RE CHEN RAY

cacv 263/2004

in the high court of the

hong kong special administrative region

court of appeal

civil appeal no. 263 of 2004

(on appeal from HCB NO. 2146 of 2004)

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REASONS FOR JUDGMENT

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Hon Rogers VP:

1.  This was an appeal from the order of Mr Justice Lam given on 16 August 2004 whereby he adjudged the appellant bankrupt and constituted the Official Receiver the receiver of his estate.  At the conclusion of the hearing of this appeal, this court dismissed the appeal with reasons to be given in writing.

2.  The debt upon which the bankruptcy petition was based was an order of the District Court under that Equal Opportunities Action No. EO3 of 2000.  The sum involved was HK$781,344.33.  The appellant was ordered to pay that amount as part of an order made on an application under section 17 of the Legal Aid Ordinance, Cap. 91.  There was no appeal from that order.  Although it was made on 27 July 2001 the formal order was filed on 15 July 2002. 

3.  On 28 January 2003 the appellant was sent a letter demanding payment of the sum which was the subject of the bankruptcy proceedings.  When the appellant failed to respond to that letter, the Director of Legal Aid forwarded the matter to the Department of Justice to seek recovery on his behalf.  The statutory demand upon which the bankruptcy petition was based was dated 13 August 2003.

4.  At the commencement of the hearing of this appeal the appellant sought to amend the notice of appeal by including a ground that the statutory demand was invalid.  The basis for that allegation was that although Form 162 had been used, the Secretary for Justice had been named in the title as the judgment creditor.  Leave to amend the notice of appeal was refused because the amendment would have been futile.  The ground sought to be argued by the appellant was of no substance.  The statutory demand was in the proper form.  It complied with the provisions of Rules 44 and 45 of the Bankruptcy Rules.  It is clear that the recovery proceedings were being taken by the Secretary for Justice on behalf of the Director of Legal Aid.  The Director of Legal Aid was named as the creditor, full particulars were given of the debt and the name of the counsel and his telephone number and fax number as well as his address were all included in the statutory demand.  In consequence there was no basis for alleging that the statutory demand was not valid.

5.  There were three grounds of appeal, but at the hearing the appellant chose only to refer to one of them.  That ground was that the judge had erroneously concluded that a technical set back was a lack of merits in the District Court proceedings which the appellant had commenced.  Briefly those proceedings were proceedings against the solicitor and counsel in respect of the case which was the subject of the section 17 application.  In the judgment in that action, EO3 of 2000, HH Judge Saunders said:

“This is the second time he has come to a court of law in Hong Kong as a plaintiff and found to be both less than frank and truthful and a liar.  This is a situation which should not be allowed to continue.  I have accordingly directed the Registrar of the District Court to forward the transcript of the evidence, the exhibits, and a copy of this judgment to the Director of Public Prosecutions for his consideration and to take such steps as he thinks appropriate.”

6.  Although nothing appears to have come from the fact that the matter has been referred to the Director of Public Prosecutions, nevertheless, as the judge said when delivering judgment on the section 17 application, the appellant’s conduct had gone far beyond that which might have otherwise been tolerated on the part of a witness who was party to proceedings.  The judge referred to the appellant’s credit being destroyed.

7.  In the light of those strictures the appellant’s case, which had been brought against the counsel and solicitors who had been instructed on his behalf, would clearly have been doomed to failure.  The appellant lost the EO3 of 2000 action because the judge did not believe him.  The fact that the subsequent action against the solicitor and counsel had been struck out otherwise than on the merits was thus irrelevant.  Even if there were an application to revive that action, clearly the judge dealing with the bankruptcy petition based on the order made following the section 17 application would not have had any regard to that action, which was seemingly irrelevant to the bankruptcy proceedings if not, in itself, yet another abuse of the process of the court.

8.  Likewise any complaint which the appellant sought to raise on the basis that he had not been granted legal aid to defend the section 17 application was, in itself, doomed to failure.  Clearly he could not be granted legal aid in respect of such an application.

9.  In my view there was no merit in this appeal whatever.

Hon Woo VP:

10.  I entirely agree with the judgment of Rogers VP.  There is no merit in this appeal whatsoever.

11.  The appellant brought the District Court action (DCCJ 2014 of 2004) against the Director of Legal Aid and the counsel conducting EO3 of 2000 on his behalf.  He claimed that the Director was negligent for having failed to grant him legal aid to defend the section 17 application made by the Director against him and for not having informed him that the legal aid certificate granted in respect of EO3 of 2000 did not cover the section 17 application.  The appellant wished to use his claim in DCCJ 2014 of 2004 against the Director as a basis for saying that the taxed costs that he had to bear as a result of the section 17 application was not a just debt to ground the bankruptcy proceedings.  The claim against the Director was struck out, and the appellant was appealing.  He complains that Lam J made the bankruptcy order against him despite the pendency of that appeal and despite his request to file further evidence. 

12.  The appellant must be well aware that the legal aid certificate for him to proceed with EO3 of 2000 did not cover his defending the section 17 application when legal aid was refused for that application.  The grant or refusal of legal aid was within the Director’s discretion, taking all statutory criteria into account.  As I see it, the refusal of legal aid to defend the section 17 application was nothing other than proper, in view of the judgment of Judge Saunders dismissing the appellant’s claim in EO3 of 2000, in which the appellant’s credibility was utterly shattered.

13.  The appellant lodged an appeal against the Director’s refusal of legal aid in respect of the section 17 application, but he withdrew that appeal.  There was no appeal against the costs order made by Judge Saunders pursuant to the section 17 application. 

14.  Having heard the appellant who proffered explanations of his opposition to being made bankrupt, Lam J considered that any affidavit evidence that the appellant allegedly intended to file would not assist him or improve his case.  Lam J came to the conclusion that an adjournment for the appellant to file evidence would only result in an unjustifiable delay of the bankruptcy proceedings.  I do not see anything improper or wrong in principle in Lam J’s decision.

15.  I agree that the appeal should be dismissed with costs.

Hon Le Pichon JA:

16.  I agree.