RE MAK HUNG FAT

HCB 2245/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

BANKRUPTCY PROCEEDINGS NO 2245 OF 2016

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J U D G M E N T

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1.  This is a bankruptcy petition dated 31 March 2016 based on a statutory demand dated 25 September 2015. The statutory demand was sent to the debtor’s address and subsequently served by advertisement in newspaper on 7 December 2015. The petition was served in June 2016.

2.  The statutory demand, which is for the sum of HK$321,667.73, is based on a judgment of the District Court in the action numbered DCCJ No 3906 of 2014 dated 22 August 2015, which was entered after the debtor had failed to comply with the condition imposed for defending the action.

3.  The debtor did not respond to the statutory demand at all but he did appear on the hearing of the petition before the Master on 17 August 2016 and before this Court on 22 August 2016. He opposed the petition but he had not filed any affirmation at that time.  The petition was adjourned on the basis that the debtor must file an affirmation setting out the matters he relied on in opposition to the petition within 2 weeks, ie by 5 September 2016.

4.  The debtor did not file an affirmation in time. Instead, last Friday, 9 September 2016, he made and filed a 2-page affirmation, without giving a copy to the petitioner.  At the hearing of the petition on 12 September 2016, the debtor appeared and made submissions in opposition.

5.  In the affirmation, the debtor alleges that in February 2013, he became acquainted with the creditor, Madam Leung Hong Wah, who is of a similar age to the debtor.  On 2 April 2013, the debtor was persuaded by the creditor to take part in an investment scheme operated by a company called Better Living Global Marketing and to invest HK$380,000.  The creditor’s younger sister, Madam Leung Tung Wah, was to handle the account for him.

6.  Between 25 April 2013 and 26 August 2013, the debtor received a total of HK$226,543 by way of returns from the investment. He said that he did not receive any return after August 2013 and so he later, apparently in August 2014, went with a friend, Mr Yeung, to the office of the company in Tsim Sha Tsui and was told that there was no more money in his account.  He alleges that there was HK$390,440 (said to be HK$39,044 on page 1 of his affirmation) in his account by 25 July 2014 but that sum was transferred to the creditor’s account at the company.

7.  The debtor admits that he borrowed HK$60,000 from the creditor but denies the rest of the claim for the judgment sum of HK$310,000. There is no dispute that the statutory demand has not been complied with in any respect.

8.  The debtor also alleges in his affirmation that there were 3   more occasions in which he invested, in each case, a sum of HK$380,000, as encouraged by the creditor.  He was persuaded to invest into one company called “資遠綜合集團” for higher and higher returns.  The investments took place, according to the debtor, on 15 March 2013, 28 November 2013 and 31 December 2013.  He orally said at the hearing that on each occasion he had borrowed HK$400,000 from a finance company and handed over HK$380,000 for investment.  The debtor claimed that he had received no return at all on these investments, but he said he did not know whether or not he had been cheated in relation to these 3 sums.

9.  The debtor said he had reported the matter to the police.  However, the police statement he produced referred only to Better Living Global Marketing.  Also, in the police statement, he said he invested approximately HK$500,000, not HK$380,000.  He claimed in the statement that there was a lot of information that needed to be organised.  Although the statement was made in January 2015, the debtor did not mention anything about the 3 other investments of HK$380,000 each which he alleges in his affirmation.  He has not explained in his affirmation why, despite not receiving any return since August 2013, he continued to invest further sums at the creditor’s suggestion in November and December 2013, as he now alleges.

10.  The debtor also said at the hearing that, at the suggestion of one Mr Cheng Kwan Ho introduced to him by the creditor, he later borrowed HK$4 million from a finance company to pay off previous loans of HK$3.2 million owed to another finance company.  I cannot see how this could give rise to any defence to the petition. 

11.  All in all, I do not think the debtor’s affirmation and what he said in court discloses anything approaching a credible defence to the petition.  All that it contains are bald and vague assertions. Despite 2  years have elapsed since he allegedly discovered that money in the account was missing, he has produced no information or supporting document whatsoever.  Nor has he explained the actual transactions showing how the creditor allegedly cheated him.  He alleges the company Better Living Global Marketing is still in existence but he has not produced a shred of documentary or independent evidence for his allegations.

12.  The creditor is a creditor by a regular judgment of the District Court.  There has been no appeal against the judgment.  I am not satisfied by the debtor that there is any basis to impugn the judgment or that there is any proper evidence showing he has a bona fide cross-claim against the creditor on substantial grounds.

13.  There will therefore be the usual bankruptcy order with costs.  The Official Receiver’s costs are to be deducted from the deposit on the petition.