Re: Au Kam Ming and Ex Parte: Au Kam Han

HCB003234/2001

HCB 3234/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

IN BANKRUPTCY PROCEEDINGS NO. 3234 OF 2001

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Coram: Hon Kwan J in Court

Date of Hearing: 13 August 2001

Date of Judgment: 13 August 2001

Date of Handing Down of Reasons for Judgment: 16 August 2001

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REASONS FOR JUDGMENT

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1.This is a petition by a judgment creditor, Madam Au Kam Han, based on a judgment obtained by her against the debtor, Mr Au Kam Ming, in HCPI No. 1069 of 1998. The judgment was given by Seagroatt J. on 13 March 2001 and the petitioner was awarded substantial damages for the dependants and for the estate of the deceased, Mr Leung Pui Hong ("the deceased"), in the sum of HK$13,474,500.00 with interest and costs. The statutory demand was served on the debtor personally on 20 March 2001. He is serving a term of imprisonment of 10 years on a charge of conspiracy to cause grievous bodily harm to the deceased, to which he had pleaded guilty. The petition was filed on 14 May 2001 and served personally on the debtor on 18 June 2001.

2.At the hearing before me, it was submitted by Mr Bedford on behalf of the debtor that the petition should be adjourned or stayed until the outcome of the debtor's appeal from the judgment of Seagroatt J. is known. The debtor has filed a Notice of Appeal on 10 April 2001. I understand that a date of the hearing of the appeal has not been fixed.

3.I will not exercise my discretion to adjourn or stay the bankruptcy proceedings unless I am satisfied that there are prima facie grounds of appeal with reasonable prospects of success. Having considered the judgment, the Notice of Appeal, the written and verbal submissions of counsel, I am not persuaded by Mr Bedford that he has surmounted this hurdle. Accordingly, I have made a bankruptcy order against the debtor and the detailed reasons appeared below.

4.As found by the Judge, the deceased was kidnapped on 12 July 1996 and was murdered on, almost certainly, the same day. The kidnapping was due to a plan initiated by the debtor and implemented by his girlfriend, who was the second defendant in the High Court Action, and a group of men she had contacted to carry out the job. The Judge rejected the debtor's evidence whereby he sought to distance himself from the actions of his girlfriend. He found that the debtor and the girlfriend had intended, at the very least, that the deceased should suffer really serious harm and that it was "unarguably foreseeable that death could result from an attack on [the deceased] which intended serious physical injury". On page 18 of his judgment, Seagroatt J. has this to say:

"The plaintiff's case is based on trespass to the person. ....

Au Kam-ming [the debtor] wanted Mr Leung [the deceased] physically harmed to a serious degree. It did not matter to him if he was killed. Whilst I am unable to find positively that he wanted him killed from the outset, I think that possibility did take hold of him, and he was content with such a solution. Careful plans were made to ensure that Mr Leung could be identified and his movements known. Au's activity demonstrated this fully. I do not believe that there was any serious attempt to cancel the 'contract' by him or his girlfriend. If there had been, and with full knowledge that the life of a man was at risk, either or both would have taken steps to warn or protect Mr Leung. I am satisfied on the balance of probabilities that both were as directly responsible for the murder of Mr Leung as if both had in turn, wielded the weapon that caused 16 or so horrendous head and neck injuries. If they had not wanted him dead or, at least subjected to the risk of death, they could easily have prevented his murder. They did nothing. I find them both liable at law for the results of their evil plan."

5.As I understand Mr Bedford's submission, the main ground of his appeal against the Judge's finding on liability is that trespass to the person was not proved and there was no evidence upon which the Judge could find that the debtor had participated in the abduction and holding to ransom of the deceased. Mr Bedford has failed to demonstrate to me that there are prima facie grounds to attack the Judge's finding on the evidence that the debtor had participated in the kidnapping. As for the cause of action, Mr Bedford submitted that the Judge's ruling that the debtor was as directly responsible for the murder of the deceased "as if" he had wielded the weapon is insufficient to found a cause of action in law. I am quite unable to see the validity of this argument. A person is liable not only for the torts committed by himself. He is also liable for those torts he has authorised. In the above extract of the judgment, it is clear that the Judge had found that the debtor had authorised others to inflict serious bodily harm on the deceased and that it was "unarguably foreseeable" that death could result from an attack which intended grievous bodily harm.

6.The other grounds of appeal relating to liability as stated in the Notice of Appeal appear to me to be equally of little substance. As for the appeal on quantum, I note that the debtor seeks to attack the awards made on pain and suffering and loss of amenities and for loss of accumulation of wealth. The debtor also seeks to attack the award on loss of dependency on the ground that there was no or no sufficient evidence for the Judge to find that the deceased's family had received various benefits due to the failure of the petitioner to serve any or any valid hearsay notice. As I am not persuaded that the debtor has made out prima facie grounds of appeal on liability with reasonable prospects of success, I do not think it would be right to stay or adjourn the petition on the basis that there is an appeal on quantum unless the debtor is prepared to make a substantial payment into court as a condition for the granting of a stay or an adjournment. And this the debtor has not offered to do. Indeed, I understand that on 11 January 2001, Seagroatt J. has ordered that the debtor is to make an interim payment of HK$2,200,000.00 into court within 14 days. That order has not been complied with to date.

7.The only other objection raised by Mr Bedford to the petition is that there is a defect in the petition in that the petitioner has failed to comply with section 6B(1) of the Bankruptcy Ordinance, Cap. 6, which requires a creditor with security to either state in the petition that he is willing to give up his security for the benefit of all creditors in the event that a bankruptcy order is made or to state the estimated value of the security on the basis that the petition is not to be made in respect of the secured part of the debt.

8.Mr Bedford submitted that the petitioner has obtained a Mareva injunction over the debtor's assets on 27 January 1999 restraining him from disposing of his assets until further order save in so far as the same should exceed the sum of HK$49.3 million. I do not think a Mareva injunction is security for the purpose of section 6B. Mr Bedford also submitted that the order for interim payment obtained by the petitioner in the High Court Action on 11 January 2001 could constitute security for this purpose, even though no payment has been made by the debtor to date.

9.I am not so sure whether the petitioner may be regarded as a creditor with security on account of the order for interim payment she has obtained against the debtor. However, to forestall any argument that the petition may be defective for that reason, Mr Chong, who appeared for the petitioner, informed me that his instructing solicitors would be prepared to give an undertaking to file an amended petition to comply with section 6B. On that basis, I have made a bankruptcy order against the debtor. I have ordered that the bankruptcy order is to take effect upon the petitioner filing in court and effecting service on the debtor and on the Official Receiver an amended petition and an affirmation verifying the amended petition within seven days hereof. I have also ordered that the petitioner is to have the costs of the petition.

Representation:

Mr K M Chong, instructed by Messrs Darin Leung & Partners, for the Petitioner

Mr Nigel Bedford, instructed by Messrs Paul Ng & Co, for the Debtor

Mr Alfred Chan, for the Official Receiver