RE TANG WAI YEE

HCB 937/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

BANKRUPTCY PROCEEDINGS NO. 937 OF 2004

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(Heard Together)

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REASONS FOR JUDGMENT

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Introduction

1. The 3 petitions, namely, HCB No. 937, 939 and 940 of 2004 share the same background and can be dealt with together. Each of the debtors therein owe the petitioning creditor a judgment debt of about $1.6 million. In the Amended Petition, the petitioner discloses that it holds security for the payment of the debt but, in short, the value of the security is less than the amount of the debt and the petitions are based on the unsecured part of the debt.

2. The debtors do not dispute the debt on which the petitions are grounded. At the hearing on 17 May 2004, they put forth the following objections:-

(a) the valuation of the security is disputed;

(b) there is a willing purchaser of the security who offered $2 million for purchasing the security.

3. In relation to the objection set out in sub-para. (a) above, the debtors have not filed or served any evidence in support of their contended valuation. When queried by the court, counsel for the debtors confirmed that the court documents relating to the 3 petitions had been obtained by their solicitors before 10 March 2004. There is no reason given why the debtors could not get hold of any valuation report earlier. The debtors ask for an adjournment of the petitions to file and serve such evidence. I consider this to be a tactical move and reject the application.

4. In relation to sub-para. (b) above, the only document showing a sale is a letter dated 7 May 2004 from the debtors' solicitors to the petitioner's solicitors. When asked by the court, counsel confirmed that no agreement had been signed by the potential purchaser. In these circumstances, I do not accept there was a genuine sale.

5. The debtors also oppose the petitions for lack of service of the statutory demand on their solicitors. There was however an order permitting the petitioner to effect substituted service thereof and there was no application (up to now) to set aside that order.

6. In addition, the debtors oppose the petitions by reason of a lack of supporting affidavit. I do not find there is any substance in this objection either.

7. To sum up, there is no valid reason to oppose the petitions. There is also no valid basis to exercise my discretion other than to make the usual bankruptcy orders sought with costs. Consequently, I so ordered at the end of the hearing on 17 May 2004.