Re: CHAN SAI KIT and Ex parte: WONG YAN YAN AMY AND OTHERS

HCB 3614/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

IN BANKRUPTCY PROCEEDINGS NO. 3614 OF 2001

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J U D G M E N T

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1. This is a summons to rescind a bankruptcy order made on 17 September 2001 upon the undertaking of the applicant and bankrupt, Mr Chan Sai Kit, to perform the terms of a settlement agreement set out in paragraphs 1, 2 , 4 and 6 of a letter dated 10 October 2001 from the petitioners' solicitors to the applicant's solicitors.

2. The petition for bankruptcy was presented on the basis of a judgment debt obtained by the petitioners in HCA Nos. 11920, 11921 and 11922 of 1998 in the sum of HK$1,878,895.56. For the background and reasons for making the bankruptcy order, I refer to the reasons handed down on 21 September 2001.

3. The applicant seeks a rescission of the bankruptcy order made against him on the ground that he has reached a compromise with the petitioners, and that the other two creditors who are both secured creditors are supportive of his application to rescind the bankruptcy order.

4. At the first hearing of this application on 17 October 2001, I adjourned the application for the Official Receiver to carry out investigation if there are any further creditors of the applicant and if any of them would wish to oppose the application. Pursuant to the directions I made on that day, the Official Receiver has placed a notice of the bankruptcy order and of the application to rescind the bankruptcy order in the Gazette and advertised this in an English newspaper and a Chinese newspaper. No additional creditors have come forward to date. The Official Receiver has considered the statement of affairs filed by the applicant and the additional information provided by his solicitors. The comments of the Official Receiver have been set out in the Official Receiver's second report to the court dated 30 October 2001. The Official Receiver has no objection to the application to rescind the bankruptcy order on the basis that all known creditors have been identified and they all support the application.

5. I do not propose to go into the details of the applicant's settlement with the petitioners. Suffice it to say that the applicant's solicitors have been put in funds of half of the sum owing by third parties who have undertaken not to seek repayment from the applicant, and there is satisfactory evidence before me of the applicant's ability to discharge the remaining half of the debt to the petitioners by instalments as agreed.

6. As for his debts to the two secured creditors, I am satisfied on the evidence before me that the securities provided by the applicant and the applicant's wife are sufficient to satisfy the debts owed to these creditors. The applicant's wife has given an undertaking in writing that she is willing to have her security realised to settle the indebtedness, if required.

7. I am satisfied under Section 33(1)(b) of the Bankruptcy Ordinance, Cap. 6 that the provable debts and expenses have, since the making of the bankruptcy order, been either paid or secured to the satisfaction of the court. There is no suggestion of misconduct on the part of the applicant. In my judgment, this is a proper case for the exercise of my discretion to annul or rescind the bankruptcy order under Section 33 or Section 98 of the Bankruptcy Ordinance.

8. I make the following orders:

(1) leave is given to the applicant to amend his summons filed on 17 September 2001 as per the draft amended summons annexed to the applicant's summons filed on 15 October 2001 and the service of the amended summons is dispensed with;

(2) upon the undertaking of the applicant to perform the terms of the agreement between himself and the petitioners set out in paragraphs 1, 2, 4 and 6 of the letter dated 10 October 2001 from the petitioners' solicitors to the applicant's solicitors (a copy of which was annexed to the draft amended summons), the bankruptcy order made on 17 September 2001 is rescinded and annulled;

(3) the costs of the Official Receiver for this application are to be borne by the applicant, agreed at the sum of HK$50,000.00; and

(4) the costs of the petitioners to date are to be borne by the applicant.