RE SHIU KWONG MAN JIMMY

RE SHIU KWONG MAN JIMMY

The Debtors' alleged crossclaim lacked substance because the evidence of undervalue was either out of date, premised on incorrect assumptions (eg existence of a hotel licence), speculative or unsupported (eg unnamed prospective bidder, unsigned letters of intent, internet advertisement). Independent contemporaneous valuations by reputable surveyors supported the sale price on the appropriate repossession/forced‑sale or market bases, and the sale was conducted by professional receivers acting as agents of the charged company; therefore the Petitioner was not liable for any alleged undervalue. Consequently the petitions succeeded and bankruptcy orders were made.

Citation
[2018] HKCFI 2504
Parties
Judgment Creditor (petitioner): Shanghai Commercial Bank Limited; Judgment Debtor: Shiu Kwong Man Jimmy; Judgment Debtor: Siu Kong Fai
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
16 November 2018
Case Number
HCB4242/2017
Procedural Posture
Bankruptcy Proceedings (presentation of Bankruptcy Petitions) / Hearing and Judgment on Bankruptcy Petitions (order Nisi Issued)
Outcome
Bankruptcy orders granted against Shiu Kwong Man Jimmy and Siu Kong Fai; Debtors' opposition dismissed
Legal Topics
Statutory Demand, Bankruptcy Petition, Set Off and Crossclaim, Sale by Receivers, Valuation Basis (market Vs Forced Sale), Liability of Chargee for Receivers' Acts
Source Language
EN
Insolvency Bankruptcy Property Law Receivership Civil Procedure Statutory Demand Bankruptcy Petition Set Off and Crossclaim +3 more

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Parties

Shanghai Commercial Bank Limited

Judgment Creditor (petitioner)

Shiu Kwong Man Jimmy

Judgment Debtor

Siu Kong Fai

Judgment Debtor

Procedural Posture

Bankruptcy Proceedings (presentation of Bankruptcy Petitions) / Hearing and Judgment on Bankruptcy Petitions (order Nisi Issued)

Legal Issues

  1. 1 Whether the Debtors have a bona fide crossclaim that the sale of charged property (129 Temple Street) was at an undervalue sufficient to defeat the bankruptcy petitions
  2. 2 Whether the sale conducted by professional receivers was at an undervalue having regard to contemporaneous valuations and offers
  3. 3 Whether the Petitioner (chargee) is liable for any alleged undervalue sale carried out by receivers acting as agents of the charged company

Ratio Decidendi

The Debtors' alleged crossclaim lacked substance because the evidence of undervalue was either out of date, premised on incorrect assumptions (eg existence of a hotel licence), speculative or unsupported (eg unnamed prospective bidder, unsigned letters of intent, internet advertisement). Independent contemporaneous valuations by reputable surveyors supported the sale price on the appropriate repossession/forced‑sale or market bases, and the sale was conducted by professional receivers acting as agents of the charged company; therefore the Petitioner was not liable for any alleged undervalue. Consequently the petitions succeeded and bankruptcy orders were made.

Court Disposition

Bankruptcy orders granted against Shiu Kwong Man Jimmy and Siu Kong Fai; Debtors' opposition dismissed

Orders

  • Usual bankruptcy order against Mr Shiu Kwong Man Jimmy
  • Usual bankruptcy order against Mr Siu Kong Fai