RE CHONG YU ON

HCB 5210/2023

[2024] HKCFI 3305

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

BANKRUPTCY PROCEEDINGS NO 5210 OF 2023

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JUDGMENT

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Introduction

1.  This is the substantive hearing of the bankruptcy petition presented by the Petitioner on 7 September 2023 (“Petition”) against the Debtor.  At the hearing, the Debtor confirmed he understood and could read English[1] and had read the Petitioner’s skeleton.  Indeed, in the Decision of Coleman J dated dated 25 September 2024 referred to below at para 6, the learned Judge observed that:

“At the hearing, the Applicant had the benefit of a Chinese/English interpreter, albeit that the Applicant plainly speaks excellent English, having apparently been educated in the UK.  Indeed, he says that he should be permitted to have an oral hearing in part so that, if necessary, he can correct any mistake in court interpretation.”

2.  On 10 November 2022, the Court of Appeal in CACV 381/2021 dismissed the Debtor’s appeal[2] against the decision of K Yeung J dated 19 July 2021 in HCA2656/2017 dismissing his claim against inter alia the Petitioner and ordered him to bear the costs of the Petitioner to be summarily assessed (“CA Judgment”).

3.  On 7 February 2023, the Court of Appeal dismissed the Debtor’s application for leave to appeal to the Court of Final Appeal.[3]

4.  The Petition is based on the Costs Order made on 19 December 2022 (“Costs Order”) by the Court of Appeal in CACV 381/2021.  Pursuant to the Costs Order, the Debtor was to pay the Petitioner’s costs, summarily assessed at HK$150,000 plus interest (“Debt”).  The Petitioner then issued a statutory demand dated 18 May 2023 for the Debt (“Statutory Demand”).

5.  On 29 May 2023, the Petitioner served the Statutory Demand on the Debtor by personal service.   This is confirmed by the Debtor at the hearing.  There is also no dispute that the Debtor has failed to comply with the Statutory Demand.

6.  On 1 June 2023, the Debtor applied to set aside the Statutory Demand in HCSD28/2023 (“Application”).  On 5 June 2023, DHCJ Au-Yeung Ho Wing (as he then was) ordered the Application be dismissed on the ground that the Debtor had failed to show sufficient cause for it.  The Deputy Judge granted leave to the Petitioner to present a bankruptcy petition after 14 June 2023.  This is also confirmed by the Debtor at the hearing.

Deliberation

7.  The applicable legal principles can be stated briefly.

(a)  The bankruptcy court will treat a judgment for a sum of money as prima facie evidence that the judgment debtor is indebted to the judgment creditor for that sum.

(b)  Where the judgment debtor has already failed in his application to set aside the judgment or his appeal on substantive grounds at the time of the petition hearing, it would be most unlikely in that situation that the bankruptcy court would find that the judgment debtor could nevertheless rebut the prima facie evidence of indebtedness.

Re Tam Mei Kam unrep, CACV 87/2012, 8 May 2013 at [22.1] and [27]

8.  The Debtor has filed 3 affirmations on 9 January, 8 March and 30 April 2024 in opposition to the Petition (“Chong 1”, “Chong 2”, and “Chong 3”) respectively.  Neither Chong 2 nor Chong 3 were filed with leave of the Court but this court was prepared to consider them de bene esse. 

9.  The grounds of objection to the Petition relied on by the Debtor as set out in his affirmations and are as follows.

Chong 1 : Grounds of opposition dated 24 October 2023(exhibit “RJ” of Chong 1 at pp 1 – 2)

10.  In the Grounds of Opposition, the Debtor said:

“1.  本人是綜援受助人。

2.  本人曾於 (2006年) 被法庭勒令破產，直至 (2011年)。

3.  本人至今仍然拖欠律政司訟費組，銀碼約為港幣62萬餘元。

4.  《律政司訟費組》考慮本人作為綜援受助人身份的經濟狀況，一直接納本人以分期方式攤還債務；相對債權人之《安達人壽保險有限公司》所追討涉及之訟費 (港幣15萬餘)，兩者銀碼明顯相差巨大。

5.  《律政司訟費組》尚可以以理性處理相關債務而並無向高院申請本人破產呈請，反而現債權人之《安達人壽保險有限公司》卻提出破產呈請申請，明顯現階段對追討及解決相關債務於事無補，反而經濟上卻直接浪費《安達人壽保險有限公司》及其股東、持份者的經濟利益。

6.  此外，本人現階段已就相關索償案 (HCA 2656/2017)向終審法院申請上訴許可，而現債權人之《安達人壽保險有限公司》卻早早進行追討涉及之訟費 (港幣15萬餘)，明顯對本人不公。”

11.  In this court’s view, the Debtor’s said grounds are irrelevant as none of them can rebut the prima facie evidence of indebtedness.  Whether or not the Debtor owes legal costs to the Department of Justice (“DOJ”) in a sum larger than the Debt and whether the DOJ has or has not entered into any repayment arrangement with him do not affect the Petition.  The Petition is based on non-compliance with the Statutory Demand which in turn is based on the Costs Order.  The Debtor had failed to overturn the Costs Order and leave to appeal against the CA Judgment to the CFA had been dismissed.

12.  This court is compelled to conclude that Chong 1 or its exhibits fail to provide any valid grounds of opposition.

Chong 2 : Supplemental Grounds of Opposition dated 8 March 2024 (Exhibit “CFA” of Chong 2 at pp 1-2)

13.  In the Supplemental Grounds of Opposition, the Debtor’s grounds of opposition are:

“1.  本人作為本存檔誓詞 提及之3宗高院案的原告人、現正向相關被告人提出索償訴訟，而第二宗案件之索償額涉及港幣6890萬及相關利息，數額遠遠超過債權人向本人追討之債務數額。

2.  《中國恒大》反對債權人向高院提出的破產呈請申請，其合理理由基於《中國恒大》集團總資產並非不抵債，而且，《中國恒大》亦從而可合法維護公司持份者的合法權益。

3.  本人亦是持上述相同理由反對債權人向本人提出破產呈請申請，因本人如成功追討相關的訴訟索償，索償數額已經足以抵消本破產呈請之相關債務；而且，《律政司訟費組》部門亦基於相關事實的存在而一直並無就本人訟費債務向高院提出破產呈請申請。

4.  本人跟《律政司訟費組》涉及之債務 (港幣66萬元) 亦遠遠超過本破產呈請提及之 (港幣16萬元) 的債務；因此，債權人的破產呈請申請確實有侵越《律政司訟費組》的實際權益。”

14.  The 3 HCAL proceedings ie HCAL 679, 924 and 1718 of 2023 referred to in Chong 2’s exhibits are irrelevant to the Petition since they have nothing to do with the Petitioner - the Petitioner is not a respondent in any of those 3 cases.  There is thus no claim against the Petitioner in those actions and so whether or not the Debtor’s claim of HK$68.9 million in the 2^nd case ie HCAL 924 of 2023 exceeds the Debt has no impact on the present Petition.

15.  Anyway, by a Decision dated 25 September 2024, Coleman J had dismissed the Debtor’s claims for judicial review in inter alia HCAL 679, 924 and 1718 of 2023 as wholly unmeritorious and in fact constituted an abuse: see paras 1 and 2 of the Decision.  Coleman J also concluded, after detailed reasoning, that the Petitioner had completely failed to identify any plausible or reasonably arguable ground for judicial review: see para 118 of the Decision.

16.  This court is compelled to conclude that Chong 2 or its exhibits fail to provide any valid grounds of opposition.

Chong 3: (Exhibit “CFF” a summons dated 19 February 2024 in HCPI471/2019)

17.  The Debtor did not exhibit another Grounds of Opposition in Chong 3.  Instead, he exhibited a Summons dated 19 February 2024 in HCPI 471/2019 which simply states:

“就高院上訴庭於 (2024-2-09) 否決第一被告人擬剔除原告人索償 (HCPI 471/2019) 的申請後，原告人現索取法庭案件管理指示”。

18.  Again, the Petitioner is not a defendant in HCPI 471/2019.  As far as this court is aware, the claim in that action was a professional negligence claim in relation to his mother[4].  Further, apart from exhibiting “CFF” to Chong 3, there is no explanation whatsoever in Chong 3 as to the relevance of HCPI 471/2019 or any further grounds of his opposition to the Petition.

19.  This court is compelled to conclude Chong 3 and its exhibit fail to provide any valid grounds of opposition.

Disposition and costs order nisi

20.  As the Debtor fails to provide any grounds of opposition which are remotely meritorious, this court is satisfied that the Petitioner is entitled to a bankruptcy order against him.

21.  There will be a usual bankruptcy order against Mr Chong Yu On and an order nisi that the costs of the Petition, including all costs reserved, if any, be to the Petitioner.