Re Liu Yi Fang

CACV 106/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 106 OF 2016

(ON APPEAL FROM HCB NO. 5613 OF 2013)

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D E C I S I O N

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Hon Cheung JA (giving the Decision of the Court) :

1.This is the Trustees in Bankruptcy’s (‘the Trustees’) application for security for costs of the appeal by Mr Liu Yi Fang (‘the Bankrupt’), who was adjudicated a bankrupt on 5 February 2014 based on an unsatisfied judgment debt of HK$84,050,474.79 plus interest.

2.Master Hui ordered the Bankrupt on 31 March 2016 to pay, out of his income, to the Trustees

1) HK$39,094 per month from the date of the bankruptcy order on 5 February 2014 until the date of the Master’s order, and

2) HK$39,094 per month from the date of the Master’s order until the discharge of his bankruptcy.

3.The Bankrupt has lodged an appeal against the Master’s order.  The Court will deal with the Trustees’ application for security on paper.  The Bankrupt has made no response to the application despite being directed by the Registrar of Civil Appeals to file an affidavit and written submissions. 

4.According to the Trustees, five proofs of debt had been lodged, the total amount of outstanding debt amounts to HK$824,255,857.53.  The total recovery by the Trustees of The Bankrupt’s assets only amounted to HK$8,187,470.

5.The Master’s order was made pursuant to an application by the Trustees for income payment against the Bankrupt.

6.The Bankrupt failed to pay the contribution required by the order for the period from 5 February 2014 to 31 March 2014 totaling $1,010,859.14 and the monthly contribution from 1 April 2016 onwards.

7.The Bankrupt’s solicitors had stated on his behalf that he did not have funds to pay the $1,010,859.14 and the costs ordered by Master Hui.

8.The Bankrupt’s appeal is against the order for the payment of $1,010,859.14.

9.The Court of Appeal has power to order security for costs of the appeal in special circumstances, one of which is that the appellant is impecunious.  The Bankrupt is plainly impecunious and to allow him to prosecute the appeal without furnishing security will clearly work to the prejudice of the Trustees in the event his appeal is unsuccessful. 

10.The Trustees seek security of $384,050.  This sum includes solicitors’ charge and counsel’s fees ($35,000) for the present application.  Counsel’s fee for the appeal is $100,000.

11.We are of the view that the appropriate security is in the sum of $270,000 which includes counsel’s fee of $35,000 and $100,000 respectively.

12.We accordingly make the following order :

1) The Bankrupt is required to pay the $270,000 into Court within 21 days.

2) Pending payment in, the appeal is stayed.

3) In default of payment, the appeal will be dismissed without further order with costs to the Trustees.

4) Costs of the application be to the Trustees.

Written Submissions by Ms Eva Sit, instructed by F. Zimmern & Co., for the Joint and Several Trustees in bankruptcy of the estate of Liu Yi Fang, the bankrupt

Henry Wan & Yeung, for the Bankrupt, providing no written submission