KAN SAI TUNG v. THE BANK OF EAST ASIA LTD

HCSD 7/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

APPLICATION TO SET ASIDE A STATUTORY DEMAND

NO. 7 OF 2004

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DECISION

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1. This is the applicant's application to set aside a statutory demand dated 19 December 2003.

2. The statutory demand is for a judgment debt of $2,684,134.84 together with interest and costs of $28,750. The judgment debt was incurred as a result of a judgment entered in favour of the respondent against the applicant in HCMP 3377 of 2001 on 26 September 2001. The statutory demand was served on the applicant on 12 January 2004.

3. On 30 January 2004, the applicant took out the present application to set aside the statutory demand.

4. The applicant does not dispute that the debt has been incurred. His application is made under Rule 48(5)(d) of the Bankruptcy Rules, which provides that the court may grant the application to set aside if it is satisfied on other grounds that the statutory demand ought to be set aside. The reference to other grounds means grounds other than those set out in Rule 48(5)(a) to (c).

5. The applicant had filed detailed affirmations setting out his assets and liabilities. They show he has a taxi and a taxi licence, which is estimated to have a value of not less than HK$3 million. They are both under hire purchase. He used to own 3 properties, all mortgaged, but they had now been sold at a deficit. He has negligible savings in his bank accounts. All his credit card accounts have debit balances. He is a self-employed taxi driver.

6. According to Mr Law who appears for him, the proceeds to be realized from any sale of the taxi licence will be insufficient to fully discharge the applicant's liabilities. On this basis, it is said that it would not be to the benefit of the creditors, including the respondent, to proceed to bankrupt the applicant. It is also said that the sale of the taxi licence will deprive him of a means of livelihood. On the contrary, if the applicant holds on to the licence and continues as a taxi driver, he will be able with his income, discharge the indebtedness slowly and bit by bit. It appears that the applicant had offered to pay the judgment debt by monthly instalments of a few hundred or one thousand dollars, but the respondent did not accept the offers.

7. In my view, none of these constitutes proper grounds for setting aside the statutory demand. Plainly, the applicant is unable to pay his debts. I would also observe that the applicant may still be an employed taxi driver if the taxi licence is to be sold.

8. There is no basis for the court exercising the power under Rule 48(5). The application is accordingly dismissed with costs to the respondent to be taxed if not agreed. The respondent is at liberty to issue a bankruptcy petition against the applicant after 21 days from the date of this order.