IN RE TANG MAN SIT

HCB720/93

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT BANKRUPTCY NO.B720 OF 1993

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R E A S O N S

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1. This is an application by Madam Chan Lin Chi ("the Applicant") for an order annulling the Order made by Rogers J on 31 January 1996 ("the Administration Order") pursuant to section 112 of the Bankruptcy Ordinance.

Background

2. The Applicant is the widow of Tang Man Sit, Deceased, who died in Hong Kong on 16 December 1991. The Applicant is named as the sole executrix under the last will of the Deceased dated 14 December 1991.

3. On 22 October 1993, Capacious Investments Limited filed a creditor's petition for the administration of the estate of the Deceased debtor under section 112 of the Bankruptcy Ordinance. The petition was heard on 31 January 1996 and an order was made under section 112 ordering that the Deceased's estate be administered in bankruptcy and that the Official Receiver be appointed the trustee. On 11 June 1996, on the application of the Official Receiver, Desmond Chung Seng Chiong and John Robert Lees ("the Trustees") were appointed joint and several trustees of the estate of the Deceased.

4. The situation has now been reached that all known debts of the Deceased have been paid in full through the joint efforts of the Applicant and her family. The Applicant has also reached agreement with the trustees relating to their fees and disbursements. In these circumstances, the Applicant seeks the annulment of the order for administration in bankruptcy made against the Deceased's estate.

Jurisdiction

5. Counsel for the Applicant pointed out that there is no provision for the annulment of a section 112 order as in the case of a bankruptcy order.

6. Where a bankruptcy order has been made against a living person, it may come to an end, inter alia, if the bankruptcy order were annulled by the court in exercise of the powers contained in section 33 of Cap.6. But an application under that section must be coupled with an application under section 98(1) "inviting the court to 'rescind' the receiving order and to dismiss the petition, neither of which effects would otherwise occur by virtue of the annulment of the adjudication alone". See Fletcher on the Law of Bankruptcy 1978 Ed. at p.91. Sections 29 and 108(1) of the 1914 Act referred to in Fletcher mirror sections 33 and 98(1) of Cap.6.

7. Although the effect of an order under section 112 is equivalent to an adjudication of bankruptcy in the case of a living debtor, there are certain differences which is unnecessary to go into for present purposes. The topic is discussed in detail in Fletcher (op.cit.) at pages 353-360.

8. An order made under section 112 whilst akin to, is different from, a bankruptcy order : it is an order for administration. This is the only order that is made unlike the case with a living debtor which would involve the making of a receiving order as well as a bankruptcy order.

9. Section 98 of Cap.6 reads as follows :

"(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."

This section confers very wide jurisdiction on the court. As noted above, it is invoked to rescind a receiving order when a bankruptcy order is annulled. In the case of an order under section 112, this power may similarly be exercised to rescind the administration order. I do not see that an administration order has to be annulled since it is not a bankruptcy order. An order for rescission would have the same effect and achieve the desired purpose.

10. In view of this conclusion, there is no need for the court to consider Mr Yuen's alternative argument based on the court's inherent jurisdiction.

11. The power contained in section 98(1) is of course discretionary. On the facts of the present case, I have no hesitation in concluding that there is every reason that the court should exercise its powers to rescind the administration order and I so order.

12. A draft minute of order should be lodged for approval.

(Doreen Le Pichon)

Judge of the Court of First Instance
High Court