RE VINCENT KAY LO IP

HCB1209/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

IN bankruptcy proceedings NO. 1209 OF 2000

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D E C I S I O N

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Background

1. The Bankrupt was the defendant in HCA699/1992.  After trial, the late Deputy Judge Z.E. Li, by Judgment dated 15 December 1999 and Supplemental Judgment dated 13 January 2000, entered judgment for the plaintiff against the Bankrupt for HK$1,500,000 with interest. 

2. The plaintiff then served a statutory demand, which was based on the said judgment debt, on the Bankrupt on 22 February 2000.  The demand was not met.  On 21 March 2000, the plaintiff filed a bankrupt petition against the Bankrupt. 

3. Separately, the Bankrupt lodged an appeal (CACV75/2000) against the judgment of the deputy judge on 25 February 2000.  On 18 July 2000, the Court of Appeal partially allowed the appeal to the extent that the judgment sum was reduced to HK$1,170,422.20. 

4. Taking into account of the Court of Appeal’s decision, the plaintiff’s solicitors filed an affirmation of continuing debt in the bankruptcy proceedings on 25 July 2000 to the effect that the Bankrupt remained indebted for the reduced judgment sum of HK$1,170,422.40 plus interest. 

5. The Bankrupt petition was amended on 4 August 2000 but the amendment did not relate to the judgment sum.  In other words, the judgment debt referred to in the petition remained HK$1,500,000 plus interest.  Nor was the statutory demand amended to reduce the judgment sum stipulated therein. 

6. On 14 August 2000, the petition came before Chung J.  The solicitor acting for the Bankrupt told the court that he was not in a position to oppose the petition.  Chung J then granted a usual bankruptcy order against the Bankrupt (“the Bankruptcy Order”). 

7. On 20 August 2000, the Bankrupt took out an application for leave to appeal to the Court of Final Appeal against the decision of the Court of Appeal in CACV75/2000.  However, the right of appeal was vested as part of the Bankrupt’s estate in the Official Receiver as the trustee for the creditors.  And the Official Receiver did not wish to appeal.  The Bankrupt then went before Deputy Judge Kwan (as she then was).  She ordered that leave be given to the Bankrupt to use the name of the Official Receiver for the intended appeal on the condition that he do pay $300,000 as security to indemnify the Official Receiver’s liability for costs.  On 23 February 2001, the Court of Appeal refused leave.  Rogers VP observed :

“	… the order made by the Deputy Judge cannot affect the question of leave to appeal. The right to appeal rests in the trustee. The trustee does not wish to appeal. Without an indemnity to safeguard the trust assets there can be no right in any other party to appeal in the trustee's name.”

8. The Bankrupt persisted and applied to the Court of First Appeal for leave to appeal (FAMV8/2001).  But the Appeal Committee agreed with the Court of Appeal and dismissed the application on 24 April 2001. 

9. The Bankrupt then took out an application to annul the Bankrupt Order on 3 February 2004.  I dismissed it on 29 March 2004. 

10. On 23 August 2004, the Bankrupt took out the second application for annulment.  Yam J dismissed it on 16 September 2004. 

11. The Bankrupt took out yet another application for annulment on 1 February 2006, which was dismissed by Chung J on 27 February 2006.  He then appealed.  While the appeal was pending, he took out the fourth application for annulment on 18 June 2006.  The Court of Appeal dismissed his appeal on 27 June 2006.  Rogers VP said at paragraph 5 of the judgment :

“

At the end of the day, there is simply nothing in this appeal.  It was a complete waste of time.  This Court has considered whether or not an order should be made in respect of [the Bankrupt] to prevent any further applications being made to court without leave.  In my view, the time has come when the Court must now seriously consider that.  However, it seems that perhaps the best course would be to leave the matter as it is, but to indicate that in this judgment so that, if [the Bankrupt] chooses to make any further applications to the Court of First Instance, the judge may consider that.”

12. Heedless of the warning, the Bankrupt proceeded with the fourth application for annulment, which was dismissed by Recorder Ho, SC on 17 July 2007.  At paragraph 30 of the Reasons for Decision, the learned Recorder said :

“

In addition, I would respectfully adopt the view of the learned Vice-President that the time has come for the Court to consider whether a restricted application order [‘RAO’] should be made to protect its process from further abuse by unmeritorious applications of similar nature.  I have accordingly directed a hearing to give [the Bankrupt] and other interested parties an opportunity to address the Court for that purpose.”

13. In the end, the hearing came before me.  Both the Bankrupt and the Official Receiver appeared and made submissions. 

Jurisdiction

14. In Ng Yat Chi v. Max Shares Ltd & Another [2005] 8 HKFACR 1, the Court of Final Appeal confirmed the courts’ jurisdiction to grant a RAO to prohibit a vexatious litigant from making further applications in existing proceedings without leave.  Such an order should only be made if the person subject to the order has abused, and is likely to continue abusing, the court’s process by persistently making unwarranted applications to the court in existing proceedings, whether before or after judgment, in circumstances where a RAO would be a proportionate response. 

Making the RAO

15. I will not dwell on the parties’ submissions.  Suffice it to say that I have already duly considered them in full. 

16. The Bankrupt’s submissions boiled down to the following main points. 

17. First, Deputy Judge Li had mis-stated the particulars of damage suffered by the plaintiff in the Judgment dated 13 January 2000.  In this regard, the Bankrupt relied on the particulars that he compiled from the trial documents.  He went on to submit that the deputy judge had thereby “restricted” his right to appeal in the Court of Appeal. 

18. The submission that the deputy judge had restricted the Bankrupt’s right in the Court of Appeal is simply nonsensical.  The particulars that the Bankrupt relied on did not assist him a bit.  He has singularly failed to point out the effect or impact that those particulars might have on the judgment of the Court of Appeal.  As rightly pointed out by Mr Suen, appearing for the Official Receiver, those particulars, even if accepted, will not have any significant bearing at all.  I further note that the Bankrupt was legally represented before both the deputy judge and the Court of Appeal.  His legal representatives did not take any issue on the particulars as he now did. 

19. Second, there was no amendment to both the statutory demand and petition to reduce the judgment sum as per the decision of the Court of Appeal.  The Bankrupt complained that he had therefore not been served with the proper statutory demand.  This contention had already been rejected by Recorder Ho : see paragraphs 22 to 28 of the Reasons for Decision.  I respectfully agree with the learned Recorder and see no merits in this submission at all. 

20. Lastly, the Bankrupt wished to annul the Bankrupt Order so that he could in his own name apply for leave to appeal the judgment of the Court of Appeal dated 18 July 2000 to the Court of Final Appeal.  He has already filed a notice of intended application for leave to appeal with the Court of Final Appeal on 7 June 2007. 

21. In my view, the Bankrupt is obviously unwilling to accept that a final judgment had been made against him by the Court of Appeal in CACV75/2000.  As a bankrupt, he cannot bring an appeal to the Court of Final Appeal in his own name.  He needs to remove the obstacle, namely, the Bankruptcy Order.  This explains why he had made repeated annulment applications, however unmeritorious they had been. 

22. I have no doubt whatsoever that the Bankrupt has abused and if not restricted will continue abusing the court’s process by bringing unwarranted and unmeritorious annulment applications against the Bankruptcy Order.  His conduct is wholly unjustified.  A RAO is called for. 

23. As to the scope of the RAO, I disagree with Mr Suen’s submission that it should cover all applications in the bankruptcy proceedings.  It would be unduly wide.  It should be confined to annulment applications or similar applications only. 

24. For these reasons, I will make an RAO in the following terms :

1.	that with immediate effect, the Bankrupt is prohibited from making any further applications to annul the Bankruptcy Order or similar applications (“the Annulment Applications”) to the Court of First Instance in HCB1209/2000 without the leave of Mr Justice Poon (“the Designated Judge”) being first obtained (“the RAO”);
2.	that all applications for leave to issue an Annulment Application in HCB1209/2000 (“the RAO leave application”) must be made in writing to the Designated Judge (and not to any other judge or to a master) without giving notice of the application to the intended respondent and/or the Official Receiver;
3.	that in the event that the Designated Judge is not available to deal with the RAO leave application, the same should be dealt with by another judge designated by the Chief Judge of the High Court;
4.	that all RAO leave applications and all matters ancillary thereto should be dealt with on the papers and without any oral hearing unless the Designated Judge otherwise directs;
5.	that where leave to make the substantive application is granted, service of the other giving leave must accompany service of the substantive application in question, which should be heard by a judge and not a master unless the judge otherwise directs;
6.	that if, contrary to the RAO, the Bankrupt seeks to issue an Annulment Application in HCB1209/2000 without prior leave of the court, the purported application should forthwith be referred by the Registry to a master for such application to be dismissed in accordance with the RAO; and
7.	that if, contrary to the RAO, the Bankrupt purports to serve on the respondent and/or the Official Receiver any Annulment Application in HCB1209/2000 without at the same time serving on the respondent and/or the Official Receiver a copy of an order giving leave to issue such application, such application should automatically stand dismissed, so that neither the respondent, the Official Receiver nor the court would be required to take any steps in response.

Costs

25. Finally, since the RAO proceeding was initiated by the court’s own motion, I think no order should be made on costs.  I so order.