Dbs Bank (Hong Kong) Ltd v. Tam Yuk Ching

HCB 2142/2018 &

HCB 2143/2018

[2019] HKCFI 1735

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

BANKRUPTCY PROCEEDINGS NO 2142 OF 2018

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AND

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

BANKRUPTCY PROCEEDINGS NO 2143 OF 2018

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(Heard together)

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REASONS FOR JUDGMENT

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1.At the end of the hearing of these two petitions, I made the bankruptcy order in respect of each of them with costs.  I now state my reasons.

2.The debtors in these petitions respectively, Mr Miu and Madam Tam, are husband and wife.  In April 2017, the petitioner commenced action in the District Court against, amongst others, the debtors pursuant to their personal guarantees in respect of loan facility extended by the petitioner (DCCJ 1654/2017).

3.On 21 June 2017, the petitioner obtained judgment against the debtors for the sum of HK$780,152.32 with interest on HK$682,900 at the rate of 36% per annum from 4 February 2017 to the date of payment as well as fixed costs of HK$7,830.

4.On 10 October 2017, the petitioner issued statutory demand to the debtors in respect of the outstanding indebtedness then in the sum of HK$955,695.08 with interest as aforesaid running from 11 October 2017 until payment.  The statutory demands were served on the debtors on 16 January and 25 January 2018 respectively.

5.The petitions were presented on 18 April 2018.

6.Since their appearance in court in June 2018, and according to their affirmations, the debtors have referred to their alleged ability to pay by relying on a prime property registered in the name of one of their holding companies at Tai Tam Road, Hong Kong (“the Property”), which could be sold.  The petitions have been adjourned for substantive hearing.

7.Mr Miu was absent from the present hearing.  Madam Tam produced to this court what appeared to be an original general power of attorney executed by Mr Miu in her favour.  However, this did not serve the purpose of absolving him from attending the court hearing or authorizing Madam Tam to represent him in respect of the petition against him personally.  Nevertheless, I saw no reason preventing the petitioner from proceeding.

8.The petitioner updated this court the amount owed by the debtors as of the present hearing has accumulated to HK$1,611,765.40.

9.Also as an update, the petitioner produced in court a copy of the memorial of registration of the assignment of the Property dated 22 May 2019, evidencing the sale of the Property as the debtors have previously suggested.  The completion of the sale of the Property was confirmed by Madam Tam in court.  The consideration for the sale and purchase was HK$180,000,000.

10.It was a sale by the mortgagee, Hang Seng Bank (“HSB”), of the Property.  The petitioner explained that the sale proceeds were absorbed entirely in repayment of the debt owed to HSB, and thus leaving nil balance that the debtors may utilize to pay the debt owed to the petitioner.  This situation is borne out by simply referring to Madam Tam’s own breakdown in her affirmation filed in April 2019.  She set out a list of 10 creditors with their respective debts, which appear to be running amounts, because of the interest factor.  Therefore, the amounts as at today, if unpaid, should be larger.  The amount then owed to HSB alone, according to that list, exceeded HK$180,000,000.

11.Section 6(2) of the Bankruptcy Ordinance, Cap 6 provides that a creditor’s petition may be presented to the court in respect of a debt if, but only if, at the time the petition is presented, the debtor appears either to be unable to pay or to have no reasonable prospect of being able to pay.  Section 6A defines that the debtor appears to be so unable if, but only if, where the debt is immediately payable, 3 weeks have elapsed since the statutory demand was served on the debtor or execution in respect of the debt on a judgment or order of any court in favour of the petitioner has been returned unsatisfied in whole or in part.

12.Where the liability to pay the debt cannot be disputed, it is for the debtor to adduce credible evidence to support any alleged prospect of paying the debt in full within a reasonable time: see Re Pai Chung Ying, HCB 413/2001 (26 October 2001).

13.In the present case, the objective fact is that the debtors could not rely on the sale of the Property to provide the support for their alleged ability to pay the petitioner, be it at the time of the petition or today. Other than the Property, the debtors have not put forward any other means whereby they may rely on in support of their ability to pay the debt owed to the petitioner.

14.When asked, Madam Tam confirmed in court that this is the situation.

15.In the circumstances, I saw no reason why the bankruptcy order should not be made in respect of each of the petitions.  So I did as mentioned above.

Mr Julian C P Yeung, instructed by Siao, Wen and Leung for the judgment creditor in both HCB 2142/2018 and HCB 2143/2018

The judgment debtor in HCB 2142/2018 was not represented and appeared in person

The judgment debtor in HCB 2143/2018 was not represented and did not appear

Attendance of Official Receiver was excused