Going green

Selected provisions of Part 2 and the whole of Part 3 of the Bankruptcy and Companies Legislation (Miscellaneous Amendments) Ordinance 2023 (Amendments Ordinance) took effect on 29 December 2023. These will update the filing and notice provisions under the Companies (Winding-Up and Miscellaneous Provisions) Ordinance (Cap 32) (CWUMPO) and the Bankruptcy Ordinance (Cap 6) (BO).

Sections 1, 4 and 5 were already given effect in July 2023 when the relevant amendments were published in the Gazette. These changes allowed, among others, for the electronic submission of proxies, amending rule 99R of the Bankruptcy Rules (Cap. 6A) and rule 139 of the Companies (Winding-up) Rules (Cap. 32H). 

Forms and Requirements – Part 2

The amendments give the power to the Official Receiver (OR) to specify the forms and requirements for electronic submission of documents, including:

• Annual Statement of Earnings and Property Acquired under section 43A of the BO to be submitted to the OR as trustee (going forward, the OR may at any time require a liquidator of a company that is being wound up by the court to provide the OR, within the time limit specified by the OR, with an account of the liquidator’s receipts and payments as liquidator); and
• Report on the investigation of the conduct of the bankrupt under section 86A of the BO.

Notice requirements – Part 3

Part 3 deals with amendments in the BO, the CWUMPO and their subsidiary legislation, to (a) require various notices, orders or matters under the relevant provisions to be published or given in the specified means as provided in Schedule 4 to the BO and Schedule 27 to the CWUMPO respectively; and (b) remove the newspaper advertising requirements, requiring only publication in the Gazette or by other specified means. At present, the Gazette is the only specified means in the two schedules.

The documents concerned include (among others): notice of bankruptcy order or administration order; notice of meeting of creditors for appointment of first trustee in bankruptcy; notice of meeting of creditors, in creditors’ voluntary winding-up; notice of the order for appointment of a provisional liquidator; and notice of public examination to creditors and contributories.

There are also amendments to some of the prescribed forms under the Bankruptcy (Forms) Rules (Cap. 6B) and the appendix to the Companies (Winding-up) Rules (Cap. 32H).

The OR stresses the amendments in Part 3 do not affect the power of the court to make orders on the publication of notices. The OR says that “where appropriate, practitioners may wish to consider whether to adopt additional advertising to bring the relevant matters to the attention of the public, including consideration on the mode of publicity to be used, which can be electronic or web-based or by way of newspaper.”¹

The remaining provisions in Part 2 are expected to commence in 2025. It is anticipated the OR will provide further information in due course.

Summary Procedure Order Applications

Separately, the ORO says it has observed certain common errors / inconsistencies in the applications for summary procedure orders (SPO) by different professional trustees in bankruptcy cases. With immediate effect from the publication of the letter from the ORO dated 28 December 2023, provisional trustees are expected to follow the revised template and complete the relevant revised checklist in every SPO application. Provisional trustees must answer all questions on the checklist and sign it.²

Going digital

The changes on electronic submission follow on from other recent statutory revisions allowing for the electronic service of statutory demands under certain circumstances and permitting parties to serve documents via the court’s e-Lodgement platform or USB to all other parties.

The changes allow for easier service of statutory demands, particularly in cases where debtors may attempt to evade service. Where the debtor has agreed with the creditor to use electronic means (which include emails, WhatsApp, WeChat or similar means of communications) to receive documents relating to the debt, or the debtor has used these communication channels during the 12 months immediately preceding the date of the statutory demand, the creditor may deliver a statutory demand through such channels.

There is also no longer any need for attendance at hearings for uncontested bankruptcy and winding-up proceedings (except in the case of a just and equitable winding-up). Clearer guidance is also provided in respect of urgent applications to the Companies Judge.

The changes are brought into effect through revised Practice Direction 3.1 and new Practice Direction 3.7.

Insolvency practitioners will welcome the latest changes which should ease the burden of certain more straightforward (but nevertheless important) administrative tasks.

Authored by Nigel Sharman.

References

1  Letter from Official Receiver’s Office to the Hong Kong Institute of Certified Public Accountants, the Law Society of Hong Kong and the Hong Kong Chartered Governance Institute, 20 October 2023.

2  Letter from Official Receiver’s Office to Hong Kong Law Society, 28 December 2023.