China Merchants Bank Co Ltd and Another v. Cheng Chao Ming

CACV 136/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 136 OF 2009

(ON APPEAL FROM HCB NO. 18932 OF 2002)

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BETWEEN

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Before : Hon Cheung JA in Chambers

Date of Hearing : 27 August 2009

Date of Judgment : 27 August 2009

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J U D G M E N T

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Hon Cheung JA :

1.A bankruptcy order was made against the Bankrupt on 4 December 2002. On the application by the Trustees in Bankruptcy, the bankruptcy period which was then due to expire on 3 December 2006, was extended by Master Yu to 3 December 2008. On an application by the Applicant, Master Hui further extended the bankruptcy period by another 18 months from 3 December 2008.

2.The Bankrupt appeals against Master Hui’s order. The Applicant now applies for security for costs of the appeal against the Bankrupt in the sum of $298,500.

3.The Court of Appeal may in special circumstances impose security against an appellant. Impecuniosity of the appellant is an example of special circumstances. The basis of the present application is that the Bankrupt is an undischarged bankrupt and therefore fulfils the impecuniosity requirement. I agree.

4.This does not, however, mean that a bankrupt would invariably be deprived of a substantive chance of appeal. The Court still retains the discretion not to impose security where the bankrupt has raised a meritorious appeal.

5.The substantive ground of appeal is that under section 30A of the Bankruptcy Ordinance (Cap. 6), Master Hui had no jurisdiction to further extend the bankruptcy period and that he was wrong to extend it. Whether the Master has jurisdiction to entertain multiple suspensions is, in my view, an arguable point only . Without expressing a final view of the matter, I do not consider that the relevant section of the Bankruptcy Ordinance is not capable of allowing multiple applications. The fact that this issue raises a matter of public importance does not mean that security should not be imposed. Given the Master’s view that the Bankrupt had not fully responded to the allegation made against him in respect of the interests and benefits that he had received, I am not convinced with his explanation that he would not be able to furnish the security by other means.

6.In the circumstances, the Court should exercise the discretion in favour of granting security. The appeal will not be overly complicated. In my view the appropriate amount to be imposed is $150,000.

7.The amount is to be paid into court within 42 days. Pending payment in, the appeal is stayed. In default of payment in, the appeal is dismissed with costs to be Applicant.

8.Costs of this application be in the cause of the appeal.

Mr. Aidan Tam, instructed by Messrs Solomon C. Chong & Co. for the Bankrupt

Mr. Liu Kin Man, instructed by Messrs Paul, Hastings, Janofsky & Walker for the Applicant

Trustees in Bankruptcy, in person, absent

Official Receiver, absent