Lok Ho Ting v. Keyes Global Holdings Ltd

CACV 612/2025, [2026] HKCA 1075

On Appeal From [2025] HKCFI 3258

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 612 OF 2025

(ON APPEAL FROM HCSD NO 16 OF 2024)

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J U D G M E N T

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Hon Chow JA (giving the Judgment of the Court):

INTRODUCTION

1.This is the Applicant (“Mr Lok”)’s renewed application for a stay of execution of:

(1)  an order made by Deputy High Court Judge Kenneth Wong (“the Judge”) dated 31 July 2025 (“the Order”) dismissing Mr Lok’s application to set aside a statutory demand dated 9 November 2023 issued by the Respondent (“Keyes”); and

(2)  an order nisi made by the Judge dated 8 August 2025 authorising Keyes to present a bankruptcy petition against Mr Lok;

pending the determination of his appeal against the Order to the Court of Appeal.

2.Having considered the documents and the written submissions filed by the parties, we consider that it is appropriate to determine this application on paper without an oral hearing, pursuant to Order 59, rule 14A(1) of the Rules of the High Court, Cap 4A (“RHC”).

BACKGROUND

3.The present application is the latest episode in a series of litigations concerning a debt (“the Debt”) guaranteed by Mr Lok and owed by China Latin (International) Company Limited (“China Latin”), a company of which Mr Lok was the sole director and shareholder, to Keyes under a loan agreement dated 14 December 2018 as amended by a supplemental loan agreement dated 22 March 2019 (collectively “the Agreements”).

4.The basic facts of this case have been set out in the written decision of the Judge in HCSD 16/2024 dated 31 July 2025 (“the Decision”)[1] and an earlier written decision of G Lam J (as he then was) in HCMP 2/2020 dated 28 May 2020 (“the Injunction Decision”)[2], and will not be repeated here. We shall, however, highlight the salient facts relevant to the present application.

5.The previous litigations relating to the Debt relevant for the present purpose are:

(1)  HCMP 2/2020 – This relates to China Latin’s application for an injunction to restrain Keyes from presenting a winding-up petition based on a statutory demand issued on 19 December 2019 in respect of the Debt. In those proceedings, Mr Lok made an affirmation in support of China Latin’s application, and in that affirmation, Mr Lok stated that China Latin did not dispute the indebtedness to Keyes under the Agreements, but contended that the repayment date of the Debt had been postponed by an oral agreement (“the Oral Postponement Defence”)[3]. China Latin’s application failed. G Lam J held that the Agreements constituted a refinancing exercise. He rejected the alleged oral agreement raised by China Latin, and held that there was no bona fide dispute of the Debt on substantial grounds.[4]  Although China Latin filed a summons dated 4 June 2020 seeking leave to appeal, no steps were taken to pursue that summons.[5]

(2)  HCSD 24/2020 – This relates to Mr Lok’s application[6], made out of time, to set aside an earlier statutory demand served on him by Keyes in respect of the Debt. Linda Chan J dismissed Mr Lok’s application on 3 June 2020 (“the Prior SD Decision”), holding, amongst other things, that (i) the issue of whether there was a bona fide dispute of the Debt had already been determined by G Lam J in HCMP 2/2020, and (ii) Mr Lok had failed to demonstrate any good reason to justify an extension of time of 4.5 months for making the application.[7]

(3)  HCCW 342/2022 – This relates to Keyes’ petition[8] to wind-up China Latin on the ground of its failure to pay the Debt. In opposing the petition, China Latin again relied on the Oral Postponement Defence, and also argued, for the first time, that the Agreements were a sham (“the Sham Defence”). Linda Chan J held that it was not open to China Latin to reopen the issue of whether there was a bona fide dispute of the Debt, whether based on the Oral Postponement Defence or the Sham Defence, because that issue had already been determined by G Lam J in HCMP 2/2020. She also held that it was not open to China Latin, having made the “concession” that it did not dispute the indebtedness to Keyes under the Agreements, to argue that the Agreements were a sham. Accordingly, the usual winding up order was made against China Latin on 5 December 2022 (“the Winding Up Decision”)[9].

6.Keyes issued a statutory demand against Mr Lok over the Debt dated 9 November 2023 (“the 2023 SD”), which was served on Mr Lok’s solicitors on 15 December 2023 and advertised in a newspaper on 22 December 2023.

7.On 2 April 2024, Mr Lok applied to set aside the 2023 SD. He relied on three defences in support of the application, referred to at §23 of the Decision as follows:

“(1) There was an oral agreement reached between the parties to postpone the due date for repayment of the subject debt. I shall refer to this ground as the ‘Oral Postponement Ground’.

(2) The subject loan agreement is a sham. There was no intention to create legal relationship. There was in fact no loan. It was an arrangement allowing the correction of the relevant accounts. I shall refer to this ground as the ‘Sham Ground’.

(3) The subject loan agreements underpinning the subject debt were derived are void and unenforceable because, at the time when they were entered into or at any time thereafter, Keyes was not a money lender licenced under the Money Lenders Ordinance. I shall refer to this ground as the ‘Money Lender Ground’.”

8.Mr Lok also relied on an affirmation made by Mr Danny Wu, who was one of the guarantors of China Latin’s obligations under the Agreements, and two audio recordings of meetings in 2018 and 2019 (“the Audio Recordings”) between Mr Chong (of VMS Investment Group), Mr Wu and Mr Lok and other individuals, in support of the application. The evidence of Mr Wu was not previously placed before the court in HCMP 2/2020. In his affirmation, Mr Wu said that Mr Lok met him in October 2023 and asked him whether he had any records of meetings concerning the subject loan, and he provided Mr Lok with the Audio Recordings as a result[10].

THE DECISION

9.By the Decision, the Judge dismissed Mr Lok’s application to set aside the 2023 SD, for the following reasons.

10.First, the Judge held that Mr Lok had failed to demonstrate any “special circumstances” that would justify an extension of time being granted to him to make the application under Rule 204 of the Bankruptcy Rules, Cap 6A. The Judge took into account that Mr Lok’s application was made almost 3 months after the time limit had expired, he did not issue any summons to seek an extension of time and did not explain why no application was made, he did not provide any basis justifying a time extension, and he gave no reason or explanation for his delay in making the application. The Judge considered that Mr Lok’s application must, on that basis alone, be dismissed[11].

11.Second, the Judge held that Mr Lok was barred from relying on the three defences referred to at §7 above to apply to set aside the 2023 SD on the grounds of issue estoppel and/or abuse of process. Specifically, the Judge held that:

(1)  Although the Injunction Decision was between China Latin and Keyes, Mr Lok was China Latin’s privy as he was its sole director and shareholder, and China Latin operated as Mr Lok’s alter ego. The Oral Postponement Defence had been considered and rejected by G Lam J in the Injunction Decision, and the court had determined that there was no bona fide dispute of the Debt on substantial grounds. China Latin took no step to pursue its summons for leave to appeal against the Injunction Decision[12].

(2)  In the Prior SD Decision, Linda Chan J rejected Mr Lok’s contention that there was a bona fide dispute of the Debt on substantial grounds because that issue had already been determined by G Lam J in HCMP 2/2020. That determination by Linda Chan J in previous proceedings between Keyes and Mr Lok was binding on Mr Lok in the present proceedings[13].

(3)  The Oral Postponement Defence and the Sham Defence were raised before, but rejected by, Linda Chan J in the Winding Up Decision. It was concluded that there was no bona fide dispute of the Debt on substantial grounds. That decision was binding on Mr Lok as China Latin’s privy[14].

(4)  The Money Lender Defence could and should have been raised when China Latin first disputed the Debt. Mr Lok offered no explanation for its omission, but confirmed in his sworn affirmation in HCMP 2/2020 that China Latin’s indebtedness to Keyes was not disputed save that there was an oral agreement to postpone the date of repayment of the Debt. The late introduction of this ground was barred by the doctrines of issue estoppel or Henderson v Henderson abuse of process[15].

(5)  In respect of Mr Wu’s evidence, Mr Lok had failed to explain how the Audio Recordings supported the Oral Postponement Defence or the Sham Defence. Mr Lok had offered no reason or explanation why he failed to request those recordings during years of prior litigation. The Judge rejected Mr Lok’s reliance on the Arnold exception, finding that no “special circumstances” existed that would make it unjust to enforce issue estoppel against him in the circumstances[16].

(6)  To permit Mr Lok to re-litigate the issue of whether there was a bona fide dispute of the Debt on substantial grounds would be manifestly unfair to Keyes, and jeopardise the due administration of justice. Mr Lok’s application must therefore also be dismissed on the ground of abuse of process[17].

(7)  Mr Lok’s application amounted to a collateral attack on previous judicial decisions[18].

(8)  It was neither necessary nor appropriate for him to express any opinion on the merits of Mr Lok’s substantive defences to the Debt claimed by Keyes[19].

12.Accordingly, the Judge dismissed Mr Lok’s application to set aside the 2023 SD, and made an indemnity costs order against Mr Lok, on the ground that he had abused the court’s process through repeated re-litigations and collateral attacks against previous judicial decisions, and blatantly failed to comply with the prescribed time limit in making the application. The Judge considered Mr Lok’s conduct to be contumelious and he had overstepped “the mark”.

NOTICE OF APPEAL

13.On 15 August 2025, Mr Lok filed his Notice of Appeal against the Order. In the Notice of Appeal, Mr Lok raised four grounds of appeal which may be broadly summarised as follows:

(1)  The Judge erred in applying the doctrines of res judicata, issue estoppel and abuse of process against Mr Lok in the present case. Mr Lok was not a party to the earlier proceedings and no privity exists. As guarantor, he is defending the claim of Keyes in his “personal capacity post-liquidation [of China Latin]”, and is entitled to assert defences not previously adjudicated. The defences raised by him are supported by new and material evidence that was not available in earlier proceedings. Those defences were either not determined or not properly considered in the previous proceedings. At least, two of the three defences, namely, the Sham Defence and the Money Lender Defence, remain unresolved.

(2)  The Judge erred in failing to consider Mr Lok’s substantive defences and whether there were bona fide disputes of the Debt on substantial grounds. Mr Lok advanced serious and arguable grounds of dispute, which were supported by new and material evidence, including the affirmation of Mr Wu and the Audio Recordings. The Judge also misapplied the Arnold exception by failing to consider whether the exclusion of Mr Wu’s evidence would render the decision unsafe or unjust.

(3)  The Judge erred in failing to exercise the discretion conferred by Rule 204 of the Bankruptcy Rules to extend time where special circumstances existed and good cause was shown. Mr Lok’s delay in making the application to set aside the 2023 SD was brief and credibly explained.

(4)  The Judge erred in penalising Mr Lok with the indemnity costs order.

14.Mr Lok’s application for a stay of execution of the Order was dismissed by the Judge on 19 November 2025, on the grounds that (i) he had failed to demonstrate how a refusal of stay would render his appeal nugatory, or any irreparable damage would be done to him without a stay, while a stay would no doubt cause considerable delay to Keyes’ enforcement of its debt entitlement, and (ii) his grounds of appeal were not reasonably arguable or did not have a strong likelihood of success (“the Stay Decision”)[20].

THE PRESENT APPLICATION

15.By a summons taken out on 20 November 2025 (“the Summons”) in the Court of Appeal, Mr Lok re-applied for a stay of execution of the Order, on the grounds that his appeal is meritorious, and without a stay, he would potentially suffer irreversible consequences of a bankruptcy order being made against him. It is also argued on his behalf that enforcement prior to the resolution of the appeal would cause disproportionate prejudice to him and render the appeal nugatory, and thus a stay of the Order pending appeal should be granted[21].

DISCUSSION

16.By Order 59, rule 13(1) of the RHC, an appeal against a judgment or order shall not operate as a stay of execution of the judgment or order, or of the proceedings under the decision of the court below. However, the court may, in the exercise of its discretion, grant a stay of execution pending appeal if the appellant can demonstrate good reasons to justify a stay.

17.The legal principles governing an application for a stay of execution pending appeal are well-settled. They were explained by Ma J (as he then was) in Star Play Development Ltd v Bess Fashion Management Co Ltd [2007] 5 HKC 84 at §§6-10, and summarised by Cheung JA in Fung Shing Chung v Choi King Hung [2024] HKCA 1021, at §20, as follows:-

“(1) The applicant is required to demonstrate a ‘good reason’ for a stay of execution.

(2) Generally speaking, the existence of merely an arguable appeal cannot by itself amount to a sufficient reason to justify a stay. It is the minimum requirement before a court would even begin to consider granting a stay.

(3) In other words, if the Court is not convinced that there exist arguable grounds of appeal, no stay will be granted however exceptional the circumstances may otherwise be justifying a stay of execution.

(4) On the other hand, the existence of a strong appeal or a strong likelihood of success will usually by itself enable a stay to be granted because this would constitute a good reason for a stay.

(5) In most cases, where the Court is faced with simply the existence of an arguable appeal, it becomes necessary for the applicant to provide additional reasons as to why a stay is justified.

(6) Commonly, this is done by demonstrating that without a stay the appeal would be rendered nugatory, for example, because of an appreciable risk that the respondent to the appeal would not be able to repay in the event of a successful appeal against a money judgment, or because the failure to grant a stay would have a serious deleterious effect on the applicant.

(7) In considering an application for a stay pending appeal, it would be impractical and even undesirable for the Court to go deeply into the merits or strengths of the appeal, although the Court must still form a preliminary view of these aspects, see: Star Play Development Ltd v Bess Fashion Management Co Ltd [2007] 5 HKC 84 per Ma J (as he then was) at [9]-[10].

(8) While the existence of a strong appeal would tend to lead the Court to exercise its discretion in favour of granting a stay, the threshold is a high one. The Court has held that for there to be a ‘strong appeal’ such as would justify the grant of a stay without more, the situation must be one which would lead the Court to conclude that something has grievously gone wrong with the process of law in the Court below, or that the appellant is ‘almost bound to succeed’. Absent such a case, something more needs to be demonstrated: John Joseph Mc Gee v. Nold (HK) Ltd [2024] HKCA 354 per Barma JA at [30]”

18.As mentioned above, it would neither be practical nor desirable for this Court to go deeply into the merits or strengths of the appeal. Having considered the Judge’s decisions, the grounds of appeal and the parties’ submissions, we are of the preliminary view that Mr Lok’s appeal, while not hopeless, is only “just arguable”. We certainly do not consider Mr Lok’s appeal to be so strong that it is “almost bound to succeed”. In coming to this view, we take into account, in particular, the following matters:

(1)  Mr Lok has failed to provide any good reason or explanation for his substantial delay in seeking to set aside the 2023 SD.

(2)  Mr Lok is plainly bound by the Prior SD Decision. There is also a strong argument that Mr Lok should be regarded as being a privy of China Latin insofar as the Injunction Decision and the Winding Up Decision are concerned, and thus those decisions are binding on him.

(3)  It is strongly arguable that the three defences sought to be raised by Mr Lok should be barred on the ground of issue estoppel and/or abuse of process.

(4)  Mr Lok has failed to properly explain why Mr Wu’s evidence was not previously sought or relied upon. Mr Lok has also failed to demonstrate that Mr Wu’s evidence provides material support for the Oral Postponement Defence or the Sham Defence. We have reservation on whether the Arnold exception has application in the present case.

19.We next turn to consider whether, without a stay, Mr Lok’s appeal will be rendered nugatory. Mr Manzoni, SC argues that enforcement of the Order prior to the resolution of Mr Lok’s appeal will cause disproportionate prejudice to him and render the appeal nugatory for the following reasons:

(1)  Once a bankruptcy order is made, Mr Lok will lose standing to pursue the appeal in his own name as the right to litigate will vest in the trustee in bankruptcy, which will irreversibly compromise the appellate process and frustrate Mr Lok’s access to justice[22].

(2)  Mr Lok will face a real and imminent risk of bankruptcy as Keyes may proceed to present a bankruptcy petition at any time. Mr Lok will suffer irreparable damage as he is a seasoned businessman and the consequences of bankruptcy are personal and detrimental[23].

20.We do not accept either submission. In respect of (1), even after a bankruptcy order is made, the debtor still has standing to pursue an appeal against a decision refusing to set aside a statutory demand served on him without the need to seek the consent or permission of the trustee to do so: see Wong See Yin v Tin Wan Tung & Another [2019] HKCA 301, at §7, per Yuen JA (giving the judgment of the Court of Appeal); and Richard Henry Addison v London European Securities Limited [2022] EWHC 1077 (Ch), at §§112 – 114. The suggestion that, without a stay, the appellate process will irreversibly be compromised, or Mr Lok’s access to justice will be frustrated, is incorrect.

21.In respect of (2), we agree with the Judge at §12 of the Stay Decision that any risk of bankruptcy of Mr Lok remains only a risk. Had Mr Lok concentrated his effort in getting on with the appeal, it could well have been heard by now, or be heard earlier than any bankruptcy order which may be made against him. Further, the court generally requires evidence as to why an appeal will be rendered nugatory in the event of a stay not being granted: see Star Play Development Ltd (supra) at §9(2) & (3). Yet Mr Lok has not produced any evidence relating to his financial condition or other relevant matters in his affirmation filed in support of the present application. There is no evidence to show that if a stay were not granted or a bankruptcy order made against him, Mr Lok would suffer serious and irremediable financial or other consequences.

22.Mr Manzoni submits that “the principle reaffirmed in [52] in Re Lau Wang Chi Barry [2024] 4 HKC 740[24] is directly engaged in the present case. The Court emphasized that where a bona fide appeal is pending, bankruptcy proceedings must be paused to avoid frustrating the debtor’s ability to challenge the judgment.”[25] With respect, the reliance on Re Lau Wang Chi Barry is misplaced:

(1)  Re Lau Wang Chi Barry is a case where a bankruptcy petition was based on a judgment debt, and the issues before the Court were whether the bankruptcy petition should be adjourned pending the determination of the appeal against the judgment, and whether security should be provided as a condition for granting an adjournment. The issues in the two cases are different.

(2)  §52 of the judgment in Re Lau Wang Chi Barry referred to by Mr Manzoni relates to submissions of counsel (Mr Sussex, SC) in that case. The submission that a bankruptcy order should not be made while a bona fide appeal is pending was advanced on the basis that “a bankrupt cannot in his own name appeal from a judgment against him which is enforceable only against the estate vested in his trustee in bankruptcy, unless the latter is willing to permit the use of his name on suitable terms for bringing the appeal. In the event of the trustee’s refusal, the bankrupt’s recourse is to apply to the court to reverse or modify the trustee’s decision, pursuant to section 83 of the Bankruptcy Ordinance, Cap 6 (Heath v Tang at 1423G, 1425G to H)”. However, as earlier mentioned, even after a bankruptcy order has been made, the bankrupt is still entitled to pursue an appeal against an order refusing to set aside the relevant statutory demand without the need to obtain the consent or permission of the trustee. Further, as noted by the court at §35, “[w]here the judgment debtor has lodged an appeal or an application to set aside the judgment, the bankruptcy court may stay the petition to await the outcome of the appeal or application, if satisfied that the debtor has reasonable prospect of succeeding” [emphasis added]. This statement clearly negates any suggestion that a stay of a bankruptcy petition should invariably be granted where there is a bona fide appeal pending before the court. A bona fide appeal is undoubtedly essential to support an application for an adjournment of a bankruptcy petition or, for that matter, an application for a stay of execution of a judgment or order pending appeal. However, it is not by itself a sufficient condition for granting an adjournment or a stay. All other relevant circumstances must be considered before the court decides whether to exercise its discretion to grant an adjournment or a stay.

(3)  The Court in Re Lau Wang Chi Barry came to the tentative view, on the available materials, that the appeal had reasonable prospect of success, and ordered security to be provided as a condition for granting the adjournment sought by the applicant. The relevant circumstances and issues before the court in that case are different from the present.

For the above reasons, we do not consider that Re Lau Wang Chi Barry establishes any general principles which are applicable to the present case.

23.In all, we are not prepared to exercise our discretion to grant a stay of execution of the Order in favour of Mr Lok pending his appeal.

DISPOSITION

24.The Summons is dismissed, with costs to the Respondent, to be summarily assessed. We have considered the Respondent’s Statement of Costs for Summary Assessment dated 2 February 2026, seeking the total sum of HK$70,500. The amount of costs claimed by the Respondent seems to us to be reasonable, and is allowed in full. The above costs order, including the assessment of costs, is an order nisi, which shall become absolute unless an application is made to vary the same within 14 days from the date of this judgment.

Mr Charles Manzoni SC leading Ms Lilian Ip, instructed by Huen & Partners, for the Applicant

Ms Sharon Yuen, instructed by Iu, Lai & Li, for the Respondent