Repayment of the loan is conditional upon if and when the agency agreement is terminated. If the agency agreement is still in force after 48 months from the date of appointment, the petitioner shall not recover the loan from the debtor. If, however, the agency agreement is terminated within 48 months from the date of appointment, the loan will become repayable, the exact amount of which depends on the number of months in which the agency agreement is in force. When the termination takes place within 36 months from the date of appointment, the loan advanced up to the time of termination is 100% repayable.

[4] The debtor’s appointment was terminated on 13 March 2006, that is, within 36 months from the date of appointment (22 April 2005). The loan advanced to the debtor so far was HK$110,000. After deducting the debtor’s basic commission, the outstanding balance was HK$109,560.69, which was on the petitioner’s case, became repayable under the Loan Agreement. But the debtor did not make any repayment.

[5] The petitioner then commenced the present proceedings.

Discussion

[6] It is trite that the burden rests on the debtor to raise a bona fide dispute of the debt on substantial grounds. In his opposing affirmations, the debtor took two points.

[7] First, he alleged that the loan of HK$110,000 was described as "award/allowance" in the notification of remuneration by the petitioner to the Inland Revenue Department ("IRD") for the assessment year ended 31 March 2006. So it was not a loan.

[8] This point does not bear a closer scrutiny of the undisputed evidence.

[9] The Loan Agreement provided if the agency agreement is still in force at the end of the assessment year and the petitioner envisages that the loan is not recoverable, the loan amount should be reported to the IRD. The agency agreement was admittedly terminated on 13 March 2006 before the assessment year ended 31 March 2006. But the petitioner envisaged that there might be a possibility that the debt would not be recoverable because the debtor had not repaid any part or submitted any repayment proposal. Its accounting department therefore reported the debt of HK$110,000 to the IRD by putting the same under the item "any other award/allowance" in the notification. The petitioner had further explained the matter to the IRD in correspondence.

[10] Accordingly, despite the description in the notification, the advance of HK$110,000 remains a loan.

[11] The second point that the debtor took is that his superior had told him : "只要做到數就可以出allowance". The superior never said that the allowance was repayable.

[12] This bare allegation of misrepresentation is devoid of any particulars. It is flatly contradicted by the express provisions in the Loan Agreement, which the debtor must be fully aware of. Before the execution of the agency agreement and the Loan Agreement on 18 April 2005, a Mr Michael Leung, assistant legal manager of the petitioner’s legal and compliance department, following the petitioner’s practice, had explained the terms and conditions to the agreements to the debtor. And I fail to see any reason why his superior would have made the alleged misrepresentation to him at all.

[13] In his oral submissions, the debtor took four more points.

[14] He first said that he had not received the statutory demand. But service of the statutory demand was effected by substituted service by advertisement in Sing Tao Daily on 18 November 2008. There is nothing in the evidence to dispute the validity of the substituted service.

[15] The debtor next alleged that the trade practice adopted by the petitioner, as is the case for the entire insurance field, is unfair. He will lodge a complaint to the Labour Department. If his complaint is established, the practice will be overthrown, which will obviate his liability to repay the loan. This is but mere speculation with no substance whatsoever.

[16] He next complained that no legal aid was granted to him. This is simply not a defence.

[17] He finally said that he should be given a fair trial in which he could call his witnesses to support his case. But he had already been given ample opportunity to state his defence and adduce evidence. He had indeed filed two opposing affirmations but failed to put up any real defence.

Conclusion

[18] For the above reasons, the debtor has failed to raise any bona fide dispute based on substantial grounds. I will make a usual bankruptcy order against him.

[19] Costs should follow the event. I will further order him to pay the petitioner costs of these proceedings, including all costs reserved, to be taxed if not agreed.

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