RE TONG WAI TAK

HCB 3621/2022

[2023] HKCFI 1522

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

BANKRUPTCY PROCEEDINGS NO 3621 OF 2022

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D E C I S I O N[1]

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1.  On 23 March 2023, this Court made a bankruptcy order against the Debtor on the ground that he failed to pay the Debt before the hearing. The background of the matter and the reasons for giving the Debtor one last opportunity to pay the Debt are set out in the Decision dated 9 March 2023.

2.  The Debtor filed a summons on 28 April 2023 (“Stay Summons”)  seeking a stay of execution of the bankruptcy order pending determination of his appeal against such order on the same grounds advanced at the hearings on 21 February and 23 March 2023, which I did not consider to be valid grounds in opposition to the petition for the reasons set out in the Decision.  

3.  Shortly before the hearing the Debtor filed another summons on 19 May 2023 seeking leave to amend the Stay Summons by deleting all the grounds set out therein and introducing the grounds that (1)  he has since received the transcripts of the hearings on 21 February 2023 and 23 March 2023 and the salary slip of his wife; and (2)  the grounds set out in his affirmation which I assume is a reference to his affirmation filed on 28 April 2023.  It is difficult to understand what is the purpose of the proposed amendments as the grounds raised in the Debtor’s affirmation are essentially the same as those stated in the Stay Summons.  

4.  At the hearing, the Debtor states that:

(1)  he is not going to pay the Debt.  He believes that even after he pays the Debt, the Petitioner will present another petition against him in reliance on the other costs orders obtained against him, which he considers to be very unfair;

(2)  the Petitioner has “unlawfully” sold another property at Morning Ray Mansion for $2 million odd;

(3)  he has a carpark worth over $1.6 million and he owns 3 companies alongside with his son, one of which is able to undertake works for the Government; and

(4)  his wife has used her property as security for a banking facility of $1 million, and the Government also provided guarantee of up to $700,000 as security for the facility.  Owing to his bankruptcy, all his bank accounts have been frozen and his business adversely affected.  If the bankruptcy order is not stayed, many employees will lose their job.    

5.  Under s.104 of the Bankruptcy Ordinance (Cap. 6), the court may stay execution of a bankruptcy order.  The principles governing an application for a stay pending appeal against a bankruptcy order have been stated in Re Tsang Wing Lam, HCB 1203/2013, 3 December 2013, §4.  In short:

(1)  It is undesirable to grant a general stay of a bankruptcy order as it would prejudice the proper administration of the estate of the bankrupt and hence the interests of the creditors;

(2)  The mere fact that there is a pending appeal is not a sufficient ground to stay a bankruptcy order.  A stay pending appeal would only be granted where the appeal is shown to be a bona fide one and the grounds of appeal are sufficiently arguable; and

(3)  Even if a stay is warranted by the circumstances of the case, it should be limited to certain steps and consequences, and subject to condition to protect the interests of creditors.  

6.  I do not consider the grounds of appeal advanced by the Debtor to be arguable.  Dealing with the grounds in the same order they appear in §4 above:

(1)  The first ground is not a ground of appeal at all.  It reinforces the fact that the only recourse available to the Petitioner was to seek a bankruptcy order against the Debtor so as to bring into operation the statutory scheme of bankruptcy for the benefit of the Petitioner and other creditors of the Debtor.

(2)  The second ground is a bare assertion made by the Debtor for the first time, and is not supported by any evidence. This is particularly so when the sale of the other property, which took place a few years ago, was a matter well known to the Debtor and he never made any complaint against the propriety of the sale.  

(3)  The third ground and the assertion that he has valuable assets and business was the same ground deployed by the Debtor in opposing the petition. Those matters, alongside with the tendering of the Cheque and the Offer made by the Debtor to the Petitioner, were matters taken into account by this Court in coming to the conclusion that the Debtor should be given one final opportunity to pay the Debt so as to avoid a bankruptcy order being made against him (see §§9-10, 18-25 of the Decision).  The Debtor has not identified any error in the court taking into account his financial circumstances and giving him the last opportunity to pay the Debt;

(4)  The fourth ground is not a ground of appeal or a reason for granting a stay.  It is the result of the bankruptcy order made against him, which the Debtor had been aware of well before he was adjudged bankrupt.  

7.  As the Debtor has not shown that he has any arguable grounds of appeal against the bankruptcy order, the Stay Summons must be dismissed.  I also dismiss the summons for amendment of the Stay Summons as the amendment sought is not necessary for the fair disposal of the Stay Summons.

8.  As for costs, I will make a costs order nisi that there be no order as to costs in respect of the Stay Summons and the summons for amendment of the Stay Summons.  This reflects the fact that no other party has appeared in the Stay Summons or asked for costs.