TAM MEI KAM v. HSBC INTERNATIONAL TRUSTEE LTD AND OTHERS

TAM MEI KAM v. HSBC INTERNATIONAL TRUSTEE LTD AND OTHERS

The court held that s43E permits an IPO to claim income which the bankrupt is or becomes entitled to during bankruptcy even if entitlement arose before the IPO; the words "during the period for which the order is in force" relate to enforcement of the order not to limit the definition of income in s43E(6). An IPO could therefore claim the accrued maintenance that was suspended, subject to protecting the bankrupt's reasonable domestic needs. The trustees' IPO was therefore not struck out and trustees were not removed.

Citation
TAM MEI KAM v. HSBC INTERNATIONAL TRUSTEE LTD AND OTHERS
Parties
Applicant / Bankrupt: Tam Mei Kam; 1st Respondent / Executor and Trustee: HSBC International Trustee Limited; 2nd Respondent: Joseph Lo Kin Ching and Derek Lai Kar Yan; 3rd Respondent: New Horizon Buddhist Association Limited; 4th Respondent: Lau Kai Eddie; 5th Respondent / Trustees: Joint and Several Trustees in Bankruptcy of Tam Mei Kam
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
21 February 2014
Case Number
HCMP2981/2004
Procedural Posture
Bankruptcy Proceedings and Maintenance Proceedings (hcmp 2981/2004; HCB 3777/2011) / Decision on Multiple Applications (heard 11 Feb 2014; Decision 21 Feb 2014)
Outcome
Motion to strike out IPO dismissed; IPO allowed; trustees not removed; payment orders made splitting monthly and accrued maintenance; costs orders nisi made against estates as specified.
Legal Topics
Income Payments Order, Accrued Maintenance, Removal of Trustees, Reasonable Domestic Needs, Costs
Source Language
EN
Bankruptcy Inheritance Trusts Civil Procedure Equity Income Payments Order Accrued Maintenance Removal of Trustees +2 more

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Parties

Tam Mei Kam

Applicant / Bankrupt

HSBC International Trustee Limited

1st Respondent / Executor and Trustee

Joseph Lo Kin Ching and Derek Lai Kar Yan

2nd Respondent

New Horizon Buddhist Association Limited

3rd Respondent

Lau Kai Eddie

4th Respondent

Joint and Several Trustees in Bankruptcy of Tam Mei Kam

5th Respondent / Trustees

Procedural Posture

Bankruptcy Proceedings and Maintenance Proceedings (hcmp 2981/2004; HCB 3777/2011) / Decision on Multiple Applications (heard 11 Feb 2014; Decision 21 Feb 2014)

Legal Issues

  1. 1 Whether a trustee may obtain an income payments order (IPO) under s43E of the Bankruptcy Ordinance to claim accrued maintenance and future maintenance payable to a bankrupt during bankruptcy
  2. 2 Whether income under s43E(6) is limited to income received or becoming due only during the period an IPO is in force
  3. 3 Whether the IPO application should be struck out for abuse or misconduct by trustees

Ratio Decidendi

The court held that s43E permits an IPO to claim income which the bankrupt is or becomes entitled to during bankruptcy even if entitlement arose before the IPO; the words "during the period for which the order is in force" relate to enforcement of the order not to limit the definition of income in s43E(6). An IPO could therefore claim the accrued maintenance that was suspended, subject to protecting the bankrupt's reasonable domestic needs. The trustees' IPO was therefore not struck out and trustees were not removed.

Court Disposition

Motion to strike out IPO dismissed; IPO allowed; trustees not removed; payment orders made splitting monthly and accrued maintenance; costs orders nisi made against estates as specified.

Orders

  • HSBC to pay Madam Tam HK$48,000 per month on first working day of each month (covering domestic needs) commencing 3 March 2014 until her discharge from bankruptcy or further order
  • HSBC to pay the balance of monthly maintenance (HK$104,000) to the trustees on same payment day