RE QUANG XIN LEE

HCB 3769/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

BANKRUPTCY PROCEEDINGS NO 3769 OF 2016

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D E C I S I O N

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1.  The petitioners petition for the bankruptcy of the debtor on the basis of failure to pay in part the judgment debt in HCA 719/2009 and HCA 947/2009 in the sum of $10,820,957.

2.  The debtor showed cause solely on the ground that the petition should be stayed until his appeal against the judgment to the Court of Appeal in CACV 254/2015 has been heard.  He has no other claims against him.

Legal principles

3.  It is trite law that an appeal does not operate as a stay of judgment. 

4.  Where a judgment debtor has lodged an appeal, the bankruptcy court may stay the hearing of the petition to await the result of the appeal.  However, the bankruptcy court may refuse to do so and proceed to make a bankruptcy order if the judgment debtor fails to satisfy the court that he has a reasonable prospect of succeeding in the appeal: Re Tam Mei Kam, CACV 87/2012, 8 May 2013, at §25, per Yuen JA.

Application of the legal principles

5.  There was no application for stay of execution of the judgment in question.

6.  In the respondents’ (petitioners’) application for security for costs, the Court of Appeal found that the respondents have made out a case that the debtor was impecunious. 

7.  The Court of Appeal made a preliminary assessment of the strength of the debtor’s grounds of appeal in that application.  The Court of Appeal noted that it was an appeal against a trial judge’s finding of facts and the threshold was high.  The Court of Appeal did not think that the debtor had a strong case for arguing that the judge’s factual findings were plainly wrong and that the merits were not such as would amount to countervailing factors that militated against the making of an order for security.

8.  The debtor has provided security for costs on appeal as ordered.

9.  No date has been fixed for hearing of the appeal.  The parties are in the course of preparing the appeal bundle.

10.  At this hearing the debtor accepted that the threshold for appealing against findings of fact was high.  He maintains that transcript of the proceedings at trial would show that the level of discovery on the respondent’s side was lacking and once the transcript is available, he would be able to substantiate his grounds of appeal and demonstrate that the trial judge had ignored evidence or made wrong findings.

11.  The transcript was not before this court.  The debtor’s vague submission without specifying what in the transcript could substantiate his grounds of appeal fell short of demonstrating reasonable prospect of success in his appeal.

12.  I therefore ordered a bankruptcy order to issue with costs to the petitioners to be borne out of the estate.

13.  I thank Mr Kwong and Mr Lee of the Official Receiver for their assistance.