Re Lin Yan Jenny

HCB 5516/2018

[2020] HKCFI 1227

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

BANKRUPTCY PROCEEDINGS NO 5516 OF 2018

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D E C I S I O N

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1.The bankruptcy order in this matter was made on 26 June 2019 after a contested hearing between the petitioner and the bankrupt, who was then legally represented: see [2019] HKCFI 1793.

2.On 15 May 2020, the bankrupt, acting in person, issued a summons for:

(1)  an order to annul the bankruptcy on the ground that she had repaid $150,000 to the petitioner;

(2)  an order that the trustees in bankruptcy do return $170,000 held by them to the bankrupt; and

(3)  an order to impose a fine or a term of imprisonment on the petitioner, Bright Nation Ltd and the trustees in relation to the false assertion of debts.

3.The application is in my view plainly misconceived.

4.The petitioner has put in a proof for over $774,000, including the petition debt of $450,000.  Credit has been given for $150,000 but there is still a large amount outstanding.  The bankrupt has raised assertions disputing the petitioner’s debt, saying that the petitioner could not possibly have lent money to her after knowing her only for a few days; that he should pay her rent and living expenses every month; that the sums due from him could be deducted from the sum of $450,000 held by her, and so on.  It seems to me the substance of what she has said on this application has already been dealt with by the court, against her, both in her application to set aside the petitioner’s statutory demand (see the Reasons for Judgment in HCSD 6/2018 dated 13 September 2018) and on the bankruptcy petition (see the Judgment in HCB 5516/2018 dated 26 June 2019), the papers of which I have reviewed.  In any event, a bankruptcy order will not be annulled simply because the bankrupt asserts she has repaid everything she considers she owes the petitioner.

5.Another creditor, Bright Nation Ltd, has lodged a proof of debt in the amount of approximately $285,000.  The debtor denies the debt but, again, the bankruptcy order cannot be annulled simply because she denies it.  The proof of debt is for the trustees to adjudicate upon.

6.In addition, there are fees of the trustees (estimated to be in the region of $500,000) that need to be paid or provided for before any annulment can be considered in these circumstances.  The bankrupt complains about the level of the fees incurred but the existence of that complaint is not a ground for annulment.

7.Accordingly, the application for annulment is rejected.  It follows that there is no basis to order the trustees to return any funds to the bankrupt.

8.As for the order sought for a fine or a term of imprisonment to be imposed, the bankrupt asserts that the petitioner and Bright Nation Ltd have made false statements in their proofs of debt and the trustees have failed to reject their proofs, and that they are all therefore liable to a fine or imprisonment under s 130(3) of the Bankruptcy Ordinance (Cap 6), which provides:

“ A person who knowingly makes a false statement when proving a debt in bankruptcy or knowingly makes a false statement in an affidavit required under this Ordinance is guilty of an offence and is liable to a fine at level 5 [i.e. $50,000] and to imprisonment for 6 months.”

This of course only arises if someone is charged, prosecuted and convicted in relation to the offence in question.  It is not a matter that this court can deal with on a summons taken out by the bankrupt.

9.The summons is therefore dismissed.

The Debtor was not represented and appeared in person

Bird & Bird, for the Petitioner, be excused

Attendance of the Official Receiver be excused