RE ZHANG JIN

HCB 4752/2025

[2026] HKCFI 3556

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

BANKRUPTCY PROCEEDINGS NO 4752 OF 2025

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J U D G M E N T

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Overview

1.  Before this Court is a bankruptcy petition dated 17 June 2025 presented by the Petitioner against his former wife the Debtor. The debt is in the sum of HK$211,639.90 due under an allocatur dated 15 May 2023 in respect of costs payable by the Debtor to the Petitioner in HCA 843/2020.

2.  On 4 May 2026, the Debtor applied for legal aid. The Petitioner applied to lift the statutory stay, which the Debtor did not oppose. In the circumstances, I am satisfied that the stay should be lifted. I also note that this was the Debtor’s third application within a relatively short time. Her previous two applications in 2025 were refused.

3.  The Debtor’s case is that she has a cross claim against the Petitioner for breach of the consent order on ancillary relief (made in FCMC 13763/2015) (“Consent Order”) whereby the Petitioner was ordered to (a) pay the Debtor HK$20,000 each month for the children’s maintenance and a total of HK$5 million for her maintenance and (b) transfer to the Debtor two Mainland properties.

4.  More specifically, the Debtor’s case is that the Petitioner never paid the children’s maintenance (totalling HK$2.34 million as at 11 November 2025) and still owes her HK$3 million for her own maintenance. It is also said the Petitioner has also failed to transfer the two Mainland properties to the Debtor.

5.  On the other hand, the Petitioner says he has paid HK$4 million to the Debtor of which 50% is attributable to the children’s maintenance whereas the remaining 50% is attributable to the Debtor’s maintenance. He denies breach for failing to transfer the two Mainland properties.

6.  The Petitioner’s main response to the Debtor’s cross claim is that he has a reverse cross-claim against the Debtor. It is said the Debtor held properties that she should have returned, but did not return, to the Petitioner. It is further said she owed various sums to the Petitioner (on top of the debt that is the subject of the present petition). The total value of the reverse cross‑claim is said to be to the tune of RMB11.57 million.

Analysis

7.  The applicable law is well-established. In opposing a petition, the debtor bears the burden of showing a bona fide dispute on substantial grounds in respect of the debt by adducing sufficiently precise evidence which is believable and must establish that he has a defence of substance, not just a fair probability of one. The Court does not try the dispute on affidavit but determines if a substantial dispute exists. See Re Tse Wai Ip [2025] HKCFI 5399 at §23 (Linda Chan J).

8.  It is open for a debtor to defend a petition by praying in aid of a bona fide and substantial cross claim. Where that is done, it is open to the petitioner to bring in reverse cross claims where these are available to extinguish the debtor’s cross claim. Both the cross claim and reverse cross claim need not necessarily be quantified. See Re To Kin Wah (HCB 9856/2007, 16 October 2008) at §6 (Barma J).

9.  Bankruptcy petitions are not meant to be used for the purpose of debt collection and the bankruptcy jurisdiction would be exercised only in very clear cases. Where oral evidence is required to decide a real and substantial dispute of fact, the Court will dismiss the petition. And if there is an abuse of process in invoking the jurisdiction of the Court in an improper manner, the petitioning creditor may be ordered to pay indemnity costs. See Re Leung Cherng Jiunn [2016] 1 HKLRD 850 at §27(5) (Kwan JA).

10.  In this regard, it is an abuse of process for a creditor to present a bankruptcy or winding up petition (as the case may be) when he is aware that the debt the subject matter of the petition is subject to a bona fide dispute on substantial grounds or that the debtor has a serious cross claim against the creditor for an amount which exceeds the debt. Such an abuse would likely be met by a costs order against the creditor on an indemnity basis. See Re Sinom (Hong Kong) Ltd [2009] 5 HKLRD 487 at §11 (Susan Kwan J); LB v F Ltd [2023] 2 HKLRD 157 at §34 (Linda Chan J).

11.  Turning to the present case, based on what appears to be largely undisputed matters, it seems to me the Debtor has a bona fide substantial cross claim against the Petitioner. As of 11 November 2025, the total sum of maintenance for the children and the Debtor exceeded HK$7 million. As mentioned, on the Petitioner’s own case, he had only paid HK$4 million. In particular, in the past 12 months alone, the children’s total maintenance in the sum of HK$240,000 would exceed the amount of the debt that is the subject of this petition.

12.  It should be said the Petitioner made a bare assertion in his affirmation that he has an oral agreement with the Debtor that he need not pay the balance of the maintenance for the Debtor pending her transfer of certain properties to him. But his case is extremely vague to say the least, and he is even unable to articulate the balance he claims he need not pay by agreement. In fairness, Ms Sylvia Ng, counsel for the Petitioner, did not press the point in her submissions. But critically, the Petitioner does not claim this alleged oral agreement applies to the payment of maintenance for the children as well.

13.  Ms Ng submitted it would be unfair to allow the Debtor to rely on the Consent Order to set up a cross claim given she has also commenced another action to set aside the Consent Order. She also accused the Debtor of not prosecuting the setting aside action expeditiously.

14.  But it seems to me the critical point is that on the Petitioner’s own case, the Consent Order is valid and he has not paid the Debtor a substantial part of the maintenance due. It follows he is aware the Debtor has a bona fide substantial cross claim against him. That must be right because, as the Petitioner accepts, unless and until the Consent Order is set aside, it is a valid order which must be obeyed.

15.  I also accept the submission of Mr Herman Ho, counsel for the Debtor, that the Debtor has not adopted necessarily inconsistent positions. The Debtor’s basis for applying to set aside the Consent Order and for an order remitting the ancillary relief issue to the Family Court is her assertion that the Petitioner had previously failed to disclose his interest in a Hong Kong property. So in essence, she seems to be saying she should be entitled to more than what she is presently entitled to under the Consent Order.

16.  Ms Ng’s response was to say the Petitioner may also want to apply to set aside the Consent Order now. She pointed primarily to the Petitioner’s reverse cross claim and the Debtor’s liability thereunder and submitted it may well be that the amount payable by the Petitioner to the Debtor under any new settlement would be smaller than the debt that is the subject of the present petition. At the very least, Ms Ng submitted that the Debtor’s cross claim based on the Consent Order is “not solid”.

17.  Apart from taking the wind out of the sails of the complaint that the Debtor has not prosecuted the setting aside action expeditiously, the difficulty with Ms Ng’s argument is that the Petitioner’s reverse cross claim is wholly unsubstantiated on the evidence. Ms Ng was only able to refer me to a few WeChat messages to say her client’s reverse cross claim is at least credible. I have considered them carefully but do not think much can be made out of them. More fundamentally, it is impossible for the Court to resolve solely on affirmation evidence at a hearing of a bankruptcy petition any dispute about the Petitioner’s reverse cross claim and the broader question of, as between the Petitioner and the Debtor, who owes what to whom.

18.  So at bottom, on the one hand, the Debtor has a bona fide substantial cross claim based on unpaid maintenance (ordered to be paid under a valid Consent Order) that exceeds the debt upon which the bankruptcy petition is grounded. On the other hand, the Petitioner’s reverse cross claim is by no means clear and substantiated on the affirmation evidence. It follows the petition is liable to be dismissed.

19.  As a fallback position, Ms Ng submitted the petition should be stayed pending resolution of the action to set aside the Consent Order and, if set aside, further pending the Family Court’s redetermination of the ancillary relief. With respect, tying a stay of the bankruptcy petition to a multitude of future contingents would be most unsatisfactory and impractical.

20.  For these reasons, I dismiss the bankruptcy petition. I also order indemnity costs against the Petitioner to be taxed if not agreed with certificate for counsel. The petition should not have been brought given the Petitioner’s awareness that the Debtor has a bona fide substantial cross claim based on the unpaid maintenance that exceeds the debt grounding the petition.