RE LEE KIM HIN CARRYING ON BUSINESS

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

IN BANKRUPTCY

NO. B287 OF 1985

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JUDGMENT

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1. This is an application for a receiving order which is based upon a judgment obtained by the petitioning creditor on the 28th August, 1984 for the sum of $109,166.68 interest and costs.

2. A bankruptcy notice was served upon the debtor on the 17th April 1985 and the present petition was issued on the 1st July 1985 and served on the following day. The debtor admits the debt due to the petitioning creditor, but says that he is unable to pay. However, he opposes the grant of a receiving order on the grounds such he has insufficient assets after appropriate deductions to pay a dividend of 15% under section 9(3) of the Bankruptcy Ordinance.

3. No issue arises on this petition with regard to the burden of proof in respect of which there are conflicting decisions. I have, therefore, been invited by Mr. Wills who appears today for the petitioner to exercise my inherent discretion to grant a receiving order.

4. The debtor has filed an affirmation dated the 5th August, 1985 in which he has exhibited a balance sheet that sets out his financial position. Amongst the liabilities are sums due to six insurance companies for whom he has acted as an insurance broker. The largest debt for over $150,000 is due to Armour Insurance Company limited and the next highest is that due to the petitioning creditor which now amounts to over $120,000. The debtor admits to a total indebtedness of over $301,000. In his evidence to-day the debtor said that his income from his employment as a self-employed insurance broker is about $3,000 per month which is his sole income. His wife works as a cleaner earning about $2,000 per month. Apart from his wife the debtor has no dependants. He claims that he has no Capital assets of any description. The rent in respect of his accommodation in Jaffee Road is $1,164.07 per month and for his business premises in Kowloon $1,600 per month. Although the debtor has continued his employment as an insurance broker for certain insurance companies his agency for the petitioning creditor was cancelled in 1983.

5. The gist of the debtor's evidence is to the effect that as an insurance broker he would collect premiums from his clients and he would then deduct his commission and thereafter account to the insurance company. It is quite clear from the evidence that the debtor has not made a full account to these insurance companies in respect of which he is now in considerable debt. He has given some explanation in the witness box to the effect that the money owed to the petitioning creditor had been accumulated over a period of six months. He mentioned that part of the debt between $10,000 and $20,000 related to policy holders who have defaulted in their liability to him. However, he has given no explanation with regard to the balance. I found the debtor to be a very unsatisfactory witness who has not given a full and frank explanation as to what has happened to the monies for which he is liable to accoun. This is a case, in my opinion, which clearly calls for a thorough investigation by the official receiver in the public interest. Accordingly I shall make the usual receiving order with costs.