China Evergrande Group (in Liquidation) v. Hui Ka Yan and Others
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HCA 551/2024 and HCMP 1080/2024 [2026] HKCFI 5079 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO. 551 OF 2024 AND MISCELLANEOUS PROCEEDINGS NO. 1080 OF 2024 _________________
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_________________ DECISION _________________ A. BACKGROUND 1.By a Decision dated 16 September 2025 ([2025] HKCFI 4327) (“the Receivership Decision”), this Court ordered the 1st defendant (“Hui”) to bear the plaintiff’s costs of a summons which was subsequently assessed as HK$1,200,000 (“the Assessed Costs”). As a result of Hui’s failure to pay the same, by virtue of another Decision dated 3 February 2026 ([2026] HKCFI 739) (“the Unless Order Decision”), this Court made an unless order against Hui, pursuant to which Hui would be debarred from defending this consolidated action (“this Action”) if he failed to pay the Assessed Costs by 4pm on 20 February 2026 (“the Unless Order”). At the end of the day, Hui did not pay the Assessed Costs by the deadline imposed by the Unless Order. B. THE APPLICATIONS 2.Before the Unless Order Decision was handed down, a summons was filed on 9 January 2026 (“the Variation Summons”) by Hui’s solicitors (“Chow de Bedin LLP”), pursuant to which an application was made to vary an Injunction Order against Hui which was re-filed on 22 September 2025 (“the Injunction Order”)[1], so that:
3.On 20 February 2026, Chow de Bedin LLP filed another summons (“the Relief Summons”) for 2 purposes:
4.On 9 March 2026, the plaintiff took out a summons (“the Authority Summons”), by which the plaintiff asked, inter alia, for:
5.I will deal with the Authority Summons first as a matter of logic. C. THE AUTHORITY SUMMONS C1. Chow de Bedin LLP’s authority 6.For the purpose of the Authority Summons, the plaintiff does not dispute that Chow de Bedin LLP have been validly instructed by Hui to defend this Action generally. However, it was argued that, according to the evidence of Mr Chow Justin Ting Fun (“Mr Chow”) and other representations made by Mr Chow’s firm (i.e. Chow de Bedin LLP), they simply did not have the necessary authority to take out the Variation Summons and the Relief Summons. The following evidence was relied on by the plaintiff:
7.It is noted that the Receivership Decision, the assessment of the costs thereof, and the Unless Order were all made in/after September 2025, that is, after Mr Chow had lost his only indirect contact with Hui. Therefore, there is no doubt (Ms Ha also fairly accepted) that there was no way that Hui could give any specific instruction to Mr Chow for the taking out of the Variation Summons and the Relief Summons. 8.In these circumstances, the only issue on authority is whether Hui’s initial authority to “defend these proceedings generally” could encompass Mr Chow (and Chow de Bedin LLP)’s specific authority to issue the Variation Summons and the Relief Summons. In this regard, it is undisputed that the burden is on Chow de Bedin LLP to establish that they have been properly authorised: Shing Hai Dong & Others v Shing Ho Yung [1961] HKLR 331 at 338. 9.In my view, the answer on the said issue is clearly “No”. 10.When considering the aforesaid issue, it is important to bear in mind that Hui had, at all material times, not been able to deal with any of his assets or assets under his control and been prohibited from discussing with anyone about the same by the Mainland authority. This is a restriction which has all along been recognized by Mr Chow and Chow de Bedin LLP. 11.By virtue of the Variation Summons, what Chow de Bedin LLP is seeking to do is to make use of the Costs on Account which is an asset of Hui. If Hui cannot deal with his own assets and is prohibited from talking to others on his own assets, I am at a loss as to how Mr Chow and his firm may say that they have the necessary authority to apply for permission to use the Costs on Account, which in effect amounts to usage and disposal of Hui’s asset. Adopting the phraseology of Mr Abraham Chan SC who acts for the plaintiff, there is an express carve-out from Chow de Bedin LLP’s authority to take any steps in respect of the Injunction Order or Hui’s assets. 12.Indeed, if Hui cannot give instruction on a matter expressly, it is futile to argue that he is able to give the same instruction impliedly. 13.It was said that the taking out of the Variation Summons and the Relief Summons are necessary and incidental to Hui’s instructions to defend this Action, in the sense that if the Injunction Order is left unvaried, it would be impossible for Hui to fund his defence or avoid being debarred from mounting such a defence at all. 14.I reject this submission for 2 reasons. 15.Firstly, if Hui himself cannot give instruction on the disposal of his own assets (because, as confirmed by Mr Chow, Hui has been prohibited by the Mainland authority from discussing about his assets with others), I cannot see how this argument can salvage Hui’s case (or Chow de Bedin LLP’s case rather), because any authority granted to Chow de Bedin LLP must be subject to the said overriding restriction. 16.Ms Ha emphasised that the authority to defend this Action given by Hui was general in nature and that there was no positive exclusion to deal with his assets, and therefore what is now lacking is lack of instructions but not lack of authority. With greatest respect, I do not agree. As discussed, the authority which had been conferred by Hui to Chow de Bedin LLP must have been limited in the sense that it would not involve the disposal of any of Hui’s properties. 17.Secondly, on the facts, Hui (or Chow de Bedin LLP) simply cannot satisfy this Court that the Costs on Account is the only possible source of fund from which the Assessed Costs can be paid and Hui’s defence be funded. In other words, he has failed to establish on the balance of probabilities that if the Injunction Order is left unvaried, it would be impossible for Hui to fund his defence or avoid being debarred from defending this Action. 18.On this matter, the following pieces of evidence have been placed before this Court:
19.In my view, the evidence adduced is insufficient to establish even on the balance of probabilities that the Costs on Account is the only possible source of fund from which the Assessed Costs can be paid and Hui’s defence be funded:
20.I therefore conclude that Chow de Bedin LLP had no authority to take out the Variation Summons and the Relief Summons on behalf of Hui. 21.For such a reason alone, the Variation Summons and the Relief Summons should be dismissed. C2. Wasted costs order 22.Section 52A(4) of the High Court Ordinance (Cap. 4, Laws of Hong Kong) and Order 62 rule 8 of the Rules of the High Court (Cap.4A, Laws of Hong Kong) confer on the Court a power to make a wasted costs order and require the legal representative concerned to meet the whole or any part of any wasted costs. 23.It is undisputed by Ms Ha that Mr Chan SC has accurately set out the legal principles and procedures in his skeleton submissions as follows:
24.In the present case, Ms Ha argued that even if this Court finds that Chow de Bedin LLP lacked the authority to issue the Variation Summons and the Relief Summons, the plaintiff did not rely on (or was not induced by) Chow de Bedin LLP’s authority because:
25.It was therefore submitted that, in the absence of the plaintiff having relied on the warranty of authority, the costs were caused by the issue of the process, not by the breach of the warranty: Zoya Ltd v Ahmed [2017] 2 Costs LO 133 at [64] and Grand Field Group Holdings Ltd. v Tsang Wai Lun Wayland (No. 2) [2010] 4 HKLRD 487 at [14]. 26.In Grand Field Group Holdings Ltd. (supra), it was explained by Poon J (as he then was) that:
27.In the present case, while Chow de Bedin LLP had indeed informed the plaintiff about Hui’s inability to deal with his own assets and the prohibition for Hui from discussing with others on his assets, Mr Chow had never represented that he was doubtful as to whether his firm had the authority to take out the Variation Summons and the Relief Summons. To the contrary, even after the Authority Summons had been taken out, Mr Chow still made his 8th Affirmation and confirmed that the taking out of both the Variation Summons and the Relief Summons fell within his firm’s general authority to defend this Action. Apparently, he was not only advancing his client’s case but his own case on authority. 28.In such circumstances, the plaintiff had no other choice but to incur costs so as to deal with Mr Chow’s arguments. It would be utterly unfair if Chow de Bedin LLP would be able to escape liability under such circumstances, particularly when, unlike the case of Zoya Ltd (supra), the plaintiff could not look to anybody else for payment of the legal costs incurred. 29.Insofar as it is necessary, I also take the view that it was improper and unreasonable for Chow de Bedin LLP to take out the Variation Summons and the Relief Summons despite Mr Chow’s clear knowledge of Hui’s restriction in dealing with and giving instruction regarding his own assets. Apparently, part of the reason for the taking out of the Variation Summons was for his firm to recoup legal fees which Chow de Bedin LLP had incurred and in respect of which Hui had never settled. 30.To conclude, I am satisfied that the criteria set out in Order 62 rule 8B(1)(a)[7] have been met. I will therefore give further directions to ensure that Chow de Bedin LLP is afforded a reasonable opportunity to show cause why a wasted costs order should not be made. D. THE VARIATION SUMMONS 31.Strictly speaking, given my conclusion under section C1 above, there is no need for this Court to consider the merits of the Variation Summons. However, I would deal with the same briefly for the sake of completeness. 32.In the event Chow de Bedin LLP has the authority to take out the Variation Summons, I do not think there is any objection from the plaintiff for the said summons to be amended, so as to reflect the fact that the Costs on Account which Hui would like to use is now already in the hands of the Receivers. In other words, the Amendment Application would have been allowed. For the avoidance of doubt, the discussion below on the Variation Summons concerns the Variation Summons as amended. 33.To recap, by the Variation Summons, it is now sought to allow Hui to spend a reasonable amount on legal costs rather than being limited to a monthly cap of HK$50,000, and an order that the same be drawn from the Costs on Account. 34.The relevant legal principles have been set out in Wharf Ltd & Others v Lau Yuen How & Others [2010] 1 HKLRD 783 at [14] as follows:
35.Hence, the question here is whether Hui has shown by sufficient evidence that he does not have other assets available to meet the payment of legal costs. 36.Ms Ha has emphasized in her submissions the fundamental principle that a defendant should not be deprived of professional legal representation, as enshrined in Article 35 of the Basic Law. Having said that, she also frankly accepted that, if Hui has other available assets to fund his legal representation, then he would arguably not be deprived of this basic right. 37.In this regard, I have already mentioned under Section C1 above that Hui has failed to establish on the balance of probabilities that the Costs on Account is the only possible source of fund from which the Assessed Costs can be paid and his defence be funded. The same reasoning should be applicable herein. 38.In particular, there is no evidence at all to show that the Family Member is unwilling to fund Hui’s defence in this Action. 39.More importantly, in breach of the obligations imposed by the Injunction Order, Hui has given no disclosure whatsoever of his assets. As Mr Chan SC pointed out:
40.Looking at the above in the round, there is simply a great doubt on the assertion that Hui does not have alternative assets available to him for the purpose of funding the defence of this Action. 41.The alleged inability on the part of Hui to give instruction to Chow de Bedin LLP on his assets would not change the situation. The fact remains that a large part of his wealth has not been disclosed. In this regard, I must express my disapproval of Mr Chow’s evidence that “[Hui] does not have alternative undisclosed assets available to him to pay the [Assessed Costs]”[8]. Given Mr Chow’s confirmation[9] that he has never had any other information or documents concerning the affairs and assets of Hui and/or his companies, he simply is not in a position to give the aforesaid evidence on alternative means to pay the Assessed Costs. 42.Ms Ha also laid emphasis on the so-called “disproportionate outcome”, and submitted that the Court should not let Hui be held liable for the judgment sum of RMB 43.318 billion by reason of a procedural order notwithstanding any substantive merits of the claim. I do not think this argument is open to her, since Hui has not appealed against the Unless Order. In any event, I do not think the Court should be lenient to Hui who has been in breach of various court orders. 43.All in all, I hold that Hui has failed to persuade this Court that it should exercise its discretion in varying the Injunction Order. 44.The Variation Summons should therefore be dismissed anyway even if Chow de Bedin LLP had the authority to take it out in the first place. E. THE RELIEF SUMMONS 45.Ms Ha accepted that the Relief Summons would only be granted upon the substantive determination of the Variation Summons in Hui’s favour. 46.It follows that the Relief Summons should also be dismissed in any event. F. THE ORDER 47.For the above reasons, I make the followings orders:
G. COSTS 48.Costs be reserved.
Mr Abraham Chan SC, instructed by Karas So LLP, for the plaintiff Ms Terri Ha, instructed by Chow de Bedin LLP, for the 1st defendant [1] The Injunction Order was first made in HCMP 1080/2024 by Coleman J on 24 June 2024 against Hui, which prohibited him from disposing of, inter alia, his assets worldwide up to the sum of US$7.7 billion [2] Mr Chow’s own bold and underline [3] Mr Lam has disclosed the gender of the Family Member in his Affidavit [4] Mr Chow’s 6th and 8th Affirmations [5] Mr Lam has made express reference to the Unless Order in his Affidavit. [6] Paragraph 50 of Mr Chow’s 8th Affirmation [7] Order 62 rule 8B(1) provides that: “The Court shall consider whether to make a wasted costs order in 2 stages – (a) in the first stage, the Court must be satisfied that – (i) it has before it evidence or other material which, if unanswered, would be likely to lead to a wasted costs order being made; and the wasted costs proceedings are justified notwithstanding the likely costs involved […]” [8] Paragraph 14.2 of Mr Chow’s 6th Affirmation [9] Paragraph 6 of Mr Chow’s 6th Affirmation | ||||||||||||||||||||||||||||||||||||||||||||
Cases cited in this judgment
China Evergrande Group (in Liquidation) v. Hui Ka Yan and Others
Anthonia Louise Zoya Anton v. Hong Kong Aircraft Engineering Company Ltd and Another
Chiu Sui Ching, The Administrator of the Estate of Leung Ho Tin, Deceased v. Cheng Kwai Hung t/a Hang Nagi Works and Others
Other judgments that cite this case
Further hearings and rulings under HCA 551/2024