Leung Pak Wo v. Leung Ho Kwong

HCA 1460/2021

[2026] HKCFI 5192

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1460 of 2021

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DECISION

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A. Introduction

1.The present action concerns the beneficial ownership of the shareholding in a private company, namely Grace Deluxe Enterprises Ltd (the “Company”).

2.The trial of the present action took place before me on 13 July 2026.

3.On the second day of the trial (ie 14 July 2026), I ordered that:-

(1)  leave be granted to the Plaintiff to adduce the audio recordings (the “Audio Recordings”) in respect of the meetings in April and May 2020 (the “Meetings”) and the transcript in respect thereof;

(2)  leave be granted to the Defendant to adduce (i) a further list of documents; and (ii) further witness statement(s), if so advised, within 42 days to address the issues arising from the Audio Recordings in respect of the Meetings and the transcript in respect thereof;

(3)  the trial be vacated; and

(4)  the Plaintiff should pay the Defendant all the costs that were wasted and thrown away as a result of the vacation of the trial forthwith to be summarily assessed[1].

4.The relevant procedural history was set out in my decision herein dated 14 July 2026 ([2026] HKCFI 5121) (the “Decision”).  I do not intend to rehearse the same.

5.For present purposes, it suffices to say that for the reasons explained in my Decision, I was of the view that:-

(1)  The Plaintiff was extremely late in adducing the Audio Recordings, and no explanation had been provided.  The Audio Recordings should have been put forward a long time ago.  The Plaintiff had breached its obligations to disclose all relevant documents.  This was plainly inexcusable: see Decision, paras 15 and 18.

(2)  The Defendant was seriously prejudiced: see Decision, para 16.

(3)  The Audio Recordings were important evidence.  The court could not ignore its existence, and proceed with the trial as if the same did not exist.  In this connection, in paragraphs 8, 9, and 14 of the Decision, I stated:-

“8. ……I bore mind that in giving effect to the underlying objectives of the Rules of the High Court, the court shall always recognize that the primary aim in exercising the powers of the court is to ‘secure the just resolution of disputes in accordance with the substantive rights of the parties’: RHC O 1A r 2(2).

9. In my view, the discussions that took place during the meetings were important in showing the parties’ understanding as to whether the shareholding in Grace Deluxe Enterprises Limited (the “Company”) was held on trust by the Defendant in favour of the Plaintiff. Bearing in mind that the meetings in question were mentioned in the parties’ witness statement, I am not of the view that the court should turn a complete blind eye to the audio recordings. It does appear to me that the audio recordings would shed light on the truth.

…

14.  I am unable to form a view that the court should turn a blind eye to the audio recordings, which evidence the discussions during that the meetings that took place in April and May 2020. As mentioned, the meetings are not new assertions, and they do have important bearings on the substantive disputes between the parties. Accordingly, I am of the view that substantive justice will be only served if the audio recordings are admitted and properly canvassed by the court.”

6.In the premises, I took the view that the appropriate course to take was to (i) admit the Audio Recordings and the transcripts as evidence, but (ii) vacate the present trial and order the Plaintiff to bear the costs that were wasted and thrown away on an indemnity basis to be summarily assessed: see Decision, para 17.

7.By summons dated 30 July 2026, the Plaintiff seeks (i) leave to appeal the costs order under my Decision and (ii) a stay of execution of the said costs order pending his appeal.

B.   The Plaintiff’s Complaints

8.The Plaintiff contended that I was wrong to order him to pay the costs that were wasted and thrown away.  He advanced two proposed grounds of appeal. His contentions can be summarized as follows.

9.First, the Plaintiff pointed out that the Defendant did not serve a notice of non-admission pursuant to Order 27 in respect of the records of the Meetings.  The Plaintiff then went on to contend that the Defendant should be blamed for the vacation of the trial.

10.Second, the Plaintiff contended that the Defendant gave false evidence regarding the Meetings, such that the Plaintiff was compelled to put forward the Audio Recordings to demonstrate the Defendant’s dishonesty.

C.   Deliberation: Leave to Appeal  

C1.  Legal Principles

11.It is trite that leave to appeal will not be granted unless the court is satisfied that the intended appeal has a “reasonable prospect of success”. That means a prospect that is more than “fanciful” but without having to be “probable”.  See Waddington Ltd & Ors v Chan Chun Hoo Thomas (HCMP 1326/2017, 18 October 2017) at para 3 (per Kwan JA, as she then was).

12.It has been suggested that the Court of Appeal will not lightly interfere with a trial judge’s exercise of discretion in the award of costs. In Up Energy Development Group Ltd (in Liquidation) [2023] HKCA 536 at para 8, Kwan VP, citing Ho Shu Kwong v Chiang Chun Yuan [2002] 3 HKLRD 419 at para 15 and Lakhan v Wu Wing Tat [1987] 3 HKC 54 at 58H and 61D, stated:-

“The approach of the appellate court in an appeal against a costs order is well established. The Court of Appeal will not interfere with the exercise of the trial judge’s discretion in the award of costs unless it was shown that the judge failed to exercise the discretion, or exercised it upon a false principle, or did not exercise it judicially, or that the exercise of discretion was demonstrably flawed. The Court of Appeal must be very careful not to interfere with the judge’s exercise of the discretion which has been entrusted to him and not substitute its discretion for that of the trial judge, unless satisfied he was plainly wrong.”

13.Along the same vein, in Chow Steel Industries Public Co Ltd & Ors v Ko Sung & Ors [2021] HKCA 1642 at para 18, Kwan VP stated:-

“As the courts have repeatedly emphasised, costs is very much a matter of discretion for the trial judge and the Court of Appeal would be very circumspect in interfering with a decision with such high discretionary content.  In the absence of any palpable error in the exercise of the discretion on costs, the mere fact that the appellate judges might have exercised the discretion in a different manner is not a sufficient ground to warrant interference with the discretion of the primary judge: see Poon Ching Man v Lam Hoi Pun [2016] 3 HKLRD 815 at §34.”

C2.  The Proposed Grounds of Appeal are New Arguments

14.At the outset, it should be pointed out that the two proposed grounds of appeal are based on entirely new arguments, which counsel for the Plaintiff did not put forward for this court to consider at the trial.  There is an overwhelming impression that these arguments are afterthoughts.

15.In Lehmanbrown Ltd v Union Trade Holdinsg Inc & Ors (HCMP 977/2015, 17 June 2015) at paras 10 to 11, Lam VP (as Lam PJ then was) stated:-

“10. Whilst the Court of Appeal obviously has power to entertain new points in an appeal, it is also clearly and firmly established that new points which are fact sensitive or otherwise affect the course of evidence or conduct of the case at the hearing below should not be allowed. Though this principle is usually applied in situations where the new points necessitate further evidence to be adduced, it is not confined to such scenarios. Very often, the raising of new point by one party may lead to the other party raising counter arguments and the consideration of such counter arguments may involve factual assessment in a different light from that undertaken by the court below. Sometimes, it may involve a different weighing of factors in the exercise of discretion. Alternatively, the other party may embark on a different course of forensic conduct if the new point were taken earlier. The appellate court, in considering whether the new point would be entertained, is entitled to take these matters into account in order to avoid unfairness to the other party.

11.  Bearing in mind the broad discretion under section 14AA of the High Court Ordinance, this court should apply the same approach when leave to appeal is sought on the basis of some new points which had not been canvassed at the substantive hearing below. There is no point in granting leave on a new ground which the Court of Appeal would not entertain on the hearing of the appeal proper.”

(emphasis added)

16.An appeal is not an avenue for the unsuccessful party to re-argue the case in its entirety, and the function of the Court of Appeal is not to decide the matters in question afresh (unless it is shown that the first instance judge had erred).  I am unable to discern any reason why the Plaintiff should be allowed to run new points, which were, inexplicably, not raised before this court.  I am also unable to see how it can be said this court erred in failing to consider contentions that were not even put forward.

17.I agree with Ms Deanna Law (for the Defendant) that the Plaintiff’s approach to his intended appeal is fundamentally wrong.  It is wrong for the Plaintiff to assume that by bringing an appeal, he may have a second bite of the same cherry.

18.In any event, for the reasons elaborated below, I am of the view that the Plaintiff’s new arguments are wholly unmeritorious.

C3.  Ground 1

19.The main reason why I ordered the Plaintiff to bear costs was that the vacation of the trial was ascribed to his failure to produce and disclose the Audio Recordings in a timely manner, which seriously disrupted the trial.

20.There can be no dispute that the Plaintiff was in breach of his obligations to make discovery.  It has been suggested that the duty to make continuous discovery is a strict one: see Lam Kwong So, the Administrator of the estate of Lam Chun Sing v Shui Dian Bao & Anor [2024] 4 HKLRD 708 at para 10.

21.In the premises, I am unable to see how the Plaintiff may seek to put the blame on the Defendant when he was the one who sought to rely on the Audio Recordings to advance his case and when he was under a continuous obligation to make proper discovery.  As Ms Law submitted, the Plaintiff’s new argument does not even engage the basis of the costs order under my Decision.

22.In any event, it appears to me that the Plaintiff barks up the wrong tree in accusing the Defendant of failing to file a notice of non-admission to challenge the records in respect of the Meetings (the “Meeting Records”).  The Defendant does not challenge the authenticity of the Meeting Records.  His case is simply that the Meeting Records do not accurately reflect what was discussed and agreed during the Meetings.  As such, it was unnecessary for the Defendant to file a notice of non-admission pursuant to Order 27 at all.

23.Put simply, the Plaintiff cannot rely on the Meeting Records as an excuse to put the blame on the Defendant.  It simply does not follow.

24.For all the above reasons, I am of the view that ground 1 is wholly unarguable.

C4.  Ground 2

25.Likewise, ground 2 is also wholly unarguable and unmeritorious.

26.I am unable to see how this court may, at this stage, come up with a finding that the Defendant’s evidence regarding the matters relating to the Meetings was dishonest.  The discussions that took place at the Meetings are live issues in dispute, and the court may only make appropriate findings upon considering all the relevant evidence (including the Audio Recordings) as well as the parties’ explanations as to the words that they spoke during the Meetings.

27.In the premises, it was of crucial importance for the parties to make proper discovery of the relevant documents in a timely manner.  Unfortunately, the Defendant had, in breach of his continuous obligations to make discovery, suppressed the Audio Recordings, which were a piece of important evidence.  In light of the prejudice caused to the Defendant, the trial could not progress.  I am unable to see any reason why the Plaintiff should not bear the adverse costs consequences.  This was entirely ascribed to his own undesirable and unacceptable litigation conduct.

C5.  Sum Up 

28.For all the above reasons, I am not of the view that the Plaintiff’s intended appeal has a reasonable prospect of success; nor am I of the view that there is any reason in the interest of justice why the Plaintiff’s intended appeal should be heard.

29.Accordingly, I dismiss the Plaintiff’s application for leave to appeal the Decision and the costs order dated 16 July 2026[2].

D.   Deliberation: Stay of Execution pending Appeal  

30.It is trite that in order for the court to grant a stay of execution pending appeal, the applicant must show an arguable ground of appeal. Otherwise, the court’s discretion to grant a stay will not even be engaged: see Biozeal LLC v Nature’s Story Co Ltd (No 2) [2022] 1 HKLRD 191 at para 65 (per Lok J).

31.For the reasons elaborated in section C above, the Plaintiff’s intended appeal is wholly unarguable and has no reasonable prospect of success.

32.In the premises, I dismiss the Plaintiff’s application for a stay of execution of the costs order dated 16 July 2026[3].

E.   Disposition  

33.I dismiss the Plaintiff’s summons dated 30 July 2026.

34.Costs should follow the event.

35.I order the Plaintiff to pay the Defendant’s costs in respect of the summons dated 30 July 2026 forthwith, summarily assessed at HK$150,000.

Mohnani & Associates, Solicitors for the Plaintiff

Ms Deanna Law and Ms Cherie Ho, instructed by Alex To & Co., for the Defendant