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The Joint And Several Trustees Of The Property Of So Ching Wan v Assen Ltd (In Liquidation) And Others

Judgment Cited authorities 5 Cited in Precedent Map Related
Vincent
Judgment Date06 June 2019
Neutral Citation[2019] HKCFI 1491
Year2019
Judgement NumberHCB4475/2002
Subject MatterBankruptcy Proceedings
CourtCourt of First Instance (Hong Kong)
HCB4475A/2002 The Joint and Several Trustees of the Property of SO CHING WAN v. ASSEN LTD (in liquidation) AND OTHERS

HCB 4475/2002

[2019] HKCFI 1491

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

BANKRUPTCY PROCEEDINGS NO 4475 OF 2002

_______________

IN THE MATTER of SO CHING WAN (now a discharged bankrupt)

and
IN THE MATTER of the Bankruptcy Ordinance (Cap 6)

_______________

BETWEEN
The Joint and Several Trustees of the Property of SO CHING WAN Applicant

and
ASSEN LIMITED (in liquidation) 1st Respondent
CHEUNG YING HO 2nd Respondent
CHEUNG CHO YI NATALIE 3rd Respondent
LAM YUK CHUN 4th Respondent

________________

Before: Deputy High Court Judge William Wong SC in Chambers
Date of Hearing: 27 May 2019
Date of Decision: 6 June 2019

________________________

DECISION

________________________

1. The Joint and Several Trustees of the Property of the Bankrupt, Mr So Ching Wan (the “Trustees”) applied, by Amended Summons filed on 22 November 2018, for the following orders:

“ 1. Each of the Respondents comply with the Order of Mr. Justice Chung made on 7 June 2016 (‘Chung Order’) by answersing on oath all of the questions (the thereto Annex A as attached to the Order of Mr Justice Chung dated 7thJune 2016 (the ‘Chung Order’)) and producing all of the documents (the Annex B thereto to the Chung Order), and with reference to a Summary shown as Exhibit ACWT-18 in the supporting affirmation of Mr. Alan CW Tang filed herein (‘Summary’), stated in the Chung Order within 14 days of the Order to be made herein;

2. If any of the Respondents cannot provide answers to any of the questions in Annex A to the Chung Order, and with reference to the Summary, each of these relevant Respondents file an affidavit/affirmation to state the reasons for not being in such a position to comply within 14 days of the Order to be made herein.

3. If any of the Respondents cannot provide any of the documents in Annex B to the Chung Order, and with reference to the Summary, each of these relevant Respondents file an affidavit/affirmation to state whether any of these documents had ever been in his/her possession, custody or control (including power to procure the same from third parties); and if these had been in his/her possession, custody or control (including power to procure same from third parties) but no longer now, since when they are no longer available and under what circumstances that they became unavailable within 14 days of the Order to be made herein;

4. Each of the 2nd, 3rd and 4th Respondents attend the court to be examined on oath at such time and place as the court shall direct and that the Trustees be at liberty to examine these Respondents under Section 29 of the Bankruptcy Ordinance (Cap.6) concerning the Bankrupt’s investment in the Company, its assets, liabilities, affairs, books and records and any other relevant matters including the matters and transactions set out in Annex A and Annex B of the Chung Order and with reference to the Summary in paragraph 1 herein.

5. Either one of the two Trustees or their legal representatives be appointed examiner for the purpose of conducting the said examination.

6. Penal notice be endorsed to the Order to be made herein.

7. Such other relief/directions as may be granted by the Court; and

8. Costs of this application (including the professional time costs of the Trustees on the ‘Panel A’ rates) be paid by the directors of Assen Limited, namely Mr. Cheung Ying Ho, Ms. Cheung Cho Yi Natalie and Ms. Lam Yuk Chun personally on a joint and several basis.”

2. The Trustees have also taken out a summons to seek leave to continue these proceedings against the 1st respondent on a retrospective basis as the 1st respondent has been wound up. (“Leave Summons”)

3. Mr So Ching Wan (the “Discharged Bankrupt”) was adjudicated bankrupt on 19 August 2002. He has since been discharged from bankruptcy as from 19 August 2010.

4. The Discharged Bankrupt used to be a director and is still a shareholder of Assen Limited, the 1strespondent. The 2nd to 4th respondents were directors and are still shareholders of the 1st respondent.

5. On 27 July 2015, the Trustees took out a summons under section 29(1) of the Bankruptcy Ordinance, Cap 6 to direct the 1st respondentand/or each of the 2nd and 4threspondents, being directors of the 1st respondent, to answer a list of questions and to provide a list of documents primarily to help the Trustees to ascertain the real worth of the Discharged Bankrupt’s shareholding in the 1st respondent.

6. On 7 June 2016, Chung J made an order that:

“ The 1st Respondent and/or each of the 2nd and 4th Respondents, being directors of the 1st Respondent, do provide to the Applicant the answer(s) and/or document(s) as set out in the schedules attached to this Order marked as ‘Annex A’ and ‘Annex B’ withina reasonable period (in any event, not more than 21 days from the date of this Order.” (‘Chung J’s Order’)

7. The Trustees take the view that Chung J’s Order has not been complied with by the respondents. Accordingly, the Trustees took out the present summons on 12 October 2018 which was amended on 22 November2018. The Trustees were represented by Mr Alan Tang, one of the Trustees in these proceedings. Mr Tang complained that despite the clear terms of Chung J’s Order, each of the 1st to the 4th respondents, after nearly three years, have not yet fully complied with the same. Mr Tang in paragraph 2 of his Supplemental Skeleton Submissions stated that:

“ Although drafted by the Applicant, paragraph 1 of the Amended Summons was carefully and repeatedly reviewed and amended by Mr. Justice A. Chung. This is clearly an ‘Enforcement Order’. As stated in paragraph 30 of Applicant’s Skeleton filed on 21 May 2019 (‘Tang Skeleton’), the Amended Summons is to seek to enforce compliance by the Respondents with the S29 Order in order to enable the Applicant to perform the 5 specific areas of investigation as set out in the Decision. It is not a ‘new [S29] application’ as stated in paragraph 11 of the Cheung Skeleton.”

8. Mr Wong SC, for the 2nd to the 4th respondents submitted that this is a new section 29 application and not an enforcement action. In any event, the position of the 2nd to the 4th respondents is that they have fully complied with Chung J’s Order.

9. I am of the view that it is important to determine the nature of the application first.

NATURE OF APPLICATION

10. Mr Tang relied on Order 45, rule 6(1) of the Rules of High Court, Cap 4A, albeit that the margin note of the Amended Summons cited Order 45, rule 7. I accept that it is a mere typographical error. Order 45, rule 6(1) provides:

“ Notwithstanding that a judgment or order requiring a person to do an act specifies a time within which the act is to be done, the Court shall, without prejudice to Order 3, rule 5, have power to make an order requiring the act to be done within another time,being such time after service of that order, or such other time, as may be specified therein.”

11. Mr Tang referred this court to the case of Wah Sun Hong Ltd v Wong Lee Yuk Ping Agnes HCA 874/2015, unreported, 12 August 2016. DHCJ Wilson Chan (as he then was) at paragraph 17 said:

“ The operation of Order 45, rule 6 has been explained in Re Ho Yuk Wah David (bankrupt) [2015] 2 HKLRD 603, at paragraph 19:-

(1) Order 45, rule 6 enables the court to give the respondent one last chance to comply with its order before the applicant may invoke the penal sanctions available in the court’s armoury.

(2) The burden is on the applicant to prove that an order had been made requiring the respondent to perform an act within a specified time and the respondent failed to do so.

(3) Once that is proved, the burden is then shifted to the respondent to show why he should not be required to comply with the order why he should not be required to comply with the order to perform the act, upon being given a second chance.

(4) The obligation to perform the act required had been determined and made an order of the court. Thus, in considering whether to exercise the discretion under this rule,there is no need for the court to revisit the appropriateness or otherwise of its previous order.

(5) The question is simply whether in all the circumstances the respondent should be excused from performing the act under its previous order. As the court’s orders are made to be complied with, such circumstances must be made to be very rare indeed. A possible example would be impossibility of performance as a result of change of circumstances.”

12. Mr Wong SC submitted that this is clearly not an enforcement application of Chung J’s Order under Order 45, rule 6(1) because the words “comply with the Order of Mr. Justice Chung made on 7 June 2016 (‘Chung Order’)” were specifically deleted by way of amendment. This, Mr Wong SC submitted, could only mean that the Amended Summons is not about compliance with Chung J’s Order but an entirely new application. Mr Tang submitted that those words were struck through because Mr JusticeChung considered the same to be unnecessary and the Trustees could simply proceed with what they like to apply.

13. I am of the view that the deletion of the words is not critical in determining whether this is a new application or an enforcement action as contended by Mr Tang. If the exact same orders were applied so that the respondents herein could be given more time to comply with Chung J’s Order, then it does not matter whether the words were deleted or not. The application would have been an application under Order 45, rule 6(1).

14. However, Mr Wong SC is right that the Trustees are not applying the exact same orders as Chung...

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