RE CHENG TUN SANG

HCB 4333/2017

[2018] HKCFI 58

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

BANKRUPTCY PROCEEDINGS NO 4333 OF 2017

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J U D G M E N T

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1.  There is before this court a bankruptcy petition dated 13 July 2017 (“Petition”) presented by Standard Chartered Bank (Hong Kong) Limited (“Bank”) against Mr Cheng Tun Sang (“Debtor”). The Petition is based on the non‑compliance with a statutory demand dated 29 June 2016 (“statutory demand”) served personally on the Debtor in July 2016 for the sum of over HK$3.67 million and US$465,064.66 (“Debt”). The Debt was principally owed by Hong Kong Tun’s Paper Limited (“HK Tun’s”) to the Bank and guaranteed by the Debtor under a Guarantee dated 25 August 2008. HK Tun’s indebtedness was also secured by an “all‑moneys” mortgage dated 23 September 2013 (“Mortgage”) provided by a Mr Cheng Pak Hung with respect to a property in Kowloon.

2.  It is indisputable that at least 3 weeks have elapsed since the statutory demand was served on the Debtor and it has not been complied with.  There was no application by the Debtor to set aside the statutory demand.

3.  On 25 January 2017, the Bank obtained a judgment (“Judgment”) for the sum of over HK$3.7 million and US$465,064.66 against inter alia the Debtor.  There is no appeal against the Judgment.  Nor is there an application to set it aside.

4.  It is well‑established that in order to successfully oppose a petition, the 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: Wong Lo Fung v AXA China Region Insurance Co Ltd unrep; HCB 1864/2013; 29 August 2014 at [25]–[26]; re Shang Lili unrep; HCB 5329/2014; 25 January 2016 at [10].

5.  In the present case, the Debtor’s 1‑page affirmation in opposition dated 27 October 2017 says this:

“…本人及本公司多年來一直有信用與渣打信貸來往，可惜渣打給予人民幣對沖額度的風險控制嚴重超出公司的抵押額度，令物業抵押不勝負荷，及質疑渣打有甚麼理由，對於一個擔保物業400萬，卻變成800萬多的負債，足以超出一倍的擔保責任，令我們根本無力償還，渣打應付上更大責任。本人正努力尋找還款安排，並要求渣打能減少高息的罰款，及要求給予分期灘分，給予本人及公司有生存的空間。”

6.  Essentially, the Debtor is not disputing the Debt as such.  He is complaining the Bank lent too much money to HK Tun’s which cannot be fully covered by the value of the property mortgaged.

7.  In these circumstances, this court is not satisfied that there are legally valid grounds in opposition to the Petition.  If so, a bankruptcy order should be made.

Disposition and Costs Order Nisi

8.  There shall be a usual bankruptcy order against Mr Cheng Tun Sang and an order nisi that the costs of the Petition, including all costs previously reserved, if any, be to the Petitioning Creditor, to be taxed if not agreed, with certificate for counsel.