RE CHOY BING WING

HCB 7796/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

BANKRUPCTY PROCEEDINGS NO. 7796 OF 2006

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J U D G M E N T

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1.  I have before me a petition presented by the Securities and Futures Commission for a bankruptcy order against Mr Choy Bing Wing based on an allocatur of the High Court, by which Mr Choy was ordered to pay taxed costs of the petitioner in the sum of $500,928.65 with interest.

2.  As stated in the petition, the total amount of debt owing to the petitioner calculated up to the date of the presentation of the petition on 22 September 2006 is $556,522.70.  The order for costs was made by Cheung J in High Court Action No. 424 of 2005 on 12 August 2005.

3.  A statutory demand for the debt was served on Mr Choy personally on 14 July 2006.  He applied to set aside the demand and his application was dismissed by Barma J in HCSD No. 23 of 2006.  This petition was then presented on 22 September 2006.  Mr Choy filed an affirmation to oppose the petition on 11 December 2006.  The petitioner filed an affidavit in reply on 12 December 2006.  There was a hearing of the petition before a Master on 13 December 2006.

4.  Due to the opposition of Mr Choy, the petition was adjourned to a judge today.  After the hearing before the Master and on 13 December 2006, Mr Choy went to the office of the petitioner’s solicitors and delivered to them a cheque of $556,522.70 being payment in full of the petitioning debt. 

5.  Although there was further interest on the petitioning debt after the date of presentation of the petition in the sum of $12,440.00, the petitioner agreed to accept Mr Choy’s cheque as full payment of his debt.

6.  As there has been full satisfaction of the petitioning debt, I will make an order to dismiss the petition.  The only matter outstanding for my decision is the petitioner’s costs in the petition.  The petitioner seeks an order that Mr Choy should pay its costs to be assessed on a gross sum basis.  I see no reason why Mr Choy should not be liable to pay the petitioner’s costs.  He only tendered full payment of the petitioning debt after the petition was presented and after he has filed evidence to oppose the petition.

7.  The power of the court to make a gross sum assessment in bankruptcy proceedings is governed by rule 32A(1)(b) of the Bankruptcy Rules, which provides that when awarding costs the court may fix a sum to be paid in lieu of taxed costs.  The petitioner has submitted a statement of costs for the gross sum assessment.  Mr Choy has submitted that this is merely a summary in that he is not provided with the time sheets of the petitioner’s solicitors, and there is no detailed breakdown.  He seeks more information to be provided by the petitioner’s solicitors and he wants a reduction of the costs that have been put forward.

8.  In my view, the statement of costs provided by the petitioner’s solicitors does contain sufficient information for the court to make a gross sum assessment and it is appropriate in the circumstances for me to assess costs on a gross sum basis, as I have considered all the documents that have been filed in these proceedings and I do have a fair knowledge of the kind of work done by the solicitors.

9.  The total fees of the petitioner’s solicitors in the statement of costs is $57,913.83.  In addition, the Official Receiver seeks his costs of $5,300.00 and that is to be paid out of the petitioner’s deposit.

10.  I will make a reduction in the fees of the petitioner’s solicitors for excessive time and possible duplication of work.  I will reduce the figure of $57,913.83 to $47,500.00.  To this amount, I will add the Official Receiver’s costs of $5,300.00.  The total amount of gross sum fees I arrive at that Mr Choy should be liable to pay the petitioner is $52,800.00.