IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF FIRST INSTANCE
IN BANKRUPTCY PROCEEDINGS NO. 3234 OF 2001
Coram: Hon Kwan J in Court
Date of Hearing: 13 August 2001
Date of Judgment: 13 August 2001
Date of Handing Down of Reasons for Judgment: 16 August 2001
REASONS FOR JUDGMENT
1. This is a petition by a judgment creditor, Madam Au Kam Han, based on a judgment obtained by her against the debtor, Mr Au Kam Ming,in HCPI No. 1069 of 1998. The judgment was given by Seagroatt J. on 13 March 2001 and the petitioner was awarded substantial damagesfor the dependants and for the estate of the deceased, Mr Leung Pui Hong (“the deceased”), in the sum of HK$13,474,500.00 with interestand costs. The statutory demand was served on the debtor personally on 20 March 2001. He is serving a term of imprisonment of 10years on a charge of conspiracy to cause grievous bodily harm to the deceased, to which he had pleaded guilty. The petition was filedon 14 May 2001 and served personally on the debtor on 18 June 2001.
2. At the hearing before me, it was submitted by Mr Bedford on behalf of the debtor that the petition should be adjourned or stayeduntil the outcome of the debtor’s appeal from the judgment of Seagroatt J. is known. The debtor has filed a Notice of Appeal on 10April 2001. I understand that a date of the hearing of the appeal has not been fixed.
3. I will not exercise my discretion to adjourn or stay the bankruptcy proceedings unless I am satisfied that there are prima faciegrounds of appeal with reasonable prospects of success. Having considered the judgment, the Notice of Appeal, the written and verbalsubmissions of counsel, I am not persuaded by Mr Bedford that he has surmounted this hurdle. Accordingly, I have made a bankruptcyorder against the debtor and the detailed reasons appeared below.
4. As found by the Judge, the deceased was kidnapped on 12 July 1996 and was murdered on, almost certainly, the same day. The kidnappingwas due to a plan initiated by the debtor and implemented by his girlfriend, who was the second defendant in the High Court Action,and a group of men she had contacted to carry out the job. The Judge rejected the debtor’s evidence whereby he sought to distancehimself from the actions of his girlfriend. He found that the debtor and the girlfriend had intended, at the very least, that thedeceased should suffer really serious harm and that it was “unarguably foreseeable that death could result from an attack on [thedeceased] which intended serious physical injury”. On page 18 of his judgment, Seagroatt J. has this to say:
5. As I understand Mr Bedford’s submission, the main ground of his appeal against the Judge’s finding on liability is that trespassto the person was not proved and there was no evidence upon which the Judge could find that the debtor had participated in the abductionand holding to ransom of the deceased. Mr Bedford has failed to demonstrate to me that there are prima facie grounds to attack theJudge’s finding on the evidence that the debtor had participated in the kidnapping. As for the cause of action, Mr Bedford submittedthat the Judge’s ruling that the debtor was as directly responsible for the murder of the deceased “as if” he had wielded the weaponis insufficient to found a cause of action in law. I am quite unable to see the validity of this argument. A person is liable notonly for the torts committed by himself. He is also liable for those torts he has authorised. In the above extract of the judgment,it is clear that the Judge had found that the debtor had authorised others to inflict serious bodily harm on the deceased and thatit was “unarguably foreseeable” that death could result from an attack which intended grievous bodily harm.
6. The other grounds of appeal relating to liability as stated in the Notice of Appeal appear to me to be equally of little substance.As for the appeal on quantum, I note that the debtor seeks to attack the awards made on pain and suffering and loss of amenitiesand for loss of accumulation of wealth. The debtor also seeks to attack the award on loss of dependency on the ground that therewas no or no sufficient evidence for the Judge to find that the deceased’s family had received various benefits due to the failureof the petitioner to serve any or any valid hearsay notice. As I am not persuaded that the debtor has made out prima facie groundsof appeal on liability with reasonable prospects of success, I do not think it would be right to stay or adjourn the petition onthe basis that there is an appeal on quantum unless the debtor is prepared to make a substantial payment into court as a conditionfor the granting of a stay or an adjournment. And this the debtor has not offered to do. Indeed, I understand that on 11 January2001, Seagroatt J. has ordered that the debtor is to make an interim payment of HK$2,200,000.00 into court within 14 days. That orderhas not been complied with to date.
7. The only other objection raised by Mr Bedford to the petition is that there is a defect in the petition in that the petitioner hasfailed to comply with section 6B(1) of the Bankruptcy Ordinance, Cap. 6, which requires a creditor with security to either state in the petition that he is willing to give up his security for thebenefit of all creditors in the event that a bankruptcy order is made or to state the estimated value of the security on the basisthat the petition is not to be made in respect of the secured part of the debt.
8. Mr Bedford submitted that the petitioner has obtained a Mareva injunction over the debtor’s assets on 27 January 1999 restraininghim from disposing of his assets until further order save in so far as the same should exceed the sum of HK$49.3 million. I do notthink a Mareva injunction is security for the purpose of section 6B. Mr Bedford also submitted that the order for interim payment obtained by the petitioner in the High Court Action on 11 January 2001could constitute security for this purpose, even though no payment has been made by the debtor to date.
9. I am not so sure whether the petitioner may be regarded as a creditor with security on account of the order for interim payment shehas obtained against the debtor. However, to forestall any argument that the petition may be defective for that reason, Mr Chong,who appeared for the petitioner, informed me that his instructing solicitors would be prepared to give an undertaking to file anamended petition to comply with section 6B. On that basis, I have made a bankruptcy order against the debtor. I have ordered that the bankruptcy order is to take effect uponthe petitioner filing in court and effecting service on the debtor and on the Official Receiver an amended petition and an affirmationverifying the amended petition within seven days hereof. I have also ordered that the petitioner is to have the costs of the petition.
Mr K M Chong, instructed by Messrs Darin Leung & Partners, for the Petitioner
Mr Nigel Bedford, instructed by Messrs Paul Ng & Co, for the Debtor
Mr Alfred Chan, for the Official Receiver