RE SUCCESS LANE DEVELOPMENTS LTD

HCCW 3/2025

[2026] HKCFI 5019

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES WINDING-UP PROCEEDINGS NO 3 OF 2025

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J U D G M E N T

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1.  Nine applications or appeals have been listed before me to be heard together. At the outset of the hearing, I said I would deal with them in the chronological order in which they were issued, apart from the application for a Restricted Application Order (“RAO”) which is identified as Application V in the Court Bundle, and which I will deal with last.

2.  The first application in time is numbered “VI” and is an application by Mr Cheung Moon Hoi (“Cheung”) and his wife, Ms Yung Mei Chun (“Yung”) (together “the Applicants”), for an order setting aside the decision of Mr Wong Sun Keung and Ms Tsui Mei Yuk Janice (“the Provisional Liquidators”[1]) rejecting the Applicants’ Proof of Debt dated 30 April 2025 (“the POD”).

The origin of the dispute

3.  The background is as follows. In about March or April 2022, Success Lane Development Limited (“the Company”) entered into a rental agreement with New World Millennium Hong Kong Hotel (“the Petitioner”) for the lease of a room at hotel owned by the Petitioner.  The Applicants were at the time the directors of the Company, and they moved into the room.  They also arranged for a number of items said to amount to approximately 200 boxes (“the Stored Items”) to be moved in with them.

4.  A second lease agreement was entered into for an extended period up to 11 July 2022, followed by a third agreement up to 14 August 2022. The Applicants continued to occupy the room but no rent was paid after that date. It is not clear from the evidence before me exactly when they vacated, but on or around 4 September 2022 they asked to retrieve the Stored Items, which indicates that by that date they had left.

5.  However, the Petitioner refused to allow them to retrieve the Stored Items because of a dispute regarding the amount of rent due since 14 August.  The difference at that stage amounted to only HK$5,460.

6.  The Stored Items remained in the room until around 18 May 2023, when they were moved by the Petitioner to a storage area in the underground car park of the hotel. The Petitioner refused to return them, claiming a lien in respect of the unpaid rent.

7.  On 2 June 2023, the Company issued a Writ against the Petitioner claiming damages of HK$2 million for alleged damage to the Stored Items.  On the same day, the Company sought an ex parte injunction including various orders relating to the Stored Items. The injunction was initially refused, but was subsequently granted by Judge Yip on 12 July 2023. It was later set aside on 25 September 2023 by Deputy District Judge M Lam after an inter partes hearing, on the grounds inter alia of material non-disclosure by the Company and abuse of the ex parte procedure.  This decision was later affirmed by the Court of Appeal.

8.  At the heart of the present dispute is the ownership of the Stored Items. In the Petitioner’s action for recovery of rent, the Company claimed that they were the Company’s property; it is now alleged by the Applicants that the Stored Items belong to them personally.

Procedural history: an abridged summary

9.  It is not necessary for present purposes to rehearse the whole of the procedural history, but some explanation is relevant. Following the Petitioner’s demand for rent and the Company’s Writ mentioned above for the return of the Stored Items, numerous applications were made, including four applications for leave to appeal. Eventually these were all dismissed in the strongest terms by the Court of Appeal on 30 August 2024.  The Court of Appeal included a Postscript in its judgment, which noted –

“Such baseless and indiscriminate applications are an unwarranted drain on the courts’ limited resources whose fair distribution in one of the underlying objectives of our rules. Firm and robust case management is needed, and unwarranted and baseless interlocutory steps will be treated as such. Although the plaintiff is a limited company, its directors should beware of the courts’ power to order costs against third parties such as directors (see section 53(2) of the District Court Ordinance, section 52A(2) of the High Court Ordinance, and Order 62 rule 6A of the Rules of the District Court and Rules of the High Court).”

10.  Two further appeals were then dismissed by the Court of Appeal on 15 October 2024 confirming costs orders against the Company. Once again, the Court of Appeal added a further warning in the following terms (paragraph [34] of the judgment) –

“The defendant has through counsel pointed out that the plaintiff’s director, Ms Yung, was the subject of a restricted application order in previous litigation, and invited this court to make such an order against the Plaintiff. We have decided not to do so in the context of the present applications, though the plaintiff should be aware that this does not mean this court or another court will not do so in future.”

The Winding-Up Order

11.  Ten days later, on 24 October 2024, the Petitioner served a statutory demand for a total sum of HK$734,667.58, representing the amount it was then owed pursuant to no fewer than fifteen unpaid orders for costs that had been made in one or other of the sets of proceedings to date.[2]  Then, on 3 January 2025, the Petitioner issued the Winding-Up Petition which was the commencement of the action now before me.

12.  On 17 March 2025 (following further unsuccessful challenges by the Company) Deputy High Court Judge Garry CC Lam ordered the Company to wound up. I have not seen a copy of the Winding-Up Order itself, but a letter dated 17 March 2025 from the Official Receiver shows that the Official Receiver was appointed the Provisional Liquidator following the making of the Winding-Up Order. The letter went on to appoint Mr Wong and Ms Tsui as the joint and several Provisional Liquidators, pursuant to section 194(1A) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap 32).

13.  On 20 November 2025, Master Hui ordered that the Company be wound up in a summary manner, and that the Provisional Liquidators be appointed the Joint and Several Liquidators. He further ordered that there should be no meetings of creditors and contributories under section 194 or 206 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap.32).

14.  The Applicants then sought to prove in the liquidation.  On 30 April 2025, they served the POD, based on the assertion that the Stored Items were their personal property.  The POD stated claimed a debt by the Company as a result of the damage to the Stored Items, now said to be worth HK$3 million. The Provisional Liquidators rejected the POD on 10 June 2025, whereupon the Applicants issued a Summons (dated 24 June 2025) as “creditors and former directors of the Company”, applying to set aside the Provisional Liquidators’ decision.

Application VI

Legal Principles on reversing a decision to reject a POD

15.  Appeals against the decision by a liquidator to reject a proof of debt are governed by Rule 95 of the Companies (Winding-Up) Rules (Cap.32H) –

“If a creditor or contributory is dissatisfied with the decision of the liquidator in respect of a proof, the court may, on the application of the creditor or contributory, reverse or vary the decision; but, subject to the power of the court to extend the time, no application to reverse or vary the decision of the liquidator in a winding up by the court rejecting a proof sent to him by a creditor, or person claiming to be a creditor, shall be entertained, unless notice of the application is given before the expiration of 21 days from the date of the service of the notice of rejection.”

16.  In In the Matter of Fortune King Trading Limited (In Liquidation) [2020] HKCFI 353, Coleman J summarised the principles as follows –

“(1) An appeal under Rule 95 against a liquidator’s adjudication is a hearing de novo, at which the Court may confirm, reverse or vary the liquidator’s decision.

(2) The purpose of the hearing is for the Court to determine to what extent the applicant should be allowed to rank as a proving creditor. Therefore, the Court is bound to decide the rights of the applicant in the light of all of the evidence which is before the Court, and not merely to express a view as to whether the liquidator was right or wrong in rejecting the proof on the evidence then available to the liquidator at the time he rejected it.

(3) A liquidator who defends his decision to reject a proof is no longer acting in a quasi-judicial capacity, but is cast in the role of an adversary.

(4) The onus of proof is on the applicant to show on a balance of probabilities that a real debt is due to him.

(5) The requirement for a liquidator or trustee in bankruptcy in admitting or rejecting a proof is to require some satisfactory evidence that the debt on which the proof is founded is a real debt, and this is a relatively low threshold. Nevertheless, the liquidator or trustee is entitled to go behind mere form so as to get at the truth.

(6) On an appeal against the rejection of a proof, the applicant’s burden is to prove a real debt, to be established by credible evidence.

(7) Hence, there may be cases, for example where probative evidence is scarce, where the incidence and standard of proof has some significance. The burden remains with the applicant to establish proof of the claim on the balance of probabilities on whatever evidence is produced.

(8) The applicant is not entitled to say that his claim should be admitted because this is all the evidence that he has and because the best evidence has been lost or destroyed. Even in such a situation, the burden remains with the applicant to prove his claim on the balance of probabilities on the evidence as is produced.

(9) But the Court is not bound to accept at face value any accounts of a company previously prepared, and is entitled to go behind them to form its own conclusion as to the truth. Even if the accounts in question have been audited, where there is evidence to show that the accounts are or may be inaccurate, or to cast doubt on the way in which the auditor carried out his duties, this will be a factor to take into account.”

Were the Provisional Liquidators justified in rejecting the POD?

17.  According to the POD, the Applicants claim as creditors of the Company. The debt is stated to be HK$3 million. Under the heading “Details of any documents by reference to which the debt can be substantiated”, the Applicants wrote –

“The debt arose as a result of loss and damage to personal belongings brought by the Company and placed under its custody, initially stored in a room at New World Millenium Hong Kong Hotel and subsequently locked in the Hotel car park, with the Company acknowledging both the loss and its consent to holding the items.”

Under “Particulars of how and when the debt was incurred”, the Applicants wrote –

“See above.”

18.  The Instructions to Creditors as to Proofs accompanying the Form of Proof draws attention to rules 79-91 of the Companies (Winding-Up) Rules, in particular Rule 82(2) which provides as follows –

“There shall be specified in the proof any documents by reference to which the debt can be substantiated and such documents or a copy of such documents shall be submitted together with the proof.”

The accompanying Notes add –

“The whole or any part of the claim made in the proof may be rejected if the necessary supporting documents are not submitted.”

Further, the Instructions begin with the following advice –

“Great care should be taken to fill up the form of proof correctly. If it is not correctly filled in, not only will you cause considerable inconvenience to yourself and the Official Receiver or liquidator, but also your rights to dividends and any security held by you may be adversely affected. If you have any difficulty in filling up the form, you should consult your solicitor or accountant.”

19.  The first, and most obvious problem with the Applicants’ POD in this case is that the “personal belongings” in respect of which damages are claimed are the same Stored Items that were the subject of the litigation between the Company and the Petitioner. In that case, the Applicants – who were at the time the sole directors of the Company – maintained its claim against the Petitioner on the basis that the Company owned the Stored Items. Now, for the first time, the Applicants say that the Stored Items were their personal property rather than that of the Company.[3]

20.  No reason or explanation is or ever has been given for the inconsistency. Nor has any evidence been provided to support the claim that the Stored Items were the personal property of the Applicants rather than, as has been maintained for the last three years, that of the Company.

21.  It is not as if the Applicants have, after further investigation and/or analysis, reached the conclusion that they were initially wrong about the ownership of the Stored Items. In one of his very recent affirmations,[4] Cheung repeatedly and consistently continues to refer to “the Company’s Belongings”.  His affirmation is confirmed by the affirmation by Yung, dated 24 July 2026.  So it is not that they have changed their case: they are running both arguments at the same time, oblivious to the fact that the arguments are mutually contradictory.

22.  The second problem with the POD is that the amount claimed has, without any explanation, increased by HK$1 million the amount originally claimed by the Company against the Petitioner.  In a letter to the Provisional Liquidators dated 29 April 2025, the Applicants said that –

“Based on the most recent valuation, the estimated value of these belongings exceeds HK$3 million.”

If such a “recent valuation” exists, it has never been produced, nor has any explanation been given for its absence.

23.  I also have regard to the fact that as long ago as 27 March 2024, the Company was ordered by the court to provide particulars of the stored items. I have not seen a copy of that order, but it is referred to in the judgment of DHCJ Gary CC Lam dated 18 March 2025 at paragraph [31], where the judge said –

“…although the Company started its action in DCCJ 2191/2023 back in mid-2023, the Company still has not provided any particulars of the Stored Items, despite the Court Order therein made on 27 March 2024 that the Company had, in essence, to provide such particulars by way of discovery, and there is, of course, not yet any evidence on the value of such Stored Items. On 13 March 2025, an Unless Order was made therein for the Company to make such discovery next week or so, but it is incumbent on the Company to present sufficient evidence before the Companies Court to present sufficient evidence before the Companies Court to resist the winding up petition, rather than asking the Court to wait until the Company’s compliance with the Unless Order in the other case.”

In March 2024, the Applicants were still the directors running the Company, and no winding-up order had yet been made against it.  They have had every opportunity to produce evidence supporting their claims about the value of the Stored Items, if such evidence ever existed, but have not done so.

24.  The third problem with the POD is that now, instead of the Company claiming that the (alleged) damage to the Stored Items was the fault of the Petitioner, the Applicants allege that it was the fault of their own Company while they were running it.

25.  The fourth and final problem is that no cause of action against the Company is, or has ever been, identified, and no particulars are given of the duties or breach relied on. At least the Company’s claim against the Petitioner had the outlines of an arguable cause of action, but no such basis has been explained for the Applicants’ claim against the Company. On the supposition that the Stored Items did, in fact, belong to the Applicants personally, the only thing that the Company could have done to protect them from damage would have been to pay (if necessary under protest) the arrears claimed by the Petitioner. The Applicants cannot now blame the Company for what they themselves decided it should not do.

26.  If they really did own the Stored Items personally, their claim would be a proprietary claim against the Petitioner for return of the Items themselves, not a claim for damages against the Company; but that, of course, would not give them standing to oppose the winding-up petition as creditors of the Company.

27.  Counsel for the Provisional Liquidators has quite properly drawn my attention to the decisions of Coleman J in Re Fortune King Trading Limited [2020] HKCFI 353 and of the Court of Appeal in The Joint and Several Liquidators of Joy Rich Development Ltd v Chen Muhua (aka Winky Chan) and Another (06/02/2024, CACV381/2022) [2024] HKCA 122 regarding the extreme caution that the court should exercise when asked to disbelieve or disregard the evidence of a witness who has not been cross-examined and has not had the opportunity to explain himself. The bar is not, however, absolute: as Coleman J put in Re Fortune King at [5] –

“Even without cross-examination, a witness’s evidence given on paper could be disbelieve (sic) or disregarded if the evidence is incredible, such as in a case where some contemporary document plainly contradicts the affidavit evidence.”

28.  In any event, this is not a case in which I have to decide whether or not a witness’s evidence on paper should be disbelieved or disregarded. The Applicants’ claim to be owed a debt by the Company is simply not coherent.  Nor is it a case of their evidence not being credible: there simply is no evidence.

29.  For those reasons, I have no hesitation in dismissing the appeal against the Provisional Liquidator’s decision to reject the POD.

The other applications

30.  Apart from Application V (the RAO application) I can deal with the remaining applications quite briefly. Yung presented some oral argument but merely repeated points that had already been made in writing. She then (as I will deal with in detail below when I come on to the RAO application) absented herself from court during the five-minute adjournment I had allowed for her to locate a document, and failed to return until 4:30pm, by which time I had already made my decisions on the remaining applications. I have nevertheless taken into account the written submissions made by the Applicants.

Application I

31.  By an Order dated 6 August 2025, Master Yip dismissed two summonses dated 4 June and 23 June 2025 respectively. The first was a summons taken out by Cheung alone, and sought orders (a) to produce “all documents – including but not limiting (sic) to emails, letters, and fax records – sent to and from any parties concerning any civil proceedings involving the Company from 17 March 2025 to the present; (b) an order requiring the Provisional Liquidators to affirm whether they intended to pursue the leave to appeal application filed on 16 January 2025 in DCCJ 2191/2023; and (c) an order removing as Provisional Liquidator Vision A.S. Limited (later amended to the Provisional Liquidators personally).  The second summons was issued by the Applicants jointly, and sought a stay of any decision or act by the Provisional Liquidators pending the determination of that summons and the summons seeking their removal.

32.  No legal basis was put forward for the court to order the production of the documents sought, nor for the orders requiring the Provisional Liquidators to make the affirmation or staying the winding-up. It was also argued by Mr Ng that the attempt to obtain documents was plainly a “fishing expedition”, and he pointed out that Cheung had no locus standi, as he was neither a creditor (the POD having been rejected) nor was he a contributory of the Company.

33.  On the issue of locus, Cheung had previously relied on a letter apparently signed by Cheung Kwong Hoi, the sole registered shareholder in the Company, on 29 December 2015, authorising Cheung to represent him on all matters related to the shareholder’s right in the Company.  However, Cheung omitted to mention that Cheung Kwong Hoi had died in or about May 2019. Any authority conferred by the letter lapsed on his death.

34.  Before me, Yung drew attention to the Grant of Letters of Representation of the estate of Cheung Kwong Hoi that had been taken out by Cheung and which DHCJ Reyes SC had allowed to be admitted in evidence. The Grant was only taken out on 13 May 2026, and therefore conferred no standing on Cheung at the time of Master Yip’s order. Nevertheless, it is common ground that the appeal before me was a hearing de novo. I therefore take into account the fact that Cheung does now have locus standi, and place no weight on the fact that did not do so previously.

35.  I do nevertheless consider the applications to be completely without merit, and without any legal foundation.

36.  On the application to remove the Provisional Liquidators, it is said that the Master had no jurisdiction, but, again, the hearing before me was de novo, and I believe it is common ground that removal of the Provisional Liquidators is something that I do have jurisdiction to order. However, it is still necessary for Cheung to adduce proper grounds for their removal, and he has not done so. All that has been provided is a repetition of the complaints about the Provisional Liquidators’ failure to provide documents and information, or to accede to the Applicants’ demands, in relation to the Stored Items. As I have already found, the Applicants’ claims in respect of the Stored Items were without any merit.

37.  The appeal regarding the 4 June 2025 summons having failed, the summons of 23 June 2025 falls away.

Application II

38.  On 27 October 2025, Master Yip ordered the Provisional Liquidators’ costs of the summons filed on 4 and 23 June 2025 to be summarily assessed at HK$84,190. Application II is an appeal against that decision.

39.  The Applicants’ objection to the order for costs is that the Provisional Liquidators had not sought the sanction of the court before contesting the summonses. This was plainly irrelevant: Mr Ng drew my attention to the decisions in Re a Debtor (No. 26A of 1975) [1985] 1 WLR 6 at p.10D-F and The Joint and Several Trustee of the Property of So Ching Wan v Assen Ltd (in Liquidation) (11/12/2025, CACV339/2024) [2025] HKCA 1107 at [51]. The purpose of obtaining the requisite sanction is to protect the company’s assets (or the bankrupt’s estate) and not to protect third parties. Had the Provisional Liquidators been unsuccessful, they would have needed retrospective leave to recover their costs from the Company, but, having won, the proper order was that costs should follow the event.

40.  I therefore reject Application II.

Application III

41.  The next application was an appeal against the decision of Registrar Hui dated 31 October 2025, dismissing a summons filed by Cheung on 16 October 2025. By that summons, Cheung had sought an order requiring the Provisional Liquidators to file a full written statement confirming the present location of the Stored Items, their current condition, the names of all persons who have handled or removed them and any persons responsible for their disposal, together with copies of correspondence and records kept in relation thereto, and to permit and arrange an inspection by Cheung or his representative.

42.  This was another “fishing expedition” for which no legal basis was identified or explained. In my judgment the Master was right to dismiss it.

Application IV

43.  By an order dated 20 November 2025, Master Hui granted an ex parte application by the Provisional Liquidators (i) that there should be no meetings of creditors and contributories under section 194 or 206 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32), and (ii) that there should be no committee of inspection, and the Provisional Liquidators might do all things which may be done by a liquidator with the sanction of a committee of inspection (“the Summary Procedure Order” or “SPO”).

44.  On 18 December 2025, the Applicants issued a Notice of Appeal against the SPO. The grounds for the appeal were set out in the Notice of Appeal, and supplemented by a letter dated 7 July 2025 addressed to the Clerk to Madam Justice Linda Chan, a copy of which was exhibited to an Affirmation by Cheung. The arguments included an unsupported assertion that the Stored Items were worth approximately HK$3 million, and that the Company’s assets therefore exceeded the statutory minimum of HK£200,000 for an SPO.  This presupposes, of course, (a) that the Stored Items were the Company’s property, and (b) that they had not been damaged. The Applicants also made numerous, but unsupported or meritless, complaints about the conduct of the Provisional Liquidators.

45.  Assuming in the Applicants’ favour for these purposes that the Stored Items did in fact belong to the Company, and assuming also in their favour that the value of the Items had not been reduced to zero by the water damage (as asserted by the POD), the absence of any evidence supporting the figure of HK$2 million or HK$3 million (or any other amount) is fatal to this appeal.

Application VII

46.  This is a Summons issued by Cheung dated 13 January 2026 for a mandatory injunction requiring the Provisional Liquidators to take various steps in relation to the Stored Items (which are again referred to as “the Company’s assets”).

47.  In his Skeleton Argument Mr Ng gave a number of reasons why this application should be dismissed. These included the argument that Cheung had no locus because he was not the registered shareholder. In the light of the recently-issued Grant of Letters of Administration, I again place no reliance on this argument.

48.  On the other hand, I do accept the argument that Cheung has failed to meet the threshold for the grant of a mandatory injunction. Apart from anything else, the absence of evidence as to the value of the Stored Items – whether or not in a damaged condition – means that Cheung cannot show that there would be irreparable harm to the Company if they are sold at scrap value. The application for an injunction is refused.

Application VIII

49.  This is an application by Cheung by a Summons dated 24 July 2026 for permission to adduce new evidence in the form of the Grant of Letters of Administration. Leave has already been given by DHCJ Reyes SC and I have treated Cheung as the duly appointed Personal Representative of the estate of Cheung Kwong Hoi.

50.  The costs of that application were, however, reserved. Although Cheung was successful in his application, I take into account the fact that Cheung Kwong Hoi had died in 2019. Not only was the Grant only taken out on 10 June 2026, but the fact of Cheung Kwong Hoi’s death had been concealed from the court and from the Provisional Liquidators while Cheung purported to act on his behalf.

51.  For those reasons, I make no order as to the costs of Application VIII.

Application IX

52.  This is a Summons taken out by both Applicants and also dated 24 July 2026. In it they seek an order requiring the Provisional Liquidators to file an affirmation identifying the source and basis of their funding of litigation expenses.

53.  The only justification put forward by the Applicants for seeking this information is the hope of finding evidence to buttress their suspicion that the Provisional Liquidators are not acting independently. No legal basis is put forward, and it is simply another “fishing expedition”. Accordingly, the application is refused.

Application V: the RAO application

54.  Finally, I turn to the RAO application, which I have left to the end as it involves a significant decision regarding Cheung’s right of access to the courts. As the Court of Appeal noted when considering whether to make such an order against the Applicants in previous proceedings, such an order will not be made lightly, and only after a careful consideration of the merits. I will begin with an account of the successive attempts by the Applicants to derail the hearing of the substantive issues in the case.

Attempted adjournments

55.  The application was originally listed to be heard on 28 July 2026 by DHCJ Reyes SC. However, on 24 July 2026, Cheung issued a Summons (“the New Evidence Summons”), seeking permission to adduce and rely on a Grant of Letters of Administration dated 10 June 2026. On the same date Cheung and Yung jointly issued another Summons (“the Litigation Funding Summons”) seeking an adjournment of the hearing listed for 28 July 2026 and for disclosure of the funding arrangements of the Provisional Liquidators for the litigation.

56.  At the hearing on 28 July 2026, DHCJ Reyes SC gave leave for Cheung to rely on the Grant of Letters of Administration, and also gave Cheung and Yung leave to issue a further Summons and Affirmation for leave to adduce their evidence in relation to the Stored Items.  He went on to direct that the substantive hearing of the Summons challenging the rejection of the POD (“the POD Appeal”) to be adjourned to 24 August 2026, to be heard together with six other appeals, summonses and applications, with (importantly) an order that no further application, summons or affirmation shall be filed without the leave of the court.

57.  This did not deter the Applicants from trying again to adjourn the hearing. On 10 August 2026 they wrote directly to the court, saying that their former solicitors had ceased acting for them, and they were having difficulty in finding legal representation.  (This was an issue they had already raised with DHCJ Reyes SC at the hearing on 28 July 2026.)  They wrote again on 11 and 13 August, followed by three further letters on 14 August.

58.  On 14 August 2026, I directed them to continue their efforts to find legal representation, but agreed to reconsider the matter if they were still unable to find anyone by Friday 20 August.

59.  Notwithstanding DHCJ Reyes SC’s order that no further summonses or affirmations be filed without leave, the Applicants then issued a Summons on 17 August 2026, again asking for an adjournment. According to the sworn evidence they filed in support, they said that “Following the direction of 14 August 2026, further approaches were made, but no further Counsel responded.” This was untrue, as the correspondence they exhibited in support showed that in fact not a single fresh approach had been made since 14 August.

The hearing on 20 August 2026

60.  The adjourned hearing then came before me on 20 August 2026 for a decision on whether the substantive hearing should go ahead on 24 August 2026 as directed by DHCJ Reyes SC, or whether, as the Applicants requested, it should be adjourned again until the end of September so as to enable them to obtain legal representation. The Applicants appeared in person, with Yung making submissions on behalf of them both. The Petitioner was represented by Kurt Ng of Counsel.

61.  Having read the letters from the Applicants and the evidence that they had filed, and having heard their submissions, I refused to grant an adjournment.  As I have said, their claim to have continued their efforts to find legal representation was not borne out by their evidence, which consisted entirely of correspondence that pre-dated 14 August 2026.  Instead of devoting their time over the previous week to the search for solicitors and barristers, they had concentrated on writing lengthy and unmeritorious letters to the court and to the solicitors acting for the Provisional Liquidators complaining about alleged procedural defects.

62.  These included a complaint that the Provisional Liquidators had unilaterally filed bundles with the court despite DHCJ Reyes SC’s direction that the bundles should be “agreed”. The Provisional Liquidators had acted quite properly in filing these bundles in the face of the Applicants’ failure to co-operate in agreeing anything. In the normal course, the Applicants would have submitted an additional bundle of any documents they felt had been wrongly omitted, and/or identified any documents they believed should not have gone in. They did neither.

The aborted hearing on 24 August 2026

63.  The substantive hearing was then due to come before me on Monday 24 August in accordance with the original order of DHCJ Reyes SC.  At 10am that day I was told that the Applicants were asking for a ten-minute delay, and then at 10:10am I was informed that Cheung had been taken sick and an ambulance had been called.

64.  In the absence of Cheung, Yung renewed her application (this time, with an interpreter) for the whole matter to be adjourned till the end of September to enable the Applicants to find legal representation.  Instead, I said I would relist it to come back before me on Friday 28 August. I made it clear that I required to see proper medical evidence that Cheung was genuinely unwell and unable to attend if I was to be asked for another adjournment.  Yung protested that she did not have authority to act on behalf of Cheung, and said she would be unable to act if the hearing went ahead on 28 August.

65.  I invited Mr Ng on behalf of the Provisional Liquidators to say whether he would wish the hearing to proceed on 28 August if neither of the Applicants attended. He said he would be concerned that any decision I might make in those circumstances would be open to appeal on procedural grounds, but he subsequently wrote to the court drawing attention to CPR Order 32, rule 5, which permits the Court to proceed in the absence of a party failing to attend if, having regard to the nature of the application, it thinks it expedient to do so.

Further attempts to adjourn the hearing

66.  Between 24 and 28 August, the Applicants sent another five letters to the court as well as issuing another Summons supported by an Affirmation by Cheung, seeking again to adjourn the hearing.  However, there was still no medical evidence.  The closest thing was a photograph of a card indicating that Cheung had been in a hospital bed on 24 August, and a letter from a doctor dated 27 August confirming that he had been admitted to hospital, but saying nothing about his condition or his ability to attend a hearing (either in person or remotely).

67.  Meanwhile, Cheung had been able to write lengthy letters to the court, and to make an affirmation in support of his latest Summons.  He emphasised that Yung did not have authority to represent him, but offered no reason why not, given that he had been content to let her speak on his behalf at the first hearing.

68.  In one of the letters to the court, Yung also announced that, despite the previous applications to adjourn the hearing to the end of September, she and Cheung would now be unavailable at any time in the last week of September. No reason was offered, and there was no mention of finding solicitors or Counsel to represent them. Nor were any alternative dates put forward.

69.  The hearing on the 28 August 2026 therefore came before me as had been directed.  Yung attended, again assisted by an interpreter, and renewed her application for an adjournment.  Having heard her submissions, and in the absence of any medical evidence regarding Cheung’s state of health, I gave my decision that the hearing would proceed.

70.  At this point, Yung attempted to hand up a couple of documents.  She did not say what they were, and I declined to look at them.  I then proceeded to hear submissions from both parties on the applications that were listed, starting, as I have said, with the application to set aside the rejection of the POD.

71.  At this point, Yung refused to sit down, and continued to argue.  I told her that if she did not sit down and let Counsel proceed, I would have to order her to be removed from the court. Again, she refused to sit down, so I rose.

72.  I was told that it would be necessary for the police to be called to remove Yung from the court, but after about another ten minutes, I was told that she had finally agreed to sit down, so I went back into court.

Yung absents herself from the court

73.  Before moving on to discuss the merits of the arguments, I should mention one final attempt to derail the hearing.  At around 3:45pm, Yung was in the course of making submissions, glancing repeatedly at the clock as if to check how much longer she would need to continue before we ran out of time. She then asked for a five-minute adjournment to find a particular document in the bundle. I agreed to rise. While waiting to come back into court, I was told that Yung had been seen getting in to the lift.  I waited for about another ten minutes, and then resumed the hearing.

74.  After hearing submissions from Mr Ng, I announced my decisions on the various applications, saying that I would give my reasons in writing in due course. I was about to rise at 4:30pm when Yung came back into court, and demanded to know why the matter had proceeded in her absence. I said that I would hand down my written judgment when it was ready, and that in the meanwhile she would receive a copy of the formal order once it had been drawn up. Against that background, I turn finally to the question whether the court should make an RAO.

The court’s jurisdiction to make RAOs

75.  The court has an inherent jurisdiction to make Grepe v Loam Orders, following the case of Grepe v Loam (1888) LR 37 Ch D 168. This jurisdiction has been recognised in Hong Kong and is discussed in detail by the Hong Kong Court of Final Appeals in Ng Yat Chi v Max Share Ltd & Anor. [2005] 8 HKCFAR 1, and is dealt with in Practice Direction 11.3 (High Court and District Court Restricted Application and Restricted Proceedings Orders) (“the RAO Practice Direction”).  The RAO Practice Direction provides as follows –

“5. In accordance with Ng Yat Chi, an RAO should only be made if the person to be subjected to the order has abused, and is likely to continue abusing, the Court’s process by persistently making unwarranted applications to the Court in certain existing proceedings, whether before or after judgment, in circumstances where an RAO would be a proportionate response.”

76.  An RAO is limited to restraining a litigant from making further applications in existing proceedings without the leave of a Judge. It is distinguished from a “restricted proceedings order” (“RPO”) (also known as an Extended Grepe v Loam Order), which not only prevents the litigant from making further applications in an existing proceeding without leave, but also from issuing fresh proceedings seeking to re-litigate the same matters as have already been concluded. The application in the case before me is only for an RAO.

77.  In Ng Yat Chi, Li CJ made the following observations at [2] –

“It is not difficult to recognise the activities of the vexatious litigant. The person concerned will almost invariably be unrepresented and will pursue abusive proceedings which usually exhibit some of the following features. Hopeless claims are instituted. Totally misconceived appeals are launched. Judgments of the court, both interlocutory and at trial and both first instance and appellate, may not be accepted. There are likely to be attempts, often repeated, to re-litigate the same matters as have already been determined. The materials filed will often be irrelevant, incoherent or scandalous. When present at a hearing, some vexatious litigants are unable to conduct themselves with decorum and may hurl abuse at the opposite parties and/or the judge.”

These words could have been written with the present case specifically in mind. The grounds relied on by the Provisional Liquidators in support of their application for an RAO are set out in the Second Affidavit of Wong Sun Keung, dated 12 December 2025.  It describes in detail the conduct of the Applicants in the events leading up to the hearings before me.  The Applicants’ behaviour falls squarely within the description of the vexatious litigant given by Li CJ.

78.  I do not overlook the fact that the oral arguments that have been presented to me have been made by Yung and not by Cheung, who only attended the first of the hearings in the circumstances described above. Nevertheless, Cheung has continued to send letters to the court, and to issue Summonses and make Affirmations throughout. I have no doubt that he and Yung have been acting in concert.

79.  I have described in paragraphs 55 to 74 above the manner in which the applications before me have been conducted. I also bear in mind facts set out in the Second Affidavit of Wong Sun Keung, as well as the warnings given by the Court of Appeal in the previous litigation arising out of the dispute regarding the Stored Items. This is, in my judgment, a clear case in which it is appropriate to make an RAO. Indeed, I would have been prepared to make an extended order or RPO, but as it has not been asked for, I will leave that for another judge to consider if it becomes necessary.

80.  The application issued by the Provisional Liquidators on 15 December 2025 is limited to seeking an RAO against Cheung alone. I have considered whether I should make the same order of my own motion against Yung. Ng Yat Chi at paragraph [17] provides authority for the proposition that there is jurisdiction for me to do so. However, Li CJ goes on to say –

“In acting on its own motion, the court would initiate the process by informing the parties that it is considering whether a Grepe v Loam order or an extended order should be made, indicating the possible basis of such order and giving the parties a sufficient opportunity to make submissions. Usually an oral hearing would be held, although written submissions could be called for beforehand. As has been noted, procedural fairness must be observed and the court should proceed with particular caution where it is acting of its own motion.”

In the light of that, I consider that it would not be right for me to make an RAO against Yung without giving her an opportunity to make submissions, but it may well be that another judge will have to consider doing so on a future occasion. The same may go for the possibility of making an RPO against one or both of the Applicants.

81.  There is one final point to consider. The RAO Practice Direction sets out the contents of an RAO, which include a requirement that the Judge whose leave must be sought by the RAO Litigant should be designated in the order itself. I understand that the usual practice in such cases is for the judge making the order to designate himself or herself for that purpose, but subject to a provision that if the Designated Judge is unavailable to deal with a Leave Application, it shall be dealt with by such other judge as the Chief Judge of the High Court may designate. I have adopted that approach.

Costs

82.  I have tried, in the foregoing analysis, to focus on the substantive merits of the Applicants’ case rather than the procedural issues. Having reached a clear view on the merits of the Applicants’ case, I now have to deal with the issue of costs.

83.  The Provisional Liquidators ask for an order that the costs be paid by Cheung on an indemnity basis for all of the applications. I have been referred to the case of Chan Chung Sing v Qupital Limited (05/01/2024, HCA40/2023) [2024] HKCFI 74 for a summary of the principles to be applied in making an order for indemnity costs. There is no single test, although it is established that there needs to be something out of the ordinary to justify such an order. The jurisdiction is not confined to cases that have been brought with an improper motive or an ulterior motive. In Liam v MGN Ltd (No. 2) [2002] 1 WLR 2810 at [11] and [12], Simon Brown LJ said –

“I for my part understand the court there to have been deciding no more than that conduct, albeit falling short of misconduct deserving of moral condemnation, can be so unreasonable as to justify an order for indemnity costs. With that I respectfully agree. To my mind, however, such conduct would need to be unreasonable to a high degree; unreasonable in this context certainly does not mean merely wrong or misguided in hindsight.”

These words were quoted with approval by Lam J (as he then was) in Cheung Wei Man Vivien and Chan Kim Thiam v Centaline Property Agency Ltd & Others (HCA 286/2000, unreported, 15 December 2006).  And in Sung Foo Kee Ltd v Pak Lik Co [1996] 3 HKC 570, the Court of Appeal said –

“… Our rules do now expressly provide for the taxation of costs on an indemnity basis and when they consider it appropriate judges should not be slow to make orders for the receiving party’s costs to be taxed on that basis.”

84.  In my judgment, the present case amply justifies an award of costs on the indemnity basis for two separate reasons. The first is the fundamental incoherence of the Applicants’ underlying claim to be creditors of the Company. The second is the repeated and increasingly abusive attempts to prevent the hearing from going ahead, and then to disrupt it once it had started, culminating in Yung absenting herself from court for over half an hour on the pretext of taking a five-minute break.

Summary

85.  (1)  Leave to appeal my decision to proceed with the hearing is refused;

(2)  The Applicants’ appeal against the rejection of their POD (Application VI) is dismissed;

(3)  Applications I, II, III, IV, VII and IX are dismissed;

(4)  The Applicants’ application for leave to adduce the Grant of Letters of Administration (Application VIII) has already been granted;

(5)  With regard to the costs of Application VIII, the parties shall bear their own costs;

(6)  The Provisional Liquidators’ application for an RAO against Cheung (Application V) is granted;

(7)  The costs of all the applications (other than Application VIII) are ordered to be paid on the indemnity basis;

(8)  Applications I, II, III, VII and VIII were issued by Cheung alone and are ordered against him; the costs of the other Applications are ordered against the Applicants jointly and severally.

Postscript

86.  A striking feature of the Applicants’ written submissions, affirmations and letters to the court is the complete absence (so far as I have been able to identify) of a single grammatical error, spelling mistake, or even typographical error. The suspicion inevitably arises that the drafting has been done by, or at least with the assistance of, AI.  This is not in itself objectionable (and I do not make any findings on the subject, which was not argued before me), but it would go some way towards explaining the fact that every conceivable argument has been pursued with equal determination and thoroughness, as well as the fact that incompatible arguments have been run side by side without any awareness of the inconsistency.  If AI is asked to generate an argument or grounds for an appeal, it will always do so: it will never take “no” for an answer, or advise that a claim or an appeal is hopeless.