RE: PUENG SUNTORN SAE and EX PARTE: WINSOME ADVANCE CO. LTD. (IN LIQUIDATION) (A Creditor)

HCB1367/99

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

BANKRUPTCY PROCEEDINGS NO.1367 OF 1999

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R E A S O N S

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1. This amended petition is presented by Winsome Advance Company Limited ("the Creditor") for a bankruptcy order against Pueng Suntorn Sae ("the Debtor"). At the hearing, the Debtor was adjudged bankrupt. The reasons appear below.

2. The statutory demand is based on an unpaid judgment debt. On 20 November 1997, the Creditor obtained judgment against, inter alia, the Debtor. The amount of the judgment debt is $9.35 million. Interest of approximately $2 to 3 million has accrued since that date. The judgment was entered against not only the Creditor but also against two other defendants, namely Pueng Suvit Sae and Pacific Enterprises (Holdings) Limited. Pueng Suvit Sae has since been made bankrupt and Pacific Enterprises has been wound up by the court.

3. The judgment debt is not disputed.

4. At the hearing, counsel for the Debtor applied for an order that the petition be struck out. When it was drawn to his attention that no summons had been issued seeking such an order, the court was asked to stay the proceedings instead. In reality, what was sought was a two-month adjournment on the basis that the Debtor would be in receipt of sufficient funds by the end of that period to make payment to the Creditor.

5. The Debtor's evidence is in a similarly confused and chaotic state. In his affidavit, the Debtor asserted that he was awaiting "the approval of a syndicating loan in the amount of US$60 million". Almost in the same breath, he asserted that he had "secured a syndicating loan in the amount of US$60 million through his joint venture partner Yang Pu Nanfang Building Materials Company Limited from Ophee International Limited in Australia". It was then further asserted that the syndicating loan would be available by means of a letter of credit discounted at 95% value within 60 days from the date of the agreement. A loan agreement is exhibited but it is undated. It was apparently signed pursuant to an agreement dated 18 August 1999 entered into between Yang Pu Nanfang and Ophee.

6. There is no evidence and indeed it seems incredible that any such loan could properly be applied to discharge the Debtor's indebtedness although he may happen to be a joint venture partner of the borrower Yang Pu Nanfang.

7. It is pertinent to note that Pacific Enterprises sought to resist the winding-up order that was eventually made against it on the basis of an affidavit filed by the Debtor that he had the ability to satisfy the judgment debt through the sale of a lot of 25 houses in Dongshan, PRC for RMB30 million. No such repayment materialized and Pacific Enterprises was wound up on 2 December 1998. In the present application, there is no attempt by the Debtor to explain why the debt had not been repaid in the manner indicated in his affidavit filed in the winding-up proceedings. This must inevitably cast grave doubts as to the reliability of his evidence.

8. Suffice to say that for the reasons stated above, the Debtor's evidence as to his asserted ability to repay is wholly unsatisfactory. In the circumstances, I was not persuaded that I ought to exercise my discretion to grant the long adjournment sought. It would serve no useful purpose. The Debtor's application was accordingly refused.