RE STANLEY CHANG t/a HONG INSTECH TRADING CO.

HCB 1454/2015

[2021] HKCFI 3403

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

BANKRUPTCY PROCEEDINGS NO 1454 OF 2015

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and

HCA 2428/2019

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2428 OF 2019

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DECISION

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1.  The Applicant, Jotron AS (formerly known as Jotron Electronics AS)  is the petitioning creditor in HCB 1454 of 2015. I am told that it holds 91% of the total indebtedness of Chang Stanley (the “Bankrupt”). There are two other creditors, namely, the Inland Revenue Department and Orix Asia Limited.

2.  The Applicant did not agree with a settlement proposed by the Trustees. Hence, it wishes to take over the conduct of the proceedings.

3.  The present Trustees, namely, Mat Ng and John Robert Lees, Joint and Several Trustees of the Property of Chang Stanley, informed this Court that they have no more funding to continue the proceedings, hence, they have no choice but to propose to settle with the Plaintiffs in HCA2428 of 2019.

4.  Both Trustees have informed the Court that they have no objection to the application to sanction an assignment of the Trustees’ cause of action under section 43A of the Bankruptcy Ordinance and/or as pleaded in the Defence and Counterclaim in HCA 2428 of 2019 from the Trustees to the Applicant.

5.  When this matter was first heard before this Court, I had  reservation on whether the Trustees can assign away their liabilities and to be struck off as a defendant in HCA 2428 of 2019.

6.  After the adjournment, the Applicant has now entered into a new assignment with the Trustees such that only the Trustees’ cause(s)  of action and rights (and not their liabilities)  are assigned.

7.  As a matter of law, a cause of action is assignable. The Trustees are willing to assign such rights and the Applicant is willing to take over the said rights. The Court will facilitate the assignment by sanctioning the same.

8.  The Applicant has also reassured the Court that it will recognise the priority of the Inland Revenue Department’s debt and will treat the other debtor ORIX Asia Ltd pari passu with its own claims. No response has been received from ORIX Asia Ltd after enquiries were made by the Applicant.

9.  I note that the Inland Revenue, by its letter dated 13 September 2021, indicated that it has no comment on the proposed assignment.

10.  In the circumstances, I will make the following orders:

(1)  An Order to sanction the assignment from the Trustees to the Applicant of the Trustees’ cause(s)  of action under section 43A of the Bankruptcy Ordinance and the cause(s)  of action as pleaded in the Defence and Counterclaim in HCA2428 of 2019.

(2)  The title deeds of the property situated at Flat No.46 on 4^th Floor of Sau Lam House (Block 2), Tsui Lam Estate, No.11 Tsui Lam Road, Tseung Kwan O, New Territories, Hong Kong be delivered to the Applicant’s solicitors, Messrs. Ernest Li & Co, upon execution of the Deed of Assignment.

(3)  The Applicant be joined as an additional defendant in HCA 2428 of 2019.

(4)  The Applicant will satisfy any orders or judgments for costs and damages or compensation to the Plaintiffs incurred at any time prior to and after the date hereof.

11.  I do not see it fit to substitute the Applicant in place of the Trustees as the Defendant as I am not sure whether the Plaintiffs in HCA 2428 of 2019 have any specific claims against the Trustees. It is up to the Trustees to decide whether they can take out applications to strike out the claims against them after the assignment as sanctioned by this Court.

12.  By letter dated 18 September 2021, Mr Stanley Chang, one of the Plaintiff has filed a written submission to oppose the substitution of the Applicant as the Defendant in HCA 2428 of 2019. As this Court has not made any order of substitution but to allow the Applicant, as an interested party, to be joined in as an additional defendant, I am of the view that in the best interest of the administration of the bankruptcy, the orders as listed out in paragraph 9 should be made and I do so accordingly.

13.  I also make no order on costs.