RE CHAO SING KUNG

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

IN BANKRUPTCY NO.B781 OF 1991

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J U D G M E N T

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1. This is a petition by the Kwangtung Provincial Bank for a receiving order based upon non-compliance with a bankruptcy notice founded upon a judgment for $19,628,600.61 given on the 3rd October 1991. The debt has since been reduced to about $18.5m. The bankruptcy notice was served personally on the debtor on the 29th November 1991.

2. The petition was presented on the 10th March 1992 and was fixed for hearing on the 8th April 1992 on which date the matter came before Master Beeson who adjourned the petition for call over before me on the 13th April 1992 when the petition was adjourned for argument until today.

3. However, two days before the petition came before Master Beeson, the 6th April 1992, Master Cannon made an order under 0.47, r.1 of the Rules of the Supreme Court in the action in which the judgment was obtained, staying the execution of a writ of fieri facias for a period of three months until the 6th July 1992 subject to review at the end of that period on condition that the debtor pay the judgment debt by monthly instalments of $3,000 commencing on the 1st May 1992 and for the delivery up to the petitioner's solicitors of some jewellery and shares. There has been some dispute with regard to the matter of delivery up, but it is of no material significance to today's application. There is no evidence to show that either the value of the jewellery or the shares would reduce the debtor's indebtedness by more than several thousand dollars.

4. Mr Kwok, counsel for the petitioner has drawn my attention to the powers of stay available under 0.45, r.1, 0.47, r.1 and 0.49, r.13 of the Rules of the Supreme Court and submitted that the order made by Master Cannon at the most amounts only to a limited stay and is therefore inapplicable to oust the jurisdiction of the Bankruptcy Court. In any event, he argued, that at the time the bankruptcy notice was served, no stay had been granted so that the stay granted by Master Cannon was ineffective.

5. Miss Eu, for the debtor, frankly conceded that the master's order does not oust the jurisdiction of the Bankruptcy Court and urged me to exercise my discretion to stay the petition or grant an adjournment until after the 6th July 1992. It is indeed clear that the jurisdiction of the Bankruptcy Court cannot be ousted by the stay granted by Master Cannon.

6. Accordingly, it is only necessary for me to decide as a matter of discretion, under s.9(2) of the Bankruptcy Ordinance as to whether a receiving order should be made. The debt is not in dispute whilst the debtor has committed an act of bankruptcy by her failure to comply with the terms of the bankruptcy notice. The stay granted by the master, if the conditions are fully complied with until the 6th July 1992, will not significantly reduce the amount of the debt. Indeed, I must say that the order made by the master was extraordinary.

7. Mr Murphy, on behalf of the Official Receiver, supports the making of a receiving order.

8. I am quite satisfied, in the exercise of my discretion, that a receiving order should be made in favour of the petitioner with the usual order as to costs.