ONG SIU SIN KEVIN v. LEE TSZ YING

HCSD 5/2021

[2021] HKCFI 2336

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

APPLICATION TO SET ASIDE A STATUTORY DEMAND NO. 5 OF 2021

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D E C I S I O N

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A.   Introduction

1.  By an ‘Application to Set Aside Statutory Demand’ dated 12 March 2021, the Applicant seeks an order that the Statutory Demand dated 9 February 2021, served on him by the Respondent, be set aside.

2.  The Statutory Demand was for the sum of HK$2,156,041.78, described as being comprised of various amounts of money lent by the Respondent to the Applicant between 7 October 2019 and 27 March 2020, and the resulting credit card and lending charges incurred by the Respondent as a result of the Applicant’s incapacity or unwillingness to repay the loans in full.  Attached to the Statutory Demand (and forming part of it) is a schedule (“Schedule”), which itemises the various loans, by reference to date, amount and description, and which also takes into account all amounts repaid by the Applicant up to the date of the Statutory Demand.

3.  The application has had what might be described as a slightly chequered procedural history, which it will be necessary to canvass below.  Although originally legally represented by a firm of solicitors, Cheung & Co, those solicitors successfully applied for an order on 6 May 2021 to cease to be the solicitors for the Applicant in this action.  Since that date, the Applicant has acted in person.

4.  At the hearing, the Applicant appeared in person and the Respondent was represented by Mr Holden Slutsky of Counsel.

5.  Two preliminary points were dealt with by me in the course of the hearing, prior to the argument on the substantive application. I can rehearse those matters below.

6.  At the conclusion of the hearing, I reserved my decision.  This is my Decision.

B.   The Procedural History

7.  As stated, the application was made on 12 March 2021. The application was supported by the affirmation of the Applicant also dated 12 March 2021.

8.  Bearing in mind that the Applicant was legally represented at the time, the affirmation can properly be described as “thin”. In the affirmation, the Applicant essentially made only the following points or assertions:

(1)  he does not admit the alleged debt as stated in the Statutory Demand;

(2)  he started a courtship with the Respondent around 2018, when she was a secretary in a law firm and he was semi-retired;

(3)  since the second half of 2019, the Respondent cried out for help that she had no money, so he therefore paid her money from time to time, more frequently in the second half of 2020;

(4)  due to different lifestyles and personality, the relationship turned sour and they broke up in about September 2020;

(5)  he was not aware of the alleged expenses stated in the Schedule to the Statutory Demand, as the schedule was void of particulars and he did not know how they were incurred;

(6)  therefore, there was a serious dispute of fact which ought to have been first resolved through legal proceedings.

9.  Even though the Applicant was legally represented, and despite the fact that the Respondent’s solicitor was named on the Statutory Demand, the application and affirmation were not served on the Respondent or her solicitor until 16 March 2021, after the Respondent’s solicitor had received a fax from the Court with a set of initial directions given by Linda Chan J.

10.  Those directions pointed out the settled principle that bankruptcy procedure is not the appropriate avenue for resolving disputes between the creditor and debtor, and required the Respondent to serve an affirmation within 14 days to demonstrate that there would not be any bona fide dispute, failing which the setting aside application would be acceded to with costs.

11.  Well within the time permitted, on 26 March 2021, the Respondent filed her affirmation.  In it, she set out the background of the relationship she had with the Applicant and the details of the circumstances as to her lending him money and buying items for him.  She also explained why the relationship was terminated by her, and how her suspicions of the Applicant increased afterwards, leading to her discovery that had given her a false name and made various false representations about himself, and that he was living in Hong Kong as an asylum seeker and a convicted serial fraudster.  She exhibited a significant body of material, including many pages of WeChat messages exchanged, which she said demonstrated the misrepresentations made by him, as well as the various loans provided to him, and his frequent acknowledgements of the debt and promises to pay, which were mainly broken.  In the affirmation, the Respondent also made clear that she had reported the matter to the Police.

12.  On 1 April 2021, the Applicant’s solicitors wrote to Linda Chan J pointing out that serious allegations have been made by the Respondent against the Applicant, and repeating that there was a bona fide dispute as to the alleged debt and that the Statutory Demand ought to be set aside.

13.  On 12 April 2021, Linda Chan J gave directions (1) giving leave to the Applicant to file affirmation in reply, if any, within 14 days (namely by 26 April 2021) and (2) giving leave to set down the application for argument with three hours reserved.

14.  On 4 May 2021, the Respondent’s solicitor wrote to Linda Chan J, pointing out that the Applicant failed to file any affirmation in reply within the permitted time, and that there had been a failure to set down the application for argument.  The solicitor pointed out that the Applicant’s evidence amounted to nothing more than bare denials, against the Respondent’s evidence showing that the Applicant had admitted on numerous occasions being liable to the Respondent for the debt, and that he had also stated that he would use all the money he owes to her against her.

15.  On 10 May 2021, Linda Chan J gave directions that unless the Applicant filed his affirmation in reply by 17 May 2021, the application would be dismissed without further order, as the Applicant would not have been able to refute the facts stated in the Respondent’s affirmation. Those directions were sent to the Applicant at his home address, because his solicitors came off the record by order of the Master dated 6 May 2021.

16.  Apparently only after close of business/court hours on 17 May 2021, that is after expiry of the time in the unless order, the Applicant wrote to Linda Chan J and applied for an extension of time of 21 days to file the “required affirmation to disprove all the claims” of the Respondent, as well as to seek new legal representation and obtain necessary proof to rebut the claims.  He also stated that the claim of monies in the form of cash having been given to him were false and not proved, that the WeChat records had been taken out of context, and that the amount claimed was wrong and false.

17.  On 17 May 2021, Linda Chan J extended the time of the unless order to permit the Applicant until 31 May 2021 for filing and serving the necessary affirmation.

18.  On 31 May 2021, the Applicant did file his affirmation in reply.  But he did not serve it as required under the unless order.

19.  In stark contrast to the stance taken by the Applicant in his original affirmation, in his reply affirmation the Applicant sought to identify various disputes of fact on the items claimed in the Schedule to the Statutory Demand.  It is clear that the Applicant went through the Schedule and was somehow now able to address various items which he could explain or dispute.

20.  On 1 June 2021, the Respondent’s solicitor learned from the Clerk to Linda Chan J that the affirmation in reply had been filed, but in a letter to the Court expressed the view that there had been a failure to comply with the unless order because the affirmation had not been served.  That letter was sent to the Applicant at his home address.

21.  On 11 June 2021, Linda Chan J gave leave to the parties to fix the application for substantive arguments with two hours reserved before any judge.  She also understandably stated that she would not consider any parties’ contentions or applications made by way of correspondence.

22.  On 22 July 2021, the Respondent’s solicitor wrote to the Applicant at his home address, again pointing out his failure to have served the affirmation in reply and demanding it be provided as soon as possible.  As a courtesy, the letter also enclosed a copy of Practice Direction 5.4 to assist the Applicant with his primary responsibility for production of the hearing bundles, skeleton argument and so forth.

23.  The Applicant completely ignored that letter – I think deliberately.  He did not provide a copy of his affirmation.  He did not file any hearing bundle.  He did not file any skeleton argument.

24.  The hearing bundle was, therefore, necessarily provided by the Respondent’s solicitor.  In compliance with the PD, Mr Slutsky did provide a skeleton argument (with attached copy authorities), a dramatis personae and a chronology of events.

C.   Stay Application

25.  At the commencement of the hearing, the Applicant applied for a stay of these proceedings.  The basis of his application was that the Respondent has made a complaint to the police, leading to an investigation by the police, based on the same set of facts and circumstances as underpinning her statutory demand.  The Applicant said that if the current proceedings were to continue, he would be seriously prejudiced in the potential criminal proceedings.

26.  In response, Mr Slutsky pointed out that the Applicant is the person who brought these proceedings, and further submitted that it is difficult to see why continuing with these proceedings would prejudice the Applicant.  In any event, there ought not be any further delay in the Respondent’s efforts to recover the monies which she says are due and which she made the subject of the statutory demand.

27.  In reply, the Applicant suggested that part of the prejudice lies in the fact that the police have seized materials from his home, including certain receipts for deposits and his mobile phone containing relevant WeChat messages.  He also said that he would potentially face trial twice for the same matters.

28.  Balancing matters overall, and in the exercise of my discretion, I refused the application for a stay, giving brief reasons. First, the last mentioned concern would not be removed by any stay.  Further, it is not unusual for there to be criminal proceedings and civil proceedings arising out of the same matters.  Therefore, the focus should be on whether there is any real prejudice suffered by either party, and to balance those prejudices.

29.  The matter falls to be considered against the general principle that bankruptcy proceedings, and matters related to potential bankruptcy proceedings, should be determined one way or another with reasonable dispatch.  One of the reasons why reasonable dispatch is required is to avoid problems which almost necessarily come from delay, where recovery of a debt is sought.  If there is a disputed debt on grounds which appear to the court to be substantial, the statutory demand will be set aside.  If there are no such substantial grounds, then the statutory demand will unlikely be set aside. Instead leave would be given to issue a bankruptcy petition, itself commencing proceedings which should be determined with reasonable dispatch.

30.  I took into account the procedural delays which have been achieved by the Applicant to date, and the fact that the stay application was not made through any formal application, nor in any part of the evidence filed by the Applicant in these proceedings.  Against the chronology that the Respondent specifically referred to her Police report in her affirmation dated 26 March 2021, there was no explanation as to why the stay application was made without notice, only at the substantive hearing.  I pointed out that it rather smacked of an attempted last minute ambush.

31.  In any event, whilst the police are now investigating the matters which lie under the claimed debt the subject matter of the Statutory Demand, I did not accept that the Applicant faces at this point any significant prejudice from proceedings which he commenced as would overbalance the prejudice which the Respondent might face from what would in effect be a stay of proceedings for an indefinite period.

D.   The Reply Affirmation and Potential Further Evidence

32.  In his skeleton argument, Mr Slutsky suggested that the hearing should proceed on the basis only of the Applicant’s original affirmation and the Respondent’s affirmation, and that no attention should be paid to the reply affirmation because of the non-compliance with the terms of the unless order, in that it was not served within the stated time (or at all).  Mr Slutsky submitted that the failure to comply was intentional and contumelious, and that there were no extraneous circumstances which would excuse that conduct.

33.  Nevertheless, the Applicant’s reply affirmation was filed in time, and the Respondent was made aware of that fact the following day.  Though it may have given rise to additional expense, I would have expected the Respondent’s solicitor to have inspected the court file, and to have obtained a copy of the affirmation (even if leave to make that copy would have been required).  I accept that the Respondent was entitled to take a principled stance that the affirmation should be ignored, but I think it would have been prudent at least to prepare for an alternative when the affirmation was at least filed within time, and was filed many weeks before the fixed date for the substantive hearing.

34.  I stopped the hearing for 20 minutes to allow the Respondent’s legal team to read and consider the reply affirmation. Having done so, and seeing that I was minded at the hearing to allow the Applicant to rely on the content of the reply affirmation, Mr Slutsky chose not to make an adjournment application (no doubt in part to avoid additional expense, where a costs order against the Applicant may well go unsatisfied), but stated that he was prepared to deal with its contents.  I therefore indicated to the Applicant that he would be permitted to rely on the content of his reply affirmation.

35.  It was then something of a surprise for him to suggest that he had other evidence which he would also wish to deploy.  Having informed him that I would not consider any further evidence filed outside the time permitted by the unless order, unless he made and I acceded to an application to permit him to do so, the Applicant made that application.

36.  I refused it.  I did so on the basis that the Applicant had already benefited from significant delay, notwithstanding that he was until 6 May 2021 represented by solicitors.  I rejected his suggestion that he had not seen the Respondent’s affirmation until sometime after 26 March 2021, and I rejected his altered suggestion that whilst he had seen the body of the affirmation he had not seen its exhibits.  He must have forgotten that he told Linda Chan J that the exhibited WeChat records were taken out of context.  The Applicant suggested that he was hampered in preparing his evidence because the Police had seized various materials from him, including his mobile phone.  But, only in answer to a direct question from the Court, he conceded that those items were taken only on 22 June 2021.  That was a date more than three weeks after the expiry of the unless order.

37.  In any event, the Applicant can have been left in no doubt that there was a ‘hard’ deadline for him to file whatever evidence he chose to file in reply to the Respondent’s evidence.  Linda Chan J’s directions were express that the evidence he had to file was evidence so as “to refute the facts stated in the Respondent’s affirmation”.  Though I shall consider if he has hit that target, he did file a reply affirmation.  It does not suggest that he was in any way hampered in doing so, or that he required further time (which he would no doubt have anticipated would have been refused).

E.   The Facts

38.  The Applicant is originally from Singapore.  He arrived in Hong Kong as a visitor on 13 October 2001, and on subsequently marrying a Hong Kong resident he was permitted to remain as a dependent until their divorce in 2008.

39.  On 22 December 2008, a Bankruptcy Order was made against him in HCB 6344/2008.

40.  Between 2006 and 2010, the Applicant was convicted of at least 25 criminal offences of dishonesty against women (including theft and fraud).  They include:

(1)  6 charges of evasion of liability by deception: ESCC 5576/2007;

(2)  2 charges of fraud: ESCC 1848/2009;

(3)  1 charge of fraud: KCCC 797/2009;

(4)  1 charge of making off without payment: ESCC 1876/2010;

(5)  15 charges, comprising 2 charges of theft of credit cards and 13 charges of fraud: DCCC 1010/2010.

41.  The first three listed cases went on appeals, heard together by Mackintosh J in HCMA 733, 734, & 735/2009 (unreported, 10 March 2011).  The fact patterns identified in most of those cases bear a remarkable similarity to the description given by the Respondent about the Applicant’s modus operandi with her, with the Applicant meeting his victims on the Internet, leading to a romantic relationship, with the Applicant claiming to be a man of substantial financial means, but on various excuses asking to be lent cash or for the victims to purchase items for him, and providing promises for repayment which were not kept (though on occasions cheques were provided, which although they bounced evidenced the acknowledgement by the Applicant that he was expected to repay the amounts).

42.  At §§40-42 (dealing with HCMA 734/2009), Mackintosh J said:

All the PWs made purchases or lent money to the appellant on the basis that he would reimburse them.  He told them that this was so and in each case, cheques were drawn on his existing or former accounts which demonstrate that the items purchased, or the money spent on hospitality, or the cash lent him were not gifts.  The cheques may have been in greater amounts than they were owed, but still, that shows that the appellant was aware that he had a liability to repay.

The appellant had represented himself as a man of established financial means and then gave cheques which he knew would be dishonoured.  In certain instances the cheques were drawn on an account which was already closed; or they were crossed cheques made out to cash which could not be met.

It was clear on the evidence that the appellant never intended to repay, despite his repeated assertions to the contrary and the delivery of the cheques themselves.

43.  The appeals were dismissed.  As described by Mackintosh J at §62:

This appellant [ie. the Applicant] has shown himself to be persistently dishonest towards gullible women.  He continued offending even whilst on trial for one set of offences.  He is a menace to such women in respect of whom he has shown himself to be wholly unscrupulous.

44.  The Judge also pointed out that the Applicant had in fact been “markedly under-sentenced by the magistrate”, and he expected that if the Applicant were to continue with this type of offending, the Department of Justice would seek to transfer his case to the District Court where sentences of the order of five years’ imprisonment or more could be imposed.

45.  In passing sentence in DCCC 1010/2010, Deputy District Judge A Yuen “totally concur[red]” with Mackintosh J’s observation, noting that the particular facts of the case involved specimen charges only and that this was not an isolated incident as the Applicant had a habit of practising fraud against women.  The Applicant was sentenced to a total 4½ years’ imprisonment.

46.  The Applicant served that sentence in prison between 2010 and 2014.  Immediately before his release from prison, a deportation order was issued against him by the Immigration Department on 27 August 2014.

47.  However, on 9 September 2014, the Applicant raised a non-refoulement claim for protection on the basis that if he returned to Singapore he would be harmed or killed by his cousin, who was said to be and Assistant Director of Prosecutions, for trying to expose a crime committed by his cousin for having stolen millions of dollars from his grandmother’s account.

48.  After completing a Non-refoulment Claim Form on 21 November 2014, and attending a shortened first screening interview, he failed to attend any follow-up interviews due to various reasons, and instead provided some answers to a list of questions raised by the Immigration Department.

49.  On 9 December 2015, the Director of Immigration rejected the Applicant’s claim on all then applicable grounds, finding serious issue with the Applicant’s credibility.  By further decision dated 18 November 2016, the Director of Immigration again rejected the Applicant’s claim.

50.  By then, the Applicant was already in the process of appealing to the Torture Claims Appeal Board.  His appeal was dismissed by that Board on 26 October 2017.  The Board found the Applicant’s evidence “unconvincing and lacking in credibility”, which was further undermined by the fact it was not until nearly 13 years after he arrived in Hong Kong and only after a deportation order was made against him that he chose to apply for non-refoulement protection.

51.  In HCAL 33/2018, the Applicant sought leave to apply for judicial review to challenge the decision of the Board.  In a judgment dated 11 December 2019 [2019] HKCFI 2481, DHCJ Bruno Chan refused leave, holding that there was “simply no merit” in the Applicant’s complaints and “[no] reasonably arguable basis to challenge the finding of the Board on the credibility of his claim”.

52.  Meanwhile, on 5 April 2019, the Applicant and the Respondent met online on a dating application.  The Applicant introduced himself as David Chou, an American and owner of a hedge fund in Hong Kong.  The Applicant and the Respondent extensively used WeChat to communicate and plan activities.  In some of the first WeChat messages, the Applicant claimed to have moved to Hong Kong 4 years earlier, and to have lived for 8 years in each of Tokyo and Korea beforehand.  From the above chronology, that was clearly untrue.  Even his name was a lie.

53.  On 12 May 2019, the Applicant and the Respondent met in person.  In around October 2019, they started a romantic relationship.  Throughout their relationship the Respondent was working as a legal secretary at a law firm, earning approximately $45,000 per month.

54.  Also, in October 2019, the first amounts were borrowed by the Applicant from the Respondent.  The Respondent says she continued to lend the Applicant monies, or to make purchases for him at his request, on an ongoing basis, and also borrowed at his request.  The last amount borrowed by the Applicant from the Respondent was on 27 March 2020.

55.  The Respondent says she agreed to lend money and purchase items for the Applicant on the basis of his representations that he was a successful and rich individual (at various times claiming to be a practising barrister, hedge fund owner, owner of garment factories, owner of instant noodle factories, owner of a 164-foot yacht, and so forth).

56.  The Respondent kept an Excel spreadsheet record of the various amounts borrowed by the Applicant, and from time to time would send him a copy of the record (usually by screenshot/photo of the running schedule, sent by WeChat), to let him know how much he owed her at various times.  Each time the schedule was sent to him, it had the total amount outstanding/lent at the bottom.  As an example, the screenshot sent to him on 6 January 2020, showing expenditure between 20 December 2019 and 4 January 2020, showed the running total of $1,699,285.73.

57.  Though, for stated reasons of procedural economy, the Respondent produced as exhibits only extracts of the messaging exchanges, she volunteered to produce to the Court (and impliedly to the Applicant) upon request the voluminous total amount of messaging.  None of the messages produced in evidence show any demur by the Applicant either to the fact that he had borrowed monies, or as to the items or amounts of the monies borrowed and shown on the spreadsheet sent to him from time to time.

58.  There are also frequent references in the messages to the Respondent holding receipts for the Applicant’s spending.  For example, on 22 December 2019, the Respondent messaged “I have a stash of ur receipt!” and “And the ledger that I prepared with only what u owe me”, a screenshot of which is sent a few messages later.

59.  The Respondent terminated the relationship with the Applicant in August 2020.  She says she did so because she discovered that the Applicant was again using dating applications.  The exchanges of messages around that time evidence that as being the true basis for her terminating the relationship, and the commencement of her efforts to be repaid what she was owed by the Applicant.

60.  At various points beginning from November 2019, the Applicant repaid some sums to the Respondent.  As the Schedule to the Statutory Demand identifies, the Applicant paid sums to the Respondent in round numbers and in dribs and drabs.  Importantly, he continued to make payments to the Respondent long after their relationship ceased, up to and including the last (68^th) payment on 4 February 2021 – see further below. The total amount of payments made by the Applicant was $299,000.

61.  The content of the WeChat messages exhibited by the Respondent to her affirmation give the lie to the Applicant’s suggestion in his first affirmation that he paid her money from time to time in response to her crying out for help because she had no money.  Indeed, the content of the Applicant’s own second affirmation confirms that lie, because he accepts in it that he was lent at least certain sums of money as shown on the Schedule, although he says he has “more than repaid in full” (and he denies receiving or benefiting from some other payments or charges shown).

62.  Indeed, immediately after the termination of their relationship, the Applicant expressly acknowledged the debt, and made various representations – which turned out to be false – that he was arranging payment.  As the Respondent put it in her evidence, there was an almost endless continuous back-and-forth between the Applicant and her, where the Applicant was promising to repay within a certain period of time and with her following up on such promises.

63.  The following are merely examples taken from the exhibits (where “R” is the Respondent and “A” is the Applicant, and his messages are shown in italics):

(1)    11 August 2020:

R:  I’m pulling receipts for you.  Do u want copies of all the credit card statements?

R:  David pls can you let me know?  If so, I will need some time to get everything for you.  If you don’t want to meet any more i would understand and I can get SF to courier it to you.

…

R:  It would also be good to go through the money issue.  See how we can work it out. Maybe make a time this week to go through it on the phone?

A:  I will get the cash to give you

(2)    13 August 2020:

R:  I pay around $3xk a month on ur debt so I am not lying about running low on money

…

R:  I also need to know when you will return the money.  I might need to move the surgery up.

A:  I am working on it

(3)    16 August 2020:

R:  I’m not trying to fight.  I am just asking what is mine

A:  And you think I don’t want to give it to you

R:  And if it wasn’t an emergency I wouldn’t reach out to u

R:  It is an emergency

A:  It has to be possible first of all

(4)    18 August 2020:

R:  I don’t want to be in the way anyways so sort what I need today and I’ll give u till end of September to return the rest

R:  I also need some money for surgery close to mid September

R:  Look I’m not here to argue anymore.  I just want to sort things out

R:  Can we agree on that?

R:  1mil or 800k

R:  ?

A:  Nope

A:  3 mil in 14 days

(5)    29 August 2020:

R:  Reminder that Tuesday u need to return the money

R:  As I need to get ready for the surgery and pay back some money

R:  Pls acknowledge my message.  Thanks

A:  Yes I know that

(6)    1 September 2020

A:  You are getting 3 mil and that’s it

A:  We call it even

R:  N

R:  No

A:  ?

R:  I meant u owe less

A:  Whatever

R:  So I need to transfer back the remaining

(7)    4 September 2020:

R:  In the meantime can u transfer money for rent as I just paid off ur credit card

A:  Ok

R:  The other money u will not return right?

R:  Yes or no would do

A:  What nonsense are you spewing

R:  I gave u extra three days and no response

A:  If I am not gonna return you money why would I even give you money for rent I. The first place?

...

A:  Look I know you want the money

A:  And I am working on it

(8)    7 September 2020:

A:  The 3 m should be shorted by this evening

A:  Sorted

R:  Deduct the rent from the 3m

R:  Still nothing

R:  ???

R:  Hello?

A:  Sorry have 15k waiting for the 5 k

A:  Once I get it will send to you

A:  Soon

R:  And the 3m?

A:  Should get it tomorrow or day after

(9)    8 September 2020:

R:  Just tell me money will be transferred today

A:  Please check bank account after 330pm tomorrow

A:  You will be in funds

R:  ?

A:  You will be credited money tomorrow

A:  Will call you again to confirm

R:  No need to if it is confirmed.  But this is the last time I’m extending it.

R:  Once all settled I’ll find a way to return the remaining balance to your lawyers

R:  It will be a week or two though

(10)   9 September 2020:

R:  Nothing yet

A:  My check which I got yesterday will only clear into the client account of the lawyer after 330pm

A:  It’s only after that can I pay you

A:  Please advise account no and account name

A:  Lee Tsz ying right?

A:  082-5-[xxxxx]

A:  Savings account or current

R:  Saving

R:  Yes

A:  Ok thanks

R:  Let me know once transferred

...

A:  You will get your money in the mooring

A:  All of it

...

A:  Look the money will be given to you tomorrow

A:  If you don’t want it can always return it

A:  I have gone to great lengths to get this for you in such a short time

R:  Oh I will get what you owe me.  Matter is how I get it back

A:  Told that you will get it tomorrow

A:  Then we are square

R:  U said that last week

A:  I had to get a loan

A:  The funds only came through today

(11)   10 September 2020:

A:  I will transfer 2 mil

R:  Fine. They think u don’t have the rest hence this

R:  Gotcha

R:  300k over everything u have.  Wow

A:  Fine I will give you 2.3

A:  Who are your lawyers

R:  So what’s the excuse now when I haven’t receive a penny?

A:  Transaction has been done to my knowledge

A:  Takes some time to process

A:  It’s not instant unless from hsbc to hsbc

A:  Or deposit via machine or Payne

A:  Pay me

R:  Yesterday it was today.  Today u tell me it’s tomorrow

R:  My lawyers call the bank.  There is nothing

A:  I am not gonna argue with you

A:  You will the money

A:  Get

R:  U say that everyday

A:  Everything will be sorted within this week

R:  Now it’s this week

(12)   11 September 2020:

A:  Look if I am not gonna repay you you would not have received any money

...

R:  I’m talking about 2.3 mil

R:  So I don’t have to deal with u again

A:  You will get it

R:  When????

R:  Exact date!

R:  If it was transferred u would be able to give me a date

A:  It should be today

R:  Everyday u say it’s today

R:  And it never shows

(13)   21 October 2020:

A:  I will use all that money against you then

R:  Like I said u will pay me back on top of legal fees and go to jail.  Ur choice

A:  No you will get nothing

...

A:  You go do your stupid things and you get nothing

A:  So do you want money on Friday or not?

A:  Say it now!

A:  If you don’t say me the trouble of running around

64.  After termination of the relationship, and no doubt in light of the constant broken assurances of repayment, the Respondent became increasingly suspicious of the Applicant.  On or about 28 September 2020, the Respondent learned from a Chan Mei Yee (the mother of the Applicant’s son) that the Applicant was not called David Chou, but was in fact Ong Siu Sin Kevin. After finding out his true identity, the Respondent discovered that the Applicant was in fact a Singaporean national living in Hong Kong as an asylum seeker, and found out about his previous convictions for fraud, the fact patterns of which resembled to a large extent the situation she experienced.

65.  An Internet search against the Applicant’s real name led the Respondent to numerous websites, forums and news outlets where he is described as a fraudster, including mentioning the WeChat ID used by the Applicant to communicate with the Respondent.  She also discovered that the Applicant is the subject of an entire episode of an American TV show called ‘Asian Swindlers’, given the nickname of “Cheating Romeo”.  The person shown on that show appears to be the Applicant, and (though the Respondent cannot verify the content of the show) it suggests other victims were defrauded in the same fashion as he treated the Respondent.

66.  The Respondent has made two reports to the Hong Kong Police in respect of the Applicant, and they are currently investigating him.  The Respondent understands that other women have also lodged complaints against him.

67.  As already pointed out, and despite his broken promises to transfer significant sums in repayment, the Applicant continued to make payments to the Respondent long after their relationship ceased.  From 18 November 2020, he made payments to the Respondent – usually in the sum of $2,000, but occasionally $1,000 or $5,000 – almost daily, as the Respondent has recorded on the Schedule to the Statutory Demand.  The last payment was made on 4 February 2021.

68.  As an aside, I note that very recently on 30 July 2021, the Court of Appeal gave Judgment [2021] HKCA 1066, refusing the Applicant’s renewed application for an extension of time to appeal against the decision of DHCJ Bruno Chan mentioned at [51] above.  Despite the fact that the Deputy Judge’s decision was given on 11 December 2019, the applicant only filed a summons for extension of time to appeal against that decision on 27 July 2020 (seven months after the expiry of time). That application was dismissed by the Deputy Judge on 1 December 2020, [2020] HKCFI 2896.  The application for extension of time to appeal was renewed to the Court of Appeal, leading to its Judgment.  In assessing the merits of the proposed appeal, the Court of Appeal noted at §§17 and 18:

The ground pertaining to the impracticality of obtaining the necessary documentary evidence due to the lack of passport is not supported by any credible evidence.  After being criticised by the Board for not obtaining some documents such as medical records through his solicitors and criticised by the judge back in December 2019 for not even producing any evidence of any attempts by him or his lawyer such as requesting letters to various authorities or government departments of Singapore, the applicant has still not adduced any evidence of any such attempts but only stated he would certainly write to the various departments to obtain documentary proof via his solicitors to prove to the court that he is unable to obtain such documentary evidence should an extension of time to appeal be given to him.  He has not provided any explanation why he could not have done so before or at the time of taking out the present application.  This ground is unmeritorious.

The rest of his grounds are just bare assertions which do not assist him in demonstrating any reasonably arguable basis that the judge was wrong in refusing his leave application.

F.   Applicable Principles

69.  The application to set aside the Statutory Demand is made pursuant to Rule 47 of the Bankruptcy Rules.  Under Rule 47(4)(b), the application should be supported by an affidavit stating the grounds on which the applicant claims the demand should be set aside.

70.  Pursuant to Rule 48(5)(b) of the Bankruptcy Rules, the court may grant the application if the debt is disputed on grounds which appear to the court to be substantial.

71.  The applicable principles are well-settled, and can be found summarised in the Hong Kong Civil Procedure 2021, Volume 2 at §I1/39.  See also Chan Ping Lam Waymond v Noble Art Ltd (unreported, CACV 270/2012, 30 September 2013) at §§8-10; Re Ip Pui Man Nina [2011] 3 HKLRD 299 at §67.

72.  The relevant burden is on the debtor, so that an applicant seeking to set aside a statutory demand must show that there is a genuine triable issue that the debt is disputed on substantial, as opposed to trivial or frivolous, grounds.  Making bare assertions, however serious they may sound, is not enough.  Therefore, the debtor must show a bona fide dispute on substantial grounds, by sufficient precise factual evidence which is believable.  He must establish that he actually has a defence of substance, not just a fair probability of one.

73.  This is a higher standard than that required of a defendant opposing an application for summary judgment under Order 14, in that he must not only show that his defence is credible, he must also adduce precise factual evidence in support of his defence, that is not just mere assertions.  The court will look at the debtor’s evidence against so much of the background and incontrovertible evidence that is not disputed or not capable of being disputed.  Even an honest belief on the part of the debtor that he has a substantial ground of defence is not sufficient to avoid a bankruptcy order.

74.  The fact that the amount of the debt stated on the statutory demand is excessive does not automatically entitle the debtor to have the demand set aside.  It will only be set aside if injustice would be caused to the debtor by allowing the particular demand to stand.  However, no injustice will arise if the debtor cannot adduce any or sufficient evidence to show that he is able to pay the correct amount.

G.   Analysis

75.  As stated, the Applicant’s original stance in his affirmation filed in support of the application to set aside the Statutory Demand was that he was not aware of the expenses shown in the Schedule, and that he had in effect gifted money to the Respondent in response to her cries for help.

76.  In her affirmation, the Respondent states that each time she received money from the Applicant, it was repayment to settle his debt, and he never gifted her sums of money.  She acknowledges that she was often forced to ask him for money (I think particularly in the later period) because she was running out of money to pay for her own personal expenses due to the fact that she had lent the Applicant almost all her savings and because of the money she had borrowed at his request.  She also states her belief that all the cost items listed in the Schedule to the Statutory Demand provide sufficient particulars of the debt, mainly because it is the same Excel sheet that she has shown the Applicant over and over and he has never raised any objections until his first affirmation in these proceedings.

77.  Faced with the evidence which demonstrates the clear lie in his original affirmation, the Applicant has had to change tack. Hence, his second affirmation attempts some criticism of individual groups of items shown on the Schedule.

78.  Insofar as he now accepts that there were indeed loans, the Applicant says they were repaid (picking certain repayments, but almost a year later, from those listed in the Schedule).  But, on the evidence, I do not think it credible that those picked payments were specific repayments of specific loans.  Rather, it is clear that there were a number of payments against a total amount owed from time to time, which payments partly paid down the total amount outstanding.

79.  As to certain individual purchases, the Applicant suggests that they are clearly the Respondent’s own purchases.  Amongst the examples given by the Applicant is the item on 9 November 2019 described as Disneyland hotel in the sum of $5,170.  But that sum was on a copy of the running schedule sent to the Applicant by WeChat on 27 November 2019, to which the Applicant responded “Ok”.  Another example is the item on 11 December 2019 described as a Chanel wallet and handbag in the sum of $32,700.  But that sum was on a copy of the running schedule sent to the Applicant by WeChat on 22 December 2019, with the message “Looks right?”, to which the Applicant responded “Ok”. Clearly, the Applicant has simply trawled through the various items on the Schedule in the hope of raising some dispute that some of the items were purchased by the Respondent for herself.  In light of the existence of the running spreadsheet which became the Schedule, that idea seems to me to be fanciful.

80.  In so far as the Applicant suggests that a lot of the items claimed as debt were in fact gifts made to him by the Respondent during the course of their relationship, I reject that suggestion as incredible in light of the various entries on the running schedule sent to him.  The idea that the Respondent, with her level of earnings and her belief that the Applicant was a wealthy man, would “shower [him] with gifts like Chloe handbags etc” is also fanciful.

81.  As to the items described in the Schedule as ‘Cash (Home)’, totalling $55,000, the Applicant says he “clearly … never received such sums of money … at any time”.  Whilst I note that at least some of those sums do not appear to have been shown exactly contemporaneously on the copies of the running schedule sent to the Applicant as are now exhibited by the Respondent, I do not think this gives rise to a dispute as to the date on substantial terms.  Further, in context, the total of those sums is not material.

82.  As to the allegation that the Respondent has double charged, because she appears to want repayment for the items bought and payments for the credit card she used to buy the items, I do not accept that the Schedule identifies double charging.  There is no reason to think that the items separately listed are duplicated in any entries on the Schedule related to credit card payments.  In fact, the WeChat messages seem to suggest that the Respondent was paying off the Applicant’s credit card.

83.  As to the financial charges and credit card charges shown on the Schedule, the Applicant says he has never at any point of time agreed to bear any of them.  Here, the Respondent’s evidence is that she borrowed money at his request, and incurred the various financing charges and credit card charges as they resulted from the Applicant’s failure to repay the debt, and from the fact that she could not herself afford to repay those sums on her salary.  Were these financial and credit card charges the only subject matter of the Statutory Demand, I might be persuaded that there is something more like a real dispute of some substance such as might justify setting aside.  However, those charges are clearly not the only subject matter of the Statutory Demand, and it is not suggested for one moment that the Applicant is able to pay anything remotely like the amount of the Statutory Demand even if those figures are excluded.  Therefore, injustice considerations do not arise.

84.  The Applicant also asserts in his second affirmation the general point that claims of cash loans are fictitious, and that the Respondent has a penchant for hallucinating and fantasising, and that she has been using always a means to try and extort money from him, even resorting to threatening him and his family with harm. 

85.  It is utterly incredible to suggest that the Respondent’s case (that the Applicant borrowed money from her) is some sort of hallucination or fantasy.  A suggestion coming from the Applicant that it is the Respondent who is engaged in extortion is more than a bit rich.  Further, on the evidence of the WeChat messages, it is the Applicant who first sought to suggest that he was being threatened (when he was not).  It can also be noted that on at least two occasions the Applicant even threatened to use against the Respondent the monies that he owed her.  In any event, though any improper threats (if any occurred) should not be condoned, that does not of itself mean that there is a dispute as to the debt on substantial grounds.

86.  The Applicant suggests that the WeChat history exhibited by the Respondent is taken out of context and that if taken in totality it can be seen that the Respondent is trying to extort the Applicant. However, despite being granted the extension of time in part on the basis that he needed time to show a proper context of the WeChat messages, the Applicant has wholly failed to produce any other part of the WeChat history – not a single message – in any attempt to make good that allegation.  This is so, notwithstanding that his mobile phone was only taken from him by the Police more than three weeks after he filed his second affirmation.

87.  Further, as well as making a number of empty assertions, the Applicant has completely failed to address the bulk of the Respondent’s evidence, including as to his numerous and serious misrepresentations about himself to her.

88.  Incidentally, it might be noted that under Rule 47(4)(b), the Applicant’s original affirmation was supposed to have stated the grounds on which the applicant claims the demand should be set aside.  The Rules do not seem to me to envisage an application being supported by an affirmation which states grounds on which the applicant claims the demand should be set aside, if those grounds are readily demonstrated as simply untrue.  Nor do the Rules seem to me to envisage that once the supporting affirmation has been demonstrated to be simply untrue, the applicant is to be given another opportunity to conjure up some dispute on substantial grounds.

89.  Further, the particular application issued in this case does not set out the grounds on the face of it, but instead expressly says that the grounds on which the Applicant claims to be entitled to an order setting aside the Statutory Demand are set out in his original affirmation. What is stated in that affirmation does not raise a dispute which any court would regard on the evidence to be bona fide or substantial.

90.  Ultimately, it seems to me that the Applicant has essentially put forward bare assertions.  He has not adduced precise factual evidence, capable of belief, in support of his case.  Most of his bare assertions are in any event readily dismissed.  The Applicant has not been able to refute the facts stated in the Respondent’s evidence, and in large part has not even attempted to do so. 

91.  Further, the Applicant on numerous occasions acknowledged his debt and promised to pay.  Indeed, after acknowledging the debt, he continued to make repayments – albeit in small sums over several months – long after the relationship between the parties had ended (on his case “soured”). 

H.  Result

92.  The Applicant’s application to set aside the Statutory Demand is dismissed.

93.  I see no reason why costs should not follow the event.  Therefore, the Applicant is to pay the Respondent’s costs, which I shall summarily assess. 

94.  The Respondent shall by 20 August 2021 provide to the Court and to the Applicant a statement of costs for summary assessment.  The Applicant shall then have until 27 August 2021 to provide to the Court and to the Respondent’s solicitor a statement of objections, if any.  I will then make a summary assessment of the costs on the papers.

95.  I also make an order under Rule 48(7) of the Bankruptcy Rules, authorising the Respondent to present a bankruptcy petition against the Applicant forthwith.

96.  Though this application was heard in ‘Chambers (Not Open to the Public)’, I exercise my discretion to direct that this Judgment be uploaded to the Judiciary website.