WONG TAK MAN, STEPHEN AND ANOTHER v. CHEUNG SIU FAI also known as DICKSON CHEUNG AND ANOTHER

WONG TAK MAN, STEPHEN AND ANOTHER v. CHEUNG SIU FAI also known as DICKSON CHEUNG AND ANOTHER

The payments from the bankrupt to the respondents were repayments made pursuant to legal obligations arising from prior advances or investments, not gifts or transfers for no consideration; the evidence does not establish that the sums paid to respondents were trust property beneficially owned by them. Consequently s.49 relief fails. Although the bankrupt became insolvent in the relevant period (insolvent after 11 October 2006 on the court's adopted assumptions), the trustees failed to prove the requisite desire to prefer or that the bankrupt was influenced by such desire, so s.50 relief also fails; originating summons dismissed.

Citation
WONG TAK MAN, STEPHEN AND ANOTHER v. CHEUNG SIU FAI also known as DICKSON CHEUNG AND ANOTHER
Parties
Applicant / Trustees in Bankruptcy: Wong Tak Man, Stephen and Osman Mohammed Arab (The Joint and Several Trustees of the Bankrupt); 1st Respondent: Cheung Siu Fai (also known as Dickson Cheung); 2nd Respondent: Cheung Wing Mei (also known as Winnie Cheung); Bankrupt / Subject of Proceedings: Cheung Siu Kin (Alex)
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
2 November 2015
Case Number
HCMP1431/2012
Procedural Posture
Bankruptcy / Judgment (court of First Instance)
Outcome
Originating summons dismissed
Legal Topics
Transactions at Undervalue, Unfair Preference, Insolvency Timing and Burden of Proof, Proprietary Versus Personal Obligation, Quistclose Trust, Rebuttable Presumptions of Influence
Source Language
EN
Bankruptcy Insolvency Trusts Commercial Law Property Transactions at Undervalue Unfair Preference Insolvency Timing and Burden of Proof +3 more

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Parties

Wong Tak Man, Stephen and Osman Mohammed Arab (The Joint and Several Trustees of the Bankrupt)

Applicant / Trustees in Bankruptcy

Cheung Siu Fai (also known as Dickson Cheung)

1st Respondent

Cheung Wing Mei (also known as Winnie Cheung)

2nd Respondent

Cheung Siu Kin (Alex)

Bankrupt / Subject of Proceedings

Procedural Posture

Bankruptcy / Judgment (court of First Instance)

Legal Issues

  1. 1 Nature of payments between bankrupt and respondents (gifts, loans, investment returns or trust property)
  2. 2 Whether bankrupt was insolvent at relevant times for s.49/s.50
  3. 3 Whether payments constituted return of beneficially owned funds or personal obligations

Ratio Decidendi

The payments from the bankrupt to the respondents were repayments made pursuant to legal obligations arising from prior advances or investments, not gifts or transfers for no consideration; the evidence does not establish that the sums paid to respondents were trust property beneficially owned by them. Consequently s.49 relief fails. Although the bankrupt became insolvent in the relevant period (insolvent after 11 October 2006 on the court's adopted assumptions), the trustees failed to prove the requisite desire to prefer or that the bankrupt was influenced by such desire, so s.50 relief also fails; originating summons dismissed.

Court Disposition

Originating summons dismissed

Orders

  • Originating summons dismissed
  • Order nisi that the trustees pay the respondents' costs