Choy Bing Wing v. Director of Housing Department of the Government of the HKSAR

HCB 12343/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

BANKRUPTCY PROCEEDINGS NO. 12343 OF 2009

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BETWEEN

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Before : Master H Au-Yeung in Chambers

Date of Hearing : 5 December 2013

Date of Decision : 5 December 2013

Date of Handing Down Reasons for Decision : 12 December 2013

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REASONS FOR DECISION

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BACKGROUND

1.This is the judgment creditor’s application for a charging order absolute against two properties of the judgment debtor.  The properties are: (1) 35/850^th shares of and in the Remaining Portion of Inland Lot No 7109, the Remaining Portion of Inland Lot No 7110, the Remaining Portion of Inland Lot No 7111, the Remaining Portion of Section A of Inland Lot No.513, the Remaining Portion of Section B of Inland Lot No 513 and the Remaining Portion of Inland Lot No 513 (Shop 4, Ground Floor, Tak Lee Building, 270-280 Queen’s Road West, Hong Kong) (“the First Property”); and (2) 14/2,000^th shares of and in New Kowloon Inland Lot No 5603 (Flat 2A, 6^th Floor, Merry Court, Nos.4-6 Fessenden Road, Kowloon, Hong Kong) (“the Second Property”).  A charging order nisi was made by Master de Souza on 4 July 2013.

2.The debt in respect of which the charging order nisi was made arose by virtue of 3 costs orders granted in the course of these bankruptcy proceedings against the judgment debtor in favour of the judgment creditor:

(1)  The first costs order in the total sum of $31,670.10 was made by the Honourable Mr Justice Chung on 24 December 2009;

(2)  The second costs order in the sum of $70,000 was made by Master Ko on 1 February 2010;

(3)  The third costs order in the sum of $18,000 was made by the Honourable Mr Justice Barma (as he then was) on 24 February 2010.

3.Thus, the total amount of costs involved (excluding interest) is $119,670.10.

JUDGMENT DEBTOR’S APPLICATION TO RECUSE

4.At the beginning of this hearing, the judgment debtor applied for me to recuse myself.  His ground was that I had previously refused his application for the tape and transcripts of a hearing in another action.  In his oral submissions, instead of explaining why I should not hear this case, and in particular, why my refusal to release such a tape and transcripts to him is relevant in this application, the judgment debtor only kept asking me to allow his application for such a tape and transcripts. 

5.I have already refused the judgment debtor’s application for the release of the said tape and transcripts many months ago, and I do not see why the judgment debtor is entitled to renew that application in the hearing today.

6.Furthermore, I cannot see why the said refusal on my part could be said in any remote way that I would have bias, be it actual or apparent, against the judgment debtor.

7.The judgment debtor’s application for recusal was therefore dismissed.

JUDGMENT DEBTOR’S ABSENCE FROM PART OF THE HEARING

8.After his application for recusal was dismissed, the judgment debtor proceeded to make submissions in an attempt to show cause against the making of the charging order absolute.  However, having gone on for a short while, he stated that he was not satisfied with the presence of a bailiff in court.  He stated that he was under threat with the bailiff’s presence.  He then said that he had to leave.  I then told him that I had a question to ask him concerning his submissions, however, he replied that he was not going to answer any further questions.  Then he left the court room of his own volition and did not come back since then.

9.I could not see why this hearing should be adjourned as a result, as it was the judgment debtor’s own choice to leave the court.  The hearing was therefore carried on in his absence thereafter.

10.To be fair to the judgment debtor, I will deal with all the matters which he has raised in his affirmations and written submissions filed or lodged (as the case may be) for the purpose of this hearing, even if he did not repeat the same orally while he was in court today.

JUDGMENT DEBTOR’S OBJECTIONS

11.By his 6^th affirmation, the judgment debtor raised a number of grounds of objection as follows:

(a)  He has issued a cheque on 10 September 2012 but the judgment creditor’s solicitors returned the cheque to him 10 days later.

(b)  The judgment creditor’s solicitors are aware that the judgment debtor is financially sound and is ready to pay the costs involved.

(c)   The judgment creditor’s solicitors did not inform Master de Souza by Cheng Yun Wah’s affirmation dated 27 June 2013 that while only a small amount of costs was involved, two properties were sought to be charged.

(d)  The court should not allow the judgment creditor to enforce the costs order by way of charging order after the withdrawal of the bankruptcy proceedings.

12.By way of written submissions, the judgment debtor also queried certain decisions made by the Honourable Mr Justice Anthony Chan.

13.I shall discuss these grounds in turn.

DISCUSSION

The judgment debtor’s payment

14.The judgment debtor stated that he had issued a cheque to the judgment creditor’s solicitors on 10 September 2012.  This is undisputed by the judgment creditor.  However, it is evident that this is not an unconditional payment. It can be seen from the covering letter issued by the judgment debtor that such a payment was said to be subject to his right to recover the same under Article 35 of the Basic Law.  On the reverse side of the cheque, it was also stated that “Rights for the recover (sic) of monies as stated in Choy’s letter dated 10/9/2012” and that “The two tilting towers must be demolished”.

15.In my view, the judgment creditor was entitled to return such a cheque on the basis that any payment made in satisfaction of the costs orders must be made unconditionally.  The judgment debtor should not impose conditions on the payment of costs.  It should also be pointed out that the conditions unilaterally imposed by the judgment debtor are totally unrelated to the costs order in issue.

16.The judgment creditor has demanded the judgment debtor to issue another cheque with no condition whatsoever imposed thereupon.  However, the judgment debtor has failed to do so. 

17.As a result, the costs under the 3 costs orders, together with interest thereon, remain outstanding.  Therefore, this ground of opposition must fail.

The judgment debtor’s financial position

18.The judgment debtor stated that he is financially sound and is ready to pay the costs involved, and the judgment creditor’s solicitors are fully aware of that.

19.In my view, the judgment debtor’s financial strength is totally beside the point.  No matter how wealthy he is, so long as he has failed to pay pursuant to an order of the court, the judgment creditor would be entitled to enforce such an order by relying on the procedures provided by the Rules of the High Court.

20.This ground is therefore rejected.

Judgment creditor’s failure to inform the court of material facts

21.Paragraph 5 of the judgment debtor’s 6^th affirmation reads:

“JSM charged 2 properties for such a small sum of money, while saw fit not to mention such crucial facts to Master de Souza in the Affirmation of Cheng Yun Wah dated 27/6/2013 …”

22.Pausing here, I should explain that the affirmation referred to by the judgment debtor was an affirmation filed by the judgment creditor in support of his application for a charging order nisi.

23.In my view, this allegation is totally unfair to the judgment creditor’s solicitors and the judgment debtor has misrepresented the fact.

24.As a matter of fact, the said affirmation of Cheng Yun Wah did refer to what the judgment debtor described as “crucial facts”, namely, the two properties which were proposed to be charged and the amount of outstanding costs.

25.Hence, this ground is totally without substance and must be rejected.

26.Having said that, the judgment creditor has informed this court that he would only ask the court to make a charging order absolute in respect of the First Property but not the Second Property so as to avoid further argument on the part of the judgment debtor of “over-security”.  The First Property was selected out of the two properties because the Secretary for Justice has applied for an order for sale in respect of that property.

Effect of withdrawal of the bankruptcy petition

27.To understand this ground properly, I should refer to the background of the present case.

28.The history should be traced back to 2007 when the judgment debtor sued, among other parties, the judgment creditor in HCA 2458/2007.  This action was subsequently discontinued.  As a result, the judgment debtor was subject to a costs order (“the HCA Costs Order”) which he failed to satisfy.

29.The judgment creditor therefore filed a bankruptcy petition against the judgment debtor.  Shortly before the hearing of the bankruptcy petition, the judgment debtor chose to pay pursuant to the HCA Costs Order in full.

30.The judgment creditor therefore sought leave to withdraw the bankruptcy petition.  Such leave was granted by Master Ko on 1 February 2010.  However, Master Ko also made the second costs order referred to in paragraph 2(2) above against the judgment debtor upon such withdrawal.

31.The judgment debtor now suggests that this court should not allow the judgment creditor to enforce the costs orders by way of charging order after his withdrawal of the bankruptcy proceedings.

32.In his written submission, the judgment debtor stated that “the Petition was dispensed off by the Defendant’s payment, thus DH had closed his case to seek bankruptcy order”.

33.In his 6^th affirmation, the judgment debtor also referred to the case of Taylor v Taylor (1875) 1 Ch D 426 and quoted a part of the judgment at page 431 that “when a statutory power is conferred for the first time upon a court, and the mode of exercising it is pointed out, it means no other mode is to be adopted”.

34.The judgment debtor’s argument is totally misconceived because the judgment creditor is not going after the judgment debtor for the underlying debt of the bankruptcy proceedings (i.e. the HCA Costs Order), but for satisfaction of, among other things, the costs order made by Master Ko upon the withdrawal of the bankruptcy petition.  The judgment debtor has mixed up two separate costs orders.

35.Further, the meaning of the paragraph in Taylor v Taylor (supra) quoted by the judgment debtor is that if the rules have stipulated a specific mode in making an application, that particular mode, but not any other mode, must be followed.  This meaning is even more apparent if the paragraph immediately follows the judgment debtor’s quotation is referred to:

“For instance, the 16th section says that the proceeding is to be by petition. It is enabling, I know, in form, that the application may be by petition; but no other process can be adopted. That has been decided on a great variety of Acts where the application has been directed to be by petition, and it has been laid down that that being the mode pointed out by the Act which conferred the jurisdiction, you must exercise the jurisdiction (as the 2nd section of this Act says in terms, though it was not necessary) according to the provisions of the Act.”

36.Therefore, it is clear that the judgment debtor has totally misunderstood the case of Taylor v Taylor.  This case is certainly irrelevant as far as the application before this court is concerned.

A Chan J’s decision

37.Finally, the judgment debtor lodged a number of attacks against A Chan J who dismissed the appeal of the judgment debtor against the directions imposed by Master K Lo in this application.  In my judgment, what the judgment debtor submitted in this regard is again totally without substance and has nothing to do with the issues before this court.

CONCLUSION

Charging order absolute

38.By reasons of the aforesaid, I now order that there be a charging order absolute in respect of the First Property.  The charging order nisi in respect of the Second Property is hereby discharged as proposed by the judgment creditor.

Costs

39.There is no reason why the judgment creditor should not be entitled to his costs of this application.

40.The judgment creditor submitted that an order for costs on indemnity basis should be made against the judgment debtor by reason of his conduct in these proceedings, namely, that he had relied on some totally unmeritorious grounds, that he had laid challenges to various court orders which amounts to an abuse of the process of the court and that he had deliberately and persistently failed to pay costs pursuant to various court orders.

41.The judgment creditor sought to rely on a number of unmeritorious appeals and applications lodged by the judgment debtor in these proceedings. In my view, if the presiding judge or master considered it appropriate, he or she would have imposed an indemnity costs order in respect of any particular appeal or application.  In my view, the failure of those appeals and applications should not be taken into account here again.

42.In respect of the judgment debtor’s unmeritorious arguments, I am prepared to be a bit more tolerant with the judgment’s debtor because after all he is acting in person.

43.That leaves the judgment debtor’s conduct in deliberately and persistently refusing to pay although, as he admitted, he has the financial means to do so.

44.I must say that the judgment debtor’s conduct is certainly not commendable.  Having said that, I do not consider it appropriate for me to exercise my discretion solely on that basis.

45.I therefore would not order that the judgment creditor’s costs be assessed on indemnity basis.

46.As aforesaid, the judgment debtor should bear the costs of the judgment creditor in this application.  This is an appropriate case where such costs should be assessed summarily pursuant to Order 62 rule 9A(1)(a) of the Rules of the High Court.  For this purpose, Ms Cheng for the judgment creditor has provided this court with a statement of costs.  Having perused the same, I am satisfied that most of the costs of the judgment creditor were reasonably incurred.  Adopting a broad brush approach, I assessed the judgment creditor’s costs of this application at $34,000.  Such costs should be payable by the judgment debtor forthwith.

Venna Cheng, of Mayer Brown JSM, for the judgment creditor

The judgment debtor appeared in person