FRED LEE AND ANOTHER v. KWAN KWONG NING

HCB 17846/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

BANKRUPTCY PROCEEDINGS NO. 17846 OF 2002

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REASONS FOR DECISION

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Background

1. Upon his own petition of bankruptcy, a bankruptcy order was made against the Bankrupt on 5 December 2002.  Pursuant to Section 30A(1) and 2(a) of the Bankruptcy Ordinance (“the Ordinance”), if no objection was raised, the Bankrupt would have been discharged from bankruptcy on 5 December 2006. 

2.  In place of the Official Receiver, Mr. Fred Lee and Ms. Christine Chow were appointed by a resolution of the creditors of the Bankrupt on 7 March 2003 as the joint and several trustees of the property of the Bankrupt (collectively referred as “the Trustee”).

3. The Trustee saw fit in this case to object the automatic discharge of the Bankrupt.  A summons was issued by the Trustee on 20 October 2006 against the Bankrupt under Section 30A(3) of the Ordinance seeking an order that the period for the discharge of the Bankrupt should cease to run.  The sole ground relied upon by the Trustee to object is under Section 30A(4)(d) of the Ordinance that the conduct of the Bankrupt in respect of the period before the commencement of the bankruptcy had been unsatisfactory.

4. The application was first heard by Master Hui on 28 November 2006.  The Bankrupt was legally represented at the hearing and indicated to oppose the summons.  Since there were 3 test cases (HCB Nos. 8779, 8989 & 9461 of 2002) with the same or similar ground of objection raised by the Trustee were referred to the Bankruptcy Judge for determination and directions, the subject summons was adjourned pending the decision of the said 3 test cases.  While adjourning the summons, an interim order was made suspending the automatic discharge pending the determination of the application (“the Interim Order”). 

5. Madam Justice Kwan handed down her Decision in the said test cases on 9 January 2007 ([2007] 1HKC 164).  Instead of restoring the summons for directions hearing, paper directions were given by me under letter dated 9 February 2007 for, inter alia, to exchange affirmations of the parties within a prescribed time frame with liberty to apply to vary the same upon good reasons shown.  The Trustee later sought to vary the time for filing their Supplemental Affirmation in support which was opposed by the Bankrupt’s solicitors.  To resolve the dispute, a hearing was fixed on 12 March 2007.  Shortly before the hearing, parties eventually agreed all the directions for the purpose of adjourning the summons for arguments.

6. The substantive arguments of the summons were heard by me on 3 July 2007.      Both parties had filed 2 respective Affirmations in support and in opposition.  After hearing the arguments of the Trustee’s solicitors and the Bankrupt’s Counsel, I ordered that the Trustee’s Summons be dismissed and the Bankrupt be discharged from bankruptcy on 5 December 2006.  No application was made by parties for costs of the summons and I made no order accordingly.

7. At the conclusion of the hearing, I indicated that I would give my reasons in writing later, which I now do.

The Trustee’s Objection

8. The Trustee’s complaint focused on the alleged unsatisfactory conduct on part of the Bankrupt prior to the commencement of the bankruptcy ie. before the grant of the bankruptcy order in December 2002.  It is worth noting that the Trustee has no complaint whatsoever for the conduct of the Bankrupt during the course of his bankruptcy for the past 4 years.

9. The facts relied upon by the Trustee in support of their objection related mainly on the one loan application made by the Bankrupt from JCG Finance Company Limited (“JCG”) in May 2002 for the sum of $100,000 (“the Loan”).  The Trustee argued that the Bankrupt should not have applied for the Loan 4 months prior to his own petition for bankruptcy because at that time he should have known that he was insolvent or that he would be unable to repay the Loan.  To support such contention, the Trustee suggested that according to their estimation, the Bankrupt would have to pay at least $20,000 each month for his credit card debts of a total sum of about $970,000.  For other instalment loans and the Loan, the Bankrupt would have to repay a monthly sum of at least $9,491.  As such, out of his then monthly income before tax at that time of about $29,000, the Bankrupt had to pay a total of $29,491 per month to service all the unsecured debts.

10. More importantly, it was the Trustee’s case that in filling the application form for the Loan (p.98 of the Bundle), the Bankrupt had misrepresented his financial position by disclosing no information on his previous loan obtained from other banks or finance companies and disclosing only 3 credit cards.  According to the Trustee, the Bankrupt at the material time should have 8 other loans/overdraft facilities and 28 credit cards.

11. The particulars of the said 8 loans and the Loan are as follows:-

12. The Trustee did not dispute that when the Bankrupt applied for the Loan, he was an existing customer of JCG and part of the Loan was used to repay an existing loan and the net amount received by the Bankrupt was about $94,000.  Upon receipt of the said net proceed of the Loan, it was used by the Bankrupt to repay his other debts.

The Bankrupt’s Explanation

13. The Bankrupt had filed 2 Affirmations purportedly to oppose the summons and to explain his position.  No direct evidence was adduced by the Trustee to contradict the Bankrupt’s evidence as contained in the Affirmations.  Further, the Trustee did not see fit to apply for the cross examination of the Bankrupt.  In the circumstances, I shall accept the Bankrupt’s evidence on its face value.

14. In respect of the application for the Loan with JCG, the Bankrupt stated that he attended a branch office to make such application.  A counter staff of JCG assisted the Bankrupt to fill in all the details of the form but leaving the parts “Credit Card Bank” and “Loans or Credit Facilities” for the Bankrupt to fill in.  Since the Bankrupt was an old customer of JCG, he was told by the counter staff that it was sufficient for him to give 2 to 3 credit card banks in the section of the form entitled “Credit Card Bank”.  He therefore wrote down the names of 3 credit card banks in that section. The staff then asked the Bankrupt to sign at various parts of the form including the sections “Bank/Finance Company” and “Credit Card Bank”.  The Bankrupt signed according to the instructions of the staff.  It is worth noting at this stage that apart from the section “Bank/Finance Company” which were left blank in the form, there were other sections such as “Approx. General Living Expenses” and “Overtime, Allowance, Other Income” which were not filled up with any information by either the staff or the Bankrupt.  About 20 to 30 minutes later, his application was approved and a cheque for the net balance of the Loan (after deducting the handling charge and the repayment of the previous loan) was issued to the Bankrupt.

15. The Bankrupt maintained strenuously that he had no intention to misrepresent JCG when seeking the Loan.  He explained that the whole purpose for him to obtain the Loan from JCG was to repay some of his credit card debts which were charging interest higher than the Loan from JCG.  By doing so, he would pay less interest on the whole. 

16. The Bankrupt has also explained in his 1^st Affirmation why he had to incur substantial indebtedness.  Tallied with the accounts given by the Bankrupt to the Official Receiver in a standard questionnaire, the Bankrupt’s indebtedness originated back since 1983 when he had to pay substantial medical expenses for treating the ailing diseases suffered by his former wife who died eventually in 1992.  He had to pay the family expenses through credit cards facilities.  His financial position became worse as a result of the economic downturn of Hong Kong after 1997.

17. Since 1995, the Bankrupt worked as a Manager in a transportation company.  He, however, had to work as a part-time teacher to meet his family expenses.  From 1997 to 2000, he obtained various external diploma and degree to equip himself hoping to have a pay rise or job promotion.  In 2001, the Bankrupt had to resort to his father for obtaining a loan of $400,000 in order to make repayments to his creditors.  Unfortunately, his financial position had no improvement and he had to file his own petition for bankruptcy in September 2002.

The Law

18. The rationale behind the automatic discharge of bankruptcy and the objection against it under the Ordinance has been set out in various of my previous Judgments (see Re Yeung Kwok Lai [2003] 2HKLRD 45 paras. 24 to 26; Re Li Chiu Fun HCB 917/1999 and Re Tang Yu Hong, Eric HCB72/1999).  I do not repeat the same here.  Under the current system, the discharge from bankruptcy becomes a right rather than a privilege subject to valid objections raised and established by the Trustee or the creditors.

19. However, the above cases and in fact, most of the previous reported cases (such as Re Hui Hing Kwok [1993] 3 HKC 683 and Re Li Tat Kong [2000] 3 HKC 360) touch on conducts of the bankrupts and matters arising after the commencement of bankruptcy.  The conducts in question in this case as complained by the Trustee related to events happened prior to the commencement of bankruptcy.  Not until recently, there is no case authority in Hong Kong to decide what unsatisfactory conducts prior to the commencement of bankruptcy would delay the automatic discharge of the bankrupt and how the Court should exercise discretion in such circumstances.

20. Madam Justice Kwan in her Judgment handed down in respect of the 3 test cases Lee Fred v. Leung Chin Yeung & Others [2007] 1 HKC 164 gave some guidance on the pre-bankruptcy unsatisfactory conducts issue :

“	44.	It is the common submission of all three counsel that ‘unsatisfactory’ conduct of the bankrupt in s 30A(4)(d) connotes a broad and low jurisdictional threshold.  Although it is recognized in the LRC Report (at para 17.42) that the pre-bankruptcy behaviour of some bankrupts will effectively disqualify them from any chance of automatic discharge, Mr Bartlett submitted that pre-bankruptcy conduct should be of a significant magnitude or quality to justify suspension of the running of the relevant period.
	45.	As mentioned earlier, a balanced view should be taken by the trustee in objecting to automatic discharge.  In a case involving excessive credit in which loans were obtained when the debtor should have known he would not be able to repay, where the bankrupt has been co-operative with the trustee and made voluntary contributions to the estate, and provided there is no other misconduct, I am inclined to think that the pre-bankruptcy conduct is not such as to warrant suspension of the running of the relevant period.
	46.	Misrepresentation in an application for credit could be a serious matter.  If there is intention to defraud, this would constitute a criminal offence under the Theft Ordinance (Cap 210).  In Re Palenkas; ex p Raymor (Brisbane) Pty Ltd (1982) 66 FLR 115, the Federal Court of Australia held that fraudulent misrepresentations as to the debtor’s assets for the purpose of obtaining a loan could be unsatisfactory conduct so that leave should be given to the creditor to enter an objection to automatic discharge.”

Though the facts of the 3 test cases are quite similar to the present case which involve allegations by the same Trustee for misrepresentation in obtaining loans from JCG, since Madam Justice Kwan required the Trustee to conduct further investigation on the matters, no conclusive determination was given in the said 3 test cases.

21. More recently, Deputy Judge To in a Judgment handed down on 20 June 2007 in Fred Lee v. Tong Yuk Kin (unreported, HCB 22870/2002) decided what, in his view, constituted unsatisfactory conduct prior to the commencement of bankruptcy and how the Court should exercise discretion in such circumstances.  Unless such decision is overruled by the appellate court, it appears that it will be binding on me.

22. To determine an objection to automatic discharge by the Trustee, Deputy Judge To was of the view that we should adopt a 2-part test:

“

In my view, in considering an objection to automatic discharge, the proper approach is to consider whether the conduct complained of is unsatisfactory within the meaning of section 30A(4) and, if it is, whether the court should exercise its discretion under section 30A(3) to suspend the running of the relevant period.”

23. While accepting that what is unsatisfactory must depend on all the circumstances of each case and it is impossible to be specific as to what conduct would be unsatisfactory, Deputy Judge To went on to examine the factors under Section 30(4) of the old Bankruptcy Ordinance and suggested examples of the type of pre-bankruptcy conduct which he considered could be regarded as unsatisfactory under the Ordinance.

“	14.	… In general, the conduct complained of must be some positive conduct related or contributed to the bankruptcy.  These include notably, contracting debts provable in bankruptcy while being insolvent or without any reasonable belief of being able to repay; indulging in hazardous speculation, gambling, extravagant living which is inappropriate to the station in life of the bankrupt; incurring liability in frivolous or vexatious litigation (by way of his own costs as well as the costs of the opponent for which the bankrupt becomes liable); incurring liability through culpable neglects; showing preference to any of his creditors and concealing or failing to account for assets available for distribution amongst his creditors.  The type of pre-bankruptcy conducts which could be regarded as unsatisfactory is incapable of definition.  The above is a list of examples, but the list is not exhaustive.
	16.	Thus, while the purpose of bankruptcy is rehabilitative, rehabilitation could not be over-emphasised as to turn pre-bankruptcy conduct in section 30A(4)(d) into a dead letter.  I think, in general, the society is prepared to condone most of the conducts which are related or contributed to the bankruptcy under the overriding consideration of rehabilitation, but there are some conducts which the society is not prepared so to condone without expressing disapproval.  This is where the line is to be drawn as to what conducts are unsatisfactory and what conducts are not.  At the one extreme end of the spectrum are conducts which are clearly unforgivable or even criminal.  Preference over some creditors to the prejudice of the general pool of creditors, even if not fraudulent, is unforgivable and deserves some form of punishment to mark the society’s disapproval of such conduct.  Concealing assets or putting one’s asset out of reach of the trustee in preparation for bankruptcy is not forgivable.  Such conducts amount to abuse of the bankruptcy regime which the society would not condone.  Those conducts if committed with the necessary intent are criminal.  In general, conducts which amount to fraud are also unforgivable.  At the other end of the spectrum are conducts which, though related or contributed to the bankruptcy, arose out of poor judgment, misfortune, supervening events and circumstances beyond the control of the bankrupt for which the bankrupt ought fairly be excused rather than forgiven.  Those conducts are clearly not unsatisfactory.  In between those extremities are conducts which arose out of a mixture of those factors and perhaps coupled with human weakness, indulgence, rashness, recklessness, and irrational decisions which may or may not be forgiven.  Thus, while conduct resulting in genuine business loss due to poor judgment, misfortune or unforeseeable events are generally not regarded as unsatisfactory, conduct resulting in loss which is the result of excessive speculation or irresponsible assumption of risk might be unsatisfactory because society has to bear the financial consequence of the bankrupt’s irresponsible conduct.  But even then, some allowance ought to be given as speculation has become part of everyday life.  Calculated risk which turned out to be far greater than expected could be the result of poor judgment and may also be forgiven if the taking of the risk is not inappropriate to one’s means or which are not unduly hazardous.  Business loss should also be distinguished from consumer credits.  The former is more likely to be forgivable, while the latter is less likely to be so.  In the majority of cases, the court should not indulge itself in conducting too detailed a post mortem analysis of the conduct which contributed to the insolvency.  It should always assume that the bankrupt’s conduct was not unsatisfactory.  I think, in this regard, the threshold is very high rather than very low and broad.”

24. In conclusion, Deputy Judge To suggested to adopt a reasonable man test in considering whether a subject conduct is unsatisfactory or not.

“

17.

Ultimately, the question of whether the conduct is unsatisfactory is whether the conduct is one which the society is prepared to condone without expressing disapproval.  This question is to be answered by the reasonable man’s test.  This hypothetical reasonable man has to bear in mind the overriding purpose of rehabilitation.  He has to take into account whether the debt is a business debt or consumer credit and consider the reasons for which the debt was incurred, the amount of the debt as compared with the bankrupt’s means and station in life, the blameworthiness of the bankrupt and all the circumstances in which the debt arose.  In addition, the reasonable man has to take into account human nature, its weakness, its readiness to indulge in extravagant spending and its readiness to engage in speculation and assumption of risk.  In the end, this is a question of fact for the reasonable member of the society.”

25. In his Judgment, Deputy Judge To has also set out the legal principles governing the exercise of the court’s discretion under Section 30A(3) of the Ordinance.  He agreed with the cautious approach of Madam Justice Kwan set out in paragraph 37 of her Judgment in the 3 test cases

“	37.	In considering the objection to automatic discharge, the public interest and the demands of commercial morality underpinning the bankruptcy laws must be weighed together with the interests of the bankrupt and his creditors (Totterdell v Nelson (1990) 97 ALR 341 at 343 to 344; Re Maher & Anor (1985) 61 ALR 592 at 598; Fletcher’s Law of Insolvency (3rd Ed), para 11-012).  An application to object to discharge is never treated lightly by the court, it involves looking beyond the interests of the bankrupt and his creditors.  The exercise of the discretion was described in this manner by Smithers J of the Federal Court of Australia, General Division, Bankruptcy District of the State of Victoria in Re Zion; ex p: The bankrupt, unreported, 26 September 1986, at para 6:
		‘	In my view it is the policy of the law that bankruptcy should in most cases come to an end at three years and when there is an objection at the end of five years from the decree for sequestration of the estate, but that in a case where public interest so requires the discharge may be delayed or made conditional according to the requirements of the public interest in the circumstances of the case.  Public interest will require that a discharge be delayed or made conditional if the conduct revealed or the character of the bankrupt indicates that the return of the bankrupt to the commercial world in full freedom might involve unacceptable risk to persons likely to be engaged in commercial relations with him in the future.  In other words, it is for the applicant to show that balancing the policy of the law in favour of the return to commercial life of a bankrupt against the dangers that might accrue to the public from full commercial capacity of the applicant, it is appropriate that the discharge be granted.’ ”

26. Deputy Judge To, however, added that risk to commercial community is only one of the elements of public interest to be considered.  There are other elements of public interest which the court should take into account in exercise of its discretion.  He stated:

“	20.	… One important element of public interest is that the bankruptcy regime should not be abused by being treated as a convenient debt clearing house, which I have already referred to above.  Another element is the need to preserve commercial morality.  Ready access to credit is the linchpin of a vibrant and dynamic economy.  Entrepreneurs and consumers alike rely heavily on credits.  Lending institutions lend on the basis of the information supplied to them by the borrowers.  Some of the information is impossible to verify.  Lending institutions rely heavily on the good faith of the borrowers in providing true answers to their questions which form the basis for approving the loan applications.  If this system is abused, borrowing would become more expensive to price in bad debts and would be tightened to minimise risk exposure.  This would not benefit the society and its economy as a whole.  …
		I think conduct involving fraud or misrepresentation in applying for credit which contributed to bankruptcy would invariably result in an abuse of the bankruptcy regime.  Save in exceptional cases, the court’s discretion should be exercised against bankrupts whose bankruptcy was related or contributed to by such conduct.”

27. Deputy Judge To then summarised how to exercise discretion as follows:-

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21.

Thus, in the exercise of its discretion under section 30A(3), the court should take a balanced view.  It should balance the interest of the bankrupt, the interest of his creditors, the public interest in the bankrupt’s rehabilitation and the demands of commercial morality underpinning the bankruptcy laws.   It should take into consideration all the circumstances leading to the bankruptcy and not just the conduct complained of.  It should consider the seriousness of the conduct, the bankrupt’s conduct after the commencement of bankruptcy, the degree of co-operation he has shown with the trustee during the relevant period and the effort he has contributed to repaying his debt.  In an appropriate case, the court should consider the risk to the commercial community should the bankrupt be allowed to resume full commercial activity.  The discretion to suspend the running of the relevant period should not be lightly exercised.  But in its balancing exercise, the court should not allow the bankruptcy regime to be abused.”

28. Finally, regarding the period of suspension, Deputy Judge To held at paragraph 22:

“

22.

As for the period of suspension, the court should bear in mind the overriding policy of the law is rehabilitation.  Any period of suspension should be minimal to enable the bankrupt to return to his normal life as soon as possible.  The purpose of suspension is also rehabilitative and solely to mark society’s disapproval of the type of unsatisfactory conduct but no more.  It is not to be used as a means of extracting more contribution from the bankrupt for distribution to his creditors.  The court should not be unduly concerned about the amount of the debt.  The period of suspension should reflect the seriousness of the conduct which the court has found to be unsatisfactory.  The court should also take into account the personal circumstances of the bankrupt, such as his age and family needs.”

Discussion

29. Although the Trustee complained against the Bankrupt for obtaining the Loan from JCG when he should have known that he was insolvent or would be unable to repay the Loan, the Trustee is not relying upon excessive borrowing as a separate and distinctive ground.  However, he argued that the Court should take the extent of the debt level into account when considers their arguments on “application fraud”.  What he referred as the “totality approach”.

30. Mr. Gopaoco, acting for the Trustee, submitted that the degree of the Bankrupt’s indebtedness served as a backdrop of the issue of “application fraud”.  A high degree of indebtedness at the time of the application would give rise to the natural inference that omissions in providing credit information was deliberate in order to ensure approval of the credit application.   The word “fraud” was used by Trustee not in strict criminal sense.  Rather, the Trustee argued that the Bankrupt acted in a highly careless or reckless manner in allowing an application with material omissions to be submitted for a loan.

31. Mr. Gopaoco further argued that despite the explanation given by the Bankrupt about the alleged representation made by the staff of JCG, it would only assist the Bankrupt for mitigation purpose only.  The Bankrupt still has an obligation to make full disclosure when he applied for the Loan so that the lender could make an informed decision.  Since the Bankrupt was in financial difficulties and had incurred substantial loans and credit facilities, according to the Trustee, the Bankrupt must have known that full disclosure of all his financial information may prejudice his loan application.  Further, the Bankrupt would be aware that his application form did not contain true and complete information.

32. At this stage, I must point out that apart from adducing a copy Affidavit of Mr. Paul John Constable filed in HCB 8779/2002 and a copy Statutory Declaration of Mr. Kam Kwong Cho of JCG (collectively referred as “the said 2 documents”) (whose evidence I shall deal with it below), the Trustee has no direct evidence to prove the intention of the Bankrupt to hide up the necessary information in order to misrepresent JCG nor to contradict and rebut the Bankrupt’s explanation.

33. The said 2 documents relied upon by the Trustee were put before the Court, in my view, quite improperly though Mr. Chiu, Counsel for the Bankrupt, chose not to object their admissibility.  The said 2 copy documents were only exhibited in one of the Affirmations filed by the Trustee.  There were directions given by the Court that parties’ evidence should be filed by means of a properly executed Affidavit/Affirmation.  Obviously, the said 2 documents failed to comply with the court’s directions.  No good reason was tendered by the Trustee to explain the failure.  Therefore, they could be excluded from consideration by the Court outright.  The said 2 documents are adduced at best as double hearsay documents and their reliability is doubtful.

34. In any event, I do not think that the said 2 documents assisted the Trustee’s case too much.  What Mr. Constable (being the Senior Manager Regional Business Standards and Regulatory Controls of the Hongkong and Shanghai Banking Corporation Limited) said from his experience about the sharing of credit history data disclosed by the applicant between credit providers in processing loan application prior to 2003 seems uncontroversial and the Bankrupt’s Counsel did not seek to challenge such evidence.  In any event, this is not the main issue for the Court to decide.

35. Mr. Kam (being the Manager of the Collection Department of JCG) purported to say about the general practice of JCG in obtaining personal and financial information of applicant in their loan application form and their processing of the loan application are also neither here nor there.  He further asserted that it was the instructions of JCG to their frontline staff that they were not allowed to obtain some credit information from the applicant instead of all necessary information as requested under the application form.  Each case must decide on its own peculiar facts.  However, Mr. Kam did not deal specifically with the evidence of the Bankrupt at all.  I must prefer the direct evidence of the Bankrupt over the indirect evidence of Mr. Kam.

36. Judging from the level of income of the Bankrupt at the time when he applied for the Loan with JCG and the amount that he might need to repay each month (see paragraph 9 above), I am not satisfied that the Trustee can ask the Court to draw an irresistible inference that the Bankrupt knew that he was insolvent and was unable to repay the debts.  No doubt, the Bankrupt was a responsible husband who was prepared to spend all that he could to seek medical treatments for the illness of his former wife.  This is not a case whereby (and there is no evidence to suggest) the money obtained by the Bankrupt from the financial institutions was used for speculative activities or the Bankrupt used the money to lead into a luxurious lifestyle.  The Bankrupt worked hard and went for further studies in order to earn more to repay his debts and to meet the family expenses.  No evidence was adduced by the Trustee to show that the Bankrupt defaulted in repayment of his indebtedness.  In fact, he tried to repay his creditors by borrowing the retirement pension of his father.  Taking this background into account and applying the reasonable man test as enunciated in the Judgment of Deputy Judge To in Tong Yuk Kin, I take the view that the Bankrupt’s conduct in complaint by the Trustee falls into the class of cases whereby a reasonable man in the society is prepared to condone without expressing disapproval.  I do not consider that this pre-bankruptcy conduct is unsatisfactory.

37. Turning to the misrepresentation issue, I have to bear in mind that the Bankrupt was an existing customer of JCG and the Loan was partly used to repay the outstanding balance of an existing loan.  Though JCG chose not to disclose to this Court what information they had already in possession concerning the Bankrupt when he applied for the Loan, I can safely assume that they must have some previous credit information about the Bankrupt.  Therefore, it is not unreasonable to expect that the counter staff of the JCG in seeking information from the Bankrupt would ask the Bankrupt to disclose only those information relevant to the subject loan application sufficient enough to enable them to process the same.  When JCG held out their staff to assist their customers to fill up the application forms, I see no reason why the customers could not rely upon the representations of the concerned staff when seeking the relevant information for the purpose of filling the form.  The bank has no obligation to assist their customers to fill up the loan application form.  Once they offered such service, the customers must be able to rely upon the representations made by the staff.

38. To illustrate this, I put up an example.  If in a loan application form, it initially contains 100 questions for the applicant to fill the answers.  However, a bank counter staff who assisted the customer to fill up the form only asked the applicant to answer only 10 of such questions.  The applicant in particular if he is an existing customer of the bank is reasonable to expect that the questions asked by the bank staff must be those relevant for the bank to process his application while the rest of the 90 questions must be irrelevant.  The staff in fact, in my view, varies the application requirements as stated in the form when he/she only requires the applicant to disclose less information then those originally specified in the form.  In the circumstances, I find no misrepresentation on part of the Bankrupt in giving only those information as required by the staff of JCG in making the loan application when he signed the form.

39. Even if I was wrong on the above,  considering the relatively less serious misconduct as compared with the one in Tong Yuk Kin  case, the use of the money borrowed for repayment of existing indebtedness, the co-operation rendered by the Bankrupt after the commencement of the bankruptcy, his continuous contribution made to the estate, and more importantly, I do not consider that there would be high risk to allow the Bankrupt to resume his commercial activity after his discharge, in balancing all the factors, I would exercise my discretion  not to suspend the automatic discharge of the Bankrupt in this case.

Conclusion

40. For reasons as mentioned above, I find that the Trustee fails to establish his grounds of objection against the Bankrupt and thus, his Summons issued under Section 30A(3) is dismissed.