INSIGHTS

Edward Alder reports on the recent decision of the Hong Kong Court of Appeal that an application to set aside a bankruptcy notice (under Bankruptcy Rule 47) cannot be allowed on a condition that the debtor pay the disputed claim amount into court: Ling Wai Hoi v Jetland Global Investments Ltd [2022] HKCA 1457 (30 September 2022). This was contrary to the views (obiter) of Coleman J below that the court’s general case management powers facilitated such a condition. In addition to reasoning based on the bankruptcy legislation, a further reason was that the power to set aside, while similar, is not identical to, the court’s power to grant summary judgment, where conditional leave to defend is commonplace. The burden on the applicant to set aside a bankruptcy notice, which requires a ‘substantial defence’, is higher than that to defeat summary judgment.