Hung Tuk Yee v. Hong Kong Housing Society
Read the full judgment text of CACV 147/2011 on BabelCite. This Court of Appeal judgment was delivered on 4 September 2014.
1. Pursuant to the bankruptcy petition filed by the creditor, the Hong Kong Housing Society (“HKHS”), on 2 November 2010, To J (“the trial judge”) made a bankruptcy order on 7 July 2011 against Mr Hung Tuk Yee, the debtor. Mr Hung now appeals to the Court of Appeal against this bankruptcy order.
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[English Translation –英譯本] IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF APPEAL CIVIL APPEAL NO 147 OF 2011 (ON APPEAL FROM HCB NO 7770 OF 2010) ________________________ BETWEEN
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JUDGMENT Hon Chu JA (giving the Judgment of the Court): 1.Pursuant to the bankruptcy petition filed by the creditor, the Hong Kong Housing Society (“HKHS”), on 2 November 2010, To J (“the trial judge”) made a bankruptcy order on 7 July 2011 against Mr Hung Tuk Yee, the debtor. Mr Hung now appeals to the Court of Appeal against this bankruptcy order. HCB 7770/2010 2.In 1999, Mr Hung and his wife, Madam Mo On Na (transliteration), purchased the unit situated at 3C, Luen Fat Mansion, Johnston Road, Wanchai (“unit 3C”) under the Home Starter Loan Schemeof the HKHS. 3.On 20 June 1999, the couple entered into a mortgage agreement with the Asia Commercial Bank to borrow $887,600 from the Bank with unit 3C as the security for the loan. 4.On 20 July 1999, the couple entered into a loan agreement with the HKHS to borrow $380,400 from it to be repaid (principal and interest) in 120 instalments. It was agreed that the first repayment was to be made 3 years later (that is, 1 August 2002). On the same day, the couple entered into a mortgage agreement with the HKHS to pledge unit 3C to the latter in the form of a second mortgage as security for the repayment of the said loan. 5.As the couple did not repay the Bank according to the schedule, the Bank instituted proceedings before the District Court (DCMP 4492/2004) on 30 December 2004 to claim the money due and owing and to apply for an order for sale. The Bank later obtained an order for sale from the Court and sold unit 3C for $1,050,000 on 26 January 2006. There was a balance of $174,379.16 left after deducting the sum the couple owed the Bank and other expenses. The Bank handed this remaining sum to the HKHS on 15 March 2006. 6.In April 2006, after deducting the said $174,379.16, the debt the couple owed the HKHS was reduced to $251,123.23. 7.As at 30 April 2007, the couple owed the HKHS $264,458.74 in principal and interest in total. 8.On 8 May 2008, the couple entered into a repayment agreement with the HKHS, agreeing to repay the said $264,458.74 in principal and interest (calculated at 2% per annum) in 63 months commencing from 1 May 2007. 9.Since 2008, the couple began to default in repaying the HKHS according to the schedule. As at 18 March 2010, the amount of instalment payment in arrears reached $90,324, besides owing $137,142.57 in principal. 10.On 29 June 2010, the HKHS served a statutory demand on the Mr Hung to demand for the repayment of the outstanding sum of $230,887.92 (that is, the $90,324 unpaid instalment payment + the $137,142.57 outstanding principal + $3,421.35 being interest from 1 March to 26 May 2010). 11.Mr Hung neither paid the HKHS the said sum nor applied to the court for setting aside the statutory demand. The HKHS therefore petitioned the Court of First Instance on 2 November 2010 for a bankruptcy order in HCB 7770/2010. 12.Mr Hung filed with the Court of First Instance a total of three affirmations, in which he mentioned: (1) that he had financial difficulties and could not repay the money due to cash flow problems in the business, his wife suffering from cancer and the passing away of the brother-in-law, and, therefore, asked to be given 6 months’ time or allowed to repay the money owed by way of instalments; and (2) that the HKHS miscalculated the money owed in the demand. 13.After a number of mention hearings, the matter was heard before the trial judge on 7 July 2011. He was satisfied that Mr Hung owed the HKHS a debt no less than the aforesaid unpaid instalment payment of $90,324 and that he was insolvent. The bankruptcy order was therefore made. Grounds of appeal 14.In the notice of appeal, Mr Hung pointed out that the Bank and the HKHS had shared the proceeds of $1,050,000 obtained from the sale of unit 3C between themselves. He asked that the money left after paying back the Bank and the HKHS be returned to him. Mr Hung also said that as the Asia Commercial Bank was later acquired by the Public Bank, he could only obtain the information regarding the sale of unit 3C shortly before lodging the appeal. He hoped to clarify the matter in the appeal. 15.In the two affirmations dated 8 April 2013 and 4 March 2014, Mr Hung mentioned (1) that based on erroneous, inaccurate and fictitious data, the HKHS overstated the debt he and his wife owed to mislead and pressurize him into entering into the repayment agreement dated 8 May 2007; and (2) that the HKHS was grossly negligent and remiss in its duty during the course of the sale of unit 3C by the Bank, and the unit was consequently sold at an undervalue. The application to have someone else acting on his behalf and addressing the court in the action 16.Before considering the merit of the grounds advanced by Mr Hung in support of the appeal, this court should deal first with two matters. 17.The first was that Mr Hung submitted to the court on 8 August 2014 a document entitled “submission for the appeal hearing [by Tsui Ka Kit (transliteration) for and on his behalf]”. The document contained a request to allow Mr Tsui Ka Kit to represent him to address the court and to make submission for the case. 18.The Court of Appeal had in the past made clear that a litigant who was a natural person in court proceedings could not have anyone other than a qualified barrister or solicitor acting or addressing the court on his behalf. The Court of Appeal said the following in paragraphs 27 to 30 of Tam Kam Mei and another and Deloitte Touche Tohmatsu and eight others CACV 14/2011 (date of judgment: 9 March 2012):
19.In the present case, Mr Tsui made it clear that he was not a professional lawyer. He was therefore unable to act for Mr Hung or to be heard in court in legal proceedings. In the directions hearing on 11 March 2014 before a master, in the absence of objection raised by the legal representative of the HKHS, Mr Tsui was allowed to make submission on behalf of Mr Hung. However, it was not correct to do so. This court did not allow Mr Tsui to represent Mr Hung to address us or to make submission. As Mr Hung had adopted the written submission submitted on 8 August 2014, we will treat it as the written submission of Mr Hung. New evidence 20.The other matter that this court has to deal with is in relation to the various sets of new documentary evidence that Mr Hung submitted in this appeal. Although the Master had reminded Mr Hung that he needed to take out summons to apply for introduction of new evidence during the appeal, he did not make such an application. 21.The HKHS opposed Mr Hung’s introduction of new evidence during the appeal on the ground that he failed to meet the legal requirement in this regard. At the same time, the HKHS also took out a summons to apply for leave to submit new evidence to rebut Mr Hung’s allegations and evidence should this court allow him to submit new evidence. 22.In the hearing before this court, the new evidence submitted by both sides was admitted on a de bene esse basis to be considered alongside with the points raised in the appeal. 23.The disputes raised by Mr Hung in this appeal can be grouped under two headings:
24.We shall deal with these matters in turn. The repayment agreement of 8 May 2007 25.Put simply, Mr Hung’s case is that in April 2007, he and his wife did not owe the HKHS $264,458.74 as it alleged. Therefore, they were misled and pressurized into signing the repayment agreement. Mr Hung also claimed that they had all along been making repayments to the HKHS but the payments were not included in the calculation made by the HKHS. 26.It can be seen from the documents and the information before this court during the appeal that the situation after Mr Hung had signed the $380,400 repayment agreement with the HKHS was as follows:
27.Judging by the situation set out above, as the couple had postponed the first instalment repayment to 1 August 2004 and paid only two instalments after that, they therefore owed the HKHS a total of over $400,000 (inclusive of interest) as at January 2006. This court does not agree that the HKHS had overstatedthe amount owed or that it was a fictitious amount. 28.Similarly, there is also basis for the amount stated to be outstanding in the repayment agreement of 8 May 2007. It is not, as alleged by Mr Hung, inaccurate or fictitious. 29.This court does not accept Mr Hung’s allegation that he was misled or put under undue pressure to enter into the repayment agreement. 30.Mr Hung also alleged that the repayments he made had not been included in the calculation the HKHS made. However, all the repayments shown on the repayment receipts that he had produced had been entered into the repayment record of the HKHS (see pages 129 and 130 of bundle B). Besides, he alleged that he had repaid $100,000 of the principal and $17,500 of the interest between August 2002 and December 2004, but produced no document whatsoever in support of this. On the contrary, it can clearly be seen from the documents the HKHS produced that the couple only made the first instalment repayment in the sum of $4,736 and paid an overdue interest of $100 on 11 October 2004. Mr Hung alleged that the document issued by the HKHS on 27 June 2013 (pages 96 and 97 of bundle B) reflects that as at October 2004, he had made 25 instalment repayments. This is not correct. The document in question is a record of the repayments made from 1 September 2002 to 1 April 2007. It clearly shows that the first instalment repayment was made on 11 October 2004, and it was for repaying the 25th instalment. This document does not show that there were other instalment repayments made between September 2002 and October 2004. Further, if Mr Hung had made instalment repayments to the HKHS according to the schedule, this document would not have shown that he and his wife had made an overdue interest payment to the HKHS. 31.This ground of appeal advanced by Mr Hung fails. The sale of unit 3C 32.Mr Hung said after the Asia Commercial Bank had sold unit 3C for $1,050,000 in January 2006, the purchaser resold it on 29 April 2006 for $1,220,000. And the second purchaser sold the property later on 15 May 2006 for $1,380,000. He argued that unit 3C was being sold at an undervalue, and the Asia Commercial Bank and the HKHS were grossly remiss in their duty in the course of its sale. 33.Mr Hung’s argument contains a number of flaws. Firstly, unit 3C was resold at a better price after its initial sale by the Bank. This does not necessarily mean that the Bank had sold it at below market price. This is because there are many causes for property market fluctuations. They include a booming market and rising property prices etc. This court notes that before the Bank sold the unit, it had appointed a surveyor to estimate its price. The surveyor’s report is dated 16 December 2005[1]. 34.Secondly, the Asia Commercial Bank was in charge of the sale of the unit in the capacity of first mortgagee pursuant to an order for sale the court had made. Generally speaking, the HKHS, being the second mortgagee, had no right to participate in or influence the decision to sell the property, including its sale price. In the present case, there is no evidence either to show that the HKHS had taken part in deciding the sale price of the unit or its sale. Mr Hung’s allegation that the HKHS had the duty to fight for the best sale price for him lacks legal basis. 35.Further, in view of the fact that the Bank was the only party making the decision to sell unit 3C and was in charge of the matter, and the HKHS had nothing to do with it at all, even if Mr Hung can prove that the unit was sold at below the reasonable market price, this does not make the HKHS grossly negligent or in breach of its duty, less so to have any effect on its right to recover the debt from him. 36.Similarly, in the affirmations, Mr Hung mentioned that a deposit of $20,000 was paid when purchasing unit 3C and complained about various matters, including that the Bank had overcharged interest and muddled the figures etc. None of these affects the right of the HKHS to seek to recover the unpaid debt Mr Hung owed pursuant to the agreement entered into between the HKHS and him. 37.This ground of appeal advanced by Mr Hung fails too. Conclusion 38.This court is of the view that the appeal lodged by Mr Hung lacks merit. The new evidence he puts forward does not help him in defending the bankruptcy petition either. This court rejects it and dismisses his appeal. We order that the costs of the HKHS (including those of the application made by way of summons on 7 August 2014) to be paid out of estate of Mr Hung. If the parties cannot agree on the amount of the costs, the matter can be referred to the court for assessment.
The debtor(appellant), in person, present Jenkin Suen, instructed by Li, Kwok & Law, for the creditor(respondent) Translated by the Judgment Translation Unit of the Judiciary and vetted by Mr P.Y. Lo, Barrister-at-law [1] See page 102 of bundle B, exhibit 9 of Mr Hung’s affirmation dated 4 March 2014. |
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