RE PANG MEI LAN MAY

HCB 9118/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

BANKRUPTCY PROCEEDINGS NO. 9118 OF 2004

____________

____________

________________

J U D G M E N T

________________

Introduction

1.  This is an application by Madam Pang Mei Lan May (“Madam Pang”) to annul the bankruptcy order made against her in these proceedings on 10 November 2004.  The ground on which such annulment is sought is that the bankruptcy order ought not to have been made against her.  Alternatively, Madam Pang seeks the rescission of the bankruptcy order.

2.  The bankruptcy order of 10 November 2004 was obtained on the basis of a petition presented by the Bank of China (Hong Kong) Ltd (“the Petitioner”) on 15 September 2004.  The petition was not served on Madam Pang personally.  It was served by substituted service, pursuant to an order of Master Kwang dated 13 October 2004, by being posted on 27 October 2004 to Madam Pang at two addresses specified in the order for substituted service, and by a notice of the proceedings giving details of the presentation of the petition and the time and place fixed for its hearing being advertised once in the Hong Kong Daily News, a Chinese language newspaper widely circulating in Hong Kong, on 29 October 2004.   The two addresses to which the petition was posted were Room 1004, Hin Fu House, Hin Keng Estate, Shatin, New Territories (“the Hin Fu House address”) and Shop 10, Ground Floor, Wah Lee Building, Tuen Mun, New Territories (“the Wah Lee Building address”).  Madam Pang did not appear at the hearing of the petition, and a bankruptcy order was made against her in her absence.

3.  The petition was founded on a statutory demand dated 8 December 2003 by which the petitioner demanded payment of the total sum of HK$850,427.61, representing the amount said to be due by Madam Pang to the Petitioner in respect of a judgment debt and interest accrued thereon under a judgment obtained by the Petitioner against her on 16 December 1992 in HCMP No. 3328 of 1992.  As in the case of the petition, the statutory demand was not served on Madam Pang personally.  It was served by being advertised in the Hong Kong Daily News on 29 December 2003.

4.  At the hearing before me, Mr Chiu, appearing for Madam Pang, contended that the bankruptcy order ought never to have been made against her because neither the statutory demand nor the petition had been properly served on Madam Pang.  Although Madam Pang’s affirmation in support of her application also suggested that the bankruptcy order ought not to have been made because she was in a position to pay her debts, or could reasonably be expected to do so, this ground was not pursued by Mr Chiu at the hearing.

Background to the statutory demand and petition

5.  The judgment debt on which the statutory demand was founded arose out of a mortgage dated 29 July 1991, under which Madam Pang and two others, Messrs. Chung See Hon and Au Choi (“Mr Chung” and “Mr Au” respectively) jointly borrowed funds from the Petitioner (then known as the Bank of China) for the purchase of the property at the Wah Lee Building address.  Madam Pang admits having entered into the mortgage.  She says in her affirmation that she did not actually contribute to the purchase price of the property, which Mr Chung and Mr Au wished to buy for the purposes of a business that they were planning to embark on.  Nor was she interested in that business.  She says that she agreed to act as a co-borrower in respect of the mortgage loan in order to assist Mr Chung and Mr Au at the request of a mutual friend, on the understanding that she might be given an unspecified share of any profits from the operation of the business or the eventual sale of the mortgaged property.  Her assistance was required because Mr Chung and Mr Au did not have any references or steady income, whereas she did, being employed at the time as a registered nurse, working at the Queen Elizabeth Hospital (“QEH”).

6.  Madam Pang says that she heard nothing further about the mortgage or the business until some time in 1998, when she was told by the mutual friend that the business had failed and the Petitioner had repossessed the mortgaged property.  She says that she was unaware that judgment had been entered against her.  However, she does not deny that she is liable to the Petitioner in respect of monies owing under the mortgage, although she does not admit the correctness of the amount of the judgment debt on which the statutory demand and petition are based.

Madam Pang

7.  As I have said, Madam Pang was employed as a nurse at QEH in 1991.  At that time, she was married and living with her first husband at an address in Whampoa Garden.  In 1996, she and her first husband separated, and she moved to the 1^st floor of No. 55-59, Station Lane in Kowloon (“the Station Lane address”), where she had lived for some years prior to her marriage to her first husband.  During her marriage to her first husband, she says that she continued to receive mail at the Station Lane address, which was occupied by her brother.  Thereafter, in about December 1998, she moved to an address in Sham Tseng, although she continued to receive mail at the Station Lane address.  In 2000, she and her first husband were divorced, and the same year she met Mr William James Newport and moved to live with him at his home at Shek O.  Mr Newport and Madam Pang were married in November 2001, but Mr Newport passed away a year later, in November 2002.  Madam Pang is the administratrix of Mr Newport’s estate, which is substantial, and from which she expects eventually to receive a substantial distribution.

8.  So far as her employment is concerned, Madam Pang continued to work as a nurse employed by the Hospital Authority until she retired in 1997.  Thereafter, she worked on a part time basis as a nurse in various private hospitals, although it is not clear whether she still does so, and if not, when she ceased doing so.

Attempts to serve the statutory demand and petition

9.  So far as the Petitioner’s attempts to serve Madam Pang with the statutory demand and petition are concerned, the position can be summarised as follows.

10.  The first attempt to serve the statutory demand was made on 10 December 2003, when Mr Tang Ka Wo (“Mr Tang”), a clerk employed by the petitioner’s solicitors, went to the Hin Fu House address, which he states in his affirmation dated 12 February 2004 to have been the “usual and last known residential address of [Madam Pang]”.  He found the door locked, and no one answered the door.  Enquiries of an occupant of the neighbouring unit and the caretaker of the building were fruitless, neither knowing of Madam Pang or her whereabouts.  When asked, the caretaker said that Madam Pang was not known at the Hin Fu House address.  On 17 December 2003, Mr Tang sent a letter to Madam Pang at the Hin Fu House address stating that he would call again on 22 December 2003.  This letter was eventually returned marked “addressee unknown”, but not until after Mr Tang had made a second visit to the Hin Fu House address, when he made similar enquiries of a neighbour and the caretaker, again with no result.

11.  Having deposed that the petitioner had “no other available residential or business address upon which service of the statutory demand [could] be attempted”, Mr Tang stated that the statutory demand was advertised in the Hong Kong Daily News on 29 December 2003, and that he believed that it would have come to Madam Pang’s attention that day.  Although Mr Tang said in his affirmation that he believed that Madam Pang was evading service, Mr Chan, appearing for the petitioner at the hearing, did not suggest that this was in fact the case.  In my view, he was right to refrain from making this suggestion, since the evidence on which this belief was allegedly founded (i.e. the alleged failure of Madam Pang to take advantage of the redirection facilities available through the post office) was clearly insufficient to provide reasonable cause for such a belief to have been held.

12.  An attempt was then made to file the petition against Madam Pang.  In accordance with what is now the normal practice, the evidence of service of the statutory demand (i.e. Mr Tang’s affirmation) was considered by Master Kwang, who was not satisfied with the attempts at service made up to that point, and did not allow the petition to be filed.  Instead, he raised a number of requisitions querying the delay in seeking to enforce the judgment by bankruptcy proceedings, enquiring whether attempts had been made to effect service on Madam Pang at the Wah Lee Building address, which was apparent from the mortgage documentation, and enquiring whether anything was known as to the business carried on at the Wah Lee Building address, perhaps with a view to a business registration search being conducted which might reveal an address at which service on Madam Pang could be attempted.

13.  These requisitions were answered by a further affirmation of Mr Tang dated 4 August 2004, which described the attempts of the petitioner to obtain repayment prior to the taking out of these bankruptcy proceedings (these are disputed insofar as they concern Madam Pang, but that is not material to the present application), and went on to describe his unsuccessful attempts to serve Madam Pang at the Wah Lee Building address.  These consisted of a visit to the Wah Lee Building address on 21 April 2004, when the occupant, an occupant of a neighbouring shop and the caretaker of the building all indicated that Madam Pang was unknown at that address.  A letter was sent on 22 April 2004, making an appointment to visit the address again on 28 April 2004.  On 28 April 2004, there was no one at the Wah Lee Building address, and enquiries at the neighbouring shop and of the caretaker also proved fruitless.  The lack of success of this attempt at service is hardly surprising, given that the petitioner had sold the mortgaged property in the exercise of its power of sale under the mortgage some three years earlier, in April 2001.  In this affirmation, Mr Tang also stated that to the best of his knowledge, information and belief, the Petitioner did not have any record of the trading name or nature of the business carried on by Madam Pang at the Wah Lee Building address, so that a business registration search was not feasible.

14.  Following the filing of Mr Tang’s further affirmation, leave was granted to the Petitioner to file the petition, which it did on 15 September 2004.

15.  So far as service of the petition is concerned, attempts to effect service were made by Mr Chin Hon Bun, another clerk in the employ of the Petitioner’s solicitors.  These are described in his affirmation dated 4 October 2004 in support of an application for leave to effect service by way of substituted service.  In summary, attempts were made to serve Madam Pang at both the Hin Fu House and Wah Lee Building addresses, initially without an appointment on 15 September and 20 September 2004 respectively, following which appointment letters were sent on 17 and 21 September 2004.  Further visits were then made (as indicated in those letters) on 24 and 27 September 2004 respectively.  There was no answer at the Hin Fu House address on the first visit, and on the second visit, an occupant told Mr Chin that Madam Pang did not live there.  There was no answer at the Wah Lee Building address on either visit.  On all four visits to the two addresses, neighbours and caretakers confirmed that Madam Pang was unknown at the addresses.  Leave to effect substituted service of the petition by posting the petition addressed to Madam Pang at the two addresses, and by advertising in a local Chinese newspaper was given on 13 October 2004.  As I have noted, substituted service was then effected in accordance with such leave, and the petition was heard on 10 November 2004, when a bankruptcy order was made against Madam Pang in her absence.

Madam Pang’s evidence

16.  In her affirmation, Madam Pang says that she does not know why the Hin Fu House address was on the Petitioner’s database, as she has never lived there and knows nothing about it.  She also suggests that there was (as I have already observed) little point in seeking to serve her at the Wah Lee Building address when the Petitioner had sold the mortgaged property nearly three years earlier.  She goes on to suggest that there were at least two things that the Petitioner could have done, but did not do, in attempting to serve the statutory demand (and the petition) on her.

17.  First, she says that she maintained a bank account with the Chiyu Bank Ltd (“Chiyu Bank”), in respect of which she had given the Station Lane address as her address, and suggests that as Chiyu Bank is a member of the Bank of China group, of which the Petitioner is also a member, the Petitioner could have obtained that  address by searching the Bank of China group’s database.  She says that Chiyu Bank’s terms and conditions of service state that they apply to all accounts provided by, inter alia, the Petitioner and Chiyu Bank, and provide that Chiyu Bank is entitled to share information concerning its customers with its affiliates, including the Petitioner, for all purposes concerning the customers’ accounts and services provided by such affiliates or Chiyu Bank to the customers.  She goes on to say that she believes the Petitioner’s database to be integrated with that of Chiyu Bank, saying that her brother applied to open a savings account with Chiyu Bank, and in the course of doing so, the officer of Chiyu Bank dealing with him asked if her brother had any other accounts with banks in the Bank of China group, and (on being told that her brother could not remember) said that it would be possible to identify all accounts maintained by him with Chiyu Bank, Nanyang Commercial Bank and the Petitioner by keying in details of his identity card number, and having done this was able to locate another Chiyu Bank account maintained by her brother.  She suggests, therefore, that the Petitioner could have obtained her address by a check on the combined database of Chiyu Bank and the Petitioner.

18.  Second, Madam Pang says that she must have told the Petitioner at the time the mortgage was obtained that she was a nurse employed at QEH, and that it would have been reasonable for the Petitioner to have sought to obtain her address from QEH or the Hospital Authority, particularly having regard to the requisition by Master Kwang concerning the business carried on at the Wah Lee Building address.  She accepts, however, that she cannot be sure that either QEH or the Hospital Authority would have provided her address to the Petitioner.

The Petitioner’s evidence

19.  Shortly before the hearing, the Petitioner filed a further affirmation by one of its officers, a Ms Sally Hui Hong Mui (“Ms Hui”).  Ms Hui says that the Hin Fu House address is recorded on the Petitioner’s database as the last known address for Madam Pang, but that it is not possible to say what the source of that address was, nor which of the Petitioner’s employees had entered it on the Petitioner’s database.  She says that the Petitioner was not aware of the Station Lane address, that it could not have obtained it by searching its database, that Chiyu Bank is a subsidiary of the Petitioner, and that in fact the Petitioner and Chiyu Bank maintain separate databases and do not share a common computer system.  She states that whatever may be stated in Chiyu Bank’s terms and conditions, Chiyu Bank and the Petitioner have never shared information concerning their customers, and that neither has access to the other’s database.  In the circumstances, she suggests that it would not be reasonable to expect the Petitioner to have been able to obtain the Station Lane address, since this would in effect be equivalent to requiring the Petitioner to make enquiries of other banks in Hong Kong in an attempt to locate and effect service on Madam Pang.  So far as enquiries with QEH or the Hospital Authority are concerned, Ms Hui says that the Petitioner does not know whether information about nurses, such as their addresses, can be traced through the Hospital Authority, whether the Hospital Authority has a record of current addresses for nurses and whether (even if it does) that information is readily available to the public.

20.  Ms Hui also exhibited the documentation relating to the initial application for the mortgage.  The loan application form identified the applicants as Madam Pang, Mr Au and Mr Chung, and recorded their address as Room 1208, Sun Yuet Building, Sun Chui Estate, Sha Tin (“the Sun Yuet Building address”).  It also recorded that Madam Pang was employed as a nurse at QEH.

21.  As a result of the disclosure of the application form, Mr Chiu submitted that in addition to the two matters mentioned by Madam Pang, the Petitioner should also have attempted service of the statutory demand on Madam Pang at QEH and at the Sun Yuet Building address.

22.  Mr Chan, appearing for the Petitioner, accepted that if service of the statutory demand or the petition was bad, the bankruptcy order against Madam Pang should be set aside.  However, he submitted that in this case, service was good, and that the bankruptcy order should therefore stand.

Requirements as to service of a statutory demand

23.  The requirements as to service of a statutory demand are set out in rules 46 and 49 of the Bankruptcy Rules (“the Rules”).  Rule 46 provides, so far as material, that:-

“	(1)	Rule 49 has effect as regards service of the statutory demand, and proof of that service by affidavit to be filed with a bankruptcy petition.
	(2)	The 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.”

Rule 46(3) deals with the situation in which a judgment debtor is known or believed to have absconded or to be evading service.  In such a case, service of the statutory demand by advertisement is expressly permitted.  In this case, Mr Chan did not suggest that the Petitioner was relying on rule 46(3).  However, he submitted, and I accept, that service by advertisement can be sufficient for the purposes of rule 46(2) where personal service cannot be effected.  In such a case, if all other reasonable means of bringing the statutory demand to the debtor’s attention have been attempted, such an advertisement will satisfy the requirements of rule 46(2).

24.  Rule 49 provides, so far as material:-

“	(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 paragraph (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 –
		(a)	give particulars of the steps which have been takwhereby (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 paragraph (5)(a) must be such as would have sufficed to justify an order for substituted service of a petition.
	(7)	If the affidavit specifies a date for the purposes of compliance with paragraph (5)(c), then unless the court otherwise orders, that date is deemed for the purposes of these rules to have been the date on which the statutory demand was served on the debtor.
	....
	(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).”

Rules 49(3) and (4) deal with cases in which personal service is effected, and are not relevant here.

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.

27.  I would also add that as Yuen J (as she then was) pointed out in Re Li Wai Man (unreported, CFI, HCB 211/99, 1 November 1999), what is reasonable is to be judged objectively in the light of the information actually or constructively available to the creditor at the time (see paragraph 31 of the judgment).

28.  If, as a result of making such reasonable inquiries, he obtains such an address, he should attempt personal service at it.   Where personal service has failed, and reasonable enquiries have led nowhere, it will always be open to the creditor to take such other steps as may be reasonable to bring the statutory demand to the debtor’s attention.  In many cases, this will consist of an advertisement of the statutory demand in a newspaper circulating in Hong Kong.

Why service is said to have been bad

29.  In the present case, Mr Chiu submitted that in the light of the information available (actually or constructively) to the Petitioner at the time that service of the statutory demand was attempted, the Petitioner had fallen short of what rule 46(2) required of it in the following respects:-

(1)	As the Petitioner was aware that Madam Pang was employed as a nurse at QEH, it should have attempted service on her at QEH;
(2)	Alternatively, in the light of that knowledge, the Petitioner should have made enquiries of QEH or the Hospital Authority, which might have resulted in an address for service being obtained, or otherwise resulted in the statutory demand coming to the attention of Madam Pang;
(3)	As the Petitioner had the Sun Yuet Building address available to it, it should have attempted service on Madam Pang there; and
(4)	As the Petitioner should have had (whether actually or constructively) the Station Lane address available to it (either on a joint database belonging to itself and its associated banks, including Chiyu Bank, or by access to the Chiyu Bank database), it should have obtained that address and attempted service on Madam Pang there as well.

Whether it is relevant to show that allegedly reasonable steps would have had no effect

30.  For the Petitioner, Mr Chan accepted, as he had to, that the Petitioner had available to it first, the knowledge that Madam Pang was, at the time of the mortgage application, employed as a nurse at QEH, and second, the Sun Yuet Building address.  However, he submitted that as Madam Pang did not suggest that she could have been served at QEH or the Sun Yuet Building address, and had provided no evidence to suggest that an effective address for service could have been obtained from QEH or the Hospital Authority, none of these points assisted Madam Pang, as it could not be said in the absence of such evidence that the suggested steps were ones which the Petitioner ought reasonably to have taken.  So far as the point concerning the Station Lane address was concerned, he submitted that on the evidence available, there was no reason to think that the Petitioner could have obtained that address, and that it was not reasonable to expect the Petitioner to enquire of other banks, of which Chiyu Bank was but one, whether Madam Pang had accounts with them, and if so, whether they would be prepared to disclose her address to the Petitioner to enable it to effect service of the statutory demand.

31.  For his part, Mr Chiu had to accept that Madam Pang was unable to say that service on either the Sun Yuet Building address or at QEH would have resulted in the statutory demand coming to her attention, or that enquiries of QEH or the Hospital Authority would have resulted in information being obtained that would have had the same result.  However, he submitted that it was not necessary for her to do so for two reasons.  First, because it was irrelevant whether or not the taking of a step which was, judged objectively, one which it was reasonable to take, but which was not taken, at the time when attempts were being made to effect service of the statutory demand would have led to the statutory demand being brought to the attention of the debtor; and secondly, even if that was not right, the burden of showing that the steps would not have had this effect lay on the creditor who had failed to take them.

32.  In support of these arguments, Mr Chiu relied on the decision of Andrew Cheung J in Re Li Wang (unreported, CFI, HCB 15846/2003, 30 June 2004), where the judge said (at paragraph 8 of his judgment) that:-

“

... a fair reading of the two rules [Rules 46 and 49] and the requirements thereunder would, in my judgment, suggest that even though a step may turn out to be ineffective, nonetheless, if it was a step which should reasonably have been taken by the creditor at the time of his effort to effect service, he must take the step.  Utility is not the criterion here.  For quite obviously, rule 49(5)(b) presupposes in the first place that there had been steps taken which were ineffective.”

Andrew Cheung J went on to say (at paragraph 16 of his judgment):-

“	In my judgment, on a proper construction of the rules, if a step was reasonable at the time to be taken, it ought to have been taken regardless of whether if taken, it would have resulted in the debtor being made aware of the demand or his being effectively served with the demand.”

33.  He went on to hold that even if it were relevant to consider what the outcome of enquiries which ought reasonably to have been made might have been (in that case, enquiries at the latest registered address of a company of whose debts the debtor was a guarantor, and in respect of which the debtor had previously been a director), he was not satisfied that no useful information as to the debtor’s whereabouts could not have been obtained, and that in such a situation, it was for the creditor to show that the enquiries would have been fruitless, or of no utility.

34.  Mr Chan took issue with this approach, drawing my attention to cases in which the court appeared to have had regard to the utility (based on information acquired after the event) of taking steps which it was suggested would have been reasonable for a creditor to have taken in seeking to effect service of a statutory demand on a debtor, and held, having concluded that the steps taken would not have been effective, that it was unnecessary for the creditor to have taken such steps (see e.g. Re Ng Chi Wo (unreported, CFI, HCB 2819/2003, 29 July 2004), where Deputy Judge Poon rejected a submission that inquiries should have been made of solicitors who had apparently acted for the debtor in other proceedings, on the basis that such inquiries would have yielded no result - see paragraphs 26 and 27 of the judgment; and Re Fung Chau Won trading as Chi Shing Company (unreported, CFI, HCB 6785 of 2001, 18 June 2004) where Master Ho rejected an argument that a business registration search should have been carried out, on the basis that it would have led nowhere, since the address given in the business registration particulars was incorrect).  He also submitted that the initial burden on the applicant debtor to identify reasonable steps that should have been, but were not, taken to try to effect personal service extended to providing evidence to show that such steps would be likely to have had some useful outcome.

35.  As to the first point, in my view, with all respect to Andrew Cheung J, I think that the approach suggested by Mr Chan is correct, at least in a situation where it is clear that the taking of the step suggested could not or would not result in the statutory demand coming to the attention of the debtor.  This would appear to accord with the purpose of the service provisions embodied in rules 46 and 49, which is, after all, to bring the statutory demand to the attention of the debtor.  Where a creditor is said to have failed to have done something which it is said would have been reasonable for him to do for the purpose of bringing the statutory demand to the debtor’s attention, it seems to me that it must be open to the creditor to show that the step in question could not have been of any use, and thus should not be regarded as one which he ought reasonably to be required to have taken.  Equally, if the creditor is able to establish to the court’s satisfaction that a step which could potentially have led to a statutory demand being brought to the debtor’s attention would not in fact have done so, there seems little point in penalising the creditor for failing to have taken it.

36.  On the other hand, in relation to the second point, it seems to me that the burden of showing that a step could not or would not have led to the statutory demand coming to the debtor’s attention does lie squarely upon the creditor.  If the evidence leaves it uncertain whether or not the step would have been of utility, it would be right to give the debtor the benefit of any doubt which the court might have in this respect, given the purpose of the rules and the consequences which ensue for the debtor as a result of his failing to comply with a statutory demand of which he was unaware.

37.  In my view, therefore, the approach to be adopted is that the debtor, whose application it is, bears the initial burden of showing that the creditor has not done all that was reasonable for the purpose of bringing the statutory demand to the debtor’s notice, by reference to the information actually or constructively available to the creditor at the time service was attempted.  Once the debtor has done this, the burden is on the creditor to show that the steps which allegedly should have been taken could not or would not have resulted in the statutory demand coming to the debtor’s attention.

Application to the present case

38.  Applying that approach to the present case, it seems to me that so far as the question of service at QEH, or the making of inquiries of QEH or the Hospital Authority is concerned, having regard to the fact that the last known place of work of Madam Pang, so far as the Petitioner was concerned, was QEH, there being nothing known to the Petitioner to indicate that Madam Pang was no longer working there, it would have been reasonable for the Petitioner to have attempted service on her there.  Moreover, if such an attempt had no success, it seems to me that it would equally have been reasonable for the Petitioner to have attempted to make enquiries of either QEH or the Hospital Authority as to whether or not they had a contact address for Madam Pang.  In saying this, I recognise that there must be some doubt as to whether or not such an enquiry would have yielded any useful result.  However, it does not seem to me that it can be said that such an enquiry would inevitably have been fruitless.  It seems likely that one or other of QEH or the Hospital Authority would have had some record of Madam Pang’s employment, and of a contact address for her, not least because she was in receipt of a pension in respect of her service as a nurse with them.  It is, no doubt, open to question whether they would have released that address to the Petitioner at its request.  However, given that relatively little effort would have to be expended in making the enquiry, whether through a number of telephone calls or letters, it seems to me that it would have been reasonable for the Petitioner to have undertaken it.  I do not agree with Mr Chan’s submission that it would be unduly onerous to expect a creditor to make enquiries of at least the last known employer of a debtor with a view to ascertaining whether the debtor can still be contacted at his last known place of employment, and if not, whether the employer has a contact address for the debtor which it is prepared to divulge.  If the employer says that it has no contact address for the debtor, that will be the end of the matter, as the creditor will have done what it reasonably could to obtain such information with a view to bringing the statutory demand to the debtor’s attention.  If the employer declines to provide an address, it would seem to me to be reasonable for the creditor to enquire whether the employer would be willing to get in touch with the debtor and let him know that the creditor wishes to contact him.  Again, if the employer declines, that will be the end of the matter.  If the employer agrees, the creditor would simply have to wait for a reasonable time to elapse, say a week or two, after which it would be free to regard this line of enquiry as having proved fruitless.  These enquiries would not be unduly burdensome, and given the consequences to the debtor of a failure to comply with a statutory demand, it seems to me that it would be reasonable to expect a creditor to make them, as long as there was some possibility that they might enable the debtor to be contacted so that the statutory demand could be brought to his attention.

39.  Thus, it seems to me that it would have been reasonable for the Petitioner to make an attempt to serve Madam Pang at QEH, and for it to have made enquiries of QEH and the Hospital Authority with a view to obtaining a contact address for her.

40.  That being so, is the Petitioner able to say, on the evidence available, that the taking of such steps would have led nowhere?

41.  So far as service at QEH is concerned, given that on Madam Pang’s own evidence she ceased working at QEH (and for the government or Hospital Authority) in 1997, it seems to me that the evidence before me indicates that service at QEH would have been ineffective, so that the failure to attempt it should not be held against the Petitioner.

42.  However, the position in relation to the making of enquiries seems to me to be different.  So far as the Petitioner knew, Madam Pang was employed by QEH.  It would therefore have been reasonable (for the reasons which I have explained above) for it to enquire of QEH and/or the Hospital Authority whether she was still working there, and if not, whether either could provide it with an address at which she could be contacted.  The Petitioner has provided no evidence to suggest that such an enquiry would have been fruitless.  All that Ms Hui says is that the Petitioner is unaware that it is possible to trace personal details of nurses through the Hospital Authority, that it is unaware of any database maintained by the Hospital Authority containing such information, and that it is unaware that any such database (if it exists) or the information on it is readily released to the general public.  But even if that is right, it does not show that any enquiry would have been fruitless.  At most, it might be an explanation (albeit ex post facto, given that the Petitioner did not examine at the time of service the loan application form which it had in its records) for the Petitioner’s failure to make such enquiries.  If the Petitioner wished to say that such enquiries would have led nowhere, it would I think be necessary for the Petitioner to put forward evidence, if it were able to, having made the necessary enquiries, either that the information as to Madam Pang’s was not known to QEH or the Hospital Authority, or that even if known to them, would not have been released to the Petitioner, and that no steps would have been taken by them to assist the Petitioner in contacting Madam Pang.  This it has not done, and in consequence, I do not think it is possible for the Petitioner to say that such enquiries would, inevitably, have had no result.

43.  I am therefore of the view that in the circumstances of this case, the Petitioner has failed to do all that was reasonable in order to bring the statutory demand to the notice of Madam Pang by failing to make enquiries of her with QEH or the Hospital Authority, and has therefore failed properly to serve the statutory demand on her in accordance with rule 46(2).

44.  For completeness, I shall go on to deal with the remaining two points raised by Mr Chiu:-

(1)	As to service at the Sun Yuet Building address, it seems to me that this was an address which was available to the Petitioner, that it would have been reasonable for the Petitioner to have made an attempt to effect service there, particularly as the Petitioner’s records did not contain any material to show how or why it should have been regarded as having been superseded by the later Hin Fu House address which it had on its computer database, service at which had had no result.  As to whether it would have led to effective personal service, it does not seem to me to be possible to say that it certainly would not have done so, on the evidence available (which did not really address this point, arising as it did at a fairly late stage).  I would therefore regard this as an additional respect in which the Petitioner had failed to effect good service in accordance with rule 46(2).
(2)	As to the Station Lane address, however, having regard to the Petitioner’s evidence as to the make up of its database, and its inability to access the database of Chiyu Bank, I would accept that it would not be reasonable to expect the Plaintiff to attempt to have accessed the Chiyu Bank database, so as to have obtained this address.  I do not think that the exercise carried out by Madam Pang and her brother when the latter sought to open a savings account with Chiyu Bank assists Madam Pang, since all that it established was that it was possible for an officer of Chiyu Bank to ascertain whether her brother had another account with Chiyu Bank itself.  It did not demonstrate the existence of a common database - to do so would have required a search on the Chiyu Bank database to have revealed the existence of an account with the Petitioner.  Absent a common database, the argument effectively is that a bank creditor should check with other banks to see whether it is possible to obtain a contact address for one of its debtors.  That would not, in my view, be a reasonable step to expect a bank to take.

45.  I have little doubt that had Master Kwang been aware of the information contained in the loan application form at the time when leave was sought to file the petition, he would (in my view rightly) have refused such leave and required the Petitioner to take further steps to try to effect personal service along the lines indicated above, on the basis that they were steps which the Petitioner should have taken in order to comply with its obligations as to service of the statutory demand under rule 46(2).

Conclusions and costs

46.  Thus, for the reasons set out above, I have come to the view that the Petitioner did not, in this case, do all that was reasonable to bring the statutory demand which it had issued against Madam Pang to her attention, and that the service of the statutory demand upon her was, in consequence, bad.  Service of the statutory demand being bad, it follows that the filing of the petition should not have been allowed, and that the bankruptcy order ought not to have been made, and it is not necessary to consider separately the question of service of the petition itself.  It was not suggested by Mr Chan that even if I were of the view that service of the statutory demand was bad, I should exercise my discretion not to annul the bankruptcy order.  I therefore allow Madam Pang’s application, and annul the bankruptcy order dated 10 November 2004.  It also follows, I think, that the petition against her should be dismissed, and that notice of the annulment should be advertised in the Gazette by the Official Receiver, the costs of such advertisement being borne by the Petitioner, and I so order.

47.  So far as costs are concerned, I make an order nisi that the Petitioner should pay Madam Pang her costs of this application, to be taxed on the party and party basis if not agreed.  It was not, I think, suggested that Madam Pang had incurred any costs in relation to the Petition.  I also make orders nisi that the Petitioner is to pay the Official Receiver’s costs in respect of this application, which are assessed in the sum of HK$6,000, and in respect of the petition and administration of the estate, assessed in the further sum of HK$17,777.50.