Case Document

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CACV 263/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 263 OF 2009

(ON APPEAL FROM HCSD NO. 15 OF 2009)

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BETWEEN

	WILFRED ROYCE LANE	Applicant
	and
	QUESTNET LTD	Respondent

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Before: Hon Rogers VP in Chambers

Date of Hearing: 7 June 2010

Date of Decision: 7 June 2010

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D E C I S I O N

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1.This is an application for a stay of bankruptcy proceedings. The application is a renewed application; it was first made before a judge on 3 March of this year and he refused the stay. It arises in this way.

2.There was a statutory demand made on the applicant; that statutory demand related to a number of orders for costs. The applicant sought to set aside that statutory demand and the proceedings were protracted. They were extended because applications for adjournments were made and were granted;the final one, as I understand it, was an application for an adjournment so that the applicant could seek legal aid.

3.Towards the end of the period of that adjournment, an application was made for legal aid. That application for legal aid was ultimately refused. The application for legal aid, of course, entails, if a memorandum is filed by the Legal Aid Department, a stay of 42 days of proceedings.

4.The matter was due to be heard again in court on 30 October and the respondents to this application issued a summons to lift the legal aid stay. The lifting of a stay is not an unusual process, it frequently happens. That summons to lift the stay was served at what I would refer to as “the Silvercord address”; that is the address which the applicant has confirmed to me is the address for service of documents. Apparently, it arrived at 5.45, but for some reason, despite the fact that there was nobody at the office at that time, it was not until, I understand, about 4 pm the next day that the applicant became aware of it. That is unfortunate. But if one has an address for service, it is an address for service and if somebody is not there at 5.45 on one day, one does expect them to be there fairly early the next day. Office hours are not normally between 4 o’clock and 5.30 each day.

5.In any event, the judge then proceeded to hear the matter. He lifted the stay because he considered that the matter was really delaying tactics. Then he considered the merits of the application to set aside the statutory notice and came to the conclusion that although the applicant may have arguments on two of the matters which he considered were meritorious, there were arguments on others which he considered were not correct and there were yet further matters, further orders for costs, which there was no merit in seeking to avoid. On that basis, the judge refused to set aside the statutory demand.

6.Pausing there, one can say that the same would have happened even if the judge had considered that the proceedings had been stayed. The statutory demand would have remained and would not have been set aside.

7.So this application now comes before this court. The major ground which has been taken on behalf of the applicant is that the court was at fault in setting aside the 42day stay of the proceedings and should not have proceeded to hear or consider the merits of the application to set aside the statutory demand.

8.In my view, it was within the judge’s power, even without service of the document, but I am not satisfied that there was not service of the notice by the respondent to set aside the 42 day stay under the Legal Aid Provisions. So in those circumstances, I do not accede to that argument.

9.But more importantly, it seems to me that the bankruptcy petition coming on for hearing on 24 June should proceed. The points which the applicant seeks to take now on the merits can be taken in the bankruptcy proceedings. If he says debts have been paid, that can be established in the bankruptcy proceedings. If he says that for other reasons a bankruptcy order should not be made, that can also be taken in the bankruptcy proceedings. Since this is an application to stay the bankruptcy proceedings, I consider that I have to decline that application and this application is, therefore, refused.