Hong Kong Aviation Support and Development Association Ltd v. Beacon International Ground Solutions Ltd (Formerly Known As Bigman HK Ltd)
Read the full judgment text of CACV 490/2025 on BabelCite. This Court of Appeal judgment was delivered on 21 October 2025.
1. This is an appeal brought by the plaintiff, Hong Kong Aviation Support and Development Association Ltd (“ HASDA ”), against the decision of Deputy High Court Judge Kent Yee on 19 June 2025 (“ Decision ”). By the Decision, the judge dismissed HASDA’s originating summons for an injunction to restrain the defendant, Beacon International Ground Solutions Limited (formerly known as Bigman HK Limited; “ Bigman ”), from presenting a winding-up petition against it based on a statutory demand dated 22
Cited by 1 case · Cites 9 cases
|
CACV 490 /2025, [2025] HKCA 1010 On appeal from [2025] HKCFI 2625 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF APPEAL CIVIL APPEAL NO 490 OF 2025 (ON APPEAL FROM HCMP NO 300 OF 2024) ________________________
________________________ BETWEEN
________________________
________________________ REASONS FOR JUDGMENT ________________________ Hon Kwan VP (giving the Reasons for Judgment of the Court): 1.This is an appeal brought by the plaintiff, Hong Kong Aviation Support and Development Association Ltd (“HASDA”), against the decision of Deputy High Court Judge Kent Yee on 19 June 2025 (“Decision”). By the Decision, the judge dismissed HASDA’s originating summons for an injunction to restrain the defendant, Beacon International Ground Solutions Limited (formerly known as Bigman HK Limited; “Bigman”), from presenting a winding-up petition against it based on a statutory demand dated 22 January 2024 (“SD”) for the sum of $1,294,700 (“Debt”). The judge also discharged Bigman forthwith from its interim undertaking not to present a winding-up petition against HASDA pending determination of the application for the injunction. An academic appeal 2.After the Decision, Bigman presented a winding-up petition against HASDA on 24 June 2025. It was only on 8 July 2025 that HASDA filed a notice of appeal against the Decision and on 11 July 2025 sought a hearing of the appeal on an expedited basis. 3.The winding-up petition came before Harris J on 1 September 2025. He was informed the present appeal would be heard on 21 October 2025. He gave directions that the petition be argued before him substantively on 24 November 2025. 4.In the notice of appeal, HASDA sought to set aside the Decision and to restrain Bigman from presenting a winding-up petition based on the SD. As the petition has been presented, it is not possible for such relief to be granted. In that sense, this appeal is academic. After the Decision was handed down, HASDA should have sought an interim injunction from the Court of Appeal on an urgent basis to restrain the presentation of the petition pending appeal so that its appeal would not be rendered academic or nugatory. 5.We decided to hear this appeal notwithstanding it is academic as there are special circumstances. The appeal raised the issue whether HASDA has a bona fide dispute on substantial grounds for the Debt in the SD. HASDA will raise the same issue in opposition to the petition which is pending. How the issue is resolved in this appeal will impact on the petition to be heard in a month’s time, as explained in Pan Sutong v China Citic Bank Corporation Limited, Tianjin Branch & Ors [2024] HKCA 580 at §§111 to 125. 6.This is because the threshold for establishing a bona fide dispute of the debt on substantial grounds to constitute an abuse of process for an injunction to be granted is the same as the threshold for resisting a petition on the disputed debt basis. Hence, a decision on the application for an injunction that no bona fide dispute of the debt has been shown is capable of precluding any further contest on the same issue in the petition, whether one regards this as prevention of duplicated and wasteful arguments in insolvency proceedings or as matters which have already been decided and therefore governed by res judicata. The debtor cannot re-argue grounds on which he unsuccessfully sought to restrain the presentation of a winding-up petition or to set aside a statutory demand under the Bankruptcy Rules, without some change of circumstance. To hold otherwise would be to encourage a waste of court time and parties’ money and defeat the obvious purpose of the statutory scheme. This has been referred to in English cases as the Turner principle[1]. 7.Mr Zenith Chan, who appeared for HASDA throughout, went so far as to submit that any pronouncement by this court on the disputed debt issue “would be binding on the parties and effectively dispose of the Petition”. It is right that HASDA should be given the opportunity to challenge the disputed debt issue in this appeal as it would be precluded from doing so in the petition by the Turner principle in the absence of change of circumstance and would only be able to do so on appeal in the event that a winding-up order is made. 8.Having heard Mr Chan and Ms Fontanne Chu for Bigman, we dismissed HASDA’s appeal with costs at the conclusion of the hearing. These are the reasons of the court. Factual background 9.The relevant factual background is taken from the Decision and available evidence which is not in dispute or cannot be disputed. 10.The disputes between the parties arose from the labour charges for ground operations at the Hong Kong International Airport. At the material time, the ground operations were primarily handled by three private ground handling agents and one of them was SATS HK Ltd (“SATS”). Wong Ching Ho Ben (“Wong”) was the Chief Executive Officer of SATS by a transfer of employment contract in June 2021. 11.HASDA was incorporated in Hong Kong on 14 June 2022. There was at the time a huge demand of manpower for ground operations due to the return to normality of air travel in Hong Kong after Covid. HASDA acted as an intermediary for the supply of part-time manpower to SATS. Wong was its founder and its sole shareholder and director at the inception. On 7 November 2023, his wife Lau Kar Yan Jill (“Lau”) replaced him as sole shareholder and director of HASDA. 12.Since December 2022, HASDA had entered into contracts with SATS for provision of labour and labour management services to SATS. Among those contracts were those relating to ground operation services provided for three airlines, namely, InterGlobe Aviation (“6E”), Scoot Pte Ltd (“TR”) and VietJet (“VJ”). The TR contract and 6E contract between SATS and HASDA were both dated 30 December 2022, the VJ contract between SATS and HASDA was dated 8 February 2023 (collectively “SATS Contracts”). 13.To fulfil its obligations under the SATS Contracts, HASDA entered into contracts with Bigman for providing casual labour for flight handling at the Airport. The written contracts between them for the provision of labour services for TR (“TR Contract”) and 6E (“6E Contract”) were both dated 28 December 2022. The contract between them for the provision of labour services for VJ was dated 3 February 2023 (“VJ Contract”). All three contracts (collectively “Contracts”) were in similar terms and contained this clause regarding the settlement of invoices (“30-day Payment Clause”):
14.In contrast, the SATS Contracts contained a provision that SATS shall settle the payment within 15 days from the date of receipt of monthly invoice. 15.There was also a provision in each of the Contracts that either party could terminate by giving the other 30 days written notice, and/or the contract would be automatically terminated once the relevant airline terminates its contract with SATS or SATS terminates or changes any term of the contract with HASDA (“Automatic Termination Clause”). 16.On 9 May 2023, Bigman issued the invoices dated 8 May 2023 for the services provided to HASDA in April 2023. HASDA sent the invoices to SATS for verification of labour sign-in record and processing. On 30 May, SATS adjusted the figures for the invoice relating to TR and HASDA in turn requested Bigman to check and revise the invoice, which was done on 6 June 2023. 17.At a meeting of the board of directors of SATS on 22 May 2023, it was noted that Wong failed to declare his 100% ownership of HASDA to the board and that he was earning income from the casual labour contracts between SATS and HASDA[2]. 18.On 23 May 2023, SATS gave 60 days’ notice to HASDA to terminate seven contracts including the SATS Contracts as from 23 July 2023. On behalf of HASDA, Wong sent an email to Bigman on 5 June 2023 informing Bigman that as services for the SATS Contracts would not be required from 23 July 2023, HASDA would have to align its position with Bigman and terminate the Contracts from 23 July 2023. 19.On 6 June 2023, SATS gave a further notice to HASDA regarding those seven contracts that the manpower to be provided by HASDA under those contracts would be reduced to nil as from 8 June 2023. HASDA in turn gave notice to Bigman on 7 June 2023 that as SATS terminated the need of labour services for TR, 6E and VJ from 8 June 2023, the Contracts were automatically terminated pursuant to the Automatic Termination Clause and labour services were no longer required from Bigman as from 8 June 2023. 20.Also on 7 June 2023, Bigman issued three invoices to HASDA for services in May 2023. The particulars are as follows:
21.By an email on 12 June 2023, the sales team of Bigman sent Wong a statement of account (showing an outstanding sum of $2,329,800) and two further invoices for settlement, drawing to HASDA’s attention the fact that of the eight invoices listed in the statement of account, three invoices for services in April were due for payment on 8 June 2023. The two further invoices were for services in June 2023 and the particulars are as follow:
22.The total amount due for the five invoices for services in May and June 2023 (“Invoices”) came up to $1,294,700, which formed the subject matter of the Debt in the SD. 23.Bigman’s Chief Executive Officer also wrote to Wong on 12 June 2023 reminding HASDA that there was an outstanding balance in the statement of account of $2,329,800 for settlement, and requesting prompt payment on or before the due date. 24.HASDA sent this reply by email on 14 June 2023 (“14/6 Email”):
25.Bigman responded to the 14/6 Email by email on 15 June 2023 stating that it was aware some of the invoices were not yet due but the invoices for services in April were unpaid and overdue since 8 June 2023. Bigman acknowledged the payment terms as clarified in the 14/6 Email that the invoice would be due after 30 days from date of receipt of monthly invoice. 26.On 23 June 2023, Bigman sent HASDA an email stating that the invoices for services in April[3] were 15 days past due and asking for settlement as soon as possible. 27.HASDA settled the invoices for services in April (due on 8 June 2023) on 21 July 2023, after it received payment from SATS the day before. 28.However, the Invoices for services in May and June 2023 being the Debt have not been paid by HASDA as it has not been paid by SATS. 29.On various dates in September, October and November 2023, WhatsApp messages (“Text Messages”) were exchanged between Bigman’s director, Dante Chow (“Chow”), and Wong about the non-payment of the Invoices. Chow repeatedly sought updates from Wong on the progress of HASDA in chasing SATS for payment. In one exchange, Chow stated that the problem did not lie with Wong and Chow and SATS had the responsibility to pay wages[4]. Chow asked Wong to pay Bigman first as Bigman could not hold on much longer and HASDA could sue SATS later[5]. Chow mentioned that if this was to continue, Bigman would issue a letter of demand to HASDA, HASDA would issue a letter of demand to SATS and HASDA would need to deal with both[6], to which Wong responded that HASDA had made advance payments in part to suppliers etc but SATS failed to settle the overdue sums and HASDA had been making advance payments of wages to employees for several months and could not afford to make advance payments to suppliers so HASDA had been chasing SATS[7]. Wong informed Chow in November 2023 that HASDA had engaged lawyer to pursue SATS for payment. 30.Bigman instructed solicitors in December 2023. A letter of demand was sent by Eddie Lee & Company (“ELC”) to HASDA dated 21 December 2023 demanding payment of the Debt within seven days, with particulars of the Invoices being the invoice number, invoice date, due date and repayment amount, failing which legal proceedings would be commenced without further notice. HASDA did not reply to this letter. 31.HASDA then issued a statutory demand against SATS on 2 January 2024[8]. On 16 January 2024, SATS issued an originating summons against HASDA for an injunction to restrain HASDA from presenting a winding-up petition against it based on the statutory demand[9]. 32.ELC issued the SD on behalf of Bigman against HASDA on 22 January 2024. As per the prescribed form of a statutory demand, particulars were given of when the debt was incurred, the description of the debt, and the amount due as at the date of the demand. 33.HASDA responded to the SD by a letter of its solicitors William W L Fan & Co (“WFC”) dated 1 February 2024 (“1 Feb Letter”). It was stated that the SD did not enclose copies of “invoices, underlying contract(s)/agreement(s), or a covering letter” and “[as] a result, HASDA lacks information and details regarding the basis of the SD; nor is HASDA able to verify the calculations presented in the SD”. WFC asked for copies of the documents to be provided by 5 February 2024, and went on to assert there is a bona fide dispute of the Debt on substantial grounds as HASDA has a strong cross-claim against Bigman based on wrongful inducement of breach of contract and/or wrongful interference with contract and/or conspiracy by Bigman and SATS to cause HASDA substantial loss by unlawful means. It was alleged that HASDA discovered Bigman had entered into contracts directly with SATS for the provision of casual labour from 22 May 2023 for two years thereby ousting HASDA and HASDA sought pre-action discovery from Bigman of those contracts with SATS. 34.ELC replied to the 1 Feb Letter on 16 February 2024 and provided copies of the Invoices but refused to give pre-action discovery regarding the alleged cross-claim. 35.WFC wrote to ELC on 16 February 2024 again asserting that HASDA was entitled to seek clarification from Bigman regarding the particulars of the SD and rejecting that the application for pre-action discovery was a fishing expedition as alleged by ELC. 36.On 21 February 2024, HASDA issued the present originating summons against Bigman for an injunction to restrain presentation of winding-up petition. The supporting affirmation, Lau 1st, was filed on 20 March 2024. On 27 March 2024, Bigman gave an interim undertaking not to present a winding-up petition pending the determination of the originating summons. 37.From March 2024 to November 2024, HASDA filed three rounds of affirmations in these proceedings and Bigman filed two rounds of affirmations. The originating summons was heard by the judge on 12 March 2025 and the Decision was handed down on 19 June 2025. The case of HASDA 38.HASDA contended it is an abuse of process for Bigman to present a winding-up petition for non-compliance with the SD on two bases: the disputed debt and the cross-claim[10]. The judge rejected both. As there is no challenge on appeal regarding the cross-claim basis, it is not necessary to say anything about this. 39.It was contended that the Debt was bona fide disputed on substantial grounds for these reasons:
40.In support of the above contentions, HASDA relied on the following evidence:
41.The judge found no credible evidence to support the existence of the Industry Practice and the Oral Agreement and HASDA has no grounds to raise any bona fide dispute about the Debt. The grounds of appeal 42.HASDA advanced two broad grounds of appeal. 43.Ground 1 contended that the judge erred in law and was in any event plainly wrong in finding there is no bona fide dispute over the Debt based on the Oral Agreement, which reflected the Industry Practice. It was submitted that the judge failed to appreciate the significance of, or accord appropriate weight to, the evidence of Candy Chan, the Text Messages, the 8/3 Email and the previous payment history between the parties. The judge was said to have effectively determined a triable issue summarily on affidavits, misapplied the applicable evidential threshold, deprived HASDA of the opportunity of cross-examining Bigman’s witnesses, and denied Wong the opportunity of giving further explanation to queries raised in the Decision. 44.Ground 2 contended that the judge erred in law and was in any event plainly wrong to find there is no bona fide dispute over the Debt based on Bigman’s persistent and unexplained refusal to provide any figures or breakdown (eg the names of part-time workers, the number of man-hours) to justify the figures billed in the Invoices. The judge erred in holding that HASDA was “not in a position to challenge the claims of [Bigman]”[11]. He has overlooked the 1 Feb Letter and WFC’s letter dated 16 February 2024 in holding that HASDA only began to challenge the amounts of the Invoices on 20 March 2024 when Lau 1st was filed in support of the originating summons[12]. Further, the judge failed to appreciate the significance of, or accord appropriate weight to, the fact that HASDA was “extremely occupied” in litigating against SATS in four High Court actions from late 2023 and did not have the time and resources to deal with the Debt at the time. The proper approach in this appeal 45.In the grounds of appeal, HASDA sought to challenge the judge’s evaluation of the evidence and findings of fact. It was contended that he had failed to appreciate the significance of, or accord appropriate weight to, various aspects of the evidence. Although no authority was cited by Mr Chan on the threshold for appellate intervention in this kind of situation, it would appear from the manner the grounds of appeal were framed (that the judge had erred in law, had failed to take relevant matters into consideration, or was in any event plainly wrong) that counsel was apparently cognisant of the proper approach for appellate intervention in the evaluation of evidence based on affidavit evidence and contemporaneous documents rather than oral evidence. 46.The proper approach is well established[13] and may be stated as follows. 47.As the applicant seeking an injunction to restrain the presentation of a winding-up petition on the disputed debt basis, the burden is on HASDA to establish a bona fide dispute of the Debt on substantial grounds by putting forward sufficiently precise factual evidence. To arrive at that determination, the judge is required to evaluate the evidence against so much of the background and evidence as is not in dispute or not capable of being disputed in good faith, and the evidence is not to be approached with a wholly uncritical eye. Bare oral allegations, uncorroborated by documentary evidence or contrary to common and commercial sense, are insufficient to raise a bona fide dispute on substantial grounds. The court does not try the dispute on affidavit but is to determine whether a substantial dispute exists. In so doing, the court necessarily has to take a view on the evidence, to see if HASDA is merely “raising a cloud of objections on affidavits” or whether there really is substance in the dispute[14]. 48.Where the appeal seeks to overturn the evaluation of evidence and findings of fact made by the judge, even though the evaluation and findings were based on affidavit evidence and contemporaneous documents rather than oral evidence, the appeal court should be reluctant to interfere. The function of the appeal court is simply one of review. If the evaluation of evidence is one that the court below was entitled to make, this should not be interfered with on appeal even though the appeal court might have reached some other conclusion, unless it is demonstrated that the judge had fallen into palpable errors in the findings of fact. The appellate process is not designed to give a litigant a platform to repeat submissions made below on the evidence and factual aspects in the hope of persuading the appeal court to come to a different view from the primary judge. 49.Matters of weight given to particular aspects of the evidence are quintessentially matters for the trial judge. The appeal court will intervene where it can be demonstrated that something has gone palpably wrong, whether by some important evidence being overlooked, or by the decision being one which no reasonable judge could have reached, or otherwise[15]. 50.We turn to consider the grounds of appeal. Ground 1: Oral Agreement 51.The four aspects of the evidence relied on by HASDA in support of the Oral Agreement (the Text Messages, the evidence of Candy Chan, the 8/3 Email and the previous payment history between the parties) were argued extensively before the judge. Mr Chan repeated his contentions in this court and sought to challenge the judge’s analysis and findings with additional arguments. (1) The Text Messages 52.Mr Chan placed particular emphasis on certain words and phrases of Chow in the Text Messages (that the problem did not lie with Wong and Chow; that SATS had the responsibility to pay wages) and contended they are consistent with the Oral Agreement and inconsistent with HASDA being liable to pay Bigman. He singled out for special mention the word “先” (first) in Chow asking Wong to pay first and that HASDA could sue SATS later. He submitted that this word is consistent with Chow asking HASDA for a payment which was not yet due at the time, ie an advance payment. He referred to a subsequent statement by Wong in the Text Messages that HASDA had made “墊付” (advance payments) in part to suppliers, and this term is again consistent with payment not yet due at the time. Hence, the language used on both sides raised a real question whether the parties had genuinely thought that payment was due and owing and, if not, why not. He contended that this issue cried out for cross-examination. 53.The judge took the view that the Text Messages can hardly salvage HASDA’s case on the Oral Agreement. No mention was made of the Oral Agreement or the Industry Practice. There was no denial by Wong of HASDA’s liability for Bigman’s outstanding charges and no reminder by him that the outstanding charges were not yet due. Nothing in the Text Messages showed that Bigman accepted HASDA was obliged to pay only after it had been paid by SATS. Whilst Bigman certainly appreciated to a certain extent that HASDA relied on amounts received from SATS to make payment and HASDA might have difficulties in paying Bigman, it is a quantum leap to say that contractually HASDA would only need to pay after it was paid by SATS[16]. 54.The judge had considered the exchanges in the Text Messages relied on by Mr Chan[17]. He took the view it is apparent that Chow merely tried to be diplomatic and empathetic and those statements were business talks only. Chow’s assertion that the problem did not lie with HASDA and Bigman and SATS had the responsibility to pay wages cannot possibly amount to acceptance of the Oral Agreement. Chow just tried to show that HASDA and Bigman were in the same boat. The fact that Chow had asked SATS to pay HASDA[18] does not suggest that HASDA’s liability to Bigman was contingent on whether SATS had paid HASDA. The judge declined to attach any weight to the assertions of Wong as well, and thought that Wong was merely buying time to pay Bigman and making up excuses[19]. 55.The judge further pointed out in other exchanges of text messages, Chow had told Wong he was not unwilling to press SATS for payments but the fact was that SATS literally ignored him, and that he had no locus and no reason to meddle in the affairs between SATS and HASDA[20]. In response to this, Wong stated that once SATS paid HASDA, HASDA would pay Bigman and he hoped that Chow would understand HASDA’s position and assist in pressing SATS for payment[21]. Wong added that because of the non-payment of SATS, HASDA did not have enough money to pay its sub-contractors and HASDA had been working hard on communication and had sought advice but if any action was taken against HASDA, it might lead to its winding-up and HASDA hoped it could persevere. Lastly, Wong asked for more time[22]. The judge formed the view that Wong’s response is totally inconsistent with the Industry Practice and the Oral Agreement[23]. 56.Mr Chan criticised the judge’s reasoning as summary determination of the factual disputes on affidavits. He maintained his reliance on selected exchanges in the Text Messages. He submitted it is “divorced from commercial reality” to consider that the only reasonable response from Wong in that situation was to assert HASDA’s strict legal rights. Just as the judge had thought Chow was trying to be diplomatic, Wong could have been diplomatic too and that would explain why he took the practical step of asking Bigman to join HASDA in chasing SATS. 57.In our judgment, Mr Chan has not demonstrated any palpable error in the judge’s analysis and evaluation of the Text Messages, which must be read as a whole instead of merely focusing on isolated words and statements. It could hardly be said that the words and statements relied on by Mr Chan, when read in context and against the entire background, are consistent only with the Oral Agreement and inconsistent with HASDA being liable to pay Bigman. The further exchanges pointed out by the judge in which Chow stated that he had no locus and no reason to meddle in the affairs between SATS and HASDA and Wong’s response that this might lead to HASDA being wound up and asking for more time are particularly telling. 58.The judge is entitled to take the view that the Text Messages can hardly salvage HASDA’s case on the Oral Agreement and the Industry Practice, for the cogent reasons he gave. There is no reason to interfere with his thinking in not attaching any weight to those of Chow’s statements and Wong’s assertions in the Text Messages relied on by Mr Chan. (2) Evidence of Candy Chan 59.The evidence of Candy Chan on the Industry Practice and AEL’s practice of submitting spreadsheets to HASDA with its payment applications for verification by SATS has been summarised earlier. She asserted her belief that the same payment process applied to all other companies under sub-contracts with HASDA and indeed “across the aviation industry in Hong Kong in respect of casual labour supply services”. She also said AEL usually received payment for the casual labour supplied to SATS through HASDA two months after AEL had submitted its payment applications to HASDA, and recalled a telephone conversation she had with Wong in about 2023 in which Wong advised her of the payment process and that AEL would not be paid until at least two months after each of its payment applications. She said that she understood the trade practice and agreed with Wong the payment process and the “somewhat late payment”[24]. 60.Mr Chan asserted that her evidence should be given considerable weight, as she was a senior officer of AEL and AEL was a specialist airport labour sub-contractor. Candy Chan would clearly have personal knowledge of prevailing industry practices through her management of AEL. The source of her knowledge is self-evident, there is no evidential basis to disbelieve her in the absence of cross-examination. Counsel submitted that the points made in her affirmation (the existence of the Industry Practice, how the payment process worked, and AEL’s acceptance of the Industry Practice in its dealings with HASDA) are all ‘self-standing’ points, so the acceptance of any of them would be sufficient for HASDA’s case. He asked rhetorically why HASDA would expressly adopt the Industry Practice and protect itself from the risk of late payment by SATS in its dealings with AEL but not with Bigman. 61.The judge had examined Candy Chan’s evidence closely. He noted that she said very little about her experience in the industry and did not explain how she acquired knowledge about the common adoption of such a practice. She did not exhibit the subcontracts between HASDA and AEL, or quote any specific provisions in the subcontracts. The judge did not find her evidence convincing, and regarded her belief that the same payment process applied to all other subcontractors of HASDA as unfounded[25]. Her account of how AEL was paid by HASDA was not really indicative of the Industry Practice of “pay when paid”. At most, it was merely agreed between AEL and HASDA that the information in the monthly payment applications had to be verified by SATS first and it was SATS which decided what amounts AEL could charge in a particular month. SATS would pay the adjusted amounts in the invoices issued by AEL. It did not really evidence the adoption of the Industry Practice that HASDA would only pay AEL after SATS paid HASDA[26]. 62.The judge further pointed out that in the present case, no such payment procedures was stipulated in the Contracts. Nor was there any allegation that Wong and Francis Chan (with whom the Oral Agreement was allegedly made) ever had a discussion, let alone reached an agreement, about such a payment procedure[27]. 63.The judge was not convinced of the existence of the Industry Practice of “pay when paid”, nor could he accept that generally the alleged practice was to be followed in all subcontracts notwithstanding any different payment provisions agreed by the parties. 64.We are not persuaded the judge has made any palpable error in his assessment of the evidence of Candy Chan. There is no basis for intervention. (3) 8/3 Email 65.This may be dealt with shortly. Mr Chan submitted this internal email of SATS confirmed the existence of the Industry Practice. The judge did not agree with this and took the view that Wong’s instruction to Geline Tsang to pay not in compliance with the subcontracts only showed that he had the interests of SATS in mind with scant regard to its contractual obligations in the subcontracts. Further, if the Industry Practice was generally followed and adopted, Geline Tsang as the Head of Finance should have simply followed the practice without the need of Wong to give such instructions to her[28]. 66.In reply to this, Mr Chan submitted that Wong should have been given an opportunity to respond to the judge’s speculative observations via oral evidence and he suggested various potential answers that Wong might give. 67.The judge is entitled to attach little or no weight to this internal email of SATS, which was not known to Bigman. The observations of the judge are legitimate and not out of the ordinary. There is no unfairness to Wong in not being able to respond to the observations. HASDA has filed three rounds of affirmations in these proceedings. (4) Payment history from 3 March 2023 to 8 May 2023 68.This is also a point of no substance. 69.Mr Chan submitted that of the ten invoices, no payment was ever made by HASDA to Bigman before HASDA was paid by SATS and for six of them payment was made after the lapse of 30 days. Despite the consistently late payments, Bigman had never chased HASDA for payment prior to its email of 12 June 2023, and this email came only after a paper dated 31 May 2023 was circulated to the board members of SATS recommending the company to cut ties with HASDA and entering into contracts directly with three subcontractors which included Bigman. It was not denied by Bigman that it had entered into direct contracts with SATS. 70.These points had all been made to the judge[29]. The judge rejected the contention that Bigman’s non-complaint about the lateness of six previous invoices was indicative of the existence of the Industry Practice and the Oral Agreement. He noted that of the six invoices, three were issued in April and May 2023 and were settled after a delay of five to eight days. He failed to see how such a short period of tolerance could be taken as any indication of the Industry Practice and the Oral Agreement. For the remaining three invoices, they were issued on 8 May 2023 and 8 June 2023. Bigman sent an email on 12 June 2023 to chase for payment of the invoices due on 8 June 2023, and followed up with another chaser in the email of 23 June 2023. This showed that Bigman was apparently seeking to enforce the 30-day Payment Clause. The judge declined to draw any inference from Bigman’s tolerance of late payment of these invoices that the parties had made the Oral Agreement incorporating the Industry Practice[30]. 71.The judge is entitled to take the view he did and attach little or no weight to the payment history. In the absence of any palpable error, we have no basis to interfere. (5) Other matters 72.Mr Chan submitted that the Oral Agreement and the Industry Practice accord with commercial sense and so they are intrinsically believable. He said that similar ‘back-to-back’ payment arrangements are well documented in construction subcontracts. He argued that as between HASDA and Bigman, it was more likely for Bigman to agree to bear the risk of late payment or non-payment by SATS, as Wong, being the Chief Executive Officer of SATS and the sole director of HASDA, would have the greater leverage and bargaining power. 73.The judge did not find the evidence relied on in support of the Oral Agreement credible. Quite apart from finding the evidence relating to the Oral Agreement “tenuous” and “wholly inadequate”[31], he took into consideration that the Industry Practice and Oral Agreement are plainly inconsistent with the 30-day Payment Clause in the Contracts. There was no explanation why the parties came to agree to the inclusion of this provision in the Contracts if the Industry Practice was to be adopted generally, or why the Oral Agreement was not embodied in the Contracts – if the Oral Agreement had been the real bargain. He did not find it credible that Bigman would have agreed to any hidden “pay when paid” term despite the express stipulation of the 30-day Payment Clause[32]. 74.It could hardly be said that the judge was plainly wrong as contended in the grounds of appeal. 75.Lastly, the judge rejected Mr Chan’s attempts to explain away the 14/6 Email, which contained a clear acknowledgment from HASDA of the 30-day Payment Clause. Mr Chan repeated the same explanation before us that this email was issued by administrative staff in HASDA Finance working under Lau rather than Wong and was unaware of the Oral Agreement and Wong might not have read the email at the time. The judge regarded it important that Wong was copied on the email and did not give any explanation of the email in his affirmation[33]. There is no valid reason to disagree with the judge. 76.For all the above reasons, we reject the contentions in Ground 1. Ground 2: complaint of lack of particulars 77.Mr Chan contended there is a bona fide dispute as to whether casual labour was supplied at all to justify the billing of any amount in the Invoices. He emphasised that HASDA had no staff on the ground to make records of the workers who had turned up and Bigman’s invoices were always conditional and subject to verification by SATS. He gave the example of invoices dated 8 May 2023 for the services provided to HASDA in April 2023, which were adjusted by SATS on 30 May 2023 and Bigman revised the invoices on 6 June 2023. Since SATS severed its relationship with HASDA, the Invoices were not verified by SATS despite repeated requests from HASDA. As a result, the Invoices were not final. 78.Mr Chan contrasted Bigman’s refusal to provide particulars of the labour supplied under the Invoices with HASDA’s other contractors, AEL and A&S (HK) Logistics Limited, which had provided breakdowns including the names of part-time workers, the dates and the shifts they worked, the hourly rates, late deductions, overtime allowances. He submitted that the onus is on Bigman to do likewise to be entitled to payment. The Invoices simply charged HASDA with “arbitrary lump sums” not explicable by reference to any underlying figures. 79.Mr Chan also submitted there is a distinct possibility that the “over-whelming bulk” of the labour as billed in the Invoices was not supplied to HASDA but was supplied directly to SATS under the new contracts between SATS and Bigman. The periods cited in the Invoices were in May and June 2023, and would overlap with the period after 22 May 2023 which was when SATS was to enter into contract directly with Bigman as mentioned in the paper dated 31 May 2023 circulated to board members of SATS. 80.These submissions have all been made before the judge[34], who rejected them. 81.The judge noted that HASDA did not ask Bigman for any particulars or breakdown in respect of the invoices issued between February 2023 to April 2023. Such invoices were settled by HASDA without any objections raised[35]. This remains a valid point. That other subcontractors had provided spreadsheets and breakdowns of labour provided is irrelevant. There was no agreement that verification by SATS was a pre-condition to payment of Bigman. 82.The judge then mentioned that even for the Invoices, HASDA did not cast doubt on the amounts even after its receipt of the SD on 22 January 2024, and HASDA began to challenge the amounts only in Lau 1st filed on 20 March 2024 in support of the present originating summons[36]. 83.The judge made an error here. HASDA did ask for information and details to verify the calculations in the SD by the 1 Feb Letter, and this was before Lau 1st was filed. We do not consider this a material error. The fact remains that the Invoices were issued on 7 and 12 June 2023, and HASDA did not ask for particulars or breakdown or query if labour as billed in the Invoices was supplied to HASDA until the 1 Feb Letter seven months later. In the meantime, there were frequent text messages between Wong and Chow regarding the outstanding Invoices and a letter before action was sent by ELC to HASDA in December 2023. 84.Further, as noted by the judge, it is the evidence of HASDA that it has acted on the Invoices and issued its own invoices based on the Invoices. There is no evidence that SATS has ever raised any requisition about the amounts in the Invoices[37]. 85.There is nothing in the contention that the dates in the Invoices would overlap with the period after 22 May 2023 and the speculation that part of the labour as billed might have been supplied directly to SATS and not through HASDA. SATS had sent an email to HASDA dated 6 June 2023 that manpower to be provided under seven contracts with HASDA would be reduced to nil as from 8 June 2023 and HASDA in turn gave notice to Bigman on 7 June 2023 that labour services were no longer required from 8 June 2023. The last date of the Invoices was 8 June 2023. 86.We agree with the judge that HASDA has no grounds to raise any bona fide dispute about the amounts in the Invoices. As stated by Harris J in Re China Cultural City Ltd at §12, it is only in a rare and extreme case that a company may be able to demonstrate it cannot work out with any confidence at all what the minimum amount is due and in those circumstances it is reasonable for it not to make any payment. What a company cannot do is simply to point to shortcomings in accounts or records and blithely say it does not know how much is payable and decline to pay anything. The court expects bona fide opposition where what is in issue is the amount of the debt to involve some credible attempt to show what the minimum owed is thought to be. 87.We do not think the present situation is a rare and extreme case of this kind. There is also no evidence from HASDA of any credible attempt to find out what should be the minimum amount due in the Invoices. 88.For the above reasons, the contentions in Ground 2 are rejected.
Mr Zenith Chan, instructed by William W L Fan & Co, for the Plaintiff (Appellant) Ms Fontanne Chu, instructed by Eddie Lee & Company, for the Defendant (Respondent) [1] Turner v Royal Bank of Scotland [2000] BPIR 683 [2] HASDA made an affirmation by Lau on 20 March 2024 (“Lau 1st”) in the present proceedings, claiming in §10 that on 15 June 2022, Wong submitted a declaration of conflict of interest with SATS that he was holding the position of president at HASDA and there could be business dealings between SATS and HASDA based on “fair market approach” and this was followed by Wong’s supplemental declaration on 25 October 2022. [3] The 23/6 Email mentioned “the June invoices is now 15 days past due”. This must be a reference to the invoices due on 8 June 2023 stated in the emails of the sales team of Bigman dated 12 June 2023 and 15 June 2023, being the three invoices dated 8 May 2023 for services in April and revised on 6 June 2023 after the adjustment of SATS. The judge erroneously thought in §21 of the Decision the “June invoices” referred to in the 23/6 Email were “outstanding invoices issued in June”. [4] “依家並唔係我同你問題 佢地有責任出糧” [5] “Ben 哥，其實你會唔會找左比我地先? 我地就頂唔住了 你可以再追佢地/告佢地” [6] “如果一直咁落去，相信你都一定知道個流程: big出信搵你，你再出信搵sats，你要應付兩邊，我擔心你吃力” [7] “之前我地等緊SATS 時試過部分墊付供應商等，但SATS Overdue未支付，我地已經墊付左員工幾個月人工已經無錢再墊付供應商 … 所以一直追緊SATS” [8] This statutory demand has not been exhibited by HASDA in the present proceedings. [9] The outcome of this application in HCMP 78/2024 is not known to this court. [10] The nature and circumstances of the grounds raised for the disputed debt and cross-claim are such that if these grounds are found to be valid, there is no question of these grounds being unknown to Bigman when it sought to present a winding-up petition on the SD. Ms Chu submitted there would be no abuse of process if the bona fide dispute of the debt on substantial grounds was not known to the creditor at the time but only demonstrated by subsequent inquiry. This has no relevance to the situation here. [11] Decision, §85 [12] Decision, §83 [13] In re DB’s Application for Judicial Review [2017] NI 301 at §80, per Lord Kerr of Tonaghmore JSC; R(Z) v Hackney London Borough Council [2019] PTRS 2272 at §67, per Lewison LJ; R(Z) v Hackney London Borough Council [2020] 1 WLR 4327 at §§118 to 119, per Lady Arden JSC; Re Cheung Kwan [2021] HKCA 282 at §§30 to 33; Re China Zenith Chemical Group Ltd [2025] 2 HKLRD 308 at §32; Re BGA Holdings Ltd [2025] 2 HKLRD 1113 at §§32 to 36 [14] Re Hong Kong Investments Group Ltd and Re Cheung Chi Mang [2018] HKCFI 984 at §13; Re China Cultural City Ltd [2020] 4 HKLRD 1 at §10 [15] Tien Sau Tong Medicine Co (Hong Kong) Ltd v Cheung Po Ling & Anr [2021] HKCA 1997 at §19 [16] Decision, §§69 to 72 [17] Decision, §42 [18] In one of the messages exhibited as “LKYJ-15” to Lau 1st, Chow stated on 3 October 2023 at 13:09 hours “我一直都有追緊SATS” (I have been chasing SATS all along). [19] Decision, §73 [20] Text messages exhibited to 1st affirmation of Chow as “CKL-1”: “唔係我唔想push, 係佢地唔so我我冇身份冇原因去過問hasda同sats之間嘅事”; see also Chow’s 1st affirmation at §11.13. [21] Text messages exhibited to 1st affirmation of Chow as “CKL-1”: “一直以來Hasda一收到sats找數都係第一時間找俾供應商，從不繼續拖延。如果我地一收到sats找數會立即找數給你，希望你明白我地嘅處境，亦幫手一齊push下sats”. [22] Text messages exhibited to 1st affirmation of Chow as “CKL-1”: “因為Sats欠款，Hasda目前唔夠錢找數供應商，我地一直努力溝通中，亦都問緊advice，但如果收到任何法律行動，可能會導致最後Hasda清盤，Hasda希望可以繼續落去，請給多些時間”. [23] Decision, §§74 to 76 [24] Affirmation of Candy Chan filed on 15 November 2024, §§10, 11 [25] Decision, §§47, 49 [26] Decision, §§48, 51 [27] Decision, §50 [28] Decision, §§58, 59 [29] Decision, §40 [30] Decision, §§61 to 63 [31] Decision, §§53, 55 [32] Decision, §§56, 57 [33] Decision, §§66, 67 [34] Decision, §§32, 80, 84, 85 [35] Decision, §82 [36] Decision, §83 [37] Decision, §86 |
Cases cited in this judgment
Other judgments that cite this case