RE TUNG HUI SHYAN t/a FAIREX TRADING CO

HCB 4599/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

BANKRUPTCYPROCEEDINGS NO. 4599 OF 2005

____________

____________

_______________

J U D G M E N T

_______________

1.  This is a bankruptcy petition presented against Tung Hui Shyan, trading as Fairex Trading Company, by the Equitable PCI Bank, Inc., formerly known as Equitable Banking Corporation.  The petitioning debt is in the sum of HK$1,440,912.30.  The debtor is and was the sole proprietor of Fairex Trading Company.

2.  The petitioning debt arose out of a restructuring agreement dated 23 April 2002 made between the debtor as the borrower, the debtor in his personal name as the guarantor, and the petitioner, by which the debtor and the petitioner agreed to restructure the loan then owed to the petitioner in the sum of HK$1,170,611.23, upon and subject to the terms and conditions in the restructuring agreement.

3.  There are provisions in the restructuring agreement that the debtor shall repay the loan and interest in successive monthly instalments as specified; that if he should fail to pay for two consecutive months that would constitute an event of default; and that immediately on or at any time after occurrence of an event of default, the petitioner may declare the loan and all the interests due and payable, either immediately or on demand.  The debtor had defaulted in payment of the monthly instalments since 19 August 2002.

4.  As at 20 June 2005, he was indebted to the petitioner under the restructuring agreement and guarantee in the aggregate sum of HK$1,440,912.30.

5.  A statutory demand dated 8 November 2004 was served on the debtor personally on 15 November 2004.  The petition herein was presented on 20 June 2005 and served on the debtor personally on 11 July 2005.

6.  The petition was adjourned on 26 September 2005 to give an opportunity to the debtor to file evidence in opposition.  It was then indicated by the debtor to the court that the debt owed was secured by a property mortgaged by Cheung Nim Cho, and is the subject of proceedings brought by the petitioner in HCMP No. 3493 of 2003.  He contended that as the petitioner is in the course of recovering from Mr Cheung in the other proceedings, the petition should not proceed until the other proceedings have been disposed of.  The debtor has not filed any evidence in opposition pursuant to the directions given on 26 September 2005.

7.  At the hearing today, he indicated to the Court that he no longer wishes to oppose the petition.  The petitioning debt is not in dispute and I am satisfied that the security provided to the petitioner by a third party Mr Cheung is irrelevant to these proceedings.  There is no ground of opposition to this petition.  I therefore make a bankruptcy order against the debtor.

8.  The petitioner’s costs are to be paid out of the debtor’s estate.