Re Ma Ting Hoi Albert (馬廷海), Ex Parte Chen Angela (陳慧芳) [2025] 2 HKC 547, [2024] HKCFI 3460 (Vincent Chen, Jeff Yau)

Vincent Chen and Jeff Yau represented the debtor in Re Ma Ting Hoi Albert (馬廷海), Ex Parte Chen Angela (陳慧芳) [2025] 2 HKC 547, [2024] HKCFI 3460.

The petitioner presented a bankruptcy petition against the debtor on 1 February 2024 based on an unsatisfied statutory demand. The petition debt arose from a loan advanced by the petitioner to the debtor to fund the A7 Project, pursuant to a Second Supplemental Investment Deed. The debtor executed a share charge over his 50% shareholding in Mighty Oak Developments Limited (‘Mighty Oak’) in favour of the petitioner as security (‘Security’). Mighty Oak’s sole asset was its shareholding in Sure Applause Limited, which indirectly held the A7 Project. In the statutory demand, the petitioner claimed a debt of US$362,332,052 after deducting the estimated value of the security (US$26,937,656). The petition was later amended on 29 July 2024 to state the value of the Security as nil and the total debt as US$389,269,708. The debtor opposed the petition on two grounds: (1) On the basis that the petition debt was different from the debt claimed in the statutory demand, the petitioner was unable to establish the debtor’s inability to pay debts pursuant to ss 6 and 6A of the Bankruptcy Ordinance (Cap 6), and, as a matter of jurisdiction, the Court could not make a bankruptcy order; and (2) The debtor had established to the necessary threshold that the value of the Security exceeded the petition debt.

Held, making a bankruptcy order:

(1) The difference in debt amounts between the statutory demand and petition did not affect jurisdiction. An error in the statutory demand as to the amount of the debt did not automatically invalidate the statutory demand, and the court must consider whether or not injustice would be caused to the debtor by allowing the statutory demand to stand. In any event, the Court would exercise its discretion to allow the petitioner to rely on the statutory demand in the circumstances, if so needed. Chan WS v CC Bank [2022] 5 HKC 691, [2022] 3 HKLRD 520, [2022] HKCA 1037; and In re a Debtor (1 of 1987) [1989] 1 WLR 271 followed. Just Classic Ltd v Evershine Group Holdings Ltd [2023] 2 HKC 445, [2023] 1 HKLRD 1386, [2023] HKCA 143 distinguished (paras 37-42, 45, 47).

(2) The debtor’s 4th affirmation exhibiting a valuation report of the Security was not admitted: The report could not assist it in determining the value of the Security, as, among others, it rested on an assumption that the A7 project would be completed (which required some further US$200 million funding). Also, the application for producing the report was made too late, and it could not be admitted at the time without prejudice to the petitioner. In the circumstances, the petitioner’s estimate that the Security had no value was accepted. It was therefore held that the debtor failed to prove on the balance of probabilities that the Security’s value equaled or exceeded the petition debt (paras 67, 69-70, 76-77).

[The above is excerpted from the headnote to the report in HKC.]