(A) Introduction
In Re Gregory Trevor (HCB 3171/2024, date of judgment: 30 September 2025) [1] and Re John Victor Bottomley (HCB 3172/2024, date of judgment: 30 September 2025) [2], the Court dismissed bankruptcy petitions presented by The Hongkong and Shanghai Banking Corporation Limited (“HSBC”) against Mr. Trevor Gregory (“Mr. Gregory”) and Mr. John Victor Bottomley (“Mr. Bottomley”) on the ground that it has no jurisdiction to make bankruptcy orders against the debtors.
In Re Gregory Trevor (HCB 3171/2024, date of judgment: 30 September 2025) [1] and Re John Victor Bottomley (HCB 3172/2024, date of judgment: 30 September 2025) [2], the Court dismissed bankruptcy petitions presented by The Hongkong and Shanghai Banking Corporation Limited (“HSBC”) against Mr. Trevor Gregory (“Mr. Gregory”) and Mr. John Victor Bottomley (“Mr. Bottomley”) on the ground that it has no jurisdiction to make bankruptcy orders against the debtors.
This case highlights that in cross-border insolvency, a creditor's failure to demonstrate a debtor's sufficient connection with Hong Kong constitutes a valid defense to a petition, regardless of the validity of the debt.
(B) Legal Framework for a Bankruptcy Order
The jurisdictional foundation for bankruptcy petitions in Hong Kong is set out in Section 4 of the Bankruptcy Ordinance (Cap. 6) (“BO”).
A bankruptcy petition can only be presented against a debtor who is: - [3]
(1) Domiciled in Hong Kong; or
(2) Personally present in Hong Kong on the day on which the petition is presented; or
(3) At any time in the period of 3 years ending with that day of the presentation of the petition (1) has been ordinarily resident or has had a place of residence in Hong Kong; or (2) has carried on business in Hong Kong.
It is trite law that the burden falls on the petitioner to prove there is jurisdiction to present the petition. [4]
(C) Facts
Mr. Gregory and Mr. Bottomley were born in the United Kingdom (“UK”) and held British passports and Hong Kong permanent identity cards. [5] Mr. Gregory moved to Hong Kong in 1982 and Mr. Bottomley in 1990. [6] In 1993, they established the “Can Build” business, operating through Can Build Management Limited (“CBM”), a Hong Kong comapny of which they were the the only directors and beneficial owners. [7]
On 26 November 2015, the debtors executed a personal guarantee to secure banking facilities that HSBC provided to CBM. [8]
Following CBM's default on these facilities, HSBC presented a creditor’s petition against CBM on 3 November 2021 and CBM was wound up on 21 February 2022. [9] Separately, on 11 March 2021, HSBC issued a statutory demand against the debtors in their capacity as guarantors. [10] HSBC sought bankruptcy orders against the debtors based on their liabilities as guarantors for the debts of CBM. [11]
The debtors did not dispute the petitioning debts. The only issue in dispute was whether the Court has jurisdiction as provided under section 4 of the BO to make bankruptcy orders against the debtors. [12]
(D) Decision
The Court dismissed both petitions on the ground that HSBC failed to establish jurisdiction under any of the three limbs of Section 4 of the BO. The reasoning is as follows:
(1) Issue 1 - Domicile
It is common ground that the debtors’ domicile of origin was the UK as they were born and raised there. The issues to be determined are as follows: [13]
(a) Have the debtors acquired Hong Kong as a domicile of choice?
(b) If they have acquired Hong Kong as a domicile of choice, have they abandoned it, with the result that their domicile of origin is revived?
The Court affirmed the following principles of domicile: [14]
(a) “Domicile” is a legal concept distinct from “permanent home”. A person who desires to acquire a domicile in a country or place must intend to reside in it permanently or indefinitely.
(b) An independent person can acquire a domicile by, and only by, residing there with the intention to reside there permanently or indefinitely.
(c) The court must assess the individual's motive for residence. The intention must be a fixed choice for the indefinite future, not of an undetermined length.
(d) Residence must be freely chosen, not compelled by external factors like employment duties, creditor demands, or medical need. A person with a specific, temporary purpose for residence lacks the required indefinite intention.
(e) The existing domicile of a person is deemed to continue until it is proved that he has acquired a new domicile, and he who asserts a change of domicile bears the burden of proving the truth of the assertion.
(f) A domicile of original is more tenacious than a domicile of choice. It is only lost upon acquiring a new domicile of choice. A domicile of choice is lost immediately upon abandoning it with no intent to return, causing the domicile of origin to revive
(g) Any circumstance which is evidence of a person’s residence, or of his intention to reside permanently or indefinitely in a country, must be considered in determining whether he has acquired a domicile of choice in that country.
The Court made a two-stage finding: [15]
(a) First, it held that both debtors had acquired Hong Kong as a domicile of choice by 1993, given their long-term residence, deep-rooted family and business connections, as well as possession of permanent identity cards.
(b) However, the Court found that they subsequently abandoned the domicile of choice by moving their center of life abroad, giving up their Hong Kong residences, and clearly stating their intentions not to return. As such, their UK domicile of origin revived, and they were not domiciled in Hong Kong when the petitions were filed in May 2024.
(2) Issue 2 - Ordinary Residence
The Court affirmed the following principles of ordinary residence: [16]
(a) The person must be habitually and normally resident in that particular place, apart from temporary or occasional absences or long or short duration.
(b) The word “habitually” refers to 2 necessary features, namely (i) residence adopted voluntarily and (ii) for settled purposes.
(c) In relation to (ii), there must be a degree of settled purpose; all that is necessary is that the purpose of living where one does has sufficient degree of continuity to be properly described as settled.
(d) The question of whether a debtor is ordinary resident in Hong Kong within the relevant period is one of fact and degree. It is not necessary for the petitioner to show that the debtor was ordinarily resident in Hong Kong throughout the period of 3 years. The consideration is whether the debtor was ordinarily resident in Hong Kong of unspecified duration at any time during the period of 3 years.
The Court accepted both debtors’ evidence and found that they had given up their Hong Kong residences by 2020. [17] Their subsequent short visits for specific events did not constitute having a "place of residence" in Hong Kong during the relevant three-year period.
(3) Issue 3 - Carry On Business
The Court affirmed the following principles governing the “carry on business” limb: [18]
(a) The requirement is not satisfied merely by showing that a person runs a company's business, even though he is the sole beneficial shareholder and is in complete control. This principle flows from the fundamental doctrine of a company's separate legal personality.
(b) However, it is possible to find that a person is conducting a separate business of their own based on the totality of the evidence. This requires evidence of activities that go beyond those performed in their capacity as a company director.
HSBC argued that pursuant to article 137 of the Table A in the First Schedule to the former Companies Ordinance prevailing in 1993 which CBM adopted as part of its articles of association [19], the directors could personally profit from CBM’s activities. This claim was based on their conviction as directors for CMB’s failure to pay its employees. [20]
The Court rejected the above arguments. It held that Article 137 cannot be regarded as conferring a “profit” on the director. Instead, it is an indemnity that compensates for out-of-pocket expenses. As such indemnity is inherently tied to the director's actions on behalf of the company, it does not apply to liabilities incurred in a personal capacity and therefore cannot be evidence of a separate business. [21]
(E) Key Takeaways
In conclusion, this case is significant for creditors pursuing bankruptcy petitions in Hong Kong, particularly in cross-border contexts on the following grounds:
(1) Jurisdiction: A debtor can successfully oppose a bankruptcy petition solely by challenging the petitioner's failure to meet the jurisdictional requirements of Section 4 of the BO. The burden of proof rests squarely on the petitioner.
(2) Domicile: The case confirms that domicile is not static. The Court will undertake a two-stage analysis: (i) determining if a domicile of choice was acquired through long-term residence and intention; (ii) assessing whether it was later abandoned. The Court will consider all the relevant factors, including family ties, property ownership, business center and the debtor's intentions.
(3) Carry on Business: The Court reinforced a strict separation between an individual and their corporate entity. Merely controlling a corporate entity, even as a sole director and shareholder, is insufficient to prove a debtor is carrying on business in a personal capacity.
(2) Domicile: The case confirms that domicile is not static. The Court will undertake a two-stage analysis: (i) determining if a domicile of choice was acquired through long-term residence and intention; (ii) assessing whether it was later abandoned. The Court will consider all the relevant factors, including family ties, property ownership, business center and the debtor's intentions.
(3) Carry on Business: The Court reinforced a strict separation between an individual and their corporate entity. Merely controlling a corporate entity, even as a sole director and shareholder, is insufficient to prove a debtor is carrying on business in a personal capacity.
In light of the above, before filing a bankruptcy petition in Hong Kong, creditors must conduct thorough due diligence to ascertain the debtor's sufficient nexus with Hong Kong. To succeed on the "carry on business" limb, they must provide evidence that the debtor conducted a separate personal business in Hong Kong, distinct from the company's affairs, at any time during the three years preceding the petition.
[1] https://legalref.judiciary.hk/lrs/common/ju/ju_frame.jsp?DIS=172932
[2] Ibid
[3] https://www.elegislation.gov.hk/hk/cap6?xpid=ID_1438403511024_004
[4] Re Zhu Guoling, HCB462/2024, date of judgment: 24 January 2025, §17
[5] Re Gregory Trevor and Re John Victor Bottomley, §6
[6] Ibid, §7
[7] Ibid, §8-9
[8] Ibid, §11
[9] Ibid, §14[10] Ibid, §15
[11] Ibid, §1
[12] Ibid, §3
[13] Ibid, §18
[14] Ibid, §19
[15] Ibid, §51
[16] Ibid, §58
[17] Ibid, §61-62
[18] Ibid, §63
[19] “[e]very director, managing director, agent, auditor, secretary and other officer for the time being of the company shall be indemnified out of the assets of the company against any liability incurred by him in relation to the company in defending any proceedings, whether civil or criminal, in which judgment is given in his favour or in which he is acquitted or in connexion with any application under 358 of the Ordinance in which relief is granted to him by the court”
[20] Ibid, §64
[21] Ibid, §65
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