26] Similarly, V Capital does not address the question posed in the present appeal.

40.  However, nothing in V Capital supports the contention that, where leave to proceed with an oral examination under O.49B r.1A has been granted, and subsequent enforcement steps have not been excluded by the terms of the leave granted, separate leave under BO s.12 is required for an application for an order for imprisonment under O.49B r.1B(1)(c).

E.     Was separate leave required in the present case?

41.  In the present case, Chan was already being examined pursuant to O.49B r.1A when she was then made the subject of a bankruptcy order on 15 August 2022.  On 6 October 2022, Dadra issued a summons pursuant to BO s.12, which was endorsed with the consent of the OR, for the order embodied in the Order to Proceed (in the terms quoted at [8] above).

42.  Chan’s oral examination pursuant to O.49B r.1A, which had been adjourned, resumed thereafter on 14 October 2022, at which Chan continued to fail to make disclosure in compliance with the 13 September 2021 Order and the 13 May 2022 Order.  In accordance with the court’s practice (described in Section F below), Dadra then took out the summons dated 28 October 2022 seeking an order for Chan’s imprisonment.  This led to the Imprisonment Order under appeal.

43.  As noted in Section D.1 above, the procedure under O.49B constitutes a holistic, coherent scheme for enforcement backed by possible coercive sanctions that may be imposed before, during or after the examination of the judgment debtor.  However, as noted in Sections D.2 and D.3 above, BO s.12 is a separate procedure serving a different purpose to O.49B and does not, on its face, mandate that leave be sought under that section in respect of discrete parts of that enforcement process.

44.  It follows, in my view, that the Order to Proceed granting Dadra leave pursuant to BO s.12 to proceed with the oral examination of Chan “as the judgment debtor in the HCA Proceedings pursuant to Order 49B” was one which Master Jack Wong was empowered to make and did not, on its terms, limit the proceedings Dadra was authorised to proceed with to the oral examination of Chan only and no more.

45.  Instead, Dadra was thereby authorised to proceed with the oral examination and to make any consequential applications within the scheme of the O.49B procedure.  The purpose of the Order to Proceed was to facilitate the identification of potentially realisable assets which, if discovered, would be for the benefit of the bankrupt estate as a whole.  The latter purpose was achieved by the condition imposed in the Order to Proceed (in its paragraph [2]) that no judgment or order obtained by Dadra as judgment creditor should be enforced against Chan without leave of the court.  If coercive sanctions forming part of the overall process of enforcement should be called for, including an application for an order of imprisonment in the event the conditions of O.49B r.1B(1)(c) were established, the leave given to proceed with the oral examination would encompass their imposition.

46.  Mr Jeff Yau, Counsel for Chan, sought to argue in support of the appeal that separate, express leave was required to be sought and obtained by Dadra under BO s.12 in order to pursue the application for an order for imprisonment under O.49B r.1B(1)(c).  Essentially, his submission was that the oral examination stage under O.49B r.1A and the imprisonment stage under O.49B r.1B had a different impact and purpose so should be treated discretely for the purposes of BO s.12 leave.  The Order to Proceed only addressed the oral examination stage and left matters consequential to that stage to be dealt with separately.  For such subsequent stages, including any possible order of imprisonment, leave under BO s.12 should be obtained.

47.  I am unable to accept Mr Yau’s argument.  In my view, it misconceives the nature of the enforcement and execution process under O.49B as consisting of a fragmented series of unconnected steps.  It also conflates the process under O.49B with that under BO s.12, which this Court has previously held (in V Capital, see above) should not be done.  In the present context, the purposes of the different stages under O.49B are not separate and discrete but are instead all part and parcel of a holistic, coherent scheme for enforcement and execution: see Section D.1 above.  Leave under BO s.12 to pursue enforcement and execution under O.49B can properly be given for all stages of that process at one time and it is not necessary to seek leave on a piecemeal step-by-step basis: see Section D.3 above.  Moreover, it would be surprising, to say the least, if the proper construction of BO s.12 required multiple applications for leave to be made to the bankruptcy court for each discrete stage of enforcement and execution of a judgment in respect of a bankrupt.  This would be a wholly impractical and inefficient use of judicial resources.

48.  Mr Yau further contended that separate BO s.12 leave was required to proceed with the application for an order of imprisonment since that would be a “remedy … against the … person of the bankrupt in respect of the debt” and the application leading to the Order to Proceed was one to which only Dadra and the OR had been party.  It was contended that separate leave to proceed with the application for an order of imprisonment in addition to the application to proceed with the oral examination was required because Chan was not a party to the application leading to the Order to Proceed and there was no suggestion at the time of that order that Dadra might seek an order for imprisonment.  Therefore, the only leave that could have been granted under BO s.12 was leave to continue the examination.[27]

49.  The contention that, because Chan was not a party to the Order to Proceed, Dadra was only granted leave to continue the oral examination which had been adjourned prior to Chan’s bankruptcy finds no support in either the enforcement and execution procedure provided for in O.49B or the leave procedure in BO s.12.  As discussed above, BO s.12 does not envisage leave being required for different stages of the same proceedings and the statutory purpose of BO s.12 does not support a requirement that each step of the O.49B procedure be the subject of separate leave or that the bankrupt be made a party to an application for leave to proceed.  Nor does the O.49B procedure fall to be construed in such piecemeal fashion.  Instead, as already noted, O.49B is a holistic, coherent scheme for execution and enforcement.

50.  Nor is it correct, as Mr Yau submitted was the case, that the Order to Proceed was limited to the anterior oral examination stage and did not contemplate any steps in any subsequent stage of the enforcement and execution process.  This is clear from paragraph [2] of the Order to Proceed which precluded any payment to the judgment creditor without the leave of the court.  By that paragraph, the Order to Proceed was designed to avoid the possibility of Dadra stealing a march on any other creditor or unfairly pressuring Chan to get some advantage over any of her other creditors since any recovery arising from the O.49B process would be subject to court supervision.

51.  Finally, it is necessary to mention an argument raised in the written Case for the Appellant (but not addressed in oral submissions at the hearing of the appeal).  It was contended that separate leave to proceed was required because an application for an order of imprisonment under O.49B r.1B(1)(c) is a judicial interference with personal liberty, a fundamental right which should not be restricted without express authority of the court.[28] Reliance is placed on the Court of Appeal’s decision in YBL v LWC.[29]

F.     Personal liberty concerns and the practice of the court

F.1     Different purpose of BO s.12

52.  The contention referred to in the preceding paragraph is wrong, in my view, because BO s.12 is not concerned with personal liberty. Instead, the leave requirement in BO s.12 is concerned with the statutory purposes of the bankruptcy regime identified above.  In any event, as discussed below, insofar as the O.49B procedure may result in a restriction of personal liberty and so potentially restrict or interfere with fundamental rights conferred under the Hong Kong Bill of Rights, sufficient safeguards are built into the procedure under O.49B and the practice whereby that procedure is implemented by the court to ensure that the process is compliant with such fundamental rights.

53.  For the reasons set out above, there is no express requirement in O.49B for a judgment creditor to apply separately for an order of imprisonment once the process of an oral examination has been commenced.  However, there are various fundamental rights of the judgment debtor that might be engaged in a judgment creditor’s pursuit of an order for imprisonment in those circumstances.  These rights include: (1) the right to liberty and security of the person under Article 5 of the Hong Kong Bill of Rights (“BOR”), (2) the right to equality before the courts and the right to a fair and public hearing under Article 10 of the BOR, and (3) the rights of persons charged with or convicted of a criminal offence under Article 11 of the BOR.

54.  The Court of Appeal had occasion to consider these fundamental rights in the context of the judgment summons procedure involving orders for commitment pursuant to Rule 87 of the Matrimonial Causes Rules (Cap.179A, Sub.Leg.) in YBL v LWC. [30]  In particular, the Court of Appeal considered the application of the presumption of innocence,[31] the right to be informed of the charges faced[32] and the segregation of the examination and committal exercises[33] in this context and concluded that aspects of Rule 87 were incompatible with those fundamental rights.[34]

55.  Following the decision in YBL v LWC, it has been the practice of Masters of the High Court to follow certain standard directions in cases where judgment creditors are seeking orders for imprisonment. These include directions: that a judgment creditor take out a summons endorsed with a penal notice and stating the case as to why imprisonment under O.49B r.1B(1) is said to be warranted; that the facts relied upon in support are verified by an affidavit; that the judgment debtor be advised to seek legal representation or to apply for Legal Aid; and that the judgment debtor be given the opportunity to file evidence in opposition.  This practice is designed to ensure that the judgment debtor is informed of the risk to his personal freedom in the event of non-compliance and to inform him of the case against him and that he can respond to the order sought, with legal representation if desired.

56.  The above safeguards are intended to address concerns regarding the interference with personal liberty and to ensure compatibility of the O.49B process for an order of imprisonment with the fundamental rights identified above.  They are, it should be noted, separate to and serve a different purpose to the leave requirement under BO s.12 in the case of a bankrupt judgment debtor.

F.2     Procedure of court consistent with rights

57.  The safeguards in question were in fact followed in the present case.  Thus, in the 13 September 2021 Order and the 13 May 2022 Order, requiring Chan to make disclosure of documents, both orders specified the particular documents or categories of documents to be disclosed and explained that serious consequences including imprisonment might follow in the event of non-compliance.  Each of the orders included a notice headed “Warning” stating that, in the event full disclosure was not made, Chan might be required to pay costs, might be subject to arrest to secure attendance, and might be subject to imprisonment on the grounds set out in O.49B r.1B(1).  Chan was further advised to instruct solicitors at the hearing and that legal aid might be available for this purpose.

58.  Following Chan’s failure at the oral examination hearings on 13 May 2022 and 14 October 2022 to comply with the two disclosure orders, Dadra issued the summons for an order for imprisonment dated 28 October 2022 which was supported by an affirmation of its sole director and shareholder detailing its case as to why an order for imprisonment of Chan under O.49B r.1B should be made.[35]

59.  Chan responded to this summons and evidence by two affirmations dated 19 December 2022 and 24 February 2023 opposing the application for an order of imprisonment.[36]

60.  In the circumstances, there is no substance in the submissions made by Chan that considerations of her personal liberty require that Dadra should have made a separate and express application under BO s.12 for leave to proceed with the application for an order for imprisonment. Master Phoebe Man had jurisdiction, by reason of the leave granted in the Order to Proceed, to make the Imprisonment Order.  Nothing in the Order to Proceed limited the leave granted under BO s.12 to the oral examination phase of the procedure or prohibited the court from considering the subsequent phase when an order for imprisonment under O.49B r.1B(1)(c) might be sought.

F.3     No infringement of appellant’s rights in fact

61.  In any event, as a matter of fact, although not a question raised in this appeal, none of Chan’s fundamental rights were unlawfully infringed in the O.49B process that was followed in the present case.

62.  Following Chan’s oral examination, Dadra separately and expressly sought an order for imprisonment of Chan for wilful non-disclosure, setting out the case against her in this regard.  Chan was fully informed of the application and the basis on which Dadra was making it. She had earlier been warned of the consequences of non-compliance with the disclosure orders served on her, including the possibility of imprisonment. She was given the opportunity to, and did, file evidence in response.  A full hearing before Master Phoebe Man followed the filing of evidence was held at which the question of whether an order for imprisonment should be made was argued, with Chan was present and, although unrepresented, made representations to the Master.  The Master’s reasons for her decision to impose an order for imprisonment were set out in the CFI Judgment.

G.     Conclusion and disposition

63.  For the reasons set out above:

(1)     I would answer the question certified by the Appeal Committee (see [15] above) in the negative. 

(2)     On a true construction of BO s.12, the leave contained in the Order to Proceed was sufficient to found jurisdiction for the Imprisonment Order. 

(3)     Considerations of personal liberty did not require that Dadra should have made a separate and express application under BO s.12 for leave to proceed with the application for the Imprisonment Order. 

(4)     Nothing in the Order to Proceed limited the leave granted under BO s.12 to the oral examination phase of the procedure or prohibited the court from considering the subsequent phase when an order for imprisonment under O.49B r.1B(1)(c) might be sought.

64.  I would accordingly dismiss the appeal and make an order nisi that Chan to pay Dadra’s costs of this appeal.  Should any party wish to apply to vary this costs order nisi written submissions should be filed within 14 days of the date of this judgment, with any reply submissions to be filed within 14 days thereafter, after which the Court will deal with the issue of costs on the papers.

65.  As a postscript to this judgment, I would draw attention to a feature of the Court of Appeal’s judgment.  In the CA Judgment at [44], [46] and [51], the Court of Appeal quoted parts of Chan’s 3^rd and 4^th Affirmations and the CFI Judgment respectively.  The parts quoted were the original Chinese text of those three documents.  Whilst this Court was provided with English translations of the three documents in question in the appeal bundles, no English translation of the Chinese text quoted was provided in the CA Judgment itself.

66.  The publication of an English judgment by a Hong Kong court in which no English translation of quoted Chinese text is provided limits the comprehensibility of the judgment to readers literate in Chinese. Given the role and importance of the common law in the context of the Hong Kong Special Administrative Region, this limitation may self-evidently impair the value of jurisprudence from our courts (which is not infrequently read in other jurisdictions and by a wider audience that includes non-Chinese readers).  Such impairment can and should be avoided quite simply by ensuring the English translation of any Chinese text quoted is always provided in a judgment written in the English language.

Mr Justice Lam PJ:

67.  I agree with the judgment of Mr Justice Fok PJ.

Mr Justice Bokhary NPJ:

68.  I agree with Mr Justice Fok PJ’s judgment, including the postscript thereto.  The Order to Proceed fully opened the way (i) for the continuation of the oral examination to its conclusion and (ii) for the exercise of the powers exercisable under the rules of court following the examination.  It is when the court considers whether, and if so how, to exercise its discretion to order imprisonment that personal liberty arises for consideration.  The order that the appellant be imprisoned was made after a full and fair hearing with, there is no reason to doubt, the dictates of personal liberty duly borne in mind.

Lord Neuberger of Abbotsbury NPJ:

69.  I agree with Mr Justice Fok PJ’s judgment, and just add this thought.

70.  It seems to me that it would have been open to Master Jack Wong to have expressly limited the Order to Proceed to the exercise of the court’s powers under O.49B r.1A, and to exclude the exercise of the court’s powers under O.49B r.1B.

71.  However, one only has to formulate that proposition to see why this appeal should be dismissed.  At least in the absence of very unusual circumstances (which I find difficult to conceive), such a limitation would seem misconceived, for both principled and practical reasons.

72.  As to principle, if the court considers that it is right to permit a bankrupt to be subject to the oral examination procedure under O.49B, it must follow that, at least in the absence of very unusual circumstances, the court considers that the powers of enforcement contained in O.49B should be available to the tribunal conducting the examination. An analogy might be a court order authorising the bringing of criminal proceedings against a person: in the absence of a proviso to the contrary, such an order would carry with it an authority to sentence the person, if found guilty.

73.  So far as practicality is concerned, it would seem to involve a clogging up of court lists, unnecessary delays, and wasted costs, if, in this case, Dadra would have had to go back to Master Jack Wong to obtain a fresh order to proceed, so that O.49B r1B(1) could be implemented. Such an order would have been inevitable: no reasonable Master could have made any other order. And, again in the absence of very unusual circumstances, that must be the position in every case where the court makes an order to proceed with an examination under O.49B.

Chief Justice Cheung:

74.  Accordingly, the Court unanimously dismisses the appeal and makes the costs order nisi and directions as indicated in paragraph [64].  The interim stay of the Imprisonment Order was granted pending the disposition of the appeal and so stands to lapse on our handing down this judgment.  Subject to any submissions we may receive from the parties within 7 days from the date of this judgment as to why the order should not take effect, which we will deal with on paper, we extend the interim stay for 7 days from the date of handing down at which time the order of imprisonment shall then be carried out forthwith.