RE: NG PATRICK SHIN KAU and EX PARTE: SANWA FINANCE HONG KONG LTD.

HCB1588/99

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

BANKRUPTCY PROCEEDINGS NO.1588 OF 1999

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J U D G M E N T

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1. This is a petition brought by Sanwa Finance Hong Kong Limited based on an unpaid debt of about $300,000. The Debtor does not dispute the existence of the debt. He is employed as a merchandising agent and earns $15,000 a month. Although he is willing to make a monthly payment of $10,000 to the Petitioner, there is in fact a second petition filed against him by the China State Bank. In those circumstances, any sums received or paid to the Petitioner would be avoided under the provisions of section 42 of the Bankruptcy Ordinance.

2. The Debtor plainly has no means with which to discharge the debt. However, he says he has a good claim against certain former directors of Grandmart Warehouse Club Limited ("GWCL") of which he was chairman until 30 July 1998 when he was removed from office by the other directors. The Debtor has instructed solicitors to institute legal proceedings against the four former directors who were also shareholders of GWCL. So far as legal costs are concerned, the Debtor stated that his brothers would support him in that regard.

3. In the present circumstances, I see no valid reason why a bankruptcy order should not be made. The debt is undisputed and the Debtor is unable to repay it. His only hope is in somewhat speculative proceedings for damages - speculative in the sense that not only have they not been commenced, the court has no means of assessing the merits of that action. Obviously even if a bankruptcy order were made, the Official Receiver would be in a position to pursue the action should he consider that it has merits, assuming that there is funding for it. In those circumstances, I will make the bankruptcy order sought.