RE VINCENT KAY LO IP

HCB1209/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

IN BANKRUPTCY PROCEEDINGS NO.1209 OF 2000

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D E C I S I O N

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1. This is the Bankrupt’s application to reverse the act or decision of the Official Receiver (“    OR”), as his trustee in bankruptcy, of sending to him two letters dated 18 April and 5 May 2008 (“the Letters”).

2. The background can be summarized as follows.

3. On 14 August 2000, the Bankrupt was adjudicated bankrupt upon the petitioner’s petition dated 21 March 2000 based on a judgment debt of HK$1,500,000 that he obtained in HCA699/1992.  All properties held by the Bankrupt at the commencement of the bankruptcy had since become vested in the OR as his trustee in bankruptcy.

4. According to the statement of affairs dated 10 October 2000, the Bankrupt apparently has interests in two Canadian properties situated in Vancouver and Toronto respectively (“the Vancouver Property” and “the Toronto Property”).

5. The land search of the Vancouver Property reveals that at the time of the bankruptcy order, the Bankrupt was the registered owner of an undivided one-third interest therein.  The other registered owners are his wife and mother.

6. The land search of the Toronto Property shows that the Bankrupt was at the time of the bankruptcy order the joint owner and has remained so to date.  The other owner is his wife.

7. The OR took the view that it would be too costly and inconvenient to instruct Canadian lawyers to take action in respect of the Bankrupt’s interest in the two Canadian properties.  The OR therefore sent the letter dated 18 April 2008 asking the Bankrupt to confirm if he would execute the relevant documents for transferring his shares in the Canadian properties to the OR as his trustee in bankruptcy.  The Bankrupt did not make any reply.  So the OR sent another letter dated 5 May 2008 asking him to reply within the next 10 days.

8. The Bankrupt then took out the present application.

9. Each of the Bankrupt, his wife and his mother has filed an affidavit to support his application.  The gist of their evidence is this.

10. The OR had commenced unilateral actions against the interests of the other owners of the Canadian properties.  The Bankrupt had obtained a loan of CAD$77,000 on 9 June 2000 through a mortgage by the three co-owners of the Vancouver Property.  The loan proceeds were credited to his account to pay for his legal costs for his appeal against the judgment in HCA699/1992.  Thus his one-third share in the Vancouver Property ceased to have any net monetary value to him.  The Bankrupt’s daughters had for many years been responsible for the upkeep and other expenditures related to the Canadian properties.  He seemed to have suggested that his daughters somehow have gained interest in the properties.  The Bankrupt’s wife said that she had used the funds of some US$15,000 from her life insurance policy to repay part of the mortgage loan on the Toronto Property.

11. In his written submissions, the Bankrupt raised two further points.  The Letters were not documents that could take the place of proper documentation for transferring his interest in the Canadian properties.  The OR should not be entitled to argue that he had not been positively responsive to the Letters in order to extend the duration of his bankruptcy.

12. In my view, none of the points raised by the Bankrupt is meritorious.

13. At the outset, it must be pointed out that the OR was perfectly entitled to send the Letters to the Bankrupt to ascertain if he would execute documents to transfer his interest in the Canadian properties.  Contrary to what the Bankrupt has argued, the OR did not seek to replace proper documentation by the Letters.

14. Further, the enquiry made by the OR only related to the Bankrupt’s interest and had nothing to do with the interest, if any, of other parties in the Canadian properties.  The allegation that the OR was taking unilateral actions against them is simply wrong.

15. The allegation that the Bankrupt did not have any beneficial interest in the Vancouver Property or the Toronto Property and the same are vested in some of his family members is irrelevant.  Such allegation cannot possibly render the Letters objectionable.

16. Finally, there is no evidence to show that the OR will try to use the Letters to complain later that the Bankrupt has not been responding positively as alleged.

17. In the letter to the Bankrupt dated 13 June 2008, the OR indicated that he would instruct Canadian lawyers to prepare the documents for executing the transfer of the Bankrupt’s title in the Canadian properties.  In his oral submissions, the Bankrupt said that whether or not he would be aggrieved by the Letters would depend on the contents of those documents.  I disagree.  Those documents should be dealt with separately if and when necessary.

18. For the above reasons, the Bankrupt has failed to show that the OR had acted unreasonably or wrongly in sending the Letters.  His application must be dismissed.

[Submissions on costs]

19. Costs are to follow the event.  The Bankrupt shall pay the OR costs of this application, assessed at HK$14,875, forthwith.