Re China Properties Group Ltd

CACV 197/2023, [2025] HKCA 1139

On Appeal From [2023] HKCFI 1500

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 197 OF 2023

(ON APPEAL FROM COMPANIES

(WINDING-UP) PROCEEDINGS NO. 67 OF 2022)

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D E C I S I O N

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Hon Cheung JA (giving the Decision of the Court) :

I.  Introduction

1.On 18 March 2025, we dismissed the appeal by China Properties Group Limited (the ‘Company’) against the judgment of Anthony Chan J dated 31 May 2023 (the ‘Appeal’) and the Company’s application to adduce new evidence for the appeal and to amend the notice of appeal.

2.By an order dated 7 May 2025 (the ‘7 May 2025 Costs Order’) pursuant to the Petitioner’s Summons dated 1 April 2025, we gave the following orders in relation to the costs of the proceedings incurred so far :

1)  The Company and Lo, Wong & Tsui (the solicitors acting for the Company) (‘LWT’) do provide the name(s) and address(es) of the person(s) who instigated or funded or are funding this Appeal (including interlocutory matters) on behalf of the Company (the ‘Funders’) within three days from the date hereof ([1]);

2)  Upon the information as stated in [1] above being provided, the Funders be joined, without further order, as parties to this Appeal for the purposes of costs only ([2])).

3)  The costs order previously made by the Court of Appeal (including orders dated 27 February 2025; 25 March 2025) be varied, such that the Funders do pay to the Petitioner all costs of and occasioned by the Appeal, the Petitioner’s Summons filed on 12 October 2023 (for strike out), the Company’s Summons filed on 1 November 2023 (to adduce new evidence and amend the Notice of Appeal), the Petitioner’s Summons filed on 26 June 2024 (for security for costs), the Company’s Summons filed on 13 February 2025 (to adduce further new evidence) and the Petitioner’s Summons filed on 1 April 2025 (for variation of costs order), on an indemnity basis, with certificate for two counsel, to be summarily assessed and payable forthwith ([4]).

4)  Directions were given for the Petitioner to file and serve statement of costs for summary assessment, the Company to file and serve written submissions on costs and/or statement of objections ([5]).

5)  The issues of whether and what costs should be ordered against the Funders, the amount on summary assessment, and the apportionment of such amount between the Funders would be determined on paper ([6]).

3.The Company/LWT purportedly provided the name(s) of the Funders and the parties filed their respective costs submissions.

4.By Notice of Motion dated 15 April 2025, the Company applied for leave to appeal to the Court of Final Appeal (‘Leave Application’).

5.By our Decision dated 8 July 2025 (‘Leave Decision’), we dismissed the Leave Application. In our Decision, we criticized the Company’s application for verging on being an abuse of process for: 1) advancing new grounds which were previously not canvassed before us, offending the Flywin principle; and 2) adopting a stance that completely reversed the concession previously made by counsel that its appeal would have no proper basis to stand on if this Court rejected its application to adduce new evidence. We considered the approach of the Company to be a blatant ‘try‑on’ by the Company who had already failed twice before two levels of the Court. We refused to address each of the questions individually and refused leave for the three questioned posed before us.

6.In our Leave Decision, we made the following order in relation to costs (‘8 July 2025 Costs Order’) :

1)  The Company to pay the costs of the Leave Application to the Petitioner; and

2)  As per our costs order made in respect of the appeal proper and other interlocutory proceedings (further discussed below), the Funders of the Leave Application be identified and joined for the purposes of costs.

7.By Summons dated 17 July 2025, the Petitioner applies to vary the 8 July 2025 Costs Order as follows :

1)  The person(s) who instigated or funded or are funding the Company’s Leave Application do pay the costs of and occasioned by the Leave Application and the Summons;

2)  Costs be awarded on an indemnity basis; and

3)  Costs be summarily assessed and payable forthwith.

II.  7 May 2025 Costs Order

8.This is the summary assessment of the costs pursuant to the 7 May 2025 Costs Order. The Petitioner claims a total of $2,427,538. Its statement of costs consists of five parts. Part 1 is for the costs of the appeal at $889,074 (of which $410,000 is counsel fee). Part 2 is for the Petitioner’s summons to strike out and the Company’s summons to adduce new evidence and amendment of the Notice of Appeal at $935,804 (of which $410,000 is counsel fee). Part 3 is for the Petitioner’s summons for security for costs and consent summons at $356,227.20 (of which $148,000 is for counsel). Part 4 is for the Company’s summons to adduce further evidence at $103,488.60. Part 5 is for the Petitioner’s application to join the Funders at $142,945.10 (of which $64,000 is for counsel fee). We will summarily assess the costs at $2,100,000.

III.  Variation of the 8 July 2025 Costs Order

1)  The parties’ submissions

9.The Petitioner, represented by Mr Keith Chan, contends that in light of the strong criticisms of this Court that the Leave Application was entirely devoid of merit, and bearing in mind the previous conduct of the Company, where in the proceedings below the Courts and this Court had already made similar scathing remarks and ordered indemnity costs in the previous occasions, the present circumstances similarly warrant an order for indemnity costs, summarily assessed and to be paid forthwith.

10.Mr Chan submitted that although the 8 July 2025 Costs Order is not a costs order nisi, the present circumstances warrant strong reasons and/or exceptional circumstances for the Court’s exercise of discretion to vary the costs order, which the Court has inherent jurisdiction to do so where the costs order has not yet been sealed, citing Kung Kwok Wai David v Commissioner of Estate Duty [2022] 1 HKLRD 965 at [15]‑[16].

11.Mr Chan also brought to our attention that LWT appeared to have failed to comply with the 8 July 2025 Costs Order to identify the Funder of the Leave Application. 　The Petitioner complains that LWT was not forthcoming in the correspondence between the parties, where, in relation to the substantive appeal proper, LWT had initially disclosed only Mr Wong Sai Wa as the sole person who funded the appeal, but upon being pressed by the Petitioner’s solicitors, YTL LLP, LWT disclosed some further entities/persons in Hong Kong who funded the appeal.　 In relation to the Leave Application, LWT again only disclosed Mr Wong Sai Wa as the person who funded the Leave Application, and upon being pressed by YTL to confirm if there are other persons or entities who funded or are funding the Leave Application, failed to provide a direct response.  

12.Mr Chan thus requests for an order to direct the Company and LWT to disclose the names and address of all other persons and/or companies, apart from  Mr Wong Sai Wa, who have transferred funds to LWT to pay for the costs in respect of the Leave Application within three days.

13.LWT submits on behalf of the Company that the present case does not fall under the exceptional circumstances or strong reasons for variation of a costs order absolute. LWT submits that the Petitioner has already filed submissions on costs in their written submissions before the Court for the Leave Application and the 8 July 2025 Costs Order was made after the Court’s consideration of such submissions.

14.LWT claims that they have properly identified the Funder of the Leave Application in their letter dated 18 July 2025, i.e. being Mr Wong Sai Wa. LWT claims that they have properly complied with our order and that the Petitioner’s ‘contention that the Company/LWT must identify all persons through whom monies have passed or who have transferred funds’ is ‘misconceived and goes beyond what has been ordered.’

2)  Our view

15.It was our intention to impose an indemnity costs in the first place in view of the way the Company conducted the Leave Application. It verged on being an abuse of process. In any event, this Court has inherent jurisdiction to vary the 8 July 2025 Costs Order, where there are exceptional circumstances or strong reasons to do so. We will order indemnity costs which are summarily assessed at $500,000 (which includes counsel fee of $364,500).

16.It is plain that LWT had refused to confirm with the Petitioner the full list of persons/entities that transferred funds to LWT to pay for the costs in respect of the Leave Application. It is plain from our 8 July 2025 Costs Order that the Company and LWT are to provide the names and addressees of all the Funders of the Leave Application, i.e. all of the persons who instigated or funded or are funding the Leave Application. That would include all the persons who transferred funds to LWT for the purpose of the Leave Application. Accordingly, we order the Company and LWT do disclose the name(s) and address(es) of all other persons and/or companies, apart from Mr Wong Sai Wa, who have transferred funds to them to pay for the costs in respect of the Leave Application, within three days of this order. These persons together with Mr Wong Sai Wa are to pay the assessed costs of $500,000.

Mr Keith Chan, instructed by YTL LLP, for the Petitioner

Lo, Wong & Tsui, for the Company