LAI CHI KEUNG v. WANG ZHIHUA AND ANOTHER

HCCW 186/2013

[2026] HKCFI 4933

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) PROCEEDINGS NO 186 OF 2013

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BETWEEN

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REASONS FOR DECISION
AND
DECISION ON COSTS

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A. Introduction

1.  By a Judgment dated 30 April 2019,[1] after a five-day trial in which the respondents did not appear and were not represented, I gave judgment in favour of the petitioner by finding that the 1^st respondent had engaged in conduct which was unfairly prejudicial to the petitioner, and made an order for the petitioner to purchase the shares in the 2^nd respondent registered in the name of the 1^st respondent (“Shares”), at a price to be fixed by a valuer, with various consequential directions. In particular, I ordered the following (“Order”):

“(8) The petitioner shall deposit into Court the value of the Shares as valued by the Valuer without interest within 14 days from the publication of the valuation by the Valuer.

(9) Upon full deposit of the value of the Shares under paragraph (8) above, the 1^st respondent shall transfer the Shares to the petitioner absolutely free from all encumbrances or claims of whatsoever nature but together with all rights benefits entitlements or interest attached thereto on a clean break basis forthwith.

(10) If the 1^st respondent shall fail to transfer the Shares as directed under paragraph (9) above within 14 days of the date of the full deposit referred to in paragraph (8) above, the Registrar shall, upon request by the petitioner, execute an instrument of transfer of the Shares to the petitioner under section 25A of the High Court Ordinance (Cap 4).

(12) The costs of the valuation of the Shares shall be borne by the 1^st respondent.

(14) There be liberty to the parties to apply for further directions or order generally”.

2.  By Summons dated 17 June 2026 (“Summons”), the petitioner applies to vary [10] of the Order, for the senior partner of the firm of solicitors now acting for him to execute the instrument of transfer of the Shares under section 25A of the High Court Ordinance,[2] instead of the Registrar as stated in the Order.

3.  Section 25A(1) states as follows:

“Where the Court of First Instance has given or made a judgment or order directing a person to execute any conveyance, contract or other document, or to endorse any negotiable instrument, then, if that person—

(a) neglects or refuses to comply with the judgment or order; or

(b) cannot after reasonable inquiry be found,

the Court of First Instance may, on such terms and conditions, if any, as may be just, order that the conveyance, contract or other document shall be executed, or that the negotiable instrument shall be endorsed, by such person as the Court may nominate for that purpose”.

4.  The 1^st respondent opposes the Summons on three grounds:

(1) I am functus officio and has no jurisdiction to vary the Order. The “liberty to apply” provision cannot be invoked to vary [10] of the Order.

(2) The application is an abuse of process because Linda Chan J has already refused a similar application.

(3) The petitioner has failed to comply with [8] of the Order as he has only paid in a part of the value of the Shares.

5.  At the hearing of the Summons on 24 August 2026, I, upon the undertaking of the petitioner to pay the sum of HK$132,120 into court within 28 days, made the following orders:

(1) Time for the petitioner to deposit into Court the balance of the value of the Shares as valued by the Valuer without interest, in the sum of HK$132,120, under [8] of the Order dated 30 April 2019, be extended to 21 September 2026.

(2) Solicitors for the petitioner do notify solicitors for the 1^st respondent, Messrs Yung & Au (“Y&A”), in a letter to be delivered by hand and by fax to the latter’s office, that the petitioner has paid into court the sum of HK$132,120 within three days of such payment in. For the avoidance of doubt, such notification to Y&A would be deemed to be good and proper notice of the payment in to the 1^st respondent, triggering the 1^st respondent’s obligation to transfer the Shares under [9] of the Order, and in default thereof the order made at (3) below applies, irrespective of whether Y&A remain solicitors instructed and retained by the 1^st respondent, and I order and direct Y&A to inform the 1^st respondent of this order and the notice of payment in irrespective of whether they remain instructed and retained by the 1^st respondent.[3]

(3) If the 1^st respondent shall fail to transfer the Shares as directed under [9] of the Order dated 30 April 2019 within 14 days of the notification stated in (2) above, Mr Lo Kam Ting, the senior partner of Messrs K T Lo & Co, Solicitors, do, pursuant to section 25A of the High Court Ordinance (Cap 4), execute the instrument of transfer of the Shares referred to in the Order dated 30 April 2019.

6.  These are my reasons for making the said orders, as well as my decision on costs of the Summons.

B. Procedural history

7.  Before I consider the application and the grounds of opposition thereto, it is necessary to go into the procedural history leading to the issue of the Summons.

8.  The valuation of the Shares to be transferred, as directed by the Order, took a fair bit of time. It is not necessary to go into the reasons for the delay. Eventually, by a report dated 17 November 2025, the valuer valued the Shares at HK$173,182.

9.  However, even though under [12] of the Order the costs of the valuation were to be borne by the 1^st respondent, he refused to pay, and thus the valuer refused to provide her report even though it had been completed. To avoid further delay, the petitioner paid the valuer the fee of HK$132,120 on 14 January 2026, thereby obtaining the report.

10.  On 26 January 2026, the petitioner paid a sum of HK$41,062 into court, purportedly in compliance with [8] of the Order, after deducting the valuation fee of HK$132,120 which he had paid from the value of the Shares (HK$173,182). This gives rise to the third ground of opposition to the Summons by the 1^st respondent, in that, given that the petitioner has not paid in the value of the Shares in full, his obligation to execute the instrument of transfer under [9] of the Order has not arisen.

11.  The 1^st respondent not having executed the instrument of transfer after the petitioner demanded him to do so, solicitors for the petitioner then wrote to the Registrar on 23 February 2026 asking him to execute the same pursuant to [10] of the Order. By a letter dated 3 March 2026 from the clerk to the Registrar to the solicitors for the petitioner:

(1) The Registrar noted that the usual practice of the court had changed, and that the current practice is for a partner of the solicitors for the applicant to execute the instrument instead of the Registrar.[4]

(2) Various queries were made by the Registrar on whether the Order had or had not been complied with by the parties. In particular, it was said:

“Before the Registrar considers whether to execute the subject document, please confirm by way of affidavit”

certain matters, essentially whether the conditions stated in [10] of the Order for the Registrar to execute the instrument of transfer had been satisfied.[5]

12.  At this juncture, despite the changed practice, the Registrar did not say that he would not sign the instrument of transfer, but would consider doing so upon receipt of further information.

13.  In the meantime, on 6 February 2026, the 1^st respondent issued a Summons seeking an order that the valuation of the Shares be undertaken by another valuer.

14.  On 5 March 2026, Linda Chan J dismissed the 1^st respondent’s application, and extended the time for the 1^st respondent to execute the instrument of transfer under [9] of the Order to 2 April 2026. The 1^st respondent did not do so.

15.  The petitioner then took out a Summons on 9 April 2026 asking for an order that the Registrar or a solicitor be appointed to execute the instrument of transfer.

16.  On 28 April 2026, Linda Chan J dismissed the Summons of the petitioner of 9 April 2026 with no order as to costs. At that hearing, Linda Chan J also dismissed the application by the 1^st respondent for leave to appeal from her decision of 5 March 2026 refusing to order a second valuation report. While no formal reasons were given for the dismissal of the petitioner’s Summons, from the court record it appears that her Ladyship considered such an order to be unnecessary. At that time, [10] of the Order, made under section 25A, remained valid and enforceable. This gives rise to the second ground of opposition to the Summons by the 1^st respondent, in that her Ladyship had already dismissed a similar application by the petitioner.

17.  The petitioner, who by then was acting in person, then engaged in further correspondence with the Registrar:

(1) On 8 May 2026, the petitioner wrote to the Registrar asking him to execute the instrument of transfer, in particular in light of the fact that the petitioner did not have legal representation at the time. Further documents were provided on 11 May 2026.

(2) On 21 May 2026, the clerk to the Registrar replied. Apart from saying that the petitioner ought not have communicated with the Registrar without copying the 1^st respondent, the Registrar repeated that the current practice is for the solicitor nominated by the applicant to execute, and the Registrar would not nominate any solicitor to do so. The Registrar asked the petitioner to seek independent legal advice and then make a formal application to the court.

(3) On 8 June 2026, solicitors now acting for the petitioner, having been instructed again by the petitioner, wrote to the clerk to the Registrar seeking certain clarifications.

(4) On 10 June 2026, the Registrar directed as follows:

“Solicitors for the Petitioner to explain why the subject application should not be made by inter-parte summons instead of by letter application and do lodge a proposed draft order to appoint Mr Lo Kam Ting, the Senior Partners [sic] of Messrs. K.T. Lo & Co. to execute instrument of transfer of shares on behalf of the 1^st Respondent for consideration by the Court”.

18.  Thus, the position of the Registrar as at 21 May 2026 changed from that on 3 March 2026, as it appears to me to be quite clear that he was now saying that he would not sign, but that the petitioner had to get his own solicitor to do so, with the appropriate court order. This was reinforced by his directions on 10 June 2026, as he was making it quite clear that what the petitioner was to do was to issue a summons to seek an order appointing Mr KT Lo to execute.

C. The grounds of opposition

C1. Partial payment in and its effect

19.  I shall dispose of the third ground of opposition first. The Order is clear. The petitioner is to pay in the full value of the Shares. He has no liberty to deduct the valuation fee on his own volition without leave of the court. He has failed to comply with [8] of the Order and thus the obligation of the 1^st respondent to execute the instrument of transfer under [9] of the Order has not yet arisen.

20.  However, I do not think that this failure by the petitioner should result in the whole buy-out, and thus the entire Order, being frustrated. That would be wholly disproportionate, in particular in light of the fact that the root of this is because it was the 1^st respondent himself who failed to comply with the Order to pay the valuation costs. In my judgment, the fairest manner to deal with this issue is to allow the petitioner to pay into court the difference, and his solicitors has given me an undertaking at the hearing that the petitioner will do so within 28 days. In so far as it is necessary, I grant an extension of time of 28 days from the date of hearing to the petitioner for him to do so.

21.  Mr Anson YY Wong, on behalf of the respondent, argues that the extension of time would cause prejudice to him, because an application for leave to appeal to the Court of Appeal against the decision of Linda Chan J refusing to direct a further valuation report (see [13], [14] and [16] above) is pending before the Court of Appeal, and a transfer of the Shares now will render that appeal nugatory.

22.  However, as Mr Wong confirms to me, there is no stay of execution of the Order, nor is there any pending application for a stay.

23.  I fail to see how a transfer of the Shares now would render the appeal (if leave is granted) nugatory, because the appeal is not against the Order relating to the buy-out, but only in relation to the valuation. If the appeal proceeds with leave and the 1^st respondent succeeds at the appeal, that only means that the 1^st respondent gets an order for a new valuation, not that the transfer is not going to, or should not, happen. On the other hand, if I do not grant the extension of time, that would mean that the buy-out cannot be proceeded, and the whole Order will be totally frustrated, which as I said above would be wholly disproportionate. If I am wrong and indeed the extension of time would somehow have the effect of rendering the proposed appeal nugatory, then it is for the 1^st respondent to make a proper application to the court for a stay, not that I should not grant an extension of time, as without the extension, the buy-out will be totally frustrated.

24.  The aforesaid means that while the Order remains valid and enforceable, and notwithstanding the order of Linda Chan J made on 5 March 2026 that the 1^st respondent was to execute the instrument of transfer within 28 days, the 1^st respondent is in fact not in breach of [9] of the Order yet. The order of Linda Chan J is not an independent substantive order but is an extension of time to comply with [9] of my Order, and thus the whole point is whether the obligation under [9] had even arisen, and the fact is that it did not as at 5 March 2026. As confirmed by Mr Wong, the point that the petitioner has not paid into court the full value of the Shares, and so the 1^st respondent’s obligation to execute the instrument of transfer has not arisen, is only taken under the Summons, and not before Linda Chan J in March or April 2026, or before the Registrar in March to June 2026.

25.  There are two conditions which must be shown by an applicant for an order under section 25A, namely (i) that there is a judgment directing a person to execute a document, and (ii) that the person so directed has failed to comply or cannot be found.[6]

26.  While condition (i) is satisfied here, condition (ii) is not, because as I said above the obligation for the 1^st respondent to transfer has not arisen. However, given the long and protracted history of the matter and that the 1^st respondent has been most unco-operative throughout, and to avoid further delay and costs, in my view it is appropriate that I made an “anticipatory order” (just as I did on 30 April 2019) at the hearing under section 25A, as stated in [5(3)] above.[7]

27.  I have not forgotten the two other grounds of opposition by the 1^st respondent. For reasons below, I do not think that they are valid reasons for me not to make the orders which I did make at the hearing.

C2. Functus, liberty to apply and variation

28.  The purpose of section 25A is self-evidently an aid to the carrying into effect of a substantive judgment or order of the court which requires the execution of a document by a person, which should not be frustrated by the refusal of, or the failure to locate, the defendant.

29.  Equally, the purpose of a liberty to apply provision is to assist in working out the order already made.[8]

30.  Thus, both section 25A and liberty to apply are powers of the court designed to assist in carrying into effect a substantive judgment or order of the court, and in so far as possible not to allow the substantive judgment or order to be frustrated. There is no question of the court being functus having made the substantive judgment or order which is sealed. An order under section 25A can be made at the time of the substantive judgment (i.e. an anticipatory order)[9] or post-judgment.

31.  I do not consider that an order varying [10] of the Order is necessary (and thus it is not necessary to consider whether I have the power to vary [10] of the Order under the liberty to apply provision). As the substantive order under [9] of the Order remains unfulfilled, and assuming and in anticipation of the 1^st respondent’s refusal to execute the instrument of transfer, I must still have all the powers and jurisdiction to grant orders to facilitate the carrying into effect of the same, if it is appropriate to do so.

32.  There is no reason why the court, having grant one manner to assist in the carrying into effect of a substantive judgment or order which somehow is not effective, cannot then grant another manner of assistance. This does not involve or require the variation of the first order, but simply that the court is making an additional order. There is no question of the court being functus in the sense that once it has made an order to assist in carrying into effect a substantive judgment or order, it cannot make any such further orders if the first order is ineffective.

33.  Equally, if the court has appointed A to be the person to execute a document under section 25A, there is no reason why if somehow that is not effective, in particular if it is (as in this case) not due to any fault of the person entitled to the document, the court cannot simply, and additionally, appoint B to execute. In such a case, both A and B are appointed, and execution by either will be good enough. There is no need to vary anything. The court is simply exercising its power under section 25A which still exists. There is no reason why that power can only be exercised once and for all (just as the court’s power to assist in the carrying into effect a judgment by certain means, once exercised, cannot preclude a further exercise of the jurisdiction to assist by other means). Perhaps to give an extreme example, after A is appointed under section 25A but before he executes the document, he passes away. Does that mean that nothing can be done by the court? Mr Wong accepts that in such a scenario B can be appointed, but contrasts that with the situation where the first appointee is the Registrar and he refuses to execute. He says it is a question of capacity. I cannot see the difference: both the Registrar and A are appointed as a person appointed to execute, and such an execution will have the effect as if the person ordered to execute in the substantive judgment or order has executed the document. The Registrar is not appointed in any capacity different from that of A.

34.  The argument of the 1^st respondent would frustrate the substantive judgment of the court, and must be rejected.

C3. Abuse of process

35.  As for the alleged abuse of process, namely that Linda Chan J had already dismissed a similar application on 28 April 2026, I am of the view that this argument should also be rejected.

36.  When the matter was before her Ladyship on 28 April 2026, as I explain above from the procedural history:

(1) The Order appointing the Registrar to execute under section 25A remained valid and enforceable.

(2) The Registrar did not indicate by then that he would not execute. He said he would consider executing the instrument of transfer upon receiving further information from the petitioner.

(3) Thus, I respectfully agree with her Ladyship that a further order under section 25A by her was at the time unnecessary.

37.  However, the position changed after 28 April 2026, because on 21 May 2026 it had become quite clear that the Registrar would not execute the instrument of transfer. That position was reinforced on 10 June 2026. See [17] and [18] above. That was a material change of circumstances,[10] making an order under section 25A appointing someone other than the Registrar to execute necessary.

38.  In the premises, there is no abuse of process by the petitioner in making the present application.

D. Costs, conclusion and disposition

39.  For these reasons, I made the orders stated at [5] above at the hearing on 24 August 2026.

40.  As for the costs of the Summons dated 17 June 2026, on the one hand the petitioner has been at fault because he, without justification, decided to deduct the valuation cost from the sum to be paid in, and thus he has failed to comply with [8] of the Order himself, thereby failing to trigger the application of [9] and [10] of the Order. On the other hand, while the failure to pay in the full sum by the petitioner means that the 1^st respondent’s obligation to transfer has not yet arisen, his failure or refusal to do so, at least before the issue of the Summons, was not said to be due to this issue. That is, the 1^st respondent was refusing to transfer other than because full payment in had not been made. Nor did the Registrar refuse to execute because of this reason. The failure by the petitioner to pay in the full value of the Shares is not the reason causing the issue of the Summons. Indeed, the only reason for the 1^st respondent not to transfer the Shares (before the Summons) appears to be that he was apparently not satisfied with the valuation report, which as matters stand is a stance which must be rejected (as it was rejected by Linda Chan J). Thus, the issue of the Summons by the petitioner, as matters stood at the time and according to the issues that had arisen between the parties, cannot be said to be unjustified. Further, two of the grounds of opposition by the 1^st respondent to the Summons are rejected by me. In all the circumstances, in my judgment the fairest order is that there be no order as to costs. I so order.

41.  I thank Ms Lo and Mr Wong for their assistance.