New Sparkle Roll International Group Ltd v. Zheng Hao Jiang and Others

HCMP 792/2024

[2025] HKCFI 4214

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMI NISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 792 OF 2024

____________________

____________________

______________________

____________________________________________

DECISION ON CONSEQUENTIAL
ORDERS AND COSTS

___________________________________________

1.The background and issues are set out in my Decision in these proceedings dated 17 July 2025 (the “Decision”). I adopt the terminology used therein.

2.By the Decision, I declined to grant to the Company the relief sought against the Subject Defendants under §2 of the OS on a summary basis. I directed that written submissions be lodged on: (i) the appropriate orders and directions for progressing §2 of the OS to a hearing including oral evidence, whether under Order 28, rule 4 or rule 8 RHC; and (ii) costs.

3.I have now received and considered the parties’ said written submissions, and give my Decision on these topics.

Whether to order the proceedings to continue as if begun by writ

4.The main issue is whether I should make directions for the OS to progress to a hearing with oral evidence under Order 28, rule 4 RHC, or whether I should order the matter to proceed as if begun by writ under Order 28, rule 8.

5.The principles are summarised in Hong Kong Civil Procedure 2025 at §§28/4/4 & 28/8/2. In Re Estate of Chiu Keung [2020] 3 HKLRD 779 Chu JA stated as follows:

“58. Under Order 28, rule 4(1) of the Rules of the High Court, the court has a wide discretion to dispose of the originating summons summarily where it is satisfied that there are no triable issues. Where there are genuine, substantial factual disputes that cannot be resolved on affidavit evidence, the court may either give direction under rule 4(3) for evidence to be taken orally, including cross-examination of deponents of the affidavits, or order under rule 8 that the proceedings be continued as if the cause or matter had been begun by writ.

59. Counsel have referred us to a number of authorities: Bank of China (Hong Kong) Limited v Keen Lloyd Resources Limited CACV 1787/2001, 26 February 2002 at [18] to [22]; Ye Hong Ying v Chan Lup Ying [1996] 1 HKLR 255 at 258F-J; Shum Wah Ming v The Estate of Chen King Ngo, deceased & Anor CACV 21/1996, 10 July 1996 at [25], [50] to [53]; Cheney Communications Pte Ltd v Christopher Charles Cheney HCMP 2942/1992, 2 August 1993. In summary, these cases establish that there is no hard and fast rule as to what cases can properly be dealt with by the originating summons procedure. It is not the case that the existence of factual disputes will invariably render the originating summons procedure inappropriate, although it is a factor to be taken into account when exercising the discretion. Other relevant considerations include whether the procedural advantages of an action begun by writ, such as delivery of pleadings and discovery, justify the exercise of the power under Order 28 rule 8 and whether in so ordering the ultimate resolution of the dispute would be significantly delayed. If the issues of fact have been identified and can be properly resolved or the disputes of fact are not central to the court’s determination, the court is entitled to proceed to determine the action without converting it into a writ action. With regard to whether to hear the summons on oral evidence, what the court has to consider, as stipulated in Order 28 rule 4(3), is what is required for the just, expeditious or economical disposal of the proceedings”.

6.I have considered all of the parties’ arguments on point, and will keep my reasoning brief.

7.On balance and on the facts of this case, I take the view that §2 of the OS ought to continue as if begun by writ. My main reasons are as follows:

(1)  The Company’s case is that the Subject Defendants acted dishonestly, and the case law is replete with reminders of the importance of such allegations being pleaded[1]. The allegations made are serious, and would have serious repercussions for the Subject Defendants if made good.

(2)  I consider that there are substantial factual issues raised in the proceedings (see eg Decision §24(6)). I also think that discovery is warranted to ensure that a full set of relevant documentation is before the court.

(3)  The Subject Defendants and the court ought to have the benefit of a case the ambit of which is precisely delineated by pleadings; in terms of the dishonesty allegations and more generally. I do not think that an order that the affidavits stand as pleadings – as suggested by the Company – would provide a satisfactory such delineation.

(4)  The Company argued strenuously that the Subject Defendants should not be given a second opportunity to file evidence, since there had already been ample chance in respect of the OS. However, given that the ambit of the parties’ cases is to be clarified by pleadings, and discovery given, I consider that both sides should have a chance to file supplementary evidence, with the affidavits filed thus far also standing as witness statements.

(5)  The Company argues that conversation to a writ action will waste time and costs. However, the materials filed to date would not be entirely wasted. Further, the imperative of efficiency must be balanced against the need for fairness to litigants, especially where serious allegations are to be ventilated.

(6)  The Company complains that had the Subject Defendants sought conversion to a writ action, they ought to have applied for the same. However, it may conversely be argued that the Company ought itself to have appreciated that a summary procedure was inappropriate for §2 of the OS.

8.Accordingly, I will make the following orders and directions:[2]

(1)  the proceedings shall continue as if begun by writ;

(2)  the Company shall file and serve its Statement of Claim within 21 days of the date of this order;

(3)  the Subject Defendants shall file and serve their Defence within 21 days thereafter;

(4)  the Company shall file and serve its Reply (if any) within 14 days thereafter;

(5)  close of pleadings shall take place in according with Order 18 rules 20 of the RHC;

(6)  the Company and the Subject Defendants shall exchange lists of documents within 14 days of the close of pleadings, with inspection of documents to follow within 7 days thereafter.;

(7)  all affirmations filed and served to date by the Company and the Subject Defendants shall be treated as witness statements of their deponents;

(8)  the Company and the Subject Defendants shall exchange supplemental witness statements or witness statements for new witnesses (if any) within 14 days after the inspection of documents;

(9)  there be liberty to apply in respect of these directions and for further directions.

Costs

9.The Subject Defendants argued that they should have the costs of the OS and the hearing before me on the basis that: (i) the Company was unsuccessful in obtaining judgment on a summary basis; (ii) it should have been obvious to the Company that the OS procedure was inappropriate and the proceedings should have been commenced by writ; and (iii) the Company had, allegedly, ambushed the Subject Defendants procedurally on various occasions.

10.The Company sought costs in the cause, arguing that this was the usual order in the present circumstances.

11.I take note of the principles on costs on conversion to a writ action, as summarised in Hong Kong Civil Procedure 2025 at §28/8/4[3].

12.Although the Company was unsuccessful at the hearing in obtaining judgment on the spot, I consider that the points run were reasonably arguable; and further, my decision to proceed under Order 28 rule 8 rather than rule 4 is a fairly finely balanced one of discretionary case management.

13.Accordingly, I consider that the fairest order on the facts of this case is costs in the cause, and I so order.

14.Last, I think both teams of counsel for their able assistance in this matter.

Mr William Wong SC, leading Ms Tinny Chan, instructed by Sit, Fung, Kwong & Shum, for the Plaintiff

Mr Hugh Kam, instructed by LCS Legal, for the 4^th to 6^th and 8^th Defendants