CAPITAL DRAGON CREDIT FINANCE LTD v. FUNG TIM WAH

HCB 8871/2025

[2026] HKCFI 1939

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

BANKRUPTCY PROCEEDINGS NO 8871 OF 2025

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REASONS FOR JUDGMENT

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A. Introduction

1.  By petition dated 18 November 2025, Capital Dragon Credit Finance Ltd (the “Petitioner”) seeks to bankrupt Mr Fung Tim Wah (the “Debtor”).

2.  Having considered the parties’ evidence and submissions, at the hearing on 30 March 2026, I granted the usual bankruptcy order against the Debtor.

3.  These are the reasons for my judgment.

B.      Background

4.  The Petitioner is a licensed money lender.

5.  From 6 November 2019 to 12 June 2020, the Petitioner and the Debtor entered into a series of loan agreements (the “Underlying Loan Agreements”), whereby the Petitioner lent an aggregate principal sum of HK$2,570,000 to the Debtor.  The details of the Underlying Loan Agreements are as follows:-

Dates of the Underlying Loan Agreement	Contract No	Amount (HK$)
6 November 2019	CDP20191106-133	200,000
21 January 2020	CDP20200121-135	380,000
25 February 2020	CDP20200225-136	360,000
23 March 2020	CDP20200323-137	560,000
21 April 2020	CDP20200421-138	570,000
12 June 2020	CDP20200612-139	500,000

6.  As the Debtor defaulted on the Underlying Loan Agreements, the Petitioner commenced proceedings against the Debtor in HCA 1631/2024.

7.  On 17 March 2025, Master Dick Ho entered judgment against the Debtor in HCA 1631/2024.  He was ordered to pay the Petitioner a sum of HK$5,494,232.31 together with interest and costs.

8.  By decision dated 17 September 2025 ([2025] HKCFI 4285), DHCJ Jonathan Wong dismissed the Debtor’s appeal against Master Dick Ho’s order out of time.

9.  Meanwhile, as early as 13 June 2025, the Petitioner, via its solicitors, issued a statutory demand against the Debtor, demanding him to pay an aggregate sum of HK$5,824,660.55 (the “Judgment Debt”).  This comprises of (i) the aforesaid principal judgment sum of HK$5,494,232.31; (ii)  interest of HK$312,528.24 and (iii) assessed costs of HK$17,900.

10.  The said statutory demand was served on the Defendant personally on 17 June 2025, but had not been complied with.

11.  Hence, the Petitioner took out the petition herein on 18 November 2025.

C.      Legal Principles

12.  The legal principles governing a bankruptcy petition are trite and summarized by Linda Chan J in Guy Kwok Hung Lam v CP Global Inc & Anor [2025] HKCFI 1220 at paras 19(2) to (4) as follows:-

“(2) An unpaid creditor whose debt is not in dispute is entitled ex debito justitiae to seek a bankruptcy order against the debtor.

(3) The burden is on the debtor to show that there is a bona fide dispute on substantial grounds in respect of the debt. For this purpose, the debtor has to adduce sufficiently precise evidence to establish a defence of substance, not just a fair probability of one (Leung Cherng Jiunn [2016] 1 HKLRD 850, §27; Re Soetrisno Farida [2019] HKCFI 2756, §11).

(4) It is not enough for the debtor merely to raise “a cloud of objections on affidavits” (Re Posismo Limited [2018] HKCFI 344, §10(4)). The court would caution itself against unsubstantiated and unparticularized assertions (Re Cheung Chi Mang [2018] HKCFI 984, §13(3), per Ng J; Re Cheung Kwan [2020] HKCFI 1033, §§30-31).”

D.      Deliberation

13.  The Debtor has plainly failed to raise a bona fide dispute on substantial grounds, and there is no basis for him to oppose the petition.

14.  The starting point is that where the petitioning debt is based on a judgment, the court would treat the judgment as prima facie evidence that the debtor is indebted to the creditor, and the bankruptcy court would not inquire into the judgment, unless there is some evidence showing that the judgment was obtained by fraud or collusion or that there was a miscarriage of justice which impinges on the validity of the judgment: see Re Lau Wang Chi Barry [2024] 3 HKLRD 118 at para 39 (per Kwan VP); Re Sin Kwok Lam [2025] HKCFI 3242 at para 15 (per Linda Chan J).

15.  In the present case, there is no suggestion, let alone evidence, showing that the judgment in HCA 1631/2024 was obtained by fraud or collusion or that there was a miscarriage of justice. Indeed, the Debtor’s appeal out of time was dismissed by DHCJ Jonathan Wong.

16.  The Debtor is plainly liable for the Judgment Debt.

17.  However, the Debtor opposed the petition on the ground that the Petitioner allegedly holds some stocks and paintings/antiques that are of sufficient value to satisfy the Judgment Debt.

18.  There is no substance in the Debtor’s complaint.

19.  Sections 6(1) and (2)(b) of the Bankruptcy Ordinance (Cap 6) read as follows:-

“(1) A creditor’s petition must be in respect of one or more debts owed by the debtor, and the petitioning creditor or each of the petitioning creditors must be a person to whom the debt or (as the case may be) at least one of the debts is owed.

(2)(d) Subject to sections 6A to 6C, a creditor’s petition may be presented to the court in respect of a debt or debts if, but only if, at the time the petition is presented—….(b) the debt, or each of the debts, is for a liquidated sum payable to the petitioning creditor, or one or more of the petitioning creditors, either immediately or at some certain, future time, and is unsecured;…” (emphasis added)

20.  In the premises, it is necessary for the Petitioner to show that the petitioning debt is unsecured.

21.  I have no doubt that this is the case.

22.  As pointed out, the petition herein is premised on the Judgment Debt in HCA 1631/2024.  This is an ordinary monetary judgment.  I cannot see how it can be said that the Judgment Debt is secured or that the Petitioner is a secured creditor insofar as the Judgment Debt is concerned.  

23.  I am not of the view that it is necessary to canvass the Plaintiff’s cause of action in HCA 1631/2024 based on the Underlying Loan Agreements, which has already been “merged” in or superseded by the judgment granted by the court.

24.  However, out of an abundance of caution, it is worth mentioning that as pointed out by Ms Linda Cho (for the Petitioner):-

(1)     The Debtor has failed to show that the indebtedness under the Underlying Loan Agreements (which eventually gave rise to the Judgment Debt in HCA 1631/2024) was secured against any collateral.

(2)     The Debtor has merely shown that he entered into some other loan agreements with the Petitioner (the “Other Loan Agreements”) and the indebtedness thereunder was secured by the shares in some private companies.  The details of the Other Loan Agreements are as follows:-

Dates of the Other Loan Agreements	Contract No	Amount (HK$)
28 November 2017	CDP20171128-105	1,200,000
28 March 2018	CDP20180328-111	400,000
23 July 2018	CDP20180723-116	1,200,000
28 November 2018	CDP20181128-122	1,200,000
28 November 2019	CDP20191128-134	1,500,000

25.  It is obvious that the transactions under the Underlying Loan Agreements (which gave rise to the Judgment Debt) are different from the transactions under the Other Loan Agreements (which have nothing to do with the Judgment Debt).  I cannot see how it can be said that by reason of the fact that the indebtedness under the Other Loan Agreements is secured, the Petitioner is also a secured creditor insofar as the Underlying Loan Agreements are concerned.  This suggestion is not even logical.

26.  For completeness, I should also point out that:-

(1)     The Debtor has failed to adduce a shred of evidence to show that the Judgment Debt in HCA 1631/2024 and/or the indebtedness under the Underlying Loan Agreements are secured by some paintings or antiques.

(2)     In any event, even if the Judgment Debt in HCA 1631/2024 and/or the indebtedness under the Underlying Loan Agreements are secured by some shares, paintings or antiques (which is definitely not the case), by serving the statutory demand and/or prosecuting the present petition, the Petitioner must have waived any alleged security in its favour.

27.  For all the above reasons, the Debtor has no basis to oppose the petition.

28.  At the hearing, the Debtor asked the court to adjourn the bankruptcy petition, so that he could explore the possibility of selling his shares in the private companies together with his relatives.  In my view, the Debtor should have explored this possibility much earlier.  In any event, this was not even a concrete proposal for repaying the petitioning debt.  On the materials available to the court, I am not satisfied that there is a realistic possibility that the petitioning debt can be repaid in the foreseeable future.

29.  Accordingly, I grant the usual bankruptcy order against the Debtor.

30.  The costs of the Petitioner in these proceedings (which are to be taxed if not agreed) shall be paid out of the estate of the Debtor.

31.  I thank Ms Linda Cho for her assistance.