Kwok Ting Wai v. Wong Ka Sek and Wong Ka Lam King, The Joint and Several Trustees of the Property of Kwok Ting Wai, The Bankrupt

HCB 4269/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

IN BANKRUPTCY PROCEEDINGS

NO 4269 OF 2013

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RE: Kwok Ting Wai (郭庭威), the Bankrupt

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D E C I S I O N

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1.This is the appeal of the bankrupt, Mr Kwok, under section 83 Bankruptcy Ordinance seeking to reverse a decision of the trustees in bankruptcy with regard to their assessment of the bankrupt’s reasonable domestic needs. 

2.The bankrupt is now working as a technician earning approximately $14,535 per month. This is the figure assessed by the trustees and accepted by the bankrupt. He is divorced but is still living with his ex-wife and their eight year-old son in a rented public housing estate in Hong Kong. Under the divorce proceedings, the bankrupt was ordered in October 2013 to pay $3,000 per month for the maintenance of his son. According to the bankrupt, his wife is 34 years old working as a part‑time waitress earning about $6,700 per month.

3.After interviewing the bankrupt, the trustees assessed his average monthly income at $14,535 as aforesaid and his monthly expenses at $12,285. The bankrupt was thus required to make a monthly contribution of $2,250 to his bankruptcy estate.

4.In this appeal, the bankrupt asked this court to vary the following four items of monthly expenses as allowed by the trustees:

5.It can be seen that regarding miscellaneoushousehold expenses, the trustees only allowed $500. In his affirmation, the bankrupt seeks $1,000 more principally to cover expenses for his son during Sundays including 4 meals, stationery, toys, snacks etc.

6.Regarding miscellaneous personal expenses, there is no explanation as to what those expenses are for save a general statement at the beginning of the bankrupt’s affirmation that the living expenses approved by the trustees are not sufficient.

7.Regarding the personal food expenses, although the bankrupt now seeks $4,000 per month, according to a table (“the table”) prepared by the trustees and annexed to a letter dated 11 February 2014 they sent to the bankrupt, the bankrupt previously only claimed $3,000 a month. The explanation in his affirmation seems to be that the additional $1,000 is to cater for his daily afternoon tea without which he might feel a bit dizzy.

8.Lastly, regarding the bankrupt’s claim for $1,970 as his son’s private tutorial fees, it would appear from the table that he had not claimed this item of expenses previously. When this court asked him about this omission, the bankrupt simply said he had forgotten to do so.

9.This court also enquired with the bankrupt about the monthly sum of $3,000 for the maintenance of his son ordered in the divorce proceedings. The bankrupt told this court that (1) he had all along paid for his son’s tutorial fees by paying them to his now ex-wife; (2) the sum of $3,000 only covered his son’s living expenses and not tutorial fees; (3) he did not inform the Family Court about this item of expenses because he did not know he had to do so; and (4) he did not know the trustees would not approve the tutorial fees as an item of his monthly expenses. This court should mention that no receipts for such tutorial fees have been produced by the bankrupt for the purpose of this appeal.

10.The law is that, when an appeal is brought under section 83, it would be inappropriate for the court to interfere with the decision of the trustees unless it is shown that the trustees’ decision is clearly wrong.  In  other words, unless the trustees’ decision is utterly unreasonable, the court would not interfere: see the decision of DHCJ Jeremy Poon (as he then was) in Chung Kau (unreported) HCB 581/2003, 23 February 2004.

11.Having considered all the evidence and submissions before me, my decision is this. 

12.As far as the bankrupt’s personal food expenses and miscellaneous personal expenses are concerned, this court is not satisfied that the trustees are clearly wrong or utterly unreasonable in refusing to allow the additional sums sought.  

13.It should be noted that the $3,000 and $500 respectively allowed for those two items of expenses are just for the bankrupt’s food expenses and miscellaneous personal expenses. In addition, the trustees have assessed and allowed over $4,200 for the bankrupt’s rent, utilities, transport, miscellaneous household expenses, internet and telephone expenses, making it a total of over $7,700 per month for the expenses of the bankrupt himself.  While this is in no way a large sum, and while this court has considerable sympathy for Mr Kwok, as a bankrupt, he has to bear the consequences of his bankruptcy. 

14.Regarding the claim for additional sums to cover the bankrupt’s miscellaneoushousehold expenses and his son’s tutorial fees, this court is again not satisfied that the trustees are clearly wrong or utterly unreasonable in refusing to allow them. The monthly maintenance sum is meant to cover his son’s reasonable needs for the whole month which should include Sundays. There is no explanation as to why an additional $1,000 should be allowed to the bankrupt to cater for his son’s needs just on Sundays. Further, this court does not accept the bankrupt’s explanation that he has simply forgotten to inform the Family Court granting the maintenance order about the tuition fees or has forgotten to claim it when he was interviewed by the trustees - the tuition fees of $1,970 constitute almost 1/7 of the bankrupt’s present monthly income.

15.This court will now take a step back and look at the bankrupt’s overall financial situation. His income is presently $14,535. His claim for additional sums, together with the sum of $12,285 approved by the trustees, will add up to over $16,000. In other words, even at this stage, the bankrupt is seeking to live beyond his means. It is unclear to this court how the bankrupt can manage to do that during his bankruptcy. But  this court is clear that the trustees are not clearly wrong or utterly unreasonable in refusing to approve the claim for additional sums.

16.To conclude, this court shall dismiss the bankrupt’s appeal. 

17.The trustees having indicated to this court that they will not seek costs against the bankrupt, there will be an order nisi that there be no order as to costs.

The Joint and Several Trustees of the property of the Bankrupt: Mr Wong Ka Lam, King (黃嘉霖), appeared in person

The Bankrupt: Kwok Ting Wai (郭庭威), appeared in person