WAN KONG SANG v. WONG KA SEK AND ANOTHER

HCB 3346/2017

[2018] HKCFI 960

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

BANKRUPTCY PROCEEDINGS NO 3346 OF 2017

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J U D G M E N T

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1.  On 2 June 2017, Wan Kong Sang (“Bankrupt”) applied for his own bankruptcy on the basis that he was unable to pay his debts. On the same day, he filed his Statement of Affairs (Debtor’s Petition) (“SoA”). The Bankrupt was self-represented.

2.  The SoA contained the following information:

(a)   List A: nil;

(b)   List B: HK$523,000 was owed to various banks for credit card debts; and

(c)   List C: the Bankrupt’s assets included (i) bank balance of HK$10, and (ii) mandatory provident fund of HK$181,230.

3.  According to List D of the SoA, the Bankrupt’s mother was his dependent. According to Lists G and H of the SoA, the Bankrupt claimed his monthly income was HK$13,000 and his monthly expenditure was HK$14,100.

4.  On 4 July 2017, a bankruptcy order was made against the Bankrupt, and the Official Receiver thereby became the provisional trustee of the estate of the Bankrupt (“Estate”).

5.  At the general meeting of creditors held on 22 September 2017, it was resolved that (a) Wong Ka Sek and Wong Ka Lam King (collectively, “TiB”) be appointed joint and several trustees of the property of the Bankrupt with immediate effect, (b) the creditors declared that any act required or authorised to be done by the trustees was to be done either by Wong Ka Sek and Wong Ka Lam King jointly or any of them singly, and (c) there should be a creditors’ committee in the bankruptcy comprising the Hongkong and Shanghai Banking Corporation Limited and Dah Sing Bank Limited.

6.  Since 22 September 2017, the administration of the Estate had been conducted by the TiB.

7.  On 24 January 2018, the TiB’s staff interviewed the Bankrupt to assess his monthly income and expenses. After the interview, the TiB assessed the Bankrupt’s monthly expenses at HK$10,350, and required the Bankrupt (a) to make a monthly contribution of HK$2,000 to the Estate, and (b) contribute all his income (after deducting the assessed monthly expenses) to the Estate and provide his income proof to the TiB every month (see letter from TiB to the Bankrupt dated 29 January 2018).

8.  The Bankrupt complained against the TiB’s decision that he should make a monthly contribution of HK$2,000 to the Estate (“TiB Decsion”).

9.  On 15 March 2018, the Bankrupt filed a summons against the TiB to reverse the TiB Decision on the ground that he had no spare money for contribution to the Estate since his monthly expenses (HK$18,097) exceeded his monthly income (“Summons”). On the same day, the Bankrupt filed his affirmation in support of the Summons (“Bankrupt Aff”). On 29 March 2018, the TiB filed the affirmation of Wong Ka Lam King in opposition on the basis that the allowed monthly expenses were reasonable (“Wong Aff”).

10.  The Summons appeared to be an application made under section 83 of the Bankruptcy Ordinance Cap 6, which provides as follows:

“If the bankrupt or any of the creditors or any other person is aggrieved by any act or decision of the trustee, he may apply to the court, and the court may confirm, reverse or modify the act or decision complained of, and make such order in the premises as it thinks just.”

11.  According to the Wong Aff, the Bankrupt informed the TiB (a) he worked as an accounting clerk in Yau Tong, (b) he lived with his 44 year-old wife (“Wife”) and his 87 year-old mother (“Mother”) in a rented flat in Nagu Tau Kok, and (c) the Wife worked as a cleaning lady earning about HK$10,000/month.

12.  It was common ground between the Bankrupt and TiB that the following monthly expenses should be allowed:

	Item	HK$
(1)	Rent	1,619
(2)	Electricity charges	384
(3)	Water charges	126
(4)	Gas charges	632
(5)	Internet charges	238
(6)	Telephone charges	131
(7)	Mobile phone charges	98

13.  The items of monthly expenses in dispute were as follows:

	Item	HK$
(8)	Family miscellaneous expenses (allowed at HK$500)	2,000
(9)	Personal meal expenses (allowed at HK$3,600)	4,000
(10)	Travelling expenses (allowed at HK$522)	1,522
11)	(Maintenance for the Mother	2,000
(12)	Salary for foreign domestic helper (to look after the Mother who had mobility problems)	4,310
(13)	Meal expenses for domestic helper (allowed at HK$8,000 x 25% = HK$2,000)	1,037

14.  In respect of item (8), the Bankrupt requested for increase of monthly family miscellaneous expenses from HK$500 to HK$2,000. The TiB considered the Wife who was employed should pay for her personal expenses and some of the family expenses in case the allowed sum of HK$500 was not enough. But on a discretionary basis the TiB allowed the Bankrupt to bear all family living expenses. The TiB considered the allowance of HK$500 reasonable.

15.  In my view, given that the other items have allowed for, say, personal meal and travelling expenses of the Bankrupt (items (9) - (10)), maintenance of the Mother (item (11)) and meal expenses for the domestic helper (item (13)), and further given the Wife would pay her own personal expenses from her own income, I cannot say the TiB’s allowance of HK$500 for this item was unreasonable or insufficient. In any event, apart from the heads of expenses in items (1) - (13) above, the TiB also allowed a sum of HK$500 for “個人雜項開支” which the Bankrupt could resort to in case of need.

16.  In respect of item (9), ie the Bankrupt’s claim for monthly meal allowance of HK$4,000, the TiB allowed HK$3,600 as a reasonable sum based on HK$120/day (HK$30 for breakfast, HK$40 for lunch and HK$50 for dinner). I am persuaded that the allowance by the TiB was reasonable in all the circumstances.

17.  In respect of item (10), the Bankrupt requested for increase of monthly personal travelling expenses from HK$522 to HK$1,522. The TiB considered HK$522 reasonable on the basis of transport cost of HK$16.20/day to and from work (HK$3.60 for minibus and HK$4.50 for MTR per trip). I agree the TiB’s allowance would be sufficient to cover the Bankrupt’s travelling expenses to and from work (HK$16.20 x 22 working days per month on the basis of 5-day week = HK$356.40) and extra money for non-work travelling expenses (HK$522.00 – HK$356.40 = HK$165.60). However, the Bankrupt submitted that (a) his work required him to carry on out-of-office work very now and then, eg collection of cheque from client, delivery of documents to others, etc, and (b) he would not be specifically reimbursed for such work-related travelling expenses as they were deemed to have been included as part of his monthly salary. In such circumstances, although I still find the claim for HK$1,522 excessive, I am prepared to increase the allowance for item (10) to HK$822 (ie an increase of HK$300).

18.  In respect of items (11) - (13), the Bankrupt requested HK$7,347 for the Mother’s monthly maintenance and also monthly expenses (salary and meals) for foreign domestic helper. Actually, the TiB already assessed the relevant monthly expenses at HK$8,000. However, the TiB allowed the Bankrupt to bear 25% of such expenses, ie HK$2,000. First, the TiB considered the Bankrupt’s siblings (2 younger brothers and 1 younger sister) who were employed should contribute to the Mother’s expenses. Secondly, the Mother was then receiving old age allowance of about HK$1,345, but the TiB considered she could apply for old age living allowance of about HK$2,600 if her assets did not exceed HK$334,000 (see information on Social Security Allowance scheme downloaded from the Social Welfare Department website). Thirdly, the TiB considered the allowed sum reasonable.

19.  In my view, there was no dispute over the quantum of the underlying expenses in respect of items (11) - (13) for the TiB allowed a monthly sum of HK$8,000 against the Bankrupt’s claim for HK$7,347. The question was whether the Bankrupt should bear the full monthly expenses of HK$8,000 or HK$2,000 being 25% of such sum. The Bankrupt claimed he did not know what pocket money his siblings gave to the Mother, and he felt he could not ask his siblings to contribute to financial support for the Mother since he was the one who had employed the foreign domestic helper and had paid for the relevant expenses before he was made Bankrupt.

20.  In my view, whatever might have been the position before the Bankruptcy Order, the Estate must be considered in the context of the bankruptcy and the need to make reasonable and diligent efforts towards repayment to the creditors. Financial support for the Mother (which included expenses for the domestic helper whom the Bankrupt confirmed was engaged for looking after the Mother rather than for him and the Wife) is a filial duty shared by all her children. Since all of the Bankrupt’s siblings were gainfully employed, I see little reason for the Bankrupt to bear the whole of the Mother’s expenses. The Bankrupt mentioned that his siblings had their own families and expenses, but this was no different from his own situation, and in his case he had an added duty to make repayment to the creditors if he reasonably could. In all the circumstances, I do not consider it reasonable for the Bankrupt to bear the whole of the Mother’s expenses, and the TiB’s decision in this respect was not unreasonable.

21.  In conclusion, the TiB Decision is reversed to the extent that the Bankrupt should make a monthly contribution of HK$1,700 to the Estate (ie a reduction of HK$300 due to adjustment of item (10) in paragraph 17 above).

22.  The TiB confirmed they would reassess the Bankrupt’s monthly expenses if there were any change in circumstances, and agreed to consider any reasonable ad hoc expenses including the medical expenses of the Bankrupt and his family upon provision of sufficient proof of evidence. At the hearing, the Bankrupt informed the court that the Wife became unemployed in late March 2018, and had been unable to secure a job to date. I would urge the Bankrupt to take steps to inform the TiB to enable them to consider whether or not it would be appropriate to reassess his monthly expenses.

23.  The TiB indicated they would not seek costs in respect of the Summons. In the circumstances, I grant a costs order nisi that there be no order as to costs of and occasioned by the Summons (including all costs reserved if any).

24.  Should the Bankrupt require translation of this decision into punti language, he can contact my clerk to arrange an appointment for a court interpreter to verbally translate this judgment to him at the High Court Building at a mutually convenient time.