Re Wu Kam Yuk

HCB001512/2002

HCB 1508/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

BANKRUPTCY PROCEEDINGS NO. 1508 OF 2002

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Re: LAI YUN KWAI

Ex Parte: WALSON INVESTMENT COMPANY LIMITED

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IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

BANKRUPTCY PROCEEDINGS NO. 1512 OF 2002

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Re: WU KAM YUK

Ex Parte: WALSON INVESTMENT COMPANY LIMITED

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(Heard Together)

Coram: Hon Kwan J in Court

Date of Hearing: 13 May 2002

Date of Judgment: 13 May 2002

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J U D G M E N T

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1.The petitioner in this matter Walson Investment Company Ltd had obtained a judgment against the two debtors in 1996 or 1997. It was in the sum of HK$1,111,685.66 including interest.

2.The statutory demand was served on both debtors personally on 7 November 2001. The petition herein filed on 23 January 2002 was served on the debtors personally on the next day.

3.The debtors have opposed this petition on three grounds. Firstly, it is alleged that the petitioner has failed to take into account the respective sums of HK$20,000.00 and HK$40,000.00 paid in September 2000 and October 2000. Next, it is contended that the petitioner has failed to take into account damages awarded in the debtors' favour under an interim award in the sum of HK$251,596.00 on 7 February 1996. Thirdly, it is alleged that the petitioner has included in its claim interest on the sum of HK$247,388.00 for which it is not entitled to do so under the final award dated 10 September 1996. If all these matters were to be resolved in the debtors' favour, according to Miss Esther Ho who appeared for the debtors, this would reduce the amount that the debtors are required to pay to about HK$500,000.00.

4.According to the petitioner's solicitor, if the above matters were resolved in the debtors' favour, this would only reduce the sum to be paid by them to HK$700,000.00. Whether the amount that should be paid by the debtors would be HK$500,000.00 or HK$700,000.00, it is still way above the threshold in the Bankruptcy Ordinance.

5.If I am satisfied that the debtors are unable to pay the debt assuming that this should be HK$500,000.00 as alleged by them, it seems that a bankruptcy order should be made.

6.At the hearing of the petition, the debtors have improved their offer to settle the debt. I understand from their solicitors that the debtors are the shareholders and directors of a company known as Wing Kee Construction Company Ltd and that this company has completed its contract with the Hong Kong Housing Authority and would expect to receive payment in July this year of about HK$2 million. The best offer the debtors can make to the petitioner is to pay HK$300,000.00 on 15 July 2002 and the balance of the proper amount that should be paid according to the debtors' calculation on 15 August 2002. This offer is rejected by the petitioner's solicitor on account of previous attempts by the parties to settle this judgment debt which was made in 1996 or 1997.

7.I understand from the petitioner's solicitor that in 1998, the petitioner had issued a bankruptcy petition against the two debtors and a receiving order was made. There was no contest by the debtors on the earlier occasion of the computation of the amount that they are required to pay. In April 1998, as a result of a settlement agreement reached between them, the receiving order was rescinded and some instalment payments were made by the debtors.

8.However, since October 1998, the debtors had defaulted in payment. Thereafter, negotiations were carried out until 2000 when the debtor promised to pay by instalments by 6 post dated cheques and only one was honoured.

9.In view of the past conduct of the debtors and that they had breached their promise to pay on at least two occasions, the petitioner is unwilling to accept the latest offer of the debtors. I am unable to say that the refusal of the petitioner to accept the debtors' latest offer is beyond the range of reasonable action of a creditor placed in these circumstances.

10.For the above reasons, I am of the view that a bankruptcy order should be made against each of the debtors with costs of the proceedings to the petitioner.

Representation:

Miss Ng, of Messrs H H Lau & Co., for the Petitioner

Miss Esther Ho, of Messrs Paul K C Chan & Co., for the Debtors

Mrs M Lam, for the Official Receiver