Fang Yue and Others v. Shing Yim Ping

HCA 845/2022

[2026] HKCFI 3024

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 845 OF 2022

________________________

________________________

_______________

D E C I S I O N

_______________

Introduction

1.On 12 March 2026, I handed down a judgment in these proceedings (“the Judgment”)[1] after trial, in which I gave judgment to Ps and ruled against Shing. I also made a costs order nisi that costs of these proceedings (including costs reserved) be to Ps, to be taxed if not agreed.

2.By a summons dated 24 March 2026 (“Ps’ Summons”), Ps made an application for varying the costs order nisi such that the costs provided in that order be taxed on an indemnity basis. I have directed that Ps’ Summons be disposed of on paper without an oral hearing. The parties have lodged their respective written submissions in accordance with the directions. This is my decision on Ps’ Summons. For ease of reference, the abbreviations used in the Judgment are adopted herein.

3.In this application, Ps are represented by Mr Byron Chiu, and Shing is represented by Mr Charlie Liu.

Discussion

4.In considering an application for varying a costs order nisi, everything must be based upon the rulings made in the main judgment. The application is not an opportunity for rearguing the matters which have already been determined by the Court in the main judgment.[2]

5.The principles concerning indemnity costs are well established and not in dispute[3]:

(1)  It is generally necessary for a party seeking an order for indemnity costs to demonstrate some “special or unusual feature” in the case.

(2)  Indemnity costs is not only ordered where the paying party’s conduct lacks moral probity or deserves moral condemnation for which the Court wishes to express disapproval. Conduct which falls short of that can be so unreasonable as to justify an order for indemnity costs. But such conduct would need to be unreasonable to a high degree. Unreasonable in this context does not mean merely wrong or misguided in hindsight.

(3)  Ordinarily, merely pursuing a weak claim would not justify indemnity costs. On the other hand, maintaining a claim that one knows, or ought to know, is doomed to fail on the facts and on the law, is conduct that is so unreasonable as would justify indemnity costs.

(4)  Ultimately, what the receiving party must demonstrate is something in the conduct of the action or other circumstances of the case that “takes it out of the norm” which warrants an order for indemnity costs.

6.The underlying rationale of indemnity costs is to indemnify the successful party, not as punishment on the paying party[4].

7.Mr Chiu has highlighted that examples warranting the exercise of the Court’s general discretion to award indemnity costs include the following:

(1)  the presence of ulterior motive or underhand conduct on the part of the paying party and where the proceedings were conducted in an oppressive manner or such that it constituted an affront to the Court[5];

(2)  where the proceedings should never have been defended but were unreasonably and unjustifiably persisted by the defendant[6];

(3)  an abuse of process where a litigant, with full knowledge of the facts, has dishonestly invented a claim[7]; and

(4)  an oppressive litigation where a litigant set out to prosecute his case knowing that in order to succeed he “would have to tell a wholesale pack of lies”[8].

8.On the other hand, Mr Liu has highlighted the following:

(1)  “The Court’s finding that the claim on the ground of defence is plainly and obviously incredible on the fact, or that the evidence has been deliberately untruthful will not necessarily in itself warrant an order for indemnity costs. The conduct of the losing party must be of a more venal kind and the conduct of the litigation has in some sense been wicked.”[9];

(2)  a finding that a witness is incredible does not necessarily mean that an indemnity costs order should be made. It must at the end of the day be a question of extent and degree[10]; and

(3)  propounding of false evidence at trial may not, without more, justify the imposition of costs on indemnity basis[11].

9.Mr Chiu submits that indemnity costs should be ordered against Shing for the following reasons:

(1)  The entire defence put forward by Shing is based upon the untrue allegations that all the relevant payments were all gifts. With full knowledge of the facts, Shing knowingly lied on oath. Shing knew that they were loans. Shing is an “an untruthful and unreliable witness”[12]. The concocted defence has resulted in a significant wastage of parties and the Court’s time and is an abuse of process.

(2)  Shing’s evidence on the Sebastian Loan Agreement was a “pack of lies”, and this has an “adverse impact on the overall credibility and reliability of her evidence”[13].

(3)  Shing’s case that she did not owe any sum to Fang after March 2021 “cannot be true”[14]. Shing’s lies permeates through all the relevant payments, including the Other Loans Agreement[15] and the residual liabilities related to Property Loan Agreement[16]. Further, Shing’s lies are contradicted by contemporaneous admissions from Shing[17].

(4)  In respect of the Shares Loan Agreement, Shing dishonestly invented her case that she held the transfer of US$500,000 on trust for Fang as joint investment. That case is wholly devoid of factual basis and so unreasonable as would justify indemnity costs. Shing’s allegation that Fang would request her to open a stock account in Hong Kong for him to trade in Hong Kong stock market is “incapable of being believed”[18]. There are “irreconcilable inconsistencies” in Shing’s case concerning the amount of initial capital injected to the Stock Account[19]. The absence of any update in the IPO issues in the WeChat Room also shows that Shing’s case is “inherently improbable”[20].

(5)  Shing must all along have known that her case was vexatious and unmeritorious but still deliberately conducted the litigation in an oppressive manner and lied on oath. Shing’s unreasonable conduct thus constitutes the special and unusual feature justifying a more onerous order of costs.

10.Mr Liu argues that indemnity costs are not justified. Mr Liu submits that:

(1)  Shing’s belief (which was ultimately rejected by the Court) that many of the payments were gifts within the context of a loving relationship cannot be equated with, for example, the deliberate fabrication of a commercially motivated fraudster.

(2)  It is inapt and goes beyond the factual findings in the Judgment to say that Shing has told lies with full knowledge of the facts.

(a)  The payments spanned multiple years, across multiple currencies, in multiple tranches, and for varied purposes. Shing admitted that some payments under the Property Loan Agreement were clearly loans.[21]

(b)  The characterisation of the remainder was genuinely contested and arose in a context where the parties never fully documented their mutual understanding at the time when the payments were made. Shing’s case at trial that the nature of those payments, viewed through the prism of a romantic relationship, was that of gifts, is not an inherently dishonest one.

(c)  Critically, this Court’s assessment of Shing’s overall credibility was itself ‘derivative’ in nature rather than the product of independent findings of dishonesty across each individual category of claim. At §55 of the Judgment, this Court held that Shing’s evidence on the Sebastian Loan Agreement “is a pack of lies” and that this finding “has an adverse impact on the overall credibility and reliability of her evidence”. The Sebastian Loan Agreement findings drive and colour the Court’s broader assessment of Shing’s credibility. The Court did not make a freestanding finding, category by category, that Shing had knowingly fabricated each and every aspect of her defence. The spillover effect described at §55 of the Judgment is a different and considerably lesser thing than a direct, positive finding that the entirety of Shing’s case was dishonestly invented with full knowledge of the facts. For Ps to treat an adverse credibility finding that is expressly derived from one contested issue as equivalent to a wholesale finding of deliberate fabrication across all issues would be to elevate the consequences of §55 of the Judgment well beyond what this Court actually held.

(d)  Further, a significant part of this Court’s rejection of Shing’s case rested on inherent improbability rather than deliberate dishonesty. For instance, the rejection of Shing’s case on the Shares Loan Agreement was expressed in terms of D’s account being inherently improbable and incapable of being believed. Such language goes to the objective implausibility of Shing’s account rather than to a positive finding of conscious lying. A finding of inherent improbability is not the same as a finding of deliberate fabrication, and Ps’ attempt to treat every adverse finding in the Judgment as equivalent to a finding of conscious dishonesty is an overreach that the authorities do not support.

(3)  Ps selectively focuses on the adverse findings without acknowledging that Shing’s defence was not uniformly or independently found to be dishonestly fabricated across all issues. The serious allegation that Shing knowingly fabricated her entire defence is a clear overstatement. Notably:

(a)  The Property Loan Agreement: Shing herself admitted the existence of this loan agreement. Far from fabricating an entirely false defence, D engaged substantively with at least one category of payments on honest terms, acknowledged her indebtedness under that head, and asserted full repayment. The dispute as to repayment (including the US$298,060 and HK$1,235,000 payments) was a genuine factual contest.

(b)  The Stock Account: Shing’s case that the US$500,000 was invested in a joint stock venture was supported by some documentary material: Fang’s own email of 27 December 2021 (股票的处理让我考虑一下) was sufficiently ambiguous to require explanation[22]. That Shing’s case ultimately failed on the totality of the evidence does not render it a dishonest invention.

(c)  The email exchanges: Shing’s admission referenced at Judgment §47, that she had not denied the existence of loans in the email exchanges, was extracted under cross-examination in the context of complex, emotionally charged correspondence. The email exchanges themselves were genuinely capable of multiple interpretations, as the extensive and careful analysis at Judgment §§44-51 demonstrates, albeit that the Court eventually rejected D’s version of events.

(4)  This was hard-fought litigation arising from the breakdown of an intimate relationship, involving genuinely disputed characterisations of payments made without contemporaneous documentation. The fact that the Court preferred Fang’s account across the board, and found Shing’s overall credibility wanting, is the ordinary consequence of adversarial fact-finding. Notwithstanding the adverse findings and contradictions identified in the Judgment, this is not a hallmark of the kind of “wicked” or “venal” conduct that justifies the exceptional remedy of indemnity costs.

11.Mr Chiu in reply submits that:

(1)  Irrespective of whether this action arises out of a romantic relation, there is no answer to the point that the character of the relevant payments are “binary” – it was either a loan or a gift. Based on this Court’s findings, Shing knew that the payments were loans and not gifts. Notwithstanding that, Shing ran a case on a false premise that they were gifts. That is unreasonable to a high degree – the defence was unreasonably and unjustifiably persisted by Shing, based on lies knowingly fabricated by Shing.

(2)  Based upon the findings made by this Court, the defence put forward by Shing is not due to Shing’s mistaken belief. The defence is a pack of lies knowingly and dishonestly put forward by Shing.

(3)  It is unfair and inappropriate for Shing to portray this litigation as merely a case where this Court preferred Fang’s account across the board, and found Shing’s overall credibility wanting”. There is a clear basis to find that Shing fabricated lies, unreasonably and unjustifiably persisted with her defence.

12.Having considered the parties’ respective submissions, I am in respectful agreement with Mr Chiu. As submitted by Mr Chiu, in the trial, Shing’s case is not based upon mistaken belief. Shing had run a positive factual case, ie in respect of all the contested payments, Shing expressly denied that those payments were loans or sums which ought to be repaid to Ps, for the reasons given by her. In the Judgment, I found that Shing has given untrue evidence on oath and rejected her case in its entirety. The whole case run by Shing in the trial is based upon lies knowingly fabricated by her, and the lies knowingly told by her on oath. With respect, to say that the characterisation of the contested payments was genuinely contested is contrary to the findings made in the Judgment. In my judgment, the litigation conduct adopted by Shing in this case is very unreasonable and amounts to an abuse of the process of this Court. Much time and costs have been wasted by this very unreasonable conduct. In these circumstances, I am of the view that an order of indemnity costs is justified and appropriate. The purpose of awarding indemnity costs to Ps is to ensure Ps to have a fuller compensation, not to punish Shing. I would allow Ps’ application and order Shing to pay indemnity costs to Ps.

13.As to the costs of Ps’ Summons, costs should follow the event. The consideration of the submissions on costs should be regarded as part of the trial[23]. Accordingly, costs of Ps’ Summons should be borne by Shing on an indemnity basis.

Disposition

14.I allow Ps’ application and vary the costs order nisi to the extent that the costs provided in that order be taxed on an indemnity basis.

15.Costs of Ps’ Summons be paid by Shing to Ps forthwith on an indemnity basis, and those costs be summarily assessed on paper. Ps have lodged a statement of costs dated 20 May 2026 together with Ps’ written reply submissions. There be leave to Shing to lodge and serve a list of objections (limited to 2 pages) in response to that statement of costs within 7 days.

16.Lastly, it remains for me to thank Mr Chiu and Mr Liu for the helpful assistance rendered to the Court.

Mr Byron Chiu, instructed by Patrick Chu, Conti Wong Lawyers LLP, for the 1^st to 3^rd Plaintiffs

Mr Charlie Liu, instructed by Lau, Chan & Ko, for the Defendant