Re Man Mui Mui
Read the full judgment text of HCB 6656/2009 on BabelCite. This HCB judgment was delivered on 22 September 2010.
1. The present dispute arose out of the applications of Madam Man and Miss Cheung to annul their respective bankruptcy order. The applications have been dealt with together as they are related and involve the same Petitioner.
Cites 2 cases
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HCB 6656/2009 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE BANKRUPTCY PROCEEDINGS NO. 6656 OF 2009 _________________________ RE: MAN MUI MUI _________________________ HCB 6660/2009 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE BANKRUPTCY PROCEEDINGS NO. 6660 OF 2009 _________________________ RE: CHEUNG FUNG MEI _________________________ Coram : Master Ko in Chambers Date of Hearing : 11 August 2010 Date of Handing Down Decision : 22 September 2010 _______________ D E C I S I O N _______________ 1.The present dispute arose out of the applications of Madam Man and Miss Cheung to annul their respective bankruptcy order. The applications have been dealt with together as they are related and involve the same Petitioner. 2.On 3 March 2010, I annulled the bankruptcy orders after hearing Madam Man, Miss Cheung and the Official Receiver (“OR”) on the ground that the orders ought not to have been made. I adjourned the question of costs for further consideration as I wanted to hear the explanation of the Petitioner (who was absent at the hearing) on some apparent irregularities. 3.On 14 May 2010, I decided not to order costs against the Petitioner after hearing the explanation. The Petitioner, Madam Man and Miss Cheung then agreed that there should be no order as to costs as between them, and an order to that effect was made. 4.By consent of all the parties, I further awarded costs (except the costs of 14 May 2010) to the OR and directed such costs to be deducted first from the deposit paid by the Petitioner and then out of the assets of Madam Man and Miss Cheung in the hands of the OR. 5.The remaining dispute is between Madam Man and Miss Cheung on the one hand and the OR on the other hand as to the quantum of the OR’s costs. The Petitioner has indicated that it does not wish to take part in the argument. 6.In Madam Man’s case, the OR wants to charge:
7.From the correspondences exchanged between Madam Man and the OR, one can appreciate that the sum of $17,664.27 is made up of:
8.As I understand him, Mr. Poon (the solicitor representing Madam Man) has put forward 3 grounds of objection:
9.I do not agree with his first objection. 10.Section 37 of the Bankruptcy Ordinance, Cap.6, provides that:
11.Thus, the Ordinance draws a distinction between fees, charges and percentages payable to the OR under Cap.6C on the one hand and costs, charges and expenses incurred or authorized by the OR on the other hand. 12.In Lam Kam Sing v Trustee of the Estate of the Bankrupt [1989] 2 HKC 352, Jones J explained the distinction in this way:
13.Likewise, Kwan J (as she then was) expressed in有關債務人甘煥芍事宜, unreported, HCB 6776/2005 that:
14.Section 114(1) of the Ordinance provides that:
And Cap.6C is the product of that section. 15.Para.3 of Cap.6C provides that:
16.Table B sets out the fees and charges of the OR. Of particular relevance for present purpose are the following items:
17.I agree with Miss Lam (who represents the OR) that the “fees, charges and percentages” prescribed in Cap.6C relate to work carried out by the OR in connection with his duties in the administration of a bankrupt’s affairs as opposed to litigation. Similar submission was advanced by the OR in Lam Kam Sing (at 353B). 18.Generally speaking, it is not part of the duty of the OR (see section 78(1) of the Ordinance) or the OR as trustee of a bankrupt’s estate (see section 86B(1) of the Ordinance) to deal with annulment applications. In my view, the OR is entitled to charge separately for the annulment application which is in the nature of litigation not covered by Cap.6C. 19.The costs of and incidental to Madam Man’s annulment application then fall within the general discretion of the court under section 100 of the Ordinance. By consent, I have already granted such costs to the OR on 14 May 2010. 20.For these reasons, I am of the view that the OR is entitled to charge separately for the annulment application. 21.The second objection relates to whether the OR is entitled to charge miscellaneous expenses on top of the minimum charge under item 11 of Table B. 22.Mr. Poon’s point is that given the minimum charge of $12,150 levied by the OR, the OR is not entitled to charge more unless the OR has demonstrated that his total fees and charges have exceeded that amount. 23.At the hearing on 11 August 2010, Miss Lam indicated that the fees and charges of the OR under Table B in respect of Madam Man’s case had exceeded $12,150 although she did not then have the necessary breakdown with her. By consent, I directed the OR to provide me with a breakdown afterwards. I have since received a breakdown from the OR (which has been copied to Mr. Poon). The time costs of the OR come to $13,720.83, which has exceeded the minimum charge under item 11 in Table B. 24.The OR has also provided a breakdown of his miscellaneous expenses of $1,204.27. These were transportation charges, land searches and registration fee, and the charges for gazetting and advertising notice of the bankruptcy order chargeable under item 8 in Table B. 25.The OR is apparently content with charging the minimum charge under item 11 of Table B. As it has been demonstrated that the minimum charge has been exceeded, the OR may charge additionally for his miscellaneous expenses of $1,204.27. 26.I shall deal with Mr. Poon’s third objection below in relation to both Madam Man’s case and Miss Cheung’s case together. 27.Turning now to Miss Cheung’s case, the OR proposes to charge:
28.Again, a breakdown of the sum of $17,460 can be discerned from the correspondence:
29.Mr. Poon has raised similar objections:
30.I have dealt with the first objection above in relation to Madam Man’s case. My ruling should apply mutatis mutandis to Miss Cheung. 31.In relation to the second objection, the OR has also provided a breakdown of his time costs and expenses in relation to Miss Cheung’s case after the hearing. The total time costs come to $15,320.78, which exceeds the minimum charge under item 11 of Table B. The total expenses for transportation charges, land searches and land registration fees and the charges for gazetting and advertising notice of bankruptcy order come to $1,079.27. The OR is apparently content to only charge for the minimum charge at $12,150 and miscellaneous expenses at $1,000. I am satisfied that he is entitled to do so. 32.Mr. Poon’s third objection relates to the total costs of the OR in both cases. It is said that the total amount is excessive and inequitable because:
33.In my view, the fees and charges prescribed by Cap.6C and the costs of the annulment applications should be considered separately. 34.There is no provision in the Ordinance empowering the OR to reduce or remit any fees prescribed by Cap.6C. Such power rests with the Court by operation of section 114(2) of the Ordinance. 35.So far, there has been no application under section 114(2). I cannot treat the present dispute as if it were such an application as I (as Master) do not have jurisdiction to deal with such an application: see sections 99(3) and 99A of the Ordinance. 36.In any event, Mr. Poon’s contention is contrary to section 114(3) and (5) which provide that:
37.In Wu Kwok Kwong v. Official Receiver, HCB 7690/2008, Barma J. rationalize the legislative scheme in the following way:
38.In any event, the breakdowns provided after the hearing have confirmed that the OR had done work in relation to the bankruptcy of Madam Man and Miss Cheung and is therefore entitled to fees and charges in accordance with Cap.6C. 39.Turning now to the costs of the annulment applications, this is subject to the discretion of the court under section 100 of the Ordinance. 40.Miss Lam has annexed a statement of costs to her skeleton submission. I am satisfied having perused the statement that the OR is justified in charging $5,000 for each application up to and including the hearing on 5 August 2010. I do not think there is any duplication of costs, as the OR had to peruse 2 sets of papers, considered 2 sets of circumstances and filed a report in each case. I fix the OR’s costs for each application at $5,000 under rule 32A(1)(b) in lieu of taxation. 41.I therefore do not think there is any merit in the third objection. Conclusion 42.For the above reasons, I rule against Madam Man and Miss Cheung on all the objections taken by Mr. Poon on their behalf. 43.In summary, I agree with the OR that he should be entitled to:
44.As agreed by the parties, the above fees, charges and costs should be deducted in each case first from the Petitioner’s deposit and then from the asset of Madam Man and Miss Cheung, as the case may be, in the hands of the OR. I agree with Miss Lam that and any shortfall will have to be met by Madam Man and Miss Cheung. Costs of the hearing on 11 August 2010 45.Costs normally follow the event. 46.One of the major concerns of Mr. Poon was whether the OR was entitled to charge more than the minimum charge under item 11 of Table B. By a letter dated 14 May 2010, he had asked for a breakdown to confirm that the fees and charges of the OR had exceeded the minimum charge of $12,150 in both cases. It appears that the OR had only provided the breakdowns after the hearing on 11 August 2010. 47.In those circumstances, I take the tentative view that Madam Man and Miss Cheung should pay half of the costs of the OR for the hearing on 11 August 2010. 48.I take into account the fact that the objections taken in both cases are similar, and fix the OR’s total costs at $5,000 under rule 32A(1)(b) in lieu of taxation. 49.I therefore make a costs order nisi that:
Mr. Y. M. Poon of Messrs. Louis K. Y. Pau & Co, for the Bankrupts Ms. J. Lam of the Official Receiver |
Cases cited in this judgment
Further hearings and rulings under HCB 6656/2009