RE WENTY CHAN OI CHING

HCB 6962/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

BANKRUPTCY PROCEEDINGS NO 6962 OF 2012

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D E C I S I O N

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1. This is a petition brought by two creditors for the bankruptcy of Madam Wenty Chan Oi Ching.  The petition debt in the sum of HK$174,337.23 is based on an order for costs in High Court Action No 893 of 2011 and is not disputed.

2. The only ground on which the petition was initially opposed was that the debtor was not domiciled in Hong Kong as at the date of the petition, ie 24 October 2012.  It is not in dispute that the debtor was born in Hong Kong in 1953 and resided here until 1994.  She filed an affirmation in April 2013 alleging that she emigrated to Canada in 1994 and has since been domiciled there.

3. In November 2013, on the application of the creditors, which was not, as I recall, seriously opposed by the debtor, I made an order that unless the debtor attends before the court at the hearing of the petition for cross-examination, she will not be at liberty to use her affirmation filed in April 2013 for the purpose of the hearing of the petition. There was no appeal from that order.

4. At the hearing of the petition on 18 June 2014, Mr Chan for the debtor informed the court that the debtor would not attend the hearing for cross-examination.  It follows that her affirmation could not be used and on that basis, there is no evidence to discharge the burden on her to prove a change of domicile from Hong Kong to Canada.  Accordingly, I conclude that this court has jurisdiction under the Bankruptcy Ordinance over Madam Chan.

5. The only issue that is raised is that at the hearing of the petition, Mr Chan made an offer on behalf of the debtor to pay the judgment debt in full on or before 15 July 2014.  By that, he means the sum stated in the statutory demand and in the petition of HK$174,337.23 which in turn is based on the principal sum of HK$169,664.50 stated in the Allocatur dated 9 May 2012 and interest in the sum of HK$4,672.73 for the period from 6 March 2012 to 9 July 2012, which is the date of the statutory demand.

6. The offer is that once the amount is paid, the petition should be withdrawn with no order as to costs.

7. The issue that arises is therefore whether notwithstanding that the petition debt is not disputed, the petition should be dismissed because the debtor has made an offer to compound for the petition debt, and the offer has been unreasonably refused by the creditors.

8. In this context, it is well-established that a petitioner is entitled to have regard to his own interest alone and is not required to take a chance or show patience or generosity to the debtor, even though some creditors might do so.  The court will not dismiss a bankruptcy petition pursuant to section 6D(3) of the Bankruptcy Ordinance, unless it can be said that the debtor has made a proposal which no reasonable creditor in light of all the circumstances would have refused.

9. On the facts of this case, I am far from satisfied that the debtor’s offer is one that no reasonable creditor would have rejected.  The offer came at the last possible minute and was made only orally at the hearing of the petition.  No evidence has been produced on the means of Madam Chan or otherwise on her ability to honour that offer.

10. The order for cross-examination was made many months before and yet only now has Madam Chan abandoned her opposition to the petition on the ground of domicile and made an offer to pay.

11. In my view, it cannot be said that the petitioners are acting unreasonably if they are sceptical and refuse to take such an oral offer at face value. 

12. Further, the offer is confined to the amount of indebtedness as at 9 July 2012.  It does not cover the amount of interest which will have accrued at judgment rate for 2 years since that date.

13. Finally, because of the stance taken by Madam Chan thus far in these proceedings, considerable costs will no doubt have been incurred by the petitioners.  No provision whatever is made in respect of the petitioners’ costs by the offer of Madam Chan.  I do not think the petitioners can be said to be acting unreasonably in rejecting the offer when Madam Chan, having taken matters this far, has wholly failed to offer any compensation for the costs they incurred.

14. In these circumstances, I do not think it right to dismiss the petition pursuant to section 6D(3).  As there is no other ground for opposing the petition, I make a bankruptcy order against Madam Chan on the usual terms.