RE MOK KWOK HOO

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

IN BANKPUPTCY NO. B403 and B404 of 1985

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JUDGMENT

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1. These two petitions for a receiving order were heard together as they arose from the same facts and the debtors are husband and wife. The petitions were opposed on the grounds that the debtors have insufficient assets to pay a dividend of 15% subject to the appropriate deductions under S. 9(3) of the Bankruptcy Ordinance. The amount of the debt and inability to pay is not in issue.

2. Judgment was entered against the debtors and other defendants on the 13th March 1984 for the sum of $2,486,931.59 plus interests and costs. This sum is due by the debtors as guarantors in respect of monies loaned by the petitioning creditor to Sunrise Electronic Company Limited. A bankruptcy notice was served upon the debtors on the 17th May 1985, but was not complied with. Both debtors filed affirmations earlier this year to the effect that they have no assets of any description but neither condescended to giving particulars. However, they elected to give evidence today in the witness box and were cross-examined by Mr. Tang who appeared for the petitioning creditor and by Mr. Robertson who appeared for the Official Receiver. Madam Lau said that she has some jewellery worth about $2,000 but otherwise reiterates that she has no capital of any description although later in cross-examination by Mr. Robertson, it was revealed that she has $10,000 shares of $10 each in Sunrise Electronic Company Limited. Whether or not they have any value at the present time is not known. She also says that she has an income of $5,000 per month and works for a firm called Maritame Manufacturing Limited. Mr. Mok says that he is unemployed although it appears that he is engaged upon some projects for the same company and hopes to derive an income next year in the region of about $20,000-$25,000 per month. This company apparently has some trade with China, but the exact relationship of the debtors to the company is by no means clear upon the evidence adduced today. Madam Lau has also been concerned with another company called Sunrise Industrial Company, a company that appears to have had some association with Sunrise Electronic Company Limited. She was described in the Business Registration Certificate of this company to be the sole proprietor, but she claims in effect that she was only a sleeping partner and that her name was only used, for this purpose. This company also appears to have had some business dealings with companies in China and it was revealed during cross-examination that the sum of US$88,638 was received by Sunrise Industrial Company under a letter of credit earlier this year. The evidence as to the ultimate recipients of this money was not satisfactorily explained by either debtor. Apart from the debts due to the petitioning creditor, the debtors have large amounts due to other banks in respect of guarantees which amount to about $600,000. No arrangements have been made by either debtor to make repayment.

3. The evidence given by both debtors has been vague and unsatisfactory and it is clearly a case which requires a thorough investigation by the Official Receiver. The question of the burden of proof in respect of which there are conflicting decisions does not arise in this case. Whether the burden lies upon the petitioner or the debtor does not affect my decision because in any event, I consider that in the exercise of my discretion, a receiving order should be made against both debtors together with the usual order as to costs.