RE CHIU BUT YORK

IN BANKRUPTCY

Mr. A. Wong (P.H. Sin & Co.) for Petitioner.

Mr A..D. McInnes for Official Receiver.

Mr. S. Soo (Samuel Soo & Co.) for Debtor.

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JUDGMENT

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1. This is an application for a receiving order.

2. On the 3rd December 1983 the petitioner obtained judgment by consent against the debtor for the sum of $220,000 interest and costs.

3. A bankruptcy notice was served on the 12th September 1984. An application to set aside the bankruptcy notice was dismissed by Bewley J. on the 27th September 1984.

4. The present petition based upon non compliance with the bankruptcy notice was filed on the 27th October 1984 and was served on the 29th October 1984.

5. Liability for the debt has not been disputed by the debtor.

6. At the hearing of the petition the debtor did not appear, but was represented by Mr. Soo who opposed the application for a receiving order on the grounds that the debtor's assets will be insufficient to pay a dividend of 15% pursuant to the provisions of Section 9(3) of the Bankruptcy Ordinance. In an affidavit sworn on the 7th December 1984 Mr. Soo deposed to the fact that the debtor was abroad on business and would not return to Hong Kong before March 1985. He said that the debtor had no assets except for three properties one of which had no monetary value whilst the other two are mortgaged, and are subject to charging orders which have been made absolute. In a supplemental affidavit Mr. Soo said that the debtor has no income.

7. When Mr. Soo addressed me at the hearing he said that the debtor would not return to Hone Kong until April 1985  but was instructed that he had every prospect of paying the debt. However, he requested an adjournment to enable the debtor to file an affidavit as he wished to invoke the 15% rule. Mr. McInnes who appeared for the Official Receiver expressed surprise that the 153 rule had been raised for the debtor has an interest in 12 properties in Hong Kong. The application for the adjournment was opposed by Mr. Wong who appeared for the petitioner.

8. The effect of an adjournment would be to delay the hearing of the petition for at least four months upon grounds that are extremely flimsy to say the least. Whereas Mr. Soo says that the debtor has no income nor assets, I am told that the debtor is away from Hong Kong on business, and has an interest in property situate here. I am further informed that despite the contention that the 15% rule applies the debtor nevertheless has every prospect of paying the debt.

9. The 15% rule is not mandatory, but is a discretionary power. The matters to be taken into consideration were set out by Clough J. in Re Fan Hung San (Bankruptcy 7/1983). One of the most important factors is the attitude of the Official Receiver who upon the available evidence in this case has supported the petitioner's application. It is pertinent to note that the court has power to annul an adjudication under Section 33(1) of the Bankruptcy Ordinance where the assets are not sufficient to pay a dividend of 15%.

10. In my judgment the application for an adjournment in the present case was wholly unreasonable and would be prejudicial to the interests of the petitioning creditor. A receiving order will therefore be made with costs.