Re Ma Pui Tung

HCB 19884/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

BANKRUPTCY PROCEEDINGS NO. 19884 OF 2003

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Coram: Hon Chung J in Court

Date of Hearing: 10 May 2004

Date of Handing Down Judgment: 17 May 2004

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J U D G M E N T

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Introduction

1.This is a creditor's petition for the bankruptcy of the debtor. The petition, which was presented on 11 November 2003, was based on the apparent inability of the debtor to pay $39,549 being the taxed costs in HCAL 421/2001.

2.The following facts giving rise to this petition are undisputed. The debtor is a practising solicitor in Hong Kong. Judicial review proceedings (HCAL 421/2001) were earlier commenced by the debtor against the Solicitors Disciplinary Tribunal. The relief sought in the notice of motion was mainly:-

(a) to remove into the High Court and to quash the decision of the said tribunal given on 21 December 2000;

(b) a declaration that the Law Society is a public authority, or otherwise is subject to the provisions of the Hong Kong Bill of Rights Ordinance (Cap. 383);

(c) a declaration that s. 9B(4), Legal Practitioners Ordinance (Cap. 159) is invalid since it is not compatible with Article 10, Cap. 383 and/or natural justice and should be read as "may sit in camera in the places and at the times it directs";

(d) an order of mandamus directing the said tribunal to conduct the hearing in open public, on the grounds set out in the copy statement served herewith used on the application for leave to apply for such order.

S. 9B(4), Cap. 159 referred to above provides:-

"The Tribunal shall sit in camera in the places and at the times it directs".

3.For present purpose, it is unnecessary to summarise the reasons for doing so, but as a matter of fact, the debtor and the solicitors then acting for the petitioner consented to an order being made in the said judicial review proceedings. The relevant parts of the consent order dated 14 November 2001 read:-

"... the costs of and arising from the captioned proceedings be paid by the [debtor] to [the petitioner] to be taxed if not agreed" (para. 3 thereof).

The costs referred to in the consent order were later taxed. In the allocatur dated 7 January 2003, the amount of costs certified to be payable by the debtor to the petitioner is $39,549. As stated above, that sum is now the basis of this petition.

4.The following written materials are relied upon by the debtor in opposition to this petition:-

(1) the debtor's affirmation dated 6 May 2004;

(2) the writ and statement of claim in HCA 844/2004 (exhibit "JMB-1" to the debtor's said affirmation);

(3) the writ and statement of claim in HCA 998/2004 (exhibit "JMB-2" to the debtor's said affirmation);

(4) "Grounds to Oppose Bankruptcy Petitioner and to Dismiss it with Costs" dated 10 May 2004;

(5) a second draft "A Discourse on the issue of the elements of personal culpability on the part of [the debtor], Officer of the Court, Solicitor of the High Court" dated 4 May 2004;

(6) "Declaration of War" dated 4 May 2004;

(7) the reported decision of Re ICS Computer Distribution Ltd [1996] 3 HKC 440;

(8) the debtor's skeleton argument dated 8 May 2004 for use at the hearing before the master on 11 May 2004 regarding (a) the debtor's application to consolidate both HCA 998/2004 and HCA 4492/2003, and (b) the petitioner's application to strike out the claim in HCA 4492/2003.

5.The debtor's first main argument put forth at the hearing of this petition was that the costs ordered to be paid by him by the consent order are not payable now. In this connection, he relies heavily on the lack of the phrase "payable forthwith" in the consent order. With respect, I disagree with this argument. It is trite law that when the court orders "costs to be paid", the court intends that those costs are to be taxed (if not agreed) and paid forthwith. Thus, Hong Kong Civil Procedure 2004 says:-

"Where one party to a summons is awarded costs to be paid he is entitled to have them taxed and paid at once, and this although the order does not refer to taxation. And where the order of the Court of Appeal on an interlocutory appeal was 'the plaintiff shall pay to the defendants ... their costs of this appeal such costs to be taxed by a taxing master,' this means that the successful party has a right to an immediate taxation and payment, although the action has not yet been tried ... " (para. 62/4/1 thereof).

6.The second main argument of the debtor is that he is entitled to set-off the debt relied on by the petitioner against any debts which the petitioner may owe him. The debtor does not assert that there are presently debts owed to him by the petitioner. But he contends that there are merits in the actions taken out by him (namely, the actions referred to in para. 4(2), 4(3) and 4(8) above). If he succeeds in those actions, there will be costs payable by the petitioner.

7.Again, I disagree with the debtor's second main argument. The proceedings in HCA 4492/2003, HCA 844/2004 and HCA998/2004 are still at their early stages. It is unknown when these claims can be tried (if at all).

8.Other grounds are put forth in the documents relied upon by the debtor (see the documents set out in para. 4 above). They include:-

(a) the statutory demand was served prematurely (because the costs were still not due and payable at the time of service);

(b) the statutory demand cannot be relied upon because it has ceased to have effect by lapse of time or by reason of estoppel. This is because the debtor has raised objection based on the ground set out in sub-para. (a) above but the petitioner has not responded to his objection;

(c) the debtor is able to pay the taxed costs but he refuses to do so. Hence, there is no basis for the petitioner to assert in the petition that he is unable to pay the debt;

(d) it is an abuse of process to seek to bankrupt a professionally qualified solicitor for a debt of only about $40,000;

(e) the legal costs incurred in various legal proceedings should be in the region of $4 million. It is "fishy" that the petitioner only relies on the debt of about $40,000 and apparently takes no action regarding the much larger amount of costs;

(f) s. 25, Cap. 159 provides in short that the petitioner's expenses may be paid out of the general revenue. The petitioner is not acting bona fide in presenting this petition;

(g) the real purpose of this petition is to insult the debtor, to reduce or eliminate competition from the small or medium sized firms and to deprive the debtor his freedom and ability to fight against the petitioner.

9.There is no need to deal with the above in detail save to say this: they are either unsound in law, or are mere assertions which lack factual support.

10.Contrary to the debtor's contentions, I am satisfied that the petitioner has established the matters relevant to this petition. I am also satisfied that my discretion should be exercised in granting the bankruptcy order sought herein.

11.There will accordingly be the usual bankruptcy order with costs to the petitioner.

Representation:

Mr W H Lam of Messrs Lo, Wong & Tsui, for the Creditor

Debtor acts in person and present

Ms C Sit of Official Receiver's Office