DING YI v. SHUM TUNG

HCB 3318/2016

[2019] HKCFI 1232

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

BANKRUPTCY PROCEEDINGS NO 3318 OF 2016

____________

____________

____________

_____________________

D E C I S I O N

_____________________

1.  The property which is the subject matter of the present dispute is the property and assets of the bankrupt situated on the Mainland, including the bankrupt’s interests in money in a bank account on the Mainland. Such property clearly falls within the definition under section 2 of the Bankruptcy Ordinance, which defines “property” to include money, goods, things in action and every description of property, whether situated in Hong Kong or elsewhere, and obligations and interest “arising out of or incident to property” as defined.

2.  Such property is vested in the Official Receiver on the making of the bankruptcy order, by virtue of section 58 (1) of the Ordinance.

3.  The court held in Chung Kau v Hong Kong Housing Authority and Others [2004] 2 HKLRD 650 that it is the Official Receiver who determines whether or not a right of action vested in the bankrupt should proceed, since rights of action are choses in action which come within the definition of “property” in section 2 of the Ordinance.  This is subject to one exception: the right to bring or continue proceedings relating to claims which are personal to the bankrupt.  This is the exception on which the bankrupt now relies, to pursue his anti-suit injunction to restrain the named respondent, a creditor, from continuing a commencing enforcement proceedings against the bankrupt’s assets on the Mainland.

4.  In Chung Kau, the Court explained by reference to Heath and Tang [1993] 1 WLR 1421, Beckham v Drake (1849) 2 HL Cases 579 and Wilson v United Counties Bank Ltd [1920] AC 102, that “personal” claims include claims for damages for personal injuries and in defamation, the rationale being that compensation awarded for these claims represent in monetary terms that part of a person or his reputation that has been lost or harmed, and these claims do not involve his property.  Likewise, an appeal against an injunction against a bankrupt to curtail a nuisance committed by him would involve a claim made against the bankrupt personally.

5.  The injunction now sought to be pursued by the bankrupt is wide as framed in the summons: to prohibit and restrain the named respondent, his creditor, from continuing or commencing any proceedings on the Mainland in connection with the enforcement of an arbitral award in the respondent’s favour, meaning, against the bankrupt’s assets on the Mainland.  The underlying claim which he is pursuing and the underlying interest he seeks to assert and protect by the injunction are his interests in the property and assets on the Mainland, including the money in his bank account there.

6.  I see no basis to assert that the interests in and right of action in relation to the bankrupt’s assets, including the money in the bankrupt’s bank account, on the Mainland are not claims which arise out of, or pertain or relate to his property, or can be said to be a claim which is purely “personal” to the bankrupt, to come within any recognized exception to the rule that such property vests in the Official Receiver.  In any event, the injunction the bankrupt seeks by his summons is not confined to such income on the Mainland in his bank account, nor to claims for damages sustained as a result of any harassment to his person or mind.

7.  The creditor has confirmed to the trustees that he is willing to bring into the bankruptcy and the estate any assets realized by the creditor’s recovery and enforcement proceedings on the Mainland.  The trustees therefore have no interest in the injunction sought by the bankrupt.

8.  In summary, I accept the submissions made on behalf of the official receiver and the creditor respondent, and I find that the bankrupt has no locus standi to pursue the present application for the injunction in the wide terms as sought against the named respondent.  The authorities relied upon by the bankrupt are all distinguishable on their own facts, and do not by their facts or reasoning support the bankrupt’s present case on locus.

9.  The answer to the 1^st preliminary question is no, and as such it is not necessary to decide on the procedural issue identified in the 2^nd preliminary question.