FUNG CHAU WON v. HKCB FINANCE LTD

CACV209/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 209 OF 2004

(ON APPEAL FROM HCB NO. 6785 OF 2001)

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JUDGMENT

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Hon Rogers VP:

1. This is a relatively simple case.  It concerns a bankruptcy and the basic facts are these.  The debtor was sued in February 2001 on a debt of something over $100,000.  That was in the District Court and the address that was used in the District Court action was taken from a business registration application form obtained as a result of a search which was conducted a few days prior to the service of those proceedings, namely on 7 February; the service of the District Court proceedings took place on 13 February 2001.  However, the debtor had moved his premises and that move was recorded at the Business Registration Office on 16 February 2001.

2. After judgment in default had been obtained in the District Court, the Petitioner sought to enforce that by these bankruptcy proceedings.  The first step that was taken was to serve a statutory demand.  On 12 May 2001, the process server employed by the solicitors for the Petitioner went to the address that had been found on the business registration application form which was obtained in February.  That was an address at Wealthy Industrial Building in Wing Yip Street.  However, when the process server arrived there, she found that the premises were not occupied by the debtor or his firm, Chi Shing Company, but were occupied by Good-use Paper Products.  Naturally, inquiries were made in the building and the caretaker informed the process server that Chi Shing Company had moved out from the address several months earlier. 

3. Further attempts were still made at Wealthy Industrial Building to effect service and for that inquiries were made but, of course, they were unfruitful and, indeed, on one occasion, the process server was directed to an office on the 4th floor but that did not produce any tangible results as regards finding the debtor.

4. Suffice it to say that one way or another, the service of the statutory demand and the bankruptcy petition in these proceedings is relied upon as having been effected at the Wealthy Industrial, Wing Yip Street address which was on the business registration application form.  What the process server did not do, however, and what was not done, was to conduct another business registration search.  Had that been done, it would at least have revealed that the debtor had moved to somewhere in the Golden Dragon Industrial Centre. 

5. There has not been exhibited a business registration application form which would show the address which would have been revealed had a search been conducted.  All we have been shown is the business registration certificate which was issued on 16 February 2001.  That, unfortunately, shows the debtor’s address to be Flat, or Room, 1 in Block L.  The correct address, we are told, would have been Flat, or Room, L in Block 1. 

6. Nevertheless, there has been evidence filed by the debtor that he did receive at the correct address, at least on one occasion, a demand note for rent and rates in respect of another premises for which he was responsible, and also that his surveyor, together with officers of the Lands Department who needed to visit the Golden Dragon Industrial Centre premises for purposes which are unconnected with this case, had no difficulty in going to the correct place and locating him on 6 March 2001 at the Golden Dragon Industrial Centre.

7. Therefore, it cannot be assumed that simply because there were these errors, presumably in the application form which were repeated in the certificate, that if the Golden Dragon address were known to the Petitioner and that correspondence had been sent there and, indeed, if someone had gone there in 2001, that the debtor would not have been located.  What the petitioner says is that on 19 November 2002, that is 18 months later, the process server went back to the Golden Dragon Industrial Centre address and found that there was some other factory occupying Unit L in Block 1.  Be that as it may, one does not know whether, even at that stage, the debtor was still there or he had moved premises yet again.

8. In those circumstances, it appears to me that it would be wrong to say that the Petitioner had complied with the rules relating to service of statutory demands and the bankruptcy petition.  Under rule 46(2) of the Bankruptcy Rules, it is provided that the creditor shall do all that is reasonable for the purpose of bringing the statutory demand to the debtor’s attention and, if practicable in the particular circumstances, to cause personal service of the demand to be effected. 

9. I regret to say that in this instance, on the basis of the process server’s own evidence, I consider that this rule was not complied with.  When told that the debtor had moved some months previously, as the process server was in May 2001, the most obvious thing would have been to conduct another business registration search and, in those circumstances, the service of the demand and the petition have to be set aside simply because the rules were not complied with. 

10. In those circumstances, I would allow this appeal.

Hon Le Pichon JA:

11. I agree.

Hon Tang JA:

12. I also agree.