AMTD GROUP INC v. SEE HIU LUN

HCA 715/2024

[2026] HKCFI 922

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 715 OF 2024

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BETWEEN

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D E C I S I O N

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A. INTRODUCTION

1.  There are two summonses before me (“the Summonses”):

(1) the plaintiff (“P”)’s summons dated 12 December 2024 for leave to enter default judgment against the defendant (“D”) (“P’s Summons”);

(2) D’s summons dated 15 January 2025 for leave to file his Draft Defence and Counterclaim out of time (“D’s Summons”)[1].

2.  Originally, the substantive hearing of the Summonses is fixed on 11 February 2026 (“the 11.02.2026 Hearing”). However, in P’s written submissions dated 28 January 2026, P proposed that the Summonses be determined on paper without an oral hearing. In D’s written submissions dated 2 February 2026, D agreed to this proposal. Having reviewed the papers, on 3 February 2026, I directed that the Summonses would be determined on paper and the 11.02.2026 Hearing be vacated. On 3 February 2026, pursuant to the directions given by the Court, P lodged written reply submissions.

3.  P’s written submissions and written reply submissions are prepared by Mr Danny Tang of counsel. D’s written submissions are prepared by D’s solicitors.

4.  This is my decision on the Summonses.

B. BACKGROUND

5.  P’s pleaded case against D is as follows:

(1) P is a company incorporated in the BVI and is part of a group of companies (“the Group”) with businesses spanning digital solutions, media and culture, education and training and premium assets.

(2) D is a former employee of P. As the Company Secretary of certain Group companies, he oversaw the Group’s corporate secretarial and compliance matters. By an Employment Agreement dated 1 December 2015, P began to employ D as a Vice President of P’s Chief Operating Office on the same date.

(3) In the course of and after the termination of his employment, D committed serious breaches of his duties owed to P by, inter alia:

(a) separately carrying on a business and practice as an accountant and failing to devote his full time, attention, and effort to the performance of his duties and responsibilities towards P;

(b) failing to exercise reasonable skill and competence in the performance of his duties;

(c) abusing important powers and functions entrusted to him and carrying out acts purportedly on behalf of P/the Group, including creating and using falsified documents; and

(d) failing to return property and confidential information belonging to P.

(4) By a notice of termination dated 16 April 2024, P was summarily dismissed for gross misconduct pursuant to Clause 19.2 of the Employment Agreement and was demanded to return all property belonging to the Group.

(5) P also claims against D in conversion, detinue and trespass to goods by reason of his failure to return a work computer and a work mobile device belonging to P.

(6) P further seeks repayment from D of discretionary bonuses in the sum of HK$3,982,000 paid to D between 2018 and 2022 pursuant to various bonus letters.

6.  On 28 March 2024, D commenced a claim against P in the Labour Tribunal (“LT”) in LBTC 1157/2024 (“LT Action”) for (a) a sum of HK$600,065.63, which comprises wages in lieu of notice and long service payment (alternatively, severance pay) and (b) damages “caused by [P]’s instruction to commit criminal offence under s.183 of Securities and Futures Ordinance”. The grounds put forward by D in the LT Action include constructive dismissal, dismissal by reason of redundancy, and breach of the implied term of mutual trust and confidence.

7.  On 17 April 2024, P issued the Writ of Summons herein. On 14 October 2024, P filed the Statement of Claim. By a Consent Order dated 20 November 2024, the time for D (legally represented at that time) to file his Defence was extended to 9 December 2024 (“the 09.12.2024 Deadline”).

8.  On 7 November 2024, the LT, inter alia, (a) granted leave to D to withdraw his damages claim; and (b) adjourned D’s remaining claims sine die pending determination of this action. I agree with P that this would mean that P’s claim against D in this case would be heard in the Court of First Instance, not in the LT.

9.  D did not file his Defence by the 09.12.2024 Deadline. On 12 December 2024, P took out P’s Summons.

10.  P’s Summons was scheduled to be heard on 16 January 2025 (“the 16.01.2025 Hearing”).

11.  On 15 January 2025, after 4 pm, D’s solicitors served D’s Summons on P’s solicitors.

12.  In the 16.01.2025 Hearing, DHCJ Kent Yee directed, inter alia, that:

(1) P’s Summons and D’s Summons be adjourned for substantive arguments;

(2) D do file and serve an affirmation in support of D’s Summons, P do file and serve an affirmation in opposition, and D do file and serve an affirmation in reply (if any);

(3) P do write to the Court and D to indicate whether it will oppose D’s Summons and continue to pursue P’s Summons (at a time after the filing and service of P and D’s respective evidence in relation to D’s Summons);

(4) In the event that P decides to agree to D’s Summons and not to pursue P’s Summons, further directions would be given by the court for paper disposal of inter alia costs issue of the parties’ summonses; and

(5) Costs of the 16.01.2025 Hearing be to P, to be paid by D forthwith. P’s costs to be summarily assessed on paper.

13.  On 17 April 2025, costs of the 16.01.2025 Hearing itself were summarily assessed at HK$109,600. D did not pay those costs forthwith. P therefore took enforcement actions, including garnishee proceedings from which P has only been able to recover HK$6.21 and HK$712.67. After repeated attempts to serve D with a statutory demand, D finally discharged his costs obligations in late December 2025.

14.  On 12 May 2025, P’s solicitors indicated to the Court and to D that P would not oppose D’s Summons (without prejudice to any application for summary judgment) nor continue to pursue P’s Summons, but would seek costs of the Summonses.

15.  Pursuant to the Order made in the 16.01.2025 Hearing, the issue of the remaining costs of the Summonses (ie costs of the Summonses apart from the costs of the 16.01.2025 Hearing) was meant to be dealt with on paper.

16.  On 2 June 2025, D made an application for legal aid (“the LA Application”) in this case, which led to a 42-day stay of the proceedings herein.

17.  On 21 July 2025, the LA Application was refused by the Director of Legal Aid.

18.  In July 2025, D’s solicitors did not provide any substantive response to P’s solicitors on the further conduct of the Summonses and simply stated that they were not in position to take instructions.

(1) On 18 July 2025, D’s solicitors said that:

“We are currently not in a position to take any instructions as to [D]’s comment on your allegation raised against him nor any instructions on your draft Consent Summons as you are aware that [D] has applied for Legal Aid. Pursuant to s.15 of the Legal Aid Ordinance Cap 91, there is a stay of proceedings of the captioned action pending the determination by the Director of Legal Aid of [D]’s application.”

(2) On 23 July 2025, D’s solicitors said:

“We maintain our stance that we are not in a position to take or receive any instructions from [D], given that there is yet an outcome of his application for Legal Aid.”

19.  On 23 July 2025, P’s solicitors reported to the Court that although the stay arising from the legal aid application had come to an end, D’s solicitors still said that they could not take instructions by virtue of the pending legal aid application. P’s solicitors sought further directions for the further conduct of the Summonses, including a direction for paper disposal.

20.  On 1 August 2025, the Court directed that since D was acting in person, the Court was not minded to make an order without a hearing, and directed for a 2-hour hearing.

21.  On 5 August 2025, P’s solicitors wrote to the Court in an attempt to persuade the Court on paper disposal, on the ground that the LA Application had been refused, and D’s solicitors remained as solicitors on record, hence D was not unrepresented.

22.  On 8 August 2025, the Court directed that no paper disposal was allowed and a hearing should be fixed.

23.  D filed a Notice to Act in Person on 12 August 2025.

24.  Subsequently, the substantive hearing of the Summonses was fixed to take place on 11 February 2026. Shortly before that hearing, on 23 January 2026, D became legally represented again.

25.  On 28 January 2026, P lodged its written submissions concerning the Summonses. The written submissions are prepared by counsel.

26.  On 29 January 2026, D’s solicitors sent a letter marked “Without Prejudice Save as to Costs”, in which D made an offer that there be leave to D to file and serve the Draft Defence and Counterclaim annexed to D’s Summons within 1 day, and costs of the Summonses be to P on a party and party basis (“the 29.01.2026 Offer”). D required P to give a reply by 10 am on 30 January 2026, otherwise the Offer would lapse automatically.

27.  P has not accepted the 29.01.2026 Offer.

C. THE ISSUE

28.  P seeks the following order:

(1) Without prejudice to the order at subparagraph (3) below, there be no order as to P’s Summons;

(2) Retrospective leave be given to D to file and serve the Draft Defence annexed to D’s Summons within 1 day;

(3) Costs of and occasioned by the Summonses (save as to the costs of the 16.01.2025 Hearing) be to P on an indemnity basis with a certificate for counsel, to be paid by D forthwith, to be summarily assessed on paper.

29.  D’s position is as follows:

(1) Regarding the order sought by P as set out in [28(1)] and [28(2)] above, save and except some minor disagreement on the wording of the order, D has no objection in principle.

(2) Regarding the order sought by P as set out in [28(3)] above, D opposes the application. D suggests that the following order should be made:

(a) Costs of both P’s Summons and D’s Summons up to 30 January 2026 (except the costs of the 16.1.2025 Hearing) be to P on a party and party basis without any certificate for counsel to be taxed if not agreed; and

(b) Costs of both P’s Summons and D’s Summons from 31 January 2026 onwards be to D on a party and party basis to be summarily assessed.

30.  In view of the above, the issue to be resolved by me is the costs of the Summonses (save and except the costs of the 16.1.2025 Hearing). In particular, whether there should be any indemnity costs awarded to P.

D. DISCUSSION

D1. Costs of the Summonses be to P

31.  P correctly submits that where both the plaintiff’s application for default judgment and defendant’s cross-application for extension of time to file its defence are before the Court, if extension of time is granted to the defendant, it is the usual order to order costs to be paid by the defendant for both summonses.[2]

32.  In my view, there is no reason why the usual order should not be made here.

33.  I am unable to agree with D that counsel’s fee be disallowed. For a hearing before a judge in chambers, one counsel’s fee would be allowed, without the necessity of having obtained a certificate for counsel from the Court.[3] Originally, the Summonses would be disposed of in the 11.02.2026 Hearing, which is a hearing before a judge in chambers. It is perfectly legitimate for P to instruct one counsel to prepare for and to attend that hearing. Before the Court issued the directions for paper disposal on 3 February 2026, P has already instructed counsel and counsel has lodged written submissions on 28 January 2026. Counsel’s fee for the hearing has been incurred. I see no reason not to include counsel’s fee in the costs awarded to P.

34.  I am also unable to agree with D that costs of the Summonses from 31 January 2026 should be awarded to D. The basis of this submission is the 29.01.2026 Offer. However, in my view, the 29.01.2026 Offer does not have any effect of altering the usual costs position.

(1) As said in the above, P’s counsel has lodged written submissions on 28 January 2026. That means that before D making the 29.01.2026 Offer, P has already instructed counsel, and almost all the costs in relation to the 11.02.2026 Hearing have been incurred. With respect, the 29.01.2026 Offer is a very late offer, which cannot be said as meaningful.

(2) Further, for the reasons below, I am of the view that P is entitled to have costs of the Summonses on an indemnity basis. Thus, in any event, the 29.01.2026 Offer would not have the effect of altering the costs position.

35.  In my view, costs of the Summonses should be to P forthwith. Those costs would be summarily assessed.

D2. Indemnity costs

36.  The principles concerning indemnity costs are well established:[4]

(1) It is generally necessary for a party seeking an order for indemnity costs to demonstrate some “special or unusual feature” in the case.

(2) Indemnity costs is not only ordered where the paying party’s conduct lacks moral probity or deserves moral condemnation for which the Court wishes to express disapproval. Conduct which falls short of that can be so unreasonable as to justify an order for indemnity costs. But such conduct would need to be unreasonable to a high degree. Unreasonable in this context does not mean merely wrong or misguided in hindsight.

(3) Ordinarily, merely pursuing a weak claim would not justify indemnity costs. On the other hand, maintaining a claim that one knows, or ought to know, is doomed to fail on the facts and on the law, is conduct that is so unreasonable as would justify indemnity costs.

(4) Ultimately, what the receiving party must demonstrate is something in the conduct of the action or other circumstances of the case that “takes it out of the norm” which warrants an order for indemnity costs.

37.  P submits that indemnity costs should be ordered against D given his inexplicable default in filing his Defence and his record of abuse of process.

D2.1 D’s default in filing his Defence

38.  In §5 of his affirmation dated 23 January 2025 (“D’s 1^st Aff”) in support of D’s Summons, D alleges, inter alia, that:

(1) He was unable to give instructions to his solicitors to take out an application for an application of time to file his Defence and Counterclaim as he was unable to come up with enough cash for his legal fees;

(2) His cash flow difficulties were directly caused by P; and

(3) He was only able to gather sufficient funds to instruct his legal representatives to draft a Defence and Counterclaim on his behalf in or around November 2024, after receiving the first payment of his wages from his new employer (ie Neo Consultancy Services Limited, “Neo Consultancy”).

39.  I agree with P that these allegations are incapable of being believed, and there is no substance in these allegations.

(1) It is undisputed or indisputable that:

(a) D lives in a luxurious apartment in Happy Valley (monthly rent in the range of HK$39,000 – HK$52,000);

(b) D and his family enjoys a high-end standard of living, including purchasing new cars, dining at high-end restaurants, and sending children to prestigious international schools;

(c) During the course of his employment with P, D received over HK$12 million in salary and HK$5 million in bonus.

(2) According to D’s own case, he received HK$360,000 from Neo Consultancy on 29 November 2024. D claims that all the payment went towards paying for his family’s necessities and he could not earmark any part of it for legal fees. This allegation cannot be true. As submitted by P, D did manage to instruct his solicitors to obtain an extension of time by a Consent Summons dated 13 November 2024 and he was informed by his solicitors about the 09.12.2024 Deadline. He claimed to have missed that deadline because he did not have sufficient funds to instruct his solicitors to prepare a Defence. However, when D was served P’s Summons on 12 December 2024, D immediately instructed his solicitors to prepare a draft Defence, and his solicitors spent approximately one month to do so.[5] It is inexplicable why D would not have enough funds to at least apply for a further extension of time by the 09.12.2024 Deadline, but would have funds 3 days thereafter to instruct his solicitors to spend around one month to prepare a draft Defence.[6]

(3) D has been carrying on an accountancy business trading as “Issac H.L. See CPA”. D claimed that he did not earn any significant income through this accountancy business, whether before or after the cessation of his employment with P.[7] Thus, it is not in dispute that D has been operating this business. However, D did not produce any financial record of his business to substantiate the allegation that he did not have any significant income from the business. In the circumstances, I do not regard D as forthcoming and truthful regarding his incomes.

(4) D alleges that his purported cash flow difficulties were caused by the acts of P of having allegedly “instructed” him to avoid interviews with the SFC in violation of s.183 of the Securities and Futures Ordinance.[8] This is a serious allegation not supported by cogent evidence. Regarding the alleged “instructions”, no particular is given, let alone cogent evidence in support of the particulars. In the circumstances, the allegation must be disregarded. D has invited me to draw an adverse inference against P for P has not put forward evidence to refute his allegation. However, since D has not even established a prima facie case on this issue, there is no case for P to answer. There would be no adverse inference against P. Further, P had provided support to D in the legal proceedings by SFC against D in HCMP 2027/2023 by assembling a legal team for D and paying the legal expenses.

(5) D also alleges that P has withheld some of his salary. However, the fact is that P received a notice from the Inland Revenue Department dated 21 March 2024 indicating that D had been owing HK$718,020 in tax and requesting P to withhold payment to D. P was required by law to withhold payment, due to D’s failure to pay tax. There is no evidence showing the causal relationship between the non-payment of this sum to D and D’s failure to put in a Defence in time.

40.  Without prejudice to the above, even if D was indeed impecunious in late 2024, that does not mean that he could ignore these proceedings and did not put in any Defence by the 09.12.2024 Deadline, which is a deadline stipulated in a court order. If D could not afford retaining a law firm to prepare a Defence, he could and should do so by himself, acting in person.

41.  I agree with P that the default in filing a Defence by the 09.12.2024 Deadline is inexplicable and not justified by any reason.

D2.2 Abuse of process

42.  P submits that D’s contumelious neglect and breaches of court orders, plus D’s tactical gamesmanship to try to delay the progress of these proceedings by every means, constitute an abuse of process. In these circumstances, an order of indemnity costs against D is justified. I agree with and accept P’s submissions.

43.  First, as said in the above, D’s failure to file a Defence by the 09.12.2024 Deadline is inexplicable. This shows that D does not respect the deadline imposed by a court order, particularly when he was reminded by his solicitors about the deadline. This also demonstrates D’s dilatory attitude towards these proceedings.

44.  Second, in the 16.01.2015 Hearing, D was ordered to pay costs of the hearing forthwith. On 17 April 2025, those costs were summarily assessed at HK$109,600. By a letter dated 23 April 2025, P’s solicitors demanded payment of that sum within 14 days. D did not give any reply, not even a courtesy holding reply. This again shows that D does not respect the order made by this Court. Subsequently, P incurred extra costs to try to enforce the costs order by garnishee proceedings but with very limited success. P could only get payment in late December 2025 after repeated attempts to serve a statutory demand on D.

45.  Third, I agree with P that the LA Application was made by D with a view to delay the proceedings herein. As submitted by P, as evidenced by his luxurious and high-end lifestyle (see [39(1)] above), D is a wealthy man with much financial resources. In the circumstances, the purpose of the LA Application (which is bound to fail given D’s wealth, and this must be known to D) could not be anything but could only be a tactical move to try to delay the progress of these proceedings.

46.  Fourth, in July 2025, the non-responsive attitude of D’s solicitors could only be D’s deliberate attempt to delay these proceedings. On 12 May 2025, P’s solicitors have made P’s stance on the Summonses known to D. Had D entered into constructive dialogue with P, the parties would have had been able to agree on the directions for the disposal of the Summonses in May 2025. Yet, D refused to give any meaningful response to P. The fact that the LA Application was in place does not mean that D could not comment on P’s stance on the Summonses. Further, on 23 July 2025, the LA Application had already been refused by the Director of Legal Aid. However, D’s solicitors still said that “we are not in a position to take or receive any instructions from [D], given that there is yet an outcome for his application for Legal Aid”. Such an unreasonable response can only be explained by D’s intent to try to delay the progress of these proceedings by every means.

47.  Fifth, by making the LA Application on 2 June 2025, and by filing a Notice to Act in Person on 12 August 2025, D has tried to create an impression that he was impecunious and could not continue to retain legal representatives, and hence the Summonses should not be disposed of on paper as originally intended by the Court in the 16.01.2025 Hearing. D succeeded in giving the Court such an impression. In August 2025, the Court directed that there would be no paper disposal of the Summonses but a hearing would be fixed. Plainly, it would take more time to wait for a date to have the substantive hearing of the Summonses. Finally, the 11.02.2026 Hearing was fixed. Shortly before the hearing, D became legally represented again. There is no explanation from D as to why he suddenly would have the resources to engage lawyers again. Taking all these into account, I am of the view that the LA Application made on 2 June 2025 and the Notice to Act in Person filed on 12 August 2025 are tactical moves by D, trying to use all these to derail the paper disposal intended in the order made in the 16.01.2025 Hearing and to delay the resolution of the Summonses.

48.  In view of all these, I agree with P that D’s act in these proceedings constitute an abuse of process, in respect of which the Court must expressly disapprove and deplore. In the circumstances, indemnity costs should be ordered.

49.  D complains that P has stifled the LT Action by commencing these proceedings, and this is an unreasonable litigation conduct. I am unable to agree. P’s claims in these proceedings include claims based upon tort and breach of fiduciary duties, in respect of which LT does not have jurisdiction to adjudicate[9]. P cannot be said as acting unreasonably in pursing those claims against D, for it is P’s legal right to do so. Obviously, the proper forum for resolving all the disputes between P and D would not be in LT but in this Court.

50.  D submits that indemnity costs should not be ordered, for an application for indemnity costs was made by P in the 16.01.2025 Hearing but was refused by the Court. In my view, this submission is flawed.

(1) In that hearing, DHCJ Kent Yee only determined the costs of that hearing. Apart from those costs, costs of the Summonses have not been determined and have been reserved.

(2) As to whether costs of the Summonses (save and except the costs of the 16.01.2025 Hearing) should be to P on an indemnity basis, it is plain that the issue has to be determined by considering the evidence filed by the parties after the 16.01.2025 Hearing, which is now placed before the Court. Having considered the evidence, I am of the view that indemnity costs are justified in the circumstances.

51.  I would award costs of the Summonses (save and except the costs of the 16.01.2025 Hearing) to P on an indemnity basis.

E. DISPOSITION

52.  As said in [29(1)] above, as to the order proposed by P mentioned in [28(1)] and [28(2)], there are only some minor disagreement on the wording between the parties. Having considered the parties’ respective submissions, I make the following order:

(1) Save and except the costs order as provided in [53] below, there be no order on P’s Summons.

(2) Leave to D to file and serve a Defence and Counterclaim within 1 day, the contents of which shall be same as the contents of the draft annexed to D’s Summons.

53.  For the reasons set out in the above, I am of the view that costs of and occasioned by the Summonses (save and except the costs of the 16.01.2025 Hearing) should be to P forthwith on an indemnity basis, and those costs be summarily assessed. I so order. Since this matter is dealt with by a judge in chambers, it would not be necessary to grant a certificate for counsel in relation to the fees of one counsel. However, for avoidance of any doubt, I would expressly state here that counsel’s fees (limited to one counsel) are allowed in the costs awarded to P. P has already lodged and served a statement of costs for summary assessment. I grant leave to D to lodge and serve a list of objections within 14 days.[10]

54.  It remains for me to thank the parties’ respective legal representatives for the assistance rendered to the Court.