SHEENLUXE DEVELOPMENT LTD v. TO HO SUM EDDY

HCB 1000/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

IN BANKRUPTCY

NO. 1000 OF 2008

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J U D G M E N T

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1.  This is the hearing of a bankruptcy petition against Mr To Ho-sum, Eddy.  The petition is brought by a judgment creditor, Sheenluxe Development Limited.

2.  The debt on which the petition is based is an arbitration award which was registered as a judgment and therefore enforceable as a judgment against the debtor.

3.  When the bankruptcy proceedings first came on for hearing, the debtor indicated that he wished to make an attempt to set aside the award and Findlay J’s order of October 1999 by which leave was granted for the award to be enforced as a judgment of the court.  The basis of the debtor’s application was that he claimed not to have received notice of the award or Findlay J’s order until shortly before the hearing of the bankruptcy petition.  He said also that he was unaware of the service on him of a statutory demand and the bankruptcy proceedings, and only became aware of the bankruptcy proceedings and therefore of the underlying award and judgment of Findlay J when he received a letter in relation to the bankruptcy proceedings on about 16 May 2008, about a month after the bankruptcy petition was served by post on an address that was in fact the appropriate address for the debtor.

4.  When the matter came before Chu J on 7 July 2008, she adjourned the hearing of the petition to enable the debtor’s motion for setting aside the award and Findlay J’s order to be heard and dealt with.  According to Chu J’s note, the petition was to be adjourned until that application had been determined.

5.  In the event, the form of the order that was actually drawn up and sealed referred to an adjournment until after the final determination of the application.

6.  The application to set aside the award and Findlay J’s order was heard before Reyes J last Wednesday, 3 December 2008.  Reyes J dismissed that application.  His judgment, a copy of which I have been provided with, makes it clear that he saw no merit whatsoever in the debtor’s application to set aside which, as he noted, was made long out of time, some nine years after the award and its registration as a judgment.  He expressed doubt as to whether or not the debtor, who had throughout resided at the same residential address, to which several pieces of correspondence were sent over the years, could seriously be believed not to have received any of such correspondence.

7.  In those circumstances, and also for other reasons given in his judgment, he declined to set aside the award, and dismissed the debtor’s motion.

8.  Today, Mr Yau, who appears for the debtor, suggests that the petition should be further adjourned on the basis that the use of the word “final” before “determination” in the order of Chu J as drawn up indicated that it was the intention to enable the matter to be finally resolved, in the sense of exhausting all possible appeals.

9.  I am afraid that I cannot agree with that contention.  It seems to me that the application was finally determined when Reyes J made an order dismissing it.  At that point, the application was determined and there was nothing further to deal with in relation to it.

10.  It seems to me that whatever might have been intended by the use of the word “final”, it was almost certainly to enable the matter – that is, the application itself – to be resolved.  I do not think that it could have been the intention to include the time that might be needed for any appeals which could have the result of adding months, if not a year or two, to the time when the matter might eventually be dealt with, given that appeals to the Court of Appeal lie as of right.

11.  Thus, it seems to me that motion that had been taken out by the debtor has in fact been determined, and while it is possible that the debtor might have wished to appeal, I would have to say that I can see very little prospect of an appeal having any success.

12.  In the circumstances, it seems to me that the motion having been determined against the debtor, there is nothing to prevent the restoration of this bankruptcy petition.  As there appears to be no basis on which the debt can be seriously disputed, I shall make the usual bankruptcy order, with costs, against the debtor.