NHD SYSTEMS (ASIA) LTD (IN LIQUIDATION) v. LI XIAO YI

HCA 1492/2018

[2026] HKCFI 1023

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1492 OF 2018

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REASONS FOR DECISION

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1.  I have before me an application by the Plaintiff for leave to appeal my judgment of 17 October 2024 out of time. Any appeal should have been issued within 28 days. It was not. On 18 February 2025 the Applicant filed a Notice of Appeal in CACV 80 of 2025, the Plaintiff’s lawyers presumably acting on the erroneous assumption that time ran from the date of the reasons, which were handed down on 21 January 2025. When the error was discovered the Plaintiff’s lawyers also erroneously assumed that leave to appeal out of time should be made to the Court of Appeal rather than the Court, which gave the judgment. Consequently, the application was dismissed^[1].

2.  The criteria for granting leave to appeal out of time are not controversial.  They are explained by Lam VP and Yuen JA in [6] of Progetto Jewellery Co Ltd v Lau Chiu Ying^[2]:

(1)     In the exercise of its discretion, the Court will take into account (1) the length of delay; (2) the reasons for the delay; (3) the chances of the appeal succeeding if an extension of time is granted; and (4) the degree of prejudice to the other party if the application is granted.

(2)     Where the delay is substantial and not wholly excusable, the applicant must show a real prospect of success on the merits, not merely a reasonable prospect of success.

3.  Mr Ho also drew my attention to Lee Chick Choi v Best Spirits Co Ltd^[3],another decision of the Court of Appeal dealing with leave to appeal out of time.  In Lee Chick Choi the delay was 6 weeks and the plaintiff was a litigant in person.  The delay arose from the plaintiff’s mistaken belief that he needed leave to appeal.  The Court of Appeal found that this did not constitute a “proper explanation for the delay”.  The facts have some similarity to the present case.  Mr Tang’s affirmation and skeleton argument give as his explanation the fact that the judgment was delivered before the reasons, which, although he does not say it expressly, suggests Mr Tang understood that time ran from the handing down of the reasons.  I find it surprising that at least by the time he filed his skeleton argument Mr Tang had not come to understand that the delay was on the face of it due to his lawyers’ mistakes not the fact that the reasons came after the judgment, which could easily have been dealt with by issuing a notice of appeal and then amending it when the reasons became available, or applying for an extension of time.  The Plaintiff has not provided a proper explanation for the delay.  Mr Tang has simply provided a chronology of events.  I also note that the tenor of his evidence and argument is that the Court is responsible, because the judgment was delivered before the reasons, which is not an explanation as his lawyers should have known how to deal with this.  It also seems to me that the delay is significant in the sense that it is not a case of the deadline being missed by a few days or weeks.  This litigation has dragged on for far too long already and the Defendant is entitled to expect a professional litigant (the Plaintiff is in liquidation and Mr Tang is one of its liquidators) to progress the proceedings promptly and competently.

4.  The length of the delay and the reason for it are relevant in particular to how strong an appeal has to be shown by the applicant before leave will be granted.  In the present case it makes no difference.  The Plaintiff’s Notice of Appeal (whether in its original form or the proposed amended version) simply is a rehash of the arguments advanced before me.  The principal claim based on an alleged loan agreement between the Plaintiff and the Defendant is hopelessly misconceived for the reasons explained in my reasons for judgment.  The alternative claims for money had and received and/or unjust enrichment were acknowledged by counsel for the Plaintiff at the pre-trial review and at the beginning of the trial to be academic, because if the Plaintiff could not prove a loan agreement almost necessarily the alternative claims would fall away as the Plaintiff cannot prove that it transferred any money to the Defendant in or about September 1992.  At the beginning of the trial the following exchange took place between me and the Plaintiff’s counsel:

“COUNSEL: On the other hand, my Lord, if I may just say, that we … apart from the loan cause of action, we also said there's money had received ….. that actually Dr Li had received.

COURT: Well, since you can't prove he ever got the money …. I thought we agreed at the PTR that basically you either succeed on the loan agreement claim or you lose. If you can't prove the loan agreement part because you can't prove you ever got any money, you're not likely to succeed on the basis of money had and received, because you can't prove he ever got the money can you?

……….

COURT: Right. So, basically, you either win on the loan agreement or you lose. Is there anything else you want to say about this, because I'm having difficulties seeing it being terribly complicated. I'm wondering what I'm missing.

COUNSEL:    No. I think my Lord is well ahead of time. Well ahead of me.”

5.  In his written Closing Submissions the Plaintiff’s counsel only said this in regard to the unjust enrichment and money had and received claims:

“And P’s pleaded case apart from the loan also concerns unjust enrichment and money had and received. Such causes of action were not seriously tested by D during XX and D’s contention of lack of consideration of the loan in [12] of his Closing Submissions would not get him home.”

6.  For all practical purposes the alternative claims for unjust enrichment and money had and received were not pursued.

7.  The highest that one can put the Plaintiff’s case on the documentary evidence is that it is possible that the Defendant received US$1,000,000, but in the absence of any banking documents showing a transfer to his bank account or even an internal ledger recording such a transfer to him, it is also possible that he did not.  The Plaintiff, therefore, cannot prove on the balance of probabilities that the Defendant received the money.  In fact, given the absence of any banking records or accounting documents showing that the payment of US$1,000,000, which the Plaintiff did make to somebody on 30 September 1992, was made to the Defendant it seems more likely that whatever might have been envisaged earlier in the month a loan was not made to the Defendant personally.

8.  I therefore dismissed the Plaintiff’s application for leave to appeal out of time and make an order nisi that the Plaintiff pays the Defendant’s costs of the application, including any reserved costs, and the hearing before me on 10 February 2026 forthwith, such costs to be taxed if not agreed.