RE LU ZHONGLOU

HCB 1119/2025

[2025] HKCFI 6165

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

IN BANKRUPTCY PROCEEDINGS

NO 1119 OF 2025

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JUDGMENT

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A. INTRODUCTION

1.  This case may serve as a timely reminder to practitioners of the importance of making full and frank disclosure when applying for leave to present a bankruptcy petition under Rule 49(9) of the Bankruptcy Rules (Cap 6A).

2.  Mr Lu Zhonglou (“Mr Lu”) was adjudged bankrupt on 22 April 2025, upon a bankruptcy petition presented by the Petitioner on 13 February 2025. The bankruptcy petition was based on a statutory demand dated 3 September 2024, seeking for payment of outstanding judgment sum of HK$70,866,262.12 awarded by the High Court of the Republic of Singapore on 14 October 2022 (“the Singapore Judgment”). By an order dated 31 January 2024 under HCMP 148/2024, the said Singapore judgment was registered as a judgment of the High Court of Hong Kong pursuant to the Foreign Judgment (Reciprocal Enforcement Ordinance (Cap 319).

3.  By the Summons filed on 30 June 2025, Mr Lu applied to annul the said bankruptcy order in reliance on section 33(1)(a) of the Bankruptcy Ordinance (Cap 6) (“the Ordinance”), namely that the bankruptcy order ought not to have been made.

4.  I heard the substantive arguments of the application on 6 November 2025, where Mr Lu was represented by Mr Douglas Lam SC, leading Ms Jacqueline Law of Counsel, and the Petitioner by Mr Thomas Wong of Counsel. At the conclusion of the hearing, I gave direction for the Petitioner to file supplemental affirmation explain the inconsistency between the Petitioner’s affirmations and the Garnishee Order made under HCMP 148/2024. The Affirmation of Law Wing Chung Vincent (“Mr Law”) was duly filed on 13 November 2025.

5.  I indicated at the end of the hearing that a written judgment will be handed down in due course. This is my judgment.

B. GROUNDS OF APPLICATION AND APPLICABLE PRINCIPLES

B1. Grounds for the application

6.  Originally, Mr Lu relied on two grounds for this application, namely:

(a) The services of both the statutory demand and the bankruptcy petition were defective because the Petitioner failed to discharge its duty to make “full and frank disclosure” of Mr Lu’s whereabouts (“the Service Ground”); and

(b) As Mr Lu had moved to Australia in April 2022, the Petitioner could not meet the jurisdictional conditions set out in section 4 of the Ordinance (“the Jurisdiction Ground”).

7.  At the hearing, Mr Lam SC submitted that the bankruptcy order should be annulled on the Service Ground alone. As a result, the oral submissions from both sides were mainly focused on that ground. For the reasons that will be apparent below, I will only be concerned with the Service Ground in this judgment. Unless it is absolutely necessary, I shall refrain from commenting on the Jurisdiction Ground in this Judgment.

B2. Legal principles on annulment

8.  Section 33(1)(a) of the Ordinance provides that: “The court may annul a bankruptcy order if it at any time appears to the court that, on any grounds existing at the time the order was made, the order ought not to have been made …”.

9.  The legal principles governing the Court’s exercise of its discretion under the said section is not in dispute. Both Mr Lam SC and Mr Wong refer me to Kam Hung Cheung v Bank of China (Hong Kong) Limited [2009] 3 HKLRD 597, where the Court of Appeal adopted the following principles as elucidated by Madam Justice Chu J (as Chu VP then was) in the court below (citation omitted):

“22. The relevant decided cases show that, in considering whether to exercise the power under section 33(1)(a), the court should first look at whether there were any grounds on which a bankruptcy order ought not to have been made at the material time when it was made. If the court does not think that such grounds existed, it cannot invoke section 33(1)(a) to annul the bankruptcy order. If the court thinks that such grounds existed, it still has to consider whether it should exercise its discretion to annul the bankruptcy order.

23. In exercising the discretion under section 33(1), the court has to carefully consider the interests of the creditor, the debtor and the public, bearing in mind that a bankruptcy order is to be annulled only under exceptional circumstances.

24. Furthermore, the person applying to annual a bankruptcy order bears the burden of proving that when the order was made there were grounds on which the order ought not to have been made.

25. And if a debtor disputes the debt on which a bankruptcy order is based, he must adduce cogent prima facie evidence to show that the dispute is supported by genuine and cogent reasons. Where the debt which forms the basis of a bankruptcy order is a judgment debt, the court will normally not reconsider any dispute on the debt.

26. In addition, where a bankruptcy order was made in the absence of the debtor, or where the underlying judgment in favour of the creditor was obtained by reason of the debtor’s failure to give Notice of Intention to Defend, then the debtor must provide reasonable and credible explanations for his absence or failure to give Notice of Intention to Defend.”

10.  Nor is it controversial that failure to serve the statutory demand properly is a ground for holding that the bankruptcy order ought not to have been made, see: Re Lam Lai Wah Susanna [2002] 4 HKC 334 (CFI) and [2003] 2 HKC 520 (CA), Re Vong Wun Man, ex p Industrial and Commercial Bank of China (Asia) Ltd [2006] 3 HKLRD 650, Re Chan Chi Ho, ex p Strong Well International Ltd [2008] 5 HKLRD 871, Re Lam Chik Sing, ex p Hong Kong Chinese Textile Mills Association [2009] 2 HKLRD 107, and Re Sung Sze Yin Daniel [2019] HKCFI 2264.

B3. Overview of scheme concerning service of statutory demands

11.  It is trite that bankruptcy jurisdiction is a statutory one. The Court may exercise its bankruptcy jurisdiction if, and only if, the conditions set out in the Ordinance are satisfied.

12.  Section 4(1) of the Ordinance sets out the conditions where a creditor may present a bankruptcy petition against a debtor. Among others, a creditor may not present a bankruptcy petition unless, at any time in the period of 3 years ending with the date of presentation of the bankruptcy petition, the debtor (a) has been ordinarily resident, or has had a place of residence, in Hong Kong, or (b) has carried on business in Hong Kong.

13.  According to sections 6(1) and 6(2)(c) of the Ordinance, a creditor may present a bankruptcy petition in respect one or more debts owed by the debtor if, and only if, at the time of the presentation of the bankruptcy petition, the debtor appears either to be unable to pay or to have no reasonable prospect of being able to pay the debt, or each of the debts.

14.  The phrase “inability to pay” is defined under section 6A of the Ordinance. Under this section, and for the purpose of section 6(2)(c), the debtor appears to be unable to pay a debt if, but only if, the debt is payable immediately and “… the petitioning creditor to whom the debt is owed has served on the debtor [a statutory demand] … at least 3 weeks have elapsed since the demand was served and the demand has been neither complied with nor set aside in accordance with the rules…”.

15.  The procedural requirements governing the contents, service, and application to set aside statutory demand are prescribed under Rules 44-49 of the Bankruptcy Rules (Cap 6A) (“the Rules”). In particular, Rule 46(2) provides that “[t]he creditor shall do all that is reasonable for the purpose of bringing the statutory demand to the debtor's attention and, if practicable in the particular circumstances, to cause personal service of the demand to be effected.”

16.  Mr Justice Barma J (as His Lordship then was) expounded the said Rule 46(2) in Re Pang Mei Lan May [2005] 1 HKC 319 at 329 as follows:

“25. Rule 46(2) specifies the steps which must be taken by a creditor in relation to service of a statutory demand on a debtor. The creditor is required to do ‘all that is reasonable’ for the purpose of bringing the statutory demand to the debtor’s attention. Where personal service is practicable, this is required. But the steps to be taken by the creditor must, I think, also include doing all that is reasonable to effect personal service, such as the taking of reasonable steps to obtain an address at which personal service might be effected. This seems to me to follow from the general requirement of doing all that is reasonable for the purpose of bringing the statutory demand to the debtor’s attention. If a creditor has not been able to serve the debtor at the address or addresses which he has in his records but has other information or other means available which might enable him to obtain an address for service, it seems to me that he should make use of them, where it is reasonable to expect him to do so, with a view to bringing the statutory demand to the attention of the debtor.

26. Thus, where a creditor has one or more addresses for a debtor, personal service should ordinarily be effected at each of those addresses. Where a creditor has one or more avenues by which an address for service might be obtained, he should, if it is reasonable for him to do so, follow up those avenues so as to obtain, if possible, an address for service. Whether or not it will be reasonable to expect him to do so will depend on the particular circumstances of the case, including the ease with which the step in question can be taken, and the likelihood of obtaining information which might enable personal service to be effected. If an enquiry can be made without much difficulty or effort, it will generally be reasonable to make it even if the chances of obtaining information are not particularly high. On the other hand, where the chances of obtaining information that might enable personal service to be effected are good, it may be reasonable to take steps which are more onerous or involve the expenditure of greater time or effort. It should of course be borne in mind that the purpose of requiring the creditor to take these steps is to bring the statutory demand, failure to comply with which is likely to have serious consequences for the debtor, to the debtor’s attention.”

See also: Re Lam Chik Sing, supra, at §§18-19.

17.  Rule 49 of the Rules further provides that:

“(1) Where under section 6A of the Ordinance the petition must have been preceded by a statutory demand, there must be filed in court, with the petition, an affidavit proving service of the demand.

…

(5) If neither subrule (3) nor (4) applies, the affidavit must be made by a person having direct personal knowledge of the means adopted for serving the statutory demand, and must— (L.N. 150 of 2014)

(a) give particulars of the steps which have been taken with a view to serving the demand personally;

(b) state the means whereby (those steps having been ineffective) it was sought to bring the demand to the debtor’s attention; and

(c) specify a date by which, to the best of the knowledge, information and belief of the person making the affidavit, the demand will have come to the debtor’s attention.

(6) The steps of which particulars are given for the purposes of subrule (5)(a) must be such as would have sufficed to justify an order for substituted service of a petition.

…

(9) The court may decline to file the petition if not satisfied that the creditor has discharged the obligation imposed on him by rule 46(2).”

18.  What the Court would normally consider as compliance with the requirements of Rule 46(2) and 49(9) has been clearly stated in Practice Direction 3.1, §§1.1-1.6 and 2.1-2.4. Paragraph 2.1(c) also refers to the steps stipulated under §3.2 as to what are normally considered to be reasonable steps that a creditor need to take in order to satisfy the Court that order for substituted service of a petition should be made. In particular, §3.2(h) provides that the affidavit for the purposes of Rule 49(1) or in support of an application for leave for substituted service of the petition should also deal with the following matters:

“(i) all relevant facts as to the debtor's whereabouts;

(ii) …

(iii) whether the debtor was within the jurisdiction or believed to be so at the time when the attempts to effect service were made, giving the facts upon which the inference is founded for such belief;

(iv) in the case of an application for leave for substituted service of the petition, whether the debtor to be served is within the jurisdiction or whether he is believed to be so at the time when the application is made, giving the facts upon which the inference is founded for such belief; and

(v) …”

B4. Legal principles on Material Non-Disclosure

19.  As pointed out by Mr Lam SC, the principles concerning the duty of “full and frank disclosure” are trite and has been helpfully summarized by Au-Yeung J in China Medical Technologies, Inc v Bank of China (Hong Kong) Limited [2018] HKCFI 1395 (citation omitted):

“65. When applying for an ex parte order, the duty is on the applicant to make full and frank disclosure to the court of all relevant facts which he knows. Failure to do so may in itself be a ground for setting aside such an order.

66. The test as to materiality is an objective one. It is not for the applicant or his legal advisers to decide the question, hence it is no excuse for the applicant subsequently to say that he was genuinely unaware, or did not believe, that the facts were relevant or important.

67. “Material information” means all matters which are relevant to the court’s assessment of the application in question, and it is no answer to a complaint of non-disclosure that if the relevant matters had been placed before the court, the decision would have been the same.

68. It will usually not be a sufficient answer to an allegation of non-disclosure for an applicant to say that the relevant information giving rise to the defence was contained in an exhibit though not referred to in the body of the affidavit in the context of a possible defence. The applicant has the responsibility of ensuring that all relevant points are presented clearly and distinctly.

69. The duty of disclosure extends to identifying potential defences (such as limitation), which although not yet taken, would have been available to be taken by the defendant had he been present at the application, provided that: (a) the defence is one which can reasonably be expected to be raised in due course by the defendant, and (b) the defence is not one which can be dismissed as without substance or importance.”

20.  On the other hand, in reliance on Haitong International Products & Solutions Ltd v Wang Yafeng [2025] HKCA 821, Mr Wong stresses the importance of the concept of “materiality”. Madam Justice Kwan VP stated the principles in §17 (citation omitted) thus:

“The duty of full and frank disclosure extends to matters of fact or law that could reasonably be expected to be raised by the defendant against the application. The test is not whether, if the matter had been disclosed, the ex parte court would nevertheless have made the order, but whether the matters not disclosed, being relevant, should have been in the scales. The court takes a realistic view and draws sensible limits in applying the broad test of materiality, otherwise an impossible burden would be placed on applicants and their advisers and the court may open itself to “counter-abuse”. The ultimate touchstone is whether the presentation of the application is fair in all material respects.”

21.  I also remind myself of what are to be regarded as material facts in this context. Browne-Wilkinson J (as he then was) said in Thermax v Schott Industries Glass [1981] FSR 289 at p 298 thus: “all facts that are relevant to the weighting operation which the court has to make in deciding whether or not to grant the order”.

C. BACKGROUND FACTS

C1. General Background

22.  The factual background of this case is by and large undisputed. The parties have helpfully prepared an Agreed Chronology for this Court’s reference. In such circumstance, it is only necessary for me to highlight the salient facts as follows.

23.  The Petitioner operates a casino in Singapore and Mr Lu became its long-standing customer since around 2010. According to Mr Lu, he made over 10 visits to the Petitioner’s casino over the years.

24.  At his last visit to the Petitioner’s casino on or around 25 December 2021, Mr Lu signed a credit agreement (“the Credit Agreement”). Pursuant to the said agreement, the Petitioner granted credit to Mr Lu for gaming at the casino. Mr Lu stayed in Singapore for about 4 months, and then left for Australia on 18 April 2022.

25.  There were some discussions between Mr Lu and the Petitioner relating to Mr Lu’s outstanding credit balance in or about June 2022. No agreement was reached.

26.  The Petitioner commenced proceedings against Mr Lu in Singapore in around August 2022. As mentioned above, on 14 October 2022, the Petitioner obtained the Singapore Judgment against Mr Lu in the sum of S$10,000,000, plus interests and costs.

27.  The Petitioner commenced proceedings in Hong Kong under HCMP 148/2024 for the registration of the Singapore Judgment, which was successfully registered as a judgment of the High Court of Hong Kong. It transpired in the statutory demand that the Petitioner was able to recover a sum of S$894,911.75, leaving the outstanding debt in the sum of HK$70,866,262.12.

C2. Procedural History

28.  The Petitioner attempted to serve the statutory demand personally on Mr Lu at the Tuen Mun Address[1], which was the address stated by Mr Lu in the Credit Agreement. The service was not successful. As a result, the Petitioner advertised the statutory demand in a Chinese newspapers published and circulating in Hong Kong.

29.  In the ex-parte application for leave to present a bankruptcy petition against Mr Lu made by way of the Affirmation of Fung Kam Sing dated 4 November 2024[2], the deponent affirmed the followings:

“10. The Petitioning Creditor is not aware of any other address of the Debtor where service of documents on the Debtor could be effected.

11. The Petitioning Creditor does not have any reason knowledge or information to believe that the Debtor is no longer in the jurisdiction of Hong Kong and the Debtor has not evinced an intention to leave Hong Kong…”

30.  In answering the requisitions raised by the Court on 6 December 2024, the Petitioner conducted various company searches and obtained the Tsim Sha Tsui Address as Mr Lu’s correspondence address. It was deposed in the 2^nd Affirmation of Fung Kam Sing dated 24 December 2024[3] that, while Mr Lu had an alternative address in Hong Kong, the deponent verily believed that it was not Mr Lu’s last known address because Mr Lu could not be located there.

31.  Based on the said affirmation, the Court granted leave on 4 February 2025 allowing the Petitioner to present a bankruptcy petition against Mr Lu. The bankruptcy petition was subsequently presented on 13 February 2025.

32.  The Petitioner later applied for an order allowing the bankruptcy petition to be served by way of substituted service. Assertions similar to those mentioned in [28] above were made in the 3^rd Affirmation of Fung Kam Sing filed on 13 March 2025. On 19 March 2025, an order for substituted service (“the Substituted Service Order”) was granted, whereby the Petitioner might serve the bankruptcy petition by sending the same at the Tuen Mun Address and by advertising a notice in a Chinese newspapers published and circulating in Hong Kong.

33.  On 26 March 2025, the Petitioner served the bankruptcy petition in accordance with the manners specified in the Substituted Service Order.

34.  As mentioned above, Mr Lu was adjudged bankrupt on 22 April 2025, and took out this annulment application on 30 June 2025.

C3. The parties’ respective cases

35.  Insofar as this application is concerned, Mr Lu’s main contention is that the Petitioner ought to have known that Tuen Mun Address was not the only address of his, and ought to have been aware of the possibility that he was not in Hong Kong at the time of the service of the statutory demand and the bankruptcy petition.

36.  Mr Lu deposed in his affirmation in support that:

(a) He had not resided at the Tuen Mun Address since February 2017. He resided at the Discovery Bay Address between February 2017 and May 2018, at the One Silversea Address between May 2018 and September 2021, and at the Peak Address between September and December 2021. As mentioned above, he left Hong Kong for Singapore on 25 December 2021 and stayed there for 4 months until April 2022. He then left for Sydney, Australia in April 2022. While he had tried to enter Singapore in June 2022, his entry was denied by the Singaporean authorities. He had never returned to Hong Kong since December 2021.

(b) The Petitioner had full knowledge of where he resided, as well as his intention to migrate to Australia. It is his case that, since 2016, the main point of contact between him and the Petitioner was a Ms Wendy Peng (“Ms Peng”), a relationship manager of the Petitioner. Mr Lu indicated that he and Ms Peng had developed a rather close relationship throughout the years. Ms Peng had often arranged to send gifts to him in various traditional Chinese festivals. Between December 2020 and July 2021, Ms Peng had indeed sent gifts to him at the One Silversea Address. In August 2021, Mr Lu informed Ms Peng that he moved to the Peak Address, and Ms Peng sent mooncakes to him at that address. These contentions are supported by the WeChat exchanges between Mr Lu’s assistant and Ms Peng in the relevant times.

(c) Mr Lu was not aware of the fact that his address in the Credit Agreement was stated as the outdated Tuen Mun Address. When he signed the agreement, he only checked the credit amount without giving particular attention to other terms.

(d) Mr Lu decided to migrate to Australia in October 2020. His visa application was rejected by the Australian government in February 2022. He expressed his frustration to Ms Peng about the rejection of visa, and Ms Peng offered comfort to him.

(e) As mentioned above, Mr Lu left Singapore for Australia in April 2022. In order to discuss with the Petitioner to resolve the outstanding credit amounts and other expenses owed by him under the Credit Agreement, Mr Lu tried to enter Singapore in June 2022. However, Mr Lu’s entry was denied by the Singaporean authorities. It was Ms Peng who assisted him to return to Australia when his entry to Singapore was denied in June 2022.

(f) As a result of the denial of entry into Singapore, Mr Lu could only discuss the matter with Ms Peng and a Mr Danny Liao (“Mr Liew”[4]) (who was a representative of the Petitioner’s finance department). During the online discussion, Mr Lu provided his email address and phone number in Australia to Mr Liew.

(g) As the online discussion yielded no fruitful result, Mr Lu sent representatives to Singapore to engage face-to-face negotiation with the Petitioner. According to Mr Lu, his representatives had expressly informed Ms Peng and Mr Liew that he was residing in Australia. Mr Lu also invited the Petitioner to send representatives to Australia to have face-to-face negotiation with him.

37.  Mr Lu also relied on two affirmations made by Ms Yang Ningning and Ms Zhang Lin, in support of his aforementioned contention that he sent representatives to Singapore to engage fact-to-face negotiation with the Petitioner.

38.  In opposition to this application, the Petitioner relied on an affirmation made by Liew Wai Leong (Mr Liew) filed on 3 October 2025. According to Mr Liew:

(a) Before Ms Peng left her employment with the Petitioner in April 2023, he had already been liaising with Mr Lu and was involved in the negotiation concerning repayment of the debt since April 2022.

(b) It was his understanding that Mr Lu had always been residing in Hong Kong. Mr Lu had never informed him of the renunciation of his Chinese nationality and of his intention to relocate or migrate to another place permanently. While he was aware that Mr Lu had travelled to Melbourne and that Australian phone number and email address of Mr Lu were given to him, he was not informed of the fact that Mr Lu had a place of residence in Australia, let alone the address of such residence.

(c) The Petitioner was only aware of the Tsim Sha Tsui Address after the company searches conducted after the Court’s requisition. The Petitioner unaware neither of the One Silversea Address nor the Peak Address.

(d) Finally, it was asserted that Ms Peng had returned her work phone to the Petitioner when she left her service, and the said work phone had been reset to its factory setting. As a result, the data contained in Ms Peng’s work phone had been permanently deleted and could no longer be retrieved. The Petitioner did not possess any text messages exchanged between her and Mr Lu (and his representatives).

39.  In reply, Mr Lu contended that it was inherently improbable for the Petitioner to delete all the messages in Ms Peng’s work phone, given the fact that the proceedings had been commenced against Mr Lu about 8 months before Ms Peng left her service with the Petitioner. He also found it disingenuous for the Petitioner to asset that it was not aware of the One Silversea Address, as the Petitioner stated that address as one of Mr Lu’s addresses[5] when it applied for the Garnishee Order to Show Cause under HCMP 148/2024.

40.  As mentioned above, I directed at the end of the hearing that the handling solicitor of Messrs Johnson Stokes & Master (“JSM”), solicitors for the Petitioner, was to file an affirmation to explain the discrepancy between the aforesaid affirmations of Fung Kam Sing and the Garnishee Order to Show Cause dated 27 May 2024 under HCMP 148/2024. An affirmation of Mr Law Wing Chung Vincent Law duly filed on 13 November 2025. In that affirmation, Mr Law denied that there was any discrepancy between Mr Fung’s affirmations and the said Garnishee Order Nisi. It was deposed that:

(a) JSM did conduct searches against the companies of which Mr Lu held shares, and was aware of the Tsim Sha Tsui Address and the One Silversea Address.

(b) However, since both the Garnishee Order to Show Cause and the Garnishee Order Absolute sent at the Tsim Sha Tsui Address and the One Silversea Address were returned to JSM, and some marked “No such person”, it was contended that, coupled with the fact that the Tuen Mun Address was stated in the Credit Agreement as Mr Lu’s address, the Tuen Mun Address was in fact the last known address of Mr Lu at the material times.

(c) Accordingly, the Tsim Sha Tsui Address could not be treated as Mr Lu’s address, at which “service could be effected”.

D. ANALYSIS

41.  Mr Lam SC submitted on behalf of Mr Lu that it is extraordinary that:

(a) The Petitioner did not attempt service at other addresses of Mr Lu, such as the One Silversea Address, and only attempted service at the Tuen Mun Address;

(b) No credible explanation was given by the Petitioner as to why no attempt was made to serve the court documents (including the Statutory Demand) via electronic means; and

(c) None of the above matters relating to Mr Lu’s whereabouts and contact details were disclosed to the Court.

42.  In response, Mr Wong argues that:

(a) As Mr Lu stated the Tuen Mun Address as his address in the Credit Agreement, the Petitioner has no reason to suppose that the same was not Mr Lu’s last known address and that the service of documents at that address would not bring notice to him.

(b) There is no basis to suggest that the Petitioner knew Mr Lu had migrated to Australia. The communications between Mr Lu and Ms Peng are self-serving assertion without any documentary evidence in support.

(c) The Petitioner had done all that are required in accordance with Practice Direction 3.1. Particularly, the provision therein governing the service of statutory demand by electronic means, namely paragraph 2.1(b), does not apply because none of the limbs was met in the present case. In any event, there is no mandatory requirement that a creditor must serve the statutory demand via electronic means.

43.  I reject the argument that, by stating the Tuen Mun Address in the Creditor Agreement, the Petitioner is reasonable to suppose that Mr Lu resided at that address at the time when the statutory demand and the bankruptcy petition were served. Absent any Notice Clause in the agreement, I cannot see how the address stated in the agreement could constitute a conclusive proof as to Mr Lu’s whereabouts at the material times.

44.  In any event, bearing in mind the above principles set out in paragraphs [8] – [21] above, it is clearly not the correct question to ask whether the Petitioner had justifiably considered the Tuen Mun Address to be the last known address of Mr Lu. Nor is it correct to ask whether the Petitioner knew that Mr Lu had migrated to Australia. Rather, in my view, the correct questions are whether the Petitioner should have disclosed the other addresses to the Court, and whether there were grounds for believing that Mr Lu might no longer be in the jurisdiction of Hong Kong at the times when leave to present bankruptcy petition and the Substituted Service Order were applied for. In other words, the question is whether such other addresses are relevant to the “weighing operation” for the Court to consider when granting leave to present the bankruptcy petition and making the Substituted Service Order.

45.  Mr Liew stated in his affirmation that the Petitioner was not aware of the One Silversea Address because the relevant Annual Report showing that address was superseded by a more updated one. It is therefore reasonable for the Petitioner to rely on the most updated information. This contention must be rejected. As I have just explained, the correct question is whether the information should be disclosed to the Court, and not whether it is reasonable on rely on it.

46.  It is noted that Mr Liew’s statement in his affirmation filed on 30 September 2025 was made without any qualification. It was unequivocal that the Petitioner was not aware of other addresses of Mr Lu, particularly the One Silversea Address. However, evidence before the Court shows that, at the material times, the Petitioner knew other addresses of Mr Lu than the Tuen Mun Address. Mr Lu’s allegation that Ms Peng had sent gifts at the One Silversea Address was not controverted by the Petitioner. Nor can it be denied that the Petitioner’s solicitors were aware of the One Silversea Address when they applied for the Garnishee Order Nisi in HCMP 148/2024. The subsequent Garnishee Order Nisi was made on 27 May 2024, which is more than 1 year and 3 months before the making of the said Mr Liew’s Affirmation. For my part, I cannot see how it can be reasonably argued that the said statement of Mr Liew can be regarded as true.

47.  What the Petitioner now contends (through Mr Law’s affirmation) is that the One Silversea Address could not be regarded as Mr Lu’s address that “service could be effected” because the Garnishee Order Absolute served at that address was returned and marked “no such person”. I reject this contention for the following reasons:

(a) This is a slippery slope from the fact of being unaware of the One Silversea Address to the contention that the same address was not regarded to be an address that “service could be effected”.

(b) Whether an address that service could be effected is not determined by the opinion of the Petitioner’s legal advisor. Even if the service at a particular address is unsuccessful, the Court should still be informed of the same, such that further inquiries may be ordered to be followed up. In my view, the legal opinion of the Petitioner’s solicitors that service at a particular address could not be validly effected is not determinative in respect of the test of materiality, nor can it exonerate the Petitioner’s duty of disclosure of material facts.

(c) As I will further elaborate below, even if service on the One Silversea Address could not be effected, it does not follow that the said address was not relevant to the “weighing operation” when the Court considers the Petitioner’s application for leave to present bankruptcy petition and for a substituted service order.

48.  Nor is it deniable that the Petitioner (through Mr Liew) possessed Mr Lu’s email address and his phone number in Australia in 2022. Mr Lu’s allegation that Ms Peng had all along knew his intention to migrate to Australia was not challenged by the Petitioner. Such information, if disclosed, would undoubtedly lead to further inquiries as to Mr Lu’s whereabouts. I therefore hold that, objectively speaking, there must exist grounds for the Petitioner in believing that Mr Lu was not within jurisdiction at the material times. I further hold that Mr Lu’s email address and his phone number in Australia are relevant facts as to Mr Lu’s whereabouts within the meaning of §3.2(h)(i) of PD 3.1, and such facts must be disclosed when applying for leave to present bankruptcy petition and for substituted service order.

49.  The Petitioner does not suggest that the knowledge of Mr Law (the Petitioner’s solicitor) and Ms Peng (the Petitioner’s employee) should not be attributable to it. In this regard, I hold that the said knowledge of Mr Law and Ms Peng should be so attributed to that of the Petitioner.

50.  To take a step back, even if the Petitioner did not regard the One Silversea Address as his “address that service could be effected”, and the information about Mr Lu’s intention to migrate to Australia did not constitute grounds in believing that Mr Lu was not within jurisdiction, such information are clearly relevant to the “weighing operation” which the Court was required to perform when deciding whether or not leave to present bankruptcy petition should be granted and substituted service of the bankruptcy petition should be ordered. In this regard, it is misguided to say that the service sent at the One Silversea Address would be futile because Mr Lu admitted that he moved out since 2021 and the Garnishee Order Absolute sent to that address was returned and marked “no such person”. In my view, these information would indubitably lead to a chain of inquiries before the Court can be satisfied that the Petitioner has discharged its obligations imposed under the rules. It is wrong for the Petitioner to say that such information should not be disclosed because the information will lead to nowhere.

51.  It is clear that the subjective belief of the Petitioner as to whether Mr Lu has migrated to Australia would not assist its case. As I mentioned during the hearing and have indicated above, the correct question must be whether there is possibility that Mr Lu might not have been within the jurisdiction. Such subjective belief of the Petitioner is of no relevancy here.

52.  Mr Wong argues that the Petitioner had done all that are required under Practice Direction 3.1 (“PD3.1”). However, as I said during the hearing, the steps set out therein are not meant to be exhaustive. It is explicitly stated in §2.1 that “The steps set out in this paragraph would normally be regarded as compliance with his obligation under Rule 46(2).” [Emphasis added]

53.  Finally, I agree with Mr Lam SC that Mr Lu’s other addresses and his means of contact in Australia are “relevant facts as to the debtor’s whereabouts”, which are required to be stated in the affidavit for the purpose of Rule 49(1) of the Bankruptcy Rules (Cap 6A), see: §3.2(h) of PD3.1.

54.  Had the matters (namely Mr Lu’s addresses other than the Tuen Mun Address, his phone number in Australia, and his email address) been duly disclosed to the Court, I have no doubt that further requisitions would be raised before the Court would grant leave to present the bankruptcy petition and would make the Substituted Service Order. The presentation of the bankruptcy petition would be declined if the Petitioner failed to answer the requisitions satisfactorily.

55.  To conclude, I hold that:

(a) Before the service of the statutory demand, the Petitioner, through its solicitors and its employees (including its ex-employee), knew that the Tuen Mun Address was not the only address of Mr Lu in Hong Kong and possessed information which might indicate that Mr Lu was not in Hong Kong at the material times;

(b) Such other addresses and information of Mr Lu are relevant to the “weighing operation” of the Court when it considered whether or not to grant leave for the Petitioner to present the bankruptcy petition and to make the Substituted Service Order; and

(c) Had such other addresses and information been disclosed, the Court would not have granted the relevant leave to present the bankruptcy petition and to make the Substituted Service Order without further inquiries of Mr Lu’s whereabouts.

56.  For these reasons, I am of the view that the Petitioner had failed to discharge its duty of full and frank disclosure. It follows that both leave to present bankruptcy petition and the Substituted Service Order are liable to be set aside.

57.  As a note of practice, when applying for leave to present bankruptcy petition or for a substituted service order, practitioners are reminded to disclose all the facts that may lead to further inquiries as to the debtor’s whereabouts. Such facts are materials and relevant to the Court’s “weighing operation” when considering such applications. Failure to disclose such facts may render the relevant leave or order defective and liable to be set aside.

E. DISCRETION OF THE COURT

58.  Even if I am satisfied that Mr Lu has made out the ground for annulling the bankruptcy order against him, the Court still has the discretion not to annul the order having regarded the interests of the creditor, the debtor and the public bearing in mind that a bankruptcy order is to be annulled only under exceptional circumstance, see: Kam Hung Cheung, supra, at [23].

59.  According to the Official Receiver’s Report, Mr Lu maintained accounts with 3 local banks. A total sum of HK$173,801.84 was realized to the bankruptcy estate. Total balance of the estate stands at HK$192,589.07. Only 1 proof of debt was received from the Petitioner claiming a sum of HK$74,399,158.79. No dividend has been declared and distributed.

60.  Mr Wong argues that the Court should not annul the bankruptcy order because Mr Lu had no answer to the underlying debt. Furthermore, as Mr Lu had declared the Peak Address and the Tsuen Wan Address as his residential address in company records, the Court has jurisdiction of making a bankruptcy order against him pursuant to section 4(1)(c)(i) of the Bankruptcy Ordinance.

61.  Given my ruling as mentioned above, leave to present bankruptcy petition is defective. The Petitioner has clearly failed to discharge its obligation imposed on it under Rule 46(2). In such circumstance, the presentation of the bankruptcy petition should have been declined pursuant to Rule 49(9).

62.  The 2 cases relied upon by Mr Wong, namely Re Yip Wan Fung [2021] HKCFI 3610 and FWD Life Insurance Co (Bermuda) Ltd v Chan Kim Fai (CACV 116/2012, judgment dated 4 March 2014), are distinguishable from the present case, in that the said cases concern defective substituted service order only, whereas the present one concerns defective leave to present bankruptcy petition. Mr Lam SC argues in his oral submissions in reply that, contrary to cases where service of bankruptcy petition is defective, proper service of statutory demand is the pre-requisite for the presentation of the bankruptcy petition and the defect goes to the foundation of the Court’s jurisdiction to make the bankruptcy order. While I can see the force of this argument, I do not think there is a hard and fast rule that a bankruptcy order must always be annulled as a result of defective service of statutory demands. Where the service of a statutory demand is defective, the Court still retains discretion to rectify the defect or waive the irregularity under Rule 203 of the Rules. Of course, whether the Court would exercise such a discretion depends on the particular facts of each case.

63.  In the present case, it is noted that 2 of 3 declarations of address as referred to by Mr Wong was made in April 2022, which is more than 3 years ago. The presentation of the bankruptcy petition was only 2 months short of the relevant 3-year period. In my view, it would not be right to allow the Petitioner to proceed based on the defective leave to present bankruptcy petition, such that it may take advantage of the statutory period to establish jurisdiction against Mr Lu. In this regard, I agree with Mr Lam SC’s submissions that the Court would not normally assist a party to retain an advantage to which he was not entitled due to material non-disclosure, see: Re Wang Huimin (王慧敏), ex p Wang Hairong (王海鎔) [2021] HKCFI 3472 at [75(4)(c)].

64.  The other declaration was made in April 2024. But such declaration was made in Form ND2B, and the address was not open for public inspection. Mr Lu provided explanation in his 1^st affirmation as to why he used the Tsuen Wan Address as his residential address when he said he had already migrated to Australia. For the present purpose, it is neither necessary nor appropriate for me to comment on the arguments raised by the parties. Suffice it for me to say that I do not find it a waste of time and resources for the parties to argue this point afresh.

65.  For the reasons as aforesaid, I take the view that, due to non-disclosure of material facts, leave to present bankruptcy petition granted on 4 February 2025 was obtained irregularly. And such irregularity is so fatal that the Court ought to have declined the filing of the bankruptcy petition. It follows that the bankruptcy petition presented pursuant to such leave must be dismissed; and the bankruptcy order be annulled accordingly.

F. COSTS

66.  Mr Lam SC asks me to award costs in Mr Lu’s favour on indemnity basis with certificate for two counsel. Both parties have lodged their respective statement of costs alongside their supplemental skeleton submissions.

67.  I have not heard full submissions on costs, particularly the basis for awarding costs in favour of Mr Lu on indemnity basis with certificate for two counsel. I think it would be prudent to give the parties a chance to vary the said costs order with written submissions on costs. As such, I would simply make an order nisi that the costs of these proceedings be paid by the Petitioner to Mr Lu. The amount of such costs are to be summarily assessed on the papers.

G. CONCLUSION

68.  For the reasons as aforesaid, I make the following order:

(1) The Bankruptcy Order made on 22 April 2025 be annulled;

(2) The Bankruptcy Petition presented on 11 February 2025 be dismissed;

(3) The gazetting and advertising of the notice of the annulment order be dispensed with;

(4) There be a costs order nisi that:

(a) The Official Receiver’s fees, expenses and costs for and incidental to the administration of the bankruptcy estate (including those under the Bankruptcy (Fees and Percentages) Order (Cap 6C) and incurred in the present application be fixed at HK$28,002.77, and be charged from the bankruptcy estate, and be reimbursed by the Petitioner;

(b) The Petitioner do pay Mr Lu Zhonglou’s costs of these proceedings on party-and-party basis, and such costs are to be summarily assessed by the Court on the papers without an oral hearing;

Absent any application to vary (and submissions therefor shall not exceed 5 pages), the said order nisi shall become absolute after the expiration of 14 days after the date of this Judgment; and

(5) Insofar as the summary assessment of costs is concerned:

(a) The paying party shall lodge its statement of objection to the other side’s statement of costs within 14 days after the costs order becomes absolute; and

(b) The Court shall deal with the summary assessment on the papers without an oral hearing.

69.  Lastly, I would like to express my gratitude to Mr Lam SC, Ms Law, and Mr Wong for their assistance rendered to this Court.