華融華僑資產管理股份有限公司 v. 李晓鹏

HCA 1016/2024

[2026] HKCFI 2639

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1016 OF 2024

____________

____________

_________________

D E C I S I O N

_________________

A.  INTRODUCTION

1.  This Decision concerns:

(1)  the Plaintiff’s summons for leave to appeal (“Leave Summons”) against this Court’s judgment on 22 December 2025 (“the Judgment”); and

(2)  the Defendant’s summons to vary the costs order nisi granted under the Judgment (“Variation Summons”).

The abbreviations in the Judgment will be adopted here.

2.  The Plaintiff has advanced grounds of appeal (under 5 Sections) seeking leave to appeal against (i) the core finding in relation to the s22(2) Defence; (ii) the dismissal of the Order 14 summons; (iii) the discharge of the Injunction Order without a re-grant; (iv) the dismissal of the application for a disclosure order and (v) the order for costs.

B.  GENERAL PRINCIPLES ON LEAVE TO APPEAL

3.  It is trite that an applicant must show that that the appeal has a reasonable prospect of success or that there is some other reason in the interests of justice why the appeal should be heard. The prospect of success must be reasonable and therefore more than “not fanciful”, without having to be “probable”. An applicant is required to show more than just an arguable case, but an appeal that has merits and ought to be heard, although he does not have to demonstrate that the appeal will probably succeed: Wynn Resorts (Macau) SA v Mong Henry [2009] 5 HKC 515.

4.  Leave to appeal may be granted if the issue on appeal is one of general principle, decided for the first time, or a question of importance upon which further argument and a decision of the Court of Appeal would be to the public advantage: Hong Kong Civil Procedure 2026, Vol 1, §59/2A/4.

C.  SECTION A – SECTION 22(2) MJREO AND THE AVAILABILITY OF COMMON LAW ENFORCEMENT (GROUNDS 1-6)

5.  Grounds 1-6 relate to the Core Defence of whether s.22(2) of MJREO precludes common law enforcement of a Mainland Judgment which satisfies s.5(2)(a) to (e) of MJREO but is time-barred under s.7.

6.  The Judgment held that the Core Defence was arguable. That holding did not contravene that in Lu Yongliang v Bank of China, Dongguan Branch [2021] 6 HKC 46, which held that bankruptcy proceedings were not proceedings for the recovery of a sum payable under a Mainland Judgment within the meaning of s.22(2) of MJREO. Lu Yongliang did not expressly hold that common law enforcement was still viable for Mainland Judgments registrable under s.5(2) (Judgment, §69).

7.  Having said that, the Core Defence is an issue of general principle. It is reasonably arguable that the common law route of enforcement is still open despite s.22(2). Given the differences in opinion between judges in China Everbright Bank Co Ltd v China Kingho Energy Group Limited [2025] 2 HKC HCA 863, Keith Yeung J (now on appeal) and the Judgment, a decision of the Court of Appeal would be to the public advantage. I give leave to appeal on Grounds 1-6.

D.  SECTION B – WHETHER THE ORDER 14 SUMMONS SHOULD BE DISMISSED OR THAT LEAVE TO DEFEND SHOULD BE GRANTED (GROUNDS 7-9)

8.  The Plaintiff submits that if the s.22(2) Defence was not suitable for definitive determination on Order 14, the Court ought to have refused summary judgment and granted leave to defend without finally determining the s.22(2) Defence.

9.  This submission misunderstood the effect of the Judgment. At the time the O.14 Summons was issued, the s.22(2) Defence was a statutory defence, which the Judgment eventually held to be arguable (at §§70, 82-84). China Everbright (or indeed any authority) did not show that the Plaintiff would succeed on the common law route. This was a situation where the Plaintiff ought to know that the Defendant would rely on a contention that would entitle him to unconditional leave to defend. Accordingly, the Order 14 Summons was dismissed with costs to the Defendant: Order 14, rule 7(1).

10.  That said, I accept that, after deciding on the Core Defence, the Court of Appeal may grant summary judgment or unconditional leave to defend instead of dismissing the O.14 Summons. Accordingly, it is appropriate to grant leave to appeal for Ground 7.

11.  In Ground 8, the query over the enforceability of the Civil Mediation Certificate was an inference from the evidence itself. There was no expert evidence to suggest that any other inference was be drawn.

12.  In Ground 9, this Court’s construction of the 2021 and 2023 Rulings was based on the wording of those Rulings themselves. There was no expert evidence to suggest any other possible construction.

13.  In the premises, I only grant leave to appeal on ground 7 but not grounds 8 or 9.

E.  SECTION C – INJUNCTION SUMMONS (GROUNDS 10 – 14)

14.  The approach to an appeal against the granting of an interlocutory injunction is summarized in New Sparkle Roll International Group Limited & Ors v Sze Ching Lau & Anor [2024] HKCA 336, §68, Kwan VP:

(1)  The granting of an interlocutory injunction is an exercise of discretion of the court. It is well-established that the appellate court must defer to the judge’s exercise of discretion and not interfere with it merely on the ground that it would have exercised the discretion differently; and

(2)  The appellate court will not disturb the judge’s exercise of discretion unless one or more of these grounds are established, e.g. the judge had misdirected himself with regard to the principles or the evidence in accordance with which his discretion had to be exercised; he had taken into account irrelevant matters; he failed to take into account relevant ones; his exercise of discretion is so plainly wrong that it is outside the generous ambit within which reasonable disagreement is possible.

(3)  It is only if and after the appellate court has reached the conclusion that the judge’s exercise of discretion must be set aside for one or other of these reasons that it becomes entitled to exercise an original discretion of its own.

15.  It is trite that the duty of disclosure extends not only to factual, but also to legal and procedural aspects of the case. Inadvertent (innocent) non-disclosure may well give rise to the ex parte order being discharged: Easy Asia Satellite Television (Holdings) Ltd v. New Cotai LLC [2011] 4 HKC 1115, at §82.

16.  In Wang Weiqing v Zhuo Yihao & Others [2025] HKCFI 4941, §101-102, DHCJ MC Law SC recently held that the fact that a case involved novel legal points or urgency did not excuse the plaintiff from or lower the standard of disclosure. Applicants for ex parte Mareva injunctions must not only disclose factual and legal points which were certain, but also actively consider what points of defense might be taken by the defendant.

17.  In the present application, the Plaintiff’s arguments are but a regurgitation of those run at first instance. The solid fact was that the Plaintiff failed to disclose the material s.22(2) Defence. The fact that the law was unsettled or that the defence was not necessarily fatal to the Plaintiff’s case was irrelevant. I decline to grant leave to appeal on Ground 10.

18.  On top of that, there was non-disclosure of the order of the auction of the Land. Ground 11 is effectively a complaint as to the weight the Court placed on the evidence, not as to an error of law.

19.  Ground 12 complains that the Court had erred in concluding that the Plaintiff had not shown “solid evidence” of a real risk of dissipation (Judgment, §§104 and 106). This is also a complaint as to the weight on which the Court placed on the evidence.

20.  Ground 13 suggests that even if there had been any non-disclosure, this Court erred in discharging and refusing to re-grant the Injunction, including by failing to apply proportionality correctly, failing to consider whether the order should be continued on varied terms, and/or failing to give proper weight to the protective purpose of a Mareva injunction. With respect, this is a complaint on the exercise of discretion having considered the seriousness of the material non-disclosure.

21.  I decline to grant leave to appeal on grounds 11 to 13, as it has not been shown that in the exercise of her discretion, this Court has gone outside the generous ambit within which reasonable disagreement was possible.

22.  Ground 14 stated that this Court had erred in concluding that the Plaintiff lacked a good arguable case because of the s.22 Defence in circumstances where the claim is at least properly arguable.

23.  With respect, this Court has not reached such a conclusion because there was no issue on there being a good arguable case (Judgment, §91). The Mareva injunction was discharged on the grounds of material non-disclosure. The Plaintiff’s reference to §70 of the Judgment was misconceived because all that §70 stated was that availability of the common law route and the s.22 Defence were both arguable. I decline to grant leave to appeal on Ground 14.

F.  SECTION D – DISCLOSURE SUMMONS (GROUND 15)

24.  It is said that the Court erred in dismissing the Disclosure Summons on the basis that it should fall with the Injunction Summons (Judgment, §112), without separately considering whether, in the circumstances, the Court should maintain or grant the disclosure sought, at least to the extent of standard asset disclosure and/or targeted disclosure regarding the shares/proceeds.

25.  Disclosure orders sought under the Mareva injunction regime are simply ancillary in nature. See eg Huobi Asia Ltd v. Chen Boliang [2020] HKCFI 2750 at §29, DHCJ le Pichon.

26.  Upon this Court’s refusal to regrant the Injunction Order, there was no other basis on which the Plaintiff could rest its application for disclosure. I decline to grant leave to appeal on Ground 15.

G.  SECTION E – COSTS (GROUND 16)

27.  It is said that this Court erred in ordering the Plaintiff to pay the Defendant’s costs for all 3 Summonses (Judgment, §114) in light of the other grounds of appeal and that this Court erred in failing to recognize that, at the minimum, the s.22 Defence was a novel/important point and/or was properly arguable, such that the costs order should be varied.

28.  Costs are in the discretion of the Court. There is no legal principle cited to show the Court’s order for costs to follow the event to be erroneous. I decline to grant leave to appeal for Ground 16.

H.  SUMMARY ON THE APPLICATION FOR LEAVE TO APPEAL

30.  Having regard to the above analyses, I give leave to appeal on Grounds 1-7 only.

I.  THE VARIATION SUMMONS

29.  The Defendant seeks to vary the costs order nisi in two respects, namely to (1) vary the basis of assessment from a party-to-party basis to an indemnity basis; and (2) to require the Plaintiff to pay the Defendant’s costs in the 3 summonses forthwith.

30.  The Defendant argues that indemnity costs are justified because the Plaintiff’s application for a Mareva injunction was oppressive and misconceived, in the light of the Plaintiff’s failure to disclose several material legal and factual issues.

31.  The discretion to award indemnity cost is not to be fettered or circumscribed beyond the requirement that costs on an indemnity basis must be appropriate: Town Planning Board v Society For the Protection Of The Harbour Ltd (No.2) [2004] 7 HKCFAR 114]. Examples of where such an order is granted is where the paying party’s conduct constitutes an “affront to the court”, eg by being scandalous or vexatious, malicious, or driven by an ulterior motive: Hong Kong Civil Procedure 2026, Vol 1, §62/App/12 and Choy Yee Chun (The Representative of the estate of Chan Pui Yiu) v Bond Star Development Ltd [1997] HKLRD 1327 (CA).

32.  The Defendant contends that the present case is analogous to Fenn Kar Bak Lily v Goh Kim Kay [1995] 3 HKC 313, where an application to continue a Mareva injunction which was rejected because, amongst others, the full circumstances of the facts were not placed before the judge by the plaintiff. However, in my view, that case is distinguishable from the present because the plaintiff’s failure to disclose relevant matters there was deliberate; a permanent injunction was unlikely and the money claim was only for only a few thousand dollars (at p.318A, D-E).

33.  In the present case, the Plaintiff’s non-disclosure was more probably an error in judgment. There is no evidence that the Plaintiff engaged an oppressive or malicious strategy to burden the Defendant or to drive up his legal costs. The Plaintiff was merely trying hard to obtain the fruits of a Mainland judgment from a judgment debtor. I therefore decline to order costs on an indemnity basis.

34.  The Plaintiff submitted that with reference to Order 62 Rule 9C(1)(a) of the RHC, the 3 Summonses are not suitable for summary assessment given there are likely to be substantial disputes over the segregation of costs between the summonses, potential duplication of workstreams, and the reasonableness of the costs incurred.

35.  Since the 3 Summonses were heard together, the facts are not unduly complicated, the Defendant’s statement of costs is only 5 pages long and the Plaintiff’s objections are only 9 pages long, I do not see why there would be particular difficulty with a summary assessment of costs. Issues of duplication, overcharging, and reasonableness are best determined by the judge who has heard all 3 Summonses. I therefore summarily assess the Defendant’s costs on party-and-party basis and allow a sum of $400,000.

J.  CONCLUSION AND COSTS

36.  With regard to the Leave Summons,

(1)  There be leave to appeal on Grounds 1-7;

(2)  On a nisi basis, 50% of the costs of the Leave Summons shall be costs in the appeal;

(3)  On a nisi basis, 50% of the costs is to the Defendant.

37.  With regard to the Variation Summons,

(1)  The application for costs on indemnity basis is dismissed, with costs to the Plaintiff on a nisi basis;

(2)  The costs order nisi is varied in part such that the Defendant’s costs are summarily assessed and allowed at $400,000.

38.  The costs nisi under paragraphs 36(3) and §37(1) are set off against each other such that there shall be no order as to costs.

39.  I thank counsel for their assistance.