陈楚生 also known as CHEN CHUSHENG v. 陈冬梅 also known as CHEN DONG MEI

HCRE 26/2024

[2025] HKCFI 4678

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

RECIPROCAL ENFORCEMENT CASE NO 26 OF 2024

________________________

________________________

________________________

D E C I S I O N

________________________

A.  Introduction

1.  Upon the Plaintiff’s ex parte application, on 19 September 2024, Master Hui ordered that a Mainland judgment, namely “廣東省廣州市越秀區人民法院（2021) 粵 0104 民初 24399號” (the “Mainland Judgment”), be registered pursuant to the provisions under the Mainland Judgments (Reciprocal Enforcement) Ordinance, Cap. 597 (the “MJREO”).

2.  This is the Defendant’s application by summons dated 2 January 2025 seeking to set aside the registration of the said Mainland Judgment.

B.  Material Background

3.  On 26 August 2014, the Plaintiff and the Defendant entered into a loan agreement (the “Loan Agreement”). In short, the Defendant borrowed a sum of RMB 2 million from the Plaintiff at the interest rate of 2% per month, and the period of the loan was from 26 August 2014 to 25 August 2015.

4.  Clause 9 of the Loan Agreement provides that the law of the Mainland is applicable, and the parties may commence legal proceedings in respect of any dispute arising out of the Loan Agreement at Guangzhou Baiyun District People’s Court (the “Baiyun Court”). Clause 9 reads as follows:-

“本合同適用於中華人民共和國法律。在本合同履行期間，因本合同發生爭議或糾紛，各方可向合同簽訂地廣州市白雲區人民法院起訴。”

5.  It is not in dispute that:

(1)  the Plaintiff advanced RMB 2 million to the Defendant pursuant to the terms and provisions of the Loan Agreement; and

(2)  the Defendant only paid interest until June 2019; and

(3)  the balance of the indebtedness has remained outstanding.

6.  In the circumstances, the Plaintiff commenced legal proceedings against the Defendant in the Mainland.

7.  According to the Plaintiff’s Mainland lawyer (namely Mr Fang Hongyuan) [1], he filed a case on the Plaintiff’s behalf at the Baiyun Court. However, he was told that as the Defendant was a Hong Kong party, the Plaintiff should commence proceedings at “廣州市越秀區人民法院” (the “Yuexiu Court”).

8.  In this connection, the Plaintiff relied on a document titled “廣東省高級人民法院粵高法函 [2018］115號廣東省高級人民法院關於 《中共廣州市中級人民法院黨組關於廣州市基層法院一審涉外、涉港澳台商事案件實施集中管轄的請示》的覆函” (hereinafter the “2018 Guideline”). In short, the 2018 Guideline provides that the Yuexiu Court and “南沙區人民法院（廣東自由貿易區南沙片區人民法院)”[2] are tasked with the responsibility of adjudicating civil disputes that involve foreign elements as well as elements relating to Hong Kong, Macao, and Taiwan.

9.  In the circumstances, the Plaintiff pursued his claims against the Defendant at the Yuexiu Court. On 20 May 2022, the Yuexiu Court entered the Mainland Judgment against the Defendant, and she was ordered to pay the Plaintiff:-

(1)  the principal debt of RMB 2 million;

(2)  interest on the principal debt at 14.6% per annum for the period from 26 July 2019 to 30 May 2022;

(3)  enhanced interest on the judgment sum at 29.2% per annum from 30 May 2022 until the day of repayment (the “Enhanced Interest”);

(4)  costs of RMB22,800; and

(5)  property preservation fee of RMB1,520.

10.  On 9 May 2024, the Plaintiff applied ex parte for registration of the Mainland Judgment.

11.  On 19 September 2024, Master Hui ordered that the Mainland Judgment (save and except the Enhanced Interest[3]) be registered as a Hong Kong judgment pursuant to section 5 of the MJREO.

12.  On 2 January 2025, the Defendant took out a summons seeking to set aside the registration of the Mainland Judgment.

C.  Legal Principles

13.  Section 2 of the MJREO provides that:-

“chosen court (選用法院) means the court or any of the courts specified in a choice of Mainland court agreement or choice of Hong Kong court agreement, as the case may be, as the court to determine a dispute to which the agreement applies;

designated court (指定法院) means a court in the Mainland which is specified in Schedule 1;”

14.  Section 3(2) provides that:

“In this Ordinance, subject to subsections (3) and (4), choice of Mainland court agreement (選用內地法院協議) means an agreement concluded by the parties to a specified contract and specifying the courts in the Mainland or any of them as the court to determine a dispute which has arisen or may arise in connection with the specified contract to the exclusion of courts of other jurisdictions.”

15.  Sections 5(1) and (2)(a)(i)(ii) provide that:-

“(1) A judgment creditor under a Mainland judgment may apply to the Court of First Instance within the time limit specified in section 7 to have the judgment registered in the Court of First Instance.

(2) On an application made under subsection (1), the Court of First Instance shall order the Mainland judgment to be registered in accordance with this Ordinance if the judgment creditor has proved to the satisfaction of the Court of First Instance that the following requirements are satisfied—

(a) the judgment is given on or after the date of the commencement of this Ordinance by—

(i) a chosen court which is a designated court;

(ii) a designated court upon a transfer of the case under the law of the Mainland from a chosen court;”

16.  In Beijing Renji Real Estate Development Group Co Ltd v Zhu Min [2022] 4 HKC 116 at para 40, G Lam JA[4] stated:-

“…The MJREO does not make all Mainland judgments registrable in Hong Kong, but only those that satisfy the specific requirements. The approach adopted in the statute is to focus on judgments for payment in civil and commercial matters and give effect to the parties’ agreement in relation to dispute resolution – in other words a consent-based regime for enforcement. The phrase “choice of Mainland court agreement” is defined to mean:

‘an agreement concluded by the parties to a specified contract and specifying the courts in the Mainland or any of them as the court to determine a dispute which has arisen or may arise in connection with the specified contract to the exclusion of courts ‘of other jurisdictions.’”

(emphasis added)

D.  The Parties’ Contentions

D1.  The Defendant’s Contentions

17.  The Defendant’s contentions are straightforward.

18.  Mr Joseph Wong (for the Defendant) pointed out that in order for a Mainland judgment to be registrable under the MJREO, the same must be given by:

(1)  a “chosen court” which is a “designated court”: see section 5(2)(a)(i); or

(2)  a “designated court” upon a transfer of the case under the law of the Mainland from a “chosen court”: see section 5(2)(a)(ii).

19.  Mr Wong then went on to contend that the Mainland Judgment does not fall within section 5(2)(a)(i) nor section 5(2)(a)(ii).

20.  Insofar as section 5(2)(a)(i) is concerned:-

(1)  It is not in dispute that the Yuexiu Court (which entered the Mainland Judgment in question) is a “designated court”.

(2)  However, under clause 9 of the Loan Agreement, the “chosen court” is the Baiyun Court, not the Yuexiu Court.

(3)  In the premises, Mr Wong submitted that the Mainland Judgment is not a judgment given by the “chosen court”.

21.  Insofar as section 5(2)(a)(ii) is concerned:-

(1)  Mr Wong pointed out that the Plaintiff directly commenced the proceedings that resulted in the Mainland Judgment at the Yuexiu Court.

(2)  As such, the Mainland Judgment was not a result of some proceedings that were transferred from the “chosen court” (ie the Baiyun Court).

(3)  It follows that section 5(2)(a)(ii) is not engaged at all.

D2.  The Plaintiff’s Contentions

22.  Mr Harrison Cheung (for the Plaintiff) submitted that the Mainland Judgment falls within section 5(2)(a)(i) of the MJREO. In this connection:-

(1)  Mr Cheung emphasized that clause 9 of the Loan Agreement should be construed in accordance with PRC law.

(2)  Mr Cheung then went on to point out that under the 2018 Guideline, the Yuexiu Court was tasked with the responsibility of adjudicating the parties’ dispute.

(3)  Mr Cheung suggested that, as a matter of construction, the parties actually agreed that the Yuexiu Court was a “chosen court”. Mr Cheung stressed that the Yuexiu Court was the “court handling cases under Baiyun Court’s jurisdiction"[5].

23.  Insofar as section 5(2)(a)(ii) is concerned:-

(1)  Mr Cheung submitted that there had been “a transfer of the case under the law of the Mainland from the Baiyun Court to the Yuexiu Court”[6].

(2)  In this connection, Mr Cheung relied on the fact that in light of the 2018 Guideline, the Plaintiff’s Mainland lawyer was told to commence the proceedings at the Yuexiu Court.

(3)  Mr Cheung further asked me to interpret the words in section 5(2)(a)(ii) widely and flexibly.

E.  Deliberation

E1.  Is the Yuexiu Court a “chosen court” within the meanings of section 5(2)(a)(i) of the MJREO?

24.  The first issue to determine is whether the Yuexiu Court (which granted the Mainland judgment) is a “chosen court” within the meanings of section 5(2)(a)(i) of the MJREO.

25.  For the following reasons, I answer this issue in favour of the Defendant.

26.  Unless a Mainland judgment is granted by a Mainland court chosen by the parties (ie the “chosen court”) pursuant to a “ choice of Mainland court agreement (選用內地法院協議)”[7], the same would not be registrable pursuant to section 5(2)(a)(i) of the MJREO. As pointed out by G Lam JA in Beijing Renji (supra) at para 40, the MJREO is “a consent-based regime for enforcement”.

27.  It is not in dispute that clause 9 of the Loan Agreement is a “choice of Mainland court agreement (選用內地法院協議)” within the meanings of section 3(2) of the MJREO.

28.  However, under clause 9 of the Loan Agreement, the parties unequivocally chose the Baiyun Court as the forum for resolving their dispute relating to the Agreement. The Baiyun Court was not the court that granted or handed down the Mainland Judgment in question.

29.  In my view, the words in clause 9 of the Loan Agreement are most unequivocal, and there is no ambiguity. As evidenced by the words in clause 9, the parties chose the Baiyun Court because Baiyun was the place where the Loan Agreement was executed.

30.  Meanwhile, not an iota of the words in the terms and provisions of the Loan Agreement remotely support the Plaintiff’s suggestion that the parties agreed to resolve their dispute in any court that may exercise the jurisdiction of the Baiyun Court.

31.  I do not see any room for twisting the words in clause 9 of the Loan Agreement.

32.  I do not lose sight of the fact that under the 2018 Guideline, the Yuexiu Court has been tasked with the responsibility of trying cases that involve parties from Hong Kong. However, this is not a valid reason for rewriting the contractual bargain of the parties. As pointed out, whilst clause 9 of the Loan Agreement unequivocally identifies the Baiyun Court as the contractual forum, none of the terms and provisions in the Loan Agreement remotely support the contention that any court that is capable of exercising the Baiyun Court’s jurisdiction may be deemed to be the contractual forum.

33.  If Mr Cheung’s contention were correct, any Mainland court that eventually enters the judgment in question could be deemed to be the “chosen court”. Bearing in mind that the MJREO is a “consent-based regime”: see Beijing Renji (supra) at para 40, this outcome is plainly absurd, and it flouts the requirement under section 5(2)(a)(i) that the court granting the Mainland judgment in question must be one that is “chosen” by the parties.

34.  For all the above reasons, I find and conclude that:-

(1)  the Yuexiu Court (which granted the Mainland Judgment) is not a “chosen court” within the meanings of section 5(2)(a)(i) of the MJREO;

(2)  section 5(2)(a)(i) of the MJREO is not engaged; and

(3)  the Mainland Judgment is not registrable pursuant to section 5(2)(a)(i) of the MJREO.

E2.  Was there a transfer of the case to the Yuexiu Court under the law of the Mainland from the Baiyun Court?

35.  The next issue to determine is whether there was a transfer of the case to the court giving the Mainland judgment (ie the Yuexiu Court) under the law of Mainland from the “chosen court” (ie the Baiyun Court) within the meanings of section 5(2)(a)(ii) of the MJREO.

36.  There are various reasons (such as administrative reasons) why a “chosen court” may decline jurisdiction in favour of another Mainland court. It is understandable why section 5(2)(a)(ii) is part of the regime. This section effectively provides that a Mainland judgment is registrable if the plaintiff commences proceedings at the “chosen court”, and the “chosen court”, under the law of the Mainland, transfers the case to the Mainland court that eventually grants the Mainland judgment[8]. In this scenario, the contractual forum chosen by the parties is involved in the judicial process initiated by the plaintiff, and it cannot be said that the plaintiff breaches the jurisdictional agreement with the defendant. This is wholly consistent with the fact that the MJREO is a “consent-based regime for enforcement”: see Beijing Renji (supra) at para 40.

37.  In order to invoke section 5(2)(a)(ii) of the MJREO, the plaintiff has to commence proceedings in the “chosen court”. If he directly commences proceedings in a forum that is not the “chosen court” and the proceedings in the court that grants the Mainland judgment are not transferred from the “chosen court”, section 5(2)(a)(ii) of the MJREO would not be engaged at all. In this scenario, the plaintiff disregards the jurisdictional agreement with the defendant, and, as such, he would not be in a position to rely on the MJREO, which is, as said, a “consent-based regime for enforcement”.

38.  The crux of the parties’ dispute is whether the proceedings before the Yuexiu Court, under which the Mainland Judgment was granted, were “transferred” from the Baiyun Court (ie the “chosen court”) under Mainland law.

39.  According to Hong Kong Legal Dictionary (LexisNexis Butterworths 2004), pages 1010 to 1011:-

(1)  “transfer” means “…the passing of…one thing from one place to another”; and

(2)  “transfer of proceedings” means “…the removal of proceedings from one court to another”.

40.  According to Shorter Oxford English Dictionary (Oxford University Press, 6^th Ed), pages 3321 to 3322, “transfer” means “[t]he action of…conveyance or removal from one place…to another”.

41.  In the premises, the notion of “transfer of an action” or “transfer of proceedings” involves 3 elements, namely:-

(1)  First, there must be a case or a legal action in an original forum;

(2)  Second, the case or the legal action was removed from the original forum; and

(3)  Third, a new forum took up or took over the same case or the same legal action that was initiated in the original forum.

42.  In the present case, the Plaintiff’s PRC lawyer (namely Mr Fang) said that he filed a case at the Baiyun Court (ie the “chosen court”)[9], and this is evidenced by an electronic receipt[10].

43.  However, Mr Wong (for the Defendant) pointed out that:-

(1)  There is a discrepancy in respect of the date shown in the electronic receipt (ie 23 March 2020) and the date mentioned in the affirmation made by the Plaintiff’s PRC lawyer (ie 20 March 2020)[11].

(2)  The electronic receipt is silent on the subject matters of the claim as well as the identities of the plaintiff and the defendant.

(3)  There is no reason why despite repeated requests, the Plaintiff did not produce the full records in respect of the court documents that were filed at the Baiyun Court. In this connection, the Plaintiff was able to file the records in respect of the proceedings at the Yuexiu Court[12]. There is no reason why the full records in respect of the proceedings at the Baiyun Court were not produced.

44.  In my view, the documentary evidence produced by the Plaintiff is unsatisfactory, and there are plainly evidential gaps that call for explanations.

45.  Be that as it may, even if it is assumed that the Plaintiff, via his PRC lawyer, filed a claim in respect of the subject matters under the Loan Agreement at the Baiyun Court (such that the first requirement is satisfied), I still have no hesitation in finding that the Plaintiff fails to satisfy the second and third requirements.

46.  There is not a shred of evidence showing that (i) the case or the legal action before the Baiyun Court was “removed”; and (ii) the Yuexiu Court (which granted the Mainland Judgment) “took up” or “took over” the case or the legal action that was previously commenced at the Baiyun Court.

47.  Had the legal proceedings before the Yuexiu Court been transferred from the Baiyun Court as alleged, the Plaintiff would have been able to adduce:-

(1)  the court documents showing that he had made an application to “transfer” or “move” the case or the legal action from the Baiyun Court to the Yuexiu Court;

(2)  the relevant court decision or court order showing that the Yuexiu Court “took over” the case or the legal action from the Baiyun Court; and

(3)  the evidence with regard to the relevant statutory provisions under Mainland law, pursuant to which the Yuexiu Court “took over” the original action or legal action from the Baiyun Court.

48.  For reasons best known to the Plaintiff, not a piece of documentary evidence has been adduced.

49.  At the hearing, Mr Cheung (for the Plaintiff) drew to my attention that:-

(1)  the electronic receipt in respect of the claims at the Baiyun Court has the following reference: “20204401090000008916”[13]; and

(2)  the statement of claim in respect of the action at the Yuexiu Court contains the following hand-written remark on its top left-hand corner: “08916”.

50.  Mr Cheung’s observation does not avail the Plaintiff at all. In my view, the hand-written remark on the statement of claim in respect of the action at the Yuexiu Court is most equivocal. It could be the case that someone inserted the same simply for the purpose of indicating that the claims in question were related to the proceedings at the Baiyun Court. There is no evidence showing (i) who wrote the hand-written remark in question; and (ii) why he or she did so. More fundamentally, what the hand-written remark does not show is that the proceedings at the Yuexiu Court originated from or were transferred from the Baiyun Court as a matter of Mainland law. Had this been the case, the Plaintiff would have been able to produce the 3 classes of documents set out in paragraph 47 above.

51.  On the evidence, it appears that upon finding out that the Baiyun Court might not be willing to exercise jurisdiction in light of the 2018 Guideline, the Plaintiff’s Mainland lawyers simply commenced a fresh or new action at the Yuexiu Court (which resulted in the Mainland Judgment).

52.  Having said that the MJREO is a “consent-based regime for enforcement”: see Beijing Renji (supra) at para 40, if the Plaintiff wished to rely on section 5(2)(a)(ii) of the MJREO, what he should have done was to make an application seeking to “transfer” or to “move” the original action from the Baiyun Court to the Yuexiu Court; he could not have started a fresh action or a set of fresh proceedings at a forum that was not “chosen” by the parties.

53.  In the premises, I find and conclude that:-

(1)  the Mainland Judgment was not granted by a “designated court” (ie the Yuexiu Court) upon a transfer of the case under the Mainland law from a “chosen court” (ie the Baiyun Court);

(2)  section 5(2)(a)(ii) of the MJREO is not engaged; and

(3)  the Mainland Judgment is not registrable under section 5(2)(a)(ii) of the MJREO.

E3.  Material Non-Disclosure

54.  I am of the view that the Plaintiff was guilty of material non-disclosure.

55.  Since the registration application was made ex parte, it was incumbent on the Plaintiff to comply with the duty to make full and frank disclosure: see Chen Hongqing v The persons whose names are set out in the second column of the Schedule to the Re-amended writ of summons filed on 26 March 2018 [2019] HKCFI 2121 at paras 56 to 57 (per Keith Yeung J)[14].

56.  It has been suggested that such a duty is one of the utmost or highest good faith, and it is not open to the Plaintiff to argue that had the relevant matters been drawn to the court’s attention, the decision would have been the same: see Fong Chak Kwan v Ascentic Ltd [2020] HKCFI 679 at para 59 (per Marlene Ng J)[15].

57.  In his affirmation filed in support of his registration application, the Plaintiff merely (i) mentioned the fact that the Mainland judgment was granted by the Yuexiu Court[16], and (ii) set out the contents of clause 9 of the Loan Agreement[17].

58.  In my view, this was insufficient. Having said that the duty required of the Plaintiff was one of the utmost or highest good faith, what the Plaintiff should have done was to draw Master Hui’s attention to the facts that whilst the “chosen court” under clause 9 of the Loan Agreement was the Baiyun Court, the Mainland Judgment was granted by the Yuexiu Court, and the proceedings that resulted in the Mainland Judgment were not transferred from the Baiyun Court. The Plaintiff should then further address Master Hui as to the reasons why he took the view that the Mainland Judgment was still registrable pursuant to sections 5(2)(a)(i) and/or 5(2)(a)(ii) of the MJREO.

59.  Regrettably, the Plaintiff did not draw Master Hui’s attention to the significance of the issues involved and the defects in respect of the application. Without engaging the issues, the Plaintiff provided no assistance to the court at all.

60.  In my view, this was inexcusable.

61.  Even if the Plaintiff has valid answers to the points raised by the Defendant (which is not the case), I would not have exercised my discretion to re-grant the registration sought by the Plaintiff.

F.  Order and Disposition

62.  For all the above reasons, the Plaintiff was not entitled to rely on sections 5(2)(a)(i) and/or 5(2)(a)(ii) of the MJREO to register the Mainland Judgment. There was simply no basis to register the Mainland Judgment at all.

63.  Further, the Plaintiff was also guilty of material non-disclosure, and the breach of duties on his part was serious.

64.  In the premises, I set aside the registration of the Mainland Judgment under the order dated 19 September 2024, and I make an order in terms of paragraph 1 of the Defendant’s summons dated 2 January 2025.

65.  Costs should follow the event.

66.  I make a costs order that the costs of the Defendant’s summons dated 2 January 2025 (including all costs reserved) be paid by the Plaintiff to the Defendant to be summarily assessed by this court.

67.  The Defendant has already lodged and served her statement of costs. I direct the Plaintiff to lodge and serve her list of objections within 3 days.

68.  Lastly, I express my gratitude to Mr Joseph Wong and Mr Harrison Cheung for their helpful assistance.