CHOY BING WING v. OFFICIAL RECEIVER

HCB 242/1992

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

BANKRUPTCY PROCEEDINGS NO. 242 OF 1992

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D E C I S I O N

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Introduction

1. This is an application by the Respondent, the Official Receiver and Trustee of the Bankrupt Ng Yat Chi (Discharged) to make the Charging Order granted by Master J Wong on 27 January 2003 against the Applicant absolute.

2. The Applicant, Mr Choy, is one of the unsecured creditors of the Bankrupt. He was until 15 November 1993 one of the members of the committee of inspection when he and another member were removed pursuant to an order of the Court. The Applicant was not satisfied with the conduct of the Respondent with respect to the disposal of a major and valuable asset of the Bankrupt, namely, shares in a company known as Alljean Investments Limited (the "Shares"). The Shares were charged by the Bankrupt in favour of Sin Hua Bank Limited to secure his indebtedness. The Shares were sold by way of public tender offer held by Sin Hua Bank Limited on or about September 1995 at the price of $23.5 million. After deducting the indebtedness and costs, a small surplus left was paid over to the Respondent forming part of the estate of the Bankrupt.

3. On 13 December 2000, the Applicant issued a Notice of Motion supported by his two affirmations alleging that the sale of the Shares was a fraudulent transaction. He also made various complaints against the Respondent to the Commissioner of Police, the Commissioner of ICAC and the Secretary for Financial Services.

4. The Notice of Motion was heard before the Honourable Madam Justice Yuen (as she then was) on 8 February 2001. On 15 February 2001, Yuen J dismissed the Notice of Motion and made an order nisi that the Applicant do pay the Respondent's costs ("Order of 15 February 2001"). The Applicant issued a summons to contest the order nisi. After hearing the parties on 2 May 2001, Yuen J made an order that the order nisi dated 15 February 2001 be made absolute. She made a further order nisi that the Applicant do bear the Respondent's costs of the summons ("Order of 2 May 2001").

5. On 6 May 2001, the Applicant lodged a Notice of Appeal against both the Order of 15 February 2001 and the Order of 2 May 2001 out of time. On 22 May 2001, Master B Kwan sitting as Registrar of Civil Appeal ruled that the appeal filed by the Applicant was invalid. She held that leave was required to appeal against the Order of 15 February 2001 and Order of 2 May 2001 pursuant to s. 14(3)(e) of the High Court Ordinance, Cap. 4 and ordered the Applicant to pay the Respondent's costs of the hearing on 22 May 2001 assessed at $1,660 ("Order of 22 May 2001").

6. The Applicant appealed against that order. His appeal was heard before the Honourable Madam Justice Kwan on 7 June 2001. Kwan J dismissed the appeal with costs to the Respondent ("Order of 7 June 2001").

7. The Applicant appealed to the Court of Appeal against the Order of 7 June 2001. In a written judgment handed down on 24 May 2002, the Court of Appeal dismissed the appeal with costs to the Respondent ("Order of 24 May 2002").

8. On 3 June 2002, the Applicant filed an application for leave to appeal to the Court of Final Appeal. The application was dismissed by the Court of Appeal on 19 July 2002 with costs to the Respondent ("Order of 19 July 2002").

9. The Applicant then applied to the Court of Final Appeal for leave to appeal. On 17 September 2002, the Appeal Committee of the Court of Final Appeal refused leave and ordered the Applicant to pay the Respondent's costs ("Order of 17 September 2002").

10. Apart from the costs awarded under the Order of 19 July 2002 which have not yet been assessed, the Respondent's costs have been assessed at $443,206. On 2 December 2002, the Respondent's solicitor, Messrs Stephenson Harwood & Lo, issued a letter of demand to the Applicant demanding full payment in respect of the Allocaturs dated 27 August and 13 November 2002. In response, the Applicant replied by a letter of the same date making various other allegations but evincing no intention to settle the costs.

11. On 27 January 2003, Master J Wong ordered that unless sufficient cause to the contrary was shown by 5 March 2003, the Applicant's property in 18th Floor of Hong Kong Jewellery Building at 178-180 Queen's Road Central be charged with payment of the costs and interest.

The law

12. It is well settled that the question whether a charging order nisi should be made absolute is one for the discretion of the court and the burden of showing cause why a charging order nisi should not be made absolute is on the judgment debtor, i.e. the Applicant in the present case. The same considerations in making a garnishee order absolute are applicable in making absolute a charging order nisi. The court takes into account all the circumstances of the case and exercises its discretion as to do equity, so far as possible, to all the parties involved, the judgment creditor, judgment debtor, other unsecured creditors and others who have an interest in the property charged.

The Applicant's case

13. In his affirmation filed for the purpose of opposing this application, the Applicant repeated his allegation of impropriety against the Respondent in his capacity as the Official Receiver and Trustee of the Bankrupt which led to his unsuccessful litigation and the various costs orders. There is no need for me to repeat his allegations here. Those matters had been litigated and concluded with decisions against him. He had exhausted his avenues of appeals up to the Court of Final Appeal.

14. His ground for opposition is that those decisions were all wrong and were not final. He referred to Article 82 of the Basic Law and submitted that the power of final adjudication in the Hong Kong Special Administrative Region is vested in the Court of Final Appeal and not the Appeal Committee of the Court of Final Appeal which refused him leave to appeal and prevented his access to the Court of Final Appeal. Hence, he submitted that without a determination by the Court of Final Appeal, the decision of the Court of Appeal against him was not final. With all respect to the Applicant, he has misinformed himself about the law. The Appeal Committee is constituted under section 18 of the Hong Kong Court of Final Appeal Ordinance, Cap 484. Under subsection (2), the power of the Court of Final Appeal to hear and determine any application for leave to appeal shall be exercised by the Appeal Committee. Subsection (3) further provides that the decision of the Appeal Committee shall be final and not itself subject to appeal. Hence, when the Appeal Committee refused his leave to appeal that decision was final. It effectively affirmed the decision of the Court of Appeal. Hence, the Applicant had a final decision against him. He may not re-litigate those matters and raise those matters as grounds for opposing the charging order.

15. The Applicant is the sole beneficial owner of the property to be charged. There is no suggestion that anyone else has any beneficial interest or equities in the property. The Respondent is not aware of any creditors other than the Respondent. The Applicant has not disclosed the existence of any other creditors. In applying the law as I have stated above and having regard to all the circumstances of the case, I find that the Applicant has failed to discharge the burden of showing why the charging order nisi should not be made absolute.

Conclusion

16. Accordingly, I make an order that the Applicant's interest in the property known as 18th Floor of Hong Kong Jewellery Building at 178-180 Queen's Road Central do stand charged with the payment of $497,818.58 and interest on $444,866.00 at judgment rate from 17 January 2003 until payment and with the costs of this application.