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Ng Yim Pui v Shanghai Commercial Bank Ltd

Judgment Cited authorities 3 Cited in Precedent Map Related
Vincent
Judgment Date24 September 1971
Year1971
Judgement NumberHCB8/1971
Subject MatterBankruptcy Proceedings
CourtHigh Court (Hong Kong)
HCB000008/1971 NG YIM PUI v. SHANGHAI COMMERCIAL BANK LTD

HCB000008/1971

IN THE SUPREME COURT OF HONG KONG

IN BANKRUPTCY

No. 8 of 1971

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Re:
NG YIM PUI alias NG CHUN SING of Kin Kwok Rubber Factory of No.4, Shum Chun Street, Mongkok Kowloon in the Colony of Hong Kong. Debtor
Ex-parte: Shanghai Commercial Bank Ltd. Creditor
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Coram: Huggins, J.

Date of Judgment: 24th September, 1971.

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JUDGMENT

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1. This is an application by the Petitioners, the Shanghai Commercial Bank Ltd., for rescission of a Receiving Order in bankruptcy made on the ground that process in execution had been levied against the Debtor by seizure and sale of his goods. The judgment Creditor was the Chartered Bank Ltd. The Debtor was trading as a manufacturer of rubber goods. The total of debts so far proved amounts to $393,165.87 but I am informed by the Official Receiver that debts amounting to a further $81,000. are sought to be proved. The total assets notified to the Official Receiver amount to $42,015.59. There is a likelihood that a dividend of about 8% might be paid if the present application is refused.

2. The application is not opposed but, on the other hand, it is not supported either by the other Creditors or by the Official Receiver. The first meeting of Creditors unanimously resolved "the the Debtor be not adjudged bankrupt and that a scheme or composition be prepared by the Debtor and put forward for consideration of the meeting". At the adjourned hearing a proposed scheme of arrangement was rejected. At the second meeting of Creditors those present would move no resolution, being apparently undecided whether they should let the bankruptcy proceedings take their course. As I understand it, the uncertainty arises principally from the fact that the Debtor is tenant of pre-war premises on a site which the landlord has plans to re-develop. If those plans are put into effect the Debtor might possibly receive a substantial sum by way of compensation, but the Official Receiver says that as he understands the position the right to such compensation does not pass to the trustee on adjudication: it is personal to the Debtor. I think that may not be an accurate way of putting it. There can be no right to compensation until a condition of payment of compensation has been imposed upon the landlord and accepted by him. Once such a right has arisen I see no reason why that should not be property which vests in the tenant's trustee in bankruptcy. What I think must have been meant was that if the contractual tenancy has already been determined (as to which I have no evidence) all the Debtor now has is a status of irremovability, which would not pass to the trustee. If, on the other hand, the contractual tenancy still subsists the trustee would in theory be a tenant who could oppose an application for exemption under s.38 of the Landlord and Tenant Ordinance. In the one case it is possible that the Debtor might himself acquire a right to compensation, but there might be difficulty in bringing the money into account in the bankruptcy: in the second case it might be that the Governor in Council would not see fit to impose a condition of payment of compensation.

3. The Debtor is indebted to the Petitioners in the sum of $51,859.95. They have come to an agreement with the Debtor that if the Debtor pays them $10,000.00 in cash, executes a promissory note in respect of the balance of their debt and (as I understand it) obtains a guarantee for payment of such balance by his wife, then upon payment by the Debtor of $1,000 towards their costs they will agree to rescission of the Receiving Order.

4. If rescission is ordered the Petitioners will gain by receiving approximately 20% of their debt in cash, together with a substantial payment on account of costs, and will thereafter be "at risk" only in respect of the balance of $41,859.95. The Chartered Bank will gain by having released to them the proceeds of their execution, namely $39,000.00, which sum represents about 25% of their debt.

5. It seems to be accepted that the Court will normally...

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