Tang Mo Lin Irene v. Norman Guy Donald and Chan Man Hoi (Ivan), The Joint and Several Trustees of the Property of Wong Yuk Tung (A Discharged Bankrupt)

HCSD 34/2024

[2026] HKCFI 5829

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

APPLICATION TO SET ASIDE A STATUTORY DEMAND

NO 34 OF 2024

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BETWEEN

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DECISION

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1.Introduction

1.1By a decision dated 27 November 2025 (“Main Decision”)[1], I dismissed the Applicant’s application to set aside the 2024 SD (“Main Application”) and authorized the Respondent to present a bankruptcy petition against the Applicant after 14 days from the date of the Main Decision. By a summons dated 15 December 2025, the Applicant seeks a stay pending appeal (“Present Application”).

1.2This is my decision on the Present Application. I have considered the written submissions from the Applicant dated 6 July 2026 (“A’s Submissions”), the written submissions from the Respondent dated 13 July 2026 (“R’s Submissions”) and the Applicant’s reply submissions dated 16 July 2026 (“A’s Reply Submissions”).

2.The Main Decision and the appeal grounds

2.1The issues in the Main Application and the relevant background matters are set out at Main Decision §§1.1-2.9. Two issues arose for determination, namely[2]:

(1) The Primary Issue: Whether, notwithstanding that the Respondent was a (fully) secured judgment creditor[3], whether the 2024 SD should be set aside when the Respondent had confirmed that it was willing, in the event of a bankruptcy order being made, to give up the Securities;

(2) Ground 3: Whether the 2024 SD should be set aside under Rule 48(5)(d) of the BR on the ground that the Respondent had, for nearly 4 years, failed to act on the Securities.

2.2I decided both issues in favour of the Respondent. I dealt with the Primary Issue at Section 4 of the Main Decision and Ground 3 at Section 5.

2.3As stated at Main Decision §1.3, although the estimated value of the Securities exceeded the Debt, the 2024 SD contained a statement that the Respondent was “willing in the event of a bankruptcy order being made, to give up this security… for the benefit of all the bankrupt’s creditors” (“Statement”).

2.4In the Applicant’s Notice of Appeal dated 15 December 2025, the Applicant attacks my analysis principally of the Primary Issue. For the purpose of the Present Application, the Applicant’s arguments may be summarized as follows.

2.5Rule 44(5) of the BR makes provision for the form and content of a statutory demand. It, inter alia, provides:

“If the creditor holds any security in respect of the debt, the full amount of the debt shall be specified, but –

(a) there shall in the statutory demand be specified the nature of the security, and the value which the creditor puts upon it as at the date of the demand; and

(b) the amount of which payment is claimed by the demand shall be the full amount of the debt, less the amount specified as the value of the security.”

2.6Rule 48(5) provides:

“The court may grant the application [to set aside a statutory demand] if –

…

(c) it appears that the creditor holds some security in respect of the debt claimed by the demand, and either rule 44(5) is not complied with in respect of it, or the court is satisfied that the value of the security equals or exceeds the full amount of the debt; or

(d) the court is satisfied, on other grounds, that the demand ought to be set aside.”

2.7Section 6(2) of the Ordinance provides:

“Subject to sections 6A to 6C, a creditor’s petition may be presented to the court in respect of a debt or debts if, but only if, at the time the petition is presented –

…

(c) the debt, or each of the debts, is a debt which the debtor appears either to be unable to pay or to have no reasonable prospect of being able to pay; and

…”

2.8Section 6A(1) of the Ordinance provides:

“For the purposes of section 6(2)(c), the debtor appears to be unable to pay a debt if, but only if, the debt is payable immediately and either –

(a) the petitioning creditor to whom the debt is owed has served on the debtor a demand (known as the statutory demand) in the prescribed form requiring him to pay the debt or to secure or compound for it to the satisfaction of the creditor, at least 3 weeks have elapsed since the demand was served and the demand has been neither complied with nor set aside in accordance with the rules; or

(b) execution or other process issued in respect of the debt on a judgment or order of any court in favour of the petitioning creditor, or one or more of the petitioning creditors to whom the debt is owed, has been returned unsatisfied in whole or in part.”

2.9Section 6B(1) of the Ordinance provides:

“A debt which is the debt, or one of the debts, in respect of which a creditor’s petition is presented need not be unsecured if either –

(a) the petition contains a statement by the person having the right to enforce the security that he is willing, in the event of a bankruptcy order being made, to give up his security for the benefit of all the bankrupt s creditors; or

(b) the petition is expressed not to be made in respect of the secured part of the debt and contains a statement by that person of the estimated value at the date of the petition of the security for the secured part of the debt.”

2.10It will be seen that the Statement contained in the 2024 SD mirrors the wording of section 6B(1)(a) of the Ordinance.

2.11The Applicant argues that I had erred in the following respects:

(1) Rule 44(5) of the BR, properly analyzed and construed, does not permit a fully-secured creditor to issue a statutory demand;

(2) I was wrong to take into account section 6B(1) of the Ordinance since that provision (a) only has application at the petition stage and (b) does not answer the anterior question whether a fully-secured creditor can issue a statutory demand;

(3) My discussion of the authorities cited in the Main Decision was incomplete.

2.12In essence, the Applicant contends that the regime envisaged by a proper interpretation of the Ordinance and the BR is as follows (“A’s Contended Regime”):

(1) A fully-secured creditor can never issue a statutory demand as he cannot comply with Rule 44(5) of the BR;

(2) Only a partially-secured creditor can issue a statutory demand in compliance with Rule 44(5) of the BR;

(3) The Respondent is a judgment creditor and has obtained two charging orders (ie the Securities) which, for the purpose of the Main Application, were conceded to have an estimated value exceeding the Debt. As I understand the Applicant[4], the routes said to be open to the Respondent, are either (1) to enforce the Securities under section 6A(1)(b) of the Ordinance following which the Respondent can present a bankruptcy petition under “inability to pay” ground set out at section 6(2)(c) of the Ordinance if the execution or other process issued in respect the judgment debt has been returned unsatisfied in whole or in part or (2) to surrender the Securities at the petition stage under section 6B(1) of the Ordinance.

2.13For the avoidance of doubt, I note that the parties are in dispute as to whether the Present Application and the appeal are in truth delaying tactics on the part of the Applicant (including whether the Notice of Appeal was served in time). I do not intend to dwell on these extraneous matters as they are not germane to the determination of the Present Application.

3.The applicable principles

3.1Counsel are in agreement on the applicable principles.[5]

3.2Whether or not to grant a stay of execution is entirely a matter within the discretion of the Court. It is trite that a stay will only be granted where there are good reasons to do so: Fung Shing Chung v Choi King Hung [2024] HKCA 1021 §20. In gist:

(1) The existence of merely an arguable appeal cannot by itself amount a sufficient reason to justify a stay. It is the minimum requirement before a court would even begin to consider granting a stay;

(2) The existence of a strong appeal will usually by itself enable a stay to be granted because this would constitute a good reason for a stay;

(3) In most cases, where the Court is faced with simply the existence of an arguable appeal, it becomes necessary for the applicant to provide additional reasons as to why a stay is justified;

(4) Commonly, this is done by demonstrating that without a stay the appeal would be rendered nugatory, for example, because of an appreciable risk that the respondent to the appeal would not be able to repay in the event of a successful appeal against a money judgment, or because the failure to grant a stay would have a serious deleterious effect on the applicant;

(5) In considering an application for a stay pending appeal, it would be impractical and even undesirable for the Court to go deeply into the merits or strengths of the appeal, although the court must still form a preliminary view of these aspects.

3.3In the present case, the Applicant principally contends that the merits of the appeal are of such strength that a stay should be granted. Alternatively, she says that, if a bankruptcy petition is presented against her, she would “potentially be compelled to wind up CTIHL and in turn wind up also Cheong On and thereby compelling the Land Resumption Programme to be aborted”[6].

4.Analysis

4.1For the following reasons, I am not persuaded that I should accede to the Present Application.

(i) Merits of the appeal

4.2Even on a preliminary basis, I do not regard the Applicant’s appeal as enjoying strong prospects of success.

4.3I have already set out my analysis of the Primary Ground in the Main Decision. It seems to me that it is only necessary to briefly comment on A’s Contended Regime.

4.4As set out in the Main Decision, I maintain my view that it is important to consider the rationale of section 6B(1)(a) of the Ordinance: Main Decision §§4.7-4.9. In particular, at Main Decision §4.9, I referred to White v Davenham Trust [2011] Bus LR 1443 and identified the rationale for the exceptions created by section 6B(1)(a) of the Ordinance. As pointed out by the Respondent, the additional passages in White cited by the Applicant in the Present Application do not undermine the general proposition that a creditor can give up his security to invoke the collective realization of assets which is the point of insolvency proceedings. At Main Decision §4.9, I said as follows:

“Viewed thus, as observed by Mr Yu, the Applicant's interpretation undermines the function of section 6B(1)(a) of the Ordinance as a standalone exception. Unlike in the winding-up of companies, service of a statutory demand is a necessary requirement to establish a debtor's inability to pay before a petition can be presented. If a fully secured creditor's statutory demand is bound to be set aside despite his willingness to give up its security upon a bankruptcy order being made, such a creditor will never be able to reach the stage of presenting a petition which invokes the section 6B(1)(a) exception.”

4.5The primary submission advanced by the Applicant is that, under A’s Contended Regime, a judgment creditor can reach the petition stage without the presentation of a statutory demand by availing himself section 6A(1)(b) of the Ordinance.

4.6In my view, A’s Contended Regime is flawed. Whilst there may be other permutations, I only need to address the scenario proffered by the Applicant. Under A’s Contended Regime, if a fully-secured judgment creditor decides not to enforce his security, it is unclear how he can issue a petition, reach the petition stage and surrender the security at the petition stage under section 6B(1)(a) of the Ordinance. This is because, under A’s Contended Regime, the fully-secured creditor can never issue a statutory demand. However, once the judgment creditor has resorted to enforcement under section 6A(1)(b) of the Ordinance (and becomes entitled to present a petition without first issuing a statutory demand), that judgment creditor can no longer rely on section 6B(1)(a) of the Ordinance at the petition stage, since, at that stage, he is no longer a person “having the right to enforce the security” (because he has already enforced it) or a person “willing to give up his security” (because there is no further security to give up).

4.7As such, it is not apparent how a judgment creditor can invoke section 6B(1)(a) of the Ordinance at the petition stage under A’s Contended Regime.

4.8In any event, the Applicant has not dealt with Main Decision §4.10 (whether in the Notice of Appeal or in her submissions), at which I pointed out that Form 162 of the Bankruptcy (Form) Rules Cap 6B (ie the prescribed form of a statutory demand) envisages the possibility of a secured creditor giving up his security.

4.9I am inclined to agree with the Respondent that the appeal is devoid of merit and the Present Application should be dismissed for failing to demonstrate an arguable appeal.

(ii) Whether appeal rendered nugatory/ deleterious effect on the Applicant

4.10Even were I wrong on the foregoing conclusion on the merits of the appeal, I would still not have acceded to the Present Application.

4.11I refer to Lok Ho Ting v Keyes Global Holdings Ltd [2026] HKCA 1075 which is a case concerning, as here, an application for stay pending appeal against a dismissal of an application to set aside a statutory demand. At §20 thereof, Chow JA observed that even after a bankruptcy order has been made, the debtor still has standing to pursue an appeal against a decision refusing to set aside a statutory demand served on him. The Court of Appeal therefore rejected the suggestion that, without a stay, the appellate process would irreversibly be compromised.

4.12That leaves the Applicant’s contention set out above, namely she may potentially be compelled to wind up CTIHL and in turn wind up also Cheong On, and thereby compelling the Land Resumption Programme to be aborted.

4.13I accept the Respondent’s submission that it is entirely unclear why the presentation of a bankruptcy petition or even the making of a bankruptcy order against her would have the above result. As pointed out by the Respondent:

(1) There is no evidence to suggest, and the Applicant has not suggested, that the resumption rights are personal to the Applicant such that once the Applicant is made bankrupt, her trustees-in-bankruptcy could not continue with the Land Resumption Programme. Indeed, it is plain from the Applicant’s evidence that the Land Resumption Programme is the business of Cheong On;

(2) Relatedly, there is no articulated basis to support the Applicant’s bare suggestion that she would be compelled to wind-up her companies once she is made bankrupt. As pointed out by the Respondent, under section 58 of the Ordinance, upon her bankruptcy, her shares in the companies would be vested in the trustees-in-bankruptcy. It will be for the trustees to decide what to do with those shares, and there is no basis for assuming – and in any event premature to conject – that the trustees would take any action that would jeopardize the value of the bankruptcy estate.

5.Conclusion

5.1For the above reasons, I dismiss the Present Application.

5.2I also make a costs order nisi that costs of and occasioned by the Present Application be to the Respondent to be summarily assessed. The Respondent is to provide its Statement of Costs within 7 days hereof and the Applicant her Statement of Objections within 7 days thereafter. I will then assess the costs on the papers.

Mr Jonathan Chan Yik Hong, counsel for the Applicant, instructed by Messrs Kelvin Cheung & Co

Mr Jason Yu and Mr Martin Lau, counsel for the Respondent, instructed by Messrs P C Woo & Co