CHU KONG (suing on behalf of himself and all other shareholders in (i) OCEAN SINO LTD (except LAU WING YAN) and (ii) PBM Asset Management LTD) v. LAU WING YAN AND OTHERS

CACV 373 /2023, [2026] HKCA 1004

On appeal from [2023] HKCFI 2703

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 373 OF 2023

(ON APPEAL FROM HCA NO 1885 OF 2021)

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J U D G M E N T

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Hon Kwan VP (giving the Judgment of the Court):

1.  This appeal is brought by Mr Chu Kong (“Chu”) against the decision of Au-Yeung J on 20 October 2023 (“Decision”)^[1]. By the Decision, the judge struck out this double derivative action (HCA 1885/2021) which Chu purported to bring on behalf of the 5^th defendant, Ocean Sino Limited (“OSL”) and the 6^th defendant, PBM Asset Management Limited (“PBM”). OSL is the parent company of PBM and both are in liquidation. Chu brought this action against the 1^st defendant Mr Lau Wing Yan (“Lau”) and the 2^nd to 4^th defendants who were some of the liquidators of OSL. They were sued for various breaches of fiduciary duties.

2.  The judge struck out this action because Chu has no locus standi to bring a derivative action, which is not available where a company is in liquidation.  He failed to establish that OSL and PBM are under the control of wrongdoers.  She also struck out the action for issue estoppel and abuse of process.

3.  Chu was legally represented in the hearing below. Less than three months before the hearing of his appeal, he filed a notice to act in person with a summons for leave to use Chinese as the language of the court at the hearing of the appeal and related procedure^[2].  At the same time, he issued a summons for leave to adduce new evidence (“New Evidence Summons”), supported by his affirmation in English (“Chu 1^st”) of 30 pages with 20 exhibits.  The court gave directions that the New Evidence Summons would be heard at the hearing of the appeal on 30 April 2026.  Lau and the 4^th defendant, Mr John Nicholas Greenwood (“Greenwood”), each filed an affirmation/affidavit in opposition to the New Evidence Summons and Chu filed an affirmation in reply (“Chu 2^nd”).  Pursuant to the directions of the court, all parties who participated in these proceedings have lodged composite submissions for the appeal and the New Evidence Summons and Chu also served a reply submission with the leave of the court.

4.  On 12 March 2026, Chu issued yet another summons, seeking a stay of his appeal and related procedure (“Stay Summons”), to await the determination of the Court of Final Appeal in FAMV 147 & 148/2025.  On 23 April 2026, Chu informed the Court of Appeal that he would withdraw the Stay Summons.  On 24 April 2026, a determination was made by the Appeal Committee under rule 7(1) of the Hong Kong Court of Final Appeal Rules, Cap 484A dismissing the two applications for leave to appeal of BGA Holdings Limited (“BGAH”).  We made an order at the outset of the hearing dismissing the Stay Summons.  The only outstanding matter is costs of that application, which will be dealt with at the end of this judgment.

5.  A notice of appeal dated 17 November 2023 was filed by the solicitors then acting for Chu raising nine grounds of appeal, with Grounds 1 and 2 dealing with locus standi and Grounds 3 to 9 dealing with issue estoppel and abuse of process.  In the two submissions lodged by Chu acting in person, he focused instead on the evidence sought to be adduced in the New Evidence Summons, contending that the new evidence strengthens and corroborates the facts of his case in the derivative action, which “inevitably” falls within the jurisdiction of Hong Kong^[3].  Much of his submissions was devoted to the new evidence and the contention that the new evidence meets the three cumulative conditions of Ladd v Marshall [1954] 1 WLR 1489 at 1491.  The nine grounds of appeal advanced by the former solicitors were very lightly argued by Chu.

6.  Chu’s conduct since acting in person in this appeal has a disruptive effect on the preparation of this appeal by other parties and by the court.  Apart from making late interlocutory applications (they should have been made before the notice of hearing for this appeal was issued more than a year ago on 27 February 2025) and changing the focus of the arguments sought to be advanced for the appellant (without any amendment to the notice of appeal), Chu has put forward a very substantial quantity of documents – by exhibiting them to Chu 1^st and Chu 2^nd and by simply including them unilaterally in the hearing bundles lodged by him – that were not placed before the judge and are not the subject of any application to adduce new evidence on appeal^[4]. As we have indicated to him at the hearing, such documents will not be considered by the court.

7.  At the hearing, Lau appeared by Mr Anson Wong, SC^[5] and Greenwood appeared by Mr Victor Joffe, SC^[6].  The 2^nd defendant, Yen Ching Wai David (“Yen”), was represented by Mr Tommy Cheung.

Background

8.  The relevant background matters may be related as follows.  They are taken mainly from the Decision and matters not in dispute.

9.  Chu and Lau have been the main protagonists in the ongoing disputes between them.  They used to be business partners in a successful shipping business.  They owned over 100 companies at the height of their business activity.  Since around the end of 2013 to early 2014, serious differences arose between them.  Their conflict has become a cause célèbre and spawned no less than 33 actions in Hong Kong.  They also engage in litigation in other jurisdictions such as the British Virgin Islands (“BVI”) and Singapore.  It culminated, in the words of a judge hearing the dispute, in a total war of attrition.

10.  OSL is a company incorporated in the BVI.  It is a joint venture set up by Chu and Lau and they are equal shareholders.  Prior to its liquidation, Chu and Lau were the only directors.

11.  PBM is a company incorporated in Hong Kong and a wholly owned subsidiary of OSL.  Until around January 2018, Chu and Lau were its only directors.

12.  PBM held a 49% interest in BGAH^[7], formerly known as Beibu Gulf Ocean Shipping (Group) Limited (“BBGOS”)^[8].

13.  BBGOS was incorporated in Hong Kong.  It was set up in December 2009 as a joint venture between PBM and Beibu Gulf Holding (Hong Kong) Co Ltd (“BBGH”), with BBGH holding 51%.  BBGH is the wholly-owned subsidiary of Guangxi Beibu Gulf International Port Group Ltd (“Guangxi BBG”), a state-owned enterprise in the Mainland.  The joint venture was set up to invest in dry bulk supply chain business and international trading of commodities.  Chu and Lau were nominated by PBM to sit on the board of directors of BBGOS.

14.  In January 2016, BBGH exited the joint venture and transferred its 51% shares in BBGOS to Bright Good (Asia) Limited^[9], a Hong Kong company.  In February 2016, Bright Good (Asia) Limited transferred 6% of its shareholding in BBGOS to Polyrise Team Limited, a BVI company.  Lau was removed as a director of BBGOS in March 2016.  In late 2016, BBGOS was renamed BGAH.  As found by the judge, Chu held or controlled 51% of BGAH through these two corporate vehicles^[10].

15.  On 27 May 2015, Lau presented a petition in the BVI to wind up OSL on the just and equitable ground.  OSL and Chu were the respondents to that petition, with OSL taking no part but agreeing to abide by the result.  On 29 June 2017, the BVI court made an order to wind up OSL on the petition^[11]. Greenwood, Yen, the 3^rd defendant Chan Pui Sze Nichole (“Ms Chan”) and one other were appointed liquidators of OSL.  The OSL liquidators procured the appointment of Yen and Ms Chan as directors of PBM on 12 September 2017 and the removal of Chu and Lau from PBM’s board on 17 January 2018.  Greenwood was appointed a director of PBM on 23 January 2018.

16.  On 17 January 2020, Chu successfully appealed against the winding-up order of OSL to the Court of Appeal of the Eastern Caribbean Supreme Court (“BVI CA”).  As a result, Yen, Ms Chan and Greenwood resigned from the board of PBM on 21 February 2020 and Chu and Lau were re-appointed as directors.

17.  On Lau’s appeal against the judgment of the BVI CA, the Privy Council allowed his appeal and restored the winding-up order of OSL on 12 October 2020.  On 28 October 2020, the OSL liquidators procured the re-appointment of Yen and Greenwood to the board of directors of PBM and Chu and Lau ceased to be directors on 26 November 2020.  Yen ceased to be a liquidator of OSL on 4 December 2020 and resigned from the board of PBM on 21 December 2020.  Since then, Greenwood has been the sole director of PBM.  Yen’s current role in PBM is a member of a special committee set up for the purpose of dealing with the statutory demand against PBM as mentioned below, which is far removed from controlling PBM or OSL^[12].

18.  The liquidators of OSL investigated the affairs of OSL and its subsidiaries, including PBM and BGAH.  Based on their findings, they caused PBM to issue a statutory demand to BGAH dated 12 December 2017 to demand payment of a shareholder’s loan of US$36,298,272 advanced by PBM to BGAH between 2010 and 2011 (“PBM Loan”).  When the demand was not met, PBM presented a petition to wind up BGAH on 23 August 2019 (HCCW 251/2019).

19.  On 22 October 2019, BGAH issued a summons to strike out the petition, contending there was a bona fide dispute on substantial grounds over the PBM Loan.  The application was supported by evidence filed by Chu, who contended that the PBM Loan was not repayable on demand and had been discharged by setting off against the purchase price of two vessels pursuant to an alleged agreement (“Agreed Treatment” and “Acquisition Agreement”).

20.  BGAH’s striking out summons was dismissed by A Chan J (as he then was) on 26 November 2021 (“A Chan J’s Strike-out Decision”). At the resumed hearing of the winding-up petition on 6 December 2021, A Chan J ordered that BGAH be wound up on the basis there was no bona fide dispute on substantial grounds over the PBM Loan^[13].  On 13 January 2023, Greenwood and two others were appointed as liquidators of BGAH.

21.  On 15 March 2021, Chu applied to the BVI court for an order to remove the liquidators of OSL (“BVI Removal Application”), to which application all four liquidators of OSL (including Yen, Ms Chan and Greenwood), OSL and Lau were parties.  Chu alleged that the OSL liquidators had displayed a total disregard of his interests by: injuring his interest in BGAH by issuing the statutory demand against BGAH and petitioning for its winding up; using Chu’s resources to deal with unmeritorious accusations raised by Lau but objected to by Chu; and refusing to consider or pursue Chu’s proposal for summary disposal to distribute the single asset owned by OSL (ie its share in PBM) equally between Chu and Lau (“Summary Disposal Proposal” or “Splitting Arrangement”) without good reason, which would have brought the winding up of OSL to an immediate close without the need for further litigation and with significant saving of time and cost.  Accordingly, the OSL liquidators had failed to act independently or properly discharge their duties as liquidators and as a result Chu, as 50% contributory, had completely lost his trust and confidence in the liquidators.

22.  On 24 November 2021, the BVI court handed down a judgment dismissing the application (“BVI Removal Judgment”)^[14]. Chu appealed against this judgment, and applied to adduce fresh evidence on appeal after his appeal was heard but before judgment was handed down by the BVI CA.  The new evidence application and the appeal were dismissed by the BVI CA on 3 July 2023 (“BVI CA Removal Judgment”).  It was held that the new evidence could have been obtained with reasonable diligence and should have been adduced prior to the appeal hearing and it would not have had an important influence on the result of the court or in the appeal.

23.  On 15 December 2021, just three weeks after the BVI Removal Judgment and a week after the winding-up order of BGAH, Chu commenced the present double derivative action (HCA 1885/2021) purportedly on behalf of OSL and PBM against Lau, Yen, Ms Chan and Greenwood.  In the amended statement of claim (“ASOC”), Chu alleged that Yen, Ms Chan and Greenwood had acted in breach of their duties as directors of PBM or had dishonestly assisted Lau’s breach of duty to PBM.  The allegations were premised on Yen, Ms Chan and Greenwood having displayed a total regard of Chu’s interests by: damaging his interest in BGAH by issuing the statutory demand and petitioning for its winding up; using Chu’s resources to deal with unmeritorious accusations raised by Lau but objected to by Chu; refusing to consider or pursue the Splitting Arrangement without good reason; displaying bias in favour of Lau by actively pursuing Lau’s interest and creating work and profits for themselves to the prejudice of Chu.

24.  In the draft re-amended statement of claim (“DRASOC”), Chu included a further allegation against Greenwood, alleging that he had acted in breach of his duty to PBM in that he caused and procured PBM to enter into a Security Assignment Deed dated 21 October 2022 (“Security Assignment Deed”) with PBM as charger and OSL as lender.  By this arrangement, OSL was to lend a substantial sum to PBM, upon the assignment of PBM’s receivables in the liquidation of BGAH as a security in favour of OSL.

25.  As noted by the judge, there is a near overlap of allegations in the derivative action and the BVI Removal Application.  The allegations in ASOC as mentioned above (defined as “Complaint 1A” in the Decision)^[15] had been advanced in the BVI Removal Application and was rejected by Wallbank J in the BVI Removal Judgment.  The further allegation in DRASOC as mentioned (defined as “Complaint 1B” in the Decision)^[16] was advanced in support of Chu’s application to adduce new evidence in his appeal against the BVI Removal Judgment and rejected in the BVI CA Removal Judgment.

The Decision

26.  The judge struck out the double derivative action and refused to grant leave to amend as per DRASOC for these reasons:

(1) Chu lacked locus standi to bring the derivative action.  By virtue of OSL’s liquidation, both OSL and PBM are controlled by the OSL liquidators under the supervision of the BVI court.  Insofar as Chu has any grievance with respect to the affairs of OSL or PBM, his proper and adequate remedy lies not in a derivative action against the liquidators, but in an appropriate application to the BVI court to which the OSL liquidators are answerable.  This finding is fatal to the derivative action^[17].

(2) Chu is debarred by the BVI Removal Judgment and the BVI CA Removal Judgment from contending that OSL and PBM are under the control of wrongdoers for the purposes of this derivative action, by issue estoppel, the wider doctrine of abuse of process under Henderson v Henderson (1843) 3 Hare 100 and the rule against collateral attack on previous judgments^[18].  Complaint 1A is a collateral attack on the BVI winding-up judgment, the BVI Removal Judgment, the BVI CA Removal Judgment, A Chan J’s Strike-out Decision and the BGAH winding-up order.  Complaint 1B is a collateral attack on the BVI Removal Judgment, the BVI CA Removal Judgment, A Chan J’s Strike-out Decision and the BGAH winding-up order^[19]. It would be a scandal to the administration of justice if Chu were allowed to relitigate by changing the form of the proceedings into a derivative action with the same complaints, and it is particularly egregious given the previous judicial criticisms against Chu for making attempts to frustrate the OSL liquidators’ investigations into his alleged misfeasance^[20].

(3) Chu is debarred by A Chan J’s Strike-out Decision from contending that Lau had acted in breach of fiduciary duties to PBM by issue estoppel and collateral attack on previous judgments^[21]. That decision has rejected Chu’s contentions as to the PBM Loan not being repayable and the existence of the alleged Agreed Treatment and Acquisition Agreement as incredible.  Chu had personal interest in advancing his case on the Agreed Treatment and Acquisition Agreement to avoid a winding-up order against BGAH and exposure of misfeasance and misappropriations alleged against him.  His position was aligned to BGAH and they were privies.

(4) In the premises, the claims in the derivative action are frivolous or vexatious and have no proper evidential foundation and ought to be struck out^[22].

(5) As to the fresh evidence put forward by Chu, being the Zhou Affirmation and the affirmation of Ma Zhengguo dated 16 June 2023 (“Ma Affirmation”)^[23], Ms Zhou did not fully participate in the affairs of BGAH prior to 2014 and did not have personal knowledge of the alleged Agreed Treatment.  In the appeals of BGAH against A Chan J’s Strike-out Decision and winding-up order, the Court of Appeal had refused to admit the Zhou Affirmation as new evidence.  That fact that the Ma Affirmation was entirely fresh evidence would not justify re-litigation of a decided issue when there is nothing close to fraud or collusion of the defendants^[24].

New Evidence Summons

27.  We will first deal with the New Evidence Summons as this seems to be the focal point of Chu’s submissions before us.

(a) Three items of new evidence

28.  The New Evidence Summons issued by him on 10 February 2026 sought an order in these terms:

“The Plaintiff [Chu] be granted leave to adduce further evidence on questions of fact by oral examination in court, by affidavit, or by deposition taken before an examiner”.

29.  It is impermissible to seek leave to adduce further evidence on appeal without specifying what evidence the applicant seeks to adduce.  In his supporting affirmation Chu 1^st, he did specify in §12 the items of new evidence he sought leave to adduce in this appeal and they are as follows:

(1)    Lau’s amended defence and counterclaim in HCA 228/2017 dated 13 June 2022 (“Lau’s Defence”);

(2)    the judgment of A Chan J in HCA 1431/2015^[25] and HCA 228/2017^[26] dated 13 February 2025 (“HCA 228 Judgment”); and

(3)    seven letters between Au & Associates (“AA”)^[27] and Norton Rose Fulbright (“NRF”)^[28] from 27 May 2025 to 14 August 2025 (“AA-NRF Letters”) in the winding-up proceedings of BGAH in HCCW 251/2019.

(b) HCA 228/2017

30.  HCA 1431/2015 and HCA 228/2017 were tried together by A Chan J in January 2025.  The central dispute in those actions was whether Chu and Lau had made a binding oral agreement in January 2014 on splitting their shipping business and assets jointly owned by them (“Restructuring Agreement”).  It was Lau’s case that a binding agreement was made, the key terms of which was that the “PB Group” (a number of companies that use the name Pacific Bulk) would be solely owned by Lau and their interest in the “BBG Group” (a group of companies including BBGOS and their subsidiaries) would be solely owned by Chu.  Chu asserted he had agreed with Lau in principle to split their business and assets but no binding agreement was reached.  They made allegations of misappropriation against each other.

31.  HCA 228/2017 essentially concerned the beneficial ownership of some of the companies within the PB Group and Lau’s counterclaim concerned the beneficial ownership after January 2014 (pursuant to the PB restructuring) of the shares in 12 companies in the PB Group.  Lau alleged that Chu was holding those 12 companies subject to the PB restructuring on trust for Lau.  Chu’s case in the counterclaim was that among those 12 companies, three were and are wholly owned by him.  The court would need to resolve the disputes about the basis on which Chu and Lau operated their business in determining Chu’s claim to the beneficial ownership of some of the companies concerned, and the findings in that regard would have a bearing on the counterclaim premised on the PB restructuring agreement.  There were many other issues in dispute in HCA 228/2017 and HCA 1431/2015 and the PB restructuring was a standalone issue.

32.  The judge held against Lau that there was no concluded agreement on the PB restructuring.  The documentary evidence demonstrated there was none and reinforced the fact that discussions remained ongoing and at a preliminary stage after January 2014.

33.  Lau and the PB company controlled by him were largely successfully in HCA 1431/2015, the counterclaim in that action was dismissed, with costs of the claim and counterclaim to the successful parties. Chu’s claim in HCA 228/2017 and Lau’s counterclaim in that action were both dismissed, with no order as to costs.

(c) Chu’s arguments in the New Evidence Summons

34.  In Chu 1^st, it was contended that each of the three conditions in Ladd v Marshall is satisfied for the new evidence to be admitted on appeal.  His arguments as stated therein may be summarised as follows:

(1) The HCA 228 Judgment was handed down on 13 February 2025, so it could not have been obtained despite reasonable diligence for the hearing below on 18 July 2023 or before the judge handed down the Decision on 20 October 2023.  As for Lau’s Defence dated 13 June 2022, although it was in existence a year before the hearing in July 2023, without the HCA 228 Judgment, “the completeness of [Lau’s Defence] could not be manifested” and Chu would not be able to raise meaningful argument to oppose the applications to strike out the derivative action.

(2) Likewise, the AA-NRF Letters could not have been obtained despite reasonable diligence prior to the hearing in July 2023 or the handing down of the Decision in October 2023, as the first of those letters was issued in May 2025.

(3) Lau’s Defence and the HCA 228 Judgment would have very important effect on the tribunal hearing the applications to strike out the derivative action in these respects:

“a. Undermining the very basis of the BVI Winding-Up Proceedings whereby Mr Greenwood, Mr Yen and Ms Chan were among those appointed liquidators over OSL;

b. Showing that Mr Lau presented false statements to the BVI Courts in pursuing the winding up of OSL, and therefore his case in the BVI Proceedings was false, thus deceiving the BVI Courts to make the Winding-Up Order on a false basis.”^[29]

(4) Chu relied on §§152 to 155 in the HCA 228 Judgment as “crucial determination … in impacting the mind of the tribunal”^[30]:

“152. In the face of the above documents, the only reasonable conclusion is that there was no concluded agreement reached on the Restructuring. It follows that Lau’s counterclaim in 228/17 has no leg to stand on. Likewise, there is no basis for Lau’s trust claim arising from PB Restructuring.

153. For completeness, first, I agree with Mr Wong’s submission [Chu’s counsel] that the documentary evidence clearly show that there was no agreement on (a) the 12 companies said to be covered by the Restructuring; (b) the price, a critical constituent of any sale; (c) immediate withdrawal from the PB shipping business by Chu or from the BBG Group by Lau; and (d) the parties would rely on an oral agreement. In respect of the last point, at the material time the parties’ relationship was no longer what it was, and they were trying to reach an agreement to split their very substantial joint business and assets. It is consonant with common sense that they would like to have a formal legal document for the purpose.

154. Second, I am unable to agree with Mr Joffe [Lau’s counsel] that the parties’ subsequent conduct had reinforced the existence of the Restructuring, eg, Lau and Chu set up their separate shipping businesses after January 2014. My understanding of the evidence is that the parties soon ran into an impasse after having agreed in principle to split their business and assets. Serious allegations of misappropriation were made, relationship turned from bad to worse and the intended audit exercise was in a stalemate. Under such circumstances, the parties took unilateral actions to protect their interest. For instance, the new shipping businesses were to allow them to continue with what they were doing.

155.     If there was a Restructuring Agreement, why would Lau subsequently petition for the winding-up of [OSL], which owned his and Chu’s interest in the BBG Group, on the ground that he was excluded from the management of that company by Chu?”

(5) In sharp contrast to the above findings in the HCA 228 Judgment, the BVI court in the winding-up proceedings of OSL (Justice Kaye QC) held at §§44 to 45 that the BBG Restructuring Agreement and the PB Restructuring Agreement were entered into, by which Lau would withdraw from BBGOS and sell his 50% interest in PBM to Chu and in return Chu would withdraw from their other joint enterprise in the so-called PB Group and buy out Lau.  Lau had made allegations in his affirmation and pleadings in the BVI winding-up proceedings regarding the BBG Restructuring Agreement and the PB Restructuring Agreement similar to §23.4 of Lau’s Defence in HCA 228/2017.  There were also discrepancies in Lau’s Defence and his affirmation and pleadings in the BVI winding up including the number of companies in the PB Group that were subject to the PB Restructuring Agreement.

(6) The above matters undermined the basis of the BVI winding-up proceedings of OSL and showed Lau’s case in the BVI proceedings was based on a false case, and yet the liquidators have not reflected on the legitimacy of their position or the propriety of acting on information originating from Lau.  Justice Kaye QC granted the winding-up order on the just and equitable ground based on deadlock and loss of all trust and confidence between Chu and Lau, holding that Chu had obstructed Lau’s reasonable efforts to establish a proper value for the two Restructuring Agreements and had hindered the implementation of the Restructuring Agreements.  And yet it was held in the HCA 228 Judgment that no binding agreement was reached in respect of the two Restructuring Agreements.

(7) Lau had breached his fiduciary duty owed to OSL and PBM in pleading a false case in the BVI court to wind up OSL.  There should be no issue estoppel arising because the previous judgments have not “handled the new finding that Lau’s case in winding up OSL in the BVI Court is false”.  Hence, Lau’s Defence and the HCA 228 Judgment would have influence on the result of the court’s decision^[31].

(8) Among the AA-NRF Letters, there is a letter dated 4 July 2025 (“CK-4”) by which AA inquired with NRF whether the liquidators knew that (i) Glory BBG Shipping Limited issued 18,149,136 non-voting preference shares to Shining Centre Limited and Shining Centre Limited issued non-voting preference shares to PBM around August 2016 (“Glory BBG Share Allotment”); and (ii) Hope BBG Shipping Limited issued 18,149,136 non-voting preference shares to Palace Centre Limited and Palace Centre Limited issued non-voting preference shares to PBM around August 2016 (“Hope BBG Share Allotment”) (collectively “Vessel Co Share Allotment”).  AA asked why it was stated in the skeleton argument in CACV 557 & 591/2021 that “PBM never obtained the shares in the vessel-holding companies”.  NRF did not make any direct response to CK-4.

(9) The AA-NRF Letters, read with the books and records of BGAH, would prove that Greenwood and other liquidators of OSL knew, or ought reasonably to have known, that the Vessel Co Share Allotment had occurred by the end of 2016, and this was and should reasonably have been in their minds when they caused PBM to petition to wind up BGAH in August 2019.

(10) The Vessel Co Share Allotment would assist in proving the validity of the Agreed Treatment and Acquisition Agreement^[32] and the PBM Loan should have been held to be set off by the purchase price of the two vessel holding companies.  The Vessel Co Share Allotment was duly performed and PBM obtained the ultimate interest in the two vessels by acquiring 100% of the shareholding in the two vessel holding companies.  Chu asserted his belief that the main reasons behind the failure of PBM to subscribe to the shares of the two vessel holding companies were the prolonged deadlock at shareholder and board level of PBM and that the BVI court was processing the winding-up petition of OSL presented by Lau, and BGAH had discharged its duty under the Agreed Treatment and Acquisition Agreement by the Vessel Co Share Allotment and whether PBM would subscribe to the shares was beyond the control of BGAH^[33].

(11) The winding-up order of BGAH was made without allowing the court to know that the Vessel Co Share Allotment was duly performed.  In petitioning for the winding up of BGAH on the ground it was insolvent due to the failure to repay the PBM Loan, Greenwood and the other liquidators should at least be regarded as negligent in omitting to mention that the PBM Loan had been set off pursuant to the Agreed Treatment and Acquisition Agreement.  Further, Greenwood had submitted on behalf of PBM in HCCW 251/2019 and in CACV 557 & 591/2025 that “It is undisputed that [BGAH] did not in fact transfer any shares in the Vessel Holding Companies to PBM”, that “PBM has not obtained any interest in the Vessel Holding Companies or the Vessels”, and that “it is legally impossible for [BGAH] to have applied the PBM Loan in discharge of the PBM Purchase Price, when PBM has obtained nothing in return”.  He caused the court to make a winding-up order against BGAH under a false basis.  He has breached the fiduciary duties he owed to PBM.

(12) The omission of the Vessel Co Share Allotment was the most critical factor causing A Chan J to make an order to wind up BGAH.  In striking out the derivative action, the judge placed heavy emphasis on A Chan J’s Strike-out Decision and judgment to wind up BGAH.  Chu was also debarred from raising complaints against Greenwood as the sole director of PBM by the Henderson abuse on the basis that he should have raised them in the BVI Removal Application.  The AA-NRF Letters in May to August 2025 had not come into existence at that time, so the question arising from the correspondence could not have been decided in previous judgments, not to mention that Chu was not a party to the winding-up proceedings of BGAH, nor could he and BGAH be regarded as privies.

35.  We turn to consider the grounds of opposition raised by the defendants to the New Evidence Summons.

(d) Delay

36.  Mr Wong and Mr Cheung submitted that this court should exercise its discretion to dismiss the application for inordinate delay alone, even if the conditions in Ladd v Marshall were satisfied, citing PW v PPTW [2015] 1 HKC 450 at §§9 to 12 and Re Lau Kam Sing Dickie [2021] HKCA 1149 at §§19 to 26, and the cases cited therein.  Adequate warnings have been given to litigants and lawyers for quite some time that they cannot expect the court to grant new evidence applications so long as the Ladd v Marshall conditions are met, regardless of the delay and without consideration whether there is proper explanation for the delay.

37.  As stated in the authorities mentioned, Order 1A rule 3 of the Rules of the High Court requires parties and their legal representatives to assist the court to further the underlying objectives of the Rules.  One of the objectives is to ensure that cases are dealt with as expeditiously as is reasonably practicable and to ensure that the resources of the court are distributed fairly.  Practice Direction 4.1 at §37 provides that “A party seeking to adduce new evidence on appeal must apply as early as practicable.”  It stands to reason that an application to adduce new evidence on appeal should be made promptly, as one of the conditions in Ladd v Marshall is that the new evidence would probably have an important influence on the result of the case.  The new evidence would impact on the preparation of the appeal in a number of ways.  The present situation is a good example.

38.  Chu filed a lengthy affirmation (Chu 1^st) in support of the New Evidence Summons and exhibited voluminous documents less than three months before the hearing of the appeal.  Two of the defendants (Lau and Greenwood) filed evidence to respond to Chu 1^st and Chu filed Chu 2^nd in reply exhibiting yet further documents.  No thought was given as to whether the grounds of appeal in the notice of appeal should be amended for the points raised in the new evidence to be relied on in this appeal.  The hearing bundles for this appeal are a shambles, a large quantity of documents was included by Chu unilaterally without regard to directions given by the Registrar.  As mentioned at the outset, these actions of Chu have a disruptive effect on the preparation of the appeal.

39.  Leaving aside the contention that the “completeness” of Lau’s Defence (which was dated 13 June 2022) could not be manifested without the HCA 228 Judgment, that judgment was available to Chu since 13 February 2025, when he was still represented by lawyers.  His solicitors had lodged a joint checklist for this appeal on 9 December 2024, stating that all necessary interlocutory applications had been taken out.  A notice of hearing of this appeal with a hearing date of 30 April 2026 was issued on 27 February 2025.  Chu had legal representation in this appeal until 10 February 2026.  There was a delay of almost a year in taking out the application to adduce new evidence on appeal.

40.  Chu gave this explanation about the delay in Chu 2^nd.  He stated that he had been involved in many other legal proceedings in litigating with Lau, and had to testify in contempt proceedings against Lau over several days in December 2025.  He claimed he only became aware of Lau’s false statements in the BVI proceedings when he made his 2^nd affirmation in HCA 631/2022^[34] on 10 November 2025.  He did not mention when he became aware of the HCA 228 Judgment handed down in February 2025.  He only stated he was advised that all that he was required to explain in his supporting affirmation (Chu 1^st) was that he had complied with the three conditions in Ladd v Marshall^[35].  He stated further that he learned on 27 October 2025 that the application of BGAH for leave to appeal to the Court of Final Appeal against the judgment in CACV 557 & 591/2025 was to be considered under rule 7 and decided to await the outcome before he was to adduce further evidence in the present appeal.  But as the determination under rule 7 took longer than expected, he had to issue the New Evidence Summons on 10 February 2026^[36]. Moreover, he has been acting in person.

41.  We do not regard the above as proper explanation for the lengthy delay of close to a year.  In other appeal proceedings, Chu had applied to adduce new evidence on a number of occasions, often on the basis that further evidence had come into existence after the hearing below.  With a considerable number of legal proceedings going on at the same time and documents created continuously and judgments handed down every now and then, it is not difficult to seize upon a statement or finding in a subsequent document or judgment as “new evidence” that came into existence after the hearing and apply to the appeal court to take it into account in reviewing the judgment below on new matters that have not been argued before the first instance judge. It is high time that this practice should stop.  We will not countenance it in this appeal, particularly when the application was made less than three months before the hearing of the appeal.  On the ground of significant delay alone without an acceptable explanation, we dismiss the New Evidence Summons.

42.  As this application has been argued extensively on other grounds, for completeness, we will deal with them as well, as succinctly as we can.

(e) Condition 1 in Ladd v Marshall: exercise of reasonable diligence

43.  We reject Chu’s contention that for each of the three items of new evidence, condition 1 of Ladd v Marshall is satisfied.

44.  Lau’s Defence came into existence in June 2022, well before the hearing of the court below on 18 July 2023.  We do not accept Chu’s contention that the “completeness” of Lau’s Defence was not manifest until it is read with the HCA 228 Judgment.

45.  For the HCA 228 Judgment, which came into existence after the Decision, there is no proper explanation why Chu only sought leave to adduce it as new evidence almost a year later.

46.  As for the AA-NRF Letters which were issued from May 2025 to August 2025, there is again no proper explanation for the six months’ delay in applying to adduce these letters as new evidence.  More significantly, there is no valid reason why the ‘counter-inquiries’ of AA in CK-4 on 4 July 2025 (which appeared to be triggered by the inquiries in the liquidators’ letters dated 27 May 2025 to Kwok Kai and Chu regarding a lump sum payment of US$2 million to Chu as director’s emoluments according to the board resolution of BGAH dated 12 June 2017) could not have been raised independently and a lot earlier, had reasonable diligence been exercised.  NRF’s letter of 27 May 2025 could not be regarded as an acceptance by the liquidators of the accuracy of BGAH’s books and records as contended by AA in the letter of 4 July 2025.  Besides, Chu was a director of the companies involved in the Vessel Co Share Allotment^[37] at the material time in August 2016 and would have known about this.  He would also know or ought to have known, when the liquidators of OSL first took control of PBM in September 2017, whether there were documents among the records of PBM that would put the liquidators on notice of the Vessel Co Share Allotment.

47.  As there is clearly non-compliance of condition 1, the New Evidence Summons falls to be dismissed on this ground as well.

(f) Condition 2 in Ladd v Marshall: importance to the result of the case regarding Lau’s Defence and HCA 228 Judgment

48.  We reject Chu’s contention those parts of Lau’s Defence and the HCA 228 Judgment he relied upon would have an important impact on the outcome of the case or in this appeal.  We do not agree with him the HCA 228 Judgment undermines the basis of the BVI winding-up judgment or that the HCA 228 Judgment has shown that Lau presented false statements to the BVI courts in pursuing the winding up of OSL.

49.  Chu cited §§44 to 45 of the judgment of Justice Kaye QC contending it was held that the BBG Restructuring Agreement and the PB Restructuring Agreement were entered into.  This is not a proper reading of the judgment.  The key issues in the BVI winding-up proceedings were whether the affairs of OSL were so deadlocked to justify an order for its winding up on the just and equitable ground, and whether some alternative remedy existed which made it reasonable for the court to refuse a winding-up order.  Whilst reference was made to the restructuring agreements in §44 that the parties had agreed to go their separate ways largely by an equity swap to be implemented under the two restructuring agreements, Justice Kaye QC went on to say that the prices or relevant values had yet to be settled between them (in §45) and further negotiations and implementation of the agreements stalled (in §46).  For the purpose of the winding-up petition, he was not concerned with and did not determine whether the restructuring agreements were enforceable and binding under Hong Kong law.  The PB Restructuring Agreement was mentioned merely as part of the context for assessing whether the relationship of the parties had broken down completely.

50.  We do not think there is any conflict or contradiction between the BVI winding-up judgment and the HCA 228 Judgment.  The issue of whether the PB Restructuring Agreement was binding was raised and determined only in the HCA 228 Judgment.

51.  Lau’s Defence and the HCA 228 Judgment clearly have no impact on the judgments (namely, A Chan J’s Strike-out decision, the BGAH winding-up order, the BGAH Removal Judgment and the BVI CA Removal Judgment) which formed the basis of the Decision to strike out the claims in the derivative action for issue estoppel, Henderson abuse and collateral attack on previous judgments.

52.  Condition 2 in Ladd v Marshall is not satisfied in respect of these two items of new evidence.  The application to adduce these items as new evidence fails on this ground as well.

(g) Condition 2 in Ladd v Marshall: importance to the result of the case regarding the AA-NRF Letters

53.  We have set out Chu’s arguments why the AA-NRF Letters have important influence on the outcome of this case.  In gist, he contended that the Vessel Co Share Allotment was performed pursuant to the Agreed Treatment and Acquisition Agreement and this gave PBM an ultimate interest in the two vessels and discharged the PBM Loan by the set off of the purchase price of the vessels.  He alleged that Greenwood and the other liquidators failed to bring the Vessel Co Share Allotment to the attention of the court in the winding-up proceedings of BGAH and falsely stated PBM had not obtained any interest in the vessel holding companies or the vessels.

54.  Chu’s contentions are entirely without merit.

55.  Firstly, the allegation that the liquidators had breached their duties towards PBM in the manner now complained of have not been pleaded in the ASOC or DRASOC.

56.  Secondly, the present contention that PBM had obtained an interest in the vessels by reason of the Vessel Co Share Allotment is contradictory to Chu’s case as pleaded in ASOC^[38] and his 1^st affirmation filed in the derivative action^[39].  On his own case, as a result of Lau’s wrongful obstruction and refusal to procure funding, PBM was deprived of the opportunity to acquire the vessel holding companies and to recover the value of the PBM Loan via the acquisition of the two vessels, which were eventually sold by the mortgagee.

57.  Thirdly, it is factually incorrect to allege that PBM (as the petitioner in the winding-up proceedings of BGAH) or Greenwood had failed to inform the court about the Vessel Co Share Allotment at the time of the petition.  In fact, PBM pleaded its knowledge and understanding of the Vessel Co Share Allotment in the petition^[40] based on the documents then available to the liquidators of OSL.  Greenwood stated that PBM received absolutely nothing out of the alleged vessel purchase agreement.  This was not disputed by Chu, or the directors of BGAH, Kwok Kai and Zhu Xiwu, in the application of BGAH to strike out the winding-up petition and the winding-up proceedings of BGAH.  There can be no basis to criticise the conduct of PBM or Greenwood.

58.  Fourthly, it is plainly impermissible for Chu to relitigate the issues in the winding-up proceedings of BGAH (namely, whether the PBM Loan has been discharged and whether the alleged vessel purchase agreement existed).

59.  For all the above reasons, it is clear that the AA-NFR Letters could not have any or any important impact on the outcome of the case or in this appeal.  This is an additional basis for rejecting the admission of the new evidence on appeal.

60.  As mentioned, the New Evidence Summons is dismissed.  We turn to consider Grounds 1 to 9 in the notice of appeal.

Grounds 1 and 2: lack of locus standi to bring derivative action

61.  Grounds 1 and 2 challenge the finding that Chu has no locus standi to bring the double derivative action.  It is contended that the judge erred in §51 of the Decision in finding that PBM is not under wrongdoers’ control as OSL is controlled by “independent liquidators” as officers of the court under the supervision of the BVI court, and PBM its wholly owned subsidiary is similarly not under wrongdoers’ control.  The OSL liquidators cannot be regarded as independent as they are the very persons against whom wrongdoing is alleged.  The judge erred in §52 in holding that Chu is not left without a proper and alternative remedy as his remedy lies in the liquidation regime and he should apply to the BVI court if he is aggrieved by the OSL liquidators’ conduct.  The existence of an alternative remedy does not bar a plaintiff from bringing a derivative action^[41].  Furthermore, the legal and equitable relief sought in this derivative action is different from the relief previously sought in the unsuccessful application in the BVI court to remove the OSL liquidators. 

62.  The applicable principles have been set out correctly in the Decision at §§47 to 48.  They do not appear to be disputed by Chu.  In gist, where a wrong has been done to a company, it is the company itself which is the proper plaintiff.  A derivative action is only permitted where it can prima facie be shown that the alleged wrongdoers are in control of the company, so as to enable them to stifle any proposed action against themselves.  A derivative action is not permitted to be brought where a company is in liquidation.  The rationale is that the company in liquidation, as well as its wholly-owned subsidiary, comes under the control of the court through the liquidator as an officer of the court and is no longer in control of the wrongdoers^[42]. If another adequate remedy is available, the court will not allow the derivative action to proceed^[43].

63.  Where a company is in liquidation, the appropriate remedy of a contributory lies in the liquidation regime.  It is open to the contributory to go to the companies court asking for an order that the liquidator bring the action in the name of the company, or that he is given the right to bring the action in the name of the company, upon the usual indemnity given by the contributory against any consequences of that litigation^[44]. There is clear authority in the Privy Council (Ferguson v Wallbridge) as to the vast distinction between the position where the company is a going concern and where it goes into liquidation.  In the latter situation, there is no longer any necessity for a derivative action because the action can be brought directly in the name of the company, subject to obtaining the directions of the court which acts as a filter against any totally wrong-headed action^[45].

64.  Further, the courts administering laws with respect to bodies corporate will not allow their officers to be subject to an action in another court which is based on the conduct of such an officer in the discharge of duties of the office, whether right or wrong.  The proper remedy is to apply to the court in the proceedings in which the court officer was appointed, and if any wrong has been done by the officer, that court will grant appropriate remedy^[46]. The rationale is that the court is concerned to protect the integrity of the winding-up process under its supervision and control, by taking appropriate steps to prevent any proceedings or conduct which will wrongfully impede that process.  One way in which this can be carried out is to require the grant of leave by the court in respect of an action against an official liquidator, so the court can satisfy itself there is no wrongful interference with the process^[47].

65.  Mr Wong submitted further that the above rationale applies with equal force to a cross-border context, so an aggrieved party in this instance should apply to the BVI court for appropriate directions, rather than to commence proceedings against the liquidators in the Hong Kong court.  This is consistent with the principle of modified universalism, under which the Hong Kong court has power at common law to assist foreign insolvency proceedings and recognise foreign court-appointed office-holders^[48]. It would be anomalous for the Hong Kong court to recognise a foreign court-appointed office-holder and at the same time permit a litigant to interfere with the integrity of the liquidation process by bringing proceedings in the Hong Kong court without first seeking directions from the appointing court^[49]. We are inclined to agree.

66.  The contentions raised in Grounds 1 and 2 of the notice of appeal are misconceived.

67.  The suggestion that since the OSL liquidators are alleged to be wrongdoers in control, they cannot be regarded as independent and therefore the exception to the rule in Foss v Harbottle (1843) 2 Hare 461 is engaged is untenable.  Quite apart from the fact that the judge held as a matter of fact Yen could not have been a wrongdoer in control of PBM^[50], this overlooks the fact that the liquidators are subject to the supervision of the BVI court.  No authority was cited by Chu to support his argument.  As mentioned, there is established mechanism that confers the right on an aggrieved party to challenge the liquidators’ decisions under section 273 of the BVI Insolvency Act 2003 and/or to apply to remove them from their office.  It cannot be said that Chu is improperly prevented from bringing legal proceedings on behalf of PBM against the liquidators for their alleged wrongdoing.  As the judge has mentioned, this is not a situation where Chu is left without an alternative remedy.

68.  The case of Fung Tin Yau v Fung Tin Shing is plainly distinguishable and does not assist Chu.  It was argued in that case a party was precluded from bringing derivative actions as he had presented separate petitions for the winding up of the companies on the just and equitable ground.  K Yeung J (as he then was) rejected this argument as unfair prejudice proceedings are concerned to bring mismanagement of the company to an end and derivative actions are concerned to provide a remedy for misconduct, they serve different functions (at §§68 to 70).  That was not a case where there was proper and adequate remedy for the party bringing derivative actions.

69.  On this basis alone, as Chu has no locus standi to bring this double derivative action, his appeal must fail.  It is not strictly necessary to deal with the other grounds of appeal.  We will do so for completeness.

Grounds 3 to 9: claim precluded by issue estoppel and/or abuse of process

70.  The judge has set out the applicable legal principles at §§54 to 66 of the Decision.  We have summarised earlier the judge’s holdings on issue estoppel, Henderson abuse and the rule against collateral attack on previous judgments.  They will not be repeated.

71.  Before we address Grounds 3 to 9, we wish to point out it does not appear from these grounds that any or any serious challenge was made regarding the holdings that the claims should be struck out for Henderson abuse and/or for mounting collateral attack on previous judgments.  Notwithstanding that Ground 9 began with the general complaint that the judge erred in striking out on the basis of, inter alia, “(c) collateral attacks on the BVI Winding-Up Judgment, BVI Removal Judgment, BVI CA Removal Judgment, A Chan J’s Strike-Out Decision and BGAH Winding-Up Order, or (d) are an abuse of process”, it does not appear from sub-paragraphs (a) and (b) that followed the opening statement in Ground 9 any ground of appeal was raised in substance as regards Henderson abuse or collateral attack.  We do not need to address those parts of the Decision specifically and would only mention them insofar as they may have relevance in our consideration of Grounds 3 to 9.

(a) The BVI judgments (Grounds 3, 5 and 8)

72.  Ground 3 contends that the judge erred in finding that the BVI Removal Judgment and the BVI CA Removal Judgment are final judgments to give rise to issue estoppel^[51]. Chu argued they are interlocutory decisions which do not decide any question finally.

73.  We reject this contention.  For the purpose of issue estoppel, what is important is not the stage of an action at which a matter is decided, but whether the decision is final in the sense that it cannot be reopened in the action except by an appeal^[52].  Whether a judgment is interlocutory or final depends on the nature and substance of the ruling^[53]. The judge had considered in detail what in substance was decided in the BVI courts.  In ruling that there was no due cause to remove the OSL liquidators (the matters complained of included their conduct as PBM directors in causing PBM to petition for the winding up of BGAH), it was an essential step in the ruling that the liquidators had not committed any misconduct or wrongdoing.  We agree with the judge that the BVI Removal Judgment and the BVI CA Removal Judgment are plainly final judgments over the issue of alleged misconduct of the OSL liquidators and whether they should be removed.

74.  Ground 5 argues that the judge erred in rejecting Chu’s contention that the OSL liquidators’ conduct as directors of PBM is governed by Hong Kong company law and falls within the exclusive jurisdiction of the Hong Kong courts^[54].

75.  We agree with Mr Joffe this is missing the point. It matters not whether the issue is governed by Hong Kong company law.  What matters is that Chu’s complaint in the BVI Removal Application concerned PBM’s commencement of the winding-up proceedings in Hong Kong against BGAH and implicated Greenwood’s role as PBM’s director.  His complaint about the OSL liquidators’ conduct as directors of PBM was an issue determined in the BVI Removal Application and it is not permissible for this to be relitigated in the derivative action^[55].

76.  Ground 8 argues that the judge erred in dismissing Chu’s application to re-amend ASOC, as DRASOC introduces new allegations such as the “direct conflict of interest for approving a loan on the part of PBM to benefit [Greenwood]”^[56], which have not been determined in the BVI Removal Judgment and the BVI CA Removal Judgment.

77.  This argument is without merit.  DRASOC §72D(5) challenges the propriety of the Security Assignment Deed.  This is the same as Complaint 1B in the BVI Removal Application, as noted by the judge, and was rejected in the BVI CA Removal Judgment at §162, when leave was refused to adduce new evidence on appeal as this evidence is clearly not effectively decisive of the issue to which it was adduced^[57]. Besides, whether leave should be granted to raise a new allegation in DRASOC is beside the point, when Chu lacks the locus standi to bring this derivative action.

(b) A Chan J’s Strike-out Decision (Grounds 6, 7^[58] and 9(2))

78.  Ground 6 argues that the judge erred in holding that Chu had privity of interest in the winding-up proceedings against BGAH^[59]. The judge should have held that no issue estoppel arises from the winding-up proceedings because Chu was not a party to A Chan J’s Strike-out Decision but merely a witness in support of BGAH.  Mere commercial interest in the outcome of the litigation is insufficient^[60] and Chu’s 51% indirect shareholding in BGAH is not sufficient to establish privity of interest^[61]. 

79.  Mr Wong submitted on behalf of Lau that he did not rely on A Chan J’s Strike-out Decision to establish issue estoppel.  His case before the judge was that it is a collateral attack against that decision to allege any breach of duty against Lau when the very premise of such breach was rejected by A Chan J.  His submissions on collateral attack were accepted by the judge as a basis for striking out the derivative action^[62].  For the proposition that a collateral attack on a previous judgment may be an abuse of process, it is not necessary to establish that the parties to the later proceedings were privy to the parties to the earlier proceedings, if it is demonstrated there is manifest unfairness that the same issues should be relitigated or the administration of justice would be brought into disrepute^[63]. The judge took the view that this action is a “clear example of a scandal to the administration of justice if Mr Chu were allowed to relitigate by changing the form of the proceedings into a double derivative action and set up the same complaints for breach of duties against D1-D4”, and “It is particularly egregious given the previous judicial criticisms against Mr Chu for making attempts to frustrate the OSL [liquidators’] investigations into his alleged misfeasance”^[64]. The judge also noted that Chu had exercised the full opportunity to advance his case in the winding-up proceedings of BGAH^[65].

80.  Mr Wong made no submissions regarding the correctness of the judge’s holding that Chu had privity of interest in the winding-up proceedings against BGAH.  Lau has filed a respondent’s notice seeking to affirm the Decision on the additional ground that to the extent the derivative claim against him is premised on the existence of the alleged Acquisition Agreement, it should be struck out as an abusive attack on A Chan J’s Strike-out Decision which rejected the case of BGAH on the alleged Acquisition Agreement as “so full of holes to be credible or bona fide”^[66].

81.  Mr Cheung took a different stance on behalf of Yen and submitted the judge is correct in holding that Chu had privity of interest in the winding-up proceedings against BGAH, as Chu’s position and BGAH’s position in the winding-up proceedings were aligned.  Chu held or controlled 51% of BGAH through two corporate vehicles.  He also held or controlled the remaining interests in BGAH indirectly through OSL and PBM, with Lau being the other party holding such interests indirectly.  He had a personal interest in advancing his case based on the alleged Agreed Treatment and Acquisition Agreement, so as to avoid a winding-up order against BGAH and exposure of misfeasance alleged against him.  As mentioned, he had full opportunity to advance his case in the BGAH winding-up proceedings.  Hence, issue estoppel would operate against Chu arising from the winding-up proceedings^[67].

82.  The Court of Appeal judgment in Lo Kai Shui v HSBC International Trustee Limited & Ors was handed down in August 2023, after the hearing took place before the judge in July 2023 but before the Decision was handed down in October 2023.  The first instance decision in Lo Kai Shui was cited to the judge at the hearing^[68].  The appeal court allowed the appeal against the ruling below that there was privity of interest of a non-party in the particular circumstances for the purpose of issue estoppel and discussed a number of authorities on this topic at §§54 to 100.  In this appeal, Mr Wong cited this authority but only referred to the latter part of the judgment at §§104 and 116 on abuse of process.  Mr Cheung did not mention this authority and only cited the first instance decision in Lo Kai Shui which was allowed on appeal.

83.  It seems to us that to strike out the derivative action on abuse of process due to its collateral attack on A Chan J’s Strike-out Decision may provide a surer basis, rather than invoking issue estoppel arising from A Chan J’s Strike-out Decision and his winding-up judgment.  We prefer to uphold the judge’s ruling on this basis.  It is not necessary for us to express a firm view regarding the judge’s holding on privity of interest.  We would merely say we have some reservation whether the positions of Chu and BGAH were so aligned to give rise to privity of interest between them in the winding-up proceedings, given the somewhat narrow approach for the doctrine of privity for this purpose as discussed in the authorities mentioned in Lo Kai Shui.

84.  These dispose of Ground 6.

85.  Ground 7 argues that the judge erred in finding issue estoppel arose from the determination of the winding-up petition against BGAH^[69]. Chu repeated the argument below that a liquidator may go behind a judgment against the company in his adjudication of a proof of debt and a winding-up order is procedural in nature and does not make any final adjudication^[70].

86.  The judge rejected this contention and held that a decision on a winding-up petition may give rise to a binding finding capable of supporting an estoppel in relation to the issue decided, citing Re Lam Kwok Hung Guy, ex p Tor Asia Credit Master Fund LP [2022] 4 HKLRD 793 at §§69 and 70.  Asia Master Logistics Ltd was disapproved by the Court of Appeal in Re Lam Kwok Hung Guy at §§67 and 71.  In light of the clear holding in Re Lam Kwok Hung Guy, this contention of Chu must fail.  A Chan J rejected the case of BGAH as being “so full of holes to be credible or bona fide” such that the threshold of showing a bona fide dispute on substantial ground with precise evidence concerning issues on the PBM Loan, the Agreed Treatment and Acquisition Agreement was not met.  This is a binding finding.  Chu sought to mount a collateral attack on this finding by his claims in the derivative action and that constitutes an abuse of process.

87.  In Ground 9(2), it is argued there is new evidence which justifies the re-consideration of A Chan J’s Strike-out Decision, being the Zhou Affirmation and the Ma Affirmation, in which both deponents spoke in support of Chu’s case regarding the Acquisition Agreement.  We agree entirely with the judge in placing no weight on such new evidence^[71]. The Court of Appeal in CACV 557 & 591/2021 has held that the Zhou Affirmation could have been adduced with reasonable diligence for the winding-up proceedings and it did not have an important influence on the outcome of the appeal^[72]. The Ma Affirmation is similar to the Zhou Affirmation and could not have any important influence on A Chan J’s Strike-out Decision, the winding-up judgment, the BVI Removal Judgment, or the BVI CA Removal Judgment.

(c) The remaining grounds (Grounds 4^[73] and 9(1))

88.  Ground 4 contends that the judge erred in rejecting Chu’s argument^[74] that the BVI winding-up judgment against OSL gave rise to issue estoppel, as the subject matter of that judgment was whether OSL should be wound up on the just and equitable ground and is different from the issues raised by Chu in the derivative action.  It also contends that the judge was wrong in holding that Chu was barred by issue estoppel arising under the Privy Council judgment from re-opening the issue of the Splitting Arrangement, and that Chu’s claim in the derivative action was as a result frivolous, vexatious or without evidential foundation^[75].

89.  As pointed out by Mr Wong, the BVI winding-up judgment and the Privy Council judgment hardly featured in the judge’s reasoning for striking out the derivative action or are of limited relevance.  Whilst the judge did mention the Privy Council judgment has the effect of debarring Chu from re-opening the issue of the Splitting Arrangement in that it was held that the Splitting Arrangement would not achieve a clean break between Chu and Lau as an alternative to winding up OSL, this is a relatively unimportant reason for striking out the derivative action and is of little moment in this appeal.

90.  In Ground 9(1), it is argued that the judge erred in striking out the claims in ASOC and refusing leave to amend as per DRASOC on the basis of the other grounds identified in the notice of appeal.  As we have rejected the other grounds, this ground falls away. 

91.  The above disposes of the arguments properly advanced in the notice of appeal.

Chu’s two submissions

92.  We would like to make a few remarks about Chu’s two submissions totalling some 30 odd pages, as supplemented by his oral submissions.

93.  As we have mentioned at the outset, large parts of his submissions were premised on the new evidence which he sought to adduce on appeal.  We have given reasons why the application to adduce new evidence should be rejected and those parts of his submissions would not be considered.

94.  Chu asserted that the judge wrongly applied the principles on striking out set out in §46 of the Decision.  He contended that the dispute between him and Lau on the interests in PBM has yet to be resolved, or has not been fairly and impartially resolved, and this must be a matter within the jurisdiction of the Hong Kong courts, such as by seeking substantial damages including but not limited to this derivative action and in other actions he brought in Hong Kong.  This is missing the point completely.  For the reasons given by the judge, with which we agree, he simply has no locus standi to bring this derivative action.

95.  He also made various complaints against Lau (Lau’s abandonment of the US$70 million issue in the trial of HCA 228/2017; Lau made an ex parte petition for the winding up of OSL in an ambush based on a pack of lies, material non-disclosure and misleading fundamental misrepresentations), which he asserted should be dealt with through the “re-trial process”^[76] of the derivative action, as the BVI courts made no ruling on Lau’s breach of fiduciary duty as a director of PBM and a director of BBGOS in the litigation concerning OSL.  These complaints do not feature in the grounds of appeal and are of no relevance to this appeal.

96.  Chu submitted there are “two important core facts”^[77] in the derivative action.  The first is that Lau concealed the fact that his ex parte winding-up action had caused PBM to default as joint guarantor in the vessels financing of BBGOS, and was in breach of his fiduciary duties as director of PBM and director of BBGOS.  The second is that up to this day, this is still deliberately concealed from the BVI courts and the Hong Kong courts by the OSL liquidators and Greenwood as the current sole director of PBM.  He contended the “two important core facts” are entirely free from the limitations of the other major points of law raised in Grounds 1 to 9 in the notice of appeal.  Insofar as the “two important core facts” are premised on the new evidence, and as the new evidence may not be adduced on appeal, we will not consider them.  Further, as the “two important core facts” are not covered in Grounds 1 to 9 in the notice of appeal, as Chu would appear to have acknowledged, they will not be considered in this appeal.  

97.  Chu raised other contentions attacking the statutory demand that the OSL liquidators caused to be issued against BGAH.  As these contentions rely on the new evidence he sought to adduce on appeal and they do not feature in the grounds of his notice of appeal, they are of no relevance and will not be considered.

Conclusion and costs

98.  For all the above reasons, we dismiss this appeal.

99.  As we have heard submissions on costs, the order on costs that we make is not an order nisi, but the assessment made on a summary basis is nisi, and will become absolute if there is no application in writing to vary the gross sum assessment within 14 days of this judgment.

100.  As we have dismissed the Stay Summons, the New Evidence Summons and this appeal, we order Chu to pay the costs of Lau, Yen and Greenwood, who took part in the summonses and the appeal.  We see no reason why costs should not follow the event in all instances.

101.  Chu submitted that the costs of the Stay Summons, which he informed the court would be withdrawn a week before the hearing of the appeal, should follow the event of the appeal and the New Evidence Summons.  Since the New Evidence Summons and the appeal are dismissed, he should bear the costs of the Stay Summons, whichever way one looks at it.

102.  Lau, Yen and Greenwood sought costs on an indemnity basis due to the total lack of merit of the applications and the appeal.  We are inclined to agree the applications and the appeal are so lacking in merits that indemnity costs are justified to mark the court’s disapproval.  Chu’s pursuit of the applications and the appeal borders on an abuse of process of the court.

103.  The Stay Summons was taken out seven weeks before the hearing of the appeal, purportedly to stay the appeal pending the determination of the Appeal Committee on BGAH’s application for leave to appeal pursuant to rule 7.  Chu withdrew his application a week after all three defendants have lodged submissions to oppose it.  Quite apart from the total lack of merits, his notification to withdraw the application came far too late.

104.  The New Evidence Summons is a non-starter in a number of ways.  We dismissed it due to lateness in taking out the application, without proper explanation to justify the delay, not to mention how it could be demonstrated that the reasonable diligence requirement might be satisfied.

105.  It is wholly misconceived to bring this double derivative action without meeting the threshold requirement of locus standi, which should be the starting and finishing point.  This action cannot be salvaged no matter how much further evidence Chu might unearth in the course of other legal proceedings in which he is engaged with Lau and/or the liquidators. It is plain that the striking out of this action, on the ground of lack of locus standi alone, must be the right decision.

106.  We have considered the statements of costs submitted by Lau, Yen and Greenwood.  We will assess the costs of each regarding the two summonses and the appeal on a global basis.

107.  The amounts of costs claimed by each are: $1,679,433 (Lau), $989,629 (Yen) and $1,821,277 (Greenwood).  We assess the costs recoverable by each on an indemnity basis at: $1,450,000 (Lau), $848,000 (Yen) and $1,630,000 (Greenwood).

108.  We order the amounts paid into court by Chu as security for costs for the appeal together with interest accrued thereon be paid out to Lau, Yen and Greenwood.

[1] [2023] HKCFI 2703

[2] Kwan VP gave directions on 13 February 2026 that English would be used for the hearing of the appeal and the New Evidence Summons, with leave to Chu to make submissions in Chinese.

[3] The original in Chinese reads: 新證據強化和證明的 (HCA 1885) 案情是香港司法必然管轄權

[4] We requested the legal representatives of the other parties at the hearing to review the documents exhibited by Chu and the hearing bundles to ascertain if the documents were placed before the judge.  Dentons replied after the hearing by letter dated 4 May 2026 with an updated index to hearing bundles C1 to C7a and Core Bundles CB5 to CB9, indicating whether the relevant documents have been placed before the judge at the hearing on 18 July 2023.

[5] With Mr Lai Chun Ho

[6] With Mr Justin Ho and Mr Jonathan Ng

[7] In Chinese: 北斗控股有限公司

[8] In Chinese: 北部灣遠洋集團有限公司

[9] In Chinese: 輝寶亞洲有限公司

[10]   Decision, §83

[11]   Judgment of Justice Roger Kaye QC (Ag)

[12]   Decision, §101

[13]   BGAH appealed against A Chan J’s Strike-out Decision and the winding-up order.  It applied for leave to adduce new evidence on appeal.  Among the new evidence was the affirmation of Zhou Zhuoli dated 21 January 2022 (“Zhou Affirmation”).  The application was rejected by the Court of Appeal on 17 November 2022, on the ground that the Zhou Affirmation could have been adduced for the hearing below with reasonable diligence and it did not have an important influence on the outcome of the appeals ([2022] HKCA 1723).  On 9 April 2025, BGAH’s appeals were dismissed by the Court of Appeal (CACV 557 & 591/2021; [2025] HKCA 322).  On 24 April 2026, the Appeal Committee dismissed BGAH’s applications for leave to appeal to the Court of Final Appeal under rule 7(1) (FAMV 147 & 148/2025).

[14]   Judgment of Wallbank J (Ag)

[15]   Decision, §§38 to 42

[16]   Decision, §§43 to 45

[17]   Decision, §§47 to 53

[18]   Decision, §§71 to 77, 85 to 92

[19]   Decision, §§89, 90

[20]   Decision, §92

[21]   Decision, §§69, 70, 78 to 84, 92

[22]   Decision, §§93 to 102

[23]   Zhou Zhuoli (“Ms Zhou”) and Ma Zhengguo (“Ma”) were in the senior management of Guangxi BBG, the parent company of BBGH.

[24]   Decision, §§104 to 106

[25]   Brought by Pacific Bulk Shipping Limited (a company controlled by Lau) and Lau against Topmove Limited (a company controlled by Chu) and Chu.

[26]   Brought by Chu against Lau

[27]   Solicitors acting for the contributories of BGAH (ie Bright Good (Asia) Ltd and Polyrise Team Ltd) in HCCW 251/2019 and for Kwok Kai, a former director of BGAH, in HCA 631/2022.  AA stated they did not act for Kwok Kai in HCCW 251/2019.

[28]   Solicitors acting for the liquidators of BGAH in HCCW 251/2019

[29]   Chu 1^st, §31

[30]   Chu 1^st, §33

[31]   Chu 1^st, §§48, 49

[32]   Referred to as “Tripartite Agreement” in ASOC and Chu 1^st.

[33]   Chu 1^st, §64

[34]   Brought by BGAH by the liquidators and two other companies against a number of former directors and associates with Chu as the 1^st defendant for misappropriation of assets and businesses from BGAH and subsidiaries.

[35]   Chu 2^nd, §7(4)

[36]   Chu 2^nd, §7(9)

[37]   PBM, BGAH, Shining Centre Limited, Palace Centre Limited, Glory BBG Shipping Limited, Hope BBG Shipping Limited

[38]   At §§2(6)(d), 2(7), 54, 59, 63(1)

[39]   At §§13.4; and in Chu 1^st in support of the New Evidence Summons, §64

[40]   At section E2.2 of the petition

[41]   Citing Fung Tin Yau v Fung Tin Shing [2020] 4 HKC 365 at §§65 to 71

[42]   Decision at §47(6), citing Re Shun Kai Finance Co Ltd [2015] 2 HKLRD 264 at §22; Jingang Group Investment Limited v Jaime Che & Ors [2021] HKCFI 948 at §§5 to 6; Shih-Hua Investment Co Ltd v Zhang Aidong & Ors [2018] HKCFI 1234 at §§35 to 37.  See also Ever Joint (Holdings) Ltd v Nice Theme Ltd & Ors [2006] 4 HKLRD 516 at §20(1).

[43]   Decision at §47(6), citing Barrett v Duckett [1995] BCC 362 at 367H.  See also Barrett v Duckett at 368D to 369G, citing two authorities on the effect of liquidation in relation to a derivative action: Ferguson v Wallbridge [1935] 3 DLR 66 at 83 (a decision of the Privy Council); and Fargro Ltd v Godfroy [1986] 1 WLR 1134 at 1136B to E and 1138B.

[44]   Fargro Ltd v Godfroy at 1136C to 1137A, quoting Cape Breton Co v Fenn (1881) 17 Ch D 198 at 208

[45]   Fargro Ltd v Godfroy at 1138B

[46]   Decision at §48, citing Sydlow Pty Ltd (in liq) v TG Kotselas Pty Ltd & Ors (1996) 20 ACSR 47 at 54

[47]   Sydlow Pty Ltd (in liq) at 54

[48]   Re USUM Investment Group Limited [2026] HKCFI 1320 at §§43 to 44, summarising the principles explained by the majority of the Privy Council in Singularis Holdings Ltd v PricewaterhouseCoopers [2015] AC 1675.

[49]   In Salgaocar v Chilton [2018] SGHC 87 at §§69 to 71, it was held in the High Court of Singapore that no distinction should be made between suing a local court-appointed office-holder and a foreign court-appointed office-holder, in both cases leave of the appointing court should be obtained first before proceedings are commenced.

[50]   Decision, §50.  Chu again relied on two judgments (Allied Ever Holdings Ltd v Li Shu Chung & Ors, HCCW 497/2009, 27 November 2017; and Re Luen Tat Watch Band Manufacturer Ltd [2024] HKCFI 546) where criticisms were made of Yen’s conduct as liquidator in another liquidation.  As held in §§107(4) and 108 of the Decision, they are wholly irrelevant.

[51]   Decision, §§71 to 73

[52]   The Law of Estoppel by Michael Barnes QC, at §9.31

[53]   Re Chime Corp Ltd (No 2) [2003] 2 HKLRD 945 at §23

[54]   Decision, §§75 to 76

[55]   Decision, §76

[56]   DRASOC, §72D

[57]   Decision, §77

[58]   Grounds 6 and 7 do not concern Greenwood.

[59]   Decision, §§81 to 83

[60]   Citing China North Industries Investment Ltd v Chum [2010] 5 HKLRD 1 at §81; Chan Benjamin Ki-Wood v Young Won Ken & Ors [2023] HKCFI 240 at §52(4).

[61]   Citing Chan Benjamin Ki-Wood v Young Won Ken & Ors at §52(4): “where the companies that are parties to the 2 sets of proceedings are wholly owned holding company and subsidiary such that they may be regarded as alter egos of each other, or as companies within the same group they have a direct interest in establishing the existence or otherwise of a matter which may impact the business or operations of the group, that would be sufficient to establish privity of interest for the purpose of abuse.”  This case and the quotation mentioned was cited to the judge, see Decision at §56.

[62]   Decision, §§89 to 92

[63]   China North Industries Investment Ltd v Chum at §58; Lo Kai Shui v HSBC International Trustee Limited & Ors [2023] HKCA 983 at §§104, 116.  See also the Decision at §65, citing Secretary for Justice v FTCW [2014] 1 HKLRD 849 at §97 and Chan Benjamin Ki-Wood v Young Won Ken at §53.

[64]   Decision, §92

[65]   Decision, §83

[66]   A Chan J’s Strike-out Decision, §§64, 72

[67]   Decision, §83

[68]   Decision, §55

[69]   Decision, §§78, 79

[70]   Citing Dayang (HK) Marine Shipping Co Ltd v Asia Master Logistics Ltd [2020] 2 HKLRD 423 at §§72 to 76; Parmalat Capital Finance Ltd & Ors v Food Holdings Ltd [2008] UKPC 23 at §8.

[71]   Decision, §§104 to 106

[72]   [2022] HKCA 1723 at §§29, 33, 34

[73]   Ground 4 does not concern Greenwood.

[74]   Decision, §68

[75]   Decision, §98

[76]   In Chinese: 重審的過程

[77]   In Chinese: HCA 1885/2021 兩宗核心重大案情