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Re Chan John Loong Fai

Judgment Cited authorities 2 Cited in Precedent Map Related
Vincent
Judgment Date11 October 2019
Neutral Citation[2019] HKCFI 2434
Year2019
Judgement NumberHCB6991/2017
Subject MatterBankruptcy Proceedings
CourtCourt of First Instance (Hong Kong)
HCB6991A/2017 RE CHAN JOHN LOONG FAI

HCB 6991/2017

[2019] HKCFI 2434

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

BANKRUPTCY PROCEEDINGS NO 6991 OF 2017

________________

RE : CHAN JOHN LOONG FAI Bankrupt
BETWEEN
The Joint and Several Trustees of the Property of CHAN JOHN LOONG FAI Applicants
and
CHU ALAN PANG CHI Respondent

________________

Before: Mr Recorder Eugene Fung SC in Chambers

Date of Hearing: 26 September 2019

Date of Decision: 11 October 2019

____________

DECISION

____________

A. INTRODUCTION

1. The applicants are the joint and several trustees of the property of Mr Chan John Loong Fai (“the Bankrupt”). This is the applicants’ application for an order requiring the respondent to (1) hand over to the applicants the official seal (公章) (“the Seal”) of Guangxi Desheng Universal Aluminium Company Limited (廣西德勝環球鋁業有限公司) (“Desheng”), and (2) submit an affidavit to the court containing an account of his dealings with the Bankrupt since 15 May 2012, and to produce the documents as specified in the applicants’ inter partes summons dated 11 April 2019 (“the Summons”).

B. THE RELEVANT FACTUAL BACKGROUND

2. On 17 January 2018, the Bankrupt was adjudged bankrupt by the Court. On 18 May 2018, Mr Kan Lap Kee Terry, Ms Hou Chung Man Anita and Mr Tang Chung Wah Alan were appointed the joint and several trustees of the property of the Bankrupt.

3. According to the applicants:

(1) Desheng is a sino-foreign joint venture with its registered office and factory premises in Hechi City, Guangxi Province in Mainland China. It has ceased operations for many years. However, the factory premises occupy a site with over 1,000,000 square metres, which is a major asset of Desheng.

(2) Lanco International Holdings Limited (“Lanco”) is now in liquidation and owns 70% of Desheng.

(3) The Bankrupt is the largest single shareholder of Lanco, holding 70% of the total issue share capital of the company.

(4) On Sky Enterprise (HK) Limited (“On Sky”) is believed to be one of the largest known creditors of Lanco, and the respondent is a shareholder and one of the directors of On Sky.

(5) The Bankrupt has been in office as the Legal Representative of Desheng for more than 10 years and was in control and had the custody of the Seal in such capacity.

(6) The applicants have not been able to locate the Bankrupt ever since his bankruptcy.

(7) On 15 May 2012, pursuant to the terms of a debenture granted by Lanco in favour of On Sky, Mr Terry Kan and Mr Alan Tang (two of the applicants) were appointed by On Sky as the joint receivers and managers of Lanco (“the Receivers”). The Receivers’ appointment was subsequently terminated by On Sky. Lanco was wound up on 2 April 2014.

(8) At a meeting on 23 January 2019, the respondent stated to the persons present (including the applicants) that he (the respondent) (a) was in possession of the Seal of Desheng, (b)had recently met the Bankrupt and (c) had lent some money to the Bankrupt to be on-lent to Desheng as a result of which the Bankrupt handed over the Seal to the respondent.

(9) Since February 2019, the applicants had made repeated requests to the respondent to hand over the Seal of Desheng but the respondent refused on the basis that the Seal was never the Bankrupt’s property.

4. By the Summons, the applicants seek the following orders:

(1) Pursuant to section 53(2) of the Bankruptcy Ordinance (Cap 6) (“the BO”), the respondent shall hand over to the Trustees, within 24 hours of the order made herein, the Seal of Desheng.

(2) Pursuant to section 29(1A) of the BO, the respondent shall,within 14 days of the order made herein, submit an affidavit to the court containing an account of his dealings with the Bankrupt since 15 May 2012, and to produce any and all documents in his possession, custody or under his control relating to the Bankrupt or the Bankrupt’s dealings, affairs or property, including but not limited to (a) exchanges of communication (voice and/or text) via letters, notes, emails,WhatsApp, WeChat, Facebook, Telegram, Instagram, Skype,Line and/or any other communication software or means;(b) details of meetings (including meeting notes) and/or video conferencing (including recordings) with the Bankrupt; (c) the circumstances under which the respondent procured the Seal to be passed to him by the Bankrupt and (d)an account of monies passing and owing between the Bankrupt and the respondent.

(3) Costs of this application (including the professional time costs of the applicants) be paid by the respondent.

C.THE RELEVANT LAW

5. Sections 29(1) and 29(1A) of the BO provide as follows:

“(1) The court may, on the application of the Official Receiver or trustee, at any time after a bankruptcy order has been made against a bankrupt summon before it the bankrupt or his spouse, or any person known or suspected to have in his possession any of the estate or effects belonging to the bankrupt or supposed to be indebted to the bankrupt,or any person whom the court may deem capable of giving information respecting the bankrupt, his dealings or property, and the court may require any such person to produce any documents in his custody or power relating to the bankrupt, his dealings or property.

(1A) The court may require a person referred to in subsection (1), other than the bankrupt, to submit an affidavit to the court containing an account of his dealings with the bankrupt or to produce any documents in his possession or under his control relating to the bankrupt or the bankrupt’s dealings,affairs or property.”

6. The relevant legal principles on the provision of information or documents under section 29 were recently summarised by this Court in Re Ho Yuk Wah David (bankrupt) (No 3) [2019] 1 HKLRD 961 at §14,and are repeated as follows:

(1) The Court’s power under section 29 of the BO to order production of information or documents is to be exercised in the same way as an...

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