PRACTICE DIRECTION - 3.1

BANKRUPTCY AND WINDING-UP PROCEEDINGS

Part I: Bankruptcy Proceedings

1.  Rule 49(9) of the Bankruptcy Rules

1.1  Rule 49(9) of the Bankruptcy Rules provides that the Court may decline to file the petition if it is not satisfied that the creditor has discharged his obligation in respect of the service of statutory demands imposed by Rule 46(2) of the Bankruptcy Rules. To give effect to this rule, a petitioning creditor shall observe the following practice directions relating to the service of statutory demands and the filing of bankruptcy petitions.

1.2  A bankruptcy petition based on the failure to comply with a statutory demand shall first be lodged with the High Court Registry together with (a) the affidavit(s) proving service of the statutory demand; and (b) a completed Checklist in the form of Appendix A attached hereto. The papers will then be passed to the Master in charge of the Bankruptcy and Winding-up List to consider whether service of the statutory demand has fully complied with Rules 46(2) and 49 of the Bankruptcy Rules. After perusing the papers, the Master may either allow or reject the filing of the petition concerned. In appropriate cases, the Master may specify the steps that need to be taken before filing is allowed.

1.3  In general, the solicitors lodging the petition will receive leave to file the petition or requisition(s) raised by the Master within 28 days. They may return to the High Court Registry or write to the Master in charge of the Bankruptcy and Winding-up List to ascertain the status of the application if they have not received leave or requisition(s) in respect of the application.

1.4  Where the statutory demand has been served personally on the debtor, the petition may be filed upon presentation without the necessity of referring the papers to the Master for consideration, provided that the petition when filed is accompanied by a certificate signed by the handling solicitor stating that the statutory demand has been served personally on the debtor. Practitioners are reminded that the filing of such certificate does not relieve the petitioning creditor of the obligation to file an affidavit of service by the person who effected that service, pursuant to Rule 49(3) of the Bankruptcy Rules. In such affidavit of service, the process server should state how he came to identify the debtor.

1.5  For a petition which is not based on failure to comply with a statutory demand, paragraphs 1.2 - 1.3 above do not apply. To avoid unnecessary confusion and delay, practitioners should endorse in the header of all petitions the grounds upon which the petitions are based.

1.6  Urgent applications for leave to file a petition may be made to the Master in charge of the Bankruptcy and Winding-up List. Applications that cannot wait until the said Master is available should be made to the Practice Master.

 

2.  Service of statutory demand

2.1  Rule 46(2) provides that “[t]he creditor shall do all that is reasonable for the purpose of bringing the statutory demand to the debtor's attention and, if practicable in the particular circumstances, to cause personal service of the demand to be effected.”. The steps set out in this paragraph would normally be regarded as compliance with his obligation under Rule 46(2):

(a)  If the debtor is represented by a solicitor, an attempt should be made to arrange an appointment for personal service through such solicitor. Rule 49(4) of the Bankruptcy Rules enables a solicitor to accept service of a statutory demand on behalf of his client; or

(b)  If the debtor has agreed with the creditor to use any electronic means (which include emails, WhatsApp, WeChat or other similar means of communications (“Electronic Means”)) to receive any documents relating to the debt the subject of the statutory demand, or the debtor has during the period of 12 months immediately preceding the date of the statutory demand used any of the Electronic Means to communicate with the creditor, and the creditor has sent the statutory demand to the debtor through the Electronic Means; or

(c)  The steps set out in paragraph 3.2 below.

2.2  Practitioners are reminded that a statutory demand is not a document issued by the Court. Leave to serve out of the jurisdiction and leave to effect service by way of substituted service are not, therefore, required. A creditor wishing to serve a statutory demand outside the jurisdiction in a foreign country may adopt the procedure prescribed by the Rules of the High Court in Order 11 Rule 6.

2.3  When a statutory demand is to be served outside the jurisdiction, the time limits of 21 and 18 days respectively referred to in the demand must be amended by adding 21 days to each of these time limits wherever they appear.

2.4  Advertisement can only be used as a means of substituted service of a statutory demand without first attempting personal service where the demand is based on a judgment or order of any Court and the requirements of Rule 46(3)(a) and (b) of the Bankruptcy Rules are met. The advertisement shall be made in a language which the debtor is expected to understand. As there is no statutory form of advertisement, the Court will normally accept an advertisement in the following form:

 

STATUTORY DEMAND

To (block letters)

of

TAKE NOTICE that a Statutory Demand has been issued by _____________ (name of creditor) __________________ of ___________________________________________ (address of creditor)

The creditor demands payment of $ _______________ the amount now due (on a Judgment / Order / Award of the _______________ Court / Tribunal dated the ________ day of ________________________). (Give the date when the debt was incurred and a description of the debt. If the creditor holds any security, the amount of the debt should be the sum the creditor is prepared to regard as unsecured for the purposes of the demand, giving brief details of the total debt, the nature of the security and the value put upon it by the creditor as at the date of the demand.)

The Statutory Demand is an important document and it is deemed to have been served on you on the date of the first appearance of this advertisement. You must deal with this demand within 21 days of the service upon you by paying the debt or reaching a settlement with the creditor or you could be made bankrupt and your property and goods taken away from you. If you consider you have grounds to set aside the Statutory Demand, you should apply to the Court within 18 days of the service upon you. If you are in any doubt as to your position, you should seek advice immediately from a solicitor.

The Statutory Demand can be obtained or is available for inspection and collection from:

Name

Address

(Solicitor for) the creditor

Tel No.     Reference

You have only 21 days from the date of the first appearance of this advertisement before the creditor may present a bankruptcy petition. You have only 18 days from that date within which to apply to the Court to set aside the demand.

(A corresponding Chinese translation should be given)

3.  Substituted service of petition

3.1  For the guidance of practitioners, the steps set out in the paragraph below are considered reasonable steps should be takenby a creditor in order to satisfy the Court that an order for substituted service of a petition should be made.

3.2  If, in any case, practitioners are of the view that some of the steps are not applicable or need not be followed having regard to the circumstances of the case, they should set out their reason(s) for such view in either written submissions or a supporting affidavit as is appropriate given the nature of the reason(s).

(a)  at least 2 personal calls should be made to all the debtor's addresses known to the petitioning creditor;

(b)  the calls should be made on weekdays and at reasonable hours. If the service is attempted at the residential address, it should be at such time of the day when the debtor is expected to be found there (usually before 7:30 a.m. or after 7:30 p.m.). If the service is attempted at the business address, it should be at such time of the day when the debtor is expected to be found there (usually between 9 a.m. and 6 p.m.);

(c)  each call should be made on a separate day. The calls should not be made in close succession and an appropriate interval should be allowed between them;

(d)  the second (or subsequent) call(s) should be made by appointment by letter ("the appointment letter") sent to the debtor by ordinary prepaid letter post, giving not less than 2 business days' notice, enclosing a copy of the statutory demand or petition to be served, and offering an opportunity of making a different appointment;

(e)  where the appointment is for service of a statutory demand (as described in §2.1(c) above, the appointment letter should state that if the debtor fails to keep the appointment, the creditor proposes to serve the debtor by post and by advertisement, and that in the event of a bankruptcy petition being presented, the Court will be asked to treat such service as service of the statutory demand on the debtor. Where the appointment is for service of a petition, the appointment letter should state that if the debtor fails to keep the appointment, the creditor will apply to the Court for an order for substituted service either by advertisement, or in such other manner as the Court may think fit;

(f)  upon keeping the appointment made by letter, and if the debtor to be served cannot be found, the process server should inquire whether the debtor has received the appointment letter and the debtor's whereabouts;

(g)  if the process server is informed that the debtor is away, inquiry should be made as to when he will return and whether letters are being or have been forwarded to another address;

(h)  the affidavit for the purposes of Rule 49(1) of the Bankruptcy Rules or in support of an application for leave for substituted service of the petition should also deal with the following matters:

(i)  all relevant facts as to the debtor's whereabouts;

(ii)  whether the appointment letter has been returned;

(iii)  whether the debtor was within the jurisdiction or believed to be so at the time when the attempts to effect service were made, giving the facts upon which the inference is founded for such belief;

(iv)  in the case of an application for leave for substituted service of the petition, whether the debtor to be served is within the jurisdiction or whether he is believed to be so at the time when the application is made, giving the facts upon which the inference is founded for such belief; and

(v)  in respect of a statutory demand, specify a date by which, to the best of the knowledge, information and belief of the deponent, the demand will have come to the debtor's attention; in respect of a petition, whether the substituted service proposed will probably come to the knowledge of the debtor;

(i)  if an application for the purpose of Rule 49(1) of the Bankruptcy Rules or for substituted service of the petition is based on an evasion of service of the statutory demand or the petition, the grounds for the statement that the debtor to be served is evading service must be given. In such a case, the efforts which have been made to find the debtor must also be stated.

3.3  Practitioners are reminded that the petition is required to be served not less than 7 clear days before the day fixed for the hearing of the petition pursuant to Order 9 Rule 4(2) of the Rules of the High Court. In the case of a petition served by ordinary post under an order for substituted service, the counting of 7 clear days shall commence on the second working day after it is posted pursuant to Practice Direction 19.2.

 

4.  Applications to Masters in bankruptcy proceedings

4.1  The following applications may be heard and determined by a Master in chambers under Rule 6(a) of the Bankruptcy Rules:

(a)  for leave to continue or commence proceedings against a debtor under Section 12(1) of the Bankruptcy Ordinance;

(b)  to dispense with a statement of affairs or to extend the time for submitting such statement under Section 18(3) of the Bankruptcy Ordinance;

(c)  for arrest of a debtor under Section 27(1) of the Bankruptcy Ordinance and for an order for release;

(d)  for the re-direction of debtors' mail under Section 28 of the Bankruptcy Ordinance;

(e)  for a certificate of automatic discharge from bankruptcy where the application is unopposed under Section 30A(1) of the Bankruptcy Ordinance and Rule 92 of the Bankruptcy Rules;

(f)  for production of documents by the Commissioner of Inland Revenue under Section 30D(1) of the Bankruptcy Ordinance;

(g)  to extend the time for the trustee to make a decision relating to a proof of debt under Section 34(7A) of the Bankruptcy Ordinance;

(h)  to approve the disposition of bankrupt's property under Section 42(1) of the Bankruptcy Ordinance;

(i)  to extend the time limit for notice under Section 43C(1) of the Bankruptcy Ordinance;

(j)  to include or exclude items from the bankrupt's estate under Section 43D(2) of the Bankruptcy Ordinance;

(k)  for income payments order under Section 43E of the Bankruptcy Ordinance and to vary and review such order under Rules 128B, 128D and 129 of the Bankruptcy Rules;

(l)  for an order to extend the bankrupt's occupation of family home under Section 43F(1) of the Bankruptcy Ordinance;

(m)  for extension of time for disclaimer of onerous property under Sections 59(1) and (4) of the Bankruptcy Ordinance;

(n)  for leave to disclaim a lease under Section 59(3) of the Bankruptcy Ordinance and Rule 130 of the Bankruptcy Rules;

(o)  for an order empowering the provisional trustee to deal with property under Section 60(3) of the Bankruptcy Ordinance;

(oa)  to bring, institute or defend any action or other legal proceeding relating to the property of the bankrupt under Section 61(b) or Section 61A of the Bankruptcy Ordinance;

(p)  for the appointment of a solicitor,counsel or agent, whether under Sections 61(c) and 61A of the Bankruptcy Ordinance or otherwise;

(q)  to allow or reduce an allowance to a bankrupt under Section 63 of the Bankruptcy Ordinance;

(r)  to approve the dealings relating to copyright work of a bankrupt's estate under Section 65 of the Bankruptcy Ordinance;

(ra)  to appoint a trustee or to fill a vacancy in the office of the trustee under Sections 81(3) and 82(2) of the Bankruptcy Ordinance;

(rb)  to appeal against any act or decision of a trustee under Section 83 of the Bankruptcy Ordinance;

(s)  to review the remuneration of the trustee under Section 85(3) of the Bankruptcy Ordinance;

(t)  to review the remuneration of the provisional or first trustee under Section 85A(2) of the Bankruptcy Ordinance;

(u)  to order payment of reimbursements to the provisional or first trustee under Section 85A(3) of the Bankruptcy Ordinance;

(v)  for the release of a trustee under Section 94 of the Bankruptcy Ordinance and Rule 169 of the Bankruptcy Rules;

(w)  for the appointment of a creditors' committee under Section 100E(1) of the Bankruptcy Ordinance;

(x)  for leave to commence and prosecute any action in the names of the trustee and of the bankrupt's partners under Section 107 of the Bankruptcy Ordinance;

(y)  for leave to disclose the names of the partners in proceedings in partnership name under Section 109 of the Bankruptcy Ordinance;

(z)  for summary administration and rescission of a summary administration order under Section 112A of the Bankruptcy Ordinance;

(aa)  to remit payment of any particular fee or fees due from any bankrupt under Section 114(2) of the Bankruptcy Ordinance.

(bb)  for service of the petition, order or summons on a debtor who cannot be found or is outside the jurisdiction under Rule 31 of the Bankruptcy Rules;

(cc)  for leave to file a petition under Rule 49(9) of the Bankruptcy Rules;

(dd)  for security for costs under Rule 55 of the Bankruptcy Rules;

(ee)  for substituted service of a petition under Rule 59(2) of the Bankruptcy Rules;

(ff)  to vary the dates relating to the submission of nominee's abstracts and reports under Rule 122Z(6) of the Bankruptcy Rules;

(gg)  to extend time for the nominee's notice of final completion of the voluntary arrangement and report under Rule 122ZC(4) of the Bankruptcy Rules;

(hh)  to dispense with the production of bills and notes under Rule 124 of the Bankruptcy Rules;

(ii)  to give directions to the Official Receiver where there are no available assets under Rule 158A of the Bankruptcy Rules;

(jj)  for disposal of books and papers under Rule 202 of the Bankruptcy Rules;

(kk)  for abridgement or enlargement of time appointed pursuant to the Bankruptcy Ordinance, the Bankruptcy Rules or fixed by any order of the Court for doing any act or taking any proceeding;

(ll)  to dispense with a public examination under Section 19A of the Bankruptcy Ordinance for cases in which bankruptcy proceedings were commenced before 1 April 1998;

(mm)  for adjudication under Section 22 of the Bankruptcy Ordinance for cases in which bankruptcy proceedings were commenced before 1 April 1998.

4.2  An application referred to in paragraph 4.1(oa) above shall be supported by an affidavit which must include the following information:

(a)  the specific proceeding(s) or intended proceeding(s) concerned;

(b)  the amount at stake or the amount which may be recovered for the benefit of the estate;

(c)  the estimated legal costs and the estimated disbursements (including counsel’s fees and experts’ fees) for defending or pursuing the proceeding(s) and the proposed cap for such costs;

(d)  the estimated time costs of the trustee (including his staff) in defending or pursuing the proceeding(s);

(e)  a comparison of the costs and benefits of the proposed proceeding(s) to be commenced, continued or defended;

4.3  An application referred to in paragraph 4.1(p) above shall be supported by an affidavit which must include the following information:

(a)  the matter(s) in relation to which the assistance of a solicitor, counsel or agent is sought;

(b)  whether any person (excluding the solicitor's staff) may be engaged and instructed by the solicitor or agent; and

(c)  in the case of appointment of solicitors or agents, the quoted fees of 3 firms of solicitors or agents in respect of the matter(s) and whether such fees included any discount(s) given, together with a brief justification for recommending the firm of solicitors or agent to be engaged.

 

5.  Corporate petitioners in bankruptcy proceedings

5.1  Many petitions in bankruptcy, purporting to be by corporations, are being presented without proper authority. Practitioners are therefore reminded that an officer of a corporation who lodges a bankruptcy petition on behalf of the corporation, or who swears an affidavit of truth of statements in a bankruptcy petition, must be duly authorized in writing under the seal of the corporation so to do. The body of the petition and the verifying affidavit must also recite the nature of the authority and that it was given under seal.

5.2  For a corporate petitioner which does not possess a corporate seal, the petition and the verifying affidavit should recite the fact that the company does not have a seal. The petition and verifying affidavit must also recite the nature of the authority by which the officer lodges the bankruptcy petition.

5.3  Forms 10, 10A, 10B, 10C and 11 of the Bankruptcy (Forms) Rules are, therefore, applicable only when appropriately amended. Suitable forms are to be found in the books of precedents.

 

6.  Proof of debt in bankruptcy proceedings

6.1  On the hearing of a petition for a bankruptcy order, the petitioner has to satisfy the Court that the debt on which the petition is founded has not been paid or secured or compounded. The Court will normally accept as sufficient a certificate signed by the person representing the petitioning creditor in the following form:

“I certify that I have / my firm has made inquiries of the petitioning creditor(s) within the last business day prior to the hearing / adjourned hearing and I am informed by (name and position of representative of petitioner) and verily believe that the debt on which the petition is founded is still due and owing and has not been paid or secured or compounded for (save as to)

Signed _______________ Dated_________________”

6.2  For the convenience of practitioners, this certificate can be submitted at the hearing. It should be filed after the hearing unless the Court treats the same as filed. A fresh certificate will be required at each adjourned hearing.

 

7.  Application for certificate of discharge of bankruptcy

7.1  Discharged bankrupts can apply to Court for a certificate of discharge pursuant to Rule 92 of the Bankruptcy Rules. Such kind of application should be made ex-parte to the Master in charge of the Bankruptcy and Winding-up List with an appropriate supporting affidavit together with a copy of the identity card of the bankrupt. A letter from the Official Receiver or the trustee indicating no objection to the issuance of the certificate should be exhibited to the supporting affidavit.

 

8.  Application to set aside statutory demands

8.1  A debtor who wishes to apply to set aside a statutory demand after the expiration of 18 days from the date of service of the statutory demand (where service is effected by advertisement in a newspaper, the period of 18 days is calculated from the date of the first appearance of the advertisement) must apply for an extension of time within which to apply.

8.2  Where an application to set aside a statutory demand is not dismissed by the Court under Rule 48(1) of the Bankruptcy Rules, the Court will give directions on paper on filing of evidence and leave to the parties to fix a date for the hearing of the application under Rule 48(3) of the Bankruptcy Rules (where appropriate).

Part II: Winding-Up Proceedings

9.  Applications to Masters in winding-up proceedings

9.1  The following applications may be heard and determined by a Master in chambers under Rule 6(a) of the Companies (Winding-up) Rules:

(a)  for leave to continue or commence proceedings against a company under Section 186 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (the “Ordinance”);

(b)  to extend the time for submission of the statement of affairs and/or supplementary affidavit under Section 190(3) of the Ordinance;

(c)  to rescind the order appointing a liquidator or special manager or to remove the liquidator or special manager, where the Official Receiver reports the failure to give or keep up the required security under Rules 48(1) or (2) of the Companies (Winding-up) Rules;

(d)  to determine the remuneration and disbursements of liquidators under Section 196(2) of the Ordinance;

(e)  to appoint a liquidator in place of a liquidator who has died, resigned or been removed, and to decide differences (if any) of the meetings summoned for the purpose of determining whether or not the vacancy should be filled, under Rule 45(7) of the Companies (Winding-up) Rules;

(f)  to bring or defend an action or legal proceedings under Item 1 of Part 2 of Schedule 25 of the Ordinance;

(g)  to employ a solicitor to assist the liquidator under Item 8 of Part 3 of Schedule 25 of the Ordinance;

(h)  for the release of a liquidator under Section 205 of the Ordinance and Rule 189 of the Companies (Winding-up) Rules;

(i)  to appoint a liquidator and a committee of inspection under Section 206 of the Ordinance and Rule 45 of the Companies (Winding-up) Rules;

(ia)  to vary the minimum or maximum number of members of a committee of inspection under Section 206(4) of the Ordinance;

(j)  to determine whether or not a vacancy occurring in the committee of inspection shall be filled under Section 207(7A) of the Ordinance;

(k)  to determine the remuneration and disbursements of special managers under Section 216(3) of the Ordinance;

(l)  for an order to inspect the books and papers of the company under Section 219 of the Ordinance;

(m)  to order the arrest of an absconding contributory or officer under Section 224 of the Ordinance and for an order for release;

(n)  for dissolution of a company by order of the Court under Section 227 of the Ordinance;

(o)  for a summary winding-up order and for rescission of a summary winding-up order under Section 227F of the Ordinance;

(oa)  to vary the minimum or maximum number of members of a committee of inspection under Section 243(1A) of the Ordinance;

(p)  to extend time for disclaiming onerous property under Section 268 of the Ordinance and Rule 63 of the Companies (Winding-up) Rules;

(q)  to determine the remuneration and disbursements of provisional liquidators under Section 193(5) of the Ordinance, Rule 28(3) of the Companies (Winding-up) Rules and/or under the inherent jurisdiction of the Court;

(qa)  to waive the requirements or extend the time limits under Rule 32(1)-(2) of the Companies (Winding-up) Rules;

(r)  to consider under Rule 42 of the Companies (Winding-up) Rules any default in complying with the requirements of Section 190 of the Ordinance relating to the submission of the statement of affairs and/or supplementary affidavit;

(s)  to dispense with the statement of affairs and/or supplementary affidavit under Rule 44 of the Companies (Winding-up) Rules;

(t)  to extend time for dealing with proofs under Rules 103 and 104 of the Companies (Winding-up) Rules;

(u)  to extend time for holding first meetings of creditors and contributories under Rule 106 of the Companies (Winding-up) Rules;

(v)  to determine whether or not the resignation of a liquidator shall be accepted and give such directions and make such orders as shall be necessary under Rules 154, 154A and 154B of the Companies (Winding-up) Rules;

(w)  for the disposal of books under Rules 167 and 190 of the Companies (Winding-up) Rules;

(x)  to extend time for sending liquidator’s statements under Rule 181 of the Companies (Winding-up) Rules;

(y)  under Rule 196 of the Companies (Winding-up) Rules to give directions to the Official Receiver where there are no available assets;

(z)  to give directions relating to gazetting of notices under Rule 202 of the Companies (Winding-up) Rules;

(aa)  for enlargement and abridgement of time under Rule 208 of the Companies (Winding-up) Rules;

(bb)  for the withdrawal of a petition which has not been advertised;

(cc)  [omitted];

(dd)  to determine applications under Items II, III and VII of Table B of Schedule 3 of the Companies (Fees and Percentages) Order;

(ee)  [omitted];

(ff)  to determine the remuneration and disbursements of receivers under Order 30 Rule 3 of the Rules of the High Court and / or inherent jurisdiction; and

(gg)  to defer the date of dissolution of a company under Sections 226A(2), 239(4) or 248(4) of the Ordinance.

9.2  Applications referred to in paragraph 9.1(f) above shall be supported by an affidavit which must include the following information:

(a)  the specific proceedings or intended proceedings concerned;

(b)  the amount at stake or the amount which may be recovered for the benefit of the estate;

(c)  the estimated legal costs and the estimated disbursements (including counsel’s fees and experts’ fees) for defending or pursuing the proceedings and the proposed cap for such costs;

(d)  the estimated time costs of the liquidators (including their staff) in defending or pursuing the proceedings; and

(e)  a comparison of the costs and benefits of the proposed proceedings to be commenced, continued or defended.

9.3  Applications under paragraph 9.1(g) above shall be supported by an affidavit which must include the following information:

(a)  the matter(s) in relation to which the assistance of a solicitor is sought;

(b)  whether any person (excluding the solicitor's staff) may be engaged and instructed by the solicitor or agent; and

(c)  the quoted fees of 3 firms of solicitors in respect of the matter(s) and whether such fees include any discounts given, together with a brief justification for recommending the firm of solicitors to be engaged.

 

10.  Advertisement of petition

10.1  For the avoidance of doubt, the reference to at least 2 Hong Kong daily newspapers for the advertisement of a petition under Rule 24 of the Companies (Winding-up) Rules should include publication once in English in an English language newspaper and once in Chinese in a Chinese language newspaper. The names and the particulars of the parties must be in the language of that newspaper pursuant to Practice Direction 24.1 unless the party / parties concerned only has / have either Chinese or English names and particulars.

10.2  For the avoidance of doubt, the reference to the day prior to the day appointed for the hearing of the petition under Rule 30 of the Companies (Winding-up) Rules should be read as a reference to the "working day" prior to the day appointed for the hearing of the petition.

 

11.  Application for certificate of compliance

11.1  Under Rule 29 of the Companies (Winding-up) Rules, the petitioning creditor has to obtain a certificate of compliance from the Registrar prior to the making of a winding-up order. In the case of a contested petition, the Master will not adjourn the petition to a judge for hearing in the absence of such a certificate.

11.2  The application for a certificate of compliance will be dealt with by the Master in charge of the Bankruptcy and Winding-up List on Mondays at 9:30 a.m., or at any time fixed by the Court if Monday is not available for hearing. Urgent applications for such a certificate shall be made to the same Master and if he is unavailable, to the Practice Master.

11.3  Practitioners are reminded that they should obtain the certificate of compliance without undue delay. Failure to obtain such a certificate within 3 months from the date of the petition, in the absence of any good reasons, may result in the dismissal of the petition.

 

12.  Service of the petition

12.1  Rule 25 of the Companies (Winding-up) Rules sets out the manner in which the petition should be served. Service should ordinarily be effected on business days and during normal working hours.

(a)  In respect of a Hong Kong company, the petition shall be served at its registered office in Hong Kong.

(b)  In respect of a “registered non-Hong Kong company”[1], the petition shall be served in Hong Kong on the authorized representative of the company or at the place of business established by the company (as the case may be) in Hong Kong in accordance with Section 803(1)-(4) of the Companies Ordinance.

(c)  In respect of a “non-Hong Kong company”[2] that has established a place of business in Hong Kong, the petition shall be served at the place of business. If the “non-Hong Kong company” no longer has a place of business in Hong Kong, the petition shall be served in accordance with Section 803(5)(b) of the Companies Ordinance.

(d)  In respect of an “unregistered company”[3] which has no  place of business in Hong Kong and is not registered under Section 777 of the Companies Ordinance, leave to serve the petition out of the jurisdiction must be obtained from the Court under the adapted Order 11 rule 1(1) of the Rules of the High Court. The applicant has to demonstrate a good arguable case that the 3 core requirements for the Court to exercise the jurisdiction under Section 327 of the Ordinance are met and that there is a serious issue to be tried on the merits[4].

12.2  The affidavit proving service of the petition should, so far as possible, identify the person with whom a copy of the petition has been left and state if known whether that person is a member, officer or servant of the company.

Part III: Bankruptcy and Winding-up Proceedings (other than Winding-up Petitions on “just and equitable” ground[5])

13.  Uncontested petitions in bankruptcy and winding-up proceedings

13.1  Where no notice of intention to appear has been served, or no notice to show cause has been filed, it will not be necessary for the petitioner or his representative to attend the hearing.

13.2  The judge or Master will on the hearing announce in open court that a winding-up or bankruptcy order is being made by him.

13.3  This direction is designed to save costs and time.  This Practice Direction, however, does not apply to a debtor's petition for self-bankruptcy.

 

14.  Monday hearings before the Companies Court

14.1  The first hearing of an opposed winding-up petition or bankruptcy petition adjourned by the Master shall, unless the Companies Judge otherwise directs, be listed for hearing in court on a Monday as follows:

(a)  Winding-up petitions will be listed at 9:30 a.m.;

(b)  Creditor’s bankruptcy petitions will be listed at 10:00 a.m.;

 

(c)  Non-commencement order in bankruptcy proceedings and self-bankruptcy petitions will be listed at 10:30 a.m.

14.2  If the Petitioner is represented and intends to seek a substantive order from the Court, the following directions shall be complied with:

(a)  The Petitioner shall lodge with the court, via
the e-Lodgement platform at https://e-services.judiciary.hk/elodge/hc/, skeleton arguments (not exceeding 10 pages) and a list of authorities (if any) and electronic bundles prepared in accordance with the requirements set out in Practice Direction 3.8, i.e. “Directions on Electronic Bundles and Skeleton Arguments”, by 10 a.m. on the Thursday before, and serve such documents on all persons who have filed notice of the intention to appear in the petition and the Official Receiver[6] by the same time;

(b)  The hearing bundles shall include (i) the petition, (ii) the substantive affidavits[7] filed by the parties unless the Respondent has raised an issue on the service of the petition, (iii) any essential exhibits which the parties consider relevant and will refer to at the hearing, and (iv) any summons issued by the parties;

(c)  The Respondent (if represented) shall lodge with the court, via the e-Lodgement platform, his skeleton arguments (not exceeding 8 pages) and list of authorities (if any) by 10 a.m. on Friday, and serve such documents on the Petitioner and the Official Receiver by the same time;

(d)  Failure to comply with the above time limits may result in an adjournment of the petition and the party in default may be ordered to pay the costs wasted (if any) to the other party irrespective of the merits of the petition; and

(e)  An unrepresented Petitioner shall lodge his skeleton arguments with the court, via e-Lodgement platform or in hard copies, within the time limits stipulated in §(a) and §(c) respectively, and serve such documents on the Respondent and the Official Receiver by the same time.

14.3  If the Petitioner is represented and intends to seek directions on the further conduct of the petition, the following directions shall be complied with:

(a)  The Petitioner shall lodge with the court, via the e-Lodgement platform, his skeleton arguments (not exceeding 3 pages) setting out the proposed directions and, if they go beyond the usual directions for filing evidence, the reasons for seeking such directions, together with a draft Order, by 10 a.m. on the Thursday before, and serve such documents on all persons who have filed notice of the intention to appear in the petition and the Official Receiver by the same time; and

(b)  The Respondent (if represented) shall lodge with the court his skeleton arguments (not exceeding 2 pages) setting out his response to the Petitioner’s proposed directions by 10 a.m. on Friday, and serve such documents on the Petitioner and the Official Receiver by the same time.

14.4  Where, after a winding-up petition has been advertised and / or gazetted, the parties reach agreement that the petition be dismissed or struck out, the petition shall be listed for hearing in court and the Court may dismiss or strike out the petition without the attendance of the parties provided that:

(a)  a consent summons signed by all parties (including all supporting and opposing creditors who have filed a notice of intention to appear in the petition)is lodged 2 clear days prior to the hearing; and

(b)  provision is made in such a summons for the costs of the Official Receiver.

14.5  Where the parties make a joint application to adjourn a winding-up petition and vacate the hearing, the application shall be made in the following manner:

(a)  the Petitioner shall lodge a consent summons together with a letter explaining the brief reason or justification for seeking the adjournment;

(b)  the consent summons must be signed by the Petitioner, the Respondent and all persons who have filed notices of intention to appear in the petition (or letters signed by such persons indicating their agreement to the proposed adjournment); and

(c)  the consent summons must be lodged with the clerk to the Companies Judge within the time limit for the Petitioner to lodge its e-bundles and skeleton arguments.

 

15.  Urgent applications

15.1  Any urgent application relating to a Bankruptcy and Winding-up List matter shall be made to the Companies Judge, not to the Duty Judge.  Reference should be made to Practice Direction 3.7and Part A(4) in Practice Direction 11.1, which relates to "Urgent Applications to the Companies Judge”.    

15.2  Only if such an application is so urgent that it cannot wait until the Companies Judge is available should such an application be made to the Duty Judge.

15.3  Any urgent application relating to a Bankruptcy and Winding-up List matter which is within the jurisdiction of a Master shall be made to the Master in charge of the Bankruptcy and Winding-up List, not to the Practice Master.

15.4  Only if such an application is so urgent that it cannot wait until the Master in charge of the Bankruptcy and Winding-up List is available should such an application be made to the Practice Master.

 

16.  Case management of a bankruptcy or winding-up petition presented by a creditor

16.1  The Respondent opposing the petition is expected to file his notice to show cause or affidavit in opposition in accordance with rule 68 of the Bankruptcy Rules and rule 32(1) of the Companies (Winding-up) Rules respectively. An application for an extension of time to file such notice or affidavit must be supported with good reasons and the Court would normally grant leave to the Respondent to file an affidavit out of time conditional upon payment into court of the petitioning debt or a part thereof.

16.2  The form and contents of an affidavit must comply with the requirements stipulated in Order 41 of the Rules of the High Court. The Respondent should outline in the affidavit the brief grounds of his opposition to the petition as well as the facts relied upon. It is inappropriate for a deponent to set out any legal arguments, opinions or submissions in his affidavit. Any non-compliance with the requirements may result in the affidavit or parts thereof being struck out by the Court with costs against the party in default.

16.3  In general, no discovery of documents or cross-examination of deponents will be ordered. If discovery or cross-examination is sought, good grounds must be shown to justify a departure from this practice.

16.4  No expert evidence (including expert evidence contained in or exhibited to an affidavit) should be filed without leave of the Court. If a party wishes to adduce any expert evidence, he must apply for leave to do so and identify (a) the specific issue or question which the expert is required to address; (b) the proposed expert by name and field; and (c) the proposed directions on filing such evidence. The Court may expunge any expert evidence filed without leave and penalize the party in default with costs.  

16.5  Where documents in Chinese are exhibited to an affidavit, the party exhibiting such documents should obtain an English translation of the documents considered essential to his case or that of the essential parts of such documents and obtain the agreement of the other party or submit the translation to the Court Language Section for certification within 28 days of the filing of the affidavit. Parties should seek directions from the Court if they consider it appropriate to dispense with the preparation of the English translation.

16.6  Interlocutory applications in the petition should be rare. The parties are, before filing an application, expected to consider whether it is necessary for the fair disposal of the petition. Where the application is contested or is listed for 30 minutes or more, Practice Direction 3.8 shall apply.

 

This Practice Direction supersedes the previous Practice Direction 3.1 on Bankruptcy and Winding-Up Proceedings dated 24 January 2017.

This Practice Direction shall take effect on 17 July 2023.

Dated this 30^th day of June 2023.

Appendix A

Ref No. ________/________

Application for Leave to File Petition

Checklist

(To be submitted when the application is lodged)

Instructions

1.   Please read rules 46 and 49 of Bankruptcy Rules (Cap. 6A) and Part I (paragraphs 1 and 2) of Practice Direction 3.1 before completing this Checklist.

2.   You MUST complete all sections by putting a tick (NOT a cross) in each of the boxes, unless otherwise stated.  

3.   If any part of this Checklist is not completed as aforesaid, please explain in details under Section J as to why it is so. Requisition will be raised if no or no satisfactory explanation is given. It may also delay the processing of the application. 

4.   *Please delete or adapt as appropriate.

5.   Abbreviations (if any) used in this Checklist are the same as those in Part I (paragraphs 1 and 2) of Practice Direction 3.1.