Re Tse Hoi King

HCB000663/1984

IN BANKRUPTCY

_________________________

Coram: The Honourable Mr. Justice Jones in Court

Date of hearing: 21st January 1985

Date of delivery of judgment: 21st January 1985

__________

JUDGMENT

__________

1. The petitioners who were employees of the debtor firm apply for a receiving order on the grounds that Lee Kam Wah one of the partners gave verbal notice on the 12th October 1984 that the firm had suspended payment of its debts.

2. The petition is supported by an affirmation of the petitioners who claim that the debtor owes sums by way of arrears of wages, wages in lieu of notice, annual pay, severance pay, and holiday pay in a sum exceeding $7,000 whilst sums due to other employees amount to $470,000. Mr. Lam filed an affirmation in reply dated the 17th January 1985 claiming that the amount due to the petitioners was less than $5,000. However, he admitted that the firm owed $16,000,000 to unsecured creditors and $300,000 to preferential creditors.

3. An earlier bankruptcy petition by LBI Finance (Hong Kong) Limited No. 269 of 1984 against the debtor was dismissed by a consent order made by Mayo J. on the 27th September 1984 on the grounds that the petitioner conceded that the debtor was unable to pay a 15% dividend to the unsecured creditors and that no act of bankruptcy had been committed.

4. At the hearing before me the solicitor for the debtor sought dismissal of the petition as the debt admitted to be due to the petitioners was less than the statutory figure of $5,000, or in the alternative an adjournment of the petition to a date to be fixed to argue the defence under Section 9(3) of the Bankruptcy Ordinance known as the 15% rule.

5. Although Mr. Lam alleged that the amount due to the petitioners was less than $5,000 he gave no particulars in his affirmation. No application was made at the hearing to call any evidence. I preferred the evidence given by the petitioners in their affirmation to that of Mr. Lam who in my opinion was seeking to delay the firm's obligations to its employees. I therefore rejected his evidence.

6. I refused the application for an adjournment in respect of the 15% rule which in any event is a matter of discretion as Section 9(3) of the Ordinance does not apply to the claims of preferential creditors see Re Wong Moon-tai Bankruptcy No. 80 of 1983. The application for a receiving order was supported by the Official Receiver.

7. Having considered the evidence before me I found that the debt claimed by the petitioners was proved and that payment was suspended on 12th October 1984. Accordingly a receiving order was made with costs together with the usual legal aid taxation.

Representation:

Mr. North (Director of Legal Aid) for petitioners.

Miss R. Ho for Official Receiver.

Mr. P. Yip ( Charles H. Y. Yeung & Co.) for factory.