MAN KAI-KWONG, DAVID v. MAK YING-MUI as the Administratrix of the estate of the Deceased AND OTHERS

HCMP 703/2019

[2026] HKCFI 2321

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 703 OF 2019

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D E C I S I O N

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Introduction and Procedural Background

1.  By my decision dated 16 March 2026, I dismissed the Plaintiff’s appeal against the Order of Master Jocelyn Leung of 16 October 2025: see [2026] HKCFI 1435 (“the Decision”). For ease of reference and consistency, save as otherwise herein indicated, I shall adopt the same abbreviations and definitions in the Decision.

2.  Essentially, having reconsidered D2’s application to commence proceedings for taxation of the costs order made against P in favour of D2 out of time, for the reasons explained in the Decision, I agreed with the Master that in the exercise of the court’s discretion, time should be extended under O.62, r.16 of RHC for D2 to commence taxation of the Costs Order made absolute by DHCJ MK Liu on 24 February 2023. This decision should be read together with the Decision.

3.  By Summons dated 20 March 2026 (“P’s Summons”), P seeks inter alia:

(1)  Leave to appeal to the Court of Appeal against my Order dated 16 March 2026; and

(2)  A stay of all costs order (including the costs order in the Decision) and the taxation proceedings scheduled for 6 May 2026 (“the Taxation Hearing”), pending appeal or alternatively, until the conclusion of the compulsory liquidation of D2 in the PRC or further order of the court.

4.  On 20 March 2026, an Affirmation of P (“P’s Aff”) and Written Submissions were also filed stated to be in support of P’s applications for leave to appeal and for stay of execution.

5.  By letter dated 23 March 2026, P wrote to this court seeking an urgent application for an interim stay of the deadline for him to file points of objections in respect of the summary assessment of costs as well as an interim stay of the Taxation Hearing pending determination of P’s Summons. This was objected to by letter from D2’s solicitors dated 25 March 2026. I did not entertain P’s application by correspondence which was wholly improper and unjustified[1]. In any event, as subsequently indicated in my summary assessment pursuant to my direction in the Decision (§39) conducted on 15 April 2026, having nonetheless received P’s Points of Objections, I saw no justification for any interim stay of the summary assessment pending determination of P’s Summons. As for a stay of execution of the costs order and a stay of the Taxation Hearing, I indicated that this should be considered together with the application for leave to appeal for which I had already directed the lodging and service of written submissions on 23 March 2026 for my determination on paper which I would do as soon as practicable.

6.  The parties filed their further written submissions as directed. A supplemental Affirmation of P (“P’s Supp Aff”) was also filed in support of P’s Summons on 14 April 2026.

7.  By letter dated 20 April 2026 to my clerk, P stated that he was requesting for “offset” of the prior costs order made by the Master (summarily assessed at HK$40,000) against my summary assessment of the costs  (assessed at HK$60,000) and “an immediate stay of execution” based on the matters state therein.  Any application that is not covered by P’s Summons (or any Summons) or submissions not filed pursuant to my directions plainly should not be considered by me and the writing of letters to the court by litigants without regard to proper procedure should not be condoned.

Applicable Principles

8.  The test for granting leave to appeal against an interlocutory order of the Court of First Instance is trite. Under s.14AA(4) of the High Court Ordinance, Cap. 4, leave to appeal shall not be granted unless the court is satisfied that the appeal has a reasonable prospect of success, or there is some other reason in the interests of justice why the appeal should be heard. Reasonable prospects of success involves the notion that the prospects of succeeding must be “reasonable” and therefore more than “fanciful”, without having to be “probable”. See e.g. Xu Hongbiao v Oasis Investment Group Limited & Ors [2024] HKCA 854 per Kwan VP at §41.

9.  Furthermore, insofar as a challenge is made to a judge’s exercise of discretion, it is well-established that the appeal court is not to exercise an independent discretion of its own. Its initial function is one of review only. It is not enough to suggest that the judge assigned inappropriate weight to one (or several) factor(s) in the balancing exercise that led him to exercise his discretion as he did. The appellate court will not interfere simply because it might take a different view from the judge as to the weight assigned to any given factor. However, it may set aside the judge’s exercise of discretion if it can be shown that the judge was plainly wrong in the sense that, for example, he had acted on wrong principles, taken into consideration irrelevant factors, ignored relevant factors or the decision is outside the generous ambit within which reasonable disagreement is possible: see e.g. ibid at §43.

10.  As for a stay of execution, the starting position is that an appeal shall not operate as a stay of execution or of proceedings under the decision of the court below: see O. 59, r.13(1) of RHC. This is because it is not the policy of the court to deprive a successful party of the fruits of his success in litigation. Unless the defendant can justify a stay of execution, one will not be ordered. The practice of the court is that justification can be demonstrated if good reasons exist. Commonly, when considering whether good reasons exist, reference is made to factors such as whether the absence or existence of a stay would render an appeal nugatory and the merits of the appeal. As for merits, merely an arguable appeal cannot by itself be sufficient reason to justify a stay. But if the court is not convinced that there exist arguable grounds of appeal, no stay will be granted. See Star Play Development Ltd v Bess Fashion Management Co Ltd [2007] 5 HKC 84 per Ma J (as he then was) at §§6-10 and Hong Kong Civil Procedure 2026, Vol.1, §59/13/1.

Discussion

11.  In P’s Summons and written submissions, essentially, the following grounds were relied upon in support of his application for leave to appeal and for a stay of execution:

(1)  There is fresh evidence that compulsory liquidation proceedings in Shenzhen against D2 and his associated entities have been commenced. It is said that those proceedings are funded and “state sanctioned” (“Ground 1”);

(2)  P believes that D2 is attempting to use this court as an “ATM” to extract or “cash in” on the costs order (by claiming HK$2.28M in his bill of costs in the taxation proceedings) to fund his legal defence to recovery efforts against him for “siphoning state-linked assets” and it would be an abuse of process to allow him to do so when he is simultaneously subject to liquidation for siphoning the Estate’s assets and currently is a debtor to the Estate in the sum of approximately RMB 260M (“Ground 2”);

(3)  P is currently coordinating with Shenzhen Bus Group (“SBG”), a state-owned enterprise, and the Shenzhen Liquidation Committee on the recovery efforts and any “distribution of funds” to D2 would violate the principles of judicial comity and compromise the global recovery efforts involving state-owned assets (“Ground 3”);

(4)  This court erred in awarding D2 with costs despite his admitted 9-month undue delay and granting D2 a “HK$2.28M windfall” constitutes a palpable error of law (“Ground 4”); and

(5)  P asserts a right of equitable set-off and it is unconscionable to compel payment of costs to D2 when D2 owes RMB32.5M (being P’s 12.5% beneficial interest in the Estate). A stay pending the conclusion of the PRC proceedings would enable the equitable set-off to be calculated upon the conclusion of those proceedings (“Ground 5”).

12.  None of the above grounds demonstrates how my exercise of the discretion to extend time and/or to order costs against P was plainly wrong, in the sense that I had acted on wrong principles, taken into consideration irrelevant factors, ignored relevant factors or my decision is outside the generous ambit within which reasonable disagreement is possible.

13.  In respect of Ground 1, from the evidence before me, it is Shenzhen New Fu Kong Transportation Development Co. Ltd (“NFK”), a corporate vehicle established by SBG and Shenciti Investments Company Limited, the latter which D2 is a director, which is the subject of liquidation filed by SBG[2]. I do not accept that there are any liquidation proceedings against D2 or his associated companies. In any event, I cannot see how the fact that liquidation proceedings are now commenced in Shenzhen against NFK is relevant to demonstrate I erred in the exercise of my discretion to extend time and in particular, my finding of any lack of prejudice to P as a result of the delay.

14.  In respect of Ground 2, as mentioned above, it is not factually correct that D2 is subject to any liquidation proceedings. I also cannot see how there can be any abuse of process when by commencing taxation proceedings, D2 is merely seeking to enforce the costs order of DHCJ MK Liu as a result of P’s unsuccessful litigation against D2 in the OS. Besides, the taxation proceedings concern the quantum of D2’s costs which is disputed by P and have nothing to do with the Estate which is not a party to the taxation proceedings and D2 cannot be said to be extracting anything from the Estate.

15.  In respect of Ground 3, as already mentioned D2 is not subject to any recovery proceedings and even if there are proceedings on foot for recovery against him personally, I cannot see how it has any bearing on P’s personal liability to pay costs ordered against him in Hong Kong proceedings. Leaving aside the lack of any authorities to support the bold assertion that the award of costs to the winner of litigation in Hong Kong would be against judicial comity, I also do not see how this matter is relevant to demonstrate that I erred in the exercise of my discretion.

16.  In respect of Ground 4, whether D2 is granted the HK$2.28M windfall is matter for the taxation proceedings. As for awarding costs against P when D2 had delayed without good explanation, I had taken that into account as one of the relevant factors but as I held in the Decision (at §33) that does not automatically debar relief. I also cannot see how any unexplained delay demonstrates that I erred in the exercise of my discretion on costs when ultimately I exercised my discretion in favour of extending time for D2 to commence taxation.

17.  In respect of Ground 5, on P’s case (which is not established by evidence), any debt would be owed by D2 to the Estate but that does not make D2 personally liable to P for there to be a set-off of debts. Besides, equitable set-off only applies to cross-claims that arise out of the same transaction or are closely connected with it: see Federal Commerce & Navigation Co. Ltd v Molena Alpha Inc. [1978] QB 927 at 974-975. I simply cannot see any connection between the costs order against P in the OS (concerning the administration of the Estate) and debts allegedly owed by D2 to the Estate which on P’s case were as a result of misfeasance committed by D2 which led to NFK’s failure (see Decision, §35).

18.  For the avoidance of doubt, I have anxiously considered all the written submissions lodged pursuant to my direction and have not overlooked the various miscellaneous submissions therein such as the serious allegations of concealment of evidence, bad faith, breach of candor/deception etc. against D2, but there is nothing to those complaints (without accepting they are justifiable) particularly when the matters relied upon and the further evidence produced by P are not simply relevant to the present application in that they do now show how I had erred in the exercise of my discretion. In the Written Submissions of P, mandatory disclosure orders are sought from D2’s solicitor. This is clearly misconceived being unsupported by any legal basis and in any event is beyond the scope of P’s Summons.

19.  In all, I am not satisfied that the intended appeal has a reasonable prospect of success, or there is some other reason in the interests of justice why the appeal should be heard by the Court of Appeal.

20.  It follows that there is no basis to grant a stay of the Taxation Hearing or the previous costs order pending appeal as there is no pending appeal upon the dismissal of P’s Summons. There is also no basis for seeking a stay pending the liquidation proceedings in the PRC.

Disposition and Orders

21.  Accordingly, P’s Summons is dismissed. I see no reason why costs should not follow the event. P should pay to D2 forthwith the costs of P’s Summons to be summarily assessed on paper. D2 should lodge and serve a Statement of Costs (limited to 3 pages) within 7 days from the handing down of this Decision and P should lodge and serve any objections (limited to 3 pages) within 7 days thereafter.