CACV 268/2024 HUZHOU SHENGHUA FINANCIAL SERVICES COMPANY LTD V. HANG PIN LIVING TECHNOLOGY COMPANY LTD

[Original]

CACV 268/2024, [2025] HKCA 434

On Appeal From [2024] HKCFI 1464

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 268 OF 2024

(ON APPEAL FROM HCMP NO 647 OF 2022)

________________________

	IN THE MATTER OF Order 71A of the Rules of the High Court, Cap. 4A of the Laws of Hong Kong
	and
	IN THE MATTER of the Mainland Judgments (Reciprocal Enforcement) Ordinance, Cap 597 of the Laws of Hong Kong (“the Ordinance”)
	and
	IN THE MATTER of a Judgment dated 24 th August 2020 of the Higher People’s Court of Zhejiang Province (浙江省高級人民法院) of the People’s Republic of China under (2020) 浙民終 290 號
	and
	IN THE MATTER of a Judgment dated 26 th December 2019 of the Intermediate People’s Court of Huzhou City Zhejiang Province (浙江省湖州市中級人民法院) of the People’s Republic of China under (2019) 浙 05民初 11 號

________________________

BETWEEN

	湖州升華金融服務有限公司 (HUZHOU SHENGHUA FINANCIAL SERVICES COMPANY LIMITED)	Plaintiff
	and
	杭品生活科技股份有限公司 (HANG PIN LIVING TECHNOLOGY COMPANY LIMITED)	Defendant

________________________

Before:

Hon Chu VP, Cheung and G Lam JJA in Court

Date of Hearing:	4 March 2025
Dates of Supplemental Written Submissions:	6 & 7 March 2025
Date of Judgment:	12 May 2025

________________________

J U D G M E N T

________________________

Hon G Lam JA (giving the Judgment of the Court):

A. Introduction

1. The dispute in this case is whether a judgment given by a court in Mainland China in the plaintiff’s favour against the defendant may be registered and thus enforced in Hong Kong pursuant to the Mainland Judgments (Reciprocal Enforcement) Ordinance ( Cap 597 ) (“ MJREO ”). Specifically, the issues are whether that judgment is “final and conclusive as between the parties to the judgment” and whether the judgment “orders the payment of a sum of money” within the meaning of the statute.

B. The facts

2. On 5 June 2017, the plaintiff entered into a written agreement with Mr Feng Chen (馮晨) (“ Feng ”) and Ms Lu Ling (陸凌) (“ Lu ”) as well as three companies, namely, the defendant, Hangzhou Fengchen Technology Co Ltd (“ HZFC ”) and another company, whereby the plaintiff agreed to lend and Feng and Lu agreed to borrow the sum of RMB 38 million for the period from 6 June to 24 August 2017, and the three companies agreed to be guarantors for repayment.

3. The defendant is a company incorporated in Bermuda with its shares listed on the Main Board of the Hong Kong Stock Exchange. The loan agreement was signed on its behalf by the then chairman of its board of directors, Mr Gao Zhiyin (“ Gao ”).

4. The amount was duly lent by the plaintiff, but the borrowers failed to repay, except a sum of RMB 211,275.34 and interest accrued up to 27 September 2017. In January 2019, the plaintiff brought a claim in the Intermediate People’s Court of Huzhou City, Zhejiang Province (“ IPC ”), against Feng and Lu as well as the defendant and HZFC as guarantors. Feng and Lu defended on the ground that they were mere middlemen for obtaining the loan, the proceeds of which were paid over to Gao. Both HZFC and the defendant defended on the ground, inter alia , that the individual who signed and stamped the agreement on their behalves (namely, Feng and Gao respectively) had no authority to do so.

5. On 6 December 2019, the IPC issued its judgment (“ IPC Judgment ”). [1] It found Feng and Lu liable as borrowers of the loan for repayment of the principal and interest. Accepting the argument of HZFC and the defendant on authority, it found that the contract of guarantee was invalid.

6. However, Art. 7 of the “Interpretation of the Supreme People’s Court on Some Issues Regarding the Application of the Guarantee Law of the People’s Republic of China” (最高人民法院關於適用《中華人民共和國擔保法》若干問題的解釋) [2] (“ SPC Interpretation on Guarantee Law ”) provided:

“ The guarantee provider and debtor shall assume joint compensation liability for the creditor’s loss on the condition that the principal contract is valid while the guarantee contract is invalid, and the creditor is not at fault. If the creditor and guarantee provider are both at fault, the guarantee provider’s portion of civil liability shall not exceed half of the debtor’s unpayable portion.” [3]

7. For the purpose of this provision, the IPC found that both the plaintiff on the one hand and HZFC and the defendant on the other hand were at fault, and held that the latter should bear responsibility to compensate the former in respect of half of the amount the debtors could not repay. Accordingly, at the end of the IPC Judgment, the IPC made, inter alia , the following orders in favour of the plaintiff: [4]

(1) Feng and Lu do forthwith repay the plaintiff the principal of RMB 38 million together with interest from 27 September 2017 to the date of payment at the rate of 1.25% per month and penalty interest of 0.75% per month, less the amount already paid of RMB 211,275.34. Payment must be made in full within 10 days.

(2) The defendant and HZFC “bear compensation responsibility in respect of 50% of the part of the liabilities of Feng and Lu in paragraph 1 that they are unable to repay, and be entitled to recover from Feng and Lu”.

(3) Of the total court fees of RMB 236,800, the defendant is responsible for RMB 29,600.

8. The defendant appealed against the IPC Judgment to the Higher People’s Court of Zhejiang Province (“ HPC ”). Neither Feng, Lu nor HZFC appealed. In a judgment issued on 24 August 2020 (“ HPC Judgment ”), [5] the HPC upheld the findings of the IPC in all respects relevant to the defendant and made an order that the appeal be dismissed and the original judgment be maintained (駁回上訴，維持原判).

9. According to the certificates subsequently issued by the IPC and the HPC on 7 May 2022 and 26 April 2022 respectively, both the IPC Judgment and the HPC Judgment came into force (發生法律效力) on 31 August 2020, i.e. a week after the HPC Judgment was issued.

10. The defendant further applied to the Supreme People’s Court of China (“ SPC ”) for an order for re-trial. By a judgment issued on 3 February 2021, the SPC rejected the defendant’s application. [6]

11. Meanwhile, on 9 October 2020, proceedings were begun by the plaintiff in the IPC against Feng, Lu, HZFC and the defendant for enforcement of the IPC Judgment. As at 24 March 2021, as recorded in the decision issued by the IPC on that date in those enforcement proceedings (“ Enforcement Decision ”): [7]

(1) Bank deposits of Feng amounting to RMB 655,710.69 were impounded.

(2) A property in Hangzhou held in Feng’s and Lu’s name had been impounded by another court, and the plaintiff had applied to that court for a share of any proceeds realised from that asset.

(3) The provident funds of Feng and Lu had only been frozen as the conditions for withdrawal had not been met.

(4) There was a vehicle registered in Lu’s name but its purchase had been funded wholly by a third party. Because Lu needed to travel for treatment of a serious illness, the plaintiff had agreed not to dispose of the vehicle and not to impose limitation on high expenditure.

12. It was also stated in the Enforcement Decision that up to 27 February 2021, interest accrued amounted to RMB 31.16 million (RMB 38 million × 2% per month [8] × 41 months), that the total unrecovered principal and interest amounted to RMB 68,728,266.91, and that “at present” there was no property of Feng, Lu, HZFC and the defendant amenable to execution (目前被执行人冯晨、陆凌、杭品公司、烽辰公司无财产可供执行). Accordingly, the enforcement proceedings came to an end (本院 （2019）浙05 民初11 號判决书的本次执行程序终结). It was also stated that “after these enforcement proceedings come to an end, the ‘enforcees’ should continue to perform their obligations. If it is discovered that the ‘enforcees’ have the ability to perform, the applicants for enforcement can apply to this court for resumption of enforcement.” [9]

13. The evidence shows that two further sums were recovered by the plaintiff after the Enforcement Decision. According to a letter of the enforcement bureau (執行局) of the IPC dated 15 March 2024 issued in response to the defendant’s enquiry (“ Enforcement Explanation ”), RMB 1,414,791.21 had been realised for the plaintiff from Feng’s and Lu’s Hangzhou property and RMB 150,284.25 from Lu’s provident funds. Together with the bank deposits referred to in §11(1) above which produced RMB 550,133.09 net of fees, the total amount recovered by the plaintiff through the enforcement proceedings was RMB 2,115,208.55.

C. MJREO

14. This case concerns the registration of Mainland judgments for enforcement under the MJREO, an Ordinance enacted to give effect to the “Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters by the Courts of the Mainland and the Hong Kong Special Administrative Region Pursuant to Choice of Court Agreements between Parties Concerned” [10] entered into between the Mainland and Hong Kong on 14 July 2006 (“ 2006 Arrangement ”).

15. There is a more recent and comprehensive arrangement for reciprocal recognition and enforcement of judgments between the Mainland and Hong Kong called the “Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters by the Courts of the Mainland and of the Hong Kong Special Administrative Region” [11] signed on 18 January 2019, which is implemented in Hong Kong by the Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Ordinance ( Cap 645 ). That Ordinance only came into operation on 29 January 2024, and has no application to the present case. It may nevertheless be noted that one of the conditions for registration under that Ordinance is that the Mainland judgment “requires the payment of a sum of money, or the performance of an act” (section 10(1)(b)(i)). Also, whilst the new Ordinance has adopted the term “effective” in place of “final and conclusive”, in setting out when a Mainland judgment is effective in the Mainland, section 8(1)(b) has in substance reproduced section 6(1) of the MJREO.

16. Under the MJREO, a Mainland judgment, once registered in Hong Kong, is for the purpose of execution of the same force and effect as if it were a judgment of the Court of First Instance (section 14). To have a Mainland judgment registered, the judgment creditor has to show that a number of requirements under section 5(2) are satisfied. Section 5(2) provides:

“ (2) On an application made under subsection (1), the Court of First Instance shall order the Mainland judgment to be registered in accordance with this Ordinance if the judgment creditor has proved to the satisfaction of the Court of First Instance that the following requirements are satisfied—

(a) the judgment is given on or after the date of the commencement [i.e. 1 August 2008] of this Ordinance by—

(i) a chosen court which is a designated court;

(ii) a designated court upon a transfer of the case under the law of the Mainland from a chosen court;

(iii) a designated court upon an appeal against a judgment of the case given by—

(A) a chosen court; or

(B) a court to which the case has been transferred under the law of the Mainland from a chosen court; or

(iv) a designated court upon a retrial of the case which has been tried in—

(A) a chosen court; or

(B) a court to which the case has been transferred under the law of the Mainland from a chosen court;

(b) the relevant choice of Mainland court agreement is made on or after the commencement date [i.e. 1 August 2008] of this Ordinance but before the commencement date [i.e. 29 January 2024] of the Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Ordinance ( Cap. 645 );

(c) the judgment is final and conclusive as between the parties to the judgment;

(d) the judgment is enforceable in the Mainland; and

(e) the judgment orders the payment of a sum of money (not being a sum payable in respect of taxes or other charges of a like nature or in respect of a fine or other penalty).”

17. The requirements in dispute in this appeal are that “the judgment is final and conclusive as between the parties to the judgment” (section 5(2)(c)) and that “the judgment orders the payment of a sum of money …” (section 5(2)(e)). We shall refer to them as the “ final and conclusive requirement ” and the “ sum of money requirement ” respectively.

18. A party against whom a registered judgment may be enforced may apply to the Hong Kong court under section 18 for an order setting aside the registration of the judgment on a number of specified grounds, one of which is that the judgment does not satisfy the requirements in section 5(2)(a) to (e).

D. The proceedings in Hong Kong

19. On 25 May 2022, the plaintiff, by an affirmation made by its solicitor, applied ex parte pursuant to the MJREO for the registration of the HPC Judgment and “some provisions” of the IPC Judgment as against the defendant. The amount due from the defendant was stated to be RMB 39,817,356.30, calculated on the basis of the principal and interest accrued up to 25 May 2022 less RMB 211,275.34 (the amount repaid by Feng and Lu) and RMB 655,710.69 (the gross amount of Feng’s bank deposits impounded).

20. On 31 May 2022, a Master raised a number of requisitions on the application including, in particular:

“ 2. At the proposed order …, please clarify the total sum of judgment debt as at 25/5/2022 …

3. Your attention is drawn to Sec. 5(2)(e), Cap. 597 . Please submit if registration of the Judgment of the Higher People’s Court (as per the proposed order) is necessary.”

21. In light of requisition no. 2, the plaintiff by a second affirmation dated 9 August 2022 clarified the amount due, revising the amount of interest, but without any amendment to the deductions mentioned above. The revised amount due was stated to be RMB 41,921,375.26. In response to requisition no. 3, the plaintiff confirmed that its application was for registration of the IPC Judgment and “the registration of the Higher People’s Court Judgment is hereby withdrawn.”

22. Further requisitions were raised by the Master on 22 August 2022. By a third affirmation dated 17 May 2023, the plaintiff further revised the amount claimed to RMB 41,213,979.66, having regard to the receipt of proceeds realised from the Hangzhou property.

23. On 30 May 2023, Master Hui gave leave for the IPC Judgment to be registered pursuant to the MJREO. The amount for which judgment was entered was RMB 48,371,172.40. This was calculated as follows:

Principal	38,000,000.00
Interest from 27/9/2017 to 21/8/2023 at (1.25% + 0.75%) per month	53,816,172.04
Additional interest under Art. 253 of Civil Procedure Law of the PRC from 11/9/2017 to 21/8/2023 at 1.75/10,000 per day	7,148,750.00
Less
Repayment	(211,275.34)
Bank deposits from enforcement	(655,710.69)
Proceeds of Hangzhou property from enforcement	(1,414,791.21)
Sub-total	96,683,144.80
The defendant’s half-share	48,341,572.40
Add
Court fees ordered against the defendant	29,600.00
Total	48,371,172.40

24. The Master’s order, subsequently drawn up, was dated 30 May 2023 and it was on this date that judgment was treated as having been entered in Hong Kong. Although this is not a subject matter of this appeal, we should point out that it was erroneous for the sum for which judgment was entered to include interest under Mainland law up to 21 August 2023, being apparently the date when the plaintiff’s solicitors submitted the draft order to the Master. This is wrong because, first, by virtue of section 12(a), judgment should only be registered for any interest under Mainland law “up to the time of registration” (taken to be 30 May 2023), and, secondly, by virtue of section 14(2)(b), the judgment entered under the MJREO carries interest as a judgment given in Hong Kong, which would result in the plaintiff getting duplicated interest for the period from 30 May to 21 August 2023. The same mistake was repeated by the plaintiff in the revised judgment sum (RMB 35,480,156.63) placed before the judge. [12] (After the hearing before us, the plaintiff’s solicitors put forward another calculation based on interest accrued under Mainland law up to 30 May 2023, resulting in a total figure of RMB 33,135,927.72. [13] )

25. By summons of 22 September 2023, the defendant applied to set aside the registration of the IPC Judgment, on the basis of four grounds: first, the IPC Judgment is not a judgment that “orders the payment of a sum of money” under section 5(2)(e); secondly, the IPC Judgment is not “final and conclusive” under section 5(2)(c); thirdly, having regard to its provisions for penalty interest, the IPC Judgment orders the payment of a penalty contrary to section 5(2)(e); and, fourthly, there was no “choice of Mainland court agreement” between the plaintiff and the defendant within the meaning of section 3(2).

26. In her decision dated 13 June 2024 (“ Decision ”), [14] Deputy High Court Judge Phoebe Man upheld the first and second grounds and rejected the fourth ground. As to the third ground, the plaintiff conceded that the part of the IPC Judgment relating to penalty interest should not have been registered, and applied to amend the order for registration to reduce the judgment sum (as set out in §17 of the Decision). For its part, the defendant conceded that the offending part could be severed. Because of her conclusions on the first two grounds, however, the matter became immaterial and the judge dismissed the plaintiff’s summons for amendment.

27. In the result, the judge granted the defendant’s application and set aside the registration of the IPC Judgment.

28. On this appeal, the plaintiff challenges the judge’s decision on the first two grounds and seeks an order that the registration of the IPC Judgment be restored subject to the amendment proposed below. We deal with the sum of money requirement and the final and conclusive requirement in turn below.

E. Whether the IPC Judgment orders the payment of a sum of money

E1. The judge’s views and the parties’ contentions

29. In her decision, the judge held that the IPC Judgment was not a judgment that “orders the payment of a sum of money …” within the meaning of section 5(2)(e) of the MJREO. The plaintiff had to rely on the Enforcement Decision and the Enforcement Explanation before arriving at the conclusion that certain sums had been recovered from the borrowers. It cannot be said that the defendant is certain as to its liability under the IPC Judgment. There is doubt whether further assets of the borrowers may be available for enforcement. On the evidence, it was at least arguable that the provident funds of Feng had not been enforced against and also the plaintiff had not enforced against a car belonging to Lu. In any event, if one has to refer to the Enforcement Decision and the Enforcement Explanation before arriving at a figure, then the sum of money requirement cannot be said to be satisfied. There are also disputes about possible further enforcements. [15]

30. On this appeal Mr Frederick Chan, who did not appear below, submits that the judge erred in so far as she proceeded on the basis that for the purposes of the sum of money requirement, extrinsic materials could not be taken into account in ascertaining the sum payable and that the exact amount of the judgment debt must be stated on the face of the Mainland judgment. It is also submitted that the judge was wrong to find there was doubt on whether further assets of the borrowers might be available for future enforcement.

31. Defending the judge’s decision, Mr John Hui submits on behalf of the defendant that to be registrable under the MJREO, a Mainland judgment must be for a definite sum of money that is stated in the judgment or can be ascertained by a simple arithmetic process. The IPC Judgment here was for compensatory liability on the part of the defendant. To ascertain the defendant’s liability, one must first assess the portion of the borrowers’ liabilities that they are unable to discharge. This is not clear from the IPC Judgment and is incapable of determination by simple arithmetic. The defendant’s liability is in truth not fixed, definite or certain, but fluctuating and subject to variation having regard to enforcement actions.

E2. The requirement at common law

32. At common law a foreign judgment is enforceable by an action brought on it if, among other things, it is for a debt or definite sum of money: see Rule 46(1)(a) of Dicey, Morris & Collins on The Conflict of Laws (16 ^th ed). The historical explanation of this limitation as set out in Dicey, Morris & Collins is that the form of action appropriate for the enforcement of a foreign judgment was originally debt, though some authorities allow assumpsit, both of which required the claim to be in a definite amount. As elaborated by Lord Collins of Mapesbury in Rubin v Eurofinance SA [2013] 1 AC 236 at §9:

“ The theoretical basis for the enforcement of foreign judgments at common law is that they are enforced on the basis of a principle that where a court of competent jurisdiction has adjudicated a certain sum to be due from one person to another, a legal obligation arises to pay that sum, on which an action of debt to enforce the judgment may be maintained: Williams v Jones (1845) 13 M & W 628, 633 per Parke B; Godard v Gray (1870) LR 6 QB 139 , 147, per Blackburn J; Adams v Cape Industries plc [1990] Ch 433 , 513; Owens Bank Ltd v Bracco [1992] 2 AC 443 , 484, per Lord Bridge of Harwich. As Blackburn J said in Godard v Gray , this was based on the mode of pleading an action on a foreign judgment in debt, and not merely as evidence of the obligation to pay the underlying liability: LR 6 QB 139 , 150. …”

33. Thus in Sadler v Robins (1808) 1 Camp 253, judgment was given in a court of Jamaica for the defendants to pay the plaintiffs a stated fixed sum, with interest for a specified period, but “deducting thereout the full costs of the said defendants expended in the said suit, the same to be taxed by … one of the masters of the said Court”. The defendants failed to cause their costs to be taxed. The plaintiffs brought an action in assumpsit in England on the Jamaican decree, but the court held that the action could not be maintained. Lord Ellenborough said:

“ At present, the sum due under decree is quite indefinite. The operations to ascertain it should have taken place in Court of Chancery in Jamaica, and cannot be gone through here, at Nisi Prius. Had the decree been perfected, I would have given effect to it, as well as to a judgment at common law. The one may be the consideration for an assumpsit equally with the other. But the law implies a promise to pay a definite, not an indefinite sum. … Till the sum to be deducted is ascertained, it is impossible to say how much is really due. The plaintiff ought to have taxed the costs ex parte . There is no Court where this proceeding is not allowed. At present no one can predicate how much the defendant is decreed to pay. The decree is therefore imperfect, and cannot be the foundation of an assumpsit.”

34. In contrast Hall v Odber (1809) 11 East 118 was a case where a court in Québec had given judgment in favour of the plaintiff but stayed its execution having regard to the existence of a cross-claim on the part of the defendant. In the event the defendant took no steps to establish his cross-claim, and it was held by the English court that the plaintiff was entitled to judgment in his action in assumpsit founded on the Québecois judgment.

35. In Russell v Smyth (1842) 9 M & W 809, Parke B said: “Where the Court of a foreign country imposes a duty to pay a sum certain, there arises an obligation to pay, which may be enforced in this country.”

36. In Bonn v National Trust Co Ltd [1930] 4 DLR 820, the plaintiff had brought an action on a promissory note in New York. As the drawer had died, the action was brought there against her husband, who had obtained in New York letters of administration of her estate. Judgment was pronounced in favour of the plaintiff for the amount of the promissory note, with interest and costs, making a total of $6,951.18, against “Max Morris as administrator of the estate of Minnie Morris, deceased.” Letters of administration for the drawer’s estate were granted in Ontario to a company at the instance of a creditor. The plaintiff brought an action in Ontario against the Ontario administrator based on the New York judgment. The Appellate Division of the Ontario Supreme Court held that the action failed since the New York judgment was obtained against another administrator, not the defendant. But two of the judges relied on an additional ground relevant for present purposes. Masten JA, with whom Orde JA agreed, considered that the New York judgment had the same meaning as the usual form of such judgments in Ontario, namely, “that the plaintiff do recover against the defendant, as administrator of the assets and effects of Minnie Morris, deceased, the sum of [etc] to be levied out of the property which was of the said Minnie Morris at the time of her death, in the hands of the said Max Morris as her administrator as aforesaid, to be administered if he hath so much thereof in his hands to be administered”, and said: “Manifestly such a judgment is not a judgment for a sum certain, and therefore on that ground also it appears to me that the plaintiff must fail.”

37. But even at common law it is not necessary that the exact amount is directly specified in the foreign judgment; it is sufficient if the sum is ascertainable by a mere arithmetical calculation. Thus in Beatty v Beatty [1924] 1 KB 807 , the plaintiff brought an action in England in December 1915 against her ex-husband, based on a judgment given by a court of the State of New York on 19 October 1911, in a matrimonial suit between them, which ordered “that the defendant pay to the plaintiff the sum of twenty dollars a week as and for the support and maintenance of the issue of the said marriage and of the plaintiff.” Up to the date of the English action, 208 weekly instalments had accrued amounting to $4,160, of which the defendant had paid $360 and no more. It was argued by the ex-husband that a foreign judgment is not final and therefore not enforceable by an action at common law unless it appears on the face of the judgment itself what is the amount to be sued for. The English Court of Appeal rejected that argument. Scrutton LJ said (at p 816): “No doubt a judgment to be final must be for a sum certain. But a sum is sufficiently certain for that purpose if it can be ascertained by a simple arithmetical process.” Sargant LJ was of the same opinion, adding that the maximum, id certum est quod certum reddi potest (if something is capable of being made certain, it should be treated as certain), applied. On the other hand, where the sum due can theoretically be calculated but the plaintiff failed to show all the facts necessary for that calculation, the court may conclude that the judgment is not one that makes a sum of money payable, which seems to us to be the true explanation of Taylor v Begg [1932] NZLR 286.

38. The case of Emajor v Emajor [2016] NZHC 2022 [16] cited by Mr Chan seems at first sight to go beyond the common law rule. There a Mexican family court had made an order requiring the husband to pay 35% of “the total of the ordinary and extraordinary income [he] receives for the concept of his work” to the wife as maintenance for her and their daughter, or 7,000 pesos, per month, whichever was the greater. The wife sought to enforce the Mexican judgment in New Zealand by action at common law. Gilbert J held that the meaning of that judgment was clear which required the husband to pay the relevant percentages of all net income he received from his employment. An independent financial analyst engaged by the wife was able to calculate that sum with precision based on the husband’s tax returns and by deducting the amounts he had paid. Importantly there was no dispute about the amount payable in terms of the judgment. In these circumstances the New Zealand court’s rejection of the husband’s argument that the order was not for payment of a specified sum of money was explicable on the facts especially that there was no dispute on the actual figure. [17]

E4. The sum of money requirement in the MJREO

39. We are concerned here with enforcement not at common law but under the MJREO, and as Lord Collins also said in Rubin v Eurofinance SA immediately after the passage quoted in §32 above: “But this is a purely theoretical and historical basis for the enforcement of foreign judgments at common law. It does not apply to enforcement under statute …” Nevertheless, section 5(2)(e) of the MJREO requires the Mainland judgment to be one that “orders the payment of a sum of money …”. Both parties’ counsel submit that the same rules apply at common law as under this requirement in the MJREO. For the reasons explained below we agree that the statutory requirement reflects existing common law principles though ultimately it is the terms of the Ordinance that are to be applied.

40. First, the MJREO is modelled on the Foreign Judgments (Reciprocal Enforcement) Ordinance ( Cap 319 ) (“ FJREO ”), [18] which is in turn modelled on the (English) Foreign Judgments (Reciprocal Enforcement) Act 1933. By virtue of section 3(2)(b) of the FJREO, one of the conditions for a foreign judgment to be enforceable by registration under that Ordinance is that “there is payable thereunder a sum of money, not being a sum payable in respect of taxes or other charges of a like nature or in respect of a fine or other penalty”. Whilst the 1933 Act was not a codifying Act, equally one ought not lightly to assume that it has substantially altered the common law: Societe Cooperative Sidmetal v Titan International Ltd [1966] 1 QB 828 , 846-847. The Report of the Greer Committee that led to its enactment proceeded on the guiding principle that the existing principles of the common law should be followed in matters of substance. [19] The general view appears to be that the conditions for enforcement under the legislation in essence reflect the common law requirements: Briggs, Civil Jurisdiction and Judgments (7 ^th ed, 2021), §35.01; Curto v Curto [2023] EWHC 2106 (KB), §§29, 47, 74-88.

41. Secondly, the 2006 Arrangement may be usefully looked at in this context as an aid to construction of the MJREO: see HKSAR v Cheung Kwun Yin (2009) 12 HKCFAR 568 , §14; Beijing Renji Real Estate Development Group Co Ltd v Zhu Min [2022] 4 HKC 116 at §41. Art. 1 of the 2006 Arrangement refers to “an enforceable final judgment requiring payment of money” (須支付款項的具有執行力的終審判決). Art. 16 provides that the scope of reciprocal recognition and enforcement shall include, “apart from the sum specified in the judgment” (除判決確定的數額外), interest and costs. It seems to be contemplated under the 2006 Arrangement that the sum of money made payable by the judgment should be an ascertained sum.

42. Thirdly, there are other provisions in the MJREO pointing in the same direction. Thus section 10 provides that if a judgment has been partly satisfied, then it shall only be registered in respect of the balance remaining payable (see also section 20(3)). Section 11 provides that if “the sum payable” under the Mainland judgment is expressed in a currency other than Hong Kong currency, then the judgment should be registered as if it were a judgment for such sum in Hong Kong currency as is equivalent to the sum payable. Section 14(2)(b) provides that “the sum” for which the judgment is registered shall carry judgment interest under Hong Kong law. All these seem to us to envisage that a definite sum of money is payable.

43. Fourthly, as pointed out by Mimmie Chan J in Foshan Nanhai Branch of Industrial and Commercial Bank of China Ltd v Foshan Ruifeng Petroleum and Chemical Fuel Co Ltd [2019] 2 HKLRD 478 , the object of the MJREO is to provide a simple and quick process of enforcement by registration, on the basis of a judgment already made by a competent and recognized court. It is plainly not the legislative intention that a judgment for an unascertained amount could be registered with the result that the enforcing court had to carry out, as a further primary adjudication of the parties’ rights and liabilities, a process of quantifying the sum payable.

44. It is true that the word “sum” may in itself be capable of referring to both simply “a quantity of money” and “a quantity of money of a specified amount”: see Horan v Quilter [2004] 1 IR 431 at §50. For the reasons above, however, we take the view that to fall within section 5(2)(e), a Mainland judgment must order the payment of a definite sum of money.

45. It is not necessary that the exact sum payable is expressly stated in the Mainland judgment. It is sufficient if it can be ascertained by a simple arithmetical process.

46. For the purpose of ascertaining the sum payable, the judge below thought that resort cannot be made to extrinsic material, particularly the Enforcement Decision and the Enforcement Explanation. She reached that view based on the following passages in Foshan Nanhai Branch of Industrial and Commercial Bank of China Ltd :

“35. On behalf of the Branch, reference to and reliance was sought to be made on other extraneous documents, such as a purported ‘Distribution Proposal’ issued by the Mainland court after the date of the Mainland Judgment (in 2013), as to how the assets of the 1 ^st and 3 ^rd Respondents should be distributed, and subsequent (unregistered) decisions or reports made by the Mainland court as to enforcement proceedings taken and the proceeds of enforcement received, for the purpose of ascertaining the sum said to be due and payable under the Mainland Judgment.

36. If it is claimed that these documents are final and conclusive judgments made by a designated court, and which orders the payment of a sum of money, then these documents should be registered to have the effect provided for under the Ordinance. It is for the creditor to decide what document or order constitutes a judgment to be registrable as an order for the payment of a sum of money under section 5 of the Ordinance. However, if the Court is not satisfied that the particular document which is sought to be registered is one made by a designated court, is final and conclusive, and which orders the payment of a sum of money, to satisfy the requirements of section 5 of the Ordinance, then the judgment is not registrable, and if wrongly registered, then the registration should be set aside under section 18.

…

39. The purpose of the Ordinance must be to facilitate the recognition and enforcement of Mainland Judgments by a simple and quick process of registration on the basis of a judgment already made by a competent and recognized court. Registration should be in terms of what is readily apparent on the face of the Mainland judgment, without the necessity of the Hong Kong Court scrutinizing the evidence or documents in the Mainland proceedings, or conducting a mini trial of the evidence as to the correct sum allowed and ordered to be payable by the judgment debtor. Nor should submissions be necessary as to the amount due. Registration of a judgment should be on the basis that there can be no more dispute that can be raised as to the amounts due from the judgment debtor, apart from arithmetic calculations under a specified formula.”

47. In Foshan Nanhai Branch of Industrial and Commercial Bank of China Ltd , the Mainland judgment in question contained a number of orders. So far as relevant, Order 1 required the 1 ^st respondent, i.e. the primary debtor, to pay the plaintiff an outstanding sum of RMB 35,445,153.82 together with interest; Order 2 stated that the plaintiff had priority in payment as against the specified security furnished by the 1 ^st and 3 ^rd respondents; Order 3 stated that in relation to any debt which remains outstanding after realisation of the security referred to in Order 2, the 2 ^nd to 9 ^th respondents are to bear joint and several liability as guarantors. [20] When the case came before the Hong Kong court, steps were apparently still being taken in the Mainland for execution against the assets of the 1 ^st respondent and the security referred to in Order 2, and only some of those assets had been realised. Further, there were different applicable limits to the amounts guaranteed by the various respondents, which were not dealt with at all in Order 3. [21]

48. On those facts, Mimmie Chan J’s decision that Order 3 did not satisfy the sum of money requirement seems to us, with respect, to be plainly correct. We do not however think that by the passages quoted above her Ladyship intended to say that under no circumstances can regard be had to any document other than the Mainland judgment to be registered for the purpose of ascertaining the sum payable.

(1) First, that would go further than the common law rule, which does not preclude admission of a fact outside the foreign judgment to establish the amount required to be paid. It seems clear from the judgments in Sadler v Robins that if the defendants’ costs had been taxed, the plaintiff’s action based on the Jamaican decree would have been held to be well-founded; the fact that the English court needed to subtract from the sum specified in the decree the amount of taxed costs appearing elsewhere would be no impediment. In Curto v Curto , where an Italian judgment ordered the defendants to pay the plaintiff money equivalent to 2/9 ^ths of the value of a deceased’s estate in the amount indicated in the court expert’s report, the English court had no difficulty in holding that, for the purposes of enforcement by registration under the 1933 Act, the sum payable was readily ascertainable by reference to the valuation report. There is nothing to suggest it was the legislative intention that the sum of money requirement in the MJREO should be stricter than the common law.

(2) Secondly, the statute provides that where the Mainland judgment has been partly satisfied, it shall only be registered in respect of the unpaid balance: sections 10 and 20(3). This requires the plaintiff to adduce and the court to examine evidence of partial satisfaction whether by voluntary payment or compulsory enforcement: see RHC Order 71A rule 3(1)(c)(iii) & (iv). Further, interest on the judgment under Mainland law up to the time of registration is within the scope of registration and requires evidence to be proved: see section 12 and Order 71A rules 3(1)(d) & (4). Thus it is contemplated in the legislation itself that the precise amount for registration may not appear on the face of the Mainland judgment and that materials extrinsic thereto may need to be examined.

(3) Thirdly, we do not think it would be contrary to the object of the Ordinance for the court to look at materials beyond the Mainland judgment in order to ascertain the sum payable. Section 5(2) requires the plaintiff to prove to the satisfaction of the court that, inter alia , the judgment orders the payment of a sum of money. Neither that section nor the rules made under section 23 (and found in RHC Order 71A) confine such proof to the Mainland judgment alone. Admitting additional materials will not necessarily defeat the purpose of having a registration system whereby Mainland judgments can be enforced in a more direct manner than through an action. If, for example, a judgment makes a guarantor liable for any balance of a debt after a specified security has been realised, we can see no reason from the statutory purpose why evidence of payment to the creditor of the net proceeds of realisation of that security cannot be admitted by the Hong Kong court in ascertaining what sum the guarantor is actually being ordered to pay.

49. Foshan Branch of Industrial and Commercial Bank of China Ltd should not be read as establishing a principle that the requirement of “payment of a sum of money” under section 5(2)(e) of the MJREO is not satisfied if reference has to be made to extrinsic materials to ascertain the sum ordered to be paid or to be registered for enforcement.

E5. Whether the IPC Judgment satisfies the sum of money requirement

50. In the present case the IPC Judgment ordered that the defendant and HZFC “bear compensation responsibility in respect of 50% of the part of the liabilities of Feng and Lu in paragraph 1 that they are unable to repay, and be entitled to recover from Feng and Lu”. [22]

51. Two points can be quickly disposed of. First, the fact that the order is expressed in terms imposing a compensatory liability rather than in the form of an express order for payment is in our view insignificant. The sum of money requirement can in our view be satisfied by a judgment that in substance requires the defendant to pay a sum of money, even if it is not expressed in the form “the defendant do pay the plaintiff the sum of …” Secondly, the defendant’s argument that its liability was secondary and had not yet arisen was rejected by the judge, [23] and there is no respondent’s notice to raise that argument on appeal.

52. The more formidable question that remains is whether the defendant’s liability is in a definite, readily ascertainable sum. Mr Chan submits that it is, by a simple arithmetical process. He says: let X be the amount of principal and interest the borrowers have to pay the plaintiff, and Y be the amount that the borrowers had been able to pay to the plaintiff; the portion that the borrowers were unable to repay would be X – Y ; and the defendant’s liability under the IPC Judgment can be simply calculated as ( X – Y ) × ½ .

53. In this way Mr Chan’s submission seems to treat “the part … that [Feng and Lu] are unable to repay” (被告冯晨、陆凌…不能清偿部分) as the part that they have not yet satisfied by way of enforcement or otherwise at any particular time. Thus as the plaintiff’s case progressed, the value of Y had actually changed. When the plaintiff first filed its application for registration, Y included only the RMB 211,275.34 repaid by Feng and Lu and the sum recovered from Feng’s bank deposits (later fixed at RMB 550,133.09 net). By the time the Master registered the IPC Judgment, Y included in addition the RMB 1,414,791.21 from the Hangzhou property. When the matter came before the judge, Y had further increased by RMB 150,284.25 being the amount recovered from Lu’s provident funds. This raises the question of what exactly is meant by “unable to repay” in this context.

54. The question turns on the meaning of the IPC Judgment, to be approached in the context of Mainland law. The judge did not enter into the parties’ evidence on Mainland law, apparently because she considered such extrinsic materials irrelevant and that the court should not conduct a “mini-trial”. [24] With respect, this takes too narrow a view of the court’s function under the MJREO. To assess whether a Mainland judgment is one that orders the payment of a definite sum of money, it is necessary first to understand what it means. If in a particular case the meaning is unclear to the Hong Kong court – such as where the order is framed in concepts or terminology peculiar to Mainland law, there is nothing to prevent recourse to expert evidence. The fact that contrary evidence is subsequently filed by the defendant when he applies to have the registration set aside, giving rise to a dispute, does not mean that the court should at the outset deny itself access to evidence that aids the construction of the Mainland judgment. Where a dispute does occur, the court can resolve it, in the way it considers appropriate, along with any other dispute arising from the grounds relied upon in the defendant’s application to set aside the registration under section 18.

55. As mentioned above in §6, the legal basis for the IPC to hold the defendant liable notwithstanding the guarantee was held to be invalid was Art.7 of the SPC Interpretation on Guarantee Law. That provision set the relevant upper limit of the liability of the guarantor at half of the portion that the debtor is “unable to repay” (不能清償), which was what the IPC ordered. The available expert evidence shows that there is another provision in the SPC Interpretation on Guarantee Law that explained what “unable to repay” meant, namely, Art. 131, which provided: [25]

“ ‘Inability to repay’ as used in this Interpretation refers to the state in which the debt remains unpaid after execution of the debtor’s deposits, cash, securities, finished products, semi-finished products, raw materials, vehicles and other movable property that can be executed, as well as other property that is convenient to execute.”

56. Just as the PRC Guarantee Law was subsumed into the PRC Civil Code, the SPC Interpretation on Guarantee Law was also superseded by a new interpretation called the “Interpretation of the Supreme People’s Court of the Application of the Civil Code of the People’s Republic of China Relevant to the Guarantee System” (最高人民法院關於適用《中華人民共和國民法典》有關擔保制度的解釋), with effect from 1 January 2021. The new Interpretation contains a provision (Art. 17) similar to Art. 7 of the old one, but there is no equivalent of Art. 131. Nevertheless, given that the underlying events took place and the IPC Judgment was issued before 2021, it should in our view be interpreted by reference to the SPC Interpretation on Guarantee Law which was in force at the time. That is also the view of the defendant’s expert Mr Wang based on Art. 1(2) of the Civil Code which we accept.

57. The concept of “unable to repay” was further elucidated by the SPC’s judgment in a case decided on 31 July 2020 (Enforcement Supervision No. 41 of 2020), [26] which stated:

“ ‘Unable to repay’ is not the same as ‘not yet repaid’. If enforcement proceedings have been initiated against the primary debtor and all executable properties have been executed against, and the debt still remains not completely repaid, only then can (the primary debtor) be considered to be in the state of being ‘unable to repay’. Only then can the specific amount for enforcement against the party with supplementary compensatory liability be determined, and only then can the enforcement court initiate execution against the party with supplementary compensatory liability so as to give effect to the creditor’s rights in respect of the debt.” [27]

In the result, it was held by the SPC in that case, upholding the decision of the Guangdong Higher People’s Court which reversed the lower courts’ decisions, that since there were assets of the primary debtors in the form of vehicles, real estate and impounded funds that had not yet been fully enforced against, the exact liability of the party that bore a supplementary compensatory liability (補充賠償責任) was not ascertained and established, and enforcement steps should therefore not yet be taken against that party.

58. In other words, the value of Y in Mr Chan’s formula is not the amount the plaintiff has managed to recover by enforcement against the primary debtors at any given time, but the amount it has recovered by exhausting all enforcement steps against the primary debtors’ accessible assets. In the present case, there is no real dispute that at least the housing provident funds of Feng and a car belonging to Lu were the borrowers’ assets which were amenable to execution but had not yet been enforced against as at the hearing before the judge (and even now). Their values are uncertain and unquantified. It follows in our view that the defendant’s liability under the IPC Judgment is as yet also uncertain and unquantified, and that the sum of money requirement under the MJREO is not satisfied. On this ground alone the appeal must be dismissed.

F. Whether the IPC Judgment is final and conclusive

59. The other requirement in dispute is whether the IPC Judgment, being the judgment registered, is “final and conclusive as between the parties to the judgment” within the meaning of section 5(2)(c). Section 6(1) further provides:

“ (1) For the purposes of section 5(2)(c), a Mainland judgment is final and conclusive as between the parties to the judgment if—

(a) it is a judgment given by the Supreme People’s Court;

(b) it is a judgment of the first instance given by a High People’s Court, an Intermediate People’s Court or a recognized Primary People’s Court and—

(i) no appeal is allowed from the judgment according to the law of the Mainland; or

(ii) the time limit for appeal in respect of the judgment has expired according to the law of the Mainland and no appeal has been filed;

(c) it is a judgment of the second instance given by a designated court other than a recognized Primary People’s Court; or

(d) it is a judgment given in a retrial by a designated court of a level higher than the court whose judgment has given rise to the retrial.”

60. Before the judge the plaintiff’s counsel submitted that the IPC Judgment fell within section 6(1)(b)(i) and was final and conclusive because it was “a judgment of the first instance given by … an Intermediate People’s Court” and, since the appeal to the HPC failed, “no appeal is allowed from the judgment according to the law of the Mainland”. The judge rejected this argument. She noted that section 6(1)(b)(i) does not read “no appeal has been allowed from the judgment”, and considered that the provision means that the judgment is not amenable to appeal under Mainland law and does not encompass the situation where there is an avenue for appeal and an appeal has been lodged but dismissed. She drew support for this construction from the Chinese version of the provision which reads: “按照內地法律，該判決是不准上訴的”. [28]

61. On this appeal, on behalf of the plaintiff Mr Chan has advanced two contentions on this requirement. His primary case is that section 6(1) is not an exhaustive definition of what judgments are final and conclusive for the purpose of section 5(2)(c) but is ancillary and subject to the latter. This requirement can be satisfied by the “deeming” provision in section 6(1) – a “special mode” for showing finality and conclusiveness – if the case falls within it. But even if a particular Mainland judgment does not fall within any limb of section 6(1), it may still be “final and conclusive” as a matter of Mainland law and this is sufficient to satisfy section 5(2)(c), which gives statutory force to the “final and conclusive” requirement at common law. Further, section 19 provides that if an appeal against the Mainland judgment is pending or the case is ordered to be retried, the court may, on application by the judgment debtor, set aside the registration or adjourn the application until after the expiration of a sufficient period to enable the appeal or retrial to be disposed of. In this case, the defendant’s appeal against the IPC Judgment was dismissed by the HPC and a further challenge brought in the SPC was unsuccessful. All avenues of appeal under Mainland law had been exhausted. The IPC Judgment had become enforceable from 31 August 2020. Mr Chan submits therefore that the IPC Judgment was final and conclusive, and that this conclusion was reinforced by section 19. The judge was inconsistent in holding on the one hand that the IPC Judgment was “valid, effective and enforceable” [29] but on the other hand it was not “final and conclusive”.

62. We do not accept Mr Chan’s submissions. Section 6(1) specifically provides that “[f]or the purposes of section 5(2)(c), a Mainland judgment is final and conclusive as between the parties to the judgment if” one of the disjunctive paragraphs from (a) to (d) is satisfied. Those four paragraphs are not special cases but appear to be intended comprehensively to cover all applicable judgments. It seems to us this is language that defines what is meant by “final and conclusive as between the parties to the judgment” for the purposes of section 5(2)(c), rather than a form of wording that deems a judgment in certain special cases to be final and conclusive whilst leaving that phrase with a separate and independent general meaning. This is reinforced when the legislative history and purpose are taken into account.

63. Prior to the 2006 Arrangement, it had already been noted that there could potentially be disputes as to whether certain Mainland judgments were final and conclusive having regard to the trial supervision system in Mainland law which could lead to an order for retrial, as had arisen in the Hong Kong courts: see e.g. Chiyu Banking Corp Ltd v Chan Tin Kwan [1996] 2 HKLR 395 , Lam Chit Man (trading as Yat Cheong Electric Co) v Lam Chi To (CACV 354/2001, 18 December 2001), Lee Yau Wing v Lee Shui Kwan ( 李祐榮訴李瑞群 ) [2007] 2 HKLRD 749 (decided in December 2005). Accordingly, by February 2006, draft provisions had been designed to address the common law requirements of finality, which eventually found their way, with modifications, into the 2006 Arrangement. [30]

64. Art. 2 of the 2006 Arrangement provides: [31]

“ ‘An enforceable final judgment’ under this Arrangement means:

(1) in the case of the Mainland:

(i) any judgment made by the Supreme People’s Court;

(ii) any judgment of the first instance made by a Higher or Intermediate People’s Court or a Basic People’s Court which has been authorized to exercise jurisdiction of the first instance in civil and commercial cases involving foreign, Hong Kong, Macao and Taiwan parties (a list of such courts is at Annex), from which no appeal is allowed according to the law or in respect of which the time limit for appeal has expired and no appeal has been filed; any judgment of the second instance; and any legally effective judgment made in accordance with the procedure for trial supervision by bringing up the case for a retrial by a people’s court at the next higher level.

(2) in the case of the HKSAR, any legally effective judgment made by the Court of Final Appeal, the Court of Appeal and the Court of First Instance of the High Court and the District Court.”

The judgments referred to in Art. 2(1) correspond to those specified in section 6(1)(a)-(d) of the MJREO. The word “means” (指) strongly suggests that Art. 2 is intended definitively to identify what judgments may be treated as “final” for the purposes of enforcement by the special arrangement agreed upon.

65. In the Report of the Bills Committee on the Mainland Judgments (Reciprocal Enforcement) Bill dated 10 April 2008, it was noted that there were previous instances where the Hong Kong court had ruled that certain Mainland judgments could not be considered final and conclusive because of the trial supervision system in the Mainland. It was stated that for the purpose of the 2006 Arrangement, special procedures would be adopted “in order to address the common law requirements of finality.” [32]

66. Section 6(1) was specifically therefore enacted to address the common law requirement that the judgment is final and conclusive, and to avoid the disputes that might arise in that context given the special trial supervision system in Mainland law. In the light of this it would to our minds be surprising if section 6(1) was not exhaustive and one needed to fall back on the common law and expert evidence on Mainland law in order to determine whether a particular judgment is final and conclusive.

67. Further, Mr Chan’s argument before us does not seem to us to sit comfortably with the decision of Deputy High Court Judge K C Chan in Re Shenzhen Qianhai Orient Ruichen Fund Management Co Ltd (深圳前海东方瑞宸基金管理有限公司) [2025] HKCFI 707 . There the creditor obtained judgment at first instance from the Shenzhen Qianhai Cooperation Zone People’s Court for RMB 4.8 million against the debtor. The debtor appealed but the Intermediate People’s Court of Shenzhen dismissed his appeal. The debtor applied unsuccessfully to the Guangdong Higher People’s Court for a retrial. He further applied to the Shenzhen People’s Procuratorate for a review of the first instance judgment but this was rejected. In support of his application to set aside the registration of the first and second instance judgments in Hong Kong, the debtor argued that those two judgments were not final and conclusive because he could still apply to the People’s Procuratorate of Guangdong Province for a review of the decision of the Shenzhen People’s Procuratorate. Both parties filed opinions from Mainland law experts, but Deputy Judge Chan said they were not relevant:

“ … in my view, my determination of [the debtor’s] summons is not assisted by these opinions as the Ordinance itself has clearly set out what Mainland judgments are regarded as ‘final and conclusive’ for the purpose of s.5(2)(c), as explained below.”

68. Deputy Judge Chan then set out a number of decisions at common law concerning whether the Mainland judgments in question were final and conclusive which were relied upon by counsel for the debtor. He also set out the creditor’s counter-arguments that those authorities were not applicable as they concerned whether the judgments in question met the requirement of finality and conclusiveness at common law and that the MJREO was enacted to overcome such controversy at common law so as to facilitate the enforcement in Hong Kong of relevant Mainland judgments. The two Legislative Council papers referred to in §§63 & 65 above were also relied upon by the creditor. In the end Deputy Judge Chan accepted the creditor’s argument, saying:

“ 28. It is evident that the purpose of the Ordinance is to provide a new and convenient mechanism to facilitate, among others, the enforcement of Mainland judgments in Hong Kong. I accept Mr Chan’s submission as correct that when enacting the Ordinance the Legislature had in view the said controversy at common law over whether a Mainland judgment can be regarded as final and conclusive with the supervisory function of the People’s Procuratorate which might order a retrial by the original court and was enacting s.6 as a measure to overcome the controversy.

29. Thus, I accept Mr Chan’s submission and take the view that on proper construction of s.6, the Second Instance Judgment is ‘a judgment of the second instance given by a designated court other than a recognized Primary People’s Court’ within the meaning of s.6(1)(c) and is, by virtue of s.6, final and conclusive for the purpose of s.5(2)(c).

30. Since I have reached the above conclusion, I do not find relevant the opinions offered by the respective experts on whether the 2 Mainland Judgments are considered as ‘final and conclusive’ under Mainland laws; nor do I find it necessary to resort to the case laws regarding whether such a Mainland judgment is ‘final and conclusive’ for purpose of enforcement of the same by a common law action.”

69. It is true that the debtor’s argument in Re Shenzhen Qianhai Orient Ruichen Fund Management Co Ltd was that the judgment there was not final and conclusive notwithstanding it fell within section 6(1), whereas the plaintiff here contends that a judgment falling outside section 6(1) is nonetheless final and conclusive. But the court’s reasoning there was that section 6(1) was enacted to overcome the controversy at common law and in our opinion supports the view that section 6(1) is exhaustive. It was therefore surprising that Mr Chan, who was counsel for the judgment creditor in that case, did not draw it to our attention.

70. Further, we reject the submission that there is inconsistency in the judge’s decision that the IPC Judgment was “valid, effective and enforceable” but not “final and conclusive”. They are different concepts dealt with by different provisions in the MJREO. Enforceability is a requirement under section 5(2)(d). Section 6(2) provides that for the purposes of section 5(2)(d), a Mainland judgment is deemed, until the contrary is proved, to be enforceable in the Mainland if a certificate is issued by the original court certifying that the judgment is final and enforceable in the Mainland. A judgment thus certified and deemed enforceable, as was the IPC Judgment in the present case, may nevertheless be found not to be final and conclusive within the meaning of sections 5(2)(c) and 6(1).

71. Section 19 does not in our view assist the plaintiff. It empowers the court to set aside the registration or adjourn the application to set aside if an appeal is pending or a retrial has been ordered. It does not follow from the fact that no appeal is pending and no retrial has been ordered that the judgment is final and conclusive. Incidentally it may be noted that section 19 does not apply if there is merely a pending application to a relevant Procuratorate for a retrial, thus avoiding the controversy seen in the cases at common law.

72. For the above reasons, we take the view that if a judgment does not fall within section 6(1), then it does not satisfy the final and conclusive requirement under section 5(2)(c). There is no residual category of Mainland judgments that lie outside section 6(1) but are nevertheless to be regarded as final and conclusive for the purposes of section 5(2)(c).

73. Mr Chan’s secondary, fall-back submission is that if section 6(1) is exhaustive, then the IPC Judgment falls within section 6(1)(b)(i). This argument can in our view be immediately rejected, for we entirely agree with the judge’s interpretation of section 6(1)(b)(i). Plainly that provision means no appeal is permissible rather than no appeal has been allowed by the appellate court. Quite apart from the judge’s reasons, it seems to us that the phrase “according to the law of the Mainland” only makes sense if the provision has the former meaning rather than the latter. There is no conflict between the Chinese and English versions of section 6(1)(b)(i).

74. Mr Chan submits that the judge’s construction would lead to an anomaly: whenever a first instance Mainland judgment in favour of the plaintiff is unsuccessfully appealed by the defendant, the first instance judgment cannot be registered in Hong Kong because it does not fall within section 6(1) and is therefore not final and conclusive, but equally the appellate judgment cannot be registered because it merely dismisses the appeal and does not order the payment of a sum of money.

75. We agree that it would be absurd if an unsuccessful appeal by the defendant would mean that neither the first instance nor the second instance judgement could be registered in Hong Kong. But in our opinion the answer is not that the first instance judgment is to be regarded as final and conclusive notwithstanding that it clearly falls outside section 6(1). Rather, as Mr Hui submits, the registrable judgment in this situation is the judgment at second instance.

76. It seems to us that section 6(1) envisages that where there is an appeal from the first instance judgment, it is the appellate judgment, i.e. the judgment of the second instance, that is final and conclusive and to be registered. Thus section 6(1)(c) specifically provides that “a judgment of the second instance given by a designated court …” is final and conclusive. This is consistent with the two-tier system of final adjudication (兩審終審制) in the Mainland. Art. 10 of the PRC Civil Procedure Law (2017 Rev.) provided: “In handling civil cases, the People’s Courts shall implement the systems of collegial deliberation, recusation, public trial, and two-instance final adjudication in accordance with the law.” [33] Art. 175 provided: “The judgments and rulings of the People’s Court of second instance are final.” [34] A litigant has the right to appeal from a first instance judgment, but the second instance judgment on appeal is generally regarded as final and enforceable. The plaintiff’s expert, Mr Ng, agreed that in this case the HPC Judgment was “the final judgment with legal effect” (是發生法律效力的終審判決). He added however that because the IPC Judgment was affirmed by the HPC, its “contents” were the contents of the final judgment and such “contents” should be the subject of enforcement. In our view, this is not in essence different from the opinion of the defendant’s expert, Mr Lei, who explained that the second instance judgment would generally repeat the contents of the first instance judgment and may even annex it, but where the first instance judgment is affirmed, it is nevertheless the second instance judgment that is the legally effective final judgment.

77. In our view, under the scheme of section 6(1), the second instance judgment is the final and conclusive judgment to be registered. Where it simply dismisses the appeal and affirms the first instance judgment containing an order for the payment of a sum of money, it may be treated for the purposes of the MJREO as a judgment re-making that order, so that the second instance judgment also satisfies the sum of money requirement. Thus in Re Shenzhen Qianhai Orient Ruichen Fund Management Co Ltd , the court held that the second instance judgment, which dismissed the appeal from the first instance judgment, was the judgment that was final and conclusive for the purposes of section 5(2)(c). [35] We do not think that the first instance judgment is registrable as such, although in practice it may be useful to annex it to the second instance judgment in the registration of the latter. In the present case the plaintiff was mistaken in withdrawing its application for registration of the HPC Judgment and confining its application to the IPC Judgment (see §21 above).

78. In his argument Mr Chan also relies on the certificate issued by the IPC that the IPC Judgment had taken legal effect on 31 August 2020 and the fact that the Enforcement Decision related to the enforcement of the IPC Judgment. In our opinion these matters do not assist the plaintiff. Section 5(2)(c) and 6(1) both contain the words “as between the parties to the judgment”. Whether a judgment is final and conclusive has to be seen in the context of the specific parties in question. In the present case, only the defendant appealed to the HPC. For the purposes of any enforcement steps against Feng, Lu and HZFC under the MJREO, the IPC Judgment, albeit a judgment of the first instance, would be final and conclusive by virtue of section 6(1)(b)(ii). It does not follow that the IPC Judgment is final and conclusive as between the plaintiff and the defendant .

79. For all these reasons we agree with the judge that the IPC Judgment does not satisfy the final and conclusive requirement.

G. Conclusion and orders

80. For the above reasons, we have come to the conclusion the IPC Judgment is neither “final and conclusive” as between the plaintiff and the defendant nor a judgment that “orders the payment of a sum of money” as against the defendant within the meaning of section 5(2)(c) and (e) of the MJREO. Accordingly, the judge was correct to set aside its registration. The plaintiff’s appeal should be dismissed. As counsel agreed that costs should follow the event, the plaintiff should pay the defendant’s costs of the appeal.

(Carlye Chu)	(Peter Cheung)	(Godfrey Lam)
Vice-President	Justice of Appeal	Justice of Appeal

Mr Frederick H. F. Chan, instructed by Messrs. Kevin L. H. Kwong & Co., for the Plaintiff (Appellant)

Mr John Hui & Mr Joshua Yeung, instructed by Messrs. CLKW Lawyers LLP for the Defendant (Respondent)