LAI YUK SHAU v. DAO HENG BANK LTD.

LAI YUK SHAU v. DAO HENG BANK LTD.

Mortgages provided by third parties do not constitute 'security in respect of the debt' under r.44(5) when read with the definition of 'secured creditor' in s.2 of the Bankruptcy Ordinance; the statutory demand complied with r.44(4) since the interest calculated to 4 October 2000 was due at the date of the demand and the form may be varied; the court declined to exercise its discretion under r.48(5)(d) because the bank was entitled to enforce the debtor's guarantee and other securities without first resorting to those securities and no injustice to the debtor was shown; accordingly the application to set aside the demand was dismissed.

Citation
LAI YUK SHAU v. DAO HENG BANK LTD.
Parties
Applicant (debtor): LAI YUK SHAU; Respondent (creditor): DAO HENG BANK LIMITED
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
15 March 2001
Case Number
HCSD39/2000
Procedural Posture
Application to Set Aside Statutory Demand / Decision in Chambers (court of First Instance)
Outcome
Application dismissed
Legal Topics
Statutory Demand, Set Aside, Secured Creditor, Security in Respect of the Debt, Bankruptcy Rules R.44 R.48, Mortgage, Guarantee
Source Language
EN
Bankruptcy Insolvency Civil Procedure Statutory Demand Set Aside Secured Creditor Security in Respect of the Debt Bankruptcy Rules R.44 R.48 +2 more

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Parties

LAI YUK SHAU

Applicant (debtor)

DAO HENG BANK LIMITED

Respondent (creditor)

Procedural Posture

Application to Set Aside Statutory Demand / Decision in Chambers (court of First Instance)

Legal Issues

  1. 1 Whether mortgages granted by third parties constitute "security in respect of the debt" under r.44(5) of the Bankruptcy Rules
  2. 2 Whether the statutory demand complied with r.44(4) regarding identification and calculation of interest
  3. 3 Whether the court should exercise its discretion under r.48(5)(d) to set aside the statutory demand on other grounds

Ratio Decidendi

Mortgages provided by third parties do not constitute 'security in respect of the debt' under r.44(5) when read with the definition of 'secured creditor' in s.2 of the Bankruptcy Ordinance; the statutory demand complied with r.44(4) since the interest calculated to 4 October 2000 was due at the date of the demand and the form may be varied; the court declined to exercise its discretion under r.48(5)(d) because the bank was entitled to enforce the debtor's guarantee and other securities without first resorting to those securities and no injustice to the debtor was shown; accordingly the application to set aside the demand was dismissed.

Court Disposition

Application dismissed

Orders

  • Debtor's application to set aside the statutory demand dismissed with costs against the debtor.
  • Order authorising Dao Heng Bank Limited to present a bankruptcy petition after 14 days under r.48(7) of the Bankruptcy Rules.