MARIA PUN SIU FUN v. THE OFFICIAL RECEIVER

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HEADNOTE

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                 Bankrupt aggrieved by the conduct of the Official Receiver in the administration of her estate. Circumstances in which the court can interfere to control actions of the trustee in bankruptcy.

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

Bankruptcy No. 251 of 1983

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In Bankruptcy

Re: Maria Pun Siu Fun

Between

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JUDGMENT

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1. A receiving order was made against Madam Maria Pun Siu Fun ("the applicant") on the 12th March 1984. The applicant was adjudicated bankrupt on the 1st May 1984 and the Official Receiver was appointed to be the trustee in bankruptcy.

2. By the present summons dated the 8th January, the applicant seeks the following relief :-

3. In her affirmation in support of the summons, the applicant states that she was of the view that her debts amounted in the region of some $700,000.00 which included a debt of $500,000.00 owed to Mr Poon Choi. However, in paragraph 5 of her affirmation, she later learnt from the Official Receiver that her debts amounted to about $1.2m. The applicant then deals with a bundle of correspondence between the Official receiver and her solicitors, herself and her husband, Mr Cheung Long Chung. Essentially, it amounts to a claim that the Official Receiver has failed to carry out his duties properly and with due diligence.

4. In particular, a complaint is made that a property in Macau of which property the applicant now claims to be the beneficial owner, although it appears that previously she only claimed to be the trustee for her father, was sold at an undervalue and had not pending the sale, been rented so claiming that it was a wasting asset. She also stated that her father has filed a proof of debt for over $500,000, but that he denies that this amount is owed to him by her.

5. Mr Murphy for the Official Receiver has filed an affidavit concerning the facts, but for the purposes of this decision it is unnecessary for me to deal with any of the matters that he has raised.

6. Miss Wong, counsel for the applicant, submits that the court has jurisdiction in this matter under either section 83 or section 97(1) of the Bankruptcy Ordinance which read as follows :-

I do not consider that the court has any jurisdiction under s.97(1) so that I turn to consider s.83.

7. Miss Wong submits that the bankrupt is aggrieved by the conduct of the Official Receiver in his administration of the estate for the reasons to which I have adverted and seeks an order to compel the Official Receiver to investigate the claims that have been made, in particular that of her father, and to make a determination upon them. She further contends that there may possibly be a surplus of assets available so as to entitle the bankrupt to make this application.

8. Mr Murphy drew my attention to the case of In re A Debtor Ex parte the Debtor v. Dodwell (The Trustee) [1949]1 Ch. 236 where a bankrupt had filed a motion in which he had complained about the trustee's administration and claimed relief under a number of heads. In particular, Mr Murphy referred to the judgment of Harman J. at page 240 where he had this to say :-

"This motion, ... raises a question of some importance in bankruptcy law, namely, to what extent, if any, can the bankrupt call the trustee in his bankruptcy to account for his management and disposition of the estate. The point, of course, can only arise where the bankrupt can show that there is, or will, or might (but for the trustee's action or inaction), be a surplus in the trustee's hands after satisfying in full all the claims of the creditors. Where, as in the vast majority of cases, the estate is insolvent, the bankrupt has clearly no interest in it, and it matters not to him how it is administered, but the bankrupt has a statutory right to any surplus under s.69 of the Act, and is, therefore, clearly concerned to increase, if he can, its amount."

Later, at p. 241, Harman J. went onto say :-

"It seems to me clear that there must be circumstances in which the court can interfere at the instance of a bankrupt to control the actions of the trustee : this is apparent from the terms of s.80 itself, and is confirmed by the all-embracing language of s.105. I need not, I think, attempt to define what these circumstances are.  They cannot, I think (in the absence of fraud) justify interference in the day-to-day administration of the estate, nor entitle the bankrupt to question the exercise by the trustee in good faith of his discretion, nor to hold him accountable for an error of judgment. Administration in bankruptcy would be impossible if the trustee must answer at every step to the bankrupt for the exercise of his powers and discretions in the management and realization of the property.

This case was applied in Leon v. York-O-Matic Ltd. and Others [1966]1 W.L.R. 1450.

9. Section 200(5) of the Companies Ordinance ,is very similar to s.83 of the Bankruptcy Ordinance and reads as follows :-

10. That subsection was considered by the Court of Appeal in Hong Kong in Eagle Queen Co. Ltd. and Another v. First Bangkok City Finance Ltd. [1989]2 HKLR 71 in which both the authorities cited today by Mr Murphy were referred to. In considering the subsection Hunter, J.A. had this to say at 74:-

11. In this case, there is no evidence of exceptional behaviour by the Official Receiver nor have there been any allegations of fraud or misconduct. Further, the Official Receiver has yet to adjudicate upon the proofs of debt so that no decision has yet been made that can be the subject of an appeal under the section. There are no other provisions in the Bankruptcy Ordinance that enable the applicant to obtain the relief claimed in the summons.

12. Accordingly, in all the circumstances, the application will be dismissed with costs to the Official Receiver.