SERES PROPERTIES B.V. v. LEE HOCK PUN AND ANOTHER

HCA 1287/2022

[2026] HKCFI 2102

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1287 OF 2022

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D E C I S I O N

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Introduction

1.  This court handed down a decision dated 26 November 2025 (“the Decision”) by which, among other things, the default judgment against D1 was set aside and several costs orders nisi in respect of different applications were made.

2.  Arising from the Decision, P has made two applications. First, by summons dated 3 December 2025 (“the Leave Summons”), P applies for leave to appeal against the Decision.

3.  Second, by summons dated 10 December 2025 (“the Variation Summons”), P applies for variation of three costs orders nisi made in the Decision.

4.  I have given directions to the parties for the paper disposal of both the Leave Summons and the Variation Summons. I have received written submissions from Mr Payne for P and Messrs. CMS Hong Kong LLP (“CMS HK”) for D1.

5.  Here, I shall adopt the abbreviations used in the Decision and I shall not repeat any background facts which can be found in the Decision.

Leave Summons

6.  I shall deal with the Leave Summons first. There is no dispute about the governing principles. As rightly stated by Mr Payne, leave to appeal from an interlocutory judgment or order will be granted if (a) the appeal has a reasonable prospect of success or (b) there is some other reason in the interests of justice why the appeal should be heard: s.14AA(4) of the High Court Ordinance, Cap.4.

7.  It is well-established that a reasonable prospect of success means that the prospects of succeeding must be ‘reasonable’ and therefore more than ‘fanciful’ without having to be ‘probable’: see SMSE v KL [2009] 4 HKLRD 125 per Le Pichon JA at§17.

8.  The core complaint of P is that because of the Consent Order, this court should not have set aside the Default Judgment by reason of its irregularity. I note that there is no appeal against my finding that the Default Judgment was irregular.

9.  The first and primary ground is about the construction of the Consent Order.

10.  The Consent Order indeed embodied a binding agreement between the parties in that PROVIDED THAT D1 do pay the Security within the prescribed time, the Default Judgment should be set aside. On a plain reading of the terms of the Consent Order, I conclude that it merely gave D1 another option as to how to set aside the Default Judgment other than pursuing his Previous Set Aside Summons on the ground of irregularity. I do not see that any mandatory obligation was imposed on D1 to pay the Security and that such a payment was the only way that the Default Judgment could be set aside despite its irregularity.

11.  I have fully explained my construction of the Consent Order in the Decision. Mr Payne essentially repeats the same arguments previously advanced. I am not convinced by Mr Payne’s submission that my construction is flawed.

12.  Mr Payne raises a new point. He highlights that the Consent Order was made under O.42 r.5A as is apparent from the consent summons. He submits that as such, the Consent Order is not only a true contract between the parties but is equivalent to a decision of the Court on the matter of which it disposes.

13.  I cannot accept his submissions. Whilst P did not include the consent summons in the hearing bundle and Mr Payne did not refer to it in the first instance, I accept that the Consent Order was made under O.42 r.5A, Rules of the High Court. That said, it does not follow that it should be deemed to be an order of this court on the setting aside of the Default Judgment: O.42 r.5A(2)(b)(v). I do not accept that the Default Judgment can only be set aside if and only if D1 pays into court the Security, as agreed by the parties and if D1 does not do so, the Default Judgment will stand. It is not discernable from the terms of the Consent Order that D1 should be barred from setting aside the Default Judgment via other routes.

14.  It is noteworthy that D1 was granted leave to, among other things, to withdraw the Previous Set Aside Summons by the Consent Order pursuant to O.21 r.6.

15.  It is trite that the discontinuance of an action or the withdrawal of part of a claim with leave is no bar to a subsequent action for the same cause of action unless the order giving the leave expressly prohibits the commencement of a fresh action: see Hong Kong Civil Procedure 2026 Vol.1§21/5/13 at p.130.

16.  Applying the same logic, the withdrawal (and not dismissal) of the Previous Set Aside Summons by the Consent Order should not preclude D1 from taking out the Set Aside Summons in the absence of any such restrictions in the Consent Order.

17.  I can well understand the frustration of P but I am not convinced that P’s challenge to my conclusion has a reasonable prospect of success.

18.  The second ground is that I erred in not finding that it was an abuse of process on the part of D1. Mr Payne submits that the distinction between withdrawal and dismissal of the Previous Setting Aside Summons is irrelevant. He further submits that to allow D1 to reinstate the Previous Setting Aside Summons in breach of the Consent Order makes a mockery of each of the objectives of O.1A, r.1.

19.  These submissions fail to convince me that I was wrong in my construction of the Consent Order. I cannot rewrite the agreement reached by the parties or improve the same for P’s purpose. P might be able to get D1 to conclude a different agreement to ensure the payment of the Security before the Default Judgment can be set aside.

20.  Mr Payne complains again about the delay of the Setting Aside Summons. Whilst D1 could have taken this step more expeditiously, I fail to see how the slight delay (less than two months after the expiry of the deadline in the Unless Order) could constitute an abuse of the process.

21.  The last ground can be disposed of briefly. Mr Payne submits that I erred in taking into account the purported financial means of D1 as a reason for not imposing the same condition that D1 should first pay the Security before the Default Judgment is to be set aside.

22.  There is no substance in this ground. My decision not to impose any condition on the setting aside of the Default Judgment has nothing to do with D1’s financial condition at all. I do not understand why Mr Payne submits that I have taken into account D1’s financial means. It is abundantly clear that I set aside the Default Judgment ex debito justitiae because I find the same to be irregular.

Variation Summons

23.  P seeks to vary the costs orders nisi in respect of the Relief Summons and the Discharge Summons so that P’s costs should be summarily assessed and paid forthwith by D1.

24.  P further seeks to vary the costs order nisi in respect of the CO Summons from costs be to D1 to that D do pay P costs up to 22 January 2025 and there be no order as to costs thereafter.

25.  Mr Payne puts forth the simple ground that both the Relief Summons and the Discharge Summons are interlocutory applications and so this court should order immediate payment of costs and if possible carry out summary assessment in the wake of Civil Justice Reform. He refers to Chow Steel Industries Public Company Limited & Ors. v. Ko Sung and Ors. [2021] HKCA 1642.

26.  I fail to see how Chow Steel Industries Public Company Limited can assist P. I did not make any costs in the cause order in respect of these two interlocutory applications.

27.  Paragraphs 7 and 8 of PD 14.3 provide that a party who wishes to seek summary assessment of costs should prepare a statement of costs and it should be lodged and served on the party against whom summary assessment is sought together with the skeleton argument for the substantive application.

28.  These provisions regrettably have been more honoured in the breach than the observance. There is good reason why the statement of costs should be lodged together with the skeleton submissions before the substantive hearing. Mr Payne should have asked for summary assessment of the Relief Summons and the Discharge Summons and attached his statement of costs to his skeleton argument lodged for the purpose of the substantive hearing of these Summonses.

29.  Even up till now, Mr Payne has not provided a statement of costs for these Summonses.

30.  Owing to the delay, the cost-effectiveness of summary assessment is seriously undermined and it would just incur extra costs.

31.  In the premises, I refuse to vary the two costs orders nisi to allow summary assessment.

32.  For the CO Summons, CMS HK point out that the costs order made by this court in respect thereof is not a nisi order and hence it is not subject to variation.

33.  I believe it is only a slip that I did not specify that the costs order was made on a nisi basis. If need be, I shall issue a corrigendum. Obviously, it was meant to be an order nisi, as with all other costs orders made in the Decision. All of them were made without the benefit of any submissions on costs.

34.  For the CO Summons, Mr Payne submits that this court should take into account the fact that D1 failed to comply with the Consent Order and did not take out the Relief Summons and the Set Aside Summons until 22 January 2025. Hence, he submits that D1 should pay P’s costs up to 22 January 2025.

35.  There is no merit in this submission. It ignores the glaring fact that the Default Judgment was irregular and should not have been obtained in the first place. D1 should not be held liable to pay any costs incurred for P’s enforcement of the Default Judgment that it had wrongly obtained.

36.  On the other hand, CMS HK have attached a statement of costs relating to the CO Summons and ask for summary assessment. They have not taken out a summons for variation and there is no reason why I should entertain their request made not in compliance with the rules.

Conclusion and orders

37.  For the reasons given, I conclude that both the Leave Summons and the Variation Summons are unmeritorious. They fall to be dismissed.

38.  P should prosecute the claim against D1 expeditiously and should not expect any assistance arising from the Default Judgment.

39.  On the issue of costs, there is no reason why costs should not follow the event. CMS HK have provided a statement of costs for the Leave Summons only and ask for HK$64,870.

40.  Adopting a broadbrush approach, in light of the simplicity of the Summonses and the lack of new arguments raised for the Leave Summons, I believe a global sum of HK$42,000 would be an appropriate amount to be paid by P to D1 as his summarily assessed costs of the two Summonses.