STRONG PETROCHEMICAL HOLDINGS LTD v. JUN HE LAW OFFICES (A FIRM)

HCMP 1106/2025

[2025] HKCFI 5281

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1106 OF 2025

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BETWEEN

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REASONS FOR DECISION

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A. INTRODUCTION

1.  By Originating Summons dated 4 July 2025, the Plaintiff applied for, inter alia, an order that the Defendant, the Plaintiff’s former solicitors, do deliver up to the Plaintiff all of the Plaintiff’s documents which are in the Defendant’s possession, custody, power or control including those set out in a Schedule attached to the Originating summons (“Requested Documents”).

2.  On 21 October 2025, the Defendant filed an affidavit of Ye Yu Rong (one of the Defendant firm’s partners) where it opposed the Originating Summons but nevertheless confirmed it was prepared to deliver the Requested Documents (which was said to consist of nearly 2,000 documents) subject to certain caveats. The main caveats were:

2.1 The Defendant claimed that certain of the Requested Documents could not be delivered up to the Plaintiff without the consent from certain “relevant regulator(s)” (“Protected Documents”). For those documents, the Defendant argued the Court should order the delivery up of them within 14 days of the Defendant receiving consent.

2.2 The Plaintiff shall pay the Defendant HK$386,400 as “costs of complying with” the order to be made.

2.3 The Defendant should be entitled to costs of the Originating Summons.

3.  At the hearing on 30 October 2025, the Plaintiff was represented by Mr Victor Dawes SC leading Mr Sik Chee Ching. The Defendant had the benefit of appearing through Ms Elizabeth Cheung.

4.  Having considered all the materials and the parties’ submissions, I made the following orders at the end of the hearing:

4.1 Order in terms of paragraphs 1 to 3 of the Originating Summons dated 4 July 2025. I gave certificate for one junior counsel in respect of the costs of the Originating Summons.

4.2 The Defendant is entitled to compliance costs in the sum of HK$50,000.

4.3 The Defendant do pay the Plaintiff’s costs of the First Summons (defined below), summarily assessed at HK$28,000.

4.4 The Defendant do pay the Plaintiff’s costs of the Second and Third Summonses (defined below), summarily assessed on an indemnity basis at HK$40,000.

5.  These are my reasons.

B. BACKGROUND

6.  The Plaintiff is a listed company. Between October 2024 and January 2025, it experienced internal management disputes whereby a shareholder sought to remove most of its then board of directors. During this period, the Defendant was the Plaintiff’s legal adviser.

7.  The Defendant’s appointment was apparently terminated on around 22 January 2025. On 25 January 2025, an extraordinary general meeting was convened, by the Court’s order dated 17 January 2025, whereby the Plaintiff’s previous management was removed.

8.  On 3 February 2025, 6 February 2025, 12 February 2025, 17 February 2025 and 4 March 2025, the Plaintiff requested the Defendant to provide documents. The formulation of the request was substantially in the same form as the request made under the Originating Summons. In the letter of 4 March 2025, the Plaintiff’s present solicitors attached a draft of the Originating Summons and intimated they have instructions to issue proceedings if the Defendant failed to comply with the request.

9.  The Defendant did not produce the documents sought:

9.1 The initial reasons given were that it no longer acted for the Plaintiff and that the documents requested had been previously provided to the Plaintiff when the Defendant was engaged by the Plaintiff.

9.2 Later, the Defendant accused the Plaintiff’s present solicitors of conflict of interest.

9.3 In face of the letter of 4 March 2025 mentioned above, the Defendant said it would “reply in due course, probably within the next 14 days”. It never did.

10.  As a result, the Plaintiff issued the Originating Summons. Deemed service was achieved on 15 July 2025. The Defendant acknowledged service on 22 July 2025. The Plaintiff’s affidavit evidence was served on the Defendant on 7 July 2025. Pursuant to O.28 r.1A(4), and given the intervening summer vacation, the Defendant had until 4 September 2025 to file its evidence. It did not file any evidence before that deadline.

11.  Unsurprisingly, the Plaintiff applied for final judgment against the Defendant. A notice of appointment dated 16 September 2025 to hear the Originating Summons was issued specifying that the Plaintiff would seek final judgment at the hearing on 30 October 2025.

B1. First application for extension of time

12.  On 8 October 2025, I heard the Defendant’s application (by summons dated 19 September 2025 (“First Summons”)) for a 56-day extension of time to file and serve its affirmation in opposition to the Originating Summons. If granted, it would mean the hearing on 30 October 2025, which is a milestone date, would have to be vacated.

13.  Regrettably, the Defendant did not file any affirmation to support the First Summons, and to explain any exceptional circumstances justifying the moving of a milestone date. Indeed, the Defendant did not file any hearing bundle or skeleton submissions to assist the Court to understand the reasons of its application, which I would have thought would be necessary given the circumstances.

14.  At the hearing on 8 October 2025, the Defendant appeared through Mr Lam Tse Lok, from the solicitors acting for the Defendant. I asked Mr Lam to explain the deficiencies, and also whether there were any exceptional circumstances that would justify moving the milestone date.

15.  Mr Lam’s explanation may be summarized as follows (a) his firm was only instructed on 6 October 2025[1] (b) his firm needed time to review the papers of the case including the Plaintiff’s evidence (c) the Defendant firm’s partner in charge of the case was busy with 2 other cases, and did not have time to give instructions.

16.  With respect, none of the reasons proffered were good let alone exceptional circumstances to justify moving a milestone date. Change of legal representation (or for that matter a party instructing legal representation only shortly before the substantive hearing) was clearly no justification. Nor was the professional schedule of the Defendant firm’s partner (especially when there was another associate on the case, and there was no suggestion that he – who was presumably relatively senior given he was made partner recently – could not deal with the Originating Summons). As I have mentioned, the Originating Summons was dated 4 July 2025 and the supporting affirmation was served on the Defendant on 7 July 2025. Clearly, the Defendant had ample time to prepare its defence.

17.  Therefore, I indicated to Mr Lam I was not prepared to grant a 56-day extension. I inquired whether he had any counter-proposal on the timetable which would enable the substantive hearing on 30 October 2025 to proceed as scheduled. Mr Lam did not offer any.

18.  On the other hand, Mr Sik (who appeared for the Plaintiff at the hearing) proposed a timetable should the Court be minded to give the Defendant time. Mr Lam expressly informed the Court that Mr Sik’s proposed timetable was acceptable. Mr Lam also accepted the Defendant was liable to pay costs but only for the sum of HK$1,040. At the end of the hearing, I made these orders in respect of the First Summons, which reflected Mr Sik’s proposed timetable as accepted by Mr Lam:

18.1 The Defendant do file and serve affirmation in opposition to the Originating Summons by 15 October 2025.

18.2 The Plaintiff do file and serve affirmation in reply by 22 October 2025.

18.3 No further affirmation evidence without leave of the Court.

18.4 The Plaintiff do file and serve skeleton and list of authorities by 24 October 2025.

18.5 D do file and serve skeleton and list of authorities by 27 October 2025.

18.6 Costs of the application be to the Plaintiff to be summarily assessed by this Court.

18.7 The Plaintiff do file and serve skeleton bill of costs by 13 October 2025.

18.8 The Defendant do file and serve list of objections to the Plaintiff’s skeleton bill by 20 October 2025.

B2. Second application for extension of time

19.  On 15 October 2025, the Defendant issued another summons for an extension of time to file and serve its affirmation in opposition from 15 October 2025 to 17 October 2025 (“Second Summons”).

20.  Yet, on 17 October 2025, the Defendant issued a third summons seeking to amend the Second Summons so that the Defendant would have until 21 October 2025 (instead of 17 October 2025) to file and serve its affirmation (“Third Summons”).

21.  Both the Second and Third Summonses were listed before me for hearing on 22 October 2025. Before I read the Plaintiff’s skeleton dated 21 October 2025 to oppose the 2 summonses, I had not realized the existence of the Third Summons and Mr Lam’s affidavit dated 17 October 2025 to support the Third Summons (but not the Second Summons).

22.  Also, in the late afternoon on 21 October 2025, the Defendant filed with the Court registry an affirmation of Tsang Man To exhibiting a final version of the affidavit of Ye Yu Rong and the exhibits therein. At the Court’s request, the Defendant faxed these documents to the Court at 17:27 that day. I read them on a de bene esse basis.

23.  At the hearing on 22 October 2025, Mr Sik informed the Court that in view of the concessions made in Ms Ye’s affidavit, namely that the Defendant was willing to produce the Requested Documents subject to certain caveats, the Plaintiff would not file any reply affidavit. Ms Jenny Yu from the solicitors acting for the Defendant indicated her client was agreeable to pay costs although it would dispute the basis and the quantum. On that basis, and by consent, I granted the Second and Third Summonses. I also directed the issues of the basis upon which the Defendant should pay the Plaintiff’s costs of the 2 summonses and quantum be dealt with at the hearing on 30 October 2025.

C. ORIGINATING SUMMONS

C1. Protected Documents

24.  As mentioned at the outset, the Defendant confirmed it was prepared to deliver up the Requested Documents (which was said to consist of nearly 2,000 documents).

25.  As regards the Protected Documents forming part of the Requested Documents, the Defendant claimed the production order should be conditional upon consent from the “relevant regulator(s)”. Beyond informing the Court that one such regulator was the Stock Exchange of Hong Kong (“SEHK”), the Defendant resolutely refused to disclose whether the SEHK was the only regulator from which consent was said to be required or whether there were other regulator(s).

26.  It should be said that at the hearing on 22 October 2025, Ms Yu for the Defendant said she was not at liberty to divulge even to the Court the identity of any of the relevant regulator(s). The fact that the SEHK’s involvement was mentioned in the Plaintiff’s supporting affirmation was apparently relied on as the basis for the Defendant’s disclosure of the identity of the SEHK in its Skeleton filed for the hearing on 30 October 2025. This was clearly not a good reason as that affirmation was dated 3 July 2025.

27.  It was regrettable the Defendant chose to present its argument on the Protected Documents in the way it did. One would have thought the Defendant ought to have been forthright with the Court. Ms Cheung was at pains to stress the Defendant took the position it did given its genuine concern about the statutory secrecy obligation, which I would come to in a moment, and on legal advice. She submitted that the Defendant was hampered from disclosing too much in its evidence based on the legal team’s analysis of the law.

28.  That said, as Mr Dawes rightly pointed out, if there were any serious concern about secrecy obligation, there are mechanisms in our civil procedure that would enable a party to inform the Court of all the relevant facts. I also agree with his in principle objection to a party relying on secrecy obligation but not telling the Court what the real concern is, as the Court cannot simply take a party’s word for it.

29.  In this regard, Mr Dawes made clear he was not criticizing Ms Cheung and her instructing solicitors (all of whom came on board late in the day) for the manner and timing in which the Protected Documents point was taken. I make no such criticism either.

30.  But be that as it may, I must deal with the Defendant’s argument as it was presented to me. Ms Cheung cited section 378 of the Securities and Futures Ordinance (Cap. 571), which she submitted imposes a wide-reaching secrecy obligation. She argued the Defendant was concerned that some of the Requested Document might potentially be caught by such obligation. Thus, it was said that in seeking the necessary consent, the Defendant was “cautious but not obstructive”.

31.  I disagree. Sections 378(2)(e) and 378(7)(v) expressly provide that the statutory secrecy obligation does not apply to bar disclosure of information in accordance with a Court order. I would have thought that a cautious and non-obstructive respondent in the Defendant’s position should have remained neutral instead of raising a last minute point insisting that production should not be made without the consent of the SEHK and possibly other undisclosed “relevant regulator(s)”. If the Court granted an order for production of documents, that order should be sufficient to address any concern about potential breaches of the statutory secrecy obligation.

32.  While not disagreeing that it would have been reasonable for the Defendant to remain neutral, Ms Cheung submitted that it was not unreasonable for the Defendant to take the stance it did either given its understanding of the statutory secrecy obligation. But the difficulty here was that the Defendant only raised this secrecy concern at the eve of the hearing via Ms Ye’s affidavit. Had the concern been raised earlier, the complexion of the case would probably be very different.

33.  In the circumstances, the Defendant’s first caveat must be rejected. For these reasons, I made an order in terms of paragraphs 1 and 2 of the Originating Summons. I consider 7 days (as opposed to 14 days requested by the Defendant) ought to be sufficient for the Defendant to deliver up the Requested Documents to the Plaintiff.

C2. Compliance costs

34.  The Defendant claimed HK$386,400 (or such other sum as the Court sees fit) as reasonable costs for compliance with the Court’s order to produce the Requested Documents. The figure was arrived at by multiplying the alleged respective time spent by 3 partners and 1 associate solicitor of the Defendant firm with their respective hourly rates, and applying a 20% discount to the total. Notably, the 3 partners were said to have spent a total of 60 hours whereas the associate was said to have spent 30 hours.

35.  Ms Cheung submitted that the starting point should be the previous retainer between the Plaintiff and the Defendant. She argued it should be inferred that the Defendant should be entitled to claim for the necessary work to comply with the order on the rates agreed in the previous retainer. That said, she accepted the Court is not bound by the previous retainer and has discretion to decide what should be the reasonable charges in the circumstances. Counsel also relied on §5.23(6) of The Hong Kong Solicitors’ Guide to Professional Conduct (Vol.1, 3^rd Ed), which states that a reasonable charge may be made for retrieving documents from a client’s file at the request of the client as this is fee earner’s work for which a charge is normally made.

36.  Mr Dawes pointed out that the Guide is not law, although he accepted the Court has discretion to allow costs for compliance of an order in an appropriate case.

37.  As such, the Defendant’s second caveat turned on whether it would be appropriate to order compliance costs and, if so, what would be a reasonable charge in the circumstances of this case. As it was the Defendant that applied for compliance costs, it was incumbent on it to establish the appropriateness to grant such costs and the reasonableness of the sum claimed.

38.  The inherent difficulty faced by the Defendant was that it had failed to produce any particulars to justify the sum claimed. Indeed, no details were provided on the work allegedly done by each of the partner and the associate to justify (a) the combination of personnel deployed (b) the hourly rates and (c) the time allegedly spent.

39.  But even based on the Defendant’s evidence, it was clear that the sum claimed was excessive and unreasonable:

39.1 The work required to identify whether the Defendant had the Requested Documents, and if so, decide whether they needed to be produced ought to be straightforward. The Requested Documents were defined clearly. This was not a discovery exercise where one would need to study the pleadings in order to identify the documents relevant to the pleaded issues. For reasons explained in section C1 above, it would not be reasonable for the Defendant to claim costs arising from the Protected Documents issue.

39.2 The Defendant only ceased to act for the Plaintiff around 9 months ago, so it was not as if the Defendant was required to spend considerable time retrieving and reviewing dated case files. The Required Documents apparently consist of nearly 2,000 documents.

39.3 It followed that someone relatively junior should be able to handle the work (or the bulk of it). The Defendant’s combination of personnel deployed (3 partners and 1 associate) could hardly be said to be reasonable. Even allowing for reasonable partner supervision, the number of partners and the hours said to have been spent by them, when compared to the hours said to have been spent by the associate, were plainly excessive and unreasonable.

39.4 Ms Cheung suggested that the partner in charge had to trawl through her mobile phone to extract the relevant text messages, which was not a delegable job. That submission was made to explain the hours used by the partner. But the partner did not even use this as a justification in her affidavit. Further, that submission, even if accepted, could not justify the hours allegedly spent by her and the other partners.

39.5 For these reasons, the Defendant’s claim that it had spent a total of 90 hours on the work was also excessive and unreasonable.

39.6 Additionally, the previous retainer could not justify the hourly rates that the Defendant proposed to use in its claim for compliance costs. That retainer was for work of a different nature. Absent justifying evidence, I consider the hourly rates claimed were excessive and unreasonable.

40.  All that said, it would in my view be appropriate to order compliance costs in favour of the Defendant in this case. At the hearing, Ms Cheung after taking instructions suggested a reasonable charge would be HK$289,000. Mr Dawes considered that was still unreasonable, and I agree. To say the least, there was no substantiation for the revised figure. Mr Dawes suggested a rough and ready range of between HK$30,000 to 40,000. Having taken all the relevant circumstances in the round, and applying a broadbrush approach, I ordered HK$50,000 as compliance costs.

C3. Costs of the Originating Summons

41.  Mr Dawes asked for costs of the Originating Summons. He submitted that his client was the substantive or effective winner, who had to come to Court to get relief as a result of the Defendant’s conduct.

42.  On the other hand, Ms Cheung submitted her client should get costs on an indemnity basis or alternatively on a party and party basis. Her main contention was that the “vast majority” of the Requested Documents are the Defendant’s property such that had the Defendant fought to the end, it would prevail as the Court has no jurisdiction to order it to produce its own documents.

43.  I made an order in terms of paragraph 3 of the Originating Summons ordering costs in favour of the Plaintiff for the following main reasons.

44.  The Plaintiff was clearly the substantive or effective winner. Had it not come to Court (and spent the time and costs it did), it would not have obtained the relief it wanted. In particular, prior to the issuance of the Originating Summons, Defendant effectively “stone-walled” the Plaintiff’s requests for documents.

45.  After issuance, the Defendant failed to file any evidence or give any response timeously. Notably, at the hearing on 22 October 2025, I observed that the time allegedly spent by the Defendant firm’s associate to review the Requested Documents (i.e. 30 hours) would suggest the work was a 2-3 day job, which would in turn suggest the volume of documents involved was not inordinate or out of the ordinary in the context of modern civil litigation. Ms Yu agreed. Thus, there was plainly no justification why it took the Defendant more than 3 months (i.e. the time between issuance of the Originating Summons and the filing of Ms Ye’s affidavit) to decide it would agree to produce the documents sought.

46.  All the caveats raised in Ms Ye’s affidavit to resist the Originating Summons were new points. The Protected Documents issue and (to a large extent) the compliance costs issue were rejected by the Court. The Defendant also no longer maintained any of its objections to production of documents raised before the issuance of the Originating Summons.

47.  As for Ms Cheung’s submission on property of the Requested Documents, the submission was also a new point. Further, it was not supported by evidence. Ms Ye only made a bare assertion in her affidavit that “certain documents of the Requested Documents are properly the property of the Defendant”, which seemed to be at variance with Ms Cheung’s submission that the “vast majority” of the Requested Documents are the Defendant’s property.

48.  I also agree with Mr Dawes that it was untenable in the present case for the Defendant to on the one hand make a last-minute concession to agree to the order sought in the Originating Summons but on the other hand apply for indemnity costs on the basis the Plaintiff would have lost.

49.  In Central Medical Holdings Ltd v Tsang Wah Tak Kenneth [2025] HKCFI 4653 at §20(1)-(2), the Court held that where a matter is resolved without substantive argument, the starting point is to ask which party succeeded, and the Court should not be required or spend time dealing with speculative arguments about what might or might not have happened if one or other of the parties had dealt with the matter differently. I agree with that approach.

50.  In any case, it was not obvious how the property argument would be relevant in any substantive argument given the Originating Summons expressly stated the request was for the Plaintiff’s documents.

51.  Ms Cheung also tried to draw a parallel between the Defendant in the present case and the innocent third party in Norwich Pharmacal / Bankers Trust applications to justify why the Plaintiff should bear costs on an indemnity basis. With respect, the comparison was plainly inapposite.

52.  Counsel also drew my attention to the Plaintiff’s conduct before and after the Originating Summons. In my view, they were insufficient to militate against the Plaintiff getting costs of the Originating Summons.

53.  Based on my assessment of this case’s complexity, I also ordered certificate for one junior counsel, which was not meant as any disrespect to Mr Dawes, whose assistance was greatly appreciated.

D. COSTS OF THE FIRST TO THIRD SUMMONSES

D1. First Summons

54.  The Defendant’s main objection to the Plaintiff’s skeleton bill was that it was unnecessary to instruct counsel.

55.  I disagree. The Defendant initially asked for a 56-day extension which, if granted, would have derailed the substantive hearing on 30 October 2025 and caused prejudice to the Plaintiff. Even if the Court were to impose a more truncated timetable (which it did), the Plaintiff would still suffer prejudice as it would not have the normal 14 days to consider the Defendant’s evidence and prepare reply evidence (if advised): O.28 r.1A(5). It was thus justified for the Plaintiff to instruct counsel.

56.  Applying a broadbrush approach, I summarily assessed the Plaintiff’s costs at HK$28,000.

D2. Second and Third Summonses

57.  The main issue was whether the Defendant should pay the Plaintiff’s costs on an indemnity basis.

58.  At the outset, it should be said that but for the parties’ consent, I would have dismissed the Second and Third Summonses. The extension would in all likelihood have derailed the hearing on 30 October 2025 as there would only be 8 days between 22 and 30 October 2025 (that was if one were to count the intervening weekend and the public holiday on 29 October 2025). Plainly, the 8-day period would not be sufficient to accommodate the filing of the Plaintiff’s reply evidence (if so advised) and the parties’ submissions.

59.  In the circumstances, it was incumbent for the Defendant to file an affirmation to explain itself, and in particular to give details of any exceptional justification for the delay and the extension sought. As mentioned, Mr Lam filed an affirmation dated 17 October 2025 to support the Third Summons only. No affirmation was filed to justify the Second Summons. With respect, Mr Lam’s affirmation was wholly inadequate. It disclosed no good reason to justify the extension sought. Notably:

59.1 In §§4-6, Mr Chan explained that since his firm’s engagement, it made “considerable efforts” to “review a large amount of documents” and that when the Second Summons was filed on 15 October 2025, “it was considered that the Defendant would be in a position to file its Affirmation in Opposition by 17 October 2025” but that “in the late afternoon of 16 October 2025”, Mr Lam’s firm was brought to the attention by the Defendant of “some additional matters in respect of the Plaintiff’s OS” and as a result “additional time is needed”.

59.2 But regrettably, Mr Lam did not provide any particulars to put flesh on the bone in respect of any of these bare assertions. Mr Lam said in his affidavit legal privilege was not waived. But as Ms Yu accepted during the hearing on 22 October 2025, legal privilege was one thing but the Defendant nevertheless owed a duty to the Court to explain by affidavit the exceptional circumstances to justify the delay and the extension sought.

60.  For the same reason, I disagree with Ms Cheung’s argument that there were new matters and new reasons which justified the Second and Third Summonses. At the hearing on 8 October 2025, the Court was apprised of the fact that Mr Lam’s firm had only been recently instructed. Nevertheless, Mr Lam expressly agreed to the 15 October 2025 deadline, and that agreement formed the basis of the Court’s order for extension. As such, the Defendant was not entitled to complain it only got a 1-week extension. As I have said, Mr Lam’s affidavit did not explain what was/were the change(s) in circumstances since the 8 October 2025 hearing. Specifically, it did not explain what were the “additional matters” that his firm was alerted to in the late afternoon of 16 October 2025.

61.  Any plea that the Defendant needed proper time to consider issues concerning legal professional privilege and potential secrecy obligations must be taken with a grain of salt. The present dispute arose in February 2025 and these proceedings were issued in July 2025. Plainly, the Defendant had ample opportunity to consider such issues.

62.  Critically, quite apart from the lack of merits, the Second Summons was issued on the day of the deadline of 15 October 2025, whereas the Third Summons was issued on 17 October 2025, which would have been the new deadline had the Second Summons been granted. The Third Summons asked for an extension until 21 October 2025, on which day the Defendant filed its first meaningful responsive evidence.

63.  It has to be said that I did not appreciate being presented by the Defendant with what was effectively a fait accompli. Such litigation conduct would, in an appropriate case, justify the Court ordering costs on an indemnity basis. See for example: Wong Wai Keung v Commissioner of Police [2022] HKCFI 448 at §16 (Wilson Chan J).

64.  For these reasons, I ordered the Defendant should pay the Plaintiff’s costs on an indemnity basis. In terms of the summary assessment, the Defendant repeated its main complaint that the Plaintiff should not have instructed counsel, which I disagree for the similar reasons at §55 above. Applying a broadbrush approach, I summarily assessed the Plaintiff’s costs at HK$40,000.