RE CHAN CHUN LAN

HCB 791/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

BANKRUPCTY PROCEEDINGS NO. 791 OF 2002

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J U D G M E N T

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1. This is a Petition by a debtor ("the Debtor") for her own bankruptcy on the ground that she is unable to pay her debts. According to her statement of affairs, she owed her unsecured creditors a total sum of $660,469.06 as at 10 January 2002. The Petition was opposed by a creditor, the Standard Chartered Bank ("the Bank"). The Petition was presented on 14 January 2002.

2. The Bank previously opposed the Petition on the ground that shortly prior to the presentation of the bankruptcy petition, the Debtor purportedly sold a property at Flat B, Academic Terrace, Block 1, No. 101 Pok Fu Lam Road, Hong Kong ("the Property"). The agreement for sale and purchase was dated 18 December 2001 whilst the assignment was dated 24 December 2001. The price of that sale was $2,600,000. The purchaser was Richard Chai Chi Fai ("the Son"), the son of the Debtor.

3. The Bank believed that the sale was an attempt by the Debtor to remove assets from her estate in anticipation of her bankruptcy and as such, not a bona fide transaction. The Bank also thought that the sale proceeds were not fully accounted for in the Debtor's statement of affairs.

4. However, the Bank did not file any valuation evidence to dispute the valuation report filed by the Debtor. That valuation report was obtained by another bank for the purpose of the mortgage granted to the Son in relation to the purchase. The valuation report shows that the market price of the Property as at 29 October 2001 was $2,600,000.

5. The Debtor's evidence filed on 13 June 2002 also accounted for the disposal of the sale proceeds. Out of the $2,600,000, a total sum of $2,497,747.94 was paid back to the original mortgagee. Regarding the balance, the Debtor said she had used $100,000 to repay two loans made to her by two friends. The repayments were by two cheques which were debited from the bank account of the Debtor on 18 and 19 December 2001 respectively.

6. At the hearing today, the Bank sensibly withdrew its opposition in the light of such evidence. The Official Receiver also agreed that it is an appropriate case for bankruptcy order to be made.

7. Based on her statement of affairs, I am satisfied that the Debtor is unable to pay her debts. I therefore make a bankruptcy order against her.