三河宏祥混凝土有限公司 v. ZHANG YONGTIE (張永鐵) (also known as 張永鉄)

HCA 873/2022

[2026] HKCFI 4315

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 873 OF 2022

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JUDGMENT

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1.  This is the trial of an action whereby the Plaintiff (“P”) seeks to enforce, at common law, two money judgments ( the “PRC Judgments”) obtained against the Defendant (“D”) in the Sanhe People’s Court, Hebei Province, the PRC (“Sanhe Court”).

2.  The PRC Judgments arose out of two written loans which D admittedly borrowed from P.  They were: (1) a loan of RMB 10,000,000 dated 25 February 2013 (“1^st Loan”); and (2) a loan of RMB 5,000,000 dated 13 June 2013 (“2^nd Loan”).[1] There were enforcement actions undertaken in the PRC and after such actions, the outstanding amount was RMB 22,855,123.54 as at the date of the Statement of Claim herein (ie, 13 July 2022).

Background

3.  P is a company incorporated in the PRC. 邢世豪 is, at all material times, the majority shareholder of P.[2]

4.  D is a PRC national holding a Hong Kong identity card and a Hong Kong residential address.  Further:

(1)  D was the majority/sole shareholder of 三河市燕郊空港物流有限公司, and has at all material times been its actual controller (even after he transferred his shareholding to one 趙麗霞[3]).[4]

(2)  D was the sole shareholder of 百世金谷實業有限公司 at least between 20 November 2018 and 21 March 2023.

5.  By a written loan agreement dated 25 February 2013, P agreed to lend and D agreed to borrow the 1^st Loan.[5]  By a written loan agreement dated 13 June 2013, P agreed to lend and D agreed to borrow the 2^nd Loan. The 1^st Loan and the 2^nd Loan were respectively guaranteed by 三河市燕郊空港物流有限公司 (“Guarantor-1”) and 百世金谷實業有限公司 (“Guarantor-2”).

6.  On or about 27 September 2020, P commenced proceedings against D and the Guarantors in the Sanhe Court for the outstanding sums under the two loans.

7.  On 16 December 2020, Sanhe Court found in favour of P against D and gave the PRC judgments, viz (2020) 冀 1082 民初 9928 號 (re the 1^st Loan) and (2020) 冀 1082 民初 9399 號 (re the 2^nd Loan).  D was respectively ordered to pay P the principal sums of RMB 10,000,000 and RMB 5,000,000, with interest at 15.4% per annum (until full payment), and costs.[6]

8.  P sought to enforce the PRC Judgments in the PRC, and recovered RMB 1,323,891.30 in respect of the outstanding sum under the PRC Judgment on the 2^nd Loan on 17 September 2021.  It is P’s case (which D makes a mere non-admission,[7] and adduces no contrary evidence) that the recovery would first reduce the costs and interest payable.[8] The total outstanding sum under the PRC Judgments as at the date of the Writ was accordingly RMB 22,855,123.54.[9]

9.  On 12 September 2022, D filed applications to the Langfang Intermediate People’s Court for retrial of the two PRC actions (the “Retrial Applications”)[10]. The Retrial Applications were accepted (受理) and assigned with action numbers[11]. However, on 30 December 2022, and acting on his own volition, D applied for the withdrawal of the Retrial Applications, which the Langfang Intermediate Peoples’ Court allowed on the same day.[12]

10.  Then, on 18 January 2023, D lodged his appeals against the PRC Judgments[13].

11.  Eventually, D failed to pay the relevant court acceptance fees despite the court’s demand notices issued under the respective appeals. Based on various PRC legal provisions, the court decided that it should treat the appeals as having been automatically withdrawn by D.  The decisions in these 2 appeals were stated to be final[14].

12.  Counsel for P and D agreed that the only issue before this court is element (iv) as listed in Jiang Xi An Fa Da Wine Co Ltd. v Zhan King [2019] HKCFI 2411 at §52, namely, whether the PRC Judgments are final and conclusive[15].  In addition, Counsel for D pointed out that P is put to strict proof as to Issue 2, ie, the priority in which enforcement proceeds are applied in the PRC. As noted in paragraph 8 above, D has adduced no contrary evidence despite expert evidence on this issue having been adduced by P.

Applicable legal principles

13.  On the meaning of “final and conclusive”, the classic statement is that of Lord Watson in Nouvion v Freeman (1889) 15 App Cas 1 at 13:

“a foreign decree need not be final in the sense that it cannot be made the subject of appeal to a higher Court; but it must be final and unalterable in the Court which pronounced it.”

Counsel for P and D are in agreement on this point and its applicability to Mainland judgments. The question for this Court is thus “whether the PRC Judgments are final and unalterable in the Sanhe Court”.

14.  Both Counsel referred to Sunsco International Holdings Ltd v Lin Chunrong [2025] HKCFI 5238 as the applicable authority which set out the relevant principles in §§12 and 13.  In particular, Counsel for D agreed that: -

(1)  the trial supervision procedure in the PRC (also known as the “Retrial Procedure”) per se does not have the effect of rendering a Mainland judgment not final and conclusive;

(2)  the paramount consideration is the likelihood of a retrial being ordered under the Retrial Procedure.  This is a fact sensitive question to be answered in the light of admissible factual evidence and/or expert evidence.

(3)  In considering this issue, the relevant, non-exhaustive considerations are: -

(i)  the cogency of the Mainland judgment being challenged;

(ii)  whether it can be shown that the conditions underpinning Avenues 1, 2 or 3 are satisfied;

(iii)  whether the party has applied under the Retrial Procedure and, if not, why not;

(iv)  if a party has applied, whether the application has been decided and its outcome; and

(v)  if a party has not made, or can no longer make, an application, the likelihood of the court or procuratorate initiating a retrial of their own motion.

15.  The 3 Avenues for invoking the trial supervision procedure in the PRC are: -

(1)  an application by a party to the appropriate people’s court for a retrial (“Avenue 1”);

(2)  a retrial triggered by the trial supervision of the procuratorate (including supervision triggered by an application by a party or supervision on the procuratorate’s own initiative) (“Avenue 2”); and

(3)  the court initiating a retrial of its own motion (“Avenue 3”).

The New Retrial Applications Papers

16.  There is however an important divergence between counsel on this single outstanding issue. According to Counsel for P, the question to be decided by this court is “whether the PRC Judgments are final and conclusive not withstanding the retrial applications filed by D as pleaded in Amended Defence §7[16]”. Counsel for P is thus asking this court to rule basing on the existing state of the pleadings.  According to the Amended Defence §7, D pleaded the filing of the Retrial Applications on 12 September 2022, the acceptance (受理) of these applications and the assignment of case numbers by the Langfang Intermediate Peoples’ Court.  In the Reply §5[17], P pleaded that: (1) the mere acceptance (受理) of the Retrial Applications does not have any legal effect on the enforceability or effectiveness of the PRC Judgments; and (2) on 30 December 2022, D had applied for the withdrawal of the retrial applications which was allowed by the Langfang Intermediate Peoples’ Court in its respective rulings. Up to the date hereof, there has not been any application for the filing of a Rejoinder or for the re-amendment of the Defence.

17.  On the other hand, Counsel for D framed the question as “whether the PRC Judgments remain final and conclusive despite the availability of Retrial Procedure”. Counsel for D then sought to rely on the fact that on 27 March 2026, D filed a new set of retrial applications with the Langfang Intermediate Peoples’ Court (the “New Retrial Applications Papers”).  On 1 April 2026, P filed a 2^nd Supplemental List of Documents purporting to disclose copies of the New Retrial Applications Papers allegedly filed with the Langfang Intermediate Peoples’ Court. 

18.  P objected in a letter dated 28 April 2026 to the inclusion of the New Retrial Applications Papers in the trial bundle[18]. P pointed out that where discovery is given at the eleventh hour just before the trial, it is quite impermissible for the litigant giving such discovery to do so under the guise of voluntary discovery without seeking leave of the court to give further discovery out of time. In such circumstances, the court will rarely exercise its discretion to admit late documents or late evidence, in the absence of exceptional circumstances or unless good reasons exist to allow the late production to ensure the just resolution of the dispute.[19]  P further pointed out that the burden was on D to make a proper application for the admission of the New Retrial Applications Papers as part of the materials for the trial.

19.  No application has been made by D since 28 April 2026 and up to the date of the trial. The stance taken by Counsel for D is curious.  In her written Opening Submissions at §3, she wrote: -

“On 27 March 2026, D filed retrial applications with the Langfang Intermediate Peoples’ Court (“New Retrial Applications Papers”). In that regard, the Defendant has confirmed his instructions that no applications for leave to admit the New Retrial Applications Papers as part of the materials for the trial or to amend the pleadings would be taken out. However, the Defendant’s choice not to seek admission of the late papers is tactical and should not be used by the Plaintiff as evidence that no retrial application exists or that retrial is improbable, particularly where other admissible documentary and/or expert evidence indicates that retrial avenues remain available…”

20.  Counsel for P reminded me of the trite law that a litigant making late discovery is expected to provide the court and his opponent with full and accurate information regarding (1) the reason why the subject documents were not disclosed earlier; (2) the provenance and the makers of such documents; (3) the relevance of such documents to the issue before the court; and (4) the availability or unavailability of the makers to attend trial for cross-examination[20]. Clearly, D has chosen not to do anything of the sort.

21.  In my judgment, D’s stance is wholly inappropriate and irregular. D cannot have the cake and eat it. If D elects not to make a proper application to seek admission of the New Retrial Applications Papers as evidence in this trial and to re-amend the Defence accordingly, he cannot seek to influence this Court through a backdoor.  Counsel cannot adduce evidence from the bar table. There is simply no admissible evidence before me that new retrial applications had in fact been lodged with the Langfang Intermediate Peoples’ Court. There is no admissible evidence on what grounds were relied upon. One does not even know whether the Langfang Intermediate Peoples’ Court had accepted (受理) the alleged new retrial applications and assigned case numbers thereto. Moreover, there is no objective basis to even speculate whether the Langfang Intermediate would further deal with the alleged new retrial applications at all. D is not giving evidence in this Court. There is no explanation as to why it took him more than 3 years 3 months to renew the once withdrawn retrial applications. The same grounds that appeared in the withdrawn retrial applications were simply repeated in the alleged New Retrial Applications Papers. There is no explanation as to why D chose only to do so 3 months before this trial is due to commence. In my view, the conduct of D is strongly suggestive, to say the least, of disingenuous tactical manoeuvre with a view to sabotaging P’s action herein.  If I allow myself to be influenced, P will be seriously prejudiced in that it could not test the veracity of the New Retrial Applications Papers and their alleged lodging with the PRC court.  P will be deprived of the opportunity of testing whether D has a genuine intention of pursuing the New Retrial Applications. Furthermore, the current expert evidence, which has been prepared on the basis of the existing pleadings, does not cover the alleged new situation.

22.  In the circumstances, I rule that this trial shall proceed on the basis of the existing pleadings without regard to the alleged lodging of the new retrial applications and the contents of the New Retrial Applications Papers.  I thus agree with Counsel for P’s formulation of the question to be decided by this Court.

Likelihood of retrial

23.  I agree with Counsel for P that in assessing the likelihood of a retrial being ordered in this case (based on the Retrial Applications), the following facts shall be firmly borne in mind: -

(1)  it is not disputed that D had once applied for retrial under the Retrial Procedure, but he had withdrawn his applications.

(2)  According to §24 of D’s witness statement, he was allegedly “informed by the Langfang Intermediate People’s Court that the retrial should be proceeded in the form of an appeal”.  Thus, on D’s own evidence, it can reasonably be inferred that the PRC court did not seem to think that D’s applications could meet the statutory conditions required for ordering a retrial. Instead, the PRC court advised D to take the route of an appeal.

(3)  In fact, D did adhere to the advice of the PRC court, withdrawing his retrial applications on 30 December 2022. D then lodged the appeals on 18 January 2023. According to 2 decisions of the PRC appeal court, D’s appeals were deemed withdrawn and these decisions were stated to be final.

(4)  It is in the light of these circumstances that the issue “whether there is real likelihood of a retrial” shall be considered.

Expert Evidence – General Credibility

24.  Counsel for P pointed out in his Written Opening that there is grave doubt over the “independence” of D’s expert Mr Xi. Counsel for P discovered, shortly before his Written Opening, that Mr Xi (and his law firm) was in fact the lawyers of Guarantor-1 and Guarantor-2 in the 2 PRC action that resulted in the PRC Judgments. In these 2 actions, D was the co-defendant of Guarantor-1 and Guarantor-2 respectively.  Given D’s ownership/control of Guarantor-1 and Guarantor-2 as stated in paragraph 4 hereinabove, Counsel for P submitted that there is good reason to question Mr Xi’s lack of independence as an expert witness of this Court. Counsel for P stated that although he is not relying on this point as a ground for challenging the admissibility of Mr Xi’s expert evidence, he will be submitting that it is an important point affecting the credibility and weight of Mr Xi’s evidence.

25.  When Mr Xi was cross-examined on this point, he claimed to have no knowledge of D being the owner/controller of Guarantor-1 and Guarantor-2. This is rather incredible because such relationship is apparent from their PRC business registration records. It is difficult to accept that Mr Xi and his law firm did not conduct such a fundamental “know-your-client” step. After being confronted with further documentary evidence[21], Mr Xi eventually admitted acting as lawyers for D on various occasions. I am not impressed by Mr Xi and find him evasive.  I agree with Counsel for P that I should be cautious with Mr Xi’s evidence and mindful of his potential lack of objectivity especially where Mr Xi’s opinions are not independently supported by legislations, regulations, judicial interpretations and/or case law.

26.  In contrast, I find Professor Ma (P’s expert) straight forward and reliable as a witness. The propositions made in his reports are invariably accompanied by references to legislations, regulations, judicial interpretations and/or case law. Professor Ma was also unshaken in cross-examination.  I have no difficulties preferring the evidence of Professor Ma in case of conflicts with that of Mr Xi.

Cogency of the PRC Judgments

27.  I agree with Counsel for P that there is nothing to suggest that the PRC Judgments are not cogent. The causes of action were simple: default in repayment of written loan agreements. In the Retrial Applications, D sought retrial on the basis of certain “new evidence”[22]. Yet, it is apparent from the Sanhe Court Judgment[23] that the so-called new evidence was in fact adduced by Guarantor-2 (a company which D controlled) which was considered and then rejected by the Sanhe Court[24] on the grounds that: (i) P disputed Guarantor-2’s argument and adduced documentary evidence to prove that said the transfers totalling RMB 10M were for some other purposes (ie not for the purpose of repaying the two Loans); and (ii)D did not give evidence before the Sanhe Court to explain the situation. D has also chosen not to testify in this trial. There is thus no evidence of D’s explanation on the so-called new evidence or D’s response to the contrary documentary evidence adduced by P before the Sanhe Court.

Avenue 1 (application by a party to the court for re-trial)?

28.  Counsel for P submitted that the two main issues are: (i) whether the so-called new evidence falls within the meaning of “new evidence” under Article 211(1) of the Civil Procedure Law; and (ii) what is the impact of 6 months’ time limit under Article 216 of the Civil Procedure Law for the making of a retrial application.

29.  As explained by Prof. Ma,[25] the definition of “new evidence” is set out in Article 386 of the Judicial Interpretation of the Civil Procedure Law issued by the Supreme People’s Court (“Judicial Interpretation of the CPL”):[26]

“再审申请人证明其提交的新的证据符合下列情形之一的，可以认定逾期提供证据的理由成立：

（一）在原审庭审结束前已经存在，因客观原因于庭审结束后才发现的；

（二）在原审庭审结束前已经发现，但因客观原因无法取得或者在规定的期限内不能提供的；

（三）在原审庭审结束后形成，无法据此另行提起诉讼的。

再审申请人提交的证据在原审中已经提供，原审人民法院未组织质证且未作为裁判根据的，视为逾期提供证据的理由成立，但原审人民法院依照民事诉讼法第六十八条规定不予采纳的除外。”[27]

30.  As mentioned above, the so-called new evidence relied upon in the Retrial Applications were in fact adduced before the Sanhe Court and duly considered by the Sanhe Court.  Mr. Xi’s evidence (in his written reports[28] and oral evidence) is to the effect that as long as the evidence can have a critical impact on the case, it can still be regarded as “new evidence” and ground a retrial. In other words, it does not matter whether Article 386 is satisfied.  Mr Xi cited no case law, legislation or judicial interpretation to support his proposition.  I do not accept Mr Xi’s opinion which is, in my view, illogical and tantamount to saying that Article 386 is superfluous.

31.  In any event, both experts agreed that there is a time limit of 6 months for an application for retrial after the relevant judgment takes effect.[29] An application for retrial should be made within 6 months after D knew or ought to have known about the “new evidence”. This is prescribed by Article 216 of the Civil Procedure Law.[30] According to his Amended Defence[31], D must have known about the “new evidence” by 12 September 2022[32].  If D were to make new applications for retrial now, he will definitely be far out of time. This is actually admitted by Mr Xi in the Joint Report §6.4(2).

32.  Yet, Mr. Xi opined that the PRC court will still invoke the retrial procedure despite failing to provide any basis for his bare opinion.  On the contrary, Prof. Ma’s view is that this would bar D from now applying for retrial.  His view is supported by the words “應當” (“should”) in Article 216[33].

33.  When cross-examined, Mr. Xi initially insisted that the PRC Court would allow D to make a retrial application notwithstanding the lapse of the 6 months’ period.  He was still unable to cite any case law, legislation or judicial interpretation in support.  At the end, in answer to clarification questions put by this Court, Mr Xi accepted that if a party delays beyond 6 months to make an application and provided no explanation for his delay, it would not surprise him that the PRC Court would refuse the application pursuant to Article 216.

34.  I agree with Counsel for P that again, the opinion of Prof Ma shall be preferred. It is thus unnecessary to consider whether the acts of D (ie lodging a retrial application; withdrawing it to proceed by way of appeal; and then failed to pay appeal fees resulting in deemed withdrawal of the appeal) by itself, constitute a bar against further retrial applications.  Furthermore, I cannot accept Counsel for D’s bare submission that an inference can be drawn from the PRC’s “acceptance (受理) of the Retrial Applications and assigning of action numbers thereto” that the Retrial Applications were not unmeritorious.  Prof Ma explained in his oral evidence that these were pure administrative acts without consideration on merits. I again accept Prof. Ma’s opinion. Mr. Xi had not suggested otherwise.

Avenue 3 (retrial triggered by the court of its own motion)?

35.  First of all, Mr Xi relied on section 209 of the Civil Procedure Law and opined that so long as one can point to errors in the Judgment, the PRC Court can initiate retrial on its own motion.  Prof. Ma is of the view that Article 209, which provides for the possible triggering of a retrial by the court on its own motion on a “verified error (確有錯誤)”, is subject to Article 21 of the Judicial Interpretation of the Trial Supervision Procedure under the Civil Procedure Law issued by the Supreme People’s Court 《最高人民法院關於適用〈中華人民共和國民事訴訟法〉審判監督程序若干問題的解釋》(2020修正)[34] (“Judicial Interpretation of CPL’s Trial Supervision Procedure”).  According to Prof. Ma, the PRC Court would trigger the retrial procedure on its own motion only in cases where the original judgment harms the national interest and/or social and public interest.  I agree with Prof Ma that this limitation is clear from the literal reading of Article 21.  Prof Ma thus opined that the present case, being a pure civil litigation between commercial parties, has no realistic prospect of invoking Avenue 3. Mr Xi had not expressed any view in respect of Article 21 in his own reports and the Joint Report.

36.  In my view, the purpose of the Judicial Interpretation of CPL’s Trial Supervision Procedure includes standardising the trial supervision procedure.[35]  It would only be sensible to read Article 209 (which is a general provision in the Civil Procedure Law) to be subject to Article 21. I have no hesitation preferring the opinion evidence of Prof Ma.  Furthermore, flowing from my judgment in paragraph 30 above, I find it improbable that the Sanhe Court would consider D’s argument of “new evidence” as a “verified error (確有錯誤)” such that it would order a retrial on its own motion.

Avenue 2 (retrial triggered by the trial supervision of the procuratorate, either of its own motion or upon a party’s application)?

37.  As to Avenue 2, Prof. Ma referred to section 220 of the Civil Procedure Law (2023 ed.) which prescribed that a party can apply to the Peoples’ Procuratorate for trial supervision in one of the following situations: -

(i) the Peoples’ Court rejects/dismisses (駁回) a retrial application;

(ii) the Peoples' Court fails to make a decision on the retrial application after expiration of the prescribed time limit; or

(iii) the decision on retrial involves obvious errors.

38.  Mr. Xi accepted in cross-examination that the present case does not fall within any of the above 3 situations. Prof. Ma took the same view. It must follow that there is no realistic prospect of a retrial under Avenue 2.

39.  Counsel for D however argued that if D now makes an application for retrial and if the PRC Court dismisses his application on, for example, the ground that it is made out of time, then condition (i) of Article 220 can be met.  In my view, this argument is fallacious. Based on my ruling in paragraph 22 above, the fact before this Court is that for 3 years there has not been any further application for retrial taken out by D since he withdrew the Retrial Applications. This Court can only adjudicate on the basis of existing pleadings and admissible evidence. I refuse to adjudicate on the basis of sheer compounded theoretical possibilities.

40.  Furthermore, during cross-examination, Prof. Ma further explained with reference to Article 219 of the Civil Procedure Law. Article 219 provides that the procuratorate would have to satisfy itself that one of the 13 conditions under Article 211 is met before making a protest or issuing a procuratorial suggestion for retrial:

“最高人民检察院对各级人民法院已经发生法律效力的判决、裁定，上级人民检察院对下级人民法院已经发生法律效力的判决、裁定，发现有本法第二百一十一条规定情形之一的，或者发现调解书损害国家利益、社会公共利益的，应当提出抗诉。地方各级人民检察院对同级人民法院已经发生法律效力的判决、裁定，发现有本法第二百一十一条规定情形之一的，或者发现调解书损害国家利益、社会公共利益的，可以向同级人民法院提出检察建议，并报上级人民检察院备案；也可以提请上级人民检察院向同级人民法院提出抗诉。”[36] (emphasis added)

Following from my decision in paragraph 30 above, the so-called new evidence does not qualify as “new evidence” under Article 211(1) of the Civil Procedure Law, hence, there is no basis for the procuratorate to issue any protest or make any procuratorial suggestion for retrial. Accordingly, I find that there is no real likelihood of Avenue 2 being invoked.

Sunsco’s 3^rd and 4^th Considerations: Any Retrial Application made and its Outcome?

41.  These 2 considerations can be dealt with together.  In short:

(1)  D made the Retrial Applications, then withdrew them on 30 December 2022. He then lodged appeals instead on 18 January 2023. He then chose not to pay the required litigation fees for the appeals which resulted in the automatic withdrawal of the appeals (on 6 June 2023 and 7 August 2023).  For 3 years, D had not make any further application for retrial according to the admissible evidence before this Court.

(2)  D has failed to provide any explanation for his behaviour. He has chosen not to give evidence in this trial.

(3)  On these facts, I infer that D has no genuine intention to pursue any retrial application. 

Sunsco’s 5^th consideration : Likelihood of the Mainland Court or the Procuratorate initiating the Retrial Procedure of their own Motion?

42.  This has in fact been answered in paragraphs 36 and 40 above.

Conclusion

43.  For all the reasons above, I conclude that there is no likelihood of retrial. I find that the PRC Judgments are final and conclusive. I shall therefore grant judgment against D in the sum of RMB 22,855,123.54 (being the outstanding sum owed by D up till the date of the Statement of Claim[37]) with interest of 15.4% p.a. from 14 July 2022 (being the day immediately after the date of the Statement of Claim) until full payment.

44.  I also make a costs order nisi that D do pay P costs of the action, to be taxed if not agreed, on party-and-party basis with certificate for counsel. If no application for variation is made within 14 days from the date of this Judgment, the costs order nisi shall automatically become absolute.

45.  I thank counsel for their assistance.