Re Yau Wing Keung
Read the full judgment text of HCB 1641/2025 on BabelCite. This HCB judgment was delivered on 17 November 2025.
1. Great Top Kingdom Limited (“ Great Top ”) presented the bankruptcy petition on 3 March 2025 (the “ Petition ”) in respect of a total debt of HK$28,778,217.64 with interest (the “ Debt ”). By the Petition, Great Top, the Petitioner, seeks a bankruptcy order against Yau Wing Keung, the Debtor (“ Yau ”), also known as Frankie.
Cites 2 cases
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HCB 1641/2025 [2025] HKCFI 5551 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE BANKRUPTCY PROCEEDINGS NO 1641 OF 2025 _______________
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________________ J U D G M E N T ________________ I. INTRODUCTION 1.Great Top Kingdom Limited (“Great Top”) presented the bankruptcy petition on 3 March 2025 (the “Petition”) in respect of a total debt of HK$28,778,217.64 with interest (the “Debt”). By the Petition, Great Top, the Petitioner, seeks a bankruptcy order against Yau Wing Keung, the Debtor (“Yau”), also known as Frankie. II. GREAT TOP’S CASE 2.Great Top’s case is that the Debt is a loan advanced by Mr Zhong Naixiong (“Mr Zhong”) to Yau under a Loan Deed dated 2 June 2017 (the “Loan Deed”) payable on or before 31 May 2022, with interest becoming payable on 31 May 2018. Mr Zhong makes an affirmation in support, saying that:-
3.Ronald Lau also makes an affirmation in support to corroborate Mr Zhong’s evidence, saying that at a dinner in around April 2017, Mr Zhong passed him a draft loan deed for him to review. 4.By an assignment dated 8 August 2024 (the “Assignment”), Mr Zhong assigned all his rights and interests under the Loan Deed. Notice of Assignment dated 8 August 2024 was served on Yau on 8 August 2024, and again under letter dated 5 September 2024 issued by the Petitioner’s solicitors. III. YAU’S CASE 5.I shall set out Yau’s case in this Part. 6.According to Yau, he and Mr Zhong had been long-time friends and business partners:-
7.In 2014 to 2018, Yau assisted Mr Zhong to develop a big sports arena in Foshan, PRC (the “Foshan Arena”) as part of a development project known as Foshan New City, and for the development, since 2012, Yau had assisted Mr Zhong to obtain funding from Nanfung Group in the sum of RMB2.5 billion to Mr Zhong’s companies. On 31 December 2014, Mr Zhong’s companies defaulted in repayment to Nanfung Group. Yau assisted in obtaining extension of the loan and eventually arranged funding for another group to replace Nanfung Group. Yau takes the view that but for his assistance, Mr Zhong would have been bankrupted. He also mentions that “the common market practice was for external professionals who were engaged to procure financing to charge a fee of 3% of the amount raised.” 8.As an aside, for the management of the Foshan Arena, Mr Zhong requested Yau to set up a company and engage professionals to manage the Foshan Arena:-
9.Yau mentioned another event that took place in around 2014, namely, an investigation into a government official in Guangdong province with whom Mr Zhong had had dealings. As Mr Zhong had had dealings with that official, he also became subjected to the investigation. During this difficult period for Mr Zhong, Yau helped Mr Zhong by pulling his connections in the PRC, preparing statements for Mr Zhong and managing Nenking Group to keep its business running. At the end, with Yau’s help, the investigation was over without any adverse result to Mr Zhong, although that government official was disciplined. 10.With all the assistance given by Yau to Mr Zhong, Mr Zhong was very grateful. In around late 2016 to early 2017, Yau asked for some remuneration for such work in addition to an increase in the monthly salary from Swiss Asia. At that time, Yau was minded to purchase a real property in Hong Kong, and told Mr Zhong about that. In response, Mr Zhong agreed to increase his salary and to subsidise the intended purchase. 11.In around April 2017, Yau informed Mr Zhong that the property he intended to purchase was over HK$30 million. Mr Zhong then agreed to gift him a sum of HK$28,387,500, to be remitted to him through a company controlled by Mr Zhong, namely, Grand Joy Limited (“Grand Joy”) on 5 June 2017. Grand Joy had many bank transactions and in the past, the bank had raised queries. For the remittance, Yau suggested that Mr Zhong could mark the remittance as a loan and for that purpose, they signed the Loan Deed knowing that it was a sham, merely to be presented to the bank as a “proof” that the remittance was for a loan. 12.In early 2021, Mr Zhong was in urgent need of capital. However, he or his companies had encountered difficulty in obtaining loans. Ruida, on the other hand, not being owned by Mr Zhong but having the exclusive right, was able to borrow. Therefore, Mr Zhong proposed that:-
13.Yau and Mr Shum agreed to the proposal, and this arrangement was put into place. 14.Yau highlights that despite Mr Zhong’s difficulty in obtaining loans, he made no demands for the repayment of the “loan” under the Loan Deed. Instead, in October 2021, he had to borrow from Gold-face Finance Limited (“Goldface”) HK$16,000,000 through his company Vantage Up Group Limited with Yau as the guarantor. The interest in the loan was subsequently transferred to a group of businesspersons including Mr Kelvin Chan (“Mr Chan”). 15.In late 2022 or early 2023, Mr Zhong had to borrow a new loan to make repayment to Goldface, and upon Yau’s request, Mr Zhong released him as the guarantor with Goldface’s agreement in February 2023. 16.On or around 7 February 2024, Yau and Mr Zhong met to discuss repayment plans for Mr Zhong to repay Yau various debts. During the meeting (the “February 2024 Meeting”), Mr Zhong did not deny the debts owed to Yau, and did not mention any debts owed to him by Yau. During the meeting, Yau presented a statement setting out what Yau had paid as at 3 February 2024 to be reimbursed entitled “游墊支結余至2024年2月3日” (the “Statement on Reimbursements”), with which Mr Zhong did not express any disagreement. 17.For convenience, I adopt the table summarising the Statement of Reimbursement prepared by Mr Terrance Tai, leading Mr Sik Chee Ching, counsel for the Petitioner, in their Skeleton Submissions §37:-
18.In Yau’s affirmation §§98-182, Yau explained in some detail each of the above transactions. It is not necessary for me to detail them here. Suffice to say that these payments were indeed made, but there is no documentary evidence to show that these payments were made upon Mr Zhong’s request. 19.The total balance as at 3 February 2024 was stated to be HK$4,553,177.68 and RMB 27,279,403 after certain set-off (對數). On Yau’s own evidence, this Statement of Reimbursement was not accurate. In his affirmation, he pointed out that:-
20.The long and short of the above is that RMB2,825,213 should be taken out. The outstanding debt in Hong Kong dollars would remain HK$4,553,177.68 while that in RMB would become RMB 24,454,190 (that is, RMB 27,279,403 – RMB2,825,213). 21.I pause here to note that in the Statement on Reimbursements, the set-off included a sum of HK$14,549,282.32 being the value of stock interest in a South Africa stock (the “SA Stock Interest”) against the outstanding liability in Hong Kong dollars (港元部分對消南非投資現值（2024年1月26日結單）匯率0.414計) held by Mr Zhong via a company known as Swiss Asia Financial Services (HK) Limited (“SA Financial”). 22.According to Yau, this set-off by the South Africa Investment was just a proposal only. It was Yau’s proposal put forward to Mr Zhong that the latter should transfer to him the SA Stock Interest as partial settlement of his indebtedness to Yau. However, this was not reaslised. Instead, according to Yau, by an assignment of loan backdated 31 December 2023 (the “2023 Assignment of Loan”), a loan due and owing to Mr Zhong by SA Financial was assigned to Yau for HK$1. In his affirmation, he does not mention when the 2023 Assignment of Loan was signed, but just says that it was backdated. 23.I further note that while Yau did not mention the value of the loan in the body of his affirmation, thus giving one an impression that the 2023 Assignment of Loan would be the documentary evidence in support of the setoff in the amount of HK$14,549,282.32 as stated in the Statement of Reimbursement, the actual amount of the loan stated in the 2023 Assignment of Loan was more than double this amount, that is, HK$30,818,587.58. Mr Earl Deng, leading Mr Dixon Co, counsel for Yau, submits that this should be understood to mean that the value of the loan assigned under the 2023 Assignment of Loan was intended to be HK$14,549,282.32. However, there is no evidence to that effect at all. There is no evidence about the market value of this loan. Nor is there any evidence to the effect that set-off would be available only when the loan was repaid by SA Financial. The context of the evidence is simply that instead of the proposal to set off, the Assignment of Loan was executed for the set-off. Therefore, on the face of it, the set-off in Hong Kong dollar in the Statement of Reimbursement should become HK$30,818,587.58 instead of HK$14,549,282.32, that is, HK$16,269,305.26 more for set-off. To argue otherwise would need sufficient basis to pass the threshold of bona fide dispute on substantial grounds, a matter I shall return to later below. 24.On the face value, the above would mean that all the Hong Kong dollar of HK$4,553,177.68 would be set off, and there would be HK$11,716,127.58 available for further set off. This should set off the outstanding liability in RMB, which should be RMB 24,454,190. Taking the exchange rate of RMB1 = HK$1.1, the amount outstanding after set-off would be (HK$24,454,190 x 1.1) – HK$11,716,127.58, that is, HK$15,183,481.42 due and owing by Mr Zhong to Yau according to the Statement of Reimbursement. 25.Since early 2024, Mr Zhong failed to repay the loan to Yuecai, and Yuecai discovered that Mr Zhong had sold the assets used as collateral for the loan without obtaining Yuecai’s consent. As a result, Yuecia issued demand letters to Ruida for the repayment of the loan in May and July 2024. Yau informed Mr Zhong of the demand letters, but Mr Zhong replied that he was unable to make repayment within a short time, and suggested that since Ruida had a stable cash flow, it should be transferred to him so that he could inject Ruida to a REIT to raise capital. 26.Further meetings on this suggestion followed, including a meeting on or around 24 July 2024 at Four Seasons Hotel in Hong Kong (the “July 2024 Meeting”) which Yau’s another friend Mr Alex Mong (“Mr Mong”) attended. In this regard, Mr Mong makes an affirmation saying that he attended a meeting with Yau and Mr Zhong on or around 23 July 2024. 27.Before the July 2024 Meeting, on 22 July 2024, Yau texted Mr Zhong:-
28.According to Yau, at the July 2024 Meeting, Mr Zhong did not agree to repay Yau first and did not make any proposal to repay him, although he acknowledged his indebtedness to Yau. Mr Zhong also did not agree to buy out Mr Shum’s shares. Mr Zhong only repeated his request to acquire Ruida. 29.For this July 2024 Meeting, according to Mong, Mr Zhong did say that he would try to repay Yau after Mr Zhong has settled some other liabilities owed to others. 30.On 26 July 2024, Mr Zhong caused some people to enter the Foshan Arena to disrupt the operation of Ruida, and in the disruption, they hurt Mr Shum physically. 31.On 26 July 2024, the following conversation via voice messages took place:-
32.“師傅”, according to Yau, referred to Goldface. 33.On 6 August 2024, some more people entered the Foshan Arena and this time, Yau was physically injured. The incident was reported to the Public Security Bureau of Lecong in Shunde District. 34.On 8 August 2024, Mr Zhong signed the Assignment purporting to assign to Great Top his rights and interests in a loan lent to Yau. 35.In mid-August 2024, Ruida commenced legal proceedings (the “Mainland Proceedings”) against Mr Zhong’s companies. 36.On 27, 28 and 29 August 2024, Mr Chan on behalf of Mr Zhong approached Yau for negotiation. From the negotiation, Yau came to understand that Mr Zhong’s assets and businesses were of little value and his only hope was in Ruida. Yau told Mr Chan about Mr Zhong’s indebtedness to Yau. On 29 August 2024, Mr Chan said that he would have to confirm with Mr Zhong about it first. 37.On 30 August 2024, Mr Chan texted Yau:-
38.Yau refused to accept the proposal. 39.On 9 October 2024, the statutory demand (the “Statutory Demand”) underlying the Petition herein was issued. 40.On 25 February 2025, Yau met Mr TC Yam (“Mr Yam”), a person connected to Mr Chan, upon Mr Yam’s request. During the meeting, Mr Yam told Yau that Yau should negotiate with Mr Zhong and settle the dispute as soon as possible, because someone was trying to take action to bankrupt him. 41.On 27 February 2025, a mutual friend of Mr Yam and Yau telephoned Yau. The mutual friend passed a message from Mr Yam, asking Yau to offer a price for the sale of his shares in Ruida. 42.On 3 March 2025, the Petition herein was presented. 43.On 4 March 2025, Yau replied that he would not make any offer before there would be the outcome of the Mainland Proceedings. IV. THE 2ND AFFIRMATION OF YAU 44.On 22 September 2025, Yau filed a Summons for leave to file and serve his 2nd Affirmation dated 20 September 2025, returnable at the hearing of the Petition. Yau’s 2nd Affirmation mainly deposes to the following:-
45.To save time and costs, I read the 2nd Affirmation of Yau on a de bene esse basis. As shall be seen below, I would consider the 2nd Affirmation of Yau. Considering the reason for the delay (namely, the Petitioner filing their reply affirmation late which would necessitate a reply from Yau), I grant leave for filing this 2nd Affirmation of Yau with costs in the Petition. V. ISSUES 46.On the Loan Deed, the Petitioner has a prima facie case. On the evidence, Yau says the following are bona fide disputes on substantial ground:-
VI. IS THE LOAN DEED A SHAM? 47.Yau’s allegation that the Loan Deed was a sham intended to be used to defraud the bank is a serious allegation that requires cogent evidence, while there is a very strong presumption against a finding of sham: see Vpower Group Holdings Limited v CRRC Hong Kong Capital Management Co. Limited [2025] HKCFI 551 at §§46-47 per DHCJ Kent Yee. In my view, there is no such cogent evidence, and the allegation itself is inherently improbable, for the following reasons:-
48.Having considered the above, I am not satisfied that there is no bona fide dispute on substantial ground in relation to Yau’s case that the Loan Deed was a sham. VII. ESTOPPEL? 49.With regard to estoppel, Mr Deng submits that:-
50.It seems to be a defence of waiver rather than estoppel. In any event, for the present purpose, whether it was estoppel or waiver, broadly speaking, the requirements are the same: (1) a clear and unequivocal representation that the Loan Deed would not be enforced; and (2) detriment or change of position caused by reliance on such representation. 51.Given that the Loan Deed was not a sham, it means that the parties did intend the Loan Deed to be what it purports to be: notably, there should be repayment. I cannot see how absence of enforcement in the circumstances could be understood clearly and unequivocally to mean that Mr Zhong would not enforce the Loan Deed anymore, while the terms of the Loan Deed clearly obliged Yau to repay and did not set out any contractual time limit for enforcing the Loan Deed. Nor can I see how there can be any change of position or detriment. In this regard, Mr Deng submits that the change of position or detriment was Yau’s purchase of the property. However, the conduct Yau is said to have relied upon as representation for the purpose of estoppel started to take place from 30 June 2018 for “a long period of time”, while the purchase of the property, according to Yau, took place in 2017. So, the change of position or detriment was suffered not as a result of any reliance on the representation in any event, if there were such representation. Insofar as there is any suggestion that the change of position or detriment was Yau’s payments on behalf of Mr Zhong as stated in the Statement of Reimbursement, clearly, such change of position or detriment is not such that it would be inequitable not to give effect to the representation – Yau in fact now claims for repayment of these expenses. 52.In my view, therefore, there is no bona fide dispute on substantial grounds in relation to estoppel. VIII. LOAN DEED TIME-BARRED? 53.The time limit for a deed is 12 years: see section 4(3) of the Limitation Ordinance (Cap. 347). Mr Deng, for Yau, submits that there is no delivery of the Loan Deed, and therefore, the Loan Deed is not legally valid, and the loan thereunder is only enforceable as a loan under a contract, the time limit for which is 6 years instead: see section 4(1) of the Limitation Ordinance (Cap. 347). There is no dispute that if it is 12 years, the enforcement has not been time-barred, and if it is 6 years, the enforcement is arguably time-barred. 54.Whether a deed is delivered or not is a question of fact. Physical delivery or exchange is not necessary. Words or conduct may be the basis for inference for delivery. The test is whether the parties intend the instrument to be legally binding. A presumption of delivery arises when a deed is signed and sealed: see Segboer & Anor v A J Richardson Properties Pty Ltd & Anor (2012) 16 BPR 31235 at §§53-59 per Court of Appeal of New South Wales (Allsop P, Campbell JA and Sackville AJA). 55.In the present case, the Loan Deed was signed and sealed. The presumption of delivery arises. That there was no delivery of the Loan Deed is raised only by Mr Deng in his written submissions for the first time. There is no evidence that there was no delivery. On the contrary, it is Yau’s own evidence that he has kept the originals. The only possible evidence of non-delivery is Yau’s evidence that there was no intention that the Loan Deed would be legally binding. This, however, goes back to whether the Loan Deed was a sham, and I have already found that there is no bona fide dispute on substantial ground in this regard. 56.Therefore, I am not satisfied that there is any bona fide dispute on substantial grounds in relation to the delivery of the Loan Deed. It also follows that there is no bona fide dispute on substantial grounds in relation to the time-bar argument. IX. LOAN NOT PROPERLY AUTHORISED BY GRAND JOY 57.Whether the loan was properly authorised by Grand Joy is an internal matter within Grand Joy. I see no ground for Yau, as the borrower, can say that because the loan was not properly authorised, he would have no liability to repay. Insofar as there is any suggestion that the loan came from Grand Joy and therefore should be repayable to Grand Joy but not Mr Zhong, given that the Loan Deed was between Mr Zhong as lender and Yau as borrower, the logical inference must be that Grand Joy on behalf of Mr Zhong advanced the loan to Yau, and as a matter of bookkeeping, there would be credit to Mr Zhong’s current account with Grand Joy. Such bookkeeping matter, again, is an internal matter within Grand Joy with which Yau has no business. 58.Therefore, I am not satisfied that there is any bona fide dispute on substantial grounds arising from this authorisation point. X. SET-OFF? 59.There are two aspects in respect of set-off here. First, whether Yau paid the items set out in the Statement of Reimbursement on behalf of Mr Zhong to be reimbursed, and second, whether the amount is sufficient to set off the Debt. 60.It is convenient to deal with the second question first. As explained in §§20-24, on the face of the evidence, the outstanding debt in the Statement of Reimbursement should be HK$15,183,481.42. Taking everything in favour of Yau, setting off this amount against the Debt in the Petition would mean that there would still be an outstanding debt of HK$28,778,217.64 – HK$15,183,481.42 = HK$13,594,736.22. In this regard, Mr Deng submits that there is bona fide dispute on substantial grounds on whether the face value of the loan of HK$30,818,587.58 under the 2023 Assignment of Loan should be taken or whether the stock value of HK$14,549,282.32. With respect, I disagree. As explained in §23 above, there is no evidence to explain why the loan in the amount of HK$30,818,587.58 should be taken to have a value of only HK$14,549,282.32 for the set-off in the Statement of Reimbursement. The burden lies upon the debtor to put in proper evidence to show that there is a bona fide dispute. While Yau produces the 2023 Assignment of Loan, he does not say anything further about it. So, I am not satisfied that there is any bona fide dispute that despite the face value of the loan stated to be HK$30,818,587.58, the true value for the purpose of the Statement of Reimbursement should be less than half as Mr Deng submits. 61.In any event, the amount available for set-off should be reduced because one item of the payment was made in 2017 and ten items of payments were made in 2018, all of which have been time-barred[1]. The total sum of these eleven items amount to approximately HK$13,480,000. This would mean that the outstanding debt available for set-off would become approximately (HK$15,183,481.24 – HK$13,480,000 = HK$1,703,481.24) only. Setting off this against the Debt means an outstanding amount of approximately (HK$28,778,217.64 – HK$1,703,481.24 = HK$27,074,736.40). 62.This outstanding debt after set-off would still be a very substantial sum and far beyond the limit for the statutory minimum of HK$10,000 for presenting a bankruptcy petition. There is not even an indication that Yau would pay any of this large sum. This is sufficient to sustain a bankruptcy petition: see Re Wong Mui Kuen Joanna, HCB 1631/2014, 12 January 2015 at §8 per Ng J. 63.Given my view above, it is strictly not necessary to deal with the question of whether there is bona fide dispute on substantial grounds that the payments set out in the Statement of Reimbursement were indeed payments made by Yau on behalf of Mr Zhong to be reimbursed. However, a substantial amount of evidence and detailed submissions have been made on this, and I should also briefly set out my view on this question. 64.In my view, there is bona fide dispute on substantial grounds in respect of this question because:-
XI. CONCLUSION 65.In the premises, I make a usual bankruptcy order against Yau, with costs to the Petitioner, to be taxed if not agreed, with certificate for two counsel. 66.Lastly, I thank Mr Tai and Mr Sik, counsel for the Petitioner, and Mr Deng and Mr Co, counsel for Yau, for their assistance.
Mr Terrence Tai and Mr Sik Chee Ching, instructed by Ince & Co, for the Petitioner Mr Earl Deng and Mr Dixon Co, instructed by Cheung, Chan & Wong, Solicitors, for the Debtor [1] These are items 1 – 11 in the Petitioner’s Table summarising the Statement of Reimbursement attached to the Petitioner’s Skeleton Submissions. |
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