RE HO YING PAT BOBBY

HCB1946/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

BANKRUPTCY PROCEEDINGS  NO. 1946 OF 2009

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J U D G M E N T

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1.     On 28 December 2009 I made a Bankruptcy Order.  On 31 December 2009 the judgment debtor issued a summons to stay the bankruptcy proceedings pending an appeal of my judgment.  The summons gives three grounds for the application for a stay:

(i)  The appeal stands a real prospect of success;

(ii) The judgment debtor is a solicitor and without a stay he will not be able to obtain a practising certificate;

(iii) That without a stay, the judgment debtor will not be able to continue High Court Action No. 1103 of 2009 against his former solicitors, Richards Butler.  Details of that action appear in my decision dated 28 December 2009.

2.     By virtue of section 6, subsection (7) of the Legal Practitioners' Ordinance, Cap. 159, a practising certificate will automatically terminate on the granting of a Bankruptcy Order.  The judgment debtor's practising certificate automatically terminated, therefore, on 28 December 2009.  A temporary stay of bankruptcy proceedings, which is what is sought in the present case, does not mean that the Bankruptcy Order becomes a nullity: see Chow Shun Yung HCB5334 of 2004 (unreported decision of Kwan J, 10 June 2005).  Therefore, even if a stay is granted to the judgment debtor, he would not be able to obtain a new practising certificate.

3.     As Kwan J explained in Chow Shun Yung and also her decision in David C Buxbaum HCB7637 of 2004 (unreported decision of 16 September 2005) the court does not grant general stays of bankruptcy proceedings pending an appeal.  It may, for example, grant a stay of steps in the proceedings such as the gazetting of a bankruptcy order.  Generally the court will not stay those parts of the bankruptcy process which protect the interests of creditors. 

4.      In this case I would not, as the application assumes, stay such part of the process (assuming it is possible) that would normally involve the Official Receiver as trustee in bankruptcy taking responsibility for the future progress of legal proceedings on behalf of a judgment debtor who has been adjudicated bankrupt.  I do not accept that the judgment debtor should be allowed to expend further money on the continuation of an extant action commenced by him pending an appeal except in exceptional circumstances and probably in circumstances where an indemnity has been obtained by a third party for any liability for costs which may attach to the judgment debtor's estate.

5.      It follows that the absence of a stay would not render the proposed appeal nugatory and that the suggested practical reasons for needing a stay in this particular case are, in my view, unfounded.

6.      Finally, I do not accept that the appeal has a real prospect of success.  For the most part, the grounds of appeal are a repetition of the arguments advanced before me which I have already found to be, in my view, ill-founded.

7.      I, therefore, refuse the application for a stay of the bankruptcy proceedings, on any terms pending the appeal.

(Submissions re costs)

8.      So far as costs are concerned, I make an order that the judgment creditor's costs are costs in the bankruptcy and I assess the Official Receiver's costs at HK$5,000 which should also be paid out of the assets of the bankrupt estate.