Re Law Siu Lun
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[2026] HKCFI 2364 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE BANKRUPTCY PROCEEDINGS NO 8176 OF 2025 __________________
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__________________________________ REASONS FOR JUDGMENT __________________________________ I. INTRODUCTION 1.At the hearing on 20 April 2026, having heard counsel’s submissions, I made a usual bankruptcy order with costs to the Petitioner. II. THE PETITIONER’S CASE 2.The hearing was the second hearing before Judge of the Amended Petition re-filed on 28 January 2026 (the “Amended Petition”). The Amended Petition was based on a Statutory Demand served on 12 September 2025 (the “Statutory Demand”) in relation to a loan of HK$800,000 (the “Loan”) advanced by the Petitioner to the Debtor on 25 October 2024. According to the Petitioner, the Debt was to be repaid by instalment of HK$19,000 starting from January 2025 through the Debtor’s employer Funing Property Management Limited (“Funing”). Seven instalments were made, and now the petitioning debt (the “Debt”) is the outstanding balance of the Loan plus interest, in the sum of HK$868,600. III. THE DEBTOR’S CASE 3.In HCSD 14/2026, the Debtor made an application on 5 February 2026 to set aside the Statutory Demand out of time (the “HCSD Application”), and so the HCSD Application was dismissed on that ground alone without the substantive merits examined. In the affirmation filed in support of the HCSD Application, only two grounds were mentioned: (1) misnomer of the Debtor in the Statutory Demand and (2) the Debtor had a cross-claim against the Petitioner. 4.In the present proceedings, no notice had been filed pursuant to Rule 68 of the Bankruptcy Rules. 5.Pursuant to the filing directions given at the first hearing of the Amended Petition before Judge on 23 February 2026, the Debtor filed his opposing affirmation on 16 March 2026 (the “Debtor’s Opposing Affirmation”). In the Debtor’s Opposing Affirmation, he alleged, in gist, that:-
6.In other words, the Debtor’s defence was that the Debt is not a debt, but 80% of the HK$1 million the Petitioner had to pay to the Debtor under this oral agreement. IV. ANALYSIS OF EVIDENCE 7.Despite some detailed terms of the oral agreement set out in §23 of the Debtor’s Opposing Affirmation, there was not a shred of any documentary evidence of the oral agreement, or the alleged “negotiations”. The only documentary evidence adduced purportedly in support was an Estate Maintenance Form (the “EM Form”). The EM Form showed that the Debtor prepared this form on behalf of the Funing, and he put his name under the item “Staff Name in English/Chinese” and the corresponding “Company Post” was EMM. Further, his email bore the domain name “@funing.com.hk”. The EM Form, prepared and adduced now as evidence by the Debtor himself, shows that he was employed by Funing. In fact, during the hearing, the Debtor’s counsel also confirmed that the Debtor’s case was that he was Funing’s employee. This, in my view, sat inconsistent with his own defence based on the oral agreement that the Petitioner would provide the Debtor to Funing under a sub-contract between the Petitioner and Funing, Funing would pay the Petitioner in return, and then the Petitioner would pay the Debtor the HK$1 million. Under this line of story, the Debtor would be the Petitioner’s employee, but not Funing’s employee. 8.The Debtor referred to the text conversation between the Debtor and the Petitioner, produced by the Petitioner in his reply affirmation. The text conversation showed that:-
9.The Debtor submitted that the text messages produced were incomplete. However, when I asked what parts were omitted that were relevant and why the Debtor himself did not produced those parts, the Debtor’s counsel was, with respect, not able to give any answer, but essentially submitted that this would show a bona fide dispute on substantial ground. I was unable to accept this submissions. If there were any omitted parts that were relevant to the Debtor’s defence (albeit raised late), the Debtor had every reason to produce these parts in the evidence. However, the Debtor did not seek to do so. 10.Further, the Petitioner produced receipt of payments from Funing for 7 months from January to July 2025, consistent with the Petitioner’s case set out in the Statutory Demand that the Debtor made seven instalments of repayment during the period. 11.The Debtor’s counsel reminded me that the loan agreement according to the Petitioner’s case was an oral agreement. He stressed that given that both parties’ cases were based on oral agreements, there was a bona fide dispute on substantial grounds. In my view, the text conversation and the seven instalments made by Funing to the Petitioner (in respect of which the Debtor did not attempt to explain what these instalments were) were sufficient to establish the Petitioner’s case on the Petition. Then in the overall assessment of the evidence to determine whether there as a bona fide dispute on substantial grounds, I should of course consider that the Petitioner’s case was based on an oral loan agreement. 12.The Debtor’s counsel repeated a few times that the Debtor had been acting in person and so did not know that he had to set out his current defence right away. With respect, first, in his supporting affirmation of the HCSD Application, he did know that he had to set out his grounds of opposition, just that he set out some grounds now not relied upon by him. Second, not knowing the requirement was not an acceptable excuse. Any person served with the legal documents, especially those that would lead to bankruptcy, would be alert enough to seek advice. Third, the Debtor himself has been a barrister since 2020. I could not accept the Debtor’s counsel’s submissions that though a barrister, he did not know enough. 13.Having considered the above, including that this allegation had been raised only lately without any explanation why this had not been raised earlier, and the lack of particulars of the negotiations and the oral agreement (for example, where and when the oral agreement was reached), I was not satisfied that there was any bona fide dispute on substantial ground on this oral agreement. 14.For completeness, in the evidence, it also seemed that the Debtor would rely on a cross-claim where he alleged that the Petitioner was indebted to him for certain client fees. It seemed to be his claim in a District Court Action. However, there was no evidence or any detail, not even about the amount of the alleged fees indebted to him. Therefore, I was also not satisfied that there was any bona fide dispute on substantial in this regard. V. CONCLUSION 15.In the circumstances, I made a usual bankruptcy order at the end of the hearing.
Mr Brian Lo, instructed by K.B. Chau & Co., for the Petitioner Mr James Wong, instructed by CP Tsui Lawyers, for the Debtor Mr Ronald Chan, of Official Receiver’s Office, for the Official Receiver |