V Capital Limited v. Margaret Chiu

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FACV No. 5 of 2024

[2024] HKCFA 31

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FINAL APPEAL NO. 5 OF 2024 (CIVIL)

(ON APPEAL FROM CACV NO. 497 OF 2021)

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J U D G M E N T

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Chief Justice Cheung:

1.I agree with the judgment of Mr Justice Fok PJ.

Mr Justice Ribeiro PJ:

2.I agree with the judgment of Mr Justice Fok PJ.

Mr Justice Fok PJ:

3.The question of law raised in this appeal concerns the jurisdiction of a Master to order imprisonment, under O.49B r.1B(1)(c) of the Rules of the High Court,[1] of a judgment debtor who has been adjudicated bankrupt, absent leave having been sought and obtained under s.12 of the Bankruptcy Ordinance.[2] The Court of Appeal held that such leave was required and set aside the order for imprisonment that had been made by the Master in this case.

A.  The background

4.By a consent judgment dated 24 September 2018, the respondent (“the Debtor”) was ordered to pay US$5,127,168.23 and interest to the appellant (“the Creditor”).

5.On 20 November 2018, the Creditor obtained an order for the oral examination of the Debtor under O.49B r.1A. At the first hearing of the examination, on 24 December 2018, the Master ordered the Debtor to supply to the Creditor copies of various classes of documents relating to her assets and liabilities and to produce them at the adjourned hearing of the examination.

6.The Debtor provided copies of some documents to the Creditor. However, believing the Debtor had not fully complied with the disclosure order, the Creditor issued a summons to enforce that order. On 15 April 2019, a Master ordered the Debtor to comply with the disclosure order within 7 days and to file an affirmation confirming full compliance with the disclosure order within 7 days thereafter. No further documents were produced and, on 25 April 2019, the Debtor deposed that she had fully complied with the disclosure order.

7.The adjourned oral examination then took place on 3 June 2019 before Master Lai. During the Debtor’s cross-examination, it became apparent that, contrary to her assertion, she had failed to comply fully with the disclosure order and that she had in fact failed to disclose a number of categories of documents including bank documents, accounts of her companies, documents concerning loans obtained under mortgages of properties owned by a company owned or controlled by her, and related loan documents. The Creditor indicated to the Master that it intended to apply for an order of imprisonment of the Debtor under O.49B r.1B.

8.Before that application was heard, the Debtor was adjudicated bankrupt on the petition of the Creditor in HCB 7106/2018 on 22 April 2020.[3]

9.The application for an order for imprisonment was heard by Master Lai on 15 March 2021. That application was initially pursued on the basis of all three grounds under O.49B r.1B(1) (see below) but, by the time of the hearing, the Creditor relied only on the ground in r.1B(1)(c), namely wilful failure to make full disclosure as required under O.49B r.1A(2). Leave of the court to proceed with the application had not been sought under BO s.12 (see below).

10.In his Decision dated 27 October 2021,[4] Master Lai found that the Creditor had proved beyond reasonable doubt that the Debtor had wilfully failed to make full disclosure as required. In the exercise of his discretion, the Master made an order for imprisonment of the Debtor for a period of one month. The order materially provided:

“Following examination of the Judgment Debtor under Order 49B rule 1A and upon the Court being satisfied as required by Order 49B rule 1B:

It is ordered that the bailiff do take the Judgment Debtor … and deliver her into the custody of Commissioner of Correctional Services to be kept in prison as a prisoner for debt for a period of one month unless she shall be sooner discharged in due course of law.

The Court has fixed the support and maintenance allowance at the rate of $725 a day.”

11.On 27 October 2021, Master Man stayed the execution of the order for imprisonment pending the Debtor’s intended appeal against that order.

12.The Debtor appealed to the Court of Appeal. The main ground of appeal (Ground 2) concerned Master Lai’s jurisdiction to make an order for the imprisonment of the Debtor under O.49B r.1B(1) after she had been adjudicated bankrupt. The Court of Appeal concluded that the application for an order for imprisonment was one which, by reason of BO s.12, the Creditor could not make without the leave of the court.[5] The Court of Appeal refused to exercise any power it might have to grant retrospective leave to the Creditor to apply for the order of imprisonment or to direct that such leave be sought from the Bankruptcy Court.[6]

13.The other ground of appeal (Ground 1) concerned a complaint that the Master had focused on the wrong facts when considering the question of whether the Debtor had wilfully failed to make full disclosure at the examination. The Court of Appeal rejected this ground[7] which need not be considered further.

14.On the basis of its conclusion on Ground 2, the Court of Appeal allowed the Debtor’s appeal and set aside the order for imprisonment.

15.On the Creditor’s application, the Court of Appeal granted leave to appeal to the Court of Final Appeal on the question of whether a Master has jurisdiction under O.49B r.1B(1)(c) to order imprisonment of a bankrupt judgment debtor for wilfully failing to make full disclosure as required under O.49B r.1A(2) in the absence of leave to proceed under BO s.12. The Court of Appeal refused leave to appeal on a further question as to the circumstances in which, assuming leave is required, retrospective leave should be granted.[8]

B.  The imprisonment of civil debtors

16.The High Court’s jurisdiction to order the arrest or imprisonment of a person in respect of a civil claim for the payment of money is conferred by s.21A of the High Court Ordinance (Cap.4) (“HCO”). That section was introduced by the Debtors (Arrest and Imprisonment) Ordinance 1984,[9] which amended the law relating to the arrest and imprisonment of debtors. Prior to this amendment, a debtor could be subject to imprisonment for failure to pay a debt upon the mere application of a judgment creditor without court order. This was controversial and, by the 1984 Ordinance, the law was reformed.

17.Materially, s.21A(1) of the HCO now provides that “a person shall not be arrested or imprisoned to enforce, secure or pursue a civil claim for the payment of money or damages except under an order of Court” and that jurisdiction to make such an order is limited to “arrest or imprisonment only to enforce, secure or pursue a judgment for the payment of a specified sum of money.” Such an order for imprisonment may not exceed three months (s.21A(2)) and the Court may impose conditions including “that the judgment debtor be released on the payment of the judgment debt and costs” (s.21A(4)).

18.The provisions of HCO s.21A are given effect to in the RHC under the procedure governed generally by RHC O.49B which is headed “Execution and Enforcement of Judgment for Money by Imprisonment”.

19.O.49B r.1 is headed “Securing attendance at examination” and r.1(1) provides that, where a judgment for the payment of a specified sum is unsatisfied, the Court may order that the judgment debtor be examined. It also empowers the Court to order the judgment debtor to appear (sub-para. (a)) or, if necessary, to order his arrest to secure his attendance (sub-para. (b)).

20.The procedure for the examination itself is governed by the provisions of O.49B r.1A which states:

“(1) Upon appearance of the judgment debtor for examination, he shall give evidence and he may be examined on oath by the judgment creditor and the Court; and the Court may receive such other evidence as it thinks fit.

(2) The judgment debtor shall, at his examination, make a full disclosure of all his assets, liabilities, income and expenditure and of the disposal of any assets or income and shall, subject to the directions of the Court, answer all questions put to him.

…”

21.The powers of the Court following an examination are provided for in O.49B r.1B and include the power of imprisonment for a period not exceeding three months. In the present case, following the Debtor’s examination, the Creditor sought an order for imprisonment of the Debtor pursuant to O.49B r.1B(1), which provides:

“Where the Court is satisfied, following the examination conducted under rule 1A or following an examination conducted under Order 48, that the judgment debtor –

(a) is able to satisfy the judgment, wholly or partly; or

(b) has disposed of assets with a view to avoiding satisfaction of the judgment or the liability which is the subject of the judgment, wholly or partly; or

(c) has wilfully failed to make a full disclosure as required under rule 1A(2) or at the examination under Order 48 or to answer any question as provided under that rule or Order,

it may, in its discretion, order the imprisonment of the judgment debtor for a period not exceeding 3 months.”

22.As noted above, the Creditor initially relied on all three limbs of r.1B(1) as the basis of an order for imprisonment. However, by the time of the hearing on 15 March 2021, the Creditor relied only on r.1B(1)(c), namely wilful failure to make full disclosure as required under r.1A(2) and this was the basis on which the Master made the order for imprisonment.

23.An order for imprisonment under O.49B does not satisfy or extinguish any judgment debt (O.49B r.1C).

24.O.49B r.2 provides for the payment to the Commissioner of Correctional Services of a support and maintenance allowance for the judgment debtor when he is committed to prison. This allowance, the amount of which must be specified in the order for imprisonment,[10] is to be paid by the person at whose instance the judgment has been executed.

25.O.49B r.4 concerns the release of a prisoner for debt and provides that “[e]very person arrested or imprisoned in execution of a judgment shall be released at any time on the judgment being fully satisfied or at the request of the person at whose instance the judgment has been executed, or on such person omitting to pay his support and maintenance money”.

26.Subject to an exception not relevant to this case, O.49B r.7 provides that “when any person imprisoned in execution of a judgment debt has been once discharged he shall not again be imprisoned on account of the same judgment”.

C.  BO s.12

27.The provision relevant to the ground of appeal on which the Court of Appeal allowed the Debtor’s appeal against the Master’s order for imprisonment is s.12(1) of the BO, which reads:

“On the making of a bankruptcy order, the Official Receiver shall thereby become the provisional trustee of the property of the bankrupt, and thereafter, except as directed by this Ordinance, no creditor to whom the bankrupt is indebted in respect of any debt provable in bankruptcy shall have any remedy against the property or person of the bankrupt in respect of the debt, nor shall proceed with or commence any action or other legal proceedings, unless with the leave of the court and on such terms as the court may impose.”

28.In the present case, the judgment debt is an unsecured debt provable by the Creditor in the bankruptcy of the debtor. Upon the making of a bankruptcy order, the bankrupt’s property vests in the Official Receiver[11] and any rights of action against the bankrupt are restricted and regulated by the BO, including s.12. As will be seen, BO s.12 is not a complete bar to the bringing of all proceedings against a bankrupt but, where a bankrupt is indebted to a creditor in respect of a debt provable in bankruptcy, the creditor cannot pursue any remedy against the property or person of the bankrupt, or commence an action or other legal proceeding against him, without the leave of the court.[12]

29.The question of law for which leave to appeal was granted asks whether the Court of Appeal was correct to hold that an order for imprisonment by the Creditor against the Debtor on the basis of O.49B r.1B(1)(c) falls within the meaning of (1) “any remedy against the property or person of the bankrupt in respect of the debt”[13] or (2) “other legal proceedings”[14] in s.12(1) of the BO.

30.The answer to this question is to be arrived at as a matter of construction, applying the well-established approach to statutory interpretation which “looks to the text of the provision to be construed, its context, including the statue of which it is part and its legislative history, and its purpose”.[15]

31.BO s.12 does not bar all proceedings against a bankrupt. That is plain as a matter of language from its text, since it applies to a “creditor to whom the bankrupt is indebted in respect of any debt provable in bankruptcy” and provides that, without leave of the court, no such creditor “shall have any remedy against the property or person of the bankrupt in respect of the debt” (emphasis added) or “proceed with or commence any action or other legal proceedings”. The restriction on remedies by a creditor against the property or person of the bankrupt must be “in respect of the debt”, being one provable in bankruptcy, and it is in that regard that there is a prohibition on proceeding with or commencing “any action or other legal proceedings”.[16]

32.The words “in respect of” are broad and convey a wide connection or relation between subject matters but they must take their meaning from their context.[17] BO s.12 is headed “Effect of bankruptcy order” and it is therefore relevant to consider the nature and objectives of the bankruptcy regime as part of the context of that provision.

33.It is well-established that the bankruptcy regime serves various purposes, including: (1) to protect the debtor from his creditors by affording the debtor an opportunity to become discharged from his debts; (2) to protect the creditors by providing mechanisms for investigating the affairs of the debtor to avoid the latter hiding his assets, escaping the jurisdiction of the court or fraudulently preferring particular creditors; and (3) to protect the creditors from each other by preventing any particular creditor stealing a march over the others by proceeding independently against the bankrupt instead of sharing proportionately (pari passu) in the realisable assets of the bankrupt.[18]

34.In this regard, the Court of Appeal cited[19] Millett J (as Lord Millett then was) in Re International Tin Council where he stated that “[t]he great object of insolvency law, whether individual or corporate, is to protect the debtor from harassment by the creditors, and the assets from piecemeal realisation and unequal distribution as the creditors scramble for them”.[20] Millett J added that the purpose of a petition was “to obtain an order which will preclude the creditors from enforcing any judgments or awards which they may have obtained, and substitute the right to participate in a pari passu distribution out of an insufficient fund in full satisfaction of their claims”.[21]

35.Specifically as regards the context and purpose of BO s.12, the Court of Appeal cited Smith (a Bankrupt) v Braintree District Council, which concerned the modern English equivalent of BO s.12(1) and 14(1),[22] namely s.285(1)[23] and (3) [24] of the Insolvency Act 1986. That case concerned an application by a local council for a committal warrant against a bankrupt ratepayer for non-payment of rates. The House of Lords had to decide if the proceedings for committal were within s.285(1) of the Insolvency Act 1986 so that the registrar had jurisdiction to stay them.

36.Lord Jauncey of Tullichettle (who gave the main speech with which the other Law Lords concurred) said,[25] as regards the purpose and context of s.285, that:

“… The purpose of section 285 is to protect the estate for the whole body of creditors and to prevent unsecured creditors, after the initiation of bankruptcy proceedings, from taking steps by putting pressure on the debtor to obtain advantages over other creditors. It is matter of agreement that it does not apply to proceedings which are purely criminal, but the council goes further and submits that it does not apply to proceedings which are quasi-criminal or punitive. What then is the nature of the proceedings under sections 102 and 103 of the Act of 1967? … If between the time when the term of imprisonment is fixed and the time when the warrant falls to be issued the ratepayer pays the whole of the sum due, the warrant will not be issued, and if he pays part of that sum the period of imprisonment in the warrant will be rateably reduced. Furthermore if, after imprisonment has begun, the ratepayer pays the whole of the sum specified in the warrant, he will be released. Two matters emerge from the consideration of the foregoing sections, namely: (1) that the issue of a warrant cannot be viewed in isolation but must be considered as part of the whole procedure for recovery of unpaid rates by way of distress, and (2) that although there may be a punitive element present in the power to issue a warrant of commitment, the predominant purpose thereof is to coerce the defaulting ratepayer into making payment. Why would the magistrates' court be empowered under section 102(1)(b), having fixed a term of imprisonment, to postpone the issue of a warrant if not to put pressure on the defaulter to pay?

My Lords, the words ‘or other legal process’ must be construed in the context of the underlying purpose of section 285, namely, the protection of the bankrupt's estate for all his creditors. It follows that proceedings by one creditor to enforce payment to himself are the sort of proceedings contemplated by the section. It cannot be in doubt that the issue of a warrant of distress would fall within the description ‘or other legal process.’ It would be both strange and illogical if the bankruptcy court could stay such proceedings but had no power to stay the next stage of the proceedings when distress had not been wholly successful. In my view, as a matter of pure construction, the words ‘or other legal process’ in section 285(1) are quite wide enough to comprehend all the machinery provided by Part VI of the Act of 1967 for the recovery of unpaid rates, including proceedings for the issue of a warrant of commitment.”

D.  Is an order for imprisonment under O.49B r.1B(1)(c) subject to BO s.12?

37.The above remarks of Lord Jauncey of Tullichettle concerning the approach to construing s.285 of the Insolvency Act 1986 are directly relevant to the interpretation of BO s.12. Thus, in the same way the House of Lords had to consider the nature of the proceedings under ss.102 and 103 of the General Rate Act 1967 (under which the relevant committal warrant had been obtained), so too it is necessary in the present case to consider the nature of the proceedings under O.49B r.1B(1)(c) which formed the basis of the order for imprisonment.

38.As set out in Section B above, O.49B sets out the procedure for execution and enforcement of a judgment for money by imprisonment. The various stages of this process include examination (O.49B rr.1 and 1A), following which the Court has power to make various orders including an order for imprisonment (O.49B r.1B(1)). An order for imprisonment does not satisfy or extinguish any judgment debt (O.49B r.1C) but, instead, the debtor may secure his release from arrest or imprisonment upon the judgment debt being satisfied (O.49B r.4). This latter provision for release is reflected in the form of order for imprisonment itself (Appendix A Form 104) which imposes a term of imprisonment for a period “unless he [i.e. the debtor] shall be sooner discharged in due course of law”. This incentive constitutes a powerful coercive element of the order for imprisonment even if based on O.49B r.1B(1)(c). Similarly, once so imprisoned, O.49B r.7 provides an immunity against further imprisonment for the same judgment debt.

39.Although an order for imprisonment on the basis of wilful failure to disclose under O.49B r.1B(1)(c) involves a punitive element for breach of a requirement under a court rule, it is independent of and distinguishable from the committal procedure for contempt of court under RHC O.52 (for which leave under BO s.12 is not required).[26] There is a distinction between an order for imprisonment sought by a judgment creditor in aid of execution, on the one hand, and an order for committal made by the court because it thinks this necessary in order to enforce its orders or undertakings given to it, on the other.[27] The focus of O.49B r.1B imprisonment being primarily on execution and enforcement of a judgment debt is underscored by the executing creditor’s obligation to support and maintain the prisoner in O.49B r.2 and the provision for release in O.49B r.4.

40.The whole process under O.49B is accordingly properly characterised as being in the nature of execution and enforcement of the judgment debt. In the particular context of a bankrupt, imprisonment under O.49B r.1B(1)(c) for wilful failure to disclose could interfere with the bankruptcy process because it would involve a creditor pursuing a bankrupt debtor independently of the administration of his bankruptcy to the prejudice of the debtor and it might also prejudice the pari passu principle to the prejudice of other creditors.

41.Construing O.49B r.1B(1)(c) contextually and purposively, therefore, strongly supports the conclusions of the Court of Appeal that an order for imprisonment under that sub-rule is a “remedy against the … person of the bankrupt in respect of the debt” and is also within the meaning of “other legal proceedings” in respect of the debt in BO s.12. Seeking an order for imprisonment of a judgment debtor is plainly a step taken (involving as it does costs and ongoing expenses) by a judgment creditor against the debtor in the hope that it will result in recovery of some or all of the judgment debt. A creditor is entitled to avail himself of all rights and remedies under the law to enforce payment of a judgment debt[28] and, in practice, invocation of the procedures under O.49B is self-evidently for that purpose.

42.In this appeal, the Creditor appellant contends to the contrary that an order for imprisonment under O.49B r.1B(1)(c) is not to be regarded as a step in execution and enforcement of the judgment debt or coercive of its payment. Rather, it is the appellant’s case that the examination hearing is an information gathering process which could benefit the general body of unsecured creditors and that imprisonment under O.49B r.1B(1)(c) is to ensure full disclosure and serves the same purpose. The appellant contends that imprisonment under O.49B r.1B(1)(c), unlike r.1B(1)(a) or (b), does not concern a debtor’s ability to pay the judgment debt and is simply punitive for breach of the order to make disclosure.

43.This argument requires the three sub-paragraphs of O.49B r.1B(1) to be construed as having entirely distinct purposes, with O.49B r.1B(1)(c) being confined to being an aid to discovery rather than execution and enforcement. However, whilst the three sub-paragraphs are separate bases for the imposition of a term of imprisonment, in my view they are all properly to be regarded as concerned with execution and enforcement of a judgment debt. In this regard, an order for disclosure under O.49B r.1A(2) being “by way of discovery”[29] is self-evidently in furtherance of execution, since a creditor will seek such disclosure of documents in the hope of identifying realisable assets. As the Appeal Committee of this Court has observed, a finding that a debtor has wilfully failed make disclosure under O.49B r.1B(1)(c) “no doubt implicitly carries a belief that assets exist of which full disclosure has not been made”.[30] And if the coercive nature of an order for imprisonment under O.49B r.1B(1)(c) results in the discovery of assets previously concealed or an offer of financial assistance from the debtor’s family or friends or some other third party, it may lead to the satisfaction in whole or in part of the judgment debt. At the very least, it will have intruded on the bankruptcy process under which the debtor would expect not to be subjected, unless with the leave of the court, to separate pressure from one individual creditor.

44.The appellant asserts further that imprisonment under O.49B r.1B(1)(c) cannot serve the purpose of coercing payment of a particular judgment debt because any asset disclosed during the examination could not be used to satisfy a particular judgment debt when the debtor is bankrupt. Doing so would, it is contended, offend the principle of pari passu distribution to all of the debtor’s creditors. Further, if an order for imprisonment under O.49B r.1B(1)(c) has the purpose of coercing payment of a particular judgment debt, then the leave requirement under BO s.12 would be otiose since the pari passu principle would always be offended.

45.The flaw in this argument is that it conflates the procedure under O.49B with that under BO s.12. There are plainly cases in which O.49B will be invoked which do not concern debtors who are bankrupt. Construed purposively and in context, O.49B r.1B(1)(c) is properly to be regarded as a constituent component of an overall process of execution and enforcement. The fact that BO s.12 adds a further requirement of leave before a particular step in that execution and enforcement process can be taken in a bankruptcy does not alter the fact that pursuit of an order for imprisonment for wilful failure to disclose is part of that process. Equally, the converse argument that O.49B already imposes an exercise of discretion by a Master before ordering the examination or imprisonment of a judgment debtor does not render redundant the requirement of leave under BO s.12 since the exercise of discretion to grant leave to proceed under the latter section depends on different factors.

46.Nor can it be assumed, as the appellant’s argument seems to do, that the grant of leave under BO s.12 and the subsequent pursuit of an order for imprisonment under O.49B r.1B(1)(c) will necessarily offend the principle of pari passu distribution. Proceeding with an examination under O.49B r.1A in respect of a bankrupt debtor may result in the trustee in bankruptcy recovering assets which will be available for the whole body of creditors including the particular judgment creditor invoking O.49B.[31] Similarly, if there are no other creditors of a bankrupt debtor, the grant of leave under s.12 will not risk offending the principle of pari passu distribution. But nor will it change the nature of the O.49B examination, disclosure and imprisonment processes as each being discrete but connected components of a continuing process of execution and enforcement.[32]

47.In any event, the appellant’s argument, that only proceedings aimed to coerce payment from a debtor in favour of a creditor to the prejudice of other creditors are caught by BO s.12 whereas those which do not concern the bankrupt’s estate or prejudice pari passu distribution are not, takes an unduly narrow view that the focus of s.12 is only to protect the pari passu distribution of the bankrupt’s realisable assets. That is not the case. The various purposes of the bankruptcy regime are referred to in Section C above. Protection of the debtor from harassment by individual creditors is a further purpose of the regime separate to and distinct from the protection of creditors by ensuring pari passu distribution. Seeking the imprisonment of a debtor under O.49B r.1B(1)(c) arising out of an examination in respect of a judgment debt is clearly capable of infringing this protection of the debtor.

48.The appellant referred the Court to the recently reported decision of the Court of Appeal in Dadra Inc v Chan Choi Har Ivy.[33] There, a debtor had been ordered to attend court for an oral examination under O.49B r.1A. Before that was completed a bankruptcy order was made against the debtor. The creditor was then granted leave by a Master under BO s.12 to proceed with the oral examination notwithstanding the bankruptcy order. On the resumed examination, the debtor was ordered to be imprisoned under O.49B r.1B(1)(c) for wilful failure to make full disclosure.

49.The Court of Appeal dismissed the debtor’s appeal against the imprisonment order. It held that the imprisonment order was properly made since it was a continuation of the process begun by the application for examination, for which examination leave to proceed had been granted under BO s.12, and leave was not separately required for the order for imprisonment.

50.The appellant contends that Dadra was wrongly decided insofar as it suggests that leave under BO s.12 was required to proceed with the oral examination under O.49B r.1A. This, it was contended, is contrary to cases concerned with Part 71 of the Civil Procedure Rules 1998 in England and Wales (“CPR”). Under Part 71, the court may make orders to obtain information from judgment debtors and, upon failure to comply with an order, the matter may be referred to a High Court Judge who may hold the person concerned in contempt and punish him accordingly.[34] A number of decisions were cited by the appellant showing that it is established that an order for examination under CPR Part 71 is not an enforcement procedure and that leave under s.285(3) of the Insolvency Act 1986 is not required.[35]

51.The question of whether leave is required under BO s.12 to proceed with an order for examination under O.49B r.1A is not before the Court as it does not form part of the certified question, nor does it arise on the facts of this appeal. However, it suffices to observe that the regime under Part 71 of the CPR is different to that under O.49B of the RHC and the decisions on Part 71 cited by the appellant are not therefore directly applicable to, and should not necessarily be followed in respect of, an order for examination under O.49B r.1A.

52.The facts in Dadra were that leave had already been obtained to proceed with the examination after the bankruptcy order. The issue was whether there was a further leave requirement to proceed with the application for imprisonment. As already noted, the Court of Appeal held that there was not. However, Dadra does not provide any support for the appellant’s case in this appeal that leave under BO s.12 is not required to proceed with an application for imprisonment under O.49B r.1B(1)(c). The reason leave was not required in Dadra was that the Court of Appeal regarded the imprisonment application “as being part and parcel, or merely consequential, to the oral examination” and therefore part of the same execution and enforcement process for which leave to proceed had already been obtained.[36]

53.In a case such as the present, where no leave has been obtained in respect of an anterior part of the execution and enforcement process because it pre-dated the bankruptcy order, the question is whether leave is required for the subsequent part of the execution and enforcement process taking place after the bankruptcy order was made. That is the situation contemplated by the certified question in this case.

E.  Answer to certified question and disposition of appeal

54.For the reasons set out more fully above, I would answer the question of law involved in this appeal (see [15] above) in the negative. Leave to proceed under BO s.12 was required to seek the order for imprisonment under O.49B r.1B(1)(c).

55.Accordingly, leave to proceed not having been obtained under BO s.12, the Master’s order for imprisonment was liable to be set aside for want of jurisdiction and I would dismiss this appeal.

Mr Justice Lam PJ:

56.I agree with the judgment of Mr Justice Fok PJ.

Lord Hoffmann NPJ:

57.I agree with the judgment of Mr Justice Fok PJ.

Chief Justice Cheung:

58.The Court therefore unanimously dismisses the appeal and makes an order nisi that the costs of the appeal be paid by the appellant to the respondent. If any party wishes to vary the order nisi, written submissions should be filed within 14 days of the handing down of this judgment and the Court will make a final order as to costs on the papers.

Ms Frances Lok SC and Mr Adrian Lee, instructed by Jun He Law Offices, for the Plaintiff/ Judgment Creditor (Appellant)

Mr Joseph Tse SC and Ms Rosa Lee, instructed by S K Wong & Co, for the Defendant/ Judgment Debtor (Respondent)