Gmt Industrial Ltd (in Members’ Voluntary Liquidation) v. Fan Rong Li As the Administratrix of the Estate of Selvam Selvaraj, Deceased

CAMP 106/2026, [2026] HKCA 1373

On An Intended Appeal From [2025] HKCFI 2141 &

[2026] HKCFI 1982

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 106 OF 2026

(ON AN INTENDED APPEAL FROM HCA NO 546 OF 2015)

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JUDGMENT

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

INTRODUCTION

1.This is the Defendant’s renewed application, by a summons dated 8 April 2026 (“the Summons”), for (i) an extension of time to appeal against the judgment of Deputy High Court Judge Kent Yee dated 22 May 2025 ([2025] HKCFI 2141, “Judgment”), and (ii) a stay of execution of the Judgment pending the determination of the Summons and, if extension of time to appeal is granted, the determination of the appeal.

2.Having considered the documents and submissions lodged by the parties, we are of the view that it is appropriate to deal with the Summons on paper without an oral hearing pursuant to Order 59, r 14A(1) of the Rules of the High Court, Cap 4A. 

BACKGROUND

3.The basic facts of this case have been set out at §§7 to 32 of the Judgment, and will not be repeated here.  The following brief summary should suffice for the present purpose.

4.The Plaintiff, a family company founded in 1979 by the late Mr Karupaya Selvaraj (“Father”) and his son, the late Mr Selvam Selvaraj (“Selvam”), used to carry on the business of trading in electronic products and related accessories.  Father passed away on 22 February 2003, and Selvam passed away on 19 May 2008.

5.Father had two other sons, namely, Mr Mohan Selvaraj (“Mohan”) and Mr Moorthy Selvaraj (“Moorthy”).  Mohan passed away on 31 March 2023, while Moorthy apparently passed away in July 2025[1].

6.Between 2003 and 2008, Father, Selvam, Mohan and Moorthy were the only shareholders of the Plaintiff, holding 65%, 13%, 12% and 10% respectively of the Plaintiff’s issued share capital.  They, or some of them, were also directors of the Plaintiff between 1979 and 2020.

7.In essence, the Plaintiff’s claim relates to 2 sums of money paid by the Plaintiff into Selvam’s personal account: (i) US$2,000,000 on 27 August 2007, and (ii) US$5,000,000 on 1 November 2007 (“the Payments”).  On those dates, Selvam was a director of the Plaintiff.  He was also one of the authorised signatories of the Plaintiff, and could operate all its bank accounts.  There is no dispute that the Payments were made.  The issue is whether there was any proper justification for Selvam to receive the Payments from the Plaintiff.

8.The Plaintiff was put into voluntary liquidation on 3 November 2020, and liquidators (“the Liquidators”) were appointed in June 2021.  According to the Liquidators, they have not been able to find any basis for the Payments from the books and records of the Plaintiff examined by them.  They claim that the Payments were made without any proper authority of the Plaintiff and in breach of fiduciary duties owed by Selvam to the Plaintiff.  The Liquidators therefore brought the present action in the name of the Plaintiff against the administrators of the estate of Selvam[2] in March 2015 for recovery of the Payments and other relief.

9.As observed by the Judge, the Defendant’s defence filed on 3 June 2015 consists of little more than bare denials and non-admissions.

THE JUDGMENT

10.A 3-day trial of the Plaintiff’s action against the Defendant took place in February 2025.  At the trial, Mr Borrelli, one of the Liquidators, testified for the Plaintiff, while Madam Fan, the wife of Selvam and the Administratrix of the estate of Selvam, gave evidence for the Defendant.  The Judge found Mr Borrelli to be a truthful witness, but did not regard Madam Fan as a credible one.

11.The Judge held that the Payments were well-documented, and Madam Fan bore an evidential burden to provide a legitimate reason for the Payments (Judgment, §45).

12.A number of explanations for the Payments were advanced by Madam Fan, who had no personal knowledge of Selvam’s dealings with the assets of the Plaintiff, or the accounting matters (including the entries in the books and records) of the Plaintiff.  Apparently, she did not even know about the Payments until the Plaintiff’s solicitors approached her on the matters.  The explanations for the Payments advanced by Madam Fan were all rejected by the Judge:

(1)  In respect of a purported commission payment in the sum of HK$16,998,114.45 appearing in the books or accounts of the Plaintiff, Madam Fan initially said in an email to the Liquidators dated 21 July 2021 (“the 2021 Email”) that the amount was for “family expense, deceased father’s estate duty, deceased father’s personal salary tax, Mohan (Leaves) unpaid his purchasing to GMT invoice” [sic].  However, Madam Fan accepted in cross-examination that this explanation was her fabrication only (Judgment, §48). The Judge also pointed out that Madam Fan was unable to produce any evidence to show that Selvam was entitled to the sum of HK$16,998,114.45 as commission, nor was she able to challenge the evidence of Mr Borrelli on the results of the Liquidators’ investigation, either by way of cross-examination or adducing contrary evidence.  The Judge considered that there was no reason why the court should not accept the investigation results of the Liquidators, and rejected the allegation of commission payment to Selvam (Judgment, §49).

(2)  In the 2021 Email, Madam Fan referred to what the Judge described as “another piece of false information” relating to an alleged payment of HK$21,285,000 to “Lenoxx” in 2004 appearing in the books or accounts of the Plaintiff.  Lenoxx was apparently a buyer of some goods from the Plaintiff, and had issued a debit note to the Plaintiff for $2,000,000 (in USD, although the currency was not specified on the face of the debit note) dated 26 April 2005 (“the Debit Note”) on the ground that some of the goods delivered by the Plaintiff were faulty.  The Judge held that the alleged payment of HK$21,285,000 to Lenoxx was not supported by any documentary evidence and was contradicted by the evidence of Mr Borrelli, who had made enquiries with Mr Mottel, a partner of Lenoxx, on 13 September 2023.  Mr Mottel told Mr Borrelli that although Lenoxx did issue the Debit Note to the Plaintiff, neither the Plaintiff nor Selvam had paid any part of the sum of US$2 million as demanded.  The Judge also considered the ledger entry in relation to the alleged payment of HK$21,285,000 to Lenoxx to be suspicious (Judgment, §§50-52).

(3)  Madam Fan alleged that the sum of US$2 million received by Selvam represented the payment to Lenoxx as compensation for faulty goods delivered.  The Judge rejected this allegation as being “in complete disregard of the unchallenged and uncontradicted evidence” of Mr Borrelli mentioned above, and refused to accept her assertion.  The Judge did not believe that Selvam ever paid Lenoxx anything pursuant to the Debit Note (Judgment, §§53-55).

(4)  As regards the receipt of US$5 million by Selvam on 1  November 2007, Madam Fan claimed repeatedly under cross-examination that there was a family arrangement for the use of US$5 million, and Selvam had distributed the sum among the family members even though there was no supporting evidence of such distribution.  The alleged family arrangement was not pleaded in the Defence, or mentioned in Madam Fan’s witness statement.  The Judge observed that this explanation was contradicted by what Madam Fan said in the 2021 Email, in which Madam Fan claimed that the entire sum was still in the bank account of Selvam.  The Judge rejected the allegation of family arrangement advanced by Madam Fan (Judgment, §§57-59).  The Judge further held that, in any event, the sum of US$5 million was the property of the Plaintiff, and the alleged family arrangement could not provide any justification for Selvam’s misappropriation of the assets of the Plaintiff (Judgment, §60).

(5)  As for Madam Fan’s reliance on the 2004 Audited Financial Statements of the Plaintiff (“the 2004 AFS”), which recorded a sum of HK$25,767,485.05 as an “Amount due to a director” and was apparently approved by the directors of the Plaintiff, the Judge noted from the 2007 Audited Financial Statements of the Plaintiff (“the 2007 AFS”) that the said amount still existed in 2006 but disappeared in the year of 2007.  The Judge took the view that these records could not sufficiently prove the alleged indebtedness absent any supporting underlying accounting documents.  The Judge held that the 2004 AFS could not, per se, justify the Payments.  The Judge accepted the evidence of Mr Borrelli that the veracity of the 2004 AFS was seriously doubtful in light of the paucity of accounting evidence to substantiate the entries and records therein, and concluded that he was unable to accept the entries and records as proven (Judgment, §§61-64).

13.The Judge concluded that the Liquidators had proved the claim of the Plaintiff against Selvam and his estate on the balance of probabilities, and found that Selvam, in breach of his fiduciary duties as a director, misappropriated US$7 million belonging to the Plaintiff. Accordingly, the Judge gave judgment for the Plaintiff, and made the orders mentioned at §68 of the Judgment.

THE PRESENT APPLICATION

14.On 31 October 2025, the Defendant issued a summons seeking an extension of time to serve a notice of appeal against the Judgment, and a stay of execution of the Judgment pending the determination of that summons.  On 2 April 2026, the Judge gave a decision ([2026] HKCFI 1982, “the Leave Decision”) dismissing the Defendant’s summons.

15.On 8 April 2026, the Defendant issued the Summons to renew the application for extension of time to appeal, and a stay of execution of the Judgment pending the determination of the Summons.  Three grounds of appeal are raised in a draft Notice of Appeal attached to the Summons.  The three grounds are substantially the same as those before, but rejected, by the Judge:

(1)  Ground 1 argues that the Judge was wrong in law to hold that (i) the Defendant had failed to discharge the evidential burden that the Payments by the Plaintiff to Selvam were proper and authorised, and/or (ii) the Plaintiff had discharged the persuasive burden that the Payments were improper and not authorised by the Plaintiff.

(2)  Ground 2 argues that the Judge made palpable errors and was plainly wrong in drawing inferences from and assessing the documentary evidence.

(3)  Ground 3 argues that the Judge was wrong in law in not requiring the Plaintiff to discharge its obligation of fair presentation.

16.These three grounds of intended appeal are elaborated in many sub-paragraphs in the draft Notice of Appeal, and the Defendant’s Written Statement dated 8 April 2026.

DISCUSSION

Applicable principles

17.In the exercise of its discretion whether to extend time to appeal, the court will take into account the length of the delay, the reasons for the delay, the chances of the appeal succeeding if an extension of time is granted, and the degree of prejudice to the other party if the application is granted.  Where the delay is substantial and not wholly excusable, the applicant must show a real prospect of success on the merits, not merely a reasonable prospect of success: Secretary for Justice v Hong Kong & Yaumati Ferry Co Ltd [2001] 1 HKC 125, at 129I.

18.The Court of Appeal’s approach in relation to an appeal against a finding of fact by a trial judge is well settled.  The assessment of evidence and credibility of witnesses are primarily the task of the trial judge.  The appellate court will not re-assess the evidence afresh on its own unless an appellant can show that there were palpable errors in the assessment or the trial judge had gone plainly wrong in the assessment: Ting Kwok Keung v Tam Dick Yuen [2002] 3 HKLRD 1; Singh Harjit v Determination Business Ltd, CACV 68/2015, 24 November 2015; and ChinaGold Finance Ltd v CIL Holdings Ltd, CACV 11/2015, 27 November 2015.

19.When it comes to the evaluation of a lower court’s factual findings, the following observations of Lord Hoffmann in Biogen Inc v Medeva Plc [1997] RPC 1, at 45, should be borne in mind:

“The need for appellate caution in reversing the judge’s evaluation of the facts is based upon much more solid grounds than professional courtesy. It is because specific findings of fact, even by the most meticulous judge, are inherently an incomplete statement of the impression which was made upon him by the primary evidence. His expressed findings are always surrounded by a penumbra of imprecision as to emphasis, relative weight, minor qualification and nuance ... of which time and language do not permit exact expression, but which may play an important part in the judge’s overall evaluation.”

Delay substantial and not excusable

20.As pointed out by the Judge at §6 of the Leave Decision, the Defendant’s delay in serving a notice of appeal in the present case was about 4 months and 10 days.  Such delay is substantial on any view of the matter.

21.In Madam Fan’s affirmation filed on 31 October 2025 (together with the Defendant’s summons for an extension of time to appeal in the court below), Madam Fan claimed that the delay was caused by her failure to appreciate the implications of the Judgment, alleging that she did not know the serious effect that the Judgment might have on the estate of her late husband until she received a letter from the Plaintiff’s solicitors in September 2025 about the Plaintiff’s intended enforcement of the Judgment, and a hearing on 17 September 2025 in relation to the Plaintiff’s application for disclosure of bank statements.  Madam Fan said that it was only then that it dawned on her that the assets of the estate of her late husband were in jeopardy.  The Judge regard this as a “bad excuse indeed” (Leave Decision, §8).  We agree.

22.Mr C Y Li, SC (for the Defendant) argues that there is no prejudice to the Plaintiff arising out of the delay.  This is no excuse for the Defendant’s delay.

23.In short, the Defendant’s delay is both substantial and inexcusable.  Hence, in order to obtain an extension of time to appeal, the Defendant has to show a real prospect of success of the intended appeal on the merits.

None of the intended grounds of appeal is reasonably arguable

(a)  Ground 1

24.Under Ground 1, the Defendant argues that –

(1)  the Judge was wrong in law to hold that the Defendant had failed to discharge the evidential burden that the Payments were proper and had been authorised by the Plaintiff, having regard to the following matters: (a) the 2004 AFS, (b) the ledger report of the “Director Current Account”, (c) the directors’ resolution dated 15 August 2005 approving the draft 2004 AFS, (d) the shareholders’ resolution dated 30  September 2005 approving the 2004 AFS, which was binding on the Plaintiff by reason of the Duomatic principle, (e)-(f) the timing of the Payments and the 2007 AFS, (g) the absence of any issue raised by the Plaintiff’s auditor at the time, Lau, Tsui & Company (“LTC”), as regards the Payments, (h) LTC’s observations in the 2014 Audited Financial Statements of the Plaintiff (“the 2014 AFS”) regarding the Payments;

(2)  further or in the alternative, the Judge was wrong in law to hold that the Plaintiff had discharged the persuasive burden that the Payments were improper and unauthorised, having regard to the following matters: (a) the lack of witness statement or evidence from Mohan, Moorthy or LTC, (b) the absence of the relevant ledger reports and sales ledger of the Plaintiff for the year of 2003, (c) the lack of witness statement or direct evidence from Lenoxx, except for the double hearsay evidence in the form of a telephone note.

25.Although this ground is couched as a complaint of error of law, it is obvious that it is an appeal against findings of fact by the Judge.  The Defendant accepts that upon proof of Selvam’s receipt of the Payments, the Defendant bore an evidential burden to justify the Payments as having been approved or authorised by the Plaintiff[3].  There is also no suggestion, or complaint, that the Judge did not require the Plaintiff to discharge the persuasive, or substantive, burden that the Payments were improper and unauthorised.  As to whether, on the evidence before the Judge, the Defendant had discharged the evidential burden to provide a proper justification for the Payments, or whether the Plaintiff had discharged the persuasive burden of proof that the Payments were improper and unauthorised, these were factual inquiries. The Defendant has failed to show that the Judge made any error of law in placing the relevant evidential and persuasive burdens on the Defendant and the Plaintiff respectively.  The whole underlying premise of Ground 1 is unsustainable.  On this ground alone, Ground 1 should be rejected.

26.For the sake of completeness, we shall briefly comment on the main points raised by the Defendant mentioned at §24(1) and (2) above.  The Judge has explained why they have no merits (Leave Decision, §§19-27).  We agree with the Judge’s views and do not propose to repeat them here, save to mention the following:

(1)  The matters mentioned at §24(1)(a), (b), (e) and (f) above, ie 2004 AFS, the ledger report of the “Director Current Account”, the timing of the Payments, and the 2007 AFS relied on by the Plaintiff were considered by the Judge in the Judgment.

(2)  Although the remaining matters mentioned at §24(1) above were not expressly dealt with by the Judge in the Judgment, it does not appear that they were raised by the Plaintiff at the trial.  There is no complaint in the draft Notice of Appeal that those points had been raised at the trial, but the Judge omitted to deal with them.  The points sought to be raised, including the argument based on the Duomatic principle, are fact-sensitive.  As mentioned by the Judge at §§21 and 34 of the Leave Decision, new points which are fact sensitive or could have affected the conduct of the case below should generally not be entertained on appeal.  In any event, they mainly relate to the accuracy or reliability of the 2004 AFS and 2007 AFS, which were expressly rejected by the Judge.  The fact that the draft 2004 AFS had been approved by a resolution of the directors of the Plaintiff dated 15 August 2005 adds nothing of significance to the fact that the 2004 AFS was signed by 2 directors of the Plaintiff[4], a fact which the Judge expressly referred to at §63 of the Judgment.  Insofar as the 2014 AFS are concerned, as mentioned by the Judge at §22 of the Leave Decision, they were not pleaded, and the witness statements said nothing about them.  The 2014 AFS was also not mentioned by Madam Fan at the trial.  We do not consider that Madam Fan should be permitted to rely on the 2014 AFS at this stage.  In any case, we have looked at LTC’s observations on the Payments in the 2014 AFS (at pages 4 and 5 thereof), but do not consider that they have any real significance on the issue of whether the Payments were justifiable, for the following reasons: (i) the 2014 AFS was prepared many years after the Payments were made, (ii) LTC’s observations were not based on any fresh information or materials which they had not previously considered when preparing the 2004 AFS, (iii) the statement that the Plaintiff’s claim in respect of the Payments was inconsistent with LTC’s findings during the audit of the financial statements of the Plaintiff for the relevant years begs the question of whether the relevant entries in the previous financial statements of the Plaintiff are accurate or reliable, and (iv) the statement that LTC had not been provided with any explanation why the relevant amounts were now alleged to have been misappropriated by Selvam is irrelevant to the question of whether the relevant entries in the previous financial statements of the Plaintiff are accurate or reliable.  In short, we do not consider that the matters relied upon by the Defendant but not expressly dealt with by the Judge in the Judgment would have any material impact on the Judge’s conclusion that the Defendant had failed to discharge the evidential burden that the Payments were proper and authorised.

(3)  In relation to the matters mentioned at §24(2) above, there was ample evidence before the Judge to support his conclusion that the Payments were improper and unauthorised.  The fact that no evidence was called from Mohan, Moorthy, LTC or Lenoxx does not demonstrate any palpable error, or that the Judge’s conclusion was plainly wrong.

(b)  Ground 2

27.Under Ground 2, the Defendant argues that the Judge made palpable errors and was plainly wrong in drawing inferences from and assessing the documentary evidence.  The complaints include (i) an alleged failure to “analyse, or to give sufficient weight” to the matters mentioned at §24(1) and (2) above, (ii) an alleged “error in law” in rejecting the evidence of the 2004 AFS, the 2007 AFS, and the signing of those documents by the directors of the Plaintiff, (iii) an alleged failure to consider the inherent probability of Selvam’s scheme of misappropriation, (iv) an alleged failure to consider the inherent probability of the Payments being for proper purpose or having been authorised by the shareholders for settling family expenses, and (v) an alleged failure to consider the lack of evidence from Mohan, Moorthy, LTC and Lenoxx.

28.Ground 2 is a direct challenge to the Judge’s findings of fact.  The main points raised under this ground were considered and dealt with by the Judge in the Leave Decision, at §§28-40.  We agree with the Judge’s analysis, and would give our brief comments as follows:

(1)  In respect of §27(i) above, we have already explained why the matters mentioned at §24(1) and (2) above relied on by the Defendant do not assist the Defendant’s case.  Assessment of, and the weight that may be given to, any particular item of evidence are generally matters for the trial judge.  A complaint that the trial judge has “failed to analyse, or to give sufficient weight” to some evidence is far from sufficient to show that the trial judge’s findings of fact are plainly or palpably wrong.

(2)  In respect of §27(ii) above, the rejection of the 2004 AFS and the 2007 AFS does not involve any “error of law” as alleged. The Judge explained why he did not accept the 2004 AFS and the 2007 AFS.  The Judge was also aware that two of the directors of the Plaintiff signed those documents (Judgment, §63).  It was open to the Judge to accept the evidence of Mr Borrelli that the veracity of the Plaintiff’s Audited Financial Statements was seriously doubtful in light of the paucity of accounting evidence to substantiate the entries and records therein, and refuse to accept the entries and records stated in those documents as proven.

(3)  In respect of §27(iii) and (iv) above, assessment of the inherent probabilities or improbabilities of alleged facts is a matter for the Judge.  The matters mentioned at §2(3)(a) to (d) and 2(4)(a) to (f) of the draft Notice of Appeal, whether taken singly or cumulatively, do not provide any sound basis for us to intervene in the Judge’s acceptance of the Plaintiff’s case and rejection of the Defendant’s case.

(4)  Finally, in respect of §27(v) above, we have already dealt with the absence of evidence at §26(3) above. Insofar as the failure to call witnesses and the drawing of adverse inferences are concerned, Mohan had already passed away by the time of the trial, while Moorthy, LTC and Lenoxx could not be regarded as the Plaintiff’s witnesses.  It was equally open to the Defendant to call Moorthy, LTC and/or Lenoxx to give evidence at the trial.  In any event, before any adverse inference on a relevant issue can be drawn from the failure of a party to call a material witness, the other party must first establish a prima facie case on that issue on which the missing witness can reasonably be expected to give material evidence to rebut the prima facie case.  The Defendant failed to establish any such prima facie case at the trial.  It follows that there is no question of drawing any adverse inference against the Plaintiff.

(c)  Ground 3

29.Ground 3 complains about the Judge’s failure to require the Plaintiff to discharge an alleged “obligation of fair presentation”. This ground can be disposed of briefly.  The duty of fair presentation was explained by Eugene Fung J in China Medical Technologies Inc (in liquidation) and Others v Wu Xiaodong and Others [2026] HKCFI 276, at §51, as follows:

“Given that Mr Tsang and Mr Chong have each filed a defence in these proceedings, it seems appropriate for the court to have some regard to the contents of their respective pleading in determining the issues at the trial. On behalf of the Plaintiffs, Mr Charles Manzoni SC referred to an authority to suggest that a plaintiff has an ‘obligation of fair presentation’ to present his case fairly as against an absent defendant, which obligation has been described as ‘less extensive than the duty of full and frank disclosure on a without notice application’. Whilst it is obviously right that a plaintiff should bring to the court’s attention all relevant matters and must not mislead the court, I do not believe there is an universal ‘obligation of fair presentation’ on the part of a plaintiff to draw the court’s attention to ‘points, factual or legal, that might be to the benefit of [the defendant]’ whenever the defendant is absent from the trial. On the other hand, where there are materials before the court, for example, to indicate that a defendant has taken a position contrary to the plaintiff’s interest in a filed pleading, or has given admissible evidence undermining the plaintiff’s position, the plaintiff should naturally bring them to the court’s attention even if the defendant plays no part during the trial.”

30.Since we have not received full submissions from the parties on the scope of this obligation of fair presentation, we are content to proceed on the basis of the above statement of principle, leaving further consideration of this topic to an appropriate future case.

31.The first and obvious difficulty faced by the Defendant is that she was not absent from the trial.  As pointed out by the Judge at §42 of the Leave Decision, Madam Fan conducted the trial in person, cross-examined the Plaintiff’s witnesses and provided full written and closing submissions.  The fact that she appeared in person at the trial cannot be equated with absence from the trial.  Mr Li relies on the fact that Madam Fan had no personal knowledge of the underlying transactions in the present case.  We do not see that the applicability of the obligation of fair presentation could depend on the extent or degree of a party’s knowledge of the relevant facts or issues in the case.  Mr Li also submits that Madam Fan could give no other input at the trial.  This submission is plainly incorrect.  Madam Fan sought to put forward various explanations to justify the Payments received by her late husband, but those explanations were rejected by the Judge.

32.Even assuming that the obligation of fair presentation has application in the present case, we have already commented on the matters which the Defendant now complains the Plaintiff failed to draw the Judge’s attention to, namely (i) the directors and shareholders’ resolutions approving and adopting the 2004 AFS, (ii) the 2007 AFS having been signed by the directors of the Plaintiff, and (iii) the 2014 AFS, at §26 above.  We do not consider those matters to be of such relevance or significance that the Plaintiff would be required by the obligation of fair presentation to specifically draw the Judge’s attention to them.  Insofar as the lack of witness statement or evidence from Mohan, Moorthy, LTC and Lenoxx is concerned, that fact was self-evident.  However, for the reasons mentioned at §28(4) above, the absence of such evidence did not give rise to any adverse inference which might be drawn against the Plaintiff.

33.In all, none of the Defendant’s intended grounds of appeal is reasonably arguable, or has a real prospect of success.  We refuse the Defendant’s application for an extension of time to serve a notice of appeal.  It follows that the Defendant’s application for a stay of execution of the Judgment pending appeal is also refused.

DISPOSITION

34.The Summons is dismissed with costs to the Plaintiff, to be assessed summarily.

35.In the Plaintiff’s 2 statements of costs for summary assessment both dated 22 April 2026 (one prepared on an indemnity basis, and the other on a party and party basis), the Plaintiff has included the fees of leading counsel only.  The Plaintiff has invited the Court to assess its costs on an indemnity basis.  The normal practice of the Court of the Appeal is to allow the fees of 2 counsel in substantive appeals, and the fees of 1 counsel in relation to interlocutory applications and applications for leave to appeal (in respect of appeals intended to be heard by the Court of Appeal), and to assess the costs on a party and party basis.  These are the default positions, and shall apply unless a different order is expressly specified.  The present application is a simple one, and the Plaintiff was represented by junior counsel only at the trial.  We do not see any special or exceptional circumstances which would justify a departure from the above practice of the Court.  Accordingly, the Plaintiff’s costs will be assessed on a party and party basis, with the fees of 1 counsel being allowed.  The Defendant shall have leave to file and serve a statement of objections (limited to 2 pages) to the Plaintiff’s statement of costs dated 22 April 2026 (prepared on a party and party basis) within 14 days from the date of this judgment.

36.The above costs order 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 Christopher Chain SC, leading Mr Terrence Tai and Mr Paul Law, instructed by Oldham, Li & Nie, for the Plaintiff

Mr C Y Li SC, leading Mr Kenny Kwok, instructed by Tam, Pun & Yipp Solicitors, for the Defendant

[1] See §35 of the 1^st Affirmation of the Defendant filed on 31 October 2025 in the proceedings below.

[2] Yau Paul, one of the administrators of the estate of Selvam, ceased to be a party to the proceedings by order dated 21 March 2018.

[3] See §1(1) of the Defendant’s draft Notice of Appeal.

[4] The directors’ resolution and the 2004 AFS were apparently signed by the same 2 directors of the Plaintiff.