RE CHAN KA WA JEFFREY

HCB 5348/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

BANKRUPTCY PROCEEDINGS NO 5348 OF 2015

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D E C I S I O N

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1.  The petitioner entered into an agreement with one Gravity 0 Entertainment Group Ltd (“Gravity 0”) whereby the petitioner would provide financial sponsorship to Gravity 0 but the latter had to open a club within 2 months from the date of the agreement, ie by 3 January 2015, failing which the petitioner had the right to ask for refund of all money paid.

2.  The petitioner paid $1,000,000 to Gravity 0 but Gravity 0 did not open a club.  The debtor was liable under a personal guarantee to repay the $1,000,000 (“the debt”) to the petitioner.

3.  The debtor does not dispute the debt but he has not repaid any part of it.  He made empty promises to repay the debt by instalments (which were not accepted by the petitioner anyway) with the assistance of his grandfather, from his own business income, with investment money from his friend, and a loan from a friend. The debtor has not paid a single cent of the debt to date. 

4.  The petitioner issued a statutory demand on 15 May 2015 for the debt, the validity of which is not in dispute.  The amended petition was premised on this statutory demand.

5.  In his affirmation in opposition, the debtor made bare assertions that the debt was not immediately payable; that there was an equitable defence of estoppel due to representations made by the petitioner, that there was a reasonable prospect of his being able to repay the debt and that the petitioner had unreasonably refused the offer to secure or compound the debt.  There were no particulars to these defences and no documentary proof of his ability to repay.

6.  The debtor’s solicitors have, twice, signed consent summons dated 6 and 18 April 2016, respectively, indicating that the debtor agreed to a bankruptcy order being issued against him.

7.  This morning, through his counsel who allegedly received late instructions, the debtor reneged on his stance under the consent summonses and proposed repaying the debt by instalments of $250,000 starting from today.  It was rejected by the petitioner.

8.  In summary, there is indisputably a debt of $1,000,000 due to the petitioner, which is not repaid, secured or compounded.  There is no defence to it.  There is no reasonable prospect of the debtor being able to repay it. Pursuant to section 6D(1) of the Bankruptcy Ordinance, Cap 6,  I order that a bankruptcy order be issued against the debtor.

9.  Costs are summarily assessed (on the basis of the debtor’s agreement) at $146,000 in favour of the petitioner.