三河宏祥混凝土有限公司 v. ZHANG YONGTIE (張永鐵) (also known as 張永鉄)

HCA 873/2022

[2024] HKCFI 2330

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 873 OF 2022

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D E C I S I O N

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Introduction

1.  This is the plaintiff’s (“P”) appeal against the Order of Master D. To on 31 January 2024 refusing P’s summons (the “Summons”) for leave to adduce expert evidence relevant to the enforceability and quantum of 2 judgments (the “Judgments”) which P has obtained against the defendant (“D”) in the Sanhe People’s Court, Hebei Province.

2.  Mr James Man appeared for P. Ms Tsang Hoi Ting of ONC Lawyers appeared for D.

3.  ONC Lawyers have indicated to P’s legal representatives, and confirmed by Ms Tsang’s written submissions, that D takes a neutral stance to the appeal.

The Summons

4.  By the summons, P seeks leave to adduce expert evidence on the following 2 issues:

(a)  Whether the Judgments are final and conclusive in the court which pronounced them (“1^st Expert Issue”); and

(b)  When the judgment debtor’s payment was not sufficient to cover all the judgment debts (including interest, costs/expenses, etc.) in 2021, in what sequence the payment should be applied to offset the judgment debt (“2^nd Expert Issue”).

P’s claim

5.  By the present action, P seeks to enforce the Judgments against D. The Judgments concerned 2 loans (the “1^st Loan” and “2^nd Loan” as appropriate).

6.  The Sanhe People’s Court is not a designated court under Schedule 1 of the Mainland Judgments (Reciprocal Enforcement) Ordinance (Cap. 597) (“MJREO”). In particular, it, being a Primary People’s Court, is not a recognised Primary People’s Court in the gazetted list of Primary People’s Courts under s.25(1) of the MJREO. The Judgments are hence not enforceable under that Ordinance.

7.  P’s present cause of action is under common law. To succeed under common law, P has to establish that the Judgments are final and unalterable – Beijing Renji Real Estate Development Group Co Ltd v Zhu Min [2022] HKCFI 1027 at §58, per G Lam JA, and China NPL Holdings Pte Ltd v Mo Haidan [2021] 1 HKLRD 344 at §27, per Lam VP.

The 1^st Expert Issue

8.  In D’s Amended Defence, D denies that P is entitled to enforce the Judgments under common law. The pleaded reason is that D had on 12 September 2022 filed an application to the Langfang Intermediate People’s Court for a retrial.

9.  Whilst that application has since been withdrawn, the denial remains on the face of pleadings.

10.  It is well-known that there is the “trial supervision” system under Mainland laws.

11.  I heed the observations of Lam JA at §65 of Zhu Min, that:

“As shown by To J’s discussion of the case law in Bank of China Ltd v Yang Fan at §§46-51, however, the impact of the procuratorate’s objection procedure on whether a Mainland judgment is final and conclusive for Hong Kong law purposes is a complicated one.”

12.  Having considered parties’ respective pleaded cases, and P’s onus to establish that the Judgments are final and conclusive, I grant P leave to adduce expert evidence on the 1^st Expert Issue.

The 2^nd Expert Issue

13.  In §8 of its Statement of Claim, P pleads that:

“[P] sought to enforce the [Judgments] against [D] in the PRC, but was only able to obtain RMB 1,323,891.30 in respect of the outstanding sum under the [Judgments] on the 2^nd Loan on 17 September 2021. Such sum reduced the costs and interest payable under the [Judgments] on the 2^nd Loan.”

14.  D pleads that it has no knowledge of those pleaded matters, and makes no admission to the same.

15.  Whilst D has on correspondence indicated that it will not raise any objection to P’s case in this regard, it has not amended its Defence to effect any admission.

16.  Having considered parties’ respective pleaded cases, I grant P leave to adduce expert evidence on the 2^nd Expert Issue.

Conclusion

17.  For the above reasons, I allow P’s appeal. I grant P leave to adduce expert evidence on the 1^st and 2^nd Expert Issues. I set aside the learned Master’s Orders to the contrary.

Expert directions

18.  On the facts of this case, given parties’ respective pleaded cases, and given in particular the absence of any pleaded case by D on the Expert Issues, I have considered the appropriateness of the appointment of a single joint expert. I have invited parties’ views on the same. Mr Man’s submissions are that given the controversial nature of the issues, and in particular the 1^st Expert Issue, it may be more appropriate for each party to appoint its or his own expert. In the end, I am persuaded that that should be so.

Disposition

19.  I grant P leave to adduce expert evidence on the 1^st and 2^nd Expert Issues. I give the further directions as set out in the Amended Notice of Appeal.

20.  On costs, and as agreed between the parties, I order that the costs of and occasioned by the Summons, including the present appeal, be costs in the cause of the trial.