MA WAI WAH EDWARD v. STANDARD CHARTERED BANK (HONG KONG) LTD

HCSD 4/2025 and HCMP 253/2025
(Heard Together)

[2026] HKCFI 3934

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

APPLICATION TO SET ASIDE STATUTORY DEMAND

NO 4 OF 2025

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IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS

NO 253 OF 2025

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J U D G M E N T

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A.  Overview

1.  Standard Chartered Bank (Hong Kong) Ltd (“SCB”) is a well-known bank.

2.  Asia Petrochemical Supplies (Holdings) Ltd (“APS”) is a company that has been carrying on a business of importing and distributing petrochemical products.

3.  Mr Ma Wai Wah Edward (“Mr Edward Ma”) is the sole director and shareholder of APS.

4.  It is not in dispute that: -

(1)  SCB and APS had entered into a facility letter dated 17 April 2023 (the “2023 Facility Letter”), which was amended pursuant to a supplemental facility letter dated 11 September 2023 (the “2023 Supplemental Facility Letter”).

(2)  Mr Edward Ma had executed a continuing guarantee dated 12 September 2013 (the “Guarantee”), which was amended pursuant to an amendment agreement dated 13 September 2023 (the “Guarantee Amendment Agreement”), in favour of SCB.

5.  On 9 January 2025: -

(1)  SCB served a statutory demand on APS (the “APS SD”), claiming a sum of US$1,389,624.25 pursuant to the 2023 Facility Letter and the 2023 Supplemental Facility Letter; and

(2)  SCB served a further statutory demand on Mr Edward Ma (the “Edward Ma SD”), claiming a sum of US$1,392,637.07 pursuant to the Guarantee and the Guarantee Amendment Agreement.

6.  There are 2 applications before the court: -

(1)  By application dated 11 February 2025 in HCSD 4/2025, Mr Edward Ma applied to set aside the Edward Ma SD.

(2)  By originating summons dated 14 February 2025 in HCMP 253/2025, APS applied to restrain SCB from presenting a winding-up petition based on the APS SD.

7.  Pursuant to the directions given by DHCJ Gary CC Lam on 17 April 2025, the two applications under HCSD 4/2025 and HCMP 253/2025 were heard together before this court.

B.  Material Background

B1.  Previous Dealings

8.  APS was established as early as 1989.

9.  From 2007 onwards, APS has had a banking relationship with SCB. It is not in dispute that SCB had provided various banking facilities to APS.

B2.  The PBF Transaction and the Settlement Agreement

10.  Throughout the years, APS entered into a number of foreign exchange forward contracts with SCB. According to SCB, APS made profits on these transactions, except for the last one.

11.  ASP entered into a pivot bonus forward transaction dated 13 February 2015 for Renminbi dollars and US dollars (the “PBF Transaction”). ASP suffered a loss as a result of the PBF Transaction.

12.  As evidenced by the contemporaneous records, APS and/or Mr Edward Ma threatened to seek legal redress and to lodge a complaint to the Hong Kong Monetary Authority. In the circumstances, SCB was willing to negotiate a settlement with APS and/or Mr Edward Ma.

13.  The parties’ negotiation culminated in a settlement agreement (the “Settlement Agreement”). The Settlement Agreement was contained in and evidenced by a letter dated 18 January 2016[1], which was signed by a representative of SCB and Mr Edward Ma for and on behalf of APS. In short, the parties agreed that, in full and final settlement of all claims against SCB in relation to the PBF Transaction: -

(1)  SCB agreed to (i) reduce the termination amount of the PBF Transaction by US$1 million, (ii) provide a term loan to APS, and (iii) increase APS’s existing trade facility from US$6 million to US$8 million; and

(2)  Meanwhile, APS agreed to (i) terminate the PBF Transaction on 18 January 2016, (ii) make full repayment of the sums due under the PBF Transaction (less US$1 million), and (iii) enter into the term loan with SCB and permit SCB to use the loan proceeds to settle the obligations under the PBF Transaction.

14.  After the parties entered into the Settlement Agreement, APS re-negotiated the term loan facility granted by SCB on a number of occasions between 2018 and 2023. Meanwhile, APS kept making repayments.

15.  As evidenced by a letter dated 25 August 2023 issued by SCB, APS made a lump payment of US$980,000 in full and final settlement of the term loan facility, and the remaining outstanding principal and interest of the term loan facility had been waived.

B3.  The Indebtedness under the SDs

16.  In the premises, the indebtedness under the APS SD and the Edward Ma SD (collectively the “SDs”) did not arise from the PBF Transaction and/or the Settlement Agreement.

17.  Instead, the said indebtedness is concerned with the trade finance facility granted by SCB pursuant to the 2023 Facility Letter and the 2023 Supplemental Facility Letter.

18.  As admitted in an email dated 9 July 2024 that Mr Edward Ma issued on behalf of APS[2], there had been overdue payments, and this was ascribed to APS’s bad business and continuous loss since 2022.

19.  Despite SCB’s demand letter dated 16 September 2024[3], APS and Mr Edward Ma had failed to repay the indebtedness under the 2023 Facility Letter/ 2023 Supplemental Facility Letter and the Guarantee/Amendment Guarantee Agreement.

20.  Accordingly, SCB issued and served the SDs on 9 January 2025.

C.  The Complaints of APS and Mr Edward Ma

21.  The complaints of APS and Mr Edward Ma can be summarized as follows: -

(1)  SBC mis-sold financial products to APS under the PBF Transaction. As a result, APS had suffered a great loss. When Mr Edward Ma executed the Guarantee back in September 2013, he did not know APS would be exposed to substantial liability under the PBF Transaction.

(2)  Further, Mr Edward Ma was given to understand that the execution of the Guarantee was purely procedural, and his attention was not drawn to the terms thereof.

(3)  The SDs do not contain breakdown, and there is a discrepancy in respect of the amount of sum claimed under the APS SD (ie US$1,389,624.25) and the amount of sum claimed under the Edward Ma SD (ie US$1,392,637.07).

D.  Legal Principles

D1.  Setting Aside Statutory Demand under the Bankruptcy Regime

22.  The applicant bears the burden of satisfying the court that there is a valid reason that the demand ought to be set aside: DCKD v JPWL [2022] HKCFI 1059 at para 22 (per Linda Chan J).

23.  When considering an application to set aside, the court only undertakes a limited exercise and will only be concerned with whether the creditor is able to pursue bankruptcy proceedings founded on the statutory demand: see Budge v AF Budge (Contractors) Ltd [1997] BPIR 366, 372A-D, per Peter Gibson LJ).

24.  As Kwan J (as she then was) explained in Re Choy Wai Bor (HCB 8565/2001, 28 May 2002)  at para 22:

“[T]he mechanism to set aside a statutory demand is intended to be a filtering process to protect the debtor against a petition being presented based on a statutory demand that is demonstrably unjustified.”

25.  In DCKD v JPWL (supra) at para 24, Linda Chan J stated: -

“For the purpose of demonstrating that the debt is disputed on substantial grounds within rule 48(5)(b), the Applicants must establish by sufficiently precise factual evidence which is believable that they have a defence of substance, not just a fair probability of one (Chan Ping Lam Waymond v Noble Art Ltd, CACV 270/2012, 30 September 2013, §8, per Fok JA (as he then was)). The Court will consider the case being put forward with a reasonably critical eye, testing the case against the other background facts and circumstances (Lai Kar Yee v The Prudential Assurance Company Limited, CACV 233/2014, 9 June 2017, §12, per Barma JA).”

D2.  Restraining Presentation of Winding-Up Petition

26.  It is not in dispute that the court may grant a quia timet injunction to prevent the presentation of a winding-up petition if the company can show that the intended petition would be an abuse of the court’s process.

27.  The legal principles were summarized by Kwan J (as Kwan VP then was) in Re Sinom (Hong Kong) Ltd [2009] 5 HKLRD 487 at para 11: -

“As with a petition where there is a bona fide dispute of the debt on substantial grounds (a disputed debt petition), where the company has a genuine and serious cross-claim against the petitioner greater than or equal to the petitioner’s debt (a cross‑claim petition), such a petition may be restrained from proceedings (Re Pan Interirors Ltd [2005] EWHC 3241, paras. 34-39). It is an abuse of the process of the court to make a statutory demand or present a winding-up petition based on a claim to which there is a triable defence (Re Company [1992] 1 WLR 351). A cross-claim petition is regarded in the same way (Southern Cross Group Plc v Deka Immobilien Investment GmbH [2005] BPIR 1010, paras. 29-30; Re Pan Interiors Ltd, para. 35).”

28.  Petitions are not meant for debt collection purposes, and the court’s winding-up jurisdiction will only be exercised in clear cases. Where there is a real and substantial dispute of facts, the court will generally dismiss the petition. While the onus is on the company to adduce credible evidence, the court is not required to make findings at this stage. Rather, it has to be satisfied that the company has a credible case that should go to trial: see Madison Lab Ltd v Pu Yan [2020] HKCFI 382 at para 18 (per DHCJ Abraham Chan SC); Re Leung Cherng Jiunn [2016] 1 HKLRD 850 at para 27(5) (per Kwan JA, as Kwan VP then was); and Re China Shanshui Investment Co Ltd (HCCW 398/2015, 28 September 2016) at para 7 (per Harris J).

E.  Deliberation

E1.  Complaints relating to the PBF Transaction

29.  I fail to see how APS and Mr Edward Ma can rely on the previous dispute relating to the PBF Transaction as an excuse to evade their obligations under the 2023 Facility Letter/2023 Supplemental Facility Letter and the Guarantee/Amendment Guarantee Agreement.

30.  The dispute relating to the PBF Transaction has been compromised under the Settlement Agreement. As stated in the letter dated 18 January 2016[4], which contains the Settlement Agreement and which was signed by SCB and Mr Edward Ma for and on behalf of APS: -

(1)  The said letter “shall constitute full and final settlement of all claims against SCB in relation to the [PBF] Transaction”.

(2)  APS irrevocably undertook “to waive all [its] existing and future claims and demands (if any) and to make no further allegations and commence no proceedings…of any nature against SCB…in respect of the [PBF] Transaction or this matter”.

31.  However, Ms Winnie Li (for APS and Mr Edward Ma) contended that the Settlement Agreement is liable to be vitiated by reason of economic duress.

32.  It has been suggested that “[t]he ingredients of actionable duress are that there must be pressure, (a) whose practical effect is that there is compulsion on, or a lack of practical choice for, the victim, (b) which is illegitimate, and (c) which is a significant cause inducing the claimant to enter into the contract.”: see Zebra Industries (Orogenesis Nova) Ltd v Wah Tong Paper Products Group Ltd [2016] 1 HKC 213 at para 81 (per G Lam J (as G Lam JA then was); DSDN Subsea Ltd v Petroleum Geo-services ASA [2000] BLR 530 (per Dyson J); Carillion Construction Ltd v Felix (UK) Ltd (2000) 74 Con LR 144 at para 24 (per Dyson J); Universe Tankships Inc of Monrovia v International Transport Workers’ Federation (“The Universe Sentinel”) [1982] 2 All ER 67 at 88, [1983] 1 AC 366 at 400; and Dimskal Shipping Co SA v International Transport Workers’ Federation, The Evia Luck [1991] 4 All ER 871 at 878, [1992] 2 AC 152 at 165.

33.  In Esquire (Electronics) Ltd v Hong Kong and Shanghai Banking Corporation Ltd [2007] 3 HKLRD 439 at paras 154 to 155 (which was applied in Zebra Industries (supra) at para 83), Stock JA stated:

“154. The key to proving economic duress is proof of the illegitimacy of the suggested pressure. Much commercial activity necessarily involves pressure, often considerable and sometimes overwhelming, exercised by parties who find themselves in powerful bargaining positions. But that of itself is not illegitimate. It was suggested by McHugh JA, as he then was, in Crescendo Management Pty Ltd v Westpac Banking Corporation (1988) 19 NSWLR 40, 46 that:

‘Pressure will be illegitimate if it consists of unlawful threats or amounts to unconscionable conduct. But the categories are not closed. Even overwhelming pressure, not amounting to unconscionable or unlawful conduct, however, would not necessarily constitute economic duress.’

155. The reference there to ‘unconscionable conduct’ itself needs explanation. It has been explained in the Australian courts by reference to a special disadvantage suffered by the weaker party of which the stronger party takes advantage and is discussed in Australia & New Zealand Banking Group v Karam and Others (2005) 64 NSWLR 149 at paragraphs [46] and [66]. In Commercial Bank of Australia Ltd v Amadio [1982-1983] 151 CLR 447, 462 Mason J, as he then was, explained the significance of the adjective ‘special’ in the phrase ‘special disadvantage’:

‘I qualify the word ‘disadvantage’ by the adjective ‘special’ in order to disavow any suggestion that the principle applies whenever there is some difference in the bargaining power of the parties and in order to emphasise that the disabling condition or circumstance is one which seriously affects the ability of the innocent party to make a judgment as to his own best interests, when the other party knows or ought to know of the existence of that condition or circumstance and of its effect on the innocent party.’ ”

34.  For the following reasons, I reject Ms Li’s contentions based on economic duress.

35.  First of all, APS’s alleged rights to avoid the Settlement Agreement must have been lost as a result of (i) its lengthy delay and/or inexplicable inaction; and (ii) its conduct of affirming the Settlement Agreement.

36.  In this connection: -

(1)  As Kwan J (as Kwan VP then was) pointed out in Re Sit Ho Yin Kingsley (HCB 3370/2008, 11 December 2008) at para 13: -

“Although a contract may be voidable for duress or misrepresentation, the right of avoidance must be exercised promptly in most situations. Further, the power of avoidance may be extinguished by affirmation of the contract.” (emphasis added)

(2)  In Re Sit Ho Yin Kingsley, there was a delay of 5 years on the part of the debtor in seeking to avoid the contracts in question. Unsurprisingly, Kwan J (as Kwan VP then was) held that (see para 13): -

“…it is far too late for the debtor to seek to avoid now the contracts…”

(3)  In the present case, SCB and APS entered into the Settlement Agreement back in January 2016. As Mr Nick Luxton (for SCB) emphasized, this was more than 9 years before ASP and Mr Edward Ma commenced these proceedings. The delay was not only extremely lengthy, but also inexplicable.

(4)  In my view, even if APS had an alleged right of avoidance, such an alleged right must have been lost by reason of APS’s inaction and/or delay.

(5)  Moreover, I am of the view that APS’s alleged right of avoidance must have been lost by reason of the fact that it had chosen to affirm the Settlement Agreement.

(6)  On the evidence before the court, it is hardly incontrovertible that SCB and ASP had performed the Settlement Agreement. Whilst SCB had agreed to reduce the termination amount of the PBF Transaction by US$1million and provided a term loan facility to APS, APS had (i) terminated the PBF Transaction, (ii) accepted the term loan facility provided by SCB, and (iii) made repayments to SCB. Moreover, APS had also re-negotiated the term loan facility granted by SCB on numerous occasions during the period from 2018 to 2023.

(7)  There is no question that APS’s previous conduct was diametrically contradictory to its current stance that the Settlement Agreement is voidable by reason of economic duress. I find that APS had affirmed the Settlement Agreement. Having done so, ASP is not in a position to avoid the Settlement Agreement.

37.  In any event, on the evidence available to the court, I am not of the view that APS and Mr Edward Ma have made out an arguable case of economic duress. Contrary to their assertions, the evidence shows that Mr Edward Ma was a sophisticated businessman who tactfully bargained with SCB, and he was indeed content with the deal under the Settlement Agreement.

38.  In this connection, the following matters are notable: -

(1)  Whilst APS was a sizable company with annual sales revenue of US$50 million and 57 employees (as of 2016), Mr Edward Ma was a seasoned business executive who spent 15 years working as Exxon’s regional general manager before APS was set up in 1989. Obviously, APS and Mr Edward Ma were not vulnerable and susceptible to abuse.

(2)  This explained why as evidenced by the contemporaneous correspondence[5], when the dispute relating to the PBF Transaction arose, APS tacitly made a threat against SCB that unless the dispute was resolved amicably, APS might lodge a complaint to regulatory bodies (including the Hong Kong Monetary Authority) and/or commence proceedings in court[6]. The way in which APS and/or Mr Edward Ma communicated with SCB amply demonstrates that their high degree of sophistication. There is no question that they were fully aware of the means by which to seek justice.

(3)  There is also evidence showing that the parties’ representatives (including SCB’s Mr Edek Ho and Mr Sam Leung as well as ASP’s Mr Edward Ma and the son of Mr Edward Ma) negotiated meaningfully with each other in an amicable manner. For instance, an email from Mr Edward Ma dated 14 January 2016[7] shows that there was a meeting at the American Club (Central) on 8 January 2016. In light of Mr Edward Ma’s tone in his email[8], it appears that the negotiation was conducted in an amicable and bona fide manner. There was no contemporaneous complaint that SCB’s representatives were being oppressive and/or unreasonable. On the contrary, Mr Edward Ma praised the representatives of SCB for showing “sincerity” and being “friendly”.

(4)  Indeed, on the day when the parties entered into the Settlement Agreement (ie 18 January 2016), Mr Edward Ma on behalf of APS issued an email to SCB’s Mr Edek Ho to express his gratitude[9]. Although Mr Edward Ma indicated that APS’s “decision to unwind and terminate the [PBF Transaction] certainly is not an easy one”, he did say that a “lesson has been learned”. Mr Edward Ma further stressed that he “highly appreciated the thoughtfulness and customized offer for [APS]” and that SCB had demonstrated “support and kind understanding” to “ensure that things are happening on a mutually acceptable basis”. He even said that he “deeply appreciated” SBC’s “respectable and insightful advices”.

39.  Bearing in mind that Mr Edward Ma was a seasoned and sophisticated businessman who appreciated the legal rights of APS, I am of the view that had SCB’s representatives made unlawful threats and/or exerted illegitimate pressure, Mr Edward Ma would have voiced out his protest and registered his complaints. These did not happen. Instead, as evidenced by the contemporaneous correspondence, Mr Edward Ma accepted that the deal under the Settlement Agreement was “mutually acceptable”. He was also grateful that SCB was willing to enter into a compromise and being “supportive” and “understanding”.

40.  In the premises, the contemporaneous evidence overwhelmingly supports the conclusion that APS and/or Mr Edward Ma willingly accepted the deal under the Settlement Agreement out of free will. They were not subject to any economic coercion or compulsion; nor were they subject to any illegitimate threat. I find that APS and Mr Edward Ma have failed to raise a bona fide dispute on substantial grounds that the Settlement Agreement is liable to be vitiated by reason of economic duress.

41.  By reason of the matters canvassed hereinabove, I also find that APS and Mr Edward Ma have failed to raise a bona fide dispute on substantial grounds that the Settlement Agreement is liable to be vitiated by reason of actual undue influence.

42.  Having said that Mr Edward Ma was a highly sophisticated businessman who was capable of bargaining with SCB’s representatives tactfully, it is absurd to suggest that he would be susceptible to the alleged influence exerted by SCB. Indeed, the contemporaneous exchange shows that the parties conducted negotiation in a meaningful and bona fide manner and that Mr Edward Ma was content with the deal under the Settlement Agreement. I have no hesitation in finding that Mr Edward Ma must have fully appreciated the consequences as well as the implications of the Settlement Agreement.

43.  In this connection, I should, for completeness, point out that the deal under the Settlement Agreement made ample commercial sense and was perfectly explicable. SCB did give up part of its legal entitlements, in that it agreed to reduce the termination amount of the PBF Transaction by US$1 million (which was a substantial concession). Furthermore, SCB was willing to provide a term loan in favour of APS so as to enable APS to repay the indebtedness by tranches. In my view, there was every reason why instead of causing APS to fight a litigation against SCB, Mr Edward Ma would cause APS to accept the deal under the Settlement Agreement. This was commercially sensible.

44.  For all the above reasons, there is no room for APS and Mr Edward Ma to vitiate the Settlement Agreement and to bring a cross-claim for recovering the sums paid to SCB pursuant to the terms of the Settlement Agreement and/or the term loan facility granted by SCB.

E2.  Execution of the Guarantee

45.  Mr Edward Ma suggested that contrary to SCB’s assertion, he did not execute the Guarantee dated 12 September 2013 in the presence of SCB’s representatives.

46.  However, Mr Edward Ma is not in a position to deny the fact that he did execute the Guarantee. According to Mr Ma, he executed the Guarantee at his own office on 12 September 2013. As such, SCB did not provide any explanation to him, and he did not pay attention to the provisions of the Guarantee[10].

47.  Likewise, Mr Edward Ma also admitted that he signed the Guarantee Amendment Agreement dated 13 September 2023. However, Mr Ma suggested that the Guarantee was not attached, and no explanation was provided to him.[11]

48.  These assertions would not avail Mr Edward Ma at all.

49.  It is trite that a person of full age and understanding is bound by his signature on a document, unless he can show that he is entitled to rely on one of the vitiating factors at common law: see Ming Shiu Chung v Ming Shiu Sum (2006) 9 HKCFAR 334 at paras 84 and 87 (per Ribeiro PJ).

50.  It is also trite that a bank does not have a duty to advise or warn a guarantor about the risks of entering into a guarantee: see Habib Bank Zurich (Hong Kong) Ltd v Creation Castle Ltd [2020] HKCFI 1062 at para 83 (per DHCJ Victor Dawes SC); DBS Bank (Hong Kong) Ltd v Young & Fortune Ltd (HCMP 1838/2013, 15 January 2016) at para 34 (per Au-Yeung J).

51.  In the premises, Mr Edward Ma’s assertions that the Guarantee and the Guarantee Amendment Agreement were not explained to him cannot constitute a bona fide dispute on substantial grounds.

E3.  Breakdown of the Debts under the SDs and the Amounts of the Debts

52.  In her skeleton submissions, Ms Li contended that: -

(1)  The SDs do not contain a breakdown.

(2)  There is a discrepancy in respect of the amount of sum claimed under the APS SD (ie US$1,389,624.25) and the amount of sum claimed under the Edward Ma SD (ie US$1,392,637.07).

53.  In Chan WS & Anor v CC Bank [2022] 3 HKLRD 520 at paras 23 to 25 and 34 to 36, Au JA stated:-

“23. It is well settled that an over-statement of the indebtedness in the statutory demand will not automatically entitle the debtor to have the demand set aside. The relevant question is whether injustice would be caused to the debtor by allowing the particular demand to stand: see Re Kwok Chok Yee (supra) at 548G-H per Le Pichon J, citing Re a Debtor (No 1 of 1987) [1989] 1 WLR 271 at 276 and 279.

24. Ms Chan drew our attention to a long line of authorities in which this principle was applied: see Winterthur Life Insurance Company v Au Oi Fong Susana (unreported, HCB 1178/1999, 28 November 2000) per Chu J (as she then was); Re Ip Pui Man Nina (supra) at [75] per Au J (as he then was); Li Wo Hing v Raiffeisen Bank International AG (Beijing Branch) (unreported, HCSD 19/2014, 10 July 2014) at [29] per To J; and Re Lo Kwai Ying Louisa (unreported, HCB 3145/2015, 27 July 2016) at [47] - [49] per Lok J.

25. In Re Ip Pui Man Nina, although it was found that the relevant debt was arguably overstated in the demand (due to questions of limitation in respect of accrued interest and the inclusion of other indebtedness extraneous to the mortgage loan), the Court went on to consider whether injustice would be caused to the debtor, and held that it would not. In so finding, the Court had regard to the fact that there was no evidence that the debtor would have been in a position or prepared to pay and settle the debt had it been correctly stated, and that the principal sum of the mortgage loan undisputedly due was well in excess of the statutory minimum of $10,000 prescribed under the BO.

26. In Winterthur and Re Lo Kwai Ying Louisa, the learned judges also took into account the negligible amount of the over-statement as compared to the size of the debt in finding that no injustice was caused to the debtors as a result of the over-statement.

…

34. Although the Judge had apparently exercised her discretion, we have found that she had erred or misdirected herself on the principles governing the exercise of that discretion, in that she specifically failed to consider whether injustice would be caused to the Debtors if the SDs were allowed to stand. A proper exercise of the discretion would at least have required the Judge to consider, amongst other things, whether there was any evidence that the Debtors could and would have repaid the indebtedness even if it were correctly stated in the SDs, especially in the light of the respondent’s subsequent clarification of the correct amount due. As none of these circumstances were taken into account by the Judge, we consider that there is sufficient and proper ground for this Court to interfere with the Judge’s exercise of discretion, and to exercise the discretion afresh.

35. In our view, it is material that the letter of 8 August 2018, which was sent specifically pursuant to the Debtors’ request for a breakdown of the debt, had provided the correct amount of the indebtedness then outstanding. The over-statement of the debt in the SDs by clerical mistake was also subsequently clarified in the 1^st affirmation of Lam Wing Kin Alex filed on behalf of the respondent on 4 January 2019 (at paragraphs 24 - 25). Despite these, there was no evidence to suggest that the Debtors would have been in a position or would have been prepared to pay or settle the correct amount of debt even if it had been correctly stated in the SDs. Moreover, the correct amount of the debt was in any event well in excess of the statutory minimum of $10,000 prescribed under the BO.

36. In the premises, we do not see how any injustice would be caused to the Debtors even if the SDs were allowed to stand. We therefore find that the Judge was wrong to set aside the SDs solely on the basis that the debt was over-stated, and would allow the appeal.”

54.  Applying the legal principles set out in Chan WS & Anor v CC Bank, I am not of the view that any injustice would be caused to APS and/or Mr Edward Ma by allowing the SDs to stand.

55.  Insofar as the complaint that the SDs do not contain breakdowns is concerned: -

(1)  The SDs do contain breakdowns in respect of the indebtedness in question[12]. The breakdowns set out the outstanding principal indebtedness as at the date of the SDs (ie 9 January 2025) and the further interest that accrues on the outstanding principal indebtedness compounded on a daily basis.

(2)  As I understand, Ms Li’s complaint is that APS and Mr Edward Ma had difficulty in verifying whether the figures in respect of the indebtedness were correct.

(3)  However, there is no question that the indebtedness owed by APS and Edward Ma far exceeds the statutory thresholds for issuing a bankruptcy petition and a winding-up petition.

(4)  In this connection, there is not a shred of evidence showing that APS and/or Mr Edward Ma were willing and able to pay the indebtedness in question upon seeking clarification from SCB and/or its solicitors. As admitted in Mr Edward Ma’s email dated 9 July 2024[13], APS has been struggling financially since 2022. This is the reason why ASP and Mr Edward Ma have been unable to repay the indebtedness in question. Indeed, in her oral submissions, Ms Li fairly accepted that APS and/or Mr Edward Ma are not willing and able to pay the indebtedness in question.

(5)  For completeness, it should be mentioned that under the previous demand letter dated 16 September 2024[14], APS and Mr Edward Ma were demanded to pay outstanding principal indebtedness of US$1,293,286.45 and outstanding normal interest (as at 12 September 2024) of US$48,862.14. However, there was no indication from APS and/or Mr Edward Ma that the said indebtedness (or any part of the said indebtedness) would be repaid; nor was there any indication that the figures put forward by SCB were incorrect or disputed.

(6)  On the evidence available to the court, I am not satisfied that had further details been provided, APS and/or Mr Edward Ma would have been willing and able to pay the indebtedness claimed under the SDs.

(7)  In my view, Ms Li’s contention was a sheer technical objection raised at the 11^th hour. I am not of the view that it carries any substance; nor am I of the view that APS and/or Mr Edward Ma have suffered any injustice or prejudice.

56.  As regards the discrepancy in respect of the amounts claimed in the APS SD and the Edward Ma SD: -

(1)  As pointed out by Mr Nick Luxton, the discrepancy is ascribed to the fact that under the terms of the Guarantee, Mr Edward Ma is liable to pay interest at 1% above the rate paid by APS. The discrepancy is obviously explicable, and it is not the case that there has been an arithmetical error.

(2)  In any event, having said that there is no evidence showing that APS and/or Mr Edward Ma are willing and able to pay the indebtedness in question (which exceeds the thresholds for issuing a bankruptcy petition and a winding-up petition), I am not of the view that they have suffered any injustice or prejudice.

F.  Disposition

57.  For all the above reasons, none of the complaints raised by APS and/or Mr Edward Ma has merit.

58.  Accordingly, I dismiss (i) Mr Edward Ma’s application dated 11 February 2025 in HCSD 4/2025 and (ii) APS’s originating summons dated 14 February 2025 in HCMP 253/2025.

59.  In light of the provisions of the Guarantee[15] and the 2023 Supplemental Facility Letter[16], I order: -

(1)  Mr Edward Ma to pay SBC’s costs in HCSD 4/2025 (including all costs previously reserved) to be taxed on an indemnity basis if not agreed; and

(2)  APS to pay SCB’s costs in HCMP 253/2025 (including all costs previously reserved) to be taxed on an indemnity basis if not agreed.

60.  Lastly, I express my gratitude to Ms Winnie Li and Mr Nick Luxton for their helpful assistance.