FRED LEE v. LEUNG SUI SUM

FRED LEE v. LEUNG SUI SUM

The court held that s30A(9) can be applied broadly so that a discharge under section 30A may be granted subject to conditions even in the automatic discharge context (including where a trustee has objected and then seeks to withdraw the objection on terms); however the power is discretionary and must be exercised sparingly and judicially with full disclosure and appropriate notice to creditors; the trustee's practice of issuing numerous objections and using withdrawal by consent as leverage was criticised and the specific consent applications were not granted but remitted to the Master for full consideration and directions; costs of this hearing are not recoverable by the trustee from the...

Citation
FRED LEE v. LEUNG SUI SUM
Parties
Trustee / Applicant: Fred Lee; Bankrupt / Respondent (hcb 8779/2002): Leung Chin Yeung; Bankrupt / Respondent (hcb 8989/2002): Leung Sui Sum; Bankrupt / Respondent (hcb 9461/2002): Lee Yuk Man; Official Receiver (intervening Public Officer): Official Receiver; Amicus Curiae: Godfrey Lam
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
9 January 2007
Case Number
HCB8989/2002
Procedural Posture
Bankruptcy Proceedings Objection to Automatic Discharge and Consent Applications / Chambers Hearing (application for Jurisdiction and Orders); Judgment and Remittal to Master
Outcome
Consent applications for conditional discharge were not granted at this stage; applications and consent summonses remitted to the Master for reconsideration and directions; order nisi made depriving trustee of entitlement to recover costs of this hearing from the estates
Legal Topics
Automatic Discharge, Section 30 A(9), Conditional Discharge, Objection to Discharge, Trustee Duties and Conflicts, Costs and Taxation, Income Payments Orders
Source Language
EN
Bankruptcy Insolvency Statutory Interpretation Trust Law Civil Procedure Automatic Discharge Section 30 A(9) Conditional Discharge +4 more

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 5 Authorities cited 16 Party arguments 2 Amounts and remedies 6
Sign in to unlock

Parties

Fred Lee

Trustee / Applicant

Leung Chin Yeung

Bankrupt / Respondent (hcb 8779/2002)

Leung Sui Sum

Bankrupt / Respondent (hcb 8989/2002)

Lee Yuk Man

Bankrupt / Respondent (hcb 9461/2002)

Official Receiver

Official Receiver (intervening Public Officer)

Godfrey Lam

Amicus Curiae

Procedural Posture

Bankruptcy Proceedings Objection to Automatic Discharge and Consent Applications / Chambers Hearing (application for Jurisdiction and Orders); Judgment and Remittal to Master

Legal Issues

  1. 1 Whether the court has jurisdiction under s30A(9) to grant discharge subject to conditions where a trustee has objected to automatic discharge and then seeks to withdraw the objection by consent
  2. 2 Whether the trustee's mechanism of issuing objections and then obtaining conditional discharge by consent is an abuse of process or improper exercise of discretion
  3. 3 Whether the facts alleged (pre-bankruptcy misrepresentations, gambling loss, single non-compliance) amount to unsatisfactory conduct under s30A(4)(d) to justify suspension

Ratio Decidendi

The court held that s30A(9) can be applied broadly so that a discharge under section 30A may be granted subject to conditions even in the automatic discharge context (including where a trustee has objected and then seeks to withdraw the objection on terms); however the power is discretionary and must be exercised sparingly and judicially with full disclosure and appropriate notice to creditors; the trustee's practice of issuing numerous objections and using withdrawal by consent as leverage was criticised and the specific consent applications were not granted but remitted to the Master for full consideration and directions; costs of this hearing are not recoverable by the trustee from the...

Court Disposition

Consent applications for conditional discharge were not granted at this stage; applications and consent summonses remitted to the Master for reconsideration and directions; order nisi made depriving trustee of entitlement to recover costs of this hearing from the estates

Orders

  • Objection summonses and joint consent applications remitted to the Master for full consideration and directions, including filing of further evidence as necessary
  • Order nisi that the trustee is not entitled to recover his costs of and occasioned in this hearing out of the bankrupts' estates