China Properties Group Limited v. Jic Trust Co., Ltd

On 14 October 2026, the Court of Final Appeal handed down reasons dismissing the appeal in China Properties Group Limited v JIC Trust Co., Ltd [2026] HKCFA 34, without calling on the respondent. Mr Laurence Li SC, Mr Keith Chan and Mr Jonathan Fung, instructed by YTL LLP, acted for the successful petitioner.

JIC Trust had lent RMB1.2 billion to a Mainland subsidiary of China Properties, with the listed Company as guarantor. After default, the Zhejiang High People's Court entered a consent judgment in April 2020 against the subsidiary and the Company. JIC Trust then served a Hong Kong statutory demand for the unpaid balance and presented a winding-up petition. A Chan J made the order on 31 May 2023, refusing a further adjournment after four restructuring proposals had failed and an auction of the Chongqing ICC development with a starting bid of RMB 4.9 billion drew no bids. The Company raised no point about an alleged assignment of the loan to a third party at that stage. The Court of Appeal later refused, on Ladd v Marshall grounds, to admit evidence of the assignment that was available at first instance, and struck out the appeal. The Appeal Committee then granted leave on whether the assignment defeated the Court's jurisdiction to wind up the Company.

The Court's holdings

The Court held that: (1) the petition debt was the unpaid balance under the Consent Judgment, which as a recognised foreign judgment conclusively established the petitioner as a creditor; the Company had itself withdrawn an assignment challenge in the Zhejiang proceedings before submitting to judgment (§§26-37); (2) even if the loan had been validly assigned in equity, an equitable assignor retains locus to present a winding-up petition, since a winding-up order is a collective execution process, not an enforcement of the debt against the debtor (Parmalat Capital Finance Ltd v Food Holdings Ltd; Re Steel Wing Co Ltd) (§§49-52); and (3) a petitioner's standing as creditor is a question of locus, not jurisdiction, and is challengeable only by appeal (§§54-61).

The Court also addressed costs against non-party instigators and funders. By section 17 of Cap 484, read with section 52A of the High Court Ordinance, the Court of Final Appeal can order such persons to pay indemnity costs of an unsuccessful appeal by an insolvent company. The $400,000 ceiling on security for costs under section 25(3)(b) of Cap 484 applies to non-parties as a condition of allowing the appeal to proceed. The Court suggested the Chief Executive in Council consider revising that limit, which has not been updated since 1997 (§§93-114).

The practical takeaway: winding-up petitioners relying on a recognised foreign judgment should not face after-the-fact assignment arguments never raised at first instance. Companies resisting a petition must take the locus point at the earliest opportunity. Solicitors acting for insolvent companies pursuing hopeless appeals should expect to disclose instigators and funders, who may be made jointly and severally liable for indemnity costs.