RE WING MING GARMENT FACTORY, A FIRM

IN THE HIGH COURT OF HONG KONG

IN BANKRUPTCY

NO. B207 OF 1991

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J U D G M E M T

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1. This is a motion to rescind a receiving order made on the 19th June 1991.

2. The receiving order was made against Wing Ming Garment Factory, a firm (the debtor) on the grounds that there had been a failure by the debtor to comply with the requirements of a bankruptcy notice.

3. The bankruptcy notice was based upon an award made by the Labour Tribunal for $37,235 in favour of the petitioning creditor on the 27th February 1991.

4. Evidence adduced at the hearing of the petition revealed that the bankruptcy notice and the petition were served personally on CHAN Ming-hung (the applicant), a partner in the debtor firm on the 11th April 1991 and the 23rd May 1991 respectively.

5. Mr Lin, counsel for the applicant, informed me that the applicant had been served with the petition although the applicant had denied service in his affirmation in support of the motion. Mr Lin said that the applicant had not been served with the bankruptcy notice which was confirmed by the applicant in his affirmation.

6. The applicant attended the hearing of the petition when he informed the master that he had transferred the firm to someone else. The master explained to the applicant that the receiving order was made against the firm and not against him personally, and proceeded to make the receiving order. The master was no doubt referring to s.7(1)(b) of the Bankruptcy Ordinance which provides :-

"7.(1) The following provisions shall have effect in the case of a firm carrying on business in Hong Kong-

(b) it shall be sufficient that a receiving order against the firm be made in the firm name, without mentioning the names of the partners, and such receiving order shall affect the joint and separate property of all the partners;"

7. The Official Receiver in a report dated the 23rd January 1992 said that in the course of his investigations, the applicant produced a Deed of Transfer of the business by the applicant to Li Chiu Lun dated the 28th November 1990. The Deed provides that the purchaser shall be liable for the debts and liabilities of the firm with two exceptions which did not include the debt in these proceedings. The applicant denies liability for the debt on the grounds of the transfer of the business, but the Director of Legal Aid, on behalf of the petitioner, disputes this contention on the grounds that the applicant orally admitted liability at the hearing before the Labour Tribunal.

8. The present motion was filed on the 5th May 1992, and was fixed for hearing on the 22nd June 1992. In his affirmation, the applicant states that he was authorised by the transferee of the business to attend the hearing before the Labour Tribunal when he consented to judgment for the award, but alleged that Mr Li had agreed to be responsible for payment of the claim. The applicant also said that the first time he had knowledge of the bankruptcy proceedings was when he received a letter from the Official Receiver dated the 28th May 1991. He also denied, as I have said, that he had been served with either the bankruptcy notice or the petition.

9. When the motion came before me for hearing, Mr Lin sought an adjournment on the grounds that service had not been effected upon the Director of Legal Aid and for leave to file a supplemental affirmation to exhibit documents referred to in the affirmation of the applicant which had not been exhibited. The Official Receiver had been served with a copy of the motion, but not with the supporting affirmation. However, at the hearing both the Official Receiver and the Director of Legal Aid had been served with the necessary documents. Both Miss Woolley for the Official Receiver and Mr Chin for the Director of Legal Aid were ready to proceed but Mr Lin pursued his application for an adjournment. However, there were now no grounds as the failure to exhibit the documents referred to in the affirmation could have been cured by calling the applicant to give evidence.

10. As a result, in the absence of a valid reason to justify an adjournment, I acceded to the application of Miss Woolley and Mr Chin to dismiss the motion with costs.