RE LI YAN CHUNG

IN THE HIGH COURT OF HONG KONG

IN BANKRUPTCY

No. B441 OF 1992

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J U D G M E N T

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1. The Debtors in both these cases were represented by Mr. Emerson. They served Notices of their Intention to oppose the Petitions which had been filed for them to be adjudicated bankrupt.

2. Mr. Emerson raised a number of technical points on both these Petitions which I consider can conveniently be dealt with together.

3. The first complaint related to the service of the Bankruptcy Notices which were relied upon by the Petitioner as supporting the acts of Bankruptcy.

4. In both cases the Petitioner's solicitors were unable to effect personal service of the said Notices upon the Debtors.

5. It is apparent from the affidavits which were before me that various inquiries were made by the solicitors and an application was made to a Master for orders for substituted service of the Notices.

6. Mr. Wong, who was the solicitor representing the Petitioner and who appeared before me placed reliance upon the address given in the Sale and Purchase Agreement which was the subject of the litigation between the parties as being the address of the Debtors. It was accepted that this was the business address of the Company of which they were both Directors and principal shareholders.

7. When the process server had attended at this address, he had been informed by a lady at the address that neither Debtor was known at the address.

8. Mr. Wong had also referred to the fact that Messrs. Ho & Chan Solicitors had been representing the Debtors in connection with the litigation between the parties but he was not aware of the fact that these solicitors had instructions to act for the Debtors in these Bankruptcy Proceedings. He suggested that the Notices might be served by way of substituted service at the said business address and by leaving a copy of the Notices at Messrs. Ho & Chan's offices. Later, he made the alternative suggestion that an advertisement be placed in a Chinese Newspaper advertising the Notices.

9. In the event, the Master ordered that papers be sent by post to the said business address and advertisements be placed in the manner proposed. This was done and the order for substituted service was complied with.

10. Mr. Emerson complains that insufficient researches were undertaken by Mr. Wong to ascertain the Debtors' residential addresses and that Mr. Wong failed to fully disclose to the Master all relevant evidence available relating to the Debtors' whereabouts.

11. I do not consider these complaints are justified. Mr. Wong was entitled to place reliance upon the address given by the Debtors in the Sale and Purchase Agreement. It was not incumbent upon him to embark upon detailed investigations to attempt to locate further addresses.

12. Perhaps most significant of all, there is no complaint made by either of the Debtors that they had not become aware of the Notices when the substituted service had been effected. As I see it, the order for substituted service was complied with and there is no evidence before me that the Notices did not come to the attention of these Debtors. This complaint is, in my view, without merit.

13. The next complaint which is made is that the name and address of the Petitioner's solicitors is also included in addition to the Petitioner's name and address. Mr. Emerson argued that this could cause confusion in the mind of the Debtors. They may not know to whom they had to make payment. His authority for this was in re a Judgment Debtor 1908 2KB 474

14. The answer to this is simple. Section 4 of the Bankruptcy Ordinance Cap. 6 reads :-

" 4. A bankruptcy notice under this Ordinance shall be issued to a judgment creditor, or creditor who has obtained a final order, by the Registrar on the filing of a request for that purpose and shall be in the prescribed form, and shall require the debtor to pay the judgment debt or sum ordered to be paid in accordance with the terms of the judgment or order, or to secure of compound for it to the satisfaction of the creditor or the court, and shall state the consequences of non-compliance with the notice, and shall be served in the prescribed manner:

Provided that a bankruptcy notice-

(a) may specify an agent to act in behalf of the creditor in respect of any. payment or other thing required by the notice to be made to, or done to the satisfaction of, the creditor;".

15. It is clear from this that the Notice may also specify that payment can be made to the Judgment Creditor's agent. This interpretation is also borne out from Form 5 which is the prescribed form of Notice under the Rules. It is evident from the notes accompanying the form that an agent's name and address can be added where such an agent has been duly authorized by the Judgment Creditor. That I think disposes of this complaint.

16. The final technical point raised by Mr. Emerson was that the amount of the costs payable under the Judgment had not been specified. He submitted that the Debtors would not know how much they had to pay to comply with the Notice.

17. Again I think that the answer to this complaint is simple. Section 3(1) of the Ordinance provides that a Debtor has committed an act of Bankruptcy where .

(g)     if a creditor has obtained a final judgment or final order against him for any amount, and execution thereon not having been stayed, has served on him in Hong Kong or, by leave of the court, elsewhere, a bankruptcy notice under this Ordinance, and he does not, within 7 days after service of the notice, in case the service is effected in Hong Kong, and in case the service is effected elsewhere, then within the time limited in that behalf by the order giving leave to effect the service, either comply with the requirements of the notice or satisfy the court that he has a counter-claim set off or cross demand which equals or exceeds the amount of the judgment debt or sum ordered to be paid, and which he could not set up in the action in which the judgment was obtained or the proceedings in which the order was obtained :"

18. I am satisfied that the terms of the judgment which was obtained against these Debtors jointly were recited with sufficient particularity to comply with the contents of Section 3(1)(g). Again I consider that this complaint is without foundation.

19. Having disposed of these technical matters I will now consider the Petitions substantively.

20. Here the position concerning these 2 Debtors diverge radically.

21. Mr. Fu has filed an affirmation which clearly takes issue on the Petitioner's contention that he is domiciled in Hong Kong. Mr. Wong submitted that Mr. Fu had a Hong Kong Identity Card and there was sufficient evidence to establish domicile. I regret that I must disagree. The burden is placed upon the Petitioner to prove the Debtor's domicile. I have no doubt that there is insufficient evidence before me to establish this. On this ground alone I would dismiss the Petition Receiving a Receiving Order against Mr. Fu.

22. No issue is raised concerning Mr. Li's domicile. I am told that no other matters are contested in the Petition seeking the Receiving Order against him and I would make an order in the terms sought in the Petition.

23. I will hear the parties on costs.