RE RE: YIP MAU KEI

HCB 4011/2017

[2018] HKCFI 1059

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

BANKRUPTCY PROCEEDINGS NO 4011 OF 2017

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J U D G M E N T

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1.  On 30 June 2017, the Department of Justice (“Petitioner”) presented a creditor’s bankruptcy petition (“Petition”) against Yip Mau Kei (“Debtor”). Pursuant to leave granted by Master Hui on 4 October 2017, the Petitioner amended the Petition (“Amended Petition”). The Petition was served personally on the Debtor on 9 August 2017, and the Amended Petition was served on the Debtor by insertion in the letterbox of the Debtor’s address on 10 October 2017.

2.  The Amended Petition was based on non-compliance with a statutory demand dated 27 January 2017 (“SD”) served personally on the Debtor on 2 February 2017 for an aggregate sum of HK$130,096.04 (“Debt”).

3.  The Debtor’s liability towards the Petitioner for the Debt arose from costs orders made in DCPI893/2011 (“Action”). In the Action, the Debtor claimed against the Secretary for Justice (ie the government) for loss and damages in respect of personal injuries suffered in a traffic accident that occurred on 22 June 2008. On 21 February 2014, HHJ Kent Yee dismissed the Debtor’s claim against the Secretary for Justice in DCPI893/2011. On 7 May 2014, the learned judge also dismissed the Debtor’s application for leave to appeal.

4.  The Petitioner claimed the Debtor owed the following liability:

(a) by an order dated 15 September 2011 in DCPI893/2011, the Debtor was ordered to pay costs summarily assessed at HK$550.00 which the Debtor settled on 16 September 2011, leaving an outstanding balance of interest of HK$0.24;

(b) by an order dated 10 October 2011 in DCPI893/2011, the Debtor was ordered to pay costs summarily assessed at HK$550.00 which the Debtor settled on 24 October 2011, leaving an outstanding balance of interest of HK$1.81;

(c) by the judgment dated 21 February 2014 in DCPI893/2011, the Debtor was ordered to pay costs taxed at HK$129,293.99 as shown in the allocator dated 14 July 2016; and

(d) by an order dated 7 May 2014 in DCPI893/2011, the Debtor was ordered to pay costs summarily assessed at HK$800.00.

5.  The Petitioner claimed the Debtor failed or had been unable to pay the Debt.

6.  It was indisputable that at least 3 weeks had elapsed since the SD was served in the Debtor, and it had not been complied with. There was no application by the Debtor to set aside the SD.

7.  It is well-established that in order to successfully oppose a petition, a debtor has to show a bona fide dispute to the debt on substantial grounds, by sufficiently precise evidence which is believable, and must establish that he actually has a defence of substance, not just a fair probability of one.[1]

8.  Here, the Debtor filed an affirmation in opposition on 3 November 2017. By such affirmation, the Debtor did not accept the judgment by HHJ Kent Yee in DCPI893/2011. He also complained against being asked by a judicial officer to amend the description of the defendant in DCPI893/2011 to the Secretary of Justice on behalf of the Highways Department, which he claimed led to the present sorry state of affairs. The Debtor was also dissatisfied with the Secretary for Justice making a payment of HK$146,000 into court under Order 22 of the Rules of the District Court on 15 August 2012 in DCPI893/2011 when the Secretary for Justice asserted he was not liable to him.

9.  Essentially, the Debtor was not disputing the Debt as such. The costs orders in DCPI893/2011 were binding on him notwithstanding his dissatisfaction with the dismissal of his personal injuries claim. There was no merit to his complaint about being asked to properly name the defendant in his personal injuries claim, which had nothing to do with the merits of the judgment that was ultimately adverse to him. As for the payment into court by the Secretary for Justice under the Order 22 regime, it would not debar the Secretary for Justice from disputing the Debtor’s claim in DCPI893/2011 nor would it affect the final adjudication by HHJ Kent Yee.

10.  In a letter dated 13 February 2017 in response to the SD, the Debtor also indicated he was unable to settle the outstanding Debt in any event.

11.  In the circumstances, this court is not satisfied there was any bona fide dispute or legally valid ground in opposition to the Amended Petition, and hence a bankruptcy order should be made.

12.  There shall be a usual bankruptcy order against Yip Mau Kei, and a costs order nisi that costs of the Petition and Amended Petition, including all costs reserved if any, be to the petitioning creditor to be taxed if not agreed.