Yung Man Tung v. Ashurst Hong Kong (A Firm)

On 14 September 2026, the Court of Appeal (Chow and Anthony Chan JJA and Ng J) handed down judgment in Yung Man Tung v Ashurst Hong Kong (CACV 162/2025), dismissing the applicant's appeal against Deputy High Court Judge Kent Yee's order refusing to set aside a statutory demand and authorising a bankruptcy petition. Ms Jasmine Cheung, instructed by Ashurst Perkins Coie Hong Kong, acted for the successful respondent.

The applicant, a Hong Kong and Canadian property investor, had engaged Ashurst to act for him and his Singapore company in Singapore proceedings and a separate Canadian land financing matter. After he fell behind on his fees, Ashurst served a statutory demand and presented a bankruptcy petition in 2022. The night before that petition was heard, the applicant signed a deed of settlement under which he and his company agreed, on a joint and several basis, to pay a discounted sum of HK$5,860,247.68 in four instalments. He paid the first three but not the fourth instalment of HK$4,860,247.68, leading to a fresh statutory demand in August 2023.

The applicant applied to set aside the second statutory demand, contending he had signed the Settlement Deed under a mistaken belief that only his company would be liable, and that the fourth instalment would only fall due after the Singapore proceedings concluded. He also alleged misrepresentation by Ashurst's partner, Mr Chow, and complained that a superseded invoice had been wrongly included in the schedule. Deputy HC Judge Kent Yee rejected all three grounds and authorised the bankruptcy petition. A bankruptcy order was subsequently made by Linda Chan J on 21 July 2025.

The Court of Appeal dismissed the appeal, the stay summons, and the evidence summons, with costs to the respondent on an indemnity basis. The Court held that:

(1) The new evidence application failed. The applicant could not satisfy the first two Ladd v Marshall conditions: the documents (emails and WhatsApp messages) could have been obtained with reasonable diligence at the hearing below, and they would not have had an important influence on the result (§§29-31).

(2) Statutory demand proceedings are summary in nature. The Court will not call witnesses or resolve disputed questions of fact on an application to set aside a statutory demand (§§32-33).

(3) None of the three grounds of appeal had merit. The Settlement Deed was a compromise of the parties' disputes, and the applicant's complaints about the superseded invoice, Singapore tax, and the exchange rate were either not raised below or substantively unfounded (§§36-38).

(4) The stay application necessarily failed because the appeal had no merit, and in any event the bankruptcy order had already been made, rendering any stay futile (§40).

Why it matters

Practitioners advising debtors facing statutory demands should note that the Court of Appeal will scrutinise bare assertions of mistake or misrepresentation against the contemporaneous documentary record, particularly where the debtor is a sophisticated commercial party who signed a settlement deed after receiving translations and negotiated drafts. Attempts to re-litigate factual disputes through new evidence applications or witness summonses on appeal are unlikely to succeed where the underlying statutory demand proceedings were intended to be disposed of summarily.