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Following is a question by the Hon Cheung Man-kwong and a written reply by the Secretary for Education, Mr Michael Suen, in the Legislative Council today (November 25):
Question:
In July last year, an aided school teacher, who was bankrupt during the contribution period of his provident fund, had been adjudicated by the Court that the total sum of his provident fund should be vested in the Official Receiver for repaying his debt. Regarding the attachment of employees・ provident funds, will the Government inform this Council:
(a) of the total number of aided school teachers whose provident funds including the part of government donations were attached in the past five years because they were adjudicated bankrupt, as well as the sums involved; how such figures compare with the relevant figures of cases in which the part of government donations for teachers had been attached because they were involved in criminal offences or professional misconduct;
(b) given that under section 85(3) of the Education Ordinance (Cap. 279), no contribution or donation to or dividend or interest on a dividend from a provident fund shall be assignable or transferable or liable to be attached, sequestered or levied upon, for or in respect of any debt or claim whatsoever, of the reasons and justifications for the Official Receiver still being able to attach the provident funds of the teachers concerned, as well as the legislative intent of the section;
(c) whether it has assessed if the part of government donations of the provident fund, before it is withdrawn by the employee, does not form part of the employee・s estate; if it does not, of the reasons and justifications for attaching the amount of provident fund which has not yet formed part of the bankrupted employee・ estate for debt repayment; if it forms part of the employee・s estate, the reasons for that;
(d) given that under section 30A of the Bankruptcy Ordinance (Cap. 6), where a person has not previously been adjudicated bankrupt, he is discharged from bankruptcy by the expiration of four years beginning with the commencement of the bankruptcy, whether the authorities will consider not attaching the part of government donations in the course of the attachment of provident fund, in order that the bankrupted persons concerned, after the discharge of bankruptcy, may obtain the part of government donations, hence their livelihood will not be affected; and
(e) given that both the Pensions Ordinance (Cap. 89) and the Pension Benefits (Judicial Officers) Ordinance (Cap. 401) stipulate that the pension of the retired civil servants and judicial officers will cease immediately if they are adjudicated bankrupt while they are receiving pension, whether the Administration will amend the Education Ordinance by adding a similar provision, so as to protect the provident fund of subsidised school teachers from being affected by bankruptcy orders?
Reply:
President,
(a) In the past five years up to August 2009, there were 45 cases concerning aided school teachers whose provident fund benefits (including government donations) vested in the Official Receiver/trustee in bankruptcy by operation of law because they were adjudicated bankrupt, involving a total sum of about $42 million. During the same period, there were nine cases in which government donations to contributors were not granted by virtue of rule 13 of the Subsidised Schools Provident Fund Rules on account of professional misconduct or being convicted of an offence. The sum involved was about $4.95 million.
(b) Under section 58 of the Bankruptcy Ordinance, on the making of a bankruptcy order, the property of the bankrupt shall vest in the Official Receiver/trustee in bankruptcy. On 23 July 2008, in a bankruptcy case concerning an aided school teacher, the Court ruled that section 85(3) of the Education Ordinance did not prevent the benefits under the Subsidised Schools Provident Fund from vesting in the trustee in bankruptcy. The Court of Appeal in its judgment delivered on 14 August 2009 also agreed with the decision in this regard. The bankrupt has filed an application for leave to appeal against the judgment of the Court of Appeal on entitlement to benefits under the Subsidised Schools Provident Fund. As to whether the provident fund benefits of a contributor shall vest in the Official Receiver/trustee in bankruptcy in the event of the contributor・s bankruptcy, the Education Bureau does not have information indicating the legislative intent of section 85(3) of the Education Ordinance in this regard.
(c) Under section 58 of the Bankruptcy Ordinance, on the making of a bankruptcy order, the property of the bankrupt shall vest in the Official Receiver/trustee in bankruptcy. Under section 2 of the Bankruptcy Ordinance, a bankrupt・s property includes things in action, present or future, vested or contingent. In the bankruptcy case mentioned in part (b) of the reply, the Court ruled that the provident fund benefits (including government donations) under the Subsidised Schools Provident Fund Rules due to the bankrupt formed part of his property. The Court of Appeal also agreed with the decision in this regard. Hence, the benefits vested in the Official Receiver/trustee in bankruptcy upon the making of the bankruptcy order.
(d) & (e) In the case mentioned in parts (b) and (c) of the reply, the Court of Appeal has ruled that a bankrupt is entitled to the benefits attributable to the period after his discharge from bankruptcy. The bankrupt has filed an application for leave to appeal against the judgment of the Court of Appeal on entitlement to benefits under the Subsidised Schools Provident Fund and the case will be fixed for hearing. At this stage, it is not known whether the judgment of the Court of Appeal will be affected. As such, we will keep close watch on the case and take appropriate follow-up action after examining the final judgment of the Court.
Ends/Wednesday, November 25, 2009
Issued at HKT 12:52
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