CHINA EVERGRANDE GROUP (IN LIQUIDATION) v. HUI KA YAN AND OTHERS

HCA 551/2024 and HCMP 1080/2024

[2026] HKCFI 723

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 551 OF 2024 AND

MISCELLANEOUS PROCEEDINGS NO. 1080 OF 2024

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(Consolidated by the Order of the Honourable
Mr Justice Coleman dated 12 February 2025)

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DECISION

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A.  INTRODUCTION

1.  By a Decision handed down on 16 September 2025[1] (“the Decision”), this Court appointed Mr Edward Simon Middleton and Ms Wing Sze Tiffany Wong as Joint and Several Receivers and Managers over the entire assets and undertaking of the 1^st defendant (“Hui”)  with costs (“the Orders”). 

2.  By a summons re-filed[2] on 17 October 2025 (“the Leave to Appeal Summons”), Hui and the 4^th defendant apply for leave to appeal against the Decision.

3.  By another summons filed on the same day, Hui and the 4^th defendant also apply to stay the Orders pending the determination of the Leave to Appeal Summons, and if leave to appeal is granted, to stay the Orders until the final determination of their appeals or until further order of the Court (“the Stay Summons”).

4.  By consent, the Leave to Appeal Summons and the Stay Summons have been ordered to be disposed of on paper.

5.  Unless otherwise stated, abbreviations used in the Decision will be adopted herein.

B.  APPLICABLE LEGAL PRINCIPLES

B1. Leave to appeal

6.  The requirement for granting leave to appeal is set out in section 14AA(4)  of the High Court Ordinance (Cap 4, Laws of Hong Kong).  It is trite that leave to appeal shall not be granted unless the court is satisfied that the intended appeal has a reasonable prospect of success or there is some other reason in the interest of justice why the appeal should be heard. 

7.  It is also well established that a reasonable prospect of success means an appeal with prospects that are more than fanciful without having to be probable (SMSE v KL [2009] 4 HKLRD 129, at [17]).

8.  The making of the Orders concerns the exercise of discretion of this Court.  It is well established that the Court of Appeal will not interfere with an exercise of judicial discretion unless the appellant can show that the judge erred in law or misapplied the law by failing to take account of relevant considerations or taking account of irrelevant considerations, or that the decision is plainly wrong, namely that the exercise of discretion is outside the generous ambit within which reasonable disagreement is possible: Target Insurance Company Ltd v Ng Yu & Others [2025] HKCA 150 at [38].

9.  Further, it has been emphasized time and again that the Court of Appeal will not entertain an appeal simply because an appellant wishes to regurgitate arguments already considered in the court below with the hope that the appeal court may come to a different assessment of the situation.  The appeal court must defer to the judge’s exercise of discretion and not interfere with it save on the well-established grounds: China Evergrande Group (in liquidation)  v Hui Ka Yan & Others [2026] HKCA 15, at [53].

B2.  Stay pending appeal

10.  The relevant principles are trite. 

11.  In Star Play Development Limited v Bess Fashion Management Co. Ltd. [2007] 5 HKC 84, Ma J (as his Lordship then was)  held that the existence of an arguable appeal (that is, one with reasonable prospect of success)  is the minimum requirement before a court would even consider granting a stay.  However exceptional the circumstances may be otherwise justifying a stay of execution, if there exist no arguable grounds of appeal, no stay will be granted.

12.  In the event the court is satisfied that there is a strong likelihood that the appeal would succeed, that in itself would enable a stay to be granted because this would constitute a good reason for a stay.

13.  If there is just an arguable appeal instead of a strong one, the appellant has to provide additional reasons as to why a stay is justified.  The demonstration of an appeal being rendered nugatory in the absence of a stay is a common example.

C.  THE DRAFT GROUNDS OF APPEAL

14.  The draft Notice of Appeal contains 10 paragraphs.  In Hui’s written submissions, they have been categorised into 3 questions as follows:

“4. […] Has the Judgment erroneously misidentified and/or misapplied the legal test or threshold governing principles (the ‘Governing Test’)  for the appointment, pending the determination of the Action, of Interim Receivers in aid of a Mareva injunction, over a defendant’s entire assets?

[…]

11. […] In the absence of any Mareva Injunction Order (or Chabra type Order restraining D4 and/or the 14 other ‘Schedule 1 Companies’ (each a non-party herein and 11 of the 14, like D4, being, off-shore companies)  from dealing with their own (on-shore and off-shore)  assets upon the ground that they are ‘associated with [D1]’, was there any jurisdictional source for the Receivership Order’s terms (which exceed the ambit of the Mareva Injunction Order itself)  empowering the Interim Receivers to:-

•  ‘to take all steps that they consider necessary or desirable … to … take possession of … and manage … the Assets [of D4 plus the 14 other ‘Schedule 1 Companies’]; or

•  ‘to … Investigate the affairs of the … Schedule 1 ‘Companies’; or

•  ‘to … take possession of the property of ….. the Schedule 1 Companies … [including their] property or books and records’; or

•  ‘to demand and receive all debts which may fall due to … the Schedule 1 Companies’; or

•  ‘to take control of and exercise all rights … [of] the Schedule 1 Companies … whether in Hong Kong or overseas …’; or

•  ‘to … bring proceedings in the name of … the Schedule 1 Companies.’?

[…]

15. […] Could the Judge legitimately:-

(1)  Appoint as Interim Receivers over D1’s and D4’s entire assets, their hostile litigation adversaries within the Action that those adversaries had caused to be brought against D1 and D4?

(2)  In the absence of those litigation adversaries undertaking to work without payment?”

15.  The aforementioned questions will be referred to as “the Governing Test Ground”, “the Jurisdictional Ground” and “the Litigation Adversaries Ground” respectively.

16.  The arguability of these grounds will be considered in turn below.

D.  THE LEAVE TO APPEAL SUMMONS – DISCUSSION

D1.  The Governing Test Ground

17.  Under this ground, Hui contends that the threshold for the appointment of interim receivers is that notwithstanding the considerable protection which the Injunction Order already afforded, there nonetheless was an imminent danger of loss or dissipation of assets if a receiver was not appointed.

18.  In support of his argument, Hui has placed reliance on National Australia Bank Ltd & Others v Bond Brewing Holdings Ltd & Others [1991] 1 VR 386, Wallace Kevin James v Merrill Lynch International Bank Ltd [1998] 1 SLR 785, Macau First Universal International Limited v Ding Xiaohong & Others (CACV 193/2011, unreported, 31 July 2012)  and Wong Luen Hang & Another v Chan Yuk Lung & Others (HCMP 2906/2016, unreported, 12 January 2017).

19.  These case authorities have been considered in [10] – [24] of the Decision.

20.  Despite Hui’s repeated arguments, I am not persuaded that it is reasonably arguable that this Court has erred in the identification of the legal test or threshold.  In my view, the key question is “necessity”, and the asking of this question leads to the issue of “whether there is no or no current effective protective regime, and some form of interim protection should be given to preserve the status quo”.  This was one of the matters which had been taken into account by the first instance judge in Macau First Universal International Limited v Ding Xiaohong & Others (CACV 193/2011, unreported, 31 July 2012).  As mentioned in [22] of the Decision:

“The Court of Appeal’s Judgment in Macau First Universal International Limited also shows that there is no merit in the defendant’s submission that the American Cyanamid principles are inapplicable, for it did not doubt the learned Deputy Judge’s formulation of the test as quoted in [17] above. The first instance decision was set aside only because the Court of Appeal took the view that the learned first instance Judge had failed to take a relevant matter into account when considering whether effective protection was in place.”

21.  Although some of the authorities had considered, in light of the respective facts of those cases, whether there was “imminent danger of loss or dissipation of assets”, I am of the view that the question of “imminent danger” as referred to in those cases was no more than a way to consider the question of “necessity”.

22.  In this regard, I should specifically refer to Hui’s arguments in relation to the case of Wallace Kevin James (supra). His counsel suggest that:

(1)  the Singapore Court of Appeal set aside a High Court order appointing an interim receiver in that case because the court below had adopted the wrong test (i.e. the “just and convenient” test)[3]; and

(2)  “mere non-compliance with an asset disclosure order” is not enough for satisfying the threshold for the appointment of receivers[4].

23.  These submissions must be rejected if the case of Wallace Kevin James (supra) is properly understood:

(1)  Firstly, it is clear from a reading of the Singapore Court of Appeal’s Judgment that the appeal was allowed not because of any “wrong test” identified by the court below as such, but because the appellate court, despite the two breaches of the Mareva injunction therein (the alleged breach of the disclosure order was not one of them – see below), took the view that the circumstances in the case did not justify the extreme remedy of a receivership order.  In other words, the decision turned on its facts.[5]

(2)  Secondly, although the disclosure made by the defendant in that case was admittedly late and incomplete, it was held that the disclosure was a “fairly comprehensive one” and that the finding of the court below that the disclosure was “quite unsatisfactory” was wrong.  It was therefore held that there was no breach of the Mareva injunction order in this regard.[6]

24.  Hence, the Wallace Kevin James (supra)  case cannot assist Hui.

25.  In paragraph 9(2)  of Hui’s reply submissions, his counsel referred to paragraph 45 of his submissions dated 29 August 2025, which in turn quoted [19] – [20] of Wong Luen Hang & Another v Chan Yuk Lung & Others (HCMP 2906/2016, unreported, 12 January 2017), and asserted that these paragraphs contain “Court of Appeal’s express conclusion of law as to the governing test – which is not mere ‘non-compliance with an asset disclosure order’ ”.  Those paragraphs in Wong Luen Hang read:

“19. The plaintiffs contended that the judge was wrong in principle to hold that interim receivers should be appointed only if the court is convinced of its necessity and not otherwise (ground 5). They submitted this is far too stringent and the test is not necessity but whether it is ‘just or convenient’ to do so, applying the wording in section 21L(1)  of the High Court Ordinance, Cap.4.

20.  We do not accept this submission.  Section 21L(1)  is a general provision relating to the granting of an injunction and the appointment of receivers, whether on an interlocutory or final basis.  For further guidance on the application of this provision to specific situations, it is necessary to look to decided cases.  We are here concerned with the appointment of an interim receiver, not of a particular asset, but over the entire assets and undertaking of 3 companies and at least one of them is a trading company.  It is well established by authorities that for such an extremely drastic remedy to be granted, the court’s jurisdiction is to be exercised with great circumspection and only when it is convinced of the necessity of making such an order instead of other forms of less intrusive and more reversible relief. Bond Brewing Holdings Ltd v National Australia Bank Ltd (1990)  1 ACSR 445 at 456 to 458 has often been cited by our courts in this regard.  See also Macau First Universal International Ltd v Ding Xiaohong & Ors, CACV 193/2011, 31 July 2012, §42; Wong Luen Hang & Anr v Chan Yuk Lung & Ors, HCMP 2481/2015, 5 November 2015, §13.”

(counsel’s emphasis)

26.  As pointed out in [24] of the Decision, I cannot see how this case can assist Hui, as all Kwan JA (as she then was)  emphasised in the above paragraphs was the requirement of “necessity”. 

27.  Hui’s counsel also referred this Court to “the ancient principle of our law concerning contempt of court (whether civil or criminal)  that the disobedience element of contempt is not made out if the defendant’s failure to comply with a court order was ‘casual or accidental and unintentional’ ”. This submission is not understood, for the Court is not dealing with contempt proceedings here. 

28.  To conclude, this ground is not reasonably arguable.

D2.  The Jurisdictional Ground

29.  This ground concerns the scope of the Orders, particularly, in relation to assets held by the 4^th defendant and the Schedule 1 Companies.

30.  The same arguments have been dealt with in [55] – [60] of the Decision.

31.  With respect, this ground is unarguable because the Orders were made on the basis of the Injunction Order which covers all the assets held by the 4^th defendant and the Schedule 1 Companies.  The Injunction Order is a valid order against which no appeal has been lodged.  It is futile for Hui and the 4^th defendant to argue at this stage that those assets should not be caught by the Injunction Order in the first place.

D3.  The Litigation Adversaries Ground

32.  Under this ground, Hui challenges the appointment of the Liquidators as the Receivers.

33.  Such appointment involves the exercise of discretion of this Court.

34.  In his proposed appeal, Hui relies again on his assertion that the appointment of the Liquidators may render the action against himself and the 4^th defendant incapable of being fairly tried.  This matter has been considered in [66] – [72] of the Decision. 

35.  As it has been pointed out above, the purpose of an appeal is not for the appellant to regurgitate arguments which have already been considered in the court below with the hope that the appellate court may come to a different assessment of the situation.

36.  This ground is therefore not reasonably arguable.

37.  Before I leave this topic, I should also specifically refer to Hui’s argument as follows:

“That serious error [of appointing Hui’s and the 4^th defendant’s hostile litigation adversaries], which the Plaintiff instigated in their application, may have rendered the Action against D1/D4 incapable of being fairly tried (and see para.s 24-28 below)  – as the Hon. Coleman, J. appears to have recognised in his 19 September 2025 Decision herein concerning D2.”[7]

(emphasis added)

38.  It is indeed true that, by virtue of the said decision dated 19 September 2025 ([2025] HKCFI 4415), Coleman J did not appoint the Liquidators as the receivers and managers of the 2^nd defendant’s assets and undertakings.  However, Hui’s counsel have gone too far (and they should not have speculated)  to say that his Lordship had made the decision because the proposed appointment “may have rendered the Action against D1/D4 incapable of being fairly tried”.

D4.  Remuneration of the Receivers

39.  Paragraph 10 of the draft Notice of Appeal reads:

“The Judge also erred and acted in disregard of established principle in allowing the Plaintiff’s Liquidators later to apply to vary the Court’s Order concerning the ultimate liability for the costs of the Interim Receivership, potentially to place the burden on the 1^st Defendant – in breach of the established principle that a litigation adversary should never be appointed receiver over his opponent’s property unless he agrees to take the appointment without reward (which the Plaintiff’s Liquidators refuse to do).”

40.  Under this ground (which Hui’s counsel categorised as part of the 3^rd ground under Section D3 above), Hui argues that:

“Additionally, in further breach of the established principles (here, those, which apply to the circumstances cited in brackets in para. 16 above), the Receivership Order also acceded to the Plaintiff’s (improper)  request that D1/D4’s hostile litigation adversaries be fully remunerated (and potentially at the future expense of D1/D4)  instead of following the long established rule of practice that they be required to work without reward e.g. DSkel#49-51; Kerr & Hunter (supra)  at para. 4.4; and Re Prytherch (1889)  42 Ch. D. 590 at 601”

41.  The same argument has been made by Hui before and it has been dealt with by this Court in the following way in [77] of the Decision:

“Hui’s counsel further contended that Hui should not be exposed to the possibility that he may be required to pay for the entire receivership. That is not a matter which Hui should be worrying at the moment, because the Group’s proposal is that the remuneration of the receivers shall be paid out of the assets of the Group. While it is also proposed that the Group would be at liberty to apply to vary this arrangement, the matter can be further debated when there is such an application.”

42.  Insofar as Re Prytherch (1889)  42 Ch. D. 590 (on the basis of which the learned author of Kerr & Hunter wrote that “[a] party to the claim will not usually be appointed receiver, unless he undertakes to act without salary”)  was relied on to support Hui’s argument that there is a “long established rule of practice that they be required to work without reward”, I am afraid that reliance is misplaced.  This is because the view in Re Prytherch was apparently expressed by reason of its own facts.  In that case, a Mr Bishop was for a time receiver in possession for some other persons who were mortgagees, but he ceased to fill that character when those persons were no longer mortgagees, and he himself became mortgagee in possession. Having remained voluntarily in possession of the property for 11 years, he applied for an order to give up possession and to appoint a receiver.  It was in such peculiar situation that the court held that the court’s discretion in appointing a receiver should not be exercised because under the law, a mortgage cannot go into and out of possession whenever he likes.  It was also in such circumstances that the court held that the mortgagors should not be put to the expense of a receivership.  At the end of the day, the court appointed Mr Bishop as receiver without salary and without security.  It can thus be seen that this authority is nothing other than another example in which the court had exercised its discretion in the circumstances of a particular case, and cannot assist Hui in the present case.

E.  THE STAY SUMMONS – DISCUSSION

43.  Counsel for Hui and the 4^th defendant do not dispute that stay would not be granted if there is no arguable appeal.

44.  It follows from the conclusion under Section D above that no stay should be granted.

F.  ORDER

45.  For the above reasons, the Leave to Appeal Summons and the Stay Summons are hereby dismissed.

G.  COSTS

46.  Costs should follow the event.  I make a costs order nisi that Hui and the 4^th defendant shall bear the Group’s costs of the Leave to Appeal Summons and the Stay Summons. 

47.  The Group’s costs of the Leave to Appeal Summons and the Stay Summons shall be summarily assessed in lieu of taxation.  Unless any application for variation of the aforesaid costs order nisi is made within time (as to be provided in the following paragraph), the Group shall lodge and serve its statement of costs within 7 days after the expiry of the 14-day period as referred to in the paragraph below.  Hui and the 4^th defendant shall lodge and serve their statement of objection within 7 days thereafter.  Summary assessment of the costs of the aforesaid Summonses will be conducted on paper (no matter whether any statement of objection is lodged within time)  thereafter.  The costs assessed shall be paid by Hui and the 4^th defendant within 14 days after assessment.

48.  The above order nisi shall become absolute in the absence of application to vary (which, if any, will be disposed of on paper)  within 14 days hereof.