China Everbright Bank Co., Ltd. Beijing Pilot Free Trade Zone Business Centre Sub Branch, Previously t/a China Everbright Bank Co., Ltd. Beijing Guanghua Road Branch v. China Kingho Energy Group Ltd and Others

HCA 809/2024

[2025] HKCFI 735

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 809 OF 2024

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BETWEEN

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DECISION

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Introduction

1.For background of the matter, I refer to my decision handed down on 13 December 2024[1] (the “Decision”).  I adopt the same terms and abbreviations used therein.

2.For reasons set out in the Decision, I made an Order as set out in §47 of the Decision.  Amongst others, I granted P leave to refer to and rely on the redacted WYY/Aff2 and the exhibits adduced thereby, and allowed P’s application against D4 for a Mareva Injunction (the “Mareva Injunction”)  and disclosure order in aid (the “Disclosure Order in Aid”).

3.On 20 December 2024, D4 took out a summons (the “Stay Summons”). In essence, D4 seeks an Order that, on condition[2] that she complies with the Disclosure Order in Aid by filing an affidavit within 7 days from the Order to be made but in a sealed envelop not to be opened “pending the determination of [D4’s] intended application for leave to appeal to the Court of Appeal against the Decision and, if such leave is granted, pending the final determination of the substantive appeal, without the leave of the Court”[3], the Disclosure Order in Aid be stayed pending D4’s intended application for leave to appeal against the Decision. 

4.On 25 December 2024, D4 took out another summons for leave to appeal against the Decision (the “Leave Summons”).  Draft Notice of Appeal (the “DNOA”)  setting out the intended grounds of appeal (the “Intended GOAs”)  is attached thereto.

5.Both Summonses were originally returnable before me on 7 February 2025.  However, given the nature of the Discovery Order in Aid and the deadline for its performance, I expedite the hearings to 8 January 2025.  On that day, having heard parties, I granted the Stay Summons.  I further gave directions with the view to dealing with the Leave Summons on the papers.

6.Mr Ernest Ng and Mr Fergus Tam have since filed their submissions in support and in reply dated respectively 15 and 27 January 2025 (“D4/Sub#1” and “D4/Sub#2” respectively).  Mr Wing So has filed his submissions in opposition dated 22 January 2025 (“P/Sub”).  I have considered those submissions.  I have also considered the authorities that have been cited to me.

The Intended GOAs

7.According to the DNOA, D4 intends to rely on 6 grounds.  They are set out in DNOA §§2.1 to 2.6.  There are, except §2.3, sub-paragraphs under each of those paragraphs.  The sub-paragraphs are however more of elaborations (which I have all read though and considered).  §DNOA §§2.1 to 2.6 themselves (with the sub-paragraphs omitted)  read:

2.1.  The learned Judge erred in failing to give effect to the exclusivity of the statutory regime to enforce Mainland judgments registrable under the MJREO and on its plain text properly construed, in particular ss.22, 5, 7 and 16 thereof …

2.2.  The learned Judge further erred in failing to place any or sufficient weight to the context and purpose and/or legislative policies of the MJREO, and the legislation upon which MJREO is modelled upon, most importantly reciprocity and exclusivity …

2.3.  For the same reasons as set out under paragraph 2.2 above, the learned Judge erred in placing too much weight on the factor that the time limit under the MJREO regime is 2 years …

2.4.  The learned Judge’s interpretation of s.22(2)  of the MJREO would lead to absurd and/or uncertain result(s)  which ought not be intended by the legislature and/or ought not be inconsistent with the context and purpose of the section …

2.5.  The learned Judge erred in not upholding a proper distinction between “recognition” and “enforcement” under the MJREO and/or failed to place any or sufficient weight thereto …

2.6.  The learned Judge erred in interpreting Lu Yongliang v Bank of China, Dongguan Branch … and China NPL Holdings Pte Ltd v Mo Haidan … to the extent that they are relied on to support [P’s] interpretation of MJREO.  Whereas, properly read, they do not so support …  

Consideration of the Intended GOAs

8.I make first of all the following overarching observations:

(a)  The Amended Summons was for Mareva and related relief;

(b)  The issue which I considered in Section E of the Decision was whether P was able to establish a good arguable case for its common law enforcement action, in the sense that its action was viable despite the provisions of the MJREO;

(c)  A “good arguable case” means “one that is more than barely capable of serious argument and yet not necessarily one which the judge believes to have a better than 50% chance of success”[4];

(d)  In the end, I concluded that P had established a good arguable case for common law enforcement of the Conciliatory Statement[5];

(e)  It is hence important to note that the hearing was not a trial. I did not rule on the core issue identified in the Decision.  All I concluded was that P had established a good arguable case on the same;

(f)  Hence, unless D4 can trigger the “some other reason” limb[6], D4 has to establish in effect that her intended appeal has a reasonable prospect of success in persuading the Court of Appeal that I was wrong in concluding that P’s case was more than barely capable of serious argument;

(g)  This is a very high threshold.

9.For the following reasons, I am not satisfied that D4 is able to overcome that threshold:

(a)  Mr Ng groups DNOA §§2.1, 2.5 and 2.6 together under the heading of “Textual Analysis”;

(i)  I have considered the texts of the relevant sections again in the light of the submissions and authorities which Mr Ng makes and relies on.  The text in my view simply does not support his submissions, to the extent that P has no arguable case to the contrary, that s.22(2)  of MJREO establishes exclusivity in the enforcement of Mainland judgments;

(ii)  Mr Ng submits[7] that “Whilst s.16 MJREO preserves the recognition of a Registrable MLJ as conclusive inter se in ‘any proceedings founded on the same cause of action’ and may be relied upon by defence or counterclaim, properly construed, this only preserves recognition proper …”;

(iii)  I see no basis for that submissions, particularly when Lam VP’s observations in Lu Yongliang are taken into account, which Mr Ng tries to brush aside by asserting that they were “general comment”;

(b)  Mr Ng Groups DNOA §§2.2, 2.3 and 2.4 together under the heading of “Purposive Interpretation”:

(i)  I have considered Mr Ng’s submissions, but there is simply nothing in terms of purpose for the MJREO regime to purposely oust common law enforcement that was available prior to the enactment of that Ordinance;

(ii)  Mr Ng’s submissions on “reciprocity” does not start to support his submissions that P has no good arguable case;

(iii)  In this regard, I have considered the “Paper for the House Committee meeting on 11 April 2008 - Report of the Bills Committee on Mainland Judgments (Reciprocal Enforcement)  Bill” adduced by Mr Ng.  As pointed out by Mr So, §5 thereof reads (with emphasis added):

Given the huge volume of activities, particularly commercial ones, between the Mainland and the HKSAR, it is in the interest of the Hong Kong and the international business communities that are doing business with the Mainland to have an arrangement on reciprocal enforcement of judgments, so that an option is available for the judgment creditors to seek summary enforcement of court judgments of one jurisdiction in the other jurisdiction within the specified scope of the arrangement, without going through the time-consuming and costly litigation proceedings.

To similar effects was what the Chairman of the Bills Committee said during the Second Reading of the MJREO bill, that:

Madam President, I believe that we share a common direction and objective, that is, to seek a practical solution, to cautiously retain the existing safeguards and to provide mainlanders and Hong Kong people having business dealings with each other an optional channel for the summary enforcement of court judgments.

(c)  I repeat also my analysis of the statutorily provisions (including in particular the FJREO)  and cases law as stated in the Decision.

10.For the above reasons, I am of the view that D4’s intended appeal seeking to establish that P does not even have a good arguable case has no reasonable prospect of success.

11.Mr Ng seeks to invoke the “some other reason” on the basis that “the question is one of general principle to be decided for the first time or of importance”[8]. I have formed the view that the point has no reasonable prospect of success.  Even if there is to be any appeal, the issue before the Court of Appeal remains whether P has a good arguable case on the continuous availability of common law enforcement.  I see little utility which any appeal may achieve.

12.For record, I state that I have also considered D4/Sub#2.  Nothing there in my view assists D4 further.

13.For the above reasons, I refuse D4 leave to appeal.

Further interim stay

14.At §11 of D4/Sub#1, D4 asks that “[if] the Leave Application is refused, D4 prays that the interim stay be extended for a further 14 days from any refusal for D4 to make further application(s)”.

15.On the facts of this case, and given it is only 14 days which D4 is seeking, I am prepared to accede to that request.

Overall disposition

16.I refuse the Leave Summons.  I extend the interim stay granted on 8 January 2015 for 14 days from the date of this Decision.

Costs

17.On costs, I make a costs order nisi that P shall have the costs of and occasioned by both the Stay Summons and Leave Summons, with certificate for counsel, to be summarily assessed.  Any application shall be made on papers within 7 days from the date hereof, in which case further directions will be handed down.  In the absence of any application for variation, D4 shall lodge her Statement of Objections within 10 days from the date hereof, and P shall lodge its reply within 3 days thereafter, with the view of the summary assessment being conducted on the papers.

Mr Wing So, instructed by Chan Ching Man & Co, for the Plaintiff

Mr Ernest Ng and Mr Fergus Tam, instructed by Watson Farley & Williams LLP, for the 4^th Defendant