AU CHAU KUK v. TSE MING FUN

HCB5356/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

IN BANKRUPTCY

NO. 5356 OF 2005

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D E C I S I O N

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1. These proceedings concern a bankruptcy petition taken out by the Petitioner, Miss Au Chau-kuk.  This matter has its background in probate proceedings between Miss Au and the Debtor, Miss Tse Ming-fun. 

2. The petition is based on a costs order that was obtained by Miss Au in the course of such probate proceedings.  Miss Tse disputes the liability to pay that costs order and, in particular, disputes the amount of the

costs that she has been ordered to pay by the court following a taxation conducted by Miss Au.  It seems that Miss Tse may not have appeared in the taxation proceedings but that is a matter that can be gone into in due course when this petition comes on to be heard. 

3. A slight complicating factor in this case was that when a statutory demand based on the costs order and the allocatur in respect of it was served on Miss Tse, apparently in about the middle of June this year, she did not immediately take steps to set aside the statutory demand.  She did issue an application for setting aside the statutory demand on 20 July this year.  That was after the time limit for doing so had expired.  For some reason, which I am unable to ascertain, the application was not immediately dismissed.  It was allowed to remain on the court file.  Nonetheless, a petition for bankruptcy had, by that point, already been issued and it is that petition which is before the court today. 

4. In the circumstances, it seems to me that given the nature of Miss Tse’s opposition to the bankruptcy petition, which is substantially the same as the basis on which she would have applied to set aside the statutory demand, there can be no prejudice to Miss Tse if the statutory demand proceedings are dismissed.  Moreover, having regard to the fact that the bankruptcy petition has already been issued, there would seem to be no purpose in the statutory demand proceedings continuing at this point. 

5. I therefore order that the application to set aside the statutory demand (HCSD 17 of 2005) be dismissed.  However, since the substantive argument in relation to that application is the same as that which will arise in the context of a bankruptcy petition, I will make an

order that as far as the costs of the statutory demand proceedings are concerned, those are to be reserved to the judge who deals with this bankruptcy petition, to be dealt with at the conclusion of these proceedings. 

6. I now turn to the bankruptcy petition itself.  Miss Tse has already filed an affirmation in support of her application to set aside the statutory demand and it seems to me that it would be open to her to either have that re-filed either as an affirmation in its own right, or to have it put before the court by exhibiting it to an affirmation to be made in these proceedings as her opposition to the bankruptcy proceedings.  As that evidence is already in place, it seems to me that Miss Tse should be well able to have that filed and served on the Petitioner within 14 days from today.  I therefore direct that Miss Tse file her evidence in opposition to the petition with 14 days from today. 

7. As far as the Petitioner is concerned, I shall direct, as requested by her counsel, Mr Hon, 韓偉漢大律師that she be allowed to file any evidence in response within 14 days thereafter. 

8. Having regard to the skeleton argument that was provided to me by Mr Hon, which contained various factual statements which will need to be supported by appropriate evidence, I anticipate that it will be necessary for Miss Tse thereafter to respond to the evidence which will be put forward by the Petitioner and I therefore propose to give her a further 14 days after receipt of the Petitioner’s evidence in response to file evidence in reply.

9. Thereafter, it would technically be open to the Petitioner to file one further affirmation or set of affirmations in reply in order to have the last word to which she is, as Petitioner, entitled.  However, Mr Hon has indicated that it is unlikely that the Petitioner would wish to avail herself of that opportunity and, in the circumstances, I do not propose to give any particular direction as to that.  However, if the Petitioner feels there is a need to file some further evidence in response, then it may apply to do so at the next hearing of the petition. 

10. With that in mind, I think it appropriate to adjourn the hearing of this petition for two months which will, hopefully, ensure that the Petitioner is in a position to provide any further evidence she wishes to rely on before the hearing. 

11. I shall therefore adjourn this petition to 12 December 2005 at 9:30 am before the bankruptcy judge that day. 

12. I should also note that much of the evidence in this matter is in the Chinese language and that Miss Tse, if acting in person, will be doing so in Chinese and therefore it seems to me that this is an appropriate matter for a direction to be given that it be heard before a bilingual judge of this court.  That may or may not be possible on 12  December 2005, but if it is not, then no doubt the matter will have to be set down for argument at that stage.  If, on 12 December, the judge hearing the bankruptcy list is a bilingual judge, then it will be for that judge to determine what course to take in relation to the proceedings on that day. 

13. I shall therefore give the directions which I have indicated above, and I shall direct that the costs of today be costs in the petition so that they will follow the outcome of these proceedings.