BANK OF HULUDAO CO LTD v. ZHONGYING INT’L HOLDING GROUP LTD

HCA 1656/2022

[2025] HKCFI 1111

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1656 OF 2022

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D E C I S I O N

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Introduction and Applicable Principles

1.  This is an application by the Defendant (“D”) by Notice of Appeal dated 17 February 2025 for leave to appeal against my Order made and Decision given at the end of the hearing on 5 February 2025 (see [2025] HKCFI 729 (“the Decision”)).  For ease of reference, I shall herein adopt the same abbreviations and definitions as the Decision.

2.  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.  See Hong Kong Civil Procedure 2025, Vol.1, §59/2A/4.

3.  Mr Wong, counsel for D, who also appeared before me at the hearing on 5 February 2025, relied on both bases: (1) reasonable prospect of success; and (2) some other reason in the interests of justice why the appeal should be heard.

Discussion

Whether intended appeal has reasonable prospect of success

4.  Firstly, Mr Wong argued that I erred to find that the PRC Judgment was a judgment on sentencing whereas it is clear that it was a judgment on both conviction and sentencing.  This is a non-point.  Whether it was a sentencing judgment or conviction and sentencing judgment is not relevant and did not have any bearing to my finding that the impugned paragraphs sought to be excluded as evidence (“the Paragraph”) did not make any factual findings.  Indeed in the Decision at §17, I accepted that in the PRC Judgment the defendants therein were sentenced for the convicted crimes.

5.  Secondly, more to the point, Mr Wong submitted that I erred to find that the Paragraph merely contained a summary of the agreed or uncontested evidence.  He submitted that it is clearly a factual finding and conclusion because it is a fact directly in support of the verdict of money laundering against the various individual defendants therein.  Even leaving aside the submissions made by Mr Mariani, solicitor advocate for P who did not appear before me at the hearing on 5 February 2025, that D has not adduced any evidence of PRC law to support this assertion, as I stated in the Decision at §17 there was no factual finding because the defendants were convicted and sentenced on the basis of uncontested evidence. 

6.  Even if I was wrong and there were findings of facts in support of the verdict of the defendants therein, as I mentioned in the Decision at §18, the Paragraph could not (as Duan HT and Zhao were not defendants therein) and did not (as any finding were directed at the conviction and sentencing of the defendants therein) make any factual findings on Duan HT’s and Zhao’s involvement in the fraud. 

7.  As I mentioned in the Decision at §13, the rationale for the Hollington principle is to ensure a fair trial. The judge is to make his or her own evaluation of the evidence and not to be influenced by the opinion of the earlier court.  See also Capital Century Textile Company Limited v Li Dianxiao & Anor [2018] HKCFI 729 at §28.  Test it this way, how is there any unfairness in admitting the Paragraph even if it included factual findings in support of the conviction of the defendants therein but not Duan HT and Zhao?  There will only be unfairness if there was a factual finding against Duan HT on his involvement in the alleged fraud which is a matter properly for the trial judge of these actions.

8.  Thirdly, Mr Wong submitted that there was a finding against Duan HT for fraud even though he was not a party to those proceedings in order to establish the conviction of money laundering against the defendants in the PRC and therefore I erred to find that the PRC court could not and did not make factual findings against Duan HT.  With greatest respect, that is a highly astonishing submission to make.  If that is the case, there would not be a need for further proceedings to be taken against him (and Zhao) as expressly stated at p.4: “勾结段洪涛（葫芦岛银行股东,另案处理）和周志龙（另案处理）”.

9.  As submitted by Mr Mariani there is no expert evidence before me on PRC law to support that submission.  Nor is it sufficient to rely on the case of Rogers v Hoyle [2013] EWHC 1409 (QB) at §89, which referred to Calyon v Michailaidis [2009] UKPC 34 that held an earlier Greek court judgment that found the claimants were the owners of an art collection was binding on a person not a party to those proceedings.  Besides, in that case, the court accepted that there was a factual finding by the earlier court.

10.  I therefore do not accept that it is reasonably arguable that there were findings in the PRC Judgment against Duan HT that he defrauded P a total sum of RMB 2.6B and dissipated a total sum of RMB 1.8B to bank accounts controlled by Duan HT in Hong Kong.

11.  In all, I do not consider that the intended grounds of appeal are arguable with reasonable prospects of success.

Whether some other reasons for the appeal to be heard

12.  Firstly, Mr Wong submitted that as the cases of Capital Century Textile Company Limited and Jin Jiang Investment Limited & Or (cited by me in the Decision, §13) are first instance decisions and the proposition has never been tested or ruled at a higher court, the general public will benefit from a decision of a higher court clarifying and explaining the scope of the rule in Hollington.  However, this submission is plainly misconceived when there can be no suggestion that there is any confusion or lack of clarity in the Hollington principle (which is well established by a body of case law both in the UK and Hong Kong) and the parties have never raised any issue on the correctness of that principle.  Indeed at the hearing, I expressly asked counsel to confirm that the only issue to be decided is whether the PRC Judgment containing the Paragraph is or is not excluded by the Hollington principle: see the Decision, §15.  In any event, the simple application of the Hollington principle to the particular PRC judgment in this case, even by a higher court, can advance no public interest.

13.  Secondly, Mr Wong submitted that the Paragraph could be on one view interpreted as both being records of uncontested evidence and factual findings which the general public would benefit from a higher court setting out the applicability of the Hollington principle.  My comments in the preceding paragraph equally applies to this ground and should be accordingly rejected.

14.  Thirdly, Mr Wong submitted that if the party against which a foreign criminal judgment is intended to be used is not a party to the foreign judgment itself, there is a legitimate question as to whether the Hollington principle is ever applicable, if that judgment makes findings which would impeach that party but without making any findings against that party as a defendant therein.  Again, the applicability of the Hollington principle was never called into question.  Besides, the applicability of that principle to the foreign judgment in the present case can serve no public interest.

15.  For all these reasons, I would refuse leave to appeal against the Order and the Decision.

16.  Costs should follow the event.  D should pay to P the costs of this application as summarily assessed by me.

17.  Having considered P’s Statement of Costs and accepting Mr Wong’s objections that the time spent on preparation of documents and preparation for today’s hearing appeared excessive and adjustments should be made to the hearing time, adopting a broad brush approach, I have summarily assessed P’s costs of this application at HK$50,000.