The Third Party (Rights Against Insurers) Ordinance Cap 273 (TPRAI) in Hong Kong allows third parties to claim against the wrongdoer’s liability insurer in the event of insolvency. The Supreme Court of New Zealand (the country’s highest court) found in BFSL 2007 Ltd (in liquidation) v. Steigrad [2013] NZSC 156 (known as the Bridgecorp case) that under the equivalent statutory provision in New Zealand, payment of defence costs do not reduce the limit of indemnity.
The Court of Appeal has declined jurisdiction to wind up Yung Kee Holdings Limited (the "Company"), a company incorporated in the British Virgin Islands ("BVI"), upholding the decision of Harris J at first instance that the Company did not have "sufficient connection" with Hong Kong.
The exercise of the court’s discretionary jurisdiction to wind up an unregistered overseas company has again come under judicial spotlight in the recent case of Re China Medical Technologies Inc. (HCCW 435/2012).
This is a case with respect to the interpretation of the words "the applicant's entitlement to severance payment" in section 16(2)(f)(i) of the Protection of Wages on Insolvency Ordinance (the "PWIO").
Under the PWIO, the applicant may apply for an ex-gratia payment from the Protection of Wages on insolvency Fund (the "Fund") as his former employer entered into voluntary liquidation.
The relevant sections of the PWIO are set out below:-
"15(1) ......an applicant to whom:-
In the wake of the global financial crisis, Hong Kong’s key financial regulators, the Financial Services and the Treasury Bureau, the Hong Kong Monetary Authority (HKMA), the Securities and Futures Commission (SFC) and the Insurance Authority (IA), have jointly issued a consultation paper (Paper) that outlines proposals for establishing a resolution regime for significant financial institutions (FIs) that are in crisis or likely to collapse.
In the recent case of Lau Siu Hung v. Krzystof Marszalek (HCCW 484/2009, 17 June 2013) the Court of First Instance held that an annulment of bankruptcy does not debar a creditor, who has not proved his provable debt, from asserting his claim after the annulment.
Procedural Background
The Court of First Instance in Hong Kong recently provided a timely reminder that the jurisdiction to wind up a foreign company is an exorbitant one and therefore winding up petitions and applications for leave to serve them out of the Hong Kong jurisdiction must be properly thought through and drafted before the Court will consider giving leave to serve out, and they may be liable to be struck out entirely if not.
The High Court in Hong Kong recently examined the circumstances in which a liquidator was able to depart from their implied duty not to disclose documents obtained from third parties under statute or in the furtherance of their legal duty.
Two recent Hong Kong cases highlight the importance for creditors to pursue action for debt recovery swiftly, as any undue delay may impact on the period for which interest is recoverable and may prevent any enforcement action on a judgment debt.
Bankruptcy Petition on a Judgment Debt Time Barred
Re Li Man Hoo, Re Foo SHuk Man Patty
In the bankruptcy proceedings in respect of Mr Gabriel Ricardo Dias-Azedo (the "Bankrupt"), the Court of First Instance recently exercised its discretion under sections 37(2) and 97 of the Bankruptcy Ordinance (Cap. 6) (BO) in favour of two creditors and granted them a priority claim against the Bankrupt's estate for their costs in preserving his assets incurred before receiving notice of the bankruptcy petition.
Background