RE LOK SHUN t/a MEI SUN WEAVING FACTORY

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J U D G M E N T

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1. A petition for a receiving order was filed on the 14th August 1984 by employees of the debtor. The act of bankruptcy relied on is that on the 9th August 1984 execution was levied by seizure of the debtor's goods which were subsequently sold. Apart from the debts due to employees the debtor admits other debts in the sum of approximately $580,000.

2. When the petition came before Mayo J. on the 15th October 1984 the debtor denied his indebtedness, but in the alternative invoked the 15% rule pursuant to Section 9(3) of the Bankruptcy Ordinance. Directions were given at the hearing and the petition was adjourned to a date to be fixed. However, the 15% rule does not apply where as in this case there are preferential claims see Re Wong Moon tai Bankruptcy No. 80/1983. Accordingly, as the debtor has admitted his indebtedness, a receiving order must be made.

3. However, as the debtor went into the witness box I will make some comments on his evidence. He said that he has a monthly income of between $2,000 and $3,000, but does not have any capital assets except a credit of $10.00 in a bank account. In cross-examination he said that he had been in business for about 9 years, originally in partnership, but subsequently as a sole proprietor. Over this period of time he had never paid any tax. On the 3rd September 1984 he issued a cheque in favour of one of his creditors Edward Wong Credit Ltd. in the sum of $1,000. In answer to a question by Mr. Davidson who appeared for the Official Receiver as to why he was resisting the making of a receiving order, he claimed that some of his workers had exaggerated the amounts owed to them.

4. I found the debtor to be an unimpressive witness, and I am far from satisfied that he was telling the whole truth.

5. The Official Receiver supports the petition.A receiving order will be made together with the usual order for costs.