CHINA NPL HOLDINGS PTE LTD v. MO HAIDAN AND OTHERS

HCA 513/2019

[2020] HKCFI 1430

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 513 OF 2019

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DECISION

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1.  This is an application for leave to appeal my order herein dated 3 June 2020. The relevant facts are recited in my decision. I concluded that the plaintiff (“P”) had failed to establish a good arguable claim based on a final and conclusive judgment of a PRC court. I also found that notwithstanding hearing extensive submissions as to the risk of dissipation of assets, I did not need to rule on those given my above finding. Accordingly, that issue remains open were an appeal to be successful.

2.  Having considered the helpful and detailed submissions of leading counsel for the parties and in particular, having regard to the well established legal principles on which leave appeal may be granted, I dismiss P’s application.  The notice of appeal lists four grounds of appeal and I deal with each in turn.

3.  First, it is alleged that I erred in law and misapprehended the facts in my conclusion that the retrial orders had the effect of setting aside the original judgments.  In effect, it is said that I ought to have held that the original judgments are final and conclusive unless and until they are set aside.  This does not seem to me tenable in circumstances where the legal force and enforceability of the original judgments had, in my judgment, been terminated or suspended pending the retrial proceedings given that the evidence before me was first, that the retrial orders had at the very least the effect of terminating, suspending or staying the original judgment; and secondly that the retrial court had the power to conduct a full and complete review, and reconsideration of the case with the power to affirm repeal amend or correct the original judgments, as well as to make new judgments to replace or override the original judgments.  The evidence was also that even if the retrial court affirmed any decision or conclusion of the original judgments, it was the new judgment after the trial which gave effect and authority to the validity of any such decision or conclusion.  In the circumstances I concluded that the stay or suspension of the original judgments were sufficient to deprive the foreign judgments of the finality and conclusiveness; the original judgments were not ‘res judicata’ under the relevant local law.

4.  I should add here that P also takes issue with the fact that the expert evidence before me was unsworn, but given the difficulties alluded to in respect of the impact of COVID-19 on the ability to attend offices to swear the affirmations in question, whilst I accept I was entitled to give somewhat less weight to the evidence where I was in any doubt about it, I found the evidence helpful and reliable for the purposes of ascertaining the issues before me.

5.  Secondly, it is said that I took into account irrelevant case law submitted as part of the 1^st defendant’s (“D1”) arguments and that I misapplied Fabiano Hotels Ltd v Profitmax Holdings Inc [2017] 6 HKC 414 in reaching my conclusion that the issues were not ‘res judicata’ in the PRC.  I concluded that the correct approach was to apply Hong Kong’s Conflict of Laws rules and for this purpose accepted the undisputed evidence of the D1’s expert opinion evidence on the legal effect of the retrial orders in the PRC.  For this reason I am not persuaded that this ground justifies leave to appeal.

6.  Thirdly, it is alleged that I erred in law and in principle in deciding the issues before me on affidavit (albeit in this case unsworn) evidence when I was trying, in effect it is said, disputed questions of PRC law and further I failed to apply and wrongly distinguished binding Hong Kong Court of Appeal authorities to the effect that whether a trial supervision or similar process in the PRC rendered a PRC judgment not final and conclusive was an issue of public importance involving questions of law that are not straightforward and not suitable therefore for summary determination without a trial and hearing expert evidence from PRC law experts in enforcement proceedings.

7.  I am satisfied that for the purposes of an application to discharge a Mareva injunction, I was entitled to form a view on the merits of the claim taking account of the expert evidence which was before the court.  I distinguished the line of authority relied on by P under this ground on the basis that the present case was a materially different one because the Intermediate People’s Court had already pronounced retrial orders, the effect of which, on the basis of the evidence before me, was as stated above.

8.  Finally, it is submitted that I failed to take any or sufficient account of the matters above in reaching my decision.  For the reasons given I dismiss P’s application for leave to appeal.

9.  P in its notice of appeal also asks for a stay of execution pending determination of the appeal and costs in the cause of the appeal.  Given my decision no such stay is appropriate but I order that the limited interim stay granted by Hon Linda Chan J should remain in place pending a decision of the Court of Appeal on a renewed application for leave to appeal or the earlier expiry of the time-limited for such an application.

10.  On costs I order that the costs of this appication for leave should follow the event and thus I make an order nisi that P pay D1’s costs, to be taxed if not agreed, with a certificate for two counsel.