HSBC Bank (Singapore) Ltd v Shi Yuzhi

• Jurisdiction: Singapore
• Judge: Woo Bih Li J
• Judgment Date: 25 August 2017
• Neutral Citation: [2017] SGHC 211
• Date: 25 August 2017
• Docket Number: Bankruptcy No 2678 of 2016 (Registrar’s Appeal No 173 of 2017)
• Published date: 31 August 2017
• Plaintiff Counsel: Tham Kai Mun (Kelvin Chia Partnership)
• Defendant Counsel: the defendant/appellant in person.
• Court: High Court (Singapore)
• Hearing Date: 24 July 2017,31 July 2017
• Subject Matter: Insolvency law,Bankruptcy,Court's power and discretion to grant bankruptcy order,Private trustees in bankruptcy

Woo Bih Li J:

The present Originating Summons was commenced by HSBC Bank (Singapore) Limited (“the Plaintiff”) against Mr Shi Yuzhi (“the Defendant”) on 27 December 2016 based on a debt of $22,719.70 due and owing by the Defendant as at 22 December 2016. On 1 June 2017, an Assistant Registrar (“AR”) granted a bankruptcy order in respect of the Defendant (“the Bankruptcy Order”). The outstanding debt at that time was $3,519.99. Subsequently, the Defendant filed an appeal on 6 July 2017 against the Bankruptcy Order.

The appeal came up for hearing before me on 24 July 2017 and 31 July 2017. I eventually dismissed the appeal. I set out my reasons below.

Background

On 27 November 2016, the Plaintiff’s solicitors served a statutory demand under s 62 of the Bankruptcy Act (Cap 20, 2009 Rev Ed) (“BA”) on the Defendant for an outstanding debt of $22,469.05 (“the Statutory Demand”).

On 27 December 2016, the Plaintiff’s solicitors filed the Originating Summons, vide, HC/B 2678/2016, for a bankruptcy order to be made against the Defendant and for public accountants registered under the Accountants Act (Cap 2, 2005 Rev Ed) to be appointed as the Defendant’s trustees in bankruptcy (“the Bankruptcy Application”). The supporting affidavit stated that the outstanding debt as at 22 December 2016 was $22,719.70. The Bankruptcy Application was first served on the Defendant on 30 December 2016.

26 January 2017 was the date of the first hearing of the Bankruptcy Application before an AR. The Defendant was absent. The Plaintiff’s counsel sought a two-week adjournment as the Defendant had promised to make full repayment by end-January 2017. The hearing was accordingly adjourned to 9 February 2017.

On 9 February 2017, the Defendant was absent. The Plaintiff’s counsel informed the AR that some payments had been made, but that there remained disagreement on interest. The hearing was adjourned to 23 February 2017. The Plaintiff’s counsel was directed to write to inform the Defendant about the next hearing date.

On 23 February 2017, the Defendant was absent. The Plaintiff’s counsel said that the Defendant had repaid what the Defendant thought was due, ie, $13,000. The Plaintiff’s counsel then sought four weeks’ adjournment to resolve the matter. The hearing was thus adjourned to 23 March 2017. The Plaintiff’s counsel was directed to inform the Defendant by email and post about the next hearing date.

On 22 March 2017, the Plaintiff filed an affidavit of non-satisfaction (“ANS”) stating that as at that date, a sum of S$3,519.99 remained due and owing by the Defendant.

On 23 March 2017, the Defendant was absent. The Plaintiff’s counsel mentioned to the AR that the Debt Repayment Scheme (“DRS”) under Part VA of the BA applied to the Defendant. He said that the Defendant had been in communication with the Plaintiff’s solicitors and the Plaintiff. The Defendant had been notified of the hearing date (of 23 March 2017) by post and email on 16 March 2017. The hearing was adjourned for six months to 7 September 2017 for the Official Assignee (“the OA”) to consider the Defendant’s suitability for the DRS. Further, the AR dispensed with the need for the Plaintiff to file a fresh ANS if the value of the outstanding debt remained unchanged by the next hearing.

On 4 May 2017, the OA wrote to the Registrar of the Supreme Court (“the Registrar”) to say that the Defendant had been determined to be unsuitable for the DRS under s 56B of the BA. The reason was that the Defendant had failed to submit the requisite documents under s 56C of the BA within the stipulated timelines despite notices sent to him dated 28 March 2017 and 12 April 2017.

A Registrar’s Notice dated 5 May 2017 was then issued to the Plaintiff’s solicitors to re-fix the next hearing of the Bankruptcy Application from 7 September 2017 to 1 June 2017 (at 9.00 am) (“the Notice”). The Notice also directed the Plaintiff’s solicitors to inform the Defendant of the new hearing date.

On 1 June 2017, the Defendant was absent. The Plaintiff’s counsel informed the AR that he was proceeding with the Bankruptcy Application and that the Defendant had been informed of the hearing date (of 1 June 2017) by letter and email dated 5 May 2017. He referred to the ANS showing an outstanding sum of $3,519.99. He also informed the court that the OA had determined the Defendant to be unsuitable for the DRS as the Defendant had failed to submit the requisite documents to the OA. The AR then made the Bankruptcy Order against the Defendant and appointed private trustees in bankruptcy in respect of his estate.

The appeal

On 4 July 2017, the Defendant appeared before a Duty Registrar. He tendered the letter dated 4 May 2017 from the OA to the Registrar. By then, apparently, a solicitor had entered an appearance on his behalf but the Defendant said that that was not for the present bankruptcy proceedings. The Defendant then informed the Duty Registrar that he wanted to appeal against the Bankruptcy Order.

On 6 July 2017, the Defendant filed Registrar’s Appeal No 173 of 2017. The reasons he stated in his appeal were as follows:

The Official Assignee had assessed the bankruptcy case against me during my academic vacation in China and Korean. This was the reason why I could not appear the hearings. Also, they didn't tell me that I could appeal the case within 14 days, which is why I apply for this appeal now.

I have decided to appeal for the case for just one reason. In the beginning of this year, I had paid all the loan. Since then there were only 2,300 interests unpaid plus the so-called legal fee 3,700. There had been an argument between HSBC, the lawyer, and me about the legal fee. As you know, the minimal amount for filing a bankruptcy case is S$15,000. This case is obviously unreasonable.

In addition, I am a tenured professor at National University of Singapore with the $137,000 annual salary. I really could understand how the people could make the decision which ruins my life.

The bankruptcy case is a disaster for my family. All my banks have been frozen, and we have no money for living. Our situation is really urgent. Please help me out. Your quick response will be highly appreciated.

The first hearing

24 July 2017 was the first hearing date of the appeal before this court. I asked the Defendant whether he wanted an interpreter of the Chinese language. The Defendant declined and said that he was prepared to carry on in the English language.

The Plaintiff was represented by Mr Tham Kai Mun of Kelvin Chia Partnership (“Mr Tham”). Mr Tham informed me that on 20 June 2017 there had been a settlement between the Plaintiff and a third party, who is apparently the Defendant’s friend, as regards the outstanding sum owed by the Defendant to the Plaintiff. Mr Tham did not take the point that under s 8(1) of the BA read with O 56 r 1(3) of the Rules of Court (Cap 322, R 5, 2014 Rev Ed), the Defendant’s appeal was filed late as it should have been filed within 14 days from 1 June 2017. Instead, Mr Tham submitted that the Defendant should have applied to annul the Bankruptcy Order under s 123(1)(b) of the BA, instead of appealing against the Bankruptcy Order.

The Defendant tendered a stack of documents to the court. He said that there was a dispute as to the legal costs claimed by the Plaintiff. In this regard, he asserted that although he was not opposed to paying the legal costs, such costs should be assessed by the court and that the Bankruptcy Order had been sought in a bid to force him to pay these costs despite his protests. When I informed him that he should have made this point prior to the Bankruptcy Order by appearing in court, he replied that he had been on an academic vacation in China and Korea. When I then queried if he had asked anyone to appear on his behalf, or written to the court to have the matter adjourned or re-fixed, he stated that he had done none of these.

The Defendant then alleged that the minimum debt in respect of which a bankruptcy order could be made was $15,000. According to him, the Plaintiff’s continued pursuit of the Bankruptcy Application despite the minimum debt threshold not being satisfied indicated that the application had been a bid to force him to pay the disputed legal costs. On this point, I informed the Defendant that the minimum debt threshold was to be considered as at the date of the bankruptcy application and not the date of the order (see s 61(1)(a) of the BA).

In any event, Mr Tham pointed out that the sum of $3,519.99 stated to be outstanding in the ANS did not include the legal costs disputed by the Defendant. Mr Tham also reiterated that there was a settlement subsequent to the Bankruptcy Order (see [16] above).

The Defendant did not dispute that there was a settlement by the time of the hearing before this court. However, he pointed out that the Plaintiff’s solicitors had claimed legal costs of $3,781.34 in their letter to him dated 20 March 2017. He also stressed that this appeal was of urgency to him because his bank accounts were frozen.

Mr Tham repeated that the ANS did not include legal costs. I add that there was an exhibit to the ANS, which was a tabulation titled “Calculation of Interest as at 22 March 2017”. This tabulation provided a detailed breakdown of the amount outstanding in respect of the Defendant’s personal loan account with the Plaintiff as at 22 March 2017. Legal costs were not included in the breakdown of $3,519.99, which appeared instead to comprise entirely of interest accruals.

Importantly, Mr Tham also informed the court that, based on his understanding, the Defendant had other creditors. Furthermore, under r 235(4) of the Bankruptcy Rules (Cap 20, R 1, 2006 Rev Ed) (“BR”), when any person other than the OA applies for an annulment of a bankruptcy order, the OA or the trustee, as the case may be, is obliged to give notice of the application to certain...