RE YEUNG CHUN WAI ANTHONY

HCB 8129/2019

[2025] HKCFI 523

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

BANKRUPTCY PROCEEDINGS NO 8129 OF 2019

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D E C I S I O N

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1.  There is before the court a Summons issued by the Joint and Several Trustees (“Trustees”)  of the estate of Yeung Chun Wai Anthony, a bankrupt (“Bankrupt”), on 26 November 2024 for:

(1)  A non-commencement order (“NCO”)  against the Bankrupt and extension of time to apply for such an order under ss. 30AB and 30AC of the Bankruptcy Ordinance (Cap. 6)  (“BO”)  (“NCO Application”); alternatively

(2)  An order that the relevant period for the purpose of s.30A(3)  of BO in respect of the discharge of the Bankrupt shall cease to run for 4 years or such period as the court deems fit (“Suspension Application”).

2.  The Trustees have served the Summons and the supporting affidavit at inter alia 3 last known addresses and 5 addresses associated with the Bankrupt. The Bankrupt has not filed evidence in opposition or appeared at the hearing.

3.  By letter dated 16 January 2025 (“OR’s Letter”), the Official Receiver (“OR”)  provided the court with her observations on the Applications and indicated her neutral stance.

A.  BACKGROUND

4.  On 21 April 2021, the Bankrupt was adjudged bankrupt and the OR became the provisional trustee of his estate (“Bankruptcy Order”).

5.  On 22 June 2021, the Trustees were appointed.

6.  As at 12 November 2024, the Trustees received 10 proofs of debt claiming a total of HK$176.7 million.  Only approximately HK$6.45 million has been recovered.

7.  The Bankrupt has not submitted any statement of affairs.  Nor has he attended any meeting with the OR or the Trustees.

8.  Prior to the Trustees’ appointment, the OR had requested that the Bankrupt to attend an initial interview:[1]

(1)  By (a)  letters dated 26 April 2021 sent to 2 last known addresses of the Bankrupt (i.e. Lee Garden Address and Kennedy Heights Address),[2] (b)  email sent to the last known email address of the Bankrupt, and (c)  letter dated 28 April 2021 sent to Highcliff Address, [3] the OR requested the Bankrupt to attend an initial interview to be held on 4 May 2021 to provide information concerning his affairs, dealings and property.  The email was successfully delivered, but the letters were later returned and all marked “moved”.

(2)  By (a)  letters dated 5 May 2021 sent to Lee Garden Address, Kennedy Heights Address and Highcliff Address and (b)  email sent to the same address, the OR requested the Bankrupt to attend an initial interview to be held on 18 May 2021 to provide information concerning his affairs, dealings and property.  The email was successfully delivered but the letters were later returned and marked “no such person”, “moved” and “refused” respectively.

(3)  The Bankrupt failed to attend an initial interview on any of the above dates appointed by the OR.

9.  After their appointment on 22 June 2021, the Trustees took further steps to contact the Bankrupt:

(1)  By letters dated 25 June 2021 sent to Lee Garden Address and Kennedy Heights Address, the Trustees reminded the Bankrupt that he had not submitted a statement of affairs and had not responded to the OR’s requests for an initial interview.  The Trustees warned the Bankrupt that they might seek a NCO from the court.  The letter sent to Lee Garden Address was returned and marked “returned”.

(2)  Between June 2021 and February 2022, the Trustees attempted to contact the Bankrupt to arrange an initial interview forthwith:

(a)  Emails were sent to 5 last known email addresses of the Bankrupt, although delivery to one of the email addresses failed.

(b)  Letters were sent to 5 other addresses associated with the Bankrupt or his family, none of which was returned.

(3)  Between August 2021 and July 2022, the Trustees also called the Bankrupt at his last known phone numbers, including those he used for WhatsApp and WeChat communications, but could not reach him.

10.  On 30 June 2022, Ms Nicole Chan (“Ms Chan”)  of Briscoe Wong Advisory called Ms Serena Chan (“Serena”), the Trustees’ representative.  During the call:

(1)  Ms Chan said that she represented the Bankrupt to approach the Trustees to deal with his bankruptcy matters. 

(2)  Serena told Ms Chan that the Bankrupt should attend an interview with the Trustees. 

(3)  Ms Chan asked if she could act on behalf of the Bankrupt to receive any correspondence from the Trustees.  Serena responded that the Bankrupt should write to the Trustees in this regard. 

11.  On 6 July 2022, Serena called Ms Chan to follow up on the Bankrupt’s availability to attend an initial interview.  Ms Chan said she would follow up with the Bankrupt and she had no idea whether the Bankrupt had received any letters previously sent by the Trustees.  The Bankrupt never responded to or got in contact with the Trustees.

B.  NCO APPLICATION

12.  Section 30AB of the BO provides:

“(1)  The trustee may apply to the court for a non-commencement order against a bankrupt if—

(a)  the trustee has required the bankrupt to—

(i)  attend an initial interview on a day appointed by the trustee for the administration of the bankrupt’s estate; and

(ii)  provide the trustee at the initial interview with information concerning the bankrupt’s affairs, dealings and property;

(b)  the bankrupt—

(i)  has failed to attend the initial interview; or …

(c)  the administration of the bankrupt’s estate was prejudiced by the matter referred to in paragraph (b)(i)  ...

(2)  The trustee may apply for a non-commencement order within—

(a)  a period of 6 months after the date of the bankruptcy order against the bankrupt; or

(b)  a longer period specified by the court under subsection (3).

(3)  The court may, on the trustee’s application (extension application), specify a longer period for the trustee to apply for a non-commencement order.

(4)  An extension application must be made within—

(a)  the period referred to in subsection (2)(a); or

(b)  (if the court has specified a longer period under subsection (3))  that longer period.

(5)  This section only applies to a bankrupt against whom a bankruptcy order is made on or after 1 November 2016.

(6)    To avoid doubt, a bankrupt has failed to attend an initial interview under subsection (1)(b)(i)  if the bankrupt is not physically present before the trustee at the initial interview.”

13.  Section 30AC(1)  of the BO further provides:

“(1)  On an application made by the trustee under section 30AB(1), the court may approve the application and make a non-commencement order against the bankrupt if it—

(a)  is satisfied by the trustee as to the matters mentioned in section 30AB(1)(a), (b)  and (c); and

(b)  is not satisfied by the bankrupt that there is sufficient cause for the order not to be made.”

14.  The substantive requirements under s.30AB(1)(a), (b)(i)  and (c)  of the BO are met:

(1)  The procedural history summarised in Section A above shows that the Bankrupt has failed to attend an initial interview with the OR or the Trustees, despite repeated requests made by the OR and the Trustees. 

(2)  The failure on the part of the Bankrupt in attending any initial interview has prejudiced the administration of the Bankrupt’s estate as the OR/Trustees have been denied of the right to interview the Bankrupt, receive information from him about his estate, affairs, dealings and property and make inquiry about such matters. 

15.  The only issue is whether the court should exercise its discretion to extend the time for the Trustees to make the NCO Application.  The Summons was only issued on 26 November 2024, more than 3 years after expiry of the initial 6-month period specified under s.30AB(2)(a)  of the BO (i.e. 20 October 2021).  The relevant period unless suspended by the court will come to an end on 21 April 2025, being 4 years from the Bankruptcy Order.

16.  Section 30AB(3)  of BO confers on the court an unfettered discretion to extend time for making a NCO application by specifying a “longer period”.  Once a “longer period” is specified under s.30AB(3), then by operation of s.30AB(4), the application can (and must)  be made within that “longer period”.  Hence, it may not be necessary for the Trustees to rely on the “cover-all” s.100(4)  of BO in seeking an extension of time (Re James Henry Ting [2021] HKCFI 1704 at §71, per Ng J).[4]

17.  In Re James Henry Ting, Ng J listed out the following non-exhaustive factors which the court may take into account in exercising the discretion to extend time for making a NCO application (at §75):

(1)  The bankrupt’s totally uncooperative conduct since the grant of the bankruptcy order;

(2)  The bankrupt has gone to great lengths over the years to conceal his whereabouts and his assets and to obfuscate the trustees’ investigations;

(3)  The almost inevitable inference that the bankrupt’s intent was to sit out the 4-year bankruptcy period after which he would be automatically discharged from his bankruptcy;

(4)  The massive amount of the bankrupt’s indebtedness to the creditors; and

(5)  The obvious importance that the trustees be allowed to continue with their efforts in locating the bankrupt’s assets for distribution to his creditor(s). 

18.  Although the OR takes a neutral stance, she considers that it is only in exceptional case and with good reasons that the court should exercise the discretion to extend time for a NCO application to be made outside the 6-month period, and she leaves it to the Trustees to justify the significant delay in making the NCO Application.

19.  During the hearing, this Court asks Ms Sharon Yuen, counsel for the Trustees, to explain the reasons for the substantial delay in making the NCO Application.  Ms Yuen acknowledges that the delay was substantial and the only explanation proffered by the Trustees is that they have been focusing on other aspects of the bankruptcy and did not turn their mind to making the NCO Application.  She emphasizes the magnitude of the debts claimed by the creditors, the limited assets which have been realized to-date, and the complete inaction on the part of the Bankrupt which has greatly hampered the Trustees’ investigation of his affairs and property. 

20.  Plainly, this is a case where the Trustees have omitted to make a NCO application.  This is despite the difficulties the Trustees have encountered in the administration of the Bankrupt’s estate and the availability of an effective tool to encourage or incentivize a bankrupt to cooperate with the OR/trustee. 

(1)  The presence of a NCO (or the threat of the court making a NCO)  provides a great incentive for a bankrupt to get in touch with the OR/trustee at the beginning of the bankruptcy and provide information relating to his affairs, dealings and property. 

(2)  Sections 30AB and 30AC are designed by the legislature to address the mischief that a bankrupt can simply ignore the requests made by the OR/trustee and wait for the relevant period to expire given that the maximum period which the court can suspend under s.30A(3)  of the BO is 4 years.  This means that even the most unscrupulous bankrupt can be discharged 8 years after his bankruptcy. 

(3)  The purpose of allowing the OR/trustee to seek a NCO is to ensure that the relevant period will only begin to run if a bankrupt has complied with the basic obligations stipulated in s.30AB(1)  of the BO. 

21.  It seems to me that in deciding whether to extend time for the OR/trustee to make a NCO application, the paramount consideration is whether the bankrupt has in the period prior to the application, approached the OR/trustee and performed the obligations stipulated in s.30AB(1)  or rendered any meaningful assistance to the OR/trustee in the administration of his estate. 

(1)  Where, as here, the Bankrupt has never approached the OR/Trustees in person, ignored all the requests made by the OR/Trustees and failed to render any form of assistance to the Trustees, the court is entitled to take into account such failings as justifications for exercising its discretion to extend time for making the NCO Application, and to make the NCO against the Bankrupt.  The approach is consistent with the legislative purpose of ss.30AB and 30AC.

(2)  The Bankrupt cannot be heard to say that he would be prejudiced by the extension when he has never performed any of the statutory obligations imposed by the BO.  Putting it in another way, any prejudice which may be suffered by the Bankrupt is the result of his own failings. 

22.  Further and in any event, the following facts and matters, which are very similar to the factors identified in Re James Henry Ting as justifications for extending the time for making the NCO application for 3 ½ years, are sufficient for this Court to exercise the discretion to extend the time for the Trustees to make the NCO Application:

(1)  The Bankrupt has been completely uncooperative since the beginning of the bankruptcy.  He has not submitted a statement of affairs.  Nor has he ever responded to any of the requests for an initial interview.  It can also be inferred from the exchanges between Ms Chan and Serena summarised in §§10-11 above that the Bankrupt was clearly aware of the Trustees’ appointment and the requests of the Trustees but chose to ignore them. 

(2)  The undisputed evidence adduced by the Trustees suggests that the Bankrupt has concealed his assets to obfuscate investigations. For example, the Bankrupt had contributed funds to the acquisition of certain landed properties but the Trustees have not been able to get hold of any such properties because they have been sold, disposed of, or remained controlled by his associates.  The Trustees have commenced proceedings in respect of some of these properties and investigations into other questionable transactions have been underway.  The Bankrupt’s refusal to cooperate with the Trustees’ investigations and recovery efforts has substantially prejudiced the proper administration of his estate.

(3)  The amount claimed by the creditors is very significant (HK$176.7 million)  and only a small fraction of this amount (HK$6.45 million)  equivalent to 3.65% of the Bankrupt’s indebtedness has been recovered to-date.

(4)  The Trustees have the benefit of a NCO to incentivize the Bankrupt to come forward and assist  their efforts in locating and realizing his assets for the benefit of the creditors.

23.  I echo the observations of Ng J in Re James Henry Ting that it would make a complete mockery of our bankruptcy regime if the NCO Application is defeated simply because it is made outside the initial 6-month period when all the substantive requirements of BO are met (§76).  It bears emphasis that an extension of time for the OR/trustee to apply for NCO particularly where the extension sought is a lengthy one, should only be made where the bankrupt has been recalcitrant and wholly uncooperative.  It is important for the OR/trustee to issue NCO application with promptitude within the initial 6-month period, given the potentially draconian nature of an NCO in delaying a bankrupt’s financial rehabilitation.

24.  For completeness, the OR points out that since the Trustees’ letters to the Bankrupt merely requested the Bankrupt to contact them to arrange for an initial interview but do not contain the date of such interview and the information requested, the Trustees may need to consider whether they satisfy the 2 requirements under s.30AB(1)(a)  of the BO.

25.  I do not think that the point raised by the OR constitutes a ground against the grant of the NCO:

(1)  The OR qua provisional trustee already sent the Bankrupt letters dated 26, 28 April 2021 and 5 May 2021 which comply with the requirements under s.30AB(1)(a). 

(2)  The Bankrupt failed to attend the initial interview on the dates proposed by the OR, which has the inevitable effect of prejudicing the administration of the estate.  The requirements under s.30AB(b)(i)  and (c)  are met.

(3)  Even if the Trustees’ letters did not specifically state the matters mentioned in s.30AB(1)(a), those letters referred to the OR’s previous requests.  Read in context, the Bankrupt must have had full notice of the need to attend an initial interview and what he was expected to do at such interview.

26.  For all the above reasons, I make an order extending the time for the Trustees to apply for a NCO to the date of the Summons and I make a NCO in terms of §§1 and 3 of the Summons.

C.  SUSPENSION APPLICATION

27.  If, contrary to my view, the NCO Application should not be allowed, for the reasons set out below, I would allow the Suspension Application and make an order suspending the running of the relevant period for 4 years.

28.  Sections 30A(1)  and 30A(2)(a)  of the BO provide that a first time bankrupt shall be discharged from bankruptcy at the end of a period of 4 years beginning with the commencement of the bankruptcy, unless an objection in s.30A(4)(a)-(h)  of the BO applies.

29.  An application for suspension of discharge from bankruptcy should be considered in 2 stages (Re Lee Raymond Cho Min & Re Lee Priscilla Hwang, CACV 112 & 113/2014, 30 July 2014 at §6):

(1)  The court should first determine whether one or more of the grounds mentioned in s.30A(4)  of BO has been established; and if so,

(2)  The court would consider whether it should exercise the discretion to suspend the relevant period having regard to all the circumstances including the nature of the acts complained of, the post-bankruptcy order conduct of the bankrupt, and the 2 main objectives of this part of the BO viz., the rehabilitation of the bankrupt by allowing him to resume a normal commercial life, and the public interest in ensuring that the return of the bankrupt to the commercial world would not carry with it an unacceptable risk to persons who may be engaged in commercial relations with him, and preserving commercial morality.

30.  In my judgment, the following grounds for suspension of the relevant period are established:

(1)  First, the discharge of the Bankrupt would prejudice the administration of his estate (s.30A(4)(b)).  Given the Bankrupt’s wholly uncooperative conduct, his estate could not be properly ascertained, gathered in and distributed for the benefit of the creditors without further in-depth investigation into his financial affairs (Li Tat Kong v Official Receiver [2001] 1 HKC 207 (CA)  at 217E-H): see §21 above.

(2)  Second, the Bankrupt has completely failed to co-operate with the OR/Trustees in the administration of his estate and his conduct after the commencement of bankruptcy has clearly been unsatisfactory (s.30A(4)(c), (d)).  He has not made any disclosure of his assets and dealings to the Trustees (Re Li Tat Kong [2000] 3 HKC 360 at 377C-G): see §21 above.

(3)  Third, the Bankrupt has also failed to prepare any annual report of his earnings and acquisitions for the Trustees (section 30A(4)(h)).

31.  Ms Yuen also relies on the ground in s.30A(4)(g)  that the Bankrupt has committed an offence under inter alia ss.129(1)(a)  to (c)  of the BO by failing to fully discover to the Trustees all his property, deliver up to the Trustees all his property and books relating to his property or affairs in his custody or control.  However, the authorities do not speak with one voice on whether it is necessary to show a criminal conviction of the bankrupt for a specified offence (Re Li Ye [2023] HKCFI 3281 at §§88-90; Re Qin Jun [2021] HKCFI 114 at §§174-179).  It is unnecessary for me to express a view on this issue.

32.  Ms Yuen submits that the present case warrants the maximum period of suspension of 4 years, which is reserved for the most egregious cases (Re Leung Yat Tung (No. 2) [2007] 4 HKC 192 (CA)  at §76). 

33.  In Re Yeung Kwok Lai [2003] 2 HKLRD 44, a 4-year suspension was ordered where the bankrupt rendered little, or no, cooperation with the OR over 4 years and submitted his statement of affairs and annual reports belatedly.  More time was needed to properly administer the estate with thorough investigations (at §§31-32). 

34.  The present case is worse than Re Yeung Kwok Lai as no information, let alone statement of affairs or annual report has been submitted by the Bankrupt.  I consider that a 4-year suspension is amply justified, having regard to (1)  the Bankrupt’s failure to perform his statutory obligations in attending an initial interview, providing information pertaining to his affairs and property and submitting statement of affairs and annual report to the Trustees, and (2)  the extent of the investigation which remains to be conducted by the Trustees.

D.  DISPOSITION AND COSTS

35.  For the reasons above, I make the following orders:

(1)  The time for the Trustees to make the NCO Application be extended to the date of the Summons;

(2)  NCO in terms of paragraphs 1 and 3 of the Summons; and

(3)  The costs of and occasioned by the Summons, subject to taxation, be paid out of the estate of the Bankrupt.