RE JAMES HENRY TING

HCB 7809/2012

[2021] HKCFI 1704

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

BANKRUPTCY PROCEEDINGS NO 7809 OF 2012

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J U D G M E N T

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Introduction

1.  There are before this court:

(1) the Bankrupt’s Summons dated 9 March 2020 for the annulment of the Bankruptcy Order made against him on 29 November 2016 (“Annulment Application”); and

(2) the joint and several trustees’ (“Trustees”) Summons dated 6 May 2020 for (a) an order that the time for the Trustees to apply for a non-commencement Order be extended, and (b) a non-commencement Order (“NCO”) pursuant to s 30AC Bankruptcy Ordinance, Cap 6 (“BO”) against the Bankrupt (“NCO Application”)

2.  No grounds for annulment are set out in the Bankrupt’s Summons save for the generic one that the Bankruptcy Order ought not to have been made.  Nor is there any evidence from the Bankrupt in support, for reasons to be explained in paragraph 4 below.  According to Mr Wong SC’s skeleton submissions at paragraph 17, the Annulment Application is said to be based on 2 grounds:

(1) The Petition presented on 23 November 2012 (“Petition”) was not properly served on the Bankrupt and such irregularity renders the Petition fatally defective (“Service Ground”).

(2) The Bankrupt was not domiciled in Hong Kong at the time the Petition was presented on 23 November 2012, such that the Hong Kong Court had no jurisdiction to make the Bankruptcy Order against him (“Domicile Ground”).

3.  The NCO Application, supported by the 8th affidavit of Mr Borrelli (“Borelli 8”), is made on the basis that the administration of the Bankrupt’s estate was prejudiced as the Bankrupt has failed to cooperate in the administration of his estate in all respects since the making of the Bankruptcy Order, including in particular the following:

(1) the Official Receiver required the Bankrupt to attend an initial interview and the Bankrupt failed to do so;

(2) the Trustees requested a meeting with the Bankrupt to obtain his assistance and also requested information concerning his affairs, dealings and property and the Bankrupt failed to respond; and

(3) the Bankrupt has not responded to any of the attempts to contact him for the entire period of his bankruptcy thus far.

4.  On 3 September 2020, this Court directed the Bankrupt to attend the substantive hearing of the 2 summonses for cross-examination, failing which his affirmation(s) shall not be adduced in evidence.  The Bankrupt has subsequently indicated in writing that he would not attend the hearing.  It follows that neither the Annulment Application nor the Bankrupt’s opposition to the NCO Application is supported by any evidence from the Bankrupt.

Annulment Application

5.  Section 33(1)(a) BO provides that the court may annul a bankruptcy order if it at any time appears to the court that on any grounds existing at the time the order was made, the order ought not to have been made. 

6.  The Court’s approach to an application under section 33(1)(a) has been laid down by the Court of Appeal in Kam Hung Cheung v Bank of China (Hong Kong) Limited [2009] 3 HKLRD 597 at [11] and can be reduced to the following propositions: 

(1) In considering whether to exercise the power under section 33(1)(a), the court should first look at whether there were any grounds on which a bankruptcy order ought not to have been made at the material time when it was made.

(2) If the court does not think that such grounds existed, it cannot invoke section 33(1)(a) to annul the bankruptcy order.  If the court thinks that such grounds existed, it still has to consider whether it should exercise its discretion to annul the bankruptcy order.

(3) In exercising the discretion under section 33(1), the court has to carefully consider the interests of the creditor, the debtor and the public, bearing in mind that a bankruptcy order is to be annulled only under exceptional circumstances.

(4) The person applying to annul a bankruptcy order bears the burden of proving that when the order was made there were grounds on which the order ought not to have been made. 

(5) Where a bankruptcy order was made in the absence of the debtor, then the debtor must provide reasonable and credible explanations for his absence.

7.  First, the burden of proof that there were grounds on which the Bankruptcy Order ought not to have been made is on the Bankrupt.  Given that there is no evidence from him in support of either the Service Ground or the Domicile Ground, Mr Dobby submits and this court agrees that, for this reason alone, the Annulment Application must fail. 

8.  Second, the Bankruptcy Order in this case was made at the trial of the Petition on 29 November 2016 from which the Bankrupt chose to be absent.  As laid down in Kam Hung Cheung, the Bankrupt must provide reasonable and credible explanations for his absence.  In the present case, the Bankrupt has failed to provide any explanation at all.  Hence, this court cannot be satisfied that there was a reasonable and credible explanation as to why the Bankrupt did not turn up at the trial to oppose the Petition.

9.  Third, as far as the Service Ground is concerned, this court is satisfied that the Bankrupt’s solicitors at the time, Robertsons, had conceded in open Court (a) the fact of service on Robertsons of a sealed copy of the Petition, (b) Robertsons could concede on service of the Petition and (c) no issue on service would be taken.  The Bankrupt, via Robertsons, had also conducted the present proceedings up to the grant of the Bankruptcy Order (and in fact until the Annulment Application) on the basis that service of the Petition had been effected.  The detailed evidence is set out in the 7th affidavit of Mr Borrelli (“Borelli 7”) and can be summarised as follows.

10.  On 23 November 2012, Akai presented the Petition.

11.  On 2 January 2013, the Petitioner’s solicitors (“Hogan Lovells”) filed an application for substituted service of the Petition by leaving the same addressed to the Bankrupt c/o Robertsons at the latter’s office - Robertsons was at the time acting for the Bankrupt as the 4th Defendant in HCCL 42 of 2005[1].

12.  On 15 February 2013, Robertsons wrote to the Official Receiver cc Hogan Lovells.  In that letter, Robertsons acknowledged receipt of a fax copy of the Petition from the Official Receiver, alleged that the Petition had not been served at their office and concluded with the following:

“We have today received instructions to act for JAMES HENRY TING in respect of [HCB7809/2012] and enclose Form 17, Notice by Debtor of Intention to Oppose Petition. As you will see, our client does not submit to the jurisdiction of Hong Kong and believes that the Court of First Instance does not have jurisdiction to make the Bankruptcy Order.”

13.  Also on 15 February 2013, Robertsons filed a Notice by Debtor of Intention to Oppose Petition (“Notice”) on behalf of the Bankrupt.  The relevant part of the Notice reads:

“We, the solicitors of the above James Henry Ting, do hereby give you notice that James Henry Ting intends to show cause against the Petition on the ground that James Henry Ting does not submit to the jurisdiction of Hong Kong as he is neither domiciled nor resident in the jurisdiction and has had no business or assets in Hong Kong in the 3 years immediately preceding the presentation of the Petition.”

14.  Under cover of their letter dated 19 February 2013, Hogan Lovells served a sealed copy of the Petition on Robertsons and proposed certain directions for inter alia the filing of affirmations.

15.  The first hearing of the Petition took place on 20 February 2013 before Master A Ho.  According to the transcript of the hearing, Ms Samantha Gershon (“Ms Gershon”) of Robertsons at first did not accept that the Petition had been served.  However, upon enquiry from Master A Ho, Ms Gershon confirmed that Robertsons:

(1) had instructions to act for the Bankrupt in the current bankruptcy proceedings;

(2) had received a sealed copy of the Petition around lunchtime on 19 February 2013 from Hogan Lovells; and

(3) “can concede on service”.

16.  In light of the response from Ms Gershon, the Master put on record that the Bankrupt “will not take issue on the service of the sealed copy petition but will dispute jurisdiction.” The Master further adjourned the Petition to 25 February 2013 before this court who gave directions for the filing of evidence and set down the Petition for substantive hearing. 

17.  In the context of the exchange between Ms Gershon and Master A Ho as a whole, this court is of the view that what had been conceded by Robertsons was not simply a legal point, as suggested by Mr Wong SC in his 3rd skeleton submissions.  Rather, the concession was on (a) matters of fact ie Robertsons had instructions to act for the Bankrupt and had accepted service of the Petition on his behalf, and (b) points of law ie service of the Petition had been validly effected and that no issue would be taken in relation to its validity.

18.  Further, it is reasonably clear to this court that it was only by reason of the aforesaid concession that the learned Master considered it unnecessary to make any Order in relation to the Petitioner’s application for substituted service.  But for the concession, the overwhelming probabilities were that Hogan Lovells would have continued with the substituted service application and the learned Master would have granted it - the basis of the Petitioner’s application being that the Bankrupt’s whereabouts were unknown: see rr 31[2] and 59(2)[3] Bankruptcy Rules, Cap 6A (“BR”).

19.  In this regard, the Court of Appeal’s decision in Deng Minghui v Chau Shuk Ling [2007] 1 HKLRD 905 is clearly distinguishable from the present case and does not assist the Bankrupt at all.  In Deng Minghui, the concession was on a point of law which was wrongly made, owing to “a misapprehension of the law” by counsel.  Further, the Court held on the facts of that case that there was no question that the withdrawal of the concession would prejudice the plaintiff.  The present case is different.  First, as pointed out above, the concession in this case is not simply on a point of law which was wrongly made.  Indeed, there is no explanation in Mr Wong SC’s 3rd skeleton submissions as to how the concession, as characterised by this court, was wrongly made.  Second, there was clear prejudice to the Petitioner since it was by reason of the concession that Hogan Lovells did not continue with the substituted service application.

20.  It is therefore far too late now even if the Bankrupt were to seek to withdraw the concession made by Robertsons back in February 2013.  In fact, if one considers Mr Wong SC’s 3rd skeleton submissions carefully, there is no suggestion that the Bankrupt is seeking to withdraw the concession now.  Rather, Mr Wong SC’s submission is simply that this court is not bound by Robertsons’ allegedly erroneous concession.

21.  To continue with the chronology, after the hearing before this court on 25 February 2013, the Bankrupt had actively opposed the Petition without ever disputing the validity of service. 

22.  The Bankrupt had unsuccessfully opposed Akai’s application by summons dated 7 May 2013 that he attended the hearing of the Petition for cross-examination, failing which no affirmation filed by him be used at the hearing.  An Order to that effect was made by this court on 27 May 2013 (“Cross-Examination Order”)[4]. 

23.  By summons dated 9 August 2013, the Bankrupt applied for leave to testify by means of video conferencing facilities at the hearing of the Petition.  The application was heard and dismissed by this court on 20 August 2013 (“VCF Order”)[5]. 

24.  On 26 August 2013, the day before the substantive hearing of the Petition scheduled for 27 and 28 August 2013, the Bankrupt applied to the Court of Appeal for leave to appeal against this court’s VCF Order. Leave was eventually refused by the Court of Appeal in March 2014.

25.  On 27 August 2013, the first day of the hearing of the Petition, counsel for the Bankrupt applied for an adjournment pending the Bankrupt’s leave application to the Court of Appeal.  It was in these circumstances that this court adjourned the hearing of the Petition to another date to be fixed, which turned out to be 29 November 2016 (“Resumed Hearing”). 

26.  Meanwhile, on 3 March 2016, Robertsons obtained an order to cease to act for the Bankrupt.  At the Resumed Hearing on 29 November 2016, the Bankrupt was not represented and did not appear.

27.  On the question of service, Mr Dobby relies on Re Li Shu Chung [2019] HKCFI 2500 which was a case in which the debtor opposed the bankruptcy petition on the ground inter alia that the petition had not been properly served on him.  Similar to the present case, the petitioner in Re Li Shu Chung had filed an application for substituted service of the petition.  Before an order for substituted service was granted by the Court, solicitors for the debtor filed a notice to act stating it was “without prejudice to the contention of [the debtor] as to jurisdiction and irregularity for (sic) service”.  The petitioner’s solicitors then served the petition on the debtor’s solicitors the next day. 

28.  On these facts, Au-Yeung J rejected the irregular service defence to the petition, describing the debtor’s challenge as to service of the petition as “disingenuous” and the service defence “utterly hopeless and a complete waste of the court and the petitioners’ time”: Re Li Shu Chung at [97]-[98]. 

29.  This court cannot agree with Au-Yeung J more.  Indeed, the Petitioner’s position is even stronger than that in Re Li Shu Chung: here, not only had Robertsons failed to expressly reserve the challenge to service of the Petition, they actually conceded service before Master A Ho. 

30.  The authorities cited by Mr Wong SC regarding the need to strictly adhere to the requirements of service of a statutory demand are also clearly distinguishable. 

31.  As DHCJ Poon (as he then was) explained in Re Lam Lai Wah Susanna [2002] 4 HKC 334 at [21], the requirements as to service of the statutory demand must be strictly adhered to because of the importance of establishing with certainty the period within which a debtor had to comply with the statutory demand, the non-compliance of which would give rise to consequences which would go far beyond those that would follow from any ordinary action.  This rationale has no application to the service of a petition.  In fact, DHCJ Poon never said in that case the same rationale for strictness must apply with regard to service of a petition.

32.  Lastly, r 203 of the BR provides:

“203. Non-compliance with rules

Non-compliance with any of these rules, or with any rule of practice for the time being in force, shall not render any proceeding void unless the court so directs, but such proceeding may be set aside, either wholly or in part, as irregular, or amended or otherwise dealt with in such manner and upon such terms as the court may think fit.”

33.  Mr Dobby submits that, to the extent as may be necessary, in the particular circumstances of this case, this court plainly has jurisdiction to and should exercise its discretion under r 203 so that the Petitioner’s failure to obtain a formal Order for substituted service shall not render the present proceedings void.  This court agrees. 

34.  In light of the facts recited from paragraph 9 above onwards, this court has no doubt that it is right and proper to exercise its discretion under r 203 in favour of the Petitioner.  As this court notes earlier, it was by reason of Robertsons’ concession that Master A Ho considered it unnecessary to make an Order granting the Petitioner’s application for substituted service of the Petition and that, but for the concession, the probabilities are that the learned Master would have granted it. 

35.  The case of Re Cheung Hoi Chu unrep, HCB 865-868 of 1998, 24 December 1998, Le Pichon J, cited by Mr Wong SC, does not assist the Bankrupt at all.  As the learned Judge pointed out at [13] of the Judgment, the petitioner’s case that the Court should waive irregularity of service of the statutory demand under r 203 came to this – so long as the statutory demand did come to the notice of the debtors (and it mattered not how this came about), that was sufficient.  The reason adopted by the learned Judge in rejecting this argument was the same used by DHCJ Poon in Re Lam Lai Wah Susanna viz the importance of establishing with certainty the period within which a debtor had to comply with the statutory demand, the non-compliance of which would give rise to consequences which would go far beyond those that would follow from any ordinary action.  That reasoning has no application to the present case. 

36.  In any event, this court does not invoke r 203 simply because that the Petition had come to the Bankrupt’s notice.  It does so for the reasons set out in paragraph 34 above.

37.  For the above reasons, the Service Ground must be rejected.

38.  The Domicile Ground is just as unmeritorious. 

39.  As a result of the Cross-Examination Order and the VCF Order, and in view of the Bankrupt’s absence at the Resumed Hearing on 29 November 2016, there was no challenge to the Petitioner’s evidence that he was domiciled in Hong Kong at the time of the presentation of the Petition. Nor was there any evidence (from the Bankrupt or someone else) in support of the Bankrupt’s case that his domicile was not in Hong Kong but somewhere else. 

40.  At the Resumed Hearing, this Court received extensive evidence and submissions from the Petitioner concerning the Bankrupt’s domicile when the Petition was presented.  The evidence and submissions are too lengthy to be recited here but can be gleaned from the Skeleton Argument and Opening Submissions of Mr Manzoni SC on behalf of the Petitioner as well as the transcript of the Resumed Hearing. 

41.  After considering the Petitioner’s evidence and submissions and hearing Mr Manzoni SC, this court accepted Akai’s case that the Bankrupt has been domiciled in Hong Kong since 1957, when his parents moved here permanently with him, all the way up to the presentation of the Petition.  This court was not satisfied that the Bankrupt had, at some point in time prior to the presentation of the Petition, changed his domicile, for the obvious reason that there was no evidence to that effect.  On that basis, this court was satisfied that it had jurisdiction to and did grant the Bankruptcy Order.

42.  The evidential position has not changed since.

43.  As such, as Mr Dobby submits, for the purpose of the Annulment Application, there is no evidence by which the Bankrupt is able to (i) support Mr Wong SC’s contention that the Petitioner had failed to prove he was domiciled in Hong Kong at the relevant time, (ii) dispute this court’s finding that he was domiciled in Hong Kong at the time the Petition was presented or (iii) show he was at the material time domiciled in Mainland China, as asserted by Mr Wong SC at paragraphs 55 - 56 of his submissions.  Given the burden of proof is on the Bankrupt, and given that he has completely failed to discharge his evidential burden, the Domicile Ground is also rejected. 

44.  To conclude, the Annulment Application must be dismissed and this court shall so order. 

NCO Application

45.  Section 30AB BO provides:

“(1) The trustee may apply to the court for a non-commencement order against a bankrupt if—

(a) the trustee has required the bankrupt to—

(i) attend an initial interview on a day appointed by the trustee for the administration of the bankrupt’s estate; and

(ii) provide the trustee at the initial interview with information concerning the bankrupt’s affairs, dealings and property;

(b) the bankrupt—

(i) has failed to attend the initial interview; or …

(c) the administration of the bankrupt’s estate was prejudiced by the matter referred to in paragraph (b)(i) ...

(2) The trustee may apply for a non-commencement order within—

(a) a period of 6 months after the date of the bankruptcy order against the bankrupt; or

(b) a longer period specified by the court under subsection (3).

(3) The court may, on the trustee’s application (extension application), specify a longer period for the trustee to apply for a non-commencement order.

(4) An extension application must be made within—

(a) the period referred to in subsection (2)(a); or

(b) (if the court has specified a longer period under subsection (3)) that longer period.

(5) This section only applies to a bankrupt against whom a bankruptcy order is made on or after 1 November 2016.

(6)       To avoid doubt, a bankrupt has failed to attend an initial interview under subsection (1)(b)(i) if the bankrupt is not physically present before the trustee at the initial interview.”

46.  Section 30AC(1) BO further provides:

“(1) On an application made by the trustee under section 30AB(1), the court may approve the application and make a non-commencement order against the bankrupt if it—

(a) is satisfied by the trustee as to the matters mentioned in section 30AB(1)(a), (b) and (c); and

(b) is not satisfied by the bankrupt that there is sufficient cause for the order not to be made.”

47.  Lastly, section 100(4) BO provides:

“Where by this Ordinance or by general rules the time for doing any act or thing is limited, the court may extend the time either before or after the expiration thereof upon such terms, if any, as the court may think fit to impose.”

48.  The detailed evidence in support of the NCO Application can be found in Borelli 8, supplemented by the 9th and 10th affidavits of Mr Borrelli (“Borelli 9” and “Borelli 10” respectively).  It is important to repeat at the outset that there is no evidence from the Bankrupt to dispute the evidence filed by the Trustees.

49.  For the present purpose, suffice it for this court to set out some of the more salient evidence, which, in this court’s view, amply justifies the grant of an extension of time to enable the Trustees to make the NCO Application and the grant of NCO against the Bankrupt. 

The Bankrupt’s association with the now collapsed Akai

50.  Akai was listed on the Hong Kong Stock Exchange. As at 31 January 1999, the value attributed to the total assets of Akai was approximately US$2.325 billion.  Akai was wound up on 23 August 2000 in Hong Kong and in Bermuda on 29 September 2000.  The collapse of Akai remains one of the largest and most notorious corporate failures in Hong Kong.  The Bankrupt was its Chairman and CEO.  At the time of the appointment of the Liquidators, Akai was estimated to have a net asset deficiency in excess of US$1 billion.

51.  As Chairman and CEO of Akai, the Bankrupt had a high level of control over Akai and the Akai group.  In HCCL 42 of 2005, Akai claimed against the Bankrupt for having fraudulently misappropriated hundreds of millions of US dollar and diverted to companies under his control during his time as Chairman and CEO.  Bharwaney J found the Bankrupt to have acted dishonestly, having engaged in concealed misappropriations, undisclosed self-dealings and transactions for fraudulent and improper purposes: Akai Holdings Ltd v Everwin Dynasty Ltd unrep, HCCL 42/2005, 16 December 2015 at [529]. The learned Judge entered judgment in Akai’s favour against the Bankrupt in the sum of US$1,209,731,677.00 together with interest and costs on an indemnity basis.  On 3 March 2016, Akai obtained an injunction restraining the Bankrupt from disposing of his assets up to the value of the judgment sum, as well as an order for disclosure of his assets.  The Bankrupt has not made disclosure to date or settled the judgment sum.

Events after the Bankruptcy Order

52.  On 29 November 2016, the Bankrupt was adjudged bankrupt and the Official Receiver was appointed as provisional trustee of his estate.

53.  On 30 November 2016, the Official Receiver sent an email to the Bankrupt requiring him to attend an initial interview at the ORO on 14 December 2016 at 10:30am (“Initial Interview”).  The email also set out the consequences of failure to attend the Initial Interview.  The Bankrupt nevertheless failed to attend the Initial Interview.

54.  By email on 6 December 2016, the Official Receiver served the Bankruptcy Order on the Bankrupt.  On the same day, a sealed copy of the Bankruptcy Order was also served on the Bankrupt c/o his former solicitors Robertsons.  The notice of Bankruptcy Order was gazetted by the Official Receiver and recorded in the public register maintained by the Official Receiver.

55.  On 1 March 2017, Ms Jacqueline Walsh and Mr Borrelli were appointed as Trustees of the Bankrupt’s estate. 

56.  The Trustees consider it inconceivable that the Bankrupt was not aware of the Bankruptcy Order given his active opposition to the bankruptcy proceedings from the outset and that his failure to attend the Resumed Hearing was deliberate as he had chosen not to instruct lawyers to represent him after March 2016. 

57.  Since their appointment, the Trustees have taken extensive steps to identify or locate his assets.  The Trustees were and are unaware of the whereabouts of the Bankrupt.  Other than one email address, the Bankrupt had not provided Akai, the Official Receiver, the Trustees or the Court any means to contact him.  The Trustees were and are unaware of the extent or location(s) of the Bankrupt’s assets.  However, they believe that there is a reasonable likelihood that portions of his assets are held or controlled by the Bankrupt in Canada, Switzerland and the People’s Republic of China.

58.  Since their appointment, the Trustees have inter alia reviewed the books of Akai and sent letters to various banks and law firms in Hong Kong or overseas with a view to locating the current whereabouts of him and his assets.  They had also engaged private investigators to locate the Bankrupt and his family members.

59.  In particular, on or about 7 March 2017, the Trustees sent a letter to the Bankrupt by email requesting the production of documents and disclosure of information in relation to his estate and property, and to request a meeting with him to obtain his assistance in relation to his affairs, dealings and property.  The Bankrupt has failed to respond.

60.  The Trustees, though, were and are aware that the Bankrupt is a Canadian citizen and his son, Andrew Ting, currently resides in Canada. 

61.  Hence, on 6 October 2017, the Trustees obtained an order in the Ontario Court recognising the Bankrupt’s bankruptcy proceeding in Hong Kong as a “foreign main proceeding” and each of the Trustees as a “foreign representative” pursuant to sections 268 and 269 of the Bankruptcy and Insolvency Act (“Recognition Order”).  Since the Bankrupt has failed to deliver his property as required under the BO, to ensure proper administration of his bankruptcy and to maintain the Trustee’s efforts to realise his property, the Trustees obtained from the Ontario Court a supplemental order on the same day for inter alia a broad stay of proceedings and which prohibited the sale or other disposition of property held or controlled by the Bankrupt in Canada (“Supplemental Order”).

62.  On 17 and 24 October 2017, notification of the Recognition Order and the Supplemental Order was advertised in the Canadian Financial Post which was widely distributed throughout Canada.  Since the placement of the advertisements, neither the Trustees nor their Canadian lawyers have received any response from the Bankrupt. 

63.  On 18 December 2019, Messrs Wilkinson & Grist became the Bankrupt’s solicitors on record in these proceedings.

64.  On 25 May 2020, Hogan Lovells wrote to Messrs Wilkinson & Grist requesting inter alia the Bankrupt to submit his Statement of Affairs and to attend a meeting with the Trustees and asking for his up-to-date contact details.  No response was received from Messrs Wilkinson & Grist by the deadline set in the letter.

65.  On 8 June 2020, Hogan Lovells sent a further letter to Messrs Wilkinson & Grist repeating the Trustees’ aforesaid request.  On 11 June 2020, Messrs Wilkinson & Grist responded to Hogan Lovells’ letter of 8 June 2020 stating they had “received no instructions from our client in relation to the alleged failure to submit the Statement of Affairs and the Trustees’ request for a meeting with him”.

66.  Lastly, on 10 September 2020, Hogan Lovells sent a further letter to Messrs Wilkinson & Grist requiring the Bankrupt to attend an interview with the Trustees on 30 September 2020 and to provide the information, books and records concerning his affairs, dealings and property.  The Bankrupt failed to attend the interview on 30 September 2020 or to furnish the information requested by the Trustees.

67.  To conclude, the evidence before this court clearly demonstrates that since the Bankruptcy Order, the Bankrupt has been wholly uncooperative and has failed to engage with the Trustees at all in the administration of his estate.  Nor has the Bankrupt made any disclosure of his assets or made any contribution to his estate.

68.  On the basis of the above uncontradicted evidence, this court is satisfied as to the matters stated in s 30AB(1)(a), (b)(i) and (c) of BO ie the Trustees have required the Bankrupt to attend an interview for the administration of his estate which the Bankrupt has failed to do and that the administration of the Bankrupt’s estate was prejudiced by reason thereof.  Further, for the purpose of s 30AC(1)(b) of BO, this court is not satisfied by the Bankrupt that there is sufficient cause for the NCO not to be made as there is no evidence to explain, let alone justify, his failure to do so. 

69.  The only ground put forward by Mr Wong SC in opposition to the NCO Application is that it is made out of time and that no extension of time should be granted[6]. 

70.  In this court’s view, the NCO Application is made out of time only if s 30AB(2)(a) alone is considered ie the application be made within 6 months after the date of the bankruptcy order.  The NCO Application is not made out of time if the Court specifies a “longer period” under s 30AB(3) and the NCO Application is made within that “longer period”: s 30AB(2)(b).

71.  Mr Dobby submits and this court agrees that s 30AB(3) of BO confers on the Court an unfettered discretion to extend time for making the NCO Application by specifying a “longer period”.  Once a “longer period” is specified under s 30AB(3), then by operation of s 30AB(4), the extension application can (and must) be made within that “longer period”.  Hence, strictly speaking, the Trustees may not even have to rely on s 100(4) BO in making the NCO Application on 6 May 2020.

72.  Nevertheless, it seems to this court clearly proper for the Trustees to fall back on s 100(4) BO in making the extension application outside the initial 6-month time limit prescribed by s 30AB(2)(a) since s 100(4) allows the Court to extend time “after” the expiration thereof.

73.  In this court’s view, s 100(4) BO is a “cover all” provision dealing with time extensions generally: Re Shum Tung Lam [2020] 4 HKLRD 749 at [62][7].  In Re Li Sau Ying unrep, HCMP 2384 of 2007, 11 December 2007, for instance, Yuen JA was satisfied that the section could be invoked to extend the time for appealing against a bankruptcy order.  Similarly, in re Cai Sui Xin [2019] 5 HKLRD 256, where the trustees initially applied for a NCO (incorrectly) on an ex parte basis but subsequently re-applied by summons (correctly) outside the 6-month period as prescribed by s 30AB(2)(a), G Lam J (as he then was) was prepared to grant the order sought by the trustees.  Although the actual decision was that the incorrect manner in which the application was first made was a mere irregularity which could be waived under s 124(1) of BO and r 203, it seems to this court the same decision could equally have been arrived at by invoking s 100(4) of BO to extend the time for the trustees to make the application by summons outside the initial 6-month period.

74.  Mr Wong SC’s submission that s 100(4) of BO only allows the court to extend time to oppose the automatic discharge of a bankrupt under s 30A(6) but not an NCO application is artificial and unconvincing.  This is because the term of s 100(4) is unambiguous - where the time for doing any act is limited, the court has a discretion to extend time.  There is no restriction as to what sort of application is covered by s 100(4) and what is not.

75.  As for the exercise of the Court’s discretion to extend time or to specify a “longer period”, this court has taken into account (i) the Bankrupt’s totally uncooperative conduct since the grant of the Bankruptcy Order, (ii) that he has gone to great length over the years to conceal his whereabouts and his assets and to obfuscate the Trustees’ investigations, (iii) the almost inevitable inference that the Bankrupt’s intent was to sit out the 4-year bankruptcy period after which he would be automatically discharged from his bankruptcy, (iv) the massive amount of his indebtedness to Akai and (v) the obvious importance that the Trustees be allowed to continue with their efforts in locating his assets for distribution to his creditor(s). 

76.  In this court’s view, it would make a complete mockery of our bankruptcy regime if the NCO Application is defeated simply because it is made outside the initial 6-month period when all the “substantive” requirements set out in s 30AB(1)(a), (b)(i) and (c) of BO are met.

77.  To conclude, the time for the Trustees to apply for a NCO should be extended and the NCO Application must be allowed and this court shall so order. 

Disposition and costs order nisi

78.  The Bankrupt’s Summons dated 9 March 2020 is hereby dismissed. 

79.  Paragraph 2 of the Trustees’ Summons dated 6 May 2020 is hereby allowed and that there shall be an Order in terms of the draft provided by the Trustees under cover of Hogan Lovells’ letter dated 14 January 2021 save and except that (a) paragraph 3(iii)(4) be deleted; (b) the words “or with his encouragement” in paragraph 4(i) and (ii) be deleted; and (c) paragraph 5 be deleted.

80.  There shall also be an Order nisi that (a) costs of and occasioned by the Bankrupt’s Summons, including all costs reserved if any, be to the Petitioner and the Trustees, and (b) costs of and occasioned by paragraph 2 of the Trustees’ Summons, including all costs reserved if any, be to the Trustees, to be taxed if not agreed, and paid out of the estate of the Bankrupt.

81.  Liberty to apply.