RE HUI YAU YAT

RE HUI YAU YAT

Section 128(1) of the Bankruptcy Ordinance applies to funds referred to in Rule 122C(2)(j) of the Bankruptcy Rules; parties to an IVA cannot contract out of the mandatory obligation in section 128(1). Nominees must pay to the Official Receiver funds/dividends that have been unclaimed for more than six months, and upon termination of an IVA nominees may either retain unclaimed funds until the six‑month period expires or pay them earlier to the Official Receiver; IVA proposals must make provision consistent with section 128(1).

Citation
RE HUI YAU YAT
Parties
Applicant Debtor: Lam Fung; Applicant Debtor: Hui Yau Yat; Official Receiver / Respondent (appeared in HCBI 1142/2002): Official Receiver
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
28 January 2003
Case Number
HCBI1142/2002
Procedural Posture
Bankruptcy Individual Voluntary Arrangement Interim Order Applications / Hearing of Interim Applications; Reserved Reasons and Decision on Applicability of Section 128(1) to Rule 122 C(2)(j)
Outcome
Court held that section 128(1) applies to funds under Rule 122C(2)(j) and that parties cannot contract out of section 128(1); court accepted amended IVA proposal clauses submitted in the two applications to ensure compliance
Legal Topics
Individual Voluntary Arrangement, Unclaimed Dividends/funds, Nominee Duties, Contracting Out of Statutory Obligations, Section 128(1) Bankruptcy Ordinance, Rule 122 C(2)(j) Bankruptcy Rules
Source Language
EN
Bankruptcy Insolvency Statutory Interpretation Civil Procedure Individual Voluntary Arrangement Unclaimed Dividends/funds Nominee Duties Contracting Out of Statutory Obligations +2 more

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Parties

Lam Fung

Applicant Debtor

Hui Yau Yat

Applicant Debtor

Official Receiver

Official Receiver / Respondent (appeared in HCBI 1142/2002)

Procedural Posture

Bankruptcy Individual Voluntary Arrangement Interim Order Applications / Hearing of Interim Applications; Reserved Reasons and Decision on Applicability of Section 128(1) to Rule 122 C(2)(j)

Legal Issues

  1. 1 Whether section 128(1) of the Bankruptcy Ordinance applies to funds referred to in Rule 122C(2)(j) of the Bankruptcy Rules
  2. 2 Whether parties to an IVA can contract out of the obligations in section 128(1)
  3. 3 When a nominee must pay unclaimed or undistributed funds to the Official Receiver and whether the 6 months rule applies on termination

Ratio Decidendi

Section 128(1) of the Bankruptcy Ordinance applies to funds referred to in Rule 122C(2)(j) of the Bankruptcy Rules; parties to an IVA cannot contract out of the mandatory obligation in section 128(1). Nominees must pay to the Official Receiver funds/dividends that have been unclaimed for more than six months, and upon termination of an IVA nominees may either retain unclaimed funds until the six‑month period expires or pay them earlier to the Official Receiver; IVA proposals must make provision consistent with section 128(1).

Court Disposition

Court held that section 128(1) applies to funds under Rule 122C(2)(j) and that parties cannot contract out of section 128(1); court accepted amended IVA proposal clauses submitted in the two applications to ensure compliance

Orders

  • Amendments to the IVA proposals in HCBI 927/2002 and HCBI 1142/2002 accepted by the court as set out in the reasons
  • Proposals and nominees must comply with section 128(1) of the Bankruptcy Ordinance regarding unclaimed or undistributed funds (payment to Official Receiver if unclaimed for more than 6 months); nominees may pay earlier if they choose