Bank of Qingdao Co., Ltd v. Ooo Securities (HK) Group Ltd (Formerly Known As Orientiert Xyz Securities Ltd)

HCA 1127/2022 and HCA 1141/2022
(Consolidated)

[2025] HKCFI 3503

HCA 1127/2022

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1127 OF 2022

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BETWEEN

(BY LEADING ACTION)

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AND

HCA 1141/2022

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1141 OF 2022

BETWEEN

(BY LEADING ACTION)

(Consolidated by Order of Master Kent Yee dated the 13^th day of October 2022)

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D E C I S I O N

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I. INTRODUCTION

1.Having heard arguments at the hearing on 14 May 2025 (the “Hearing”), in my Decision handed down on 28 May 2025 ([2025] HKCFI 2223)  (the “Decision”)  (the abbreviations and definitions in which I shall adopt here), I dismissed OOO Securities’ appeal (by Notice of Appeal filed on 6 January 2025)  against Master Val Chow’s Order made on 23 December 2024.  By Summons filed on 11 June 2025, OOO Securities applies for leave to appeal against the Decision on the intended grounds of appeal set out in the draft Notice of Appeal annexed to the Summons.  I now deal with the intended grounds (referred to as “Ground 1”, “Ground 2” and so on)  below.

II.  GROUND 1

2.Ground 1 concerns my construction of the Unless Order.  In his written submissions, Mr Benjamin Yu SC (leading Mr Danny Tang), for OOO Securities, submits that construction of a court order is a question of law and it is reasonably arguable that the Unless Order should cover “all” interlocutory applications rather than only the “intended” interlocutory applications despite the word “intended”, having proper regard to the syntax, context and background in which the Unless Order was made.  Mr Yu also submits that I failed to take into account that the Unless Order as I construed would become “a toothless tiger with an empty bite”, and I also failed to take into account the fact that contrary to my view in §35(4)  of the Decision, no further counsel advice has ever been ordered.

3.Mr Yu does not really complain that I apply the wrong legal principles in the construction of the Unless Order.  Mr Yu’s argument is essentially a re-run of his argument made before me during the Hearing that I should accord more weight to certain factors but less to others.  All these factors I considered in some detail in §35 of the Decision.  In my view, the Court of Appeal would be reluctant to interfere with such a conclusion as based on evaluative assessment of a large number of factors: see Xu Hongbiao v Oasis Investment Group Ltd [2023] HKCFI 2887 at §§8-10 per K Yeung J.

4.In respect of Mr Yu’s complaint that I failed to take into account the fact that no further counsel advice has ever been ordered, in §35(4)  of the Decision, I only said that the Master foresaw that she “may have to make a usual order that further counsel’s advice shall be taken” (emphasis added).  The fact that there was no such further counsel’s advice ordered does not mean that the Master did not foresee that way. 

5.For the avoidance of doubt, I state the obvious – I only construed the Unless Order with regard to the syntax, context and background.  The practice of the Court – to order counsel’s advice to ensure that the case is in proper order before leave to set down for trial is granted (§35(4)  of the Decision)  – is of course a context I had to consider. In this regard, I did not speculate, as argued in Ground 1.4, what Master foresaw; it was just the context or practice of the Court against which I considered the matter.

6.While what the Unless Order meant is a question of law, having considered Mr Yu’s submissions and the arguments set out under Ground 1, I find no real prospect of success in this Ground.

III.  GROUND 2

7.Ground 2 complains that had I found the Unless Order to cover BOQ’s interlocutory applications in question, I would have failed to consider the question of relief against sanction.

8.In other words, Ground 2 hinges upon Ground 1. Since I have found no real prospect of success in Ground 1, I also find no real prospect of success in this Ground.

IV.  GROUNDS 3 AND 4

9.Grounds 3 and 4 concern my exercise of discretion to allow the Everglory Amendments.  Ground 3 complains that on the ground that it is embarrassing, lacks clarity and in any event runs impermissible alternatives, I should have exercised my discretion to refuse the Everglory Amendments.  Ground 4 complains that the Everglory Amendments lacks of particulars.  It seems that lack of clarity may also arise from lack of particulars, and so I shall deal with Grounds 3 and 4 together.

10.In essence, Mr Yu submits that it is embarrassing and lacks of clarity because by the Everglory Amendments, it was impossible for OOO Securities to know what this Everglory Amendments are “further” or “alternative” to.  I accept that the Everglory Amendments could have been pleaded with more clarity, but pleadings is not a game of words.  One reads pleadings in context in order to understand the contents and ascertain the issues. Excluding those impermissible alternatives well articulated by Mr Yu in his submissions during the Hearing which I accepted (§51 of the Decision)  and read in the context consisting of OOO Securities alternative case (§52 of the Decision), the “further” or “alternative” case is a tolerably clear one set out and explained in §§52-56 of the Decision, and such a case is clearly relevant. With respect, I do not agree with Mr Yu’s submissions that the interpretation or understanding of the Everglory Amendments was my own way to “salvage” or “reformulate” the Everglory Amendments.  I just read it in context objectively.

11.Mr Yu submits that even understood this way, the Everglory Amendments are still impermissible because it was BOQ’s case that the Investment Restrictions had not been released by Schedule 5 given that BOQ did not sign Schedule 5.  Mr Yu submits that it is within BOQ’s knowledge whether it was signed, and so it is impermissible for BOQ to run the Everglory Amendments this way.  However, in my view, if the trial court rejected BOQ’s version of event, then there were no Investment Restrictions.  That BOQ’s version of event was rejected does not mean that there can be no triable issue on whether OOO Securities’ authority to invest would be restricted by the Duties.  Mr Yu’s reference to Hurstanger Ltd v Wilson [2007] 1 WLR 2351 at §35 and Frank Lee v The Hongkong and Shanghai Banking Corporation Ltd [2022] HKCFI 3680 at §122 (which I dealt with at §55 of the Decision)  are useful, but in my view is insufficient to cross the threshold of rendering the Everglory Amendments “bound to fail”, especially as pointed out by Mr Rimsky Yuen SC (leading Mr Martin Ho)  in his written submissions, (at least apparently)  on OOO Securities’ own case, the alleged release from the Investment Restrictions was nothing to do with BOQ’s consent to the Everglory Subscriptions.

12.As regards the alleged lack of particulars, I see nothing wrong in my reasoning and my view set out in §57 of the Decision dealing with the same argument now raised again by Mr Yu.

13.Therefore, I see no real prospect of success in Grounds 3 and 4.

V.  GROUND 5

14.Ground 5 concerns my exercise of discretion to allow the Clause 3.2 Amendments.  Mr Yu submits that the Clause 3.2 Amendments would not be necessary for a fair disposal of the case or for saving costs. 

15.I point out that while at the Hearing, BOQ apparently reserved its position on the quantum of damages (see §37(1)  of BOQ’s Skeleton Submissions for the Hearing), no quantum has been pleaded or particularised.  It was therefore fair for Mr Yu to run his primary argument on the basis that the damages would be nominal only.

16.My decision to allow the Clause 3.2 Amendments was made having considered all the relevant factors holistically.  It was common ground that the Clause 3.2 Amendments did constitute a good cause of action, but only that Mr Yu argued that the claim was too nominal to proceed with as necessary for a fair disposal of the matter.  In my view, even the various cases relied upon by Mr Yu during the Hearing (mentioned in §69 of the Decision)  did not go so far as to say that a claim sounding only in nominal damages can never be permitted.  Whether it was too nominal to proceed with is a value judgment considered in the circumstances, and I was guided by the legal principles distilled and summarised in §73 of the Decision.  I also considered the reason for the delay (§§66-68 of the Decision), the merits of the Clause 3.2 Amendments (§§69-75 of the Decision)  and the prejudice (§§77-78 of the Decision).

17.In the circumstances, I see no real prospect of success in this Ground.

VI.  CONCLUSION

18.In the premises, I dismiss OOO Securities’ Summons. 

19.Mr Yuen seeks costs on an indemnity basis.  I do not think OOO Securities’ Summons is so unreasonable as to amount to abuse or in any even warrants taxation on such basis. 

20.I order that OOO Securities shall pay BOQ costs of the Summons with certificate for two counsel, summarily assessed at HK$380,000, taking into account the fact that the Summons is effectively the third time BOQ has to deal with the same matter.

21.It remains for me to thank Mr Yu SC and Mr Tang, counsel for OOO Securities, and Mr Yuen SC and Mr Ho, counsel for BOQ, for their able assistance as for the Hearing.

Mr Rimsky Yuen SC, leading Mr Martin Ho, instructed by Zhong Lun Law Firm LLP, for the Plaintiff in HCA 1127/2022 and the Defendant in HCA 1141/2022

Mr Benjamin Yu SC, leading Mr Danny Tang, instructed by Gibson, Dunn & Crutcher, for the Defendant in HCA 1127/2022 and the Plaintiff in HCA 1141/2022