RE WANG DAN

HCB 6584/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

BANKRUPTCY PROCEEDINGS NO 6584 OF 2014

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REASONS FOR JUDGMENT

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Introduction

1. This is the debtor’s petition for her own bankruptcy dated 28 August 2014; it was opposed by the opposing creditors.  At the end of the hearing of the petition, I made a bankruptcy order indicating reasons for doing so would be handed down later. They appear below.

2. The petition and the supporting affirmation state that the debtor was unable to pay her debts.

3. The opposing creditors (of a judgment debt of about RMB269,000) opposed the petition and contended in the affirmation that:

(a)  the debtor was in fact able to pay her debts;

(b)  the debtor’s above statement is untruthful and should not be accepted by the court.

4. In making the above contention, the opposing creditors relied on the following:

(1)  the debtor earlier misappropriated the opposing creditors’ properties;

(2)  the debtor used forged documents to withdraw money belonging to the opposing creditors (which  resulted in the judgment debt);

(3)  the debtor’s other two creditors (whose loans advanced to the debtor were $188,000 and $250,000) were her associates.  The alleged loans might not be genuine;

(4)  the debtor was earlier able to raise fund to engage lawyers to defend (unsuccessfully) the opposing creditors’ legal claims.

5. They also asserted that the debtor’s motive for petitioning for her own bankruptcy is to prevent the opposing creditors from:

(a)  imposing charge(s) on the debtor’s real properties (which have so far been concealed from them (despite their investigative work so far));

(b)  examining her on oath;

(c)  investigating into her financial affairs.

6. The opposing creditors’ above contentions and assertions are however not supported by the provisions of the Bankruptcy Ordinance (Cap 6).  Cap 6 confers on the trustee in bankruptcy various powers, and imposes on him various duties in the investigation into, and the realization, protection and administration of, the bankrupt’s estate.

7. The trustee in bankruptcy’s powers include those:

(1)  to publicly examine the bankrupt (s 19 thereof) (the creditors can take part in such examination);

(2)  to apply to court to summons various persons to inquire into the bankrupt’s conduct, dealings and properties (s 29 thereof);

(3)  to take custody and control the bankrupt’s properties (s 60 thereof);

(4)  to exercise other discretionary powers (s 82 thereof).

His duties under Cap 6 include the following:

(a)  to be controlled by the court in the exercise of his powers conferred by ss 60 and 61 thereof (and creditors may apply to the court in such regard) (s 61A thereof) (see also s 84 thereof);

(b)  he shall have regard to the creditors, or the general meeting of creditors, in relation to his powers conferred by s 82 thereof (s 82 thereof);

(c)  to investigate the bankrupt’s conduct and to report accordingly (s 86A thereof);

(d)  various duties as regards the bankrupt’s estate (s 86B thereof).

8. In view of para 7 above (which set out an apparently wide range of powers on the part of the trustee in bankruptcy, some of which an ordinary creditor may not enjoy), it is difficult to see:

(1)  what advantage the debtor could gain;

(2)  what disadvantage the opposing creditors could suffer,

if a bankruptcy order is made against the debtor (and the opposing creditors have not been able to put forth any).

9. I therefore do not accept that the debtor has put forth untruthful evidence to procure a bankruptcy order so as to prevent (or delay) the opposing creditors’ enforcement of the judgment debt.

Other matters

10. The parties’ written submissions also mentioned various other points.  These have not been expressly set out or dealt with above.  This is so only because of the need to balance between the length of the reasons for judgment and its comprehension.  It does not mean those other points are thought to be irrelevant (or have been overlooked).  To avoid doubt, those other points have also been considered.