XCHRX Re Statutory Demand served by Bangkok Bank Public Co. Ltd.

HCSD 39/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

STATUTORY DEMAND LIST NO. 39 OF 1999

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D E C I S I O N

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1. This is an application to set aside a Statutory Demand.

2. Service of the Statutory Demand was accepted by solicitors for the Applicant. The Applicant has now sought to set aside that Statutory Demand and in an affirmation of a person who says that the Applicant is his "immediate superior", a number of points have been raised relating to liability for the debt and also on the calculation of interest.

3. These points relating to liability and interest have not been pursued by Mr Carolan, the Applicant's counsel today, and in my view, correctly so.

4. As far as liability is concerned, any dispute as to liability should have been raised before the Court in the Order 14 proceedings on which judgment has been given, which judgments formed the basis of the present Statutory Demand. There has been no appeal from those judgments.

5. As far as interest is concerned, Rule 44 of the Bankruptcy Rules provide at sub-rule (4) that if the amount claimed in the Statutory Demand includes any charge by way of interest "not previously notified" to the debtor as a liability of his, then the amount or rate of the charge must be separately identified, the grounds on which payment of his claim must be stated, and in either case the amount claimed must be limited to that which has accrued due at the date of the demand.

6. In the present case, the sum inclusive of interest in the Statutory Demand has been calculated according to the judgments given in the Order 14 proceedings, copies of which judgments have been served on solicitors for the Applicant. Therefore, although I accept that the form of the Statutory Demand served here, which states in the "Notes for Creditor" that

"If the amount of the debt includes interest, details should be given in column (2), including the grounds upon which interest is charged, the amount of interest must be shown separately in column (3)"

is a little misleading and it would have been better if a breakdown was appended to the Statutory Demand, in my view, Rule 44 of the Bankruptcy Rules has not been contravened.

7. I say it would have been better if the breakdown had been appended to the Statutory Demand because the procedure now is that a judge reads an ex parte application to set aside the Statutory Demand and a decision is made under Rule 48(1) of the Bankruptcy Rules. A judge on reading such an ex parte application would not be aware of how that interest has been calculated even though it might previously have been notified to the debtor, and therefore, for that reason, creditors ought to be aware that if a breakdown is appended to the Statutory Demand, that would certainly be more appropriate.

8. Anyway, the main point taken by Mr Carolan today is that he says that the Applicant is not domiciled in Hong Kong and there is no evidence that he has been resident or has been carrying on business in Hong Kong.

9. Mr Jonathan Harris, for the Respondent Creditor, has said that it is the Creditor's case that the Applicant has carried on business in Hong Kong. There are two companies in Hong Kong which he has guaranteed and which guarantees formed the basis of the Order 14 judgments. The deponent of the affidavit which seeks to set aside the Statutory Demand has said that the Applicant was his "immediate superior" and Mr Harris says that there is evidence that the Applicant has been carrying on business in Hong Kong.

10. In my view, it is really for another court for another day whether the extent of the evidence that the Creditor seeks to adduce is sufficient for the purposes of Section 4(1)(c) of the Bankruptcy Ordinance.

11. In any event, Section 4(1)(b) of the Bankruptcy Ordinance provides that

"A bankruptcy petition shall not be presented to the court under section 3(1)(a) or (b) unless the debtor - is personally present in Hong Kong on the day on which the petition is presented".

12. Therefore, jurisdiction can to be founded on such minimum contact as the debtor's presence in Hong Kong on the day on which the petition is presented.

13. The purpose of a Statutory Demand is to provide a statutory ground for a creditor's petition. So long as there is a possibility of founding jurisdiction when the petition is presented, I can no reason why the Statutory Demand should be set aside for "want of jurisdiction". Effect must be given to the clear wording of Section 4, subsection 1(b) of which requires and requires only the presence of the debtor on the day the petition is presented. To read into that a requirement that the Statutory Demand cannot be served unless the debtor is domiciled or resident or is carrying on business in Hong Kong or has to be present in Hong Kong on the day on which the Statutory Demand is served would be to add a requirement to the legislation which is not there.

14. Accordingly, in my view, the point contended by Mr Carolan does not form a ground for setting aside the Statutory Demand under Rule 48(5)(d). The application is dismissed.