PROOF OF DEBTS RULES

PROOF OF DEBTS RULES

ROOF OF DEBTS RULES
(Cap. 6, section 36)
[1st January, 1932.1

PROOF IN ORDINARY CASES

1. Every creditor shall prove his debt as soon as may be
after the making of a receiving order.

2. A debt may be proved by delivering or sending through
the post in a prepaid letter to the Official Receiver, or, if a trustee
has been appointed, to the trustee, an affidavit verifying the debt.

3. The affidavit may be made by the creditor himself or by
some person authorized by or on behalf of the creditor and having
knowledge of the facts. If made by a person so authorized, it
shall state his authority and means of knowledge.

4. The affidavit shall contain or refer to a statement of
account showing the particulars of the debt, and shall specify the
vouchers, if any, by which the same can be substantiated. The
Official Receiver or trustee may at any time call for the produc-
tion of the vouchers. The particulars shall be in the English
language.

5. The affidavit shall state whether the creditor is or is not
a secured creditor, and if it is found at any time that the affidavit
made by or on behalf of a secured creditor has omitted to state
that he is a secured creditor, the secured creditor shall surrender
his security to the Official Receiver or trustee for the general bene-
fit of the creditors unless the court on application is satisfied that
the omission has arisen from inadvertence, and in that case the
court may allow the affidavit to be amended upon such terms as
to the repayment of any dividends or otherwise as the court may
consider just.

6. A creditor shall bear the cost of proving his debt unless
the court otherwise specially orders.

7. Every creditor who has lodged a proof shall be entitled
to see and examine the proofs of other creditors before the first
meeting, and at all reasonable times on payment of the prescribed
fee.

8. A creditor proving his debt shall deduct therefrom all
trade discounts, but he shall not be compelled to deduct any dis-
count, not exceeding 5 per cent on the net amount of his cl
which he may have agreed to allow for payment in cash.





PROOF BY SECURED CREDITORS

9. If a secured creditor realizes his security, he may prove for the
balance due to him, after deducting the net amount realized.

10. If a secured creditor surrenders his security to the Official
Receiver or trustee for the general benefit of the creditors, he may prove
for his whole debt.

11. If a secured creditor does not either realize or surrender his
security, he shall, before ranking for dividend, state in his proof the
particulars of his security, the date when it was given and the value at
which he assesses it, and shall be entitled to receive a dividend only in
respect of the balance due to him after deducting the value so assessed.

12. (1) Where a security is so valued the trustee may at any time
redeem it on payment to the creditor of the assessed value.

(2) If the trustee is dissatisfied with the value at which a security is
assessed, he may require that the property comprised in any security so
valued be offered for sale at such times and on such terms and
conditions as may be agreed on between the creditor and the trustee or
as, in default of such agreement, the court may direct. If the sale be by
public auction, the creditor, or the trustee on behalf of the estate, may
bid or purchase.

(3) Provided that the creditor may at any time by notice in writing
require the trustee to elect whether he will or will not exercise his power
of redeeming the security or requiring it to be realized, and if the trustee
does not within 6 months after receiving the notice signify in writing to
the creditor his election to exercise the power, he shall not be entitled to
exercise it; and the equity of redemption, or any other interest in the
property comprised in the security which is vested in the trustee, shall
vest in the creditor and the amount of his debt shall be reduced by the
amount at which the security has been valued.

13. Where a creditor has so valued his security, he may at any time
amend the valuation and proof on showing to the satisfaction of the
trustee or the court that the valuation and proof were made bona fide on
a mistaken estimate or that the security has diminished or increased in
value since its previous valuation, but every such amendment shall be
made at the cost of the creditor and upon such terms as the court shall
order, unless the trustee allows the amendment without application to
the court.

14. Where a valuation has been amended in accordance with rule
13, the creditor shall forthwith repay any surplus dividend which he may
have received in excess of that to which he would





have been entitled on the amended valuation or, as the case may
be, shall be entitled to be paid out of any money, for the time being
available for dividend, any dividend or share of dividend which
he may have failed to receive by reason of the inaccuracy of the
original valuation, before that money is made applicable to the
payment of any future dividend, but he shall not be entitled to
disturb the distribution of any dividend declared before the date
of the amendment.

15. If a creditor after having valued his security subsequently
realizes it, or if it is realized under the provisions of rule 12, the
net amount realized shall be substituted for the amount of any
valuation previously made by the creditor, and shall be treated in
all respects as an amended valuation made by the creditor.

16. If a secured creditor does not comply with the foregoing
rules, he shall be excluded from all share in any dividend.

17. Subject to the provisions of rule 12, a creditor shall in
no case receive more than the full amount of his debt, and interest
as provided by the Ordinance.

PROOF IN RESPECT OF DISTINCT CONTRACTS

18. If a debtor was at the date of the receiving order liable
in respect of distinct contracts as a member of 2 or more distinct
firms, or as a sole contractor, and also as member of a firm, the
circumstance that the firms are in whole or in part composed of
the same individuals, or that the sole contractor is also one of the
joint contractors, shall not prevent proof in respect of the con-
tracts, against the properties respectively liable on the contracts.

PERIODICAL PAYMENTS

19. When any rent or other payment falls due at stated
periods and the receiving order is made at any time other than
one of those periods, the person entitled to the rent or payment
may prove for a proportionate part thereof up to the date of the
order as if the rent or payment became due from day to day.

20. On any debt or sum certain, payable at a certain time
or otherwise, whereon interest is not reserved or agreed and which
is overdue at the date of the receiving order and provable in bank-
ruptcy, the creditor may prove for interest at a rate not exceeding
8 per cent per annum to the date of the order from the time when
the debt or sum was payable, if the debt or sum is payable by
virtue of a written instrument at a certain time, and if payable
otherwise, then from the time when a demand in writing has been
made giving the debtor notice that interest will be claimed from
the date of the demand until the time of payment.





INTEREST

Debt payable at a future time

21. A creditor may prove for a debt not payable when the debtor
committed an act of bankruptcy as if it were payable presently, and may
receive dividends equally with the other creditors, deducting only
thereout a rebate of interest at the rate of 5 per cent per annum
computed from the declaration of a dividend to the time when the debt
would have become payable, according to the terms on which it was
contracted.

ADMISSION OR REJECTION OF PROOFS

22. The trustee shall examine every proof and the grounds of the
debt, and in writing admit or reject it in whole or in part or require further
evidence in support of it. If he rejects a proof, he shall state in writing to
the creditor the grounds of the rejection.

23. If the trustee thinks that a proof has been improperly admitted,
the court may, on the application of the trustee, after notice to the
creditor who made the proof, expunge the proof or reduce its amount.

24. If a creditor is dissatisfied with the decision of the trustee in
respect of a proof, the court may, on the application of the creditor,
reverse or vary the decision. The Official Receiver or trustee shall not be
personally liable for any costs in respect of the rejection by him in whole
or in part of any proof unless it is proved to the satisfaction of the court
that he has acted mala fide or with gross negligence.

25. The court may also expunge or reduce a proof upon the
application of a creditor if the trustee declines to interfere in the matter,
or in the case of a composition or scheme, upon the application of the
debtor.

26. The Official Receiver, before the appointment of a trustee, shall
have all the powers of a trustee with respect to the examination,
admission and rejection of proofs, and any act or decision of his in
relation thereto shall be subject to the like appeal.

27. These rules may be cited as the Proof of Debts Rules.
10 of 1931. Second Schedule. Forms 46, 47, 48, Bankruptcy (Forms) Rules. (Cap. 6.) Form 49, Bankruptcy (Forms) Rules.

10 of 1931. Second Schedule. Forms 46, 47, 48, Bankruptcy (Forms) Rules. (Cap. 6.) Form 49, Bankruptcy (Forms) Rules.

https://oelawhk.lib.hku.hk/items/show/2209

1964

v2

6

4