Re 深圳前海东方瑞宸基金管理有限公司

HCMP 437/2023

[2025] HKCFI 707

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 437 OF 2023

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D E C I S I O N

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1.For determination is the summons dated 2 February 2024 taken out by the judgment debtor林鎮洪 (“Lam”) to set aside the Order of Master Hui dated 31 July 2023 (the “Registration Order”) registering the below-mentioned two judgments obtained by the judgment creditor 深圳前海东方瑞宸基金管理有限公司 (“ORC Capital”) against Lam (together “the 2 Mainland Judgments”) pursuant to Mainland Judgments (Reciprocal Enforcement) Ordinance Cap 597 (“the Ordinance”).

2.The sole ground relied on by Lam is that the 2 Mainland Judgments are not “final and conclusive” within the meaning of, and therefore do not satisfy, s.5 (2)(c) of the Ordinance, and their registration is therefore liable to be set aside under s.18 of the Ordinance.

Background

3.In about March 2015, 林增强 (“Lam Jr”), the son of Lam, borrowed a loan from ORC Capital under a loan contract in which Lam signed as the guarantor of Lam Jr. Lam Jr defaulted in repayment and he passed away on 19 May 2019.

4.ORC Capital initially sued Lam Jr and Lam in Mainland, but later substituted the personal representative of Lam Jr, his widow Madam 甘泉, as defendant in place of Lam Jr. ORC Capital obtained (2019) 粵0391 民初4829号《民事判决書》dated 14 October 2020 from Shenzhen Qianhai Cooperation Zone People’s Court (“the First Instance Judgment”) whereby Lam was adjudged to pay ORC Capital the balance of the principal in the sum of RMB4.8 million and interest thereon accruing from 9 March 2016 until full repayment, with costs.

5.Lam was dissatisfied and lodged an appeal. By (2021) 粵03 民終4182号《民事判决書》dated 31 October 2022 from Intermediate People’s Court of Shenzhen Municipality (“the Second Instance Judgment”), Lam’s appeal was dismissed with costs.

6.On 30 May 2023, Lam further lodged an application for retrial with the Guangdong Higher People’s Court to seek to set aside the First Instance Judgment and the Second Instance Judgment on 2 grounds, namely, errors on factual findings and errors of law.

7.On 31 July 2023, ORC Capital obtained in Hong Kong the Registration Order.

8.On 23 December 2023, the Guangdong Higher People’s Court handed down (2023) 粤民申9852 号 (“the Retrial Dismissal Judgment”) upholding the 2 Mainland Judgments and rejecting Lam’s application for retrial.

9.On 2 February 2024, Lam took out the present summons.

10.On 22 May 2024, Lam applied to the Shenzhen People’s Procuratorate (深圳市人民檢察院)(“SPP”) to review or protest against the Second Instance Judgment. The application was formally accepted to be considered (受理) by SPP on 30 May 2024.

11.In the latest 2^nd affirmation of Lam filed on 13 September 2024 (“Lam 2^nd”), Lam relied on the fact that the review/protest was pending as the basis for setting aside the Registration Order. There, he exhibited a supplemental expert opinion dated 26 August 2024 opining on the effect of the review/protest. In the written submissions lodged by Mr But, counsel for Lam, dated 28 October 2024, the pending review/protest was continued to be relied on.

12.However and in fact, the SPP by its 不支持監督申请決定書 深检民违監 [2024] 107 号 dated 30 August 2024 (“the Non-support Decision”) had already adjudged that the case did not meet the criteria for supervision by the Procuratorate and had formally rejected the application. This was not referred to in Lam 2^nd or in the written submission of Mr But.

13.At the commencement of the hearing, I acceded to ORC Capital’s summons dated 22 October 2024 and gave it leave to file and serve its latest affirmation speaking to that fact and exhibiting the documents and the supplemental expert opinion with costs of the summons be in the cause.

Latest basis for contending that the 2 Mainland Judgments are not final and conclusive

14.Therefore, at this hearing, the basis put forth by Lam that the 2 Mainland Judgments should not be considered as “final and conclusive” has been changed to : that all the possible venues whereby the 2 Mainland Judgments may be disturbed have not been completely exhausted in that under《人民檢察院民事訴訟監督規則 》第一百二十六条，Lam can still apply to The People's Procuratorate of Guangdong Province (广東省人民檢察院) to review the Non-support Decision of SPP.

15.《人民檢察院民事訴訟監督規則 》第一百二十六条 reads :

“第一百二十六条 当事人认为人民检察院对同级人民法院已经发生法律效力的民事判决、裁定、调解书作出的不支持监督申请决定存在明显错误的，可以在不支持监督申请决定作出之日起一年内向上一级人民检察院申请复查一次。负责控告申诉检察的部门经初核，发现可能有以下情形之一的，可以移送本院负责民事检察的部门审查处理：

（一） 有新的证据，足以推翻原判决、裁定的；

（二） 有证据证明原判决、裁定认定事实的主要证据是伪造的；

（三） 据以作出原判决、裁定的法律文书被撤销或者变更的；

（四） 有证据证明审判人员审理该案件时有贪污受贿，徇私舞弊，枉法裁判等行为的；

（五） 有证据证明检察人员办理该案件时有贪污受贿，徇私舞弊，滥用职权等行为的；

（六） 其他确有必要进行复查的。

负责民事检察的部门审查后，认为下一级人民检察院不支持监督申请决定错误，应当以人民检察院的名义予以撤销并依法提出抗诉；认为不存在错误，应当决定复查维持，并制作《复查决定书》，发送申请人。

上级人民检察院可以依职权复查下级人民检察院对同级人民法院已经发生法律效力的民事判决、裁定、调解书作出不支持监督申请决定的案件。

对复查案件的审查期限，参照本规则第五十二条第一款规定执行。”

16.For completeness, 第五十二条第一款provides that the Procuratorate should render its decision within 3 months.

Relevant provisions of the Ordinance

17.As there is no dispute that the other requirements for registration under s.5 of the Ordinance have been met, I will just quote the relevant part of the sections in the Ordinance touching on the requirement of “final and conclusive”, and on the setting aside of the registration if that requirement is not met :

“5. Application for registration of Mainland judgments

(1) …

(2) On an application made under subsection (1), the Court of First Instance shall order the Mainland judgment to be registered in accordance with this Ordinance if the judgment creditor has proved to the satisfaction of the Court of First Instance that the following requirements are satisfied—

(a) …

(b) …

(c) the judgment is final and conclusive as between the parties to the judgment;

(d) …; and

(e) …

6. Finality of Mainland judgments

(1) For the purposes of section 5(2)(c), a Mainland judgment is final and conclusive as between the parties to the judgment if—

(a) it is a judgment given by the Supreme People’s Court;

(b) it is a judgment of the first instance given by a High People’s Court, an Intermediate People’s Court or a recognized Primary People’s Court and— (Amended 17 of 2018 s. 17; 21 of 2024 s. 52)

(i) no appeal is allowed from the judgment according to the law of the Mainland; or

(ii) the time limit for appeal in respect of the judgment has expired according to the law of the Mainland and no appeal has been filed;

(c) it is a judgment of the second instance given by a designated court other than a recognized Primary People’s Court; or (Amended 17 of 2018 s. 17)

(d) it is a judgment given in a retrial by a designated court of a level higher than the court whose judgment has given rise to the retrial.

(2) …”

“18. Cases in which registration of registered judgments shall be set aside

(1) On an application in that behalf made by any party against whom a registered judgment may be enforced, the registration of the judgment shall be set aside if the Court of First Instance is satisfied that—

(a) the judgment is not a Mainland judgment which satisfies the requirements specified in section 5(2)(a) to (e);

(b) the judgment has been registered in contravention of this Ordinance;

…

(k) the judgment has been reversed or otherwise set aside pursuant to an appeal or a retrial under the law of the Mainland.

(2) …

“19. Cases in which registration of registered judgments may be set aside or application to set aside registration may be adjourned

On an application in that behalf made by any party against whom a registered judgment may be enforced, if the Court of First Instance is satisfied that an appeal against the judgment is pending or the case on which the judgment was based is ordered to be retried by a competent designated court, the Court of First Instance may, on such terms as it may think just—

(a) set aside the registration; or

(b) adjourn the application until after the expiration of such period as it appears to the Court of First Instance to be reasonably sufficient to enable the applicant to take the necessary steps to have the appeal or retrial in respect of the judgment disposed of by a competent designated court.”

Discussion

18.Though s.6 of the Ordinance is clearly pertinent, Mr But did not address the Court on it.

19.Instead, he relied heavily on the expert opinion of Mr. Chang Hung Rui of Zhong Yin Law Firm dated 15 January 2024 and his supplemental expert opinion dated 26 August 2024 filed on behalf of Lam. Mr Chang essentially explained that under the laws in Mainland, the 2 Mainland Judgments could not be “final and conclusive” as there was still available the application for review/protest to SPP, and that even after such an application is refused, there could still be a further review by The People's Procuratorate of Guangdong Province pursuant to 《人民檢察院民事訴訟監督規則 》第一百二十六条.

20.The expert opinion filed by ORC Capital, namely, that of Mr 譚小波 of 广东华商律师事务所 dated 15 May 2024 and his supplemental opinion dated 21 October 2024, in gist opined that under “兩审終审制度” implemented in Mainland and particularly under 《民事訴訟法》第一百八十二條, “第二审人民法院的判決、裁定，是終审的裁決、裁定”. It was also opined that any application by Lam for further review by The People's Procuratorate of Guangdong Province pursuant to 《人民檢察院民事訴訟監督規則 》第一百二十六条 would fail as by the materials so far submitted by Lam and the grounds he has been relying on, Lam would not have brought the case within any of the 6 specific categories listed in 第一百二十六条.

21.Had my decision on which of the expert opinions I would accept been pivotal, I would have preferred the opinion of ORC Capital’s expert over Lam’s. However, in my view, my determination of Lam’s summons is not assisted by these opinions as the Ordinance itself has clearly set out what Mainland judgments are regarded as “final and conclusive” for the purpose of s.5(2)(c), as explained below.

22.Mr But also cited a number of decisions on whether certain Mainland judgments were regarded as “final and conclusive” for the purpose of deciding whether the particular Mainland judgment could be enforced by a common law action. It is trite for the purposes of common law enforcement of a foreign judgment, the foreign judgment must meet a number of criteria, among them is that the judgment is final and conclusive (see eg. JSC BTA Bank v Nukhtar Kabulovich HCMP 341/2014, unreported, 27 February 2014, Zervos J (as he then was) at §27 and Jiang Xi An Fa Da Wine Co. Ltd v Zhan King [2019] HKCFI 2411, Lisa Wong J at §52).

23.These decisions cited by Mr But included, among some others,

a. The oft cited case of Nouvion v Freeman (1889) 15 App Cas 1, which held that “a foreign decree need not be final in the sense that it cannot be made the subject of appeal to a higher court; but it must be final and unalterable in the court which pronounced it” per Lord Watson at p.13;

b. Chiyu Banking Corporation Limited v Chan Tin Kwun [1996] 2 HKLR 395 in which P Cheung J (as the learned JA then was) held that with the supervisory function of the People’s Procuratorate (which might order a retrial by the original court), the Mainland judgment was not final and conclusive and granted a stay of proceedings;

c. Bank of China Limited v Yang Fan [2016] 3 HKJRD 7 in which To J (at §54) held that the regime of protest by the People’s Procuratorate did not render the Mainland judgments not final and conclusive and re-granted a Mareva injunction under s.21M of the High Court Ordinance;

d. Beijing Renji Real Estate Development Group Co., Ltd v Zhu Min [2022] 4 HKC 116 in which G Lam JA (sitting as an additional CFI judge) held (at §66) that, despite the protest regime, the plaintiff there has established sufficient prospect that the Mainland judgment was final and conclusive and might as such be enforced at common law in Hong Kong; and

e. the Court of Appeal case of Lee Yau Wing v Lee Shui Kwan [2007] 2 HKLRD 749 in which the majority (P Cheung JA and Yuen JA) held that whether a Mainland judgment might be rendered not final and conclusive solely by reason of the protest regime was an important issue involving important public interest which could not be determined by interlocutory proceedings, and set aside a summary judgment. Andrew Chung J dissented and held that the protest regime per se did not render a Mainland judgment inconclusive and not final.

24.Mr Chan, counsel for ORC Capital, submitted that those decisions are not applicable as they all were concerned only with whether the Mainland judgment in question met the requirement of finality and conclusiveness at common law for the purpose of enforcing the Mainland judgment by an action at common law.

25.He submitted that the Ordinance was enacted with the above-mentioned controversy at common law in view; and the statutory framework and provisions in the Ordinance were enacted to overcome it so as to facilitate the enforcement in Hong Kong of Mainland judgments in civil and commercial matters.

26.He refers to the following documents to make good his point :

a. Paragraphs 12 to 15 of LC Paper No. CB(2)1202/05-06(2) by the Department of Justice to the Legco Panel on Administration of Justice and legal Services for it discussion on 27 February 2006 titled “Reciprocal Enforcement of Judgments in Commercial Matters between the HKSAR and the Mainland ” :

“12. As set out in paragraph 4 above, it has been the Administration’s initial proposal that the Arrangement should only apply to judgments that are final and conclusive. Under the revised proposal, we have gone further to agree on a set of special procedures (paragraph 15) to address the concerns (paragraph 13) about the requirement of finality.

13. There were instances that the HKSAR courts ruled that the relevant judgments of the Mainland courts were not final and conclusive for the purpose of enforcement in Hong Kong. In Chiyu Banking Corp. Ltd v Chan Tin Kwun [1996] 2 HKLR 395, a party has initiated the protest procedure against the Mainland judgement sought to be enforced in Hong Kong which could result in the retrial of the case by the original trial court. As a result Cheung J (as he then was) held that the relevant Mainland judgment failed to satisfy the common law requirements of finality and conclusiveness of a judgment. … Cheung J's judgment was approved by the Court of Appeal in subsequent cases, e.g. Lam Chit Man (trading as Yet Chong Electronic Co. v LAM Chi-To unreported 18 December 2021, CACV 354/2001)

14. However, in a recent Court of Appeal case 李祐榮 v 李瑞群 (CACV 159/2004) Chung J (dissenting) considered that it was probable, in certain instances, that a retrial of a case could be ordered by a court in some common law jurisdictions including Hong Kong. Hence, the fact that a Mainland judgment could be subject to an order of retrial should not be automatically taken as the ground for finding the judgement not “final and conclusive”. A copy of the said case is annexed as Appendix 1 (Chinese only).

15. The set of special procedures to address the common law requirements of finality, which will be set out clearly in the Arrangement, are as follows –

(a) only a final judgment will be recognized and enforced. Under the revised proposal, “a legally enforced final judgment” shall carry the meaning of –

(i) in the Mainland

◾ any judgment of the Supreme People's Court;

◾ any judgment or first instance made by a Higher or Intermediate People's Court or a designated Basic Level People's Court … in respect of which the time limit for appeal or protest has expired and no appeal or protest has been filed;

◾ any judgment of second instance; and

◾ any judgement made in accordance with the trial supervision procedure by bringing up the case for trial by a people's court at the next higher level”

(my emphasis in bold)

b. The speech given by the Honourable Secretary for Justice, Mr. Wong Yan Lung SC on 7 March 2007 when moving the 2nd reading of the Mainland Judgments (Reciprocal Enforcement Bill) that:

“It has always been the case that judgments given by Mainland courts requiring payment of money could only be recognized and enforced in Hong Kong by beginning a new action in debt at common law. … such proceedings are often time-consuming and involved high legal costs … Pursuant to the Arrangement, the Bill establishes a new and convenient mechanism for the enforcement in Hong Kong of judgments given by Mainland courts. …” (my emphasis)

c. In the Legislative Council’s LC Paper No. CB(2)1666/07-08, Ref: CB2/BC/6/06 titled the “Report of the Bills Committee on Mainland Judgments (Reciprocal Enforcement) Bill” dated 21 April 2008, it was stated that:

“BACKGROUND

The current situation

…

3. …

(c) the Mainland judgment may not be considered by the Hong Kong court as final and conclusive for the purpose of seeking enforcement in Hong Kong in view of the system of civil procedures in the Mainland.

…

Finality of Mainland Judgments

71. The Bills Committee notes that at common law, in order to establish a foreign money judgment is final, it must be shown that the court, by which the judgment was pronounced, conclusively, finally and forever established the existence of the debt in question so as to make it res judicata between the parties. A judgment can still be regarded as final even if it is under appeal.

72. Under the trial supervision system in the Mainland, a party to the case, a people’s court or a people’s procuratorate at a higher level may initiate a review of a legally effective judgment subject to certain conditions. This could result in the retrial of the case by the original trial court. Hence, there are instances where the Hong Kong courts ruled that judgments of the Mainland courts could not be considered final and conclusive for the purpose of seeking enforcement in Hong Kong.

73. For the purpose of the Arrangement, special procedures will be adopted in order to address the common law requirement of finality. Clause 5(2) stipulates that in order to render a Mainland Judgment enforceable in Hong Kong, that judgment must be, inter alia, final and conclusive as between the parties to the judgment. Clause 6(1) further provides that for the purposes of clause 5(2)(c), a Mainland Judgment is final and conclusive as between the parties if:

…”.

(my emphasis in bold)

27.Mr Chan submitted that on a proper construction of s.6, if a Mainland judgment falls within any of the stated categories therein, then it fulfills the requirement of being “final and conclusive” as s.6 clearly and plainly states that “For the purposes of section 5(2)(c), a Mainland judgment is final and conclusive as between the parties to the judgment if …”.

28.It is evident that the purpose of the Ordinance is to provide a new and convenient mechanism to facilitate, among others, the enforcement of Mainland judgments in Hong Kong. I accept Mr Chan’s submission as correct that when enacting the Ordinance the Legislature had in view the said controversy at common law over whether a Mainland judgment can be regarded as final and conclusive with the supervisory function of the People’s Procuratorate which might order a retrial by the original court and was enacting s.6 as a measure to overcome the controversy.

29.Thus, I accept Mr Chan’s submission and take the view that on proper construction of s.6, the Second Instance Judgment is “a judgment of the second instance given by a designated court other than a recognized Primary People’s Court” within the meaning of s.6(1)(c) and is, by virtue of s.6, final and conclusive for the purpose of s.5(2)(c).

30.Since I have reached the above conclusion, I do not find relevant the opinions offered by the respective experts on whether the 2 Mainland Judgments are considered as “final and conclusive” under Mainland laws; nor do I find it necessary to resort to the case laws regarding whether such a Mainland judgment is “final and conclusive” for purpose of enforcement of the same by a common law action.

Disposal

31.In the premises, Lam fails in his application to set aside the Registration Order and his summons stands to be dismissed with costs to ORC Capital, on nisi basis, to be made absolute within 14 days. Thereafter, ORC Capital do lodge its Statement of Cost with 7 days and Lam his List of Objections 7 days after for summary assessment on paper.

32.At the conclusion of the hearing, Mr Chan asked that Lam do pay ORC Capital’s costs to be taxed on an indemnity basis, contending that the same rationale or treatment as for a contestant who has failed to stay an arbitral award or challenge an arbitration agreement should apply. Presently, I am not so convinced as a party to an arbitration agreement enters into it voluntarily and should be expecting the court to recognize and enforce the agreement. I do not readily see the same consideration applies where one party registered the Mainland judgment pursuant to the Ordinance. Mr Chan also mentioned other conducts of Lam that should attract indemnity costs. I would let ORC Capital ventilate them, if so advised, in an application to vary the costs order nisi.

33.I thank Mr Chan and Mr But for their assistance.

Mr. Frederick Chan, instructed by Nixon Peabody CWL, for the Applicant (Judgment Creditor)

Mr. But Sun Wai, instructed by Ivan Lee & Co., for the Judgment Debtor