RE WONG KUN SHING

HCB 632/2018

[2018] HKCFI 1368

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

BANKRUPTCY PROCEEDINGS NO 632 OF 2018

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R E A S O N S   F O R   J U D G M E N T

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1.  On 11 June 2018, I made a bankruptcy order against the Debtor. These are my reasons for doing so.

2.  The Petition is based on a judgment debt pursuant to a judgment dated 6 February 2017 of the Court of First Instance in High Court Action No 2497 of 2016 in which the Petitioner is the Plaintiff and the Debtor the Defendant.

3.  As at July 2017 the date of the statutory demand, the total outstanding amount of the debt was over HK$37.6 million.  A bankruptcy petition was duly presented and served on the Debtor in due course.  The Debtor has filed no evidence to dispute the debt, only claiming before the Master that he would be able to repay the debt in future.

4.  The case was adjourned at the end of April 2018 for the position in relation to the security held by the Petitioner to be clarified.  The Petitioner had obtained a charging order in HCA 2497 of 2016 in respect of the Debtor’s beneficial interest in 9,999 ordinary shares standing in his name in a Hong Kong company called Skywell (China) Limited. 

5.  Despite investigation by the Petitioner, there is little up‑to‑date financial information about the company.  The only, and apparently the latest, audited financial statements available were those for the year ended 31 March 2014 which show net assets in the amount of only HK$21,624.  There is also in evidence a copy of the profit tax return of the company for the fiscal year 2013/2014 but it does not take the matter any further.

6.  In these circumstances, the Petitioner has estimated the value of the 9,999 shares in the company in the amount of share capital paid up ie HK$9,999. I do not think such an estimate can be faulted even though it has been said that the practice of the bankruptcy court not to inquire into the correctness of the petitioning creditor’s estimate of the value of a security should not be applied inflexibly: see Re Choi Chi Kwun [2000] 3 HKC503; Re Choi Wing Cheong (unrep, HCB 16148/2003, 22 December 2004). 

7.  The Debtor had no defence to the Petition and all he could say at the hearing was that because the accounts had only been made up to 2014, he had to ask the accountants to provide updated figures on the financial condition of the company.  That is obviously not a defence to the Petition; nor does it provide any reason why a bankruptcy order should not be made given that the petitioner has complied with the requirements of section 6B(1)(b) in stating an estimated value of the security and making clear that the Petition is not made in respect of the secured part of the debt.

8.  For these reasons, I made the usual bankruptcy order with costs.