Re Tse Wai Ip

HCB 5599/2025

[2025] HKCFI 5399

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

BANKRUPTCY PROCEEDINGS NO 5599 OF 2025

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REASONS FOR JUDGMENT

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1.At the hearing of the petition presented on 21 July 2025 by the petitioner, Dr. Mok Chui Yuk (莫翠玉) (“Petitioner”), against the debtor, Dr. Tse Wai Ip (謝偉業) (“Debtor”), I made a usual bankruptcy order against the Debtor. These are the reasons for my judgment.

Background facts

2.The following facts are not in dispute.

3.The Debtor is a medical doctor. He is a founder of a Clarity Medical Group Holding Ltd (“Parent Company”) and was its director from June 2022 to August 2025[1].

4.The Petitioner is a registered medical practitioner. She owns and controls 5 companies which engage in provision of eye surgery services to patients[2] (collectively “Service Companies”).

5.The Debtor says that for the purpose of boosting the financial performance of Saintford Limited (“Saintford”) (an operating company wholly owned by the Parent Company)[3] in connection with the Parent Company’s application for initial public offering at the Stock Exchange of Hong Kong Limited, a series of agreements were entered into between Saintford and the Service Companies, the effect of which was to transfer all the business and revenues generated by the Service Companies to Saintford.

6.The relevant agreements were described in Recital (B)-(I) to the Deed of Undertaking and Indemnity dated 16 March 2023 executed by the Debtor in favour of the Petitioner (“Deed”). They comprised:

(1)  2 consultancy agreements dated 1 November 2019 made between Tse, Lau & Hui Medical Practice (“Partnership”) and 2 of the Service Companies;

(2)  3 consultancy agreements dated 31 May 2021 made between Saintford and 3 of the Service Companies;

(3)  a deed of novation dated 1 May 2020 made between the Partnership, Saintford and 2 of the Service Companies novating the rights under the 2 consultancy agreements dated 1 November 2019 (as described in sub-§(1) above) from the Partnership to Saintford

(collectively “Consultancy Agreements”)[4].

7.Under the Consultancy Agreements, Saintford agreed to pay to the Service Companies 60% of the net fees (net costs borne by Saintford) received by Saintford for consultation or procedure performed for the patients referred to Saintford by the Service Companies (“Referral Fees”)[5].

8.By 5 Supplemental Agreements (collectively “Supplemental Agreements”) dated 26 November 2021 made between Saintford and the Service Companies, the parties agreed to vary the Service Agreements by increasing the Referral Fees payable to the Service Companies from 60% to 80%.[6]

9.After the successful listing of the Parent Company on 18 February 2022, the management of Saintford considered that the Petitioner’s purpose had been served and looked for ways to end the cooperation with her[7].

10.In March 2023, the Petitioner and Saintford decided to terminate the cooperation and all the Service Agreements previously entered into between them[8].

11.As of 16 March 2023, the outstanding fees owed by Saintford to the Petitioner was HK$8,911,314, which the Debtor says represented the 20% increase in Referral Fees under the Supplemental Agreement.

12.According to the Debtor:

(1)  He was informed by Mr Chris Hui Yung (“Chris Hui”) and Mr Anthony Wu Ting Yuk (“Anthony Wu”), who were respectively the CEO and Chairman of Saintford, that the cashflow of Saintford was tight and could not pay the outstanding fees to the Petitioner[9].

(2)  It was agreed between the Petitioner, Saintford (represented by Chris Hui and Anthony Wu) and the Debtor that the Debtor would provide a “guarantee” in favour of the Petitioner to ensure that the outstanding fees would be repaid by instalments.

(3)  He agreed to sign the Deed on the basis of the assurance and confirmation given by Chris Hui and Anthony Wu that Saintford would pay the instalments to the Petitioner[10].

13.The Deed stated, inter alia, as follows:

(1)  Immediately prior to execution of the Deed, Saintford, the Petitioner and the Service Companies entered into a Cancellation Agreement whereby the parties agreed to cancel the Service Agreements with immediate effect, subject to the terms and conditions of the Deed (“Cancellation Agreement”) (Recital (J)).

(2)  Pursuant to the Cancellation Agreement, Saintford paid a one-off bonus in the sum of HK$4,500,000 to the Petitioner upon its execution (Reduced Payment), which represented part of the bonus payment originally agreed to be paid by Saintford to the Petitioner (Original Bonus). In consideration of the Petitioner accepting the Reduced Payment from Saintford in lieu of the Original Bonus the Debtor, being a substantial shareholder and an executive director of the Parent Company, agreed to pay the remaining balance of the Original Bonus (i.e. HK$4,852,440) (“Remaining Balance”) to the Petitioner in the manner stated in the Deed (Recital (K)).

(3)  In consideration of the Petitioner agreeing to accept the Reduced Payment from Saintford in lieu of the Original Bonus, the Debtor unconditionally and irrevocably undertook to pay to the Petitioner the Remaining Balance by 12 monthly instalments of HK$404,370, with the first instalment due on 1 March 2024 (clause 1).

(4)  If the Debtor defaulted in payment of any of the monthly instalments, any outstanding amount payable under the Deed would become immediately due and payable (clause 3(i)).

(5)  If the Debtor defaulted in making payment, the Petitioner would be entitled to charge interest on such sum from the date of default until payment at 2% per month (clause 4).

(6)  The Debtor had either obtained independent legal advice in relation to the Deed or had voluntarily waived his right to seek such independent legal advice under the Deed (clause 6).

14.Despite execution of the Deed, the Debtor did not pay any of the monthly instalments to the Petitioner.

15.By a statutory demand served upon the Debtor on 21 March 2024, the Petitioner required the Debtor to pay HK$4,914,041.79, being the amount payable under the Deed[11].

16.Between 19 April 2024 and 2 May 2024, the Debtor paid HK$780,000 to the Petitioner[12].

17.On 22 July 2024, the Petitioner presented a bankruptcy petition in HCB 5059/2024 against the Debtor[13].

18.By a settlement agreement dated 25 October 2024 entered into between the Debtor and the Petitioner (“Settlement Agreement”), the parties agreed to settle the proceedings in HCB 5059/2024 on the following terms:

(1)  The Debtor will upon execution of the Settlement Agreement pay HK$500,000 to the Petitioner (clause 1.1);

(2)  The Petitioner will use her best endeavours to adjourn the hearing of the petition to a date not earlier than 1 April 2025 with costs reserved (clause 2.1);

(3)  The Debtor will pay the sum of HK$3,979,265.45 to the Petitioner in 3 instalments on 31 January 2025, 28 February 2025 and 31 March 2025, whereupon the Petitioner will waive her right to receive interest under the Deed (clause 3.1-3.2);

(4)  If the Debtor fails to make any of the payments specified in clause 3.1, all unpaid instalments shall become immediately due and owing, and interest on the unpaid principal due under the Deed shall accrue at 2% pursuant to clause 4 of the Deed, and shall be deemed to accrue from 23 July 2024 until full payment, and the Petitioner shall be entitled to seek a bankruptcy order against the Debtor or to take any other action to obtain payment of the debt owed by the Debtor (clause 4.1).

19.After execution of the Settlement Agreement and receiving payment of HK$500,000 from the Debtor, the Petitioner applied for leave to withdraw the petition in HCB 5059/2024 whereupon leave was granted by the court on 29 October 2024.

20.The Debtor did not pay the remaining amount in accordance with the Settlement Agreement.

21.By a statutory demand served on the Debtor on 27 February 2025 (“SD”), the Debtor was required to pay interest on the principal sum of HK$4,479,265.45 at 2% per month from 23 July 2024 to 22 October 2024, and the outstanding principal sum of HK$3,979,265.45 together with interest at 2% per month from 23 October 2024 to 27 February 2025, being the amount payable under the Settlement Agreement (“Debt”)[14]. The Debtor did not pay the Debt.

22.On 21 July 2025, the petition was presented.

Applicable principles

23.The approach of the court in considering a bankruptcy petition is well-established. As submitted by Mr Oliver Tse, counsel for the Petitioner:

(1)  Where a debt is established and the procedural requirements have been complied with, a petitioning creditor has a prima facie right to a bankruptcy order (Ho Ying Pat Bobby v Overseas Way (China) Ltd [2011] 2 HKLRD 837 (CA), per Le Pichon JA, at §12).

(2)  In opposing the petition, the debtor has to show a bona fide dispute on substantial grounds in respect of the debt by adducing sufficiently precise evidence which is believable, and must establish that he has a defence of substance, not just a fair probability of one (Re Leung Cherng Jiunn [2016] 1 HKLRD 850 (CA), per Kwan JA (as she then was), at §23).

(3)  In assessing whether the debt is bona fide disputed on substantial grounds, the following principles expounded in Re Hong Kong Construction (Works) Ltd, HCCW 670/2002, 7 January 2003), per Kwan J (as she then was), at §§6(1)-(4), are applicable:

(a)  The burden is on the debtor to establish that there is a genuine dispute of the debt on substantial grounds. In this context, “substantial” means having substance and not frivolous. An honest belief in an insubstantial ground of defence is not sufficient.

(b)  The court should look at the debtor’s evidence against so much of the background and evidence that is not disputed or not capable of being disputed in good faith; in other words, the evidence is not to be approached with a wholly uncritical eye.

(c)  The court cautions itself against unsubstantiated and unparticularised assertions. It is incumbent on the debtor to put forth “sufficiently precise factual evidence” to substantiate its allegations.

(d)  The court does not try the dispute on affidavit but determines if a substantial dispute exists. In so doing, the court necessarily has to take a view on the evidence, to see if the debtor is merely “raising a cloud of objections on affidavits” or whether there is substance in the dispute raised by the debtor.

24.Mr Tse submits (and I agree) that despite the length of Tse 1^st, the Debtor’s grounds of opposition may be summarized as follows:

(1)  The Deed was (a) incomplete, misleading, deceptive and tainted with illegality, (b) a condition within the Deed was unfulfilled, (c) there was breach of collateral agreement to the Deed; and (d) there have been significant changes in circumstances since the Debtor signed the Deed[15].

(2)  If the Deed is unlawful or unenforceable, so is the Settlement Agreement[16].

25.I do not think that the Debtor has discharged the burden of showing that there is a bona fide dispute on substantial grounds in respect of the Debt.

26.The Debt is based on the Settlement Agreement signed by the Debtor and the Petitioner which is binding upon them.

(1)  Where, as here, a person of full age and understanding “has signed a document which purports to have legal effect, the law has never regarded it as enough to show that he signed without knowing its contents for the document to be disavowed…. But they are held to the documents which have chosen to sign unless there is shown to be a recognized legal basis for concluding that their apparent consent has been in some way vitiated or that reliance on that document by some other person falls into some category of unconscionable conduct justifying relief in equity” (Ming Shiu Chung v Ming Shiu Shum (2006) 9 HKCFAR 334, at §§84-86, per Ribeiro PJ).

(2)  The vitiating factors at common law include fraud, mistake, misrepresentation, non est factum, duress, undue influence and lack of mental capacity. To disown a signed legal document, facts constituting the vitiating factor relied on must be pleaded and established by the evidence (Ming Shiu Chung, §87).

27.The Debtor has not identified, let alone established, any vitiating factor which would entitle him to disown the Settlement Agreement.

28.The Debtor’s bald assertion that if the Deed is unlawful or unenforceable, the Settlement Agreement would also be unlawful or enforceable is wholly without merit:

(1)  No reason has been articulated by the Debtor as to why the alleged invalidity of the Deed, even if established, would have the effect of rendering the Settlement Agreement unlawful or unenforceable. This is unsurprising given that the Settlement Agreement was prepared by the Debtor and provided to the Petitioner for her comments and signature[17].

(2)  The Settlement Agreement is a separate agreement made between the parties for the purpose of settling their dispute in the previous bankruptcy proceedings. Both parties had relied on and acted upon the Settlement Agreement in that the Debtor paid HK$500,000 to the Petitioner, and the Petitioner agreed to extend the time for payment of the Remaining Fee and withdrew the petition in HCB 5059/2024. Having acted on and obtained the benefit under the Settlement Agreement, it is not properly open to the Debtor to act inconsistently by alleging that the Settlement Agreement is unlawful or unenforceable.

(3)  This is particularly so when the parties expressly agreed, under clause 5.1, that the Settlement Agreement constitutes the entire understanding between the parties and supersedes all prior negotiations and agreements including the Deed.

29.Further, I agree with the submissions of Mr Tse that the principle of contractual estoppel applies and the Debtor is estopped from denying the Debt. The principles have been stated by Riberio PJ in Ng Yuk Pui Kelly v Ng Lai Ling Winnie (2021) 24 HKCFAR 401, at §§25-27:

“25. Thus, in the leading case of Peekay Intermark Ltd v Australia and New Zealand Banking Group Ltd, Moore-Bick LJ explained the doctrine’s operation by reference to what was agreed between he contractual parties:

There is no reason in principle why parties to a contract should not agree that a certain state of affairs should form the basis for the transaction, whether it be the case or not. For example, it may be desirable to settle a disagreement as to an existing state of affairs in order to establish a clear basis for the contract itself and its subsequent performance. Where parties express an agreement of that kind in a contractual document neither can subsequently deny the existence of the facts and matters upon which they have agreed, at least so far as concerns those aspects of their relationship to which the agreement was directed. The contract itself gives rise to an estoppel: see Colchester Borough Council v Smith [1991] Ch 448, affirmed on appeal [1992] Ch 421.

26. And in Springwell Navigation Corp v JP Morgan Chase Bank, another leading authority, Aikens LJ stated:

… I will try and analyse the matter from principle. If A and B enter into a contract then, unless there is some principle of law or statute to the contrary, they are entitled to agree what they like. Unless Lowe v Lombank is authority to the contrary [which was held not to be the case], there is no legal principle that states that parties cannot agree to assume that a certain state of affairs is the case at the time the contract is concluded or has been so in the past, even if that is not the case, so that the contract is made upon the basis that the present or past facts are as stated and agreed by the parties.

He added:

Like Moore-Bick LJ in Peekay I see commercial utility in such clauses being enforceable, so that parties know precisely the basis on which they are entering into their contractual relationship.

27. Finally, we should mention First Tower Trustees Ltd v CDS (Superstores International) Ltd, in which Lewison LJ stated:

It is now firmly established at this level in the judicial hierarchy that parties can bind themselves by contract to accept a particular state of affairs even if they know that state of affairs to be untrue. This is a particular form of estoppel which has been given the label “contractual estoppel”. Unlike most forms of estoppel it requires no proof of reliance other than entry into the contract itself. Thus as a matter of contract parties can bind themselves at common law to a fictional state of affairs in which no representations have been made or, if made, have not been relied on.” (underlined added).

30.In the present case, Recital (E) of the Settlement Agreement expressly states that the Debtor “acknowledges that he is indebted to the Petitioner in the amount of HK$4,479,265.45, plus interest on the unpaid principal pursuant to paragraph 4 of the Deed”. Having acknowledged and agreed that he was indebted to the Petitioner in the amount stated, the Debtor is estopped from denying his liability to pay the Debt in these proceedings.

31.Mr Donald Ting, counsel for the Debtor, argues that “estoppel does not render what is illegal legal”, relying on First Laser Ltd v Fujian Enterprises (Holdings) Co Ltd (2012) 15 HKCFAR 569 §86 where Lord Collins NPJ said “…if a contract is illegal because it is contrary to public policy or unenforceable because it is too uncertain, I do not see how estoppel by convention can turn that contract into something that is legal or certain”. The argument only falls to be rejected. The passage cited is concerned with estoppel by convention, not contractual estoppel. In any event, the principle only applies to a contract which is illegal or unenforceable, which is not the case here as the Settlement Agreement is valid and enforceable for the reasons set out above.

32.It is unnecessary to consider Mr Ting’s arguments that the “Agreed Arrangement” for payment of an additional 20% referral fee to the Petitioner under the Supplemental Agreement was “designed to deliberately conceal from [Saintford’s] accounts the increased rates (or bonus) payable to [the Petitioner]: with the increased fees to [the Debtor] paid off-the-books, the proper revenue and financial position of [Saintford] (and thus the Parent Company) would be overstated”, and to create “a misleading (if not false) accounting records for [Saintford] and/or the Parent Company with a view to inflating its revenue” in contravention of s.895 of the Companies Ordinance (Cap. 622) or market misconduct offences under s.277 of the Securities and Futures Ordinance (Cap. 571).[18] It is difficult to see how Mr Ting can advance such arguments when the Debtor has not made such allegations in Tse 1^st. In any event, it seems to me that if the arguments were right, the relevant offences would have been committed by Saintford and the Parent Company and their management (including the Debtor), rather than the Petitioner.

Mr Oliver Tse, instructed by Long An & Lam LLP, for the Petitioner

Mr Donald Ting, instructed by Lau, Kwong & Hung, for the Debtor

Mr Jacky Chan, of Official Receiver’s Office, for the Official Receiver