RE TIN SHUK CHUN

HCB 1289/2025

[2026] HKCFI 1935

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

BANKRUPTCY PROCEEDINGS NO 1289 OF 2025

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REASONS FOR JUDGMENT

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Introduction

1.  This is the substantive hearing of the Petition presented on 19 February 2025 (“the Petition”) by the Creditor for a bankruptcy order against the Debtor.  The Petition concerns a debt in the sum of HK$649,217.83 (as at 25 January 2024, the date of the statutory demand (“SD”) issued by the Creditor) (“the Debt”), being the outstanding balance due and payable under a margin account (“the Margin Account”) maintained by the Debtor, the Debtor being the borrower and customer with the Creditor being the lender.  The Debt is not a judgment debt.  The Creditor says that the Debtor is unable to pay, or has no reasonable prospect of being able to pay the Debt.  The Petition is based upon Bankruptcy Ordinance (“BO”) s.6(2)(c).

2.  The Creditor was represented by Mr Ernest Wong on 28 January 2026 and 1 April 2026.  The Debtor was represented by Mr Charlie Liu on 28 January 2026, and by Ms Valerie Kwok on 1 April 2026.[1]

3.  At the end of the hearing on 1 April 2026, I made the usual bankruptcy order with costs (including costs reserved) against the Debtor.  I now give my reasons.

Background[2]

4.  The Creditor is a trading service provider established in 1998.

5.  By an Account Opening Form dated 29 December 2020, the Debtor applied for a margin trading account with the Creditor on the basis of the terms and conditions provided in the latter’s Margin Client Agreement.

6.  In the Account Opening Form filed by the Debtor:

(1)     The Debtor provided her email address (“the Email Address”) and her mobile phone number (“the Mobile Phone Number”).

(2)     The Debtor opted for email to be the mode of correspondence and accepted all risks of and incidental to the use of electronic communication.

(3)     The Debtor requested the Creditor to provide internet and mobile application services.

(4)     The Debtor did not indicate that she was to co-own the account with anyone else or she had authorised anyone to use or control her account.

(5)     The Debtor signed on the form to affirm the accuracy of the contents therein in the presence of a licensed person as witness.

7.  On or about 30 December 2020, the Creditor approved the Debtor’s application and opened the Margin Account under the Debtor’s name.  By a letter dated 30 December 2020, the Creditor informed the Debtor of her successful application.

8.  The Creditor’s case is that after the opening of the Margin Account, the Debtor had made use of the same from time to time to carry out trading activities by making use of the margin facilities provided by the Creditor to the Debtor via the Margin Account, leading finally to the Debt.

9.  The Creditor issued the SD on 25 January 2024.  It is the Creditor’s case that the SD was served on the Debtor by advertisement on 8 March 2024.

10.  On 19 February 2025, the Petitioner issued the Petition.  The Petition was served on the Debtor by way of substituted service pursuant to the Order of Master J Wong made on 19 May 2025.

11.  According to the Creditor, the amount of the Debt owed by the Debtor as at 30 May 2025, taking into account the part payments made by the Debtor and the interest into account, was HK$728,117.15.  The Debt remains outstanding, and interest is still accruing.

12.  The Debtor does not dispute she opened and maintained the Margin Account in question with the Creditor.  However, the Debtor claims that she “did not place the sale/purchase orders which resulted in the [Debt]”.[3]  In her Notice of Intention to Oppose Petition (“the Notice”), coupled with the elaborations made in her affirmation in opposition (ie the Debtor’s 2^nd Affirmation), the Debtor raises some grounds opposing the Petition.

13.  In the hearing on 28 January 2026:

(1)     Counsel for the Debtor sought leave to amend the Notice by deleting all the grounds in the Notice and putting therein the following new ground (“the New Ground”):

“The petition debt is not a liquidated sum under s.6(2)(b) of the Bankruptcy Ordinance, Cap.6.”

(2)     Counsel for the Debtor expressly abandoned all the points previous taken by the Debtor and sought leave to rely upon only the New Ground.  Counsel for the Debtor also confirmed that there would be no dispute as to the service of the SD.

(3)     After hearing the submissions, I make the following order (“the Order”):

(a)     leave to the Debtor to amend the Notice in the way proposed by the Debtor;

(b)     leave to the Debtor  to file and serve the Amended Notice within 2 days;

(c)     leave to the Creditor to file and serve an affirmation in reply within 35 days thereafter;

(d)     the hearing be adjourned to 1 April 2026;

(e)     costs of and occasioned by the adjournment be to the Creditor forthwith and be summarily assessed on an indemnity basis;

(f)     the Debtor may only rely upon the new ground as set out in §13(1) above after paying the costs awarded to the Creditor in §13(3)(e) above in full; and

(g)     subject to the above, costs reserved.

14.  On 4 February 2026, costs payable by the Debtor to the Creditor under the costs order dated 28 January 2026 were summarily assessed at HK$50,000 (“the Costs”).

15.  On 5 March 2026, the Creditor’s solicitors wrote to this Court and informed the Court that the Costs had not yet been paid by the Debtor.  In that letter, the Creditors’ solicitors said:

“We write to inform this Court that notwithstanding the costs assessment pursuant to the Order dated 4 February 2026, for over one whole month and until this day hereof, the Debtor has still blatantly failed/refused to pay the assessed costs in compliance with the aforesaid Order, clearly evinced her intention not to proceed with and is not allowed to rely on her new ground of opposition.

Accordingly, the Creditor has not filed any affirmation in reply to the new ground and will invite the Court to grant the usual bankruptcy order at the forthcoming hearing on 1 April 2026.” (Emphasis added)

16.  The Debtor has not given any response to the Creditor’s solicitors’ letter dated 5 March 2026.

17.  Less than 24 hours before the commencement of the hearing on 1 April 2026, on 31 March 2026 at 2:38 pm, the Debtor sent a cheque to the Creditor to pay the Costs.

Discussion

18.  The principles concerning a bankruptcy petition have recently been succinctly summarized by Linda Chan J in Re Tse Wai Ip[4]. In that case, the learned judge said:

“23. The approach of the court in considering a bankruptcy petition is well-established. ……

(1)     Where a debt is established and the procedural requirements have been complied with, a petitioning creditor has a prima facie right to a bankruptcy order (Ho Ying Pat Bobby v Overseas Way (China) Ltd [2011] 2 HKLRD 837 (CA), per Le Pichon JA, at §12).

(2) In opposing the petition, the debtor has to show a bona fide dispute on substantial grounds in respect of the debt by adducing sufficiently precise evidence which is believable, and must establish that he has a defence of substance, not just a fair probability of one (Re Leung Cherng Jiunn [2016] 1 HKLRD 850 (CA), per Kwan JA (as she then was), at §23).

(3) In assessing whether the debt is bona fide disputed on substantial grounds, the following principles expounded in Re Hong Kong Construction (Works) Ltd, HCCW 670/2002, 7 January 2003), per Kwan J (as she then was), at §§6(1)-(4), are applicable:

(a) The burden is on the debtor to establish that there is a genuine dispute of the debt on substantial grounds. In this context, “substantial” means having substance and not frivolous. An honest belief in an insubstantial ground of defence is not sufficient.

(b) The court should look at the debtor’s evidence against so much of the background and evidence that is not disputed or not capable of being disputed in good faith; in other words, the evidence is not to be approached with a wholly uncritical eye.

(c) The court cautions itself against unsubstantiated and unparticularised assertions. It is incumbent on the debtor to put forth “sufficiently precise factual evidence” to substantiate its allegations.

(d) The court does not try the dispute on affidavit but determines if a substantial dispute exists. In so doing, the court necessarily has to take a view on the evidence, to see if the debtor is merely “raising a cloud of objections on affidavits” or whether there is substance in the dispute raised by the debtor.”

19.  As to the true meaning of “bona fide dispute on substantial grounds” in the context of considering a bankruptcy petition, in Re Leung Cherng Jiunn[5], Kwan JA (as she then was) said (footnotes omitted):

“27. I would endeavour to state my understanding of the law in this way:

……

(2) The wording of Order 14 rule 3 is different from the test of bona fide dispute on substantial grounds. The test of bona fide dispute involves different consideration in respect of the evidence. The difference may not be significant, but there is still a difference. See ICS Computer at 183F and Re Yuen Mun Wa at §11.

(3) The distinction between the two tests lies in establishing a bona fide defence (for resisting a petition) and a fair probability of establishing a bona fide defence (for obtaining leave to defend a civil action, whether unconditionally or with condition). So in that sense, the threshold test for resisting a petition would require a higher standard. See ICS Computer at 183G to J and Re Grandfield Pacific Hotel Ltd at §11.

(4) Notwithstanding this difference, it is fair to say that the threshold tests in both situations are broadly similar, as noted in the two recent English authorities. If a petition is dismissed on the basis there is a bona fide dispute on substantial grounds, it would be most unlikely that summary judgment could be obtained. Most probably, the defendant would be given leave to defend, whether unconditionally, or with conditions imposed if his defence is regarded as shadowy. Conversely, where a defendant has obtained leave to defend, unconditionally or with conditions, it would be most unlikely that a petition would be granted. See Markham v Karsten at §45. The statements of Rogers J in ICS Computer at 183E to F[6] did not suggest otherwise.

(5)   This is not to say it should be easier for a creditor to succeed in a petition than in seeking summary judgment in a civil action, notwithstanding the higher threshold test for resisting a petition in the sense as explained above.  It is well established that petitions are not meant to be used for the purpose of debt collection and the winding-up or bankruptcy jurisdiction of the court would be exercised only in very clear cases.  Where oral evidence is required to decide a real and substantial dispute of fact, the court will dismiss the petition.  And if there is an abuse of process in invoking the jurisdiction of the court in an improper manner, the petitioning creditor may be ordered to pay indemnity costs.”

20.  As a result of the position adopted by the Debtor in the hearing on 28 January 2026, the only ground of opposition left is the New Ground.  In the hearing on 1 April 2026, Ms Kwok submitted that the Debtor had paid the Costs on 31 March 2026.  Hence, in accordance with the Order, the Debtor should be entitled to rely upon the New Ground to oppose the Petition.

21.  With respect, I am unable to agree.  I have disallowed the Debtor to rely upon the New Ground in the hearing on 1 April 2026.

(1)     On 4 February 2026, the costs payable by the Debtor to the Creditor under the Order were summarily assessed at HK$50,000.  There is no explanation from the Debtor as to why she did not pay the Costs shortly after 4 February 2026.

(2)     In view of the non-payment of the Costs, the Creditor’s stance as stated in the Creditor’s solicitors’ letter dated 5 March 2026 is a reasonable stance, ie not filing an affirmation in reply in view of the non-payment of the Costs by the Debtor.

(3)     There is no explanation from the Debtor as to why she did not pay the Costs after receiving the Creditor’s solicitors’ letter dated 5 March 2026, and did not respond to that letter.  There is also no explanation as to why she did not give an indication that she was prepared to pay at a later time.

(4)     With no prior indication, the Debtor chose to pay the Costs in the afternoon on 31 March 2026 (ie the day immediately before the adjourned hearing).  By doing so, the Debtor has prevented the Creditor from having any opportunity to file an affirmation to deal with the New Ground in the adjourned hearing, which is a right conferred on the Creditor in the Order.

(5)     There is no explanation from the Debtor as to why she only paid the Costs less than 24 hours before the commencement of the adjourned hearing and not at an earlier time.

(6)     In the circumstances, I am driven to the conclusion that the Debtor was playing games to adopt a tactic to prevent the Creditor from having any opportunity to file evidence to deal with the New Ground in the adjourned hearing.

(7)     Litigation conduct of this kind cannot be condoned.  To allow the Debtor to rely upon the New Ground in these circumstances is grossly unfair to the Creditor.

22.  For the reasons set out in the above, the Debtor is not entitled to rely upon the New Ground to oppose the Petition.  That being the case, there is no ground opposing the Petition.

23.  I am satisfied that the Debt in the SD is established and the procedural requirements have been complied with.  The Debtor has not shown any bona fide dispute on substantial grounds in respect of the debt.  Accordingly, a bankruptcy order against the Debtor should be made.

Conclusion

24.  For these reasons, I made the order as set out in §3 above.

25.  I thank all counsel for the helpful assistance rendered to the Court.