RE LAU YU also known as JAFFE LAU

RE LAU YU also known as JAFFE LAU

The debtor failed to establish a bona fide defence because he did not show sufficient prejudice resulting from the alleged breach (subrogation would not have arisen had the security been perfected because the debt would have been discharged) and there remained factual gaps which did not amount to an arguable legal defence; accordingly a bankruptcy order must be made and the Bank is entitled to costs on an indemnity basis with certificate for two counsel.

Citation
RE LAU YU also known as JAFFE LAU
Parties
Petitioner: the Bank; Debtor: Lau Yu (also known as Jaffe Lau)
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
5 September 2017
Case Number
HCB104/2017
Procedural Posture
Bankruptcy Petition / Judgment on Petition Hearing
Outcome
Bankruptcy order made against the debtor (petition allowed)
Legal Topics
Statutory Demand, Settlement Agreement, Registration of Mortgage, Consent of First Mortgagee, Subrogation, Bona Fide Defence, Costs on Indemnity Basis
Source Language
EN
Bankruptcy Contract Security Equity Statutory Demand Settlement Agreement Registration of Mortgage Consent of First Mortgagee +3 more

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Parties

the Bank

Petitioner

Lau Yu (also known as Jaffe Lau)

Debtor

Procedural Posture

Bankruptcy Petition / Judgment on Petition Hearing

Legal Issues

  1. 1 Whether the debtor has a bona fide defence to the bankruptcy petition based on the Banks alleged breach of the Settlement Agreement by failing to execute and perfect a second lien mortgage
  2. 2 Whether the debtor suffered prejudice as a result of the alleged breach sufficient to defeat the petition (including loss of right to subrogation)
  3. 3 Whether the Bank was obliged to realise available security before pursuing the debtor personally

Ratio Decidendi

The debtor failed to establish a bona fide defence because he did not show sufficient prejudice resulting from the alleged breach (subrogation would not have arisen had the security been perfected because the debt would have been discharged) and there remained factual gaps which did not amount to an arguable legal defence; accordingly a bankruptcy order must be made and the Bank is entitled to costs on an indemnity basis with certificate for two counsel.

Court Disposition

Bankruptcy order made against the debtor (petition allowed)

Orders

  • Bankruptcy order made against Lau Yu (also known as Jaffe Lau)
  • Bank awarded costs on an indemnity basis with certificate for two counsel pursuant to clause 2.3 of the Settlement Agreement