Lai Mun Wing v. New Grand Coach Ltd

HCA 1323/2025

[2026] HKCFI 5958

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1323 OF 2025

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BETWEEN

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D E C I S I O N

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I.  INTRODUCTION

1.Before me are:-

(1)  The Intended Intervener (“Mr Chan”)’s Summons filed on 15 September 2025 (the “1^st Summons for Retrospective Leave to Defend and Counterclaim”) for retrospective leave under section 733 of the Companies Ordinance (Cap. 622) (the “CO”) to him to intervene in this action and to defend and bring a counterclaim on behalf of the Defendant (the “Company”) per the Defence and Counterclaim (the “Original D&C”) already filed on 26 August 2025;

(2)  The Plaintiff (“Lai Senior”)’s Summons filed on 30 September 2025 (the “Plaintiff’s Strike-out Summons”) to strike out the Company’s Defence and Counterclaim filed on 26 August 2026; and

(3)  Mr Chan’s Summons filed on 1 April 2026 (the “2^nd Summons for Leave to Defend and Counterclaim”) for leave under section 733 of the CO to him to intervene in this action and to defend and bring a counterclaim on behalf of the Company per the draft Amended Defence and Counterclaim (the “Draft Amended D&C”) attached thereto.

II.  BACKGROUND

2.On 15 July 2025, Lai Senior commenced the present action against the Company, of which Lai Senior’s son and Mr Chan are the only directors and equal shareholders.

3.On 26 August 2025, the Original A&C was filed with Mr Chan signing the Statement of Truth. However, Mr Chan was not authorised by the board of the Company to file the Original A&C.

4.On 15 September 2025, Mr Chan filed the 1^st Summons for Retrospective Leave to Defend and Counterclaim in respect of the Original A&C.

5.On 23 September 2025, Lai Senior filed the Reply and Defence to Counterclaim without prejudice to his right to dispute the validity of the Original A&C.

6.On 30 September 2025, Lai Senior filed the Plaintiff’s Strike-out Summons.

7.After exchange of affirmations in relation to the 1^st Summons for Leave to Defend and Counterclaim and the Plaintiff’s Strike-out Summons, on 1 April 2026, Mr Chan filed the 2^nd Summons for Leave to Defend and Counterclaim per the Draft Amended D&C.

III. AUTHORITY FOR THE ORIGINAL D&C

8.At the material time when the Original D&C was filed on 26 August 2025, Lai Senior’s son was restrained from acting as a director by an ex parte order granted on 25 February 2025 in HCMP 300/2025 (which I discharged on 3 October 2025). Therefore, there is no chance to convene a board meeting in accordance with the articles of association of the Company requiring at least two directors for a board meeting, and therefore, there is no chance that the Company would authorise the filing of the Original D&C.

9.Mr Timothy Harry, counsel for Mr Chan, submits that in such circumstances, Lai Senior’s son could be discounted as a director and Mr Chan, being the only director left, would be able to convene a board meeting on his own. With respect, I disagree. The ex parte order only restrains Lai Senior’s son from acting as a director. It did not remove him as a director. So, he was still one of the two directors. He was still a director on the register of directors and on the records filed with the Company Registry. If there would be any need for a board meeting for proper management and operation of the Company, the parties were at liberty to apply for exception in HCMP 300/2025 for Lai Senior’s son to act as a director in limited circumstances. But a Court Order cannot somehow rewrite the articles of association of a company.

10.Therefore, in my view, there was no authority for Mr Chan to file the Original D&C on behalf of the Company.

IV. JURISDICTION TO GRANT RETROSPECTIVE LEAVE UNDER SECTION 733 OF THE CO?

11.As such, Mr Chan has to resort to statutory leave under section 733 of the CO.

12.Since leave is sought under section 733 only after the Original D&C was filed while Lai Senior applies to strike out the Original D&C for want of authority, the question is whether the Court has jurisdiction under section 733 to grant retrospective leave, and if so, whether the Court should exercise it in favour of Mr Chan. In my view, this question would only become a dispute due to costs or limitation issue. Assuming that there is no jurisdiction to grant retrospective leave and therefore, logically, the defence would be struck out, in the normal course of events, nothing would prevent the intervener from re-applying for leave to defend per the same defence.

A. Statutory provisions – sections 732 and 733 of the CO

13.To determine whether the Court has jurisdiction to grant retrospective leave, I start with the relevant statutory provisions:-

“732. Member of company or of associated company may bring or intervene in proceedings

(1) If misconduct is committed against a company, a member of the company or of an associated company of the company may, with the leave of the Court granted under section 733, bring proceedings in respect of the misconduct before the court on behalf of the company.

(2) If, because of misconduct committed against the company, a company fails to bring proceedings in respect of any matter, a member of the company or of an associated company of the company may, with the leave of the Court granted under section 733, bring proceedings in respect of the matter before the court on behalf of the company.

(3) If, because of misconduct committed against the company, a company fails to diligently continue, discontinue or defend proceedings, a member of the company or of an associated company of the company may, with the leave of the Court granted under section 733, intervene in the proceedings before the court for the purpose of continuing, discontinuing or defending those proceedings on behalf of the company.

(4) The cause of action in relation to the proceedings under subsection (1) or (2) is vested in the company. Any of those proceedings must be brought in the name of, and the relief (if any) must be sought on behalf of, the company.

(5) The right to continue, discontinue or defend any proceedings intervened in under subsection (3) is vested in, and the relief (if any) must be sought on behalf of, the company.

(6) Subject to section 736, this Division does not affect any common law right of a member of a company, or a member of an associated company of a company, to bring proceedings on behalf of the company, or intervene in any proceedings to which the company is a party.

(7) This section does not prevent a member of a company, or of an associated company of a company, from bringing proceedings in respect of the company, or intervening in any proceedings to which the company is a party, on the member’s own behalf in respect of any personal right.

733. Leave of Court to bring or intervene in proceedings

(1) On application by a member of a company or of an associated company of a company, the Court may grant leave for the purposes of section 732(1), (2) or (3) if it is satisfied that —

(a) on the face of the application, it appears to be in the company’s interests that leave be granted to the member;

(b) in the case of —

(i) an application for leave to bring proceedings under section 732(1) or (2), there is a serious question to be tried and the company has not itself brought the proceedings; or

(ii) an application for leave to intervene in proceedings under section 732(3), the company has not diligently continued, discontinued or defended the proceedings; and

(c) except where leave is granted by the Court under subsection (5), the member has served a written notice on the company in accordance with subsection (3), and the notice complies with subsection (4).

(2) The Court may refuse to grant leave if it is satisfied that —

(a) in the case of an application for leave to bring proceedings under section 732(1) or (2), the member has, in the exercise of any common law right, brought proceedings on behalf of the company in respect of the same cause or matter; or

(b) in the case of an application for leave to intervene in proceedings under section 732(3), the member has, in the exercise of any common law right, intervened in the proceedings in question to which the company is a party.

(3) The written notice must be served on the company, at least 14 days before the member applies for leave in respect of the company —

(a) in the case of a company as defined by section 2(1), by leaving the notice at, or by sending the notice by post to, its registered office; or

(b) in the case of a non-Hong Kong company, in a manner that the notice is sufficiently served on the company by virtue of section 803.

(4) The written notice must state…

(5) The Court may grant leave to dispense with the service of a written notice for the purposes of subsection (1)(c).”

B.  Statutory construction

14.To construe statutes, “[w]ords are construed in their context and purpose”: see HKSAR v Chan Chun Kit (2022) 25 HKCFAR 191 at §10 per Cheung CJ. In my view, from the text, nothing points towards or against retrospective leave. In respect of leave for “continuing” defence under section 733(1)(b)(ii), it has to be read in conjunction with section 732(3) in relation to a company having failed to continue defending the company, that is, the company has already properly filed a defence, but subsequently does not pursue the defence diligently. This, in my view, does not point to any retrospective leave.

15.As regards the context, judicial control over derivative actions has always been considered by the common law to be procedural in nature since Foss v Harbottle: see Wilton UK Limited v John Michael Shuttleworth and Others [2017] EWHC 2195 (Ch) at §62(a) per Deputy Judge Davis-White QC. Here, consistently, the statutory provisions for statutory derivative actions under section 733 are regulating and augmenting the court procedures. They are not creating any substantive causes of action vested in the company in question. They are creating a mechanism regulating and augmenting the procedures whereby claims based on proper causes of action vested in the company in question may be commenced or proceeded with by its members. There is nothing in the statutory provision suggesting that the court’s own procedures would be entirely subsumed under the statutes. In other words, in my view, against this context, the Court still retains its own jurisdiction in such procedures, subject to any regulation and augmentation by the statutory provisions. In controlling its own procedures, the Court has inherent power to make an order with retrospective effect, or known in its Latin phrase “nunc pro tunc”: see Hong Kong Civil Procedure 2026 Volume 1 §42/3/6. In similar though not the same context, the Court has granted retrospective leave for commencing action against court-appointed receiver: see Li Ming and Others v Liu Yiu Keung and Another [2020] HKCFI 2708 at §§31-33. I shall return to this case later. Suffice to say at this stage that there is nothing in the statutory provisions suggesting that this power is excluded.

16.As regards the purpose of the statutory provisions and how the purpose could be achieved, although the requirements set out in the English statutory provisions, the Australian statutory provisions, and the Canadian statutory provisions in relation to leave to commence statutory derivative actions are not the same as section 733 of the CO and the wording is different, given the same common law background in relation to derivative actions, and given that in enacting the CO, such statutory provisions in other major common law jurisdictions were considered, I find it appropriate to draw on their jurisprudence.

17.The first authority is Wilton UK Limited v John Michael Shuttleworth and Others, supra. Before I discuss this case in detail, one must note that in England, the procedure for starting a statutory derivative action is different from Hong Kong. In England, a member may start a derivative action without leave, but for that member plaintiff to continue the derivative action, he has to apply for permission to continue the derivative action after the defendant serves notice of intention to defend: see Wilton UK Limited v John Michael Shuttleworth and Others, supra at §56. That said, the question in that case was still whether retrospective permission may be granted for continuing the action when such permission should have been obtained first: see §1, and more problematic in that case was that the limitation period had expired when the application for the retrospective permission was made: see §1.

18.Having reviewed the history of the statutory regime for statutory derivative action, Deputy Judge Davis-White QC concluded at §62:-

“In my judgment what can be derived from this history is that (a) control by the court over derivative actions has been historically a procedural matter and the procedure has varied over time but the key is that the court is involved or can be involved at an early stage; (b) the precise moment at which the court has to be involved is a matter for the CPR. It may now be earlier than originally suggested by the Law Commission. However, the purpose of there being, and the policy underlying, rules about derivative actions do not of themselves require that such proceedings cannot be issued without court permission or that no steps at all should be taken in proceedings, once issued, without such permission; (c) the key thought processes underlying the proposals to change the rule from that in Foss v Harbottle was, subject to certain rules now crystallised in the CA 2006 itself, to make the court the body responsible for determining whether leave should be given. Accordingly, an ability for the court retrospectively to validate steps where leave has not been obtained is consistent with such court control; and (d) although it is true that limits on derivative proceedings are, as a matter of policy, designed primarily for the protection of the company in question, there is also some protection for the other defendants to the proceedings who are substantively being pursued for alleged wrongs…” (emphasis added)

19.Therefore, put shortly, (1) the purpose of the statutory regime is to empower the Court at an early stage as a gatekeeper to make sure that the derivative action in question would be in the interests of the Company and to filter out those that would not be; and (2) granting retrospective leave would not be necessarily inconsistent with this purpose. I see no difference in Hong Kong in this respect.

20.Before I proceed to the next authority, Mr Lavesh Kirpalani, counsel for Lai Senior, draws my attention to a subsequent, the second Wilton UK Ltd v Shuttleworth and Others (No 2) case (“Wilson UK Ltd v Shuttleworth and Others (No 2)”), reported in [2018] 1 WLR 4677 and stresses that the two cases read together suggest that the issue there was whether the Court should grant retrospective order to validate service of the action after the limitation period had expired. That is a correct reading of the cases, but this background does not detract anything from the reasoning set out above. In fact, in Wilson UK Ltd v Shuttleworth and Others (No 2), the same judge (namely, Deputy Judge Davis-White QC) proceeded on the basis, at §125, that he had already ruled, in the first case, that the Court had jurisdiction to grant retrospective permission.

21.The second authority is RTP Holdings Pty Ltd and Another v Roberts and Others [2000] SASC 386. In explaining the purpose of the statutory derivative action regime, the Supreme Court of South Australia (Lander J) said:-

“12 As I have said, objection was taken by Mr Keen on behalf of Mr and Mrs Roberts and Modern Machinery Systems Pty Ltd to the proceedings which have been brought in Action No. 838 of 2000 because leave had not been obtained prior to the institution of those proceedings.

13 In my opinion, that objection to those proceedings at that time was correct. In my opinion, proceedings cannot be brought under s 236 of the Corporations Law at the instigation of those persons described in s 236(1) unless leave to bring those proceedings has been first obtained; s 237(1). That follows from the provision of s 236(1)(b) of the Corporations Law.

14 There are good reasons why leave should be first obtained. If any member or officer or former member or office was able to cause the company to commence proceedings before leave was granted, a multiplicity of suits might arise. Moreover a member or officer could usurp the proper functions of the company. A company is entitled to decide for itself whether it wishes to bring, defend or intervene in legal proceedings. Where a company will not itself bring, defend or intervene in proceedings it is necessary that there be some filtering system such as the requirement for leave before proceedings are commenced in the name of the company.” (emphasis added)

22.In other words, the purpose identified is similar, namely, to empower the Court at an early stage as a gatekeeper to make sure that the derivative action in question would be proper in the name of the company. Having considered the circumstances in that case, retrospective leave was granted.

23.The third authority is Su v Hougen Co. Ltd., 2025 BCCA 164 (CanLII), a judgment of the Court of Appeal for British Columbia. It was a judgment of two cases heard together. In one of the cases, the claimant commenced a derivative action without leave in order to avoid a potential limitation defence, and the defendant applied to strike out the claim as a nullity. The claimant applied for leave nunc pro tunc. The judge refused, and the claimant appealed. The Court of Appeal for British Columbia, in upholding the first instance judge’s refusal to grant leave nunc pro tunc, basically endorsed the first instance judge’s reasoning, namely, the Court had jurisdiction to grant an order nunc pro tunc, but the Court, having considered all the relevant circumstances bearing in mind the purpose of the statutory regime, refused to grant it. The Court of Appeal had the following to say:-

“[55] The judge thus began her assessment of whether to grant a nunc pro tunc order with the recognition that such an order could be made in the present case, subject to the limits on the exercise of judicial discretion as described in Green [a Canadian authority on when an order nunc pro tunc could be granted].

[56] She noted that ‘[t]he analysis must start with a consideration of the legislative intention and purpose underlying the leave provisions in the BCA [Business Corporation Act, SBC, 2002]’: at para. 32. In this regard, she said:

‘[37] Derivative actions were specifically created by the Legislature through statute, to provide a process to advance a cause of action in the name of a company. The clear legislative intent is that judicial oversight is required in respect of whether any such action that may be brought and, if so, on what conditions that can occur. It is a judicial decision as to whether the necessary prerequisite – leave of the Court – will be granted under the BCA…

[38] As emphasized in Green, the intention of the legislature as requiring leave in these circumstances is a key consideration.

[39] Here, I have no difficulty concluding that the legislative intent in fashioning the derivative action leave provisions in the BCA is that leave is required to be obtained before such action is filed. Section 232(2) of the BCA provides that a complainant may, ‘with leave of the court, prosecute a legal proceeding…’ The corollary to that provision is that a complainant has no capacity to prosecute the legal proceeding if no leave is in hand.

[40] In my view, requiring leave before any action is commenced makes good commercial sense. The filing of legal proceedings has consequences, for not only the defendants, but the corporate plaintiff too. Allowing shareholders to commence proceedings in a corporation’s name, as they alone see fit, even with the future intention to seek leave under the BCA, has the real potential to wreak havoc and cause confusion and uncertainty in corporate affairs. The prospect is that any number of ‘potential’ claims may proliferate, which may or may not be found to be justified at a later time.

[41] If nothing else, such unilateral action by any shareholder takes place without any of the judicial oversight that is inherently required under the BCA leave provisions.

[42]…’ [original emphasis]

[57] The judge then quoted with approval from Markus Koehnen’s, Oppression and Related Remedies (Toronto: Thomson Carswell, 2004) at 454:

‘The better reason for requiring leave is that the plaintiff is assuming control over corporate decision-making and is committing corporate resources to the action. The decision to bring an action requires corporate actors to balance risks and apply business judgment. The strength of any claim must be balanced against the financial and management resources required to pursue the law suit and against other business risks that the law suit might entail. A corporation should not be deprived of this decision-making ability without some safeguard.’

[58] It is evident, then, that the judge applied the important caveat identified in Green: a court should not exercise its inherent jurisdiction to backdate a grant of leave if to do so would undermine the legislation in issue. Here, the legislation requires that the court act as a gatekeeper before a shareholder, director, or other complainant files an action in a corporation’s name. In her view, granting a nunc pro tunc order to ‘validate’ a notice of civil claim filed without first obtaining leave would ‘effectively circumvent or defeat the express will of the legislature’: Green at para. 94.” (emphasis added)

24.In other words, again, the purpose of the statutory scheme for derivative actions is to allow judicial control over when such an action may be commenced and continued. To achieve this purpose, in general, leave has to be obtained before the action is commenced. I respectfully agree with this as logical and as a matter of common sense, and see no reason why the Hong Kong position is different.

C.  Existence of jurisdiction to grant retrospective leave

25.That said, as I explained above, the Court has inherent power to grant orders with retrospective effect, and the relevant statutory provisions, regulating and augments the Court’s procedures, do not suggest anything that would exclude the Court’s such inherent power. This is the position in Wilton UK Limited v John Michael Shuttleworth and Others, supra and Su v Hougen Co. Ltd., supra. In fact, in Australia, the same position has been assumed without any argument and seeing any need for explanation: see RTP Holdings Pty Ltd and Another v Roberts and Others, supra at §§27-28 and Maher v Honeysett and Maher Electrical Contractors Pty Ltd [2005] NSWSC 859 at §17, referring to RTP Holdings Pty Ltd and Another v Roberts and Others, supra.

26.Mr Kirpalani submits that the authorities mentioned above did not consider the question that the proceedings (the Original D&C in the present case) were taken without authority and as a nullity in the first place, and so the authorities do not assist me in the question of whether there exists jurisdiction to grant retrospective leave. With respect, I fail to understand his submissions. By nature, for derivative proceedings (statutory or common law), they are taken without authority, and that is the very reason why leave of the Court would be required.

27.Consistent with the positions in other major common law jurisdictions, I hold that the Hong Kong Courts have jurisdiction to grant retrospective leave to commence derivative actions under section 733 of the CO.

28.This position is also consistent within the company law of Hong Kong. In Li Ming and Others v Liu Yiu Keung and Another, supra, retrospective leave was sought for an action commenced against a court-appointed receiver. The rationale for requiring such leave was to prevent collateral attack against court’s order of appointment of the receiver: see Company Law in Hong Kong – Insolvency 2018 at §11.025 cited in §29 of that case. Thus, in my view, this is similar to the statutory derivative action regime in that as a matter of procedure, the Court assumes the role of gatekeeper to ensure that the action would be proper (in the sense that there would be no collateral attack in an action against a court-appointed receiver, or that it would be in the company’s interests in derivative action). Although the jurisdiction to grant leave for action against court-appointed receiver is not statutory regulated, the jurisdiction in respect of statutory derivative action, as I explained above, remains procedural in nature. Viewed this way, there is not much difference between the two, or at least, the existence of the power to grant retrospective leave for statutory derivative action is consistent within the company law.

29.Finally, I note that the learned authors state in Company Law in Hong Kong – Practice and Procedure (2023) at §8 that “[i]n both Canada and Australia, it has been held that although proceedings on behalf of the company have been commenced without leave, it is possible for the courts to grant leave nunc pro tunc so as to rectify the irregularity”.

D.  Exercise of jurisdiction to grant retrospective leave

30.Having held that the Court has jurisdiction to grant jurisdiction to grant retrospective leave, the next question is how the Court should exercise it.

31.In Wilton UK Ltd v Shuttleworth and Others (No 2), supra, Deputy Judge Davis-White QC adopted a two-stage test: first, whether the Court would have granted leave had an application for prospective leave been made (§56); and if so, second, the Court would then consider (1) the seriousness and significance of the breach; (2) the reasons why the default occurred; and (3) all the circumstances of the case (§156). In that case, bearing in mind, among others, that the purpose of the statutory derivative action is not to protect the defendant but the company and the action would otherwise be time-barred to the benefit of the defendant at the expense of the company, that the need to encourage claimants to apply prospectively rather than retrospective under the statutory regime and that the breach was not abusive, the Court granted retrospective leave. In my view, the factor of time-bar was a very significant factor. This is because as I mentioned at §12 above, without time-bar, in the normal course of events, there should be nothing to prevent the same applicant from re-applying for leave to commence the statutory derivative action. In such circumstances, without any time bar, if retrospective leave would still be granted absent any exceptional circumstances, the statutory purpose of conferring the gatekeeper role on the Court would be significantly undermined.

32.In Su v Hougen Co. Ltd, supra, as quoted in §23 above, the Court of Appeal for British Columbia placed much emphasis on the legitimate concern that grant of retrospective leave would defeat or undermine the statutory purpose of conferring a gatekeeper role on the Court and proliferate actions may be brought on behalf of the company to the prejudice to its role and resources. In my view, such emphasis is in line with the Court’s restraint in exercising its jurisdiction with the statutory purpose in mind.

33.In RTP Holdings Pty Ltd and Another v Roberts and Others, supra and Maher v Honeysett and Maher Electrical Contractors Pty Ltd, supra, the Courts considered the applications as if they were prospective applications, without much, if any, consideration of the reason for the failure to apply for prospective leave. With respect, in my view, this approach may undermine the statutory purpose of conferring a gatekeeper role on the Court.

34.Having considered the overseas authorities, I venture to set out the test for whether to grant retrospective leave as follows:-

(1)  At the first stage, the Court has to consider whether prospective leave would be granted, had the application been made prior to the commencement of the action or for the present purpose, filing of the defence;

(2)  Only the answer at the first stage is in the affirmative, the Court should then consider whether there is any exceptional circumstance (such as time-bar) justifying the applicant’s failure to make a prospective application prior to the commencement of the action or for the present purpose, filing of the defence; and

(3)  The circumstance must be exceptional. For instance, even if there was time-bar issue, there must be good explanation as to why no prospective application was made within the time-limitation (for example, for good reason, the wrong was discovered on the last day of the limitation period) or why a prospective application on an urgent basis could not have been made.

35.For the avoidance of doubt, the analysis made and views expressed above do not apply to any interlocutory application brought on behalf of a company with a substantive derivative action yet to be commenced pending grant of leave. It is not unusual that before leave is formally obtained, an interlocutory application for injunction is made first, for urgency: see Re Tysan Holdings Ltd [2013] 4 HKC 425 at §32 per Mimmie Chan J.

E.  Analysis

36.In the present case, for the first stage, namely, whether leave would have been granted had a prospective application been made, after various complaints about the defects in the Original D&C, Mr Chan now applies for retrospective leave to defend and counterclaim on the Draft Amended D&C. I do not see there is any much real complaint from Mr Kirpalani in relation to the Draft Amended D&C. Further, to add clarity, Mr Harry confirmed to me that in response to Mr Kirpalani’s submissions that the plea of misappropriation did not mention why the monies in question were wrongfully misappropriated, the phrase “for no ascertainable proper purpose” would be added to the main parts of paragraph 24 of the Draft Amended D&C. There are serious issued to be tried in respect of the defence and the counterclaim. There is no evidence to explain why such defence and counterclaim would not be in the interests of the Company. In respect of Mr Kirpalani’s complaint that no notice has been given as required by section 733(1)(c) of the CO, I would dispense with this requirement given that the only two shareholders and directors of the Company are Lai Senior’s son and Mr Chan, and Lai Senior’s son would be a defendant to the counterclaim. In the circumstances, had a prospective application been made, I would have granted leave.

37.For the second stage, whether there is any exceptional circumstance, the explanation from Mr Chan, in gist, is that Lai Senior’s son was restrained from acting as a director and so no authority could be obtained to file the defence and counterclaim, and if the defence was not filed in time, there would be chance that Lai Senior would proceed to obtain default judgment. In my view, Mr Chan could have written to Lai Senior warning him against any application for default judgment pending his prospective application for leave. If Lai Senior would still proceed, he would take the risk of adverse costs consequence should the default judgment later be set aside. There is no evidence that Mr Chan gave such warning and Lai Senior refused, such that there was such urgency that Mr Chan had to file the defence and counterclaim without leave. There is also no time-bar issue here. Bearing in mind the statutory purpose that the Court should be the gatekeeper in this filtering out process, I do not think that Mr Chan’s explanation constitute any exceptional circumstance justifying grant of retrospective leave.

38.In the circumstances, I refuse to grant retrospective leave. It follows that the Original D&C should not have been filed and no Draft Amended D&C could have been filed (for there is no Original D&C to be amended), and therefore I strike out the Original D&C and refuse to grant any leave for the Draft Amended D&C.

V.  SHOULD THE COURT TAKE THE 2^ND SUMMONS FOR LEAVE TO DEFEND AND COUNTERCLAIM AS A FRESH APPLICATION?

39.As I reiterate above, there is nothing to prevent an applicant from re-applying for leave. Of my own motion, I raise the question whether I should simply take the 2^nd Summons for Leave to Defend and Counterclaim as a fresh application rather than an application for retrospective leave.

40.Upon my enquiry, Mr Kirpalani did not say that he would have to file any evidence in opposition. Therefore, all the evidence necessary for a proper consideration of an application under section 732 is all laid before me. Mr Kirpalani urges me not to consider certain affirmations filed without proper leave of the Court. However, those affirmations go mainly to the substantive merits of the Draft Amended D&C rather than to the Company’s position, and given the low threshold of serious issues to be tried, I do not see how any evidence from Lai Senior would make any difference in this regard.

41.Mr Kirpalani also raises that the 2^nd Summons for Leave to Defend and Counterclaim should be served on the intended defendants to the counterclaim. With respect, this is wrong. In the normal course of events, an application under section 733 need be taken out against the company in question only, not the intended defendants, and there is no reason to warrant any departure from this course. However, I do note that the 1^st Summons for Retrospective Leave to Defend and Counterclaim and the 2^nd Summons for Leave to Defend and Counterclaim have not been served on the Company. That said, the only two shareholders and directors of the Company are Lai Senior’s son and Mr Chan, and so I do not see any prejudice to grant leave to waive this irregularity.

42.Having considered the circumstances, I am satisfied that the Company has not diligently defended against Lai Senior’s claim (given that the Company has been at deadlock between Lai Senior’s son and Mr Chan at least in respect of Lai Senior’s claim since the discharge of the ex parte order restraining Lai Senior’s son on 3 October 2025), that there are serious issues to be tried in the counterclaim, and thus it appears to be in the Company’s interest that it should defend and counterclaim per the Draft Amended D&C, I grant leave for Mr Chan on defend and counterclaim on behalf of the Company as per the Draft Amended D&C with the addition of the phrase “for no ascertainable proper purpose” to paragraph 24 as explained above.

VI.  CONCLUSION AND COSTS

43.In the premises, I make the following order:-

(1)  I dismiss the 1^st Summons for Retrospective Leave to Defend and Counterclaim;

(2)  On the Plaintiff’s Strike-out Summons, I strike out the Original D&C;

(3)  The 2^nd Summons for Leave to Defend and Counterclaim be taken as if a Summons for leave under section 733 of the CO to defend and counterclaim per the Draft Amended D&C (subject to the modification to paragraph 24 thereof);

(4)  There be leave to Mr Chan to file and serve within 14 days from today a fresh defence and issue a counterclaim per the Draft Amended D&C (subject to the modification to paragraph 24 thereof) with all the redlines removed (since there is no original defence and counterclaim now), and for the avoidance of doubt, the issuance of the counterclaim shall be subject to the usual procedures; and

(5)  There be leave for Lai Senior to file and serve Reply and Defence to Counterclaim within 28 days after the service of the Defence and Counterclaim on him.

44.For costs, Mr Chan fails on the 1^st Summons for Retrospective Leave to Defend and Counterclaim and the Plaintiff’s Strike-out Summons. The failure is a failure on locus. For the 2^nd Summons for Leave to Defend and Counterclaim, it would have failed following the failure on the 1^st Summons for Retrospective Leave to Defend and Counterclaim but for the Court’s indulgence in regarding it as a fresh application. In the circumstances, I order Mr Chan to pay costs of all the Summonses to Lai Senior forthwith. I also find it appropriate to order indemnity costs because of the lack of locus and the haphazard manner in applying for leave (that the Court suggested of its own motion to treat the 2^nd Summons for Leave to Defend and Counterclaim). I summarily assess the costs of the Summonses to be HK$360,000.

45.Lastly, I thank Mr Kirpalani and Mr Harry for their assistance.

Mr Lavesh Kirpalani, instructed by ATL Law Offices, for the Plaintiff

Mr Timothy Harry, instructed by Jackson Ho & Co., for the Intended Intervener