Do Trustees in Bankruptcy Owe an Implied Duty Towards a Major Creditor?


The Hong Kong Court of Final Appeal has recently affirmed the Court of Appeal’s decision that the Trustees in Bankruptcy did not owe an implied duty to act with reasonable care and skill towards a major creditor.

The Court of Final Appeal agreed with the trial judge that the contract entered into between the Plaintiff (i.e. a major creditor) and the Defendant (i.e. Deloitte Touche Tohmatsu), under which two of the Defendant’s partners had been appointed trustees in bankruptcy of the Bankrupt, was simply for Defendant to provide its partners to act as trustees in bankruptcy, and to administer the insolvent estate in accordance with the statutory code in the Bankruptcy Ordinance (“BO”) governing the activities of such trustees. Given the extensive statutory code and remedies regulating the conduct of the trustees under the BO, there was no necessity or other basis for implying the Implied Term.

To find out more, please read the latest article written by our Dispute Resolution Partner, Simon Wong.