RE YIP KIT WAH

Headnote

                Amendments of petitions in bankruptcy where the act of bankruptcy relied upon is non compliance with a Bankruptcy Notice - Effect of order 10 of the Rules of the Supreme Court and the necessity for making it clear in the Bankruptcy Notice when time begins to run. Unless it is possible to calculate the time in the Bankruptcy Notice the notice is defective. These cases dealt with some of the situations which can arise.

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

Bankruptcy No. B413 of 1985

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JUDGMENT

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1. Applications have been made to me concerning amendments to these various petitions for receiving orders to be made. This has necessitated my making three separate orders in respect of the different situations which have arisen. I hope that it will be of convenience to all parties concerned if I write one judgment which it is hoped will cover most of the problems which arise when it is found to be necessary for amendments to be made of dates given in petitions relating to the issue of bankruptcy notices and the date of the act of bankruptcy which may arise when there has been non-compliance with the notices.

2. I will deal first with the situation which arose in Bankruptcy 413 of 1985. Paragraph 4 of the petition read :

It was noticed by the solicitor acting for the petitioning creditor that the date given for the expiration of the notice had been incorrectly inserted. An application was made to me on the 23rd of September 1985 to delete the word 'July' and substitute in place thereof the word 'June'. Although the application to amend the petition was made outside the three month period for the act of bankruptcy, I gave leave to the petitioning creditor to effect the amendment sought.

3. The solicitor acting for the petitioner, Mr Lam, submitted that I was right in ordering this amendment as the amendment related to a matter of form rather than to a matter of substance. Mr To, for the debtors, submitted that the amendment should not have been made. He invited me to dismiss the petition. Mr To placed reliance upon the authority of re Hastings, a bankrupt ⁽¹⁾ and the judgment of Mr Justice Jones in re NG CHO SHING⁽²⁾. He argued that an incorrect date had been given in the petition for the coming into effect of the act of bankruptcy. When his client had been served with the papers he would not have known which date was correct and accordingly the decisions in re Hastings and NG CHO SHING were relevant. The order that I had made for the amendment of the petition was ineffectual as it was outside the three month period for the act of bankruptcy. In effect a new act of bankruptcy was being relied upon.

4. Mr Lam submitted that this case could be distinguished from re Hastings and NG CHO SHING. As the original date of service of the notice on the debtor of the 30th of May 1985 was correct, it would have been possible for the debtor to calculate that the notice expired on the 7th of June and accordingly the defect was a defect of form rather than substance. He referred to in re Dunhill⁽³⁾ as authority for the proposition that where the date could be thus calculated, the defect was of form rather than substance. I am satisfied that Mr Lam is correct in his contention. This case can be distinguished from in re Hastings and NG CHO SHING as it is possible to calculate when the act of bankruptcy occurred. This being the case it was in order for me to grant the leave on the 23rd of September 1985 and by virtue of the amendment the papers were in order.

5. I did not make a receiving order against the debtor as a notice of opposition was filed on another ground. I adjourned the hearing of the petition to a further date in the future. The situation was similar in B414, 415 and 416.

6. I will deal next with the petition in Bankruptcy No. B448 of 1985. Here paragraph 4 of the petition reads :-

It is evident from the affirmation which was affirmed by the petitioning creditor's process server that he was unable to personally serve the debtor on the 28th of May 1985. Instead on that day he served the papers by posting them by pre-paid post to the last known address of the debtor. It will be appreciated that by virtue of the provisions contained in Order 10 rule 3 of the Rules of the Supreme Court which apply as the bankruptcy rules are silent on this point that 7 days must elapse from the posting of the process before the service is deemed to be effectual. This means that the debtor was not deemed to have been served with the bankruptcy notice until 7 days after the 28th of May. Therefore the notice only began running from the 4th of June onwards. Mr Alexander Wong, who was representing the petitioning creditor, sought leave to amend the petition by making it clear that the deemed date of service was the effective date. He argued that re Dunhill could save him in the same way as it had Mr Lam. I regret that I cannot agree with this. If the paragraph in the petition is taken at its face value unamended it is not possible for the debtor to calculate when the act of bankruptcy would have occurred. In my view the situation is indistinguishable from in re Hastings and NG CHO SHING. This being the case I declined to order the amendments sought by Mr Wong and having regard to the fact that the three month period for the act of bankruptcy has now expired I had no alternative but to dismiss the petition.

7. Finally I will consider the amendment sought in Bankruptcy 634 of 1985. Here for practical purposes the situation was similar to the position I have outlined in Bankruptcy No. 448 of 1985. There is however one important distinguishing feature. In this case the three month period for the act of bankruptcy has not yet expired. Although the petition is defective as it presently stands it is open to the petitioning creditor to apply for an amendment within the three month period. Mr Ip for the petitioning creditor sought to add the words 'by way of posting in an envelope with duly pre-paid postage' at the end of paragraph 4 of his petition. By adding these words, it would be possible for the debtor to calculate the period of the bankruptcy notice and thus rectify the defect in the petition. I gave appropriate leave to Mr Ip.

8. In these applications I was assisted by Mr Osborn and Mr Knos of the Official Receiver's Office. I would like to express my appreciation for the assistance they gave me in these cases. Mr Knos suggested that it would be helpful to lay down some guidelines for the legal profession on this subject. I agree that this is desirable. I do not though consider that it would be right for me to lay down any prescribed form of wording as no such form is required by the rules. I would however like to make it clear that whenever papers are served by post in accordance with Order 10 of the Rules practitioners would be well advised to make it abundantly clear when the bankruptcy notice runs from. It would seem to be wise to include a statement that the papers have been served by post and that the date when service is deemed to have been effected is included in the petition.

(1) [1985] 1 A.E.R. 885

(2) (unreported) Bankruptcy 82 of 85

(3) [1894] 2 Q.B. 234