Re Chau Yuk Ha

HCB000088/1983

IN BANKRUPTCY

Coram: The Honourable Mr. Justice Jones in Court

Hearing dates: 19th October, 20th October, 25th November 1983

Date of delivery of judgment: 28th November 1983

Mr. Daniel Fung (Director of Legal Aid) for Petitioner

Mr. Wong (Tang &.So) for Debtor

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JUDGMENT

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1. A bankruptcy petition was filed on the 26th April 1983 on the grounds that the debtor gave verbal notice to the petitoners on the 18th March 1983 that she had suspended payment of her debts.

2. The debtor is the sole proprietor of the Hing Her Hair Centre in Shatin. The 1st petitioner Chau Sai Ko was employed by the debtor as a hairdresser from January 1983 until the 17th April 1983 and the 2nd petitioner Kwong Shun Hang was a shampoo boy from March 1982 until the 19th February 1983.

3. When the petition was presented Chau Sai Ko claimed the sum of $13,388 in respect of arrears of wages from 1st January 1983 to 28th February 1983, wages in lieu of notice and annual leave pay and Kwong Shun Hang the sum of $5,747 for arrears of wages for the same period, wages in lieu of notice and annual leave pay. The other employees have claimed $8,646 for arrears of wages, wages in lieu of notice and annual leave pay. Since the petition was filed the debtor has paid the sum of $12,582.50 to the Director of Legal Aid as stakeholder on account of monies that she admits are due to the petitioners.

4. Kwong Shun Hang testified that the debtor told him to leave her employment on the 19th February 1983 when she refused to pay him wages which were due on the grounds that she had no money. Chau Sai Ko gave evidence with regard to the sums that he has claimed from the debtor.

5. On the 14th March 1983 the debtor signed as acknowledgment of amounts due to the petitioners and the two other employees which included a promise to pay on the 18th March 1983. On the 18th March 1983 the petitioners with the other 2 employees saw the debtor when she said that she was unable to pay her debts. Chau Sai Ko said that he left the debtor's employment on the 17th April 1983 when he was told that he need not report for work again.

6. The debtor admits that she owed monies to the petitioners on the 18th March 1983 and at the date when the petition was filed. However, she disputes the amount of her indebtedness and her liability for wages in lieu of notice and annual leave pay. She denied that she terminated the employment of the petitioners, but maintained that they left of their own accord with the result that she claims to be entitled to be paid one month's wages in lieu of notice.

7. One of the main disputes between Chau Sai Ko and the debtor concerned a cheque for $4,000 dated the 25th April 1982 which was signed by the debtor. Chau Sai Ko said that the cheque was given to him by the debtor on the 20th March 1982 to cover arrears of salary from January to March 1982.On the other hand the debtor and her brother Chau Yuk Kin testified that it was given for the repayment of a loan that had been made by Chau Sai Ko's sister-in-law to the debtor. According to the debtor and her brother the loan was requested by the brother in a telephone conversation with Chau Sai Ko on the morning of the 10th April 1983 and the money was handed over to the debtor at a restaurant in the evening in exchange for the cheque. Interest was to be paid at the rate of $150 for every $1,000 borrowed.

8. On the due date for repayment the debtor did not have sufficient funds but paid $1,000 on account of the principal and $600 by way of interest. Neither the debtor nor her brother was able to give a credible explanation for the payment of $600 interest when the correct sum on their calculations for half a month should have been $300. The debtor's brother also gave conflicting evidence when he gave two versions about the time when the question of interest was discussed with Chau Sai Ko. The debtor's evidence with regard to the failure to pay interest at a later stage on the grounds that she wanted the cheque to be returned was also unbelievable. I found the debtor to be a most unconvincing witness whilst her brother who was equally unimpressive had quite obviously rehearsed his evidence beforehand in an attempt to lend credence. I am quite satisfied that both witnesses were lying and I reject their evidence. I accept Chau Sai Ko's evidence that the cheque was given in payment of arrears of wages.

9. When the debtor was confronted by the petitioners and her other employees on the 18th March 1983 she paid $200 to each of them and promised to pay the outstanding sums by weakly instalments of $400 which would be increased to $1,000 if her business improved.

10. Mr. Wong who appeared for the debtor submitted that there was no evidence that the debtor had announced her intention to suspend payment of her debts on the 18th March 1983, but had made a proposal for payment by instalments. However, I prefer the evidence of the two petitioners and accept their version of the events that happened on that day and reject that given by the debtor. Nevertheless Mr. Wong contends that the evidence of the petitioner does not show that the debtor had suspended payment. In my judgment in accepting the petitioners' evidence I cannot find a clearer intention to suspend payment. In a further argument Mr. Wong said that it was insufficient for the debtor to give notice unless it was given to her creditors as a body. However, it is quite clear that a debtor need only give notice to one of her creditors.

11. The assertion that the petitioners would be liable to pay the debtor one month's wages in lieu of notice was devoid of merit. Mr. Wong also submitted that there was no evidence that the debtor was not in a position to pay any debt found to be outstanding, but there was no evidence before the court of the debtor's means nor has any offer been made to discharge any liabilities that may be due.

12. Upon the evidence I find that the debtor suspended payment of her debts on the 18th March 1983 and that the petitioners have established proof of the debts. I shall therefore make a receiving order with costs to be paid out of the estate. There will be the usual taxation in accordance with the Legal Aid (Scale of Fees) Regulations.

Representation:

Mr. Daniel Fung (Director of Legal Aid) for Petitioner

Mr. Wong (Tang &.So) for Debtor