HCMP1080/2024

HCMP1080/2024

A A B B HCA 551/2024 and HCMP 1080/2024 C [2026] HKCFI 723 C D D IN THE HIGH COURT OF THE E HONG KONG SPECIAL ADMINISTRATIVE REGION E COURT OF FIRST INSTANCE F F ACTION NO. 551 OF 2024 AND G MISCELLANEOUS PROCEEDINGS NO. 1080 OF 2024 G _________________ H H I BETWEEN I J CHINA EVERGRANDE GROUP (中國恒大集團) Plaintiff J (IN LIQUIDATION) K K and L L HUI KA YAN (許家印) 1st Defendant M M XIA HAIJUN (夏海鈞) 2nd Defendant N N PAN DARONG (潘大榮) 3rd Defendant O O th XIN XIN (BVI) LIMITED 4 Defendant P P th DING YUMEI (丁玉梅) 5 Defendant Q Q th YAOHUA LIMITED 6 Defendant R R EVEN HONOUR HOLDINGS LIMITED 7th Defendant S S HE KUN (何坤) 8th Defendant T (Consolidated by the Order of the Honourable T Mr Justice Coleman dated 12 February 2025) U U V V  -2- A A B B _________________ C C Before: Hon H. Au-Yeung J (Paper Disposal) D D Dates of Submissions: 18 December 2025, 8 & 16 January 2026 E Date of Decision: 3 February 2026 E _________________ F F DECISION G _________________ G H A. INTRODUCTION H I I 1 1. By a Decision handed down on 16 September 2025 (“the J Decision”), this Court appointed Mr Edward Simon Middleton and J Ms Wing Sze Tiffany Wong as Joint and Several Receivers and Managers K K st over the entire assets and undertaking of the 1 defendant (“Hui”) with L costs (“the Orders”). L M M 2. By a summons re-filed on 17 October 2025 (“the Leave to 2 N Appeal Summons”), Hui and the 4th defendant apply for leave to appeal N O against the Decision. O P P 3. By another summons filed on the same day, Hui and the 4 th Q defendant also apply to stay the Orders pending the determination of the Q Leave to Appeal Summons, and if leave to appeal is granted, to stay the R R Orders until the final determination of their appeals or until further order of S the Court (“the Stay Summons”). S T 1 T [2025] HKCFI 4327 2 The Summons was originally filed on 30 September 2025. It was expunged because the draft Notice of Appeal which was supposed to be attached thereto had been omitted U U V V  -3- A A B B C 4. By consent, the Leave to Appeal Summons and the Stay C Summons have been ordered to be disposed of on paper. D D E 5. Unless otherwise stated, abbreviations used in the Decision E will be adopted herein. F F G B. APPLICABLE LEGAL PRINCIPLES G H H B1. Leave to appeal I I 6. The requirement for granting leave to appeal is set out in section J J 14AA(4) of the High Court Ordinance (Cap 4, Laws of Hong Kong). It is K trite that leave to appeal shall not be granted unless the court is satisfied that K the intended appeal has a reasonable prospect of success or there is some L L other reason in the interest of justice why the appeal should be heard. M M 7. It is also well established that a reasonable prospect of success N N means an appeal with prospects that are more than fanciful without having to O be probable (SMSE v KL [2009] 4 HKLRD 129, at [17]). O P P 8. The making of the Orders concerns the exercise of discretion of Q this Court. It is well established that the Court of Appeal will not interfere Q with an exercise of judicial discretion unless the appellant can show that the R R judge erred in law or misapplied the law by failing to take account of relevant S considerations or taking account of irrelevant considerations, or that the S decision is plainly wrong, namely that the exercise of discretion is outside the T T U U V V  -4- A A B B generous ambit within which reasonable disagreement is possible: Target C Insurance Company Ltd v Ng Yu & Others [2025] HKCA 150 at [38]. C D D 9. Further, it has been emphasized time and again that the Court of E Appeal will not entertain an appeal simply because an appellant wishes to E regurgitate arguments already considered in the court below with the hope F F that the appeal court may come to a different assessment of the situation. The G appeal court must defer to the judge’s exercise of discretion and not interfere G with it save on the well-established grounds: China Evergrande Group (in H H liquidation) v Hui Ka Yan & Others [2026] HKCA 15, at [53]. I I B2. Stay pending appeal J J K 10. The relevant principles are trite. K L L 11. In Star Play Development Limited v Bess Fashion M Management Co. Ltd. [2007] 5 HKC 84, Ma J (as his Lordship then was) M held that the existence of an arguable appeal (that is, one with reasonable N N prospect of success) is the minimum requirement before a court would O even consider granting a stay. However exceptional the circumstances O may be otherwise justifying a stay of execution, if there exist no arguable P P grounds of appeal, no stay will be granted. Q Q 12. In the event the court is satisfied that there is a strong R R likelihood that the appeal would succeed, that in itself would enable a stay S to be granted because this would constitute a good reason for a stay. S T T U U V V  -5- A A B B 13. If there is just an arguable appeal instead of a strong one, the C appellant has to provide additional reasons as to why a stay is justified. C The demonstration of an appeal being rendered nugatory in the absence of D D a stay is a common example. E E C. THE DRAFT GROUNDS OF APPEAL F F G 14. The draft Notice of Appeal contains 10 paragraphs. In Hui’s G written submissions, they have been categorised into 3 questions as H H follows: I I “4. […] Has the Judgment erroneously misidentified and/or J misapplied the legal test or threshold governing principles (the J ‘Governing Test’) for the appointment, pending the determination of the Action, of Interim Receivers in aid of a K Mareva injunction, over a defendant’s entire assets? K L […] L 11. […] In the absence of any Mareva Injunction Order (or M Chabra type Order restraining D4 and/or the 14 other ‘Schedule M 1 Companies’ (each a non-party herein and 11 of the 14, like D4, N being, off-shore companies) from dealing with their own N (on-shore and off-shore) assets upon the ground that they are ‘associated with [D1]’, was there any jurisdictional source for O the Receivership Order’s terms (which exceed the ambit of the O Mareva Injunction Order itself) empowering the Interim Receivers to:- P P • ‘to take all steps that they consider necessary or desirable … Q to … take possession of … and manage … the Assets [of D4 Q plus the 14 other ‘Schedule 1 Companies’]; or • ‘to … Investigate the affairs of the … Schedule 1 R R ‘Companies’; or • ‘to … take possession of the property of ….. the Schedule 1 S Companies … [including their] property or books and S records’; or • ‘to demand and receive all debts which may fall due to … the T Schedule 1 Companies’; or T U U V V  -6- A A B B • ‘to take control of and exercise all rights … [of] the Schedule 1 Companies … whether in Hong Kong or overseas …’; or C • ‘to … bring proceedings in the name of … the Schedule 1 C Companies.’? D […] D E 15. […] Could the Judge legitimately:- E (1) Appoint as Interim Receivers over D1’s and D4’s entire F assets, their hostile litigation adversaries within the F Action that those adversaries had caused to be brought against D1 and D4? G G (2) In the absence of those litigation adversaries undertaking H to work without payment?” H I 15. The aforementioned questions will be referred to as “the I Governing Test Ground”, “the Jurisdictional Ground” and “the J J Litigation Adversaries Ground” respectively. K K L 16. The arguability of these grounds will be considered in turn L below. M M N D. THE LEAVE TO APPEAL SUMMONS – DISCUSSION N O O D1. The Governing Test Ground P P 17. Under this ground, Hui contends that the threshold for the Q Q appointment of interim receivers is that notwithstanding the considerable R protection which the Injunction Order already afforded, there nonetheless R was an imminent danger of loss or dissipation of assets if a receiver was S S not appointed. T T U U V V  -7- A A B B 18. In support of his argument, Hui has placed reliance on C National Australia Bank Ltd & Others v Bond Brewing Holdings Ltd & C Others [1991] 1 VR 386, Wallace Kevin James v Merrill Lynch D D International Bank Ltd [1998] 1 SLR 785, Macau First Universal E International Limited v Ding Xiaohong & Others (CACV 193/2011, E unreported, 31 July 2012) and Wong Luen Hang & Another v Chan Yuk F F Lung & Others (HCMP 2906/2016, unreported, 12 January 2017). G G 19. These case authorities have been considered in [10] – [24] of H H the Decision. I I 20. Despite Hui’s repeated arguments, I am not persuaded that it J J is reasonably arguable that this Court has erred in the identification of the K legal test or threshold. In my view, the key question is “necessity”, and the K asking of this question leads to the issue of “whether there is no or no L L current effective protective regime, and some form of interim protection M should be given to preserve the status quo”. This was one of the matters M which had been taken into account by the first instance judge in Macau N N First Universal International Limited v Ding Xiaohong & Others (CACV O 193/2011, unreported, 31 July 2012). As mentioned in [22] of the O Decision: P P “The Court of Appeal’s Judgment in Macau First Universal Q Q International Limited also shows that there is no merit in the defendant’s submission that the American Cyanamid principles R are inapplicable, for it did not doubt the learned Deputy Judge’s R formulation of the test as quoted in [17] above. The first instance decision was set aside only because the Court of Appeal S took the view that the learned first instance Judge had failed to S take a relevant matter into account when considering whether T effective protection was in place.” T U U V V  -8- A A B B 21. Although some of the authorities had considered, in light of C the respective facts of those cases, whether there was “imminent danger of C loss or dissipation of assets”, I am of the view that the question of D D “imminent danger” as referred to in those cases was no more than a way to E consider the question of “necessity”. E F F 22. In this regard, I should specifically refer to Hui’s arguments G in relation to the case of Wallace Kevin James (supra). His counsel G suggest that: H H I (1) the Singapore Court of Appeal set aside a High Court order I appointing an interim receiver in that case because the court J J below had adopted the wrong test (i.e. the “just and K convenient” test)3; and K L L (2) “mere non-compliance with an asset disclosure order” is not M enough for satisfying the threshold for the appointment of M receivers4. N N O 23. These submissions must be rejected if the case of Wallace O Kevin James (supra) is properly understood: P P Q (1) Firstly, it is clear from a reading of the Singapore Court of Q Appeal’s Judgment that the appeal was allowed not because R R of any “wrong test” identified by the court below as such, but S because the appellate court, despite the two breaches of the S T T 3 Paragraph 5(3) of Hui’s written submissions 4 Paragraph 9(2) of Hui’s reply submissions U U V V  -9- A A B B Mareva injunction therein (the alleged breach of the C disclosure order was not one of them – see below), took the C view that the circumstances in the case did not justify the D D extreme remedy of a receivership order. In other words, the E decision turned on its facts.5 E F F (2) Secondly, although the disclosure made by the defendant in G that case was admittedly late and incomplete, it was held that G the disclosure was a “fairly comprehensive one” and that the H H finding of the court below that the disclosure was “quite I unsatisfactory” was wrong. It was therefore held that there I was no breach of the Mareva injunction order in this regard.6 J J K 24. Hence, the Wallace Kevin James (supra) case cannot assist K Hui. L L M 25. In paragraph 9(2) of Hui’s reply submissions, his counsel M referred to paragraph 45 of his submissions dated 29 August 2025, which N N in turn quoted [19] – [20] of Wong Luen Hang & Another v Chan Yuk Lung O & Others (HCMP 2906/2016, unreported, 12 January 2017), and asserted O that these paragraphs contain “Court of Appeal’s express conclusion of law P P as to the governing test – which is not mere ‘non-compliance with an asset Q disclosure order’ ”. Those paragraphs in Wong Luen Hang read: Q R R “19. The plaintiffs contended that the judge was wrong in principle to hold that interim receivers should be appointed only S if the court is convinced of its necessity and not otherwise S (ground 5). They submitted this is far too stringent and the test is not necessity but whether it is ‘just or convenient’ to do so, T T 5 See [33] – [35] of the Singapore Court of Appeal’s Judgment 6 See [30] – [32] and [35] of the Singapore Court of Appeal’s Judgment U U V V  - 10 - A A B applying the wording in section 21L(1) of the High Court B Ordinance, Cap.4. C C 20. We do not accept this submission. Section 21L(1) is a general provision relating to the granting of an injunction and D the appointment of receivers, whether on an interlocutory or D final basis. For further guidance on the application of this E provision to specific situations, it is necessary to look to decided E cases. We are here concerned with the appointment of an interim receiver, not of a particular asset, but over the entire F assets and undertaking of 3 companies and at least one of them F is a trading company. It is well established by authorities that for such an extremely drastic remedy to be granted, the court’s G G jurisdiction is to be exercised with great circumspection and only when it is convinced of the necessity of making such an H order instead of other forms of less intrusive and more reversible H relief. Bond Brewing Holdings Ltd v National Australia Bank Ltd (1990) 1 ACSR 445 at 456 to 458 has often been cited by our I courts in this regard. See also Macau First Universal I International Ltd v Ding Xiaohong & Ors, CACV 193/2011, 31 J July 2012, §42; Wong Luen Hang & Anr v Chan Yuk Lung & J Ors, HCMP 2481/2015, 5 November 2015, §13.” K (counsel’s emphasis) K L L 26. As pointed out in [24] of the Decision, I cannot see how this M case can assist Hui, as all Kwan JA (as she then was) emphasised in the M above paragraphs was the requirement of “necessity”. N N O 27. Hui’s counsel also referred this Court to “the ancient principle O of our law concerning contempt of court (whether civil or criminal) that the P P disobedience element of contempt is not made out if the defendant’s failure Q to comply with a court order was ‘casual or accidental and Q unintentional’ ”. This submission is not understood, for the Court is not R R dealing with contempt proceedings here. S S 28. To conclude, this ground is not reasonably arguable. T T U U V V  - 11 - A A B B D2. The Jurisdictional Ground C C 29. This ground concerns the scope of the Orders, particularly, in D D relation to assets held by the 4th defendant and the Schedule 1 Companies. E E 30. The same arguments have been dealt with in [55] – [60] of the F F Decision. G G 31. With respect, this ground is unarguable because the Orders H H were made on the basis of the Injunction Order which covers all the assets I held by the 4th defendant and the Schedule 1 Companies. The Injunction I Order is a valid order against which no appeal has been lodged. It is futile J J for Hui and the 4th defendant to argue at this stage that those assets should K not be caught by the Injunction Order in the first place. K L L D3. The Litigation Adversaries Ground M M 32. Under this ground, Hui challenges the appointment of the N N Liquidators as the Receivers. O O 33. Such appointment involves the exercise of discretion of this P P Court. Q Q 34. In his proposed appeal, Hui relies again on his assertion that R R the appointment of the Liquidators may render the action against himself S and the 4th defendant incapable of being fairly tried. This matter has been S considered in [66] – [72] of the Decision. T T U U V V  - 12 - A A B B 35. As it has been pointed out above, the purpose of an appeal is C not for the appellant to regurgitate arguments which have already been C considered in the court below with the hope that the appellate court may D D come to a different assessment of the situation. E E 36. This ground is therefore not reasonably arguable. F F G 37. Before I leave this topic, I should also specifically refer to G Hui’s argument as follows: H H “That serious error [of appointing Hui’s and the 4th defendant’s I hostile litigation adversaries], which the Plaintiff instigated in I their application, may have rendered the Action against D1/D4 J incapable of being fairly tried (and see para.s 24-28 below) – as J the Hon. Coleman, J. appears to have recognised in his 19 September 2025 Decision herein concerning D2.”7 K K (emphasis added) L L 38. It is indeed true that, by virtue of the said decision dated 19 M M September 2025 ([2025] HKCFI 4415), Coleman J did not appoint the N Liquidators as the receivers and managers of the 2nd defendant’s assets and N undertakings. However, Hui’s counsel have gone too far (and they should O O not have speculated) to say that his Lordship had made the decision P because the proposed appointment “may have rendered the Action against P D1/D4 incapable of being fairly tried”. Q Q R D4. Remuneration of the Receivers R S S 39. Paragraph 10 of the draft Notice of Appeal reads: T T 7 Paragraph 17 of Hui’s written submissions U U V V  - 13 - A A B “The Judge also erred and acted in disregard of established B principle in allowing the Plaintiff’s Liquidators later to apply to C vary the Court’s Order concerning the ultimate liability for the C costs of the Interim Receivership, potentially to place the burden on the 1st Defendant – in breach of the established principle that D a litigation adversary should never be appointed receiver over D his opponent’s property unless he agrees to take the appointment E without reward (which the Plaintiff’s Liquidators refuse to do).” E F 40. Under this ground (which Hui’s counsel categorised as part of F the 3rd ground under Section D3 above), Hui argues that: G G “Additionally, in further breach of the established principles H (here, those, which apply to the circumstances cited in brackets H in para. 16 above), the Receivership Order also acceded to the Plaintiff’s (improper) request that D1/D4’s hostile litigation I I adversaries be fully remunerated (and potentially at the future expense of D1/D4) instead of following the long established rule J of practice that they be required to work without reward e.g. J DSkel#49-51; Kerr & Hunter (supra) at para. 4.4; and Re Prytherch (1889) 42 Ch. D. 590 at 601” K K L 41. The same argument has been made by Hui before and it has L been dealt with by this Court in the following way in [77] of the Decision: M M N “Hui’s counsel further contended that Hui should not be N exposed to the possibility that he may be required to pay for the entire receivership. That is not a matter which Hui should be O worrying at the moment, because the Group’s proposal is that O the remuneration of the receivers shall be paid out of the assets of the Group. While it is also proposed that the Group would be P P at liberty to apply to vary this arrangement, the matter can be further debated when there is such an application.” Q Q 42. Insofar as Re Prytherch (1889) 42 Ch. D. 590 (on the basis of R R which the learned author of Kerr & Hunter wrote that “[a] party to the S claim will not usually be appointed receiver, unless he undertakes to act S without salary”) was relied on to support Hui’s argument that there is a T T “long established rule of practice that they be required to work without U U V V  - 14 - A A B B reward”, I am afraid that reliance is misplaced. This is because the view in C Re Prytherch was apparently expressed by reason of its own facts. In that C case, a Mr Bishop was for a time receiver in possession for some other D D persons who were mortgagees, but he ceased to fill that character when E those persons were no longer mortgagees, and he himself became E mortgagee in possession. Having remained voluntarily in possession of F F the property for 11 years, he applied for an order to give up possession and G to appoint a receiver. It was in such peculiar situation that the court held G that the court’s discretion in appointing a receiver should not be exercised H H because under the law, a mortgage cannot go into and out of possession I whenever he likes. It was also in such circumstances that the court held I that the mortgagors should not be put to the expense of a receivership. At J J the end of the day, the court appointed Mr Bishop as receiver without K salary and without security. It can thus be seen that this authority is K nothing other than another example in which the court had exercised its L L discretion in the circumstances of a particular case, and cannot assist Hui in M the present case. M N N E. THE STAY SUMMONS – DISCUSSION O O 43. Counsel for Hui and the 4th defendant do not dispute that stay P P would not be granted if there is no arguable appeal. Q Q 44. It follows from the conclusion under Section D above that no R R stay should be granted. S S T T U U V V  - 15 - A A B B C F. ORDER C D D 45. For the above reasons, the Leave to Appeal Summons and the E Stay Summons are hereby dismissed. E F F G. COSTS G G 46. Costs should follow the event. I make a costs order nisi that H H Hui and the 4th defendant shall bear the Group’s costs of the Leave to I Appeal Summons and the Stay Summons. I J J 47. The Group’s costs of the Leave to Appeal Summons and the K Stay Summons shall be summarily assessed in lieu of taxation. Unless any K application for variation of the aforesaid costs order nisi is made within L L time (as to be provided in the following paragraph), the Group shall lodge M and serve its statement of costs within 7 days after the expiry of the 14-day M period as referred to in the paragraph below. Hui and the 4th defendant N N shall lodge and serve their statement of objection within 7 days thereafter. O Summary assessment of the costs of the aforesaid Summonses will be O conducted on paper (no matter whether any statement of objection is P P lodged within time) thereafter. The costs assessed shall be paid by Hui and Q the 4th defendant within 14 days after assessment. Q R R S S T T U U V V  - 16 - A A B B C 48. The above order nisi shall become absolute in the absence of C application to vary (which, if any, will be disposed of on paper) within 14 D D days hereof. E E F F G G H H I I J J ( H. Au-Yeung ) Judge of the Court of First Instance K K High Court L L M M N N O O P P Q Q R R Karas So LLP, for the plaintiff S S Mr Barrie Barlow SC leading Mr Vincent Chen, instructed by Chow de Bedin LLP, for the 1st and 4th defendants T T U U V V