In Chen Hongqing v Liu Yiu Keung Stephen & Ors [2026] HKCFI 5023, K Yeung JA (sitting as an additional judge of the Court of First Instance) refused the Plaintiff leave to re-amend his Statement of Claim to plead, in the alternative, a case directly contrary to the one on which he had already obtained judgments and awards elsewhere. The decision adds to a developing line of Hong Kong authority on when inconsistent positions across proceedings amount to an abuse of process, and gives some content to the “reasonable grounds” requirement in Order 18 rule 12A.
The Plaintiff’s case has always been that the “Loan Agreements” between him and 11 nominees were in substance agency agreements, under which the nominees acquired shares in China Shanshui Investment Company Limited as his purchasing agents, so that he is the beneficial owner of the shares. He had obtained Mainland judgments from the People’s Court of Ruzhou City and CIETAC awards against the nominees on that footing, and his pleading relies on both.
The Plaintiff sought leave to add an “Alternative Claim” for repayment of principal and interest under the Loan Agreements, to be pursued only if the Court accepted the Loan Agreements were in fact just loans at trial. He relied on the expressly alternative nature of the plea, on Order 18 rule 12A, and on Poon Hau Kei v Hsin Chong Construction Co Ltd (2004) 7 HKCFAR 148 as authority that a party may obtain relief on the other side’s factual case.
The Court rejected the application as an abuse of process. Whether the agreements were loan or agency was a matter of fact as much as law, and the Plaintiff had pleaded the underlying facts himself; this was not a party pleading in the alternative from incomplete information. More fundamentally, allowing the amendment would permit the Plaintiff to seek and obtain reliefs on different and inconsistent factual and legal bases in different courts and tribunals.
Applying Chu Yue Bun v Lai Shiu Woon [2021] HKCA 1929, where the Court of Appeal held that advancing a claim diametrically opposed to a position taken in earlier proceedings may be abusive because of its effect on the integrity of the administration of justice, the Judge held that the present case was a fortiori: the inconsistent position had already been converted into judgments and awards, and it made no difference that those proceedings took place in another jurisdiction.
As to Order 18 rule 12A, the Judge applied Herostar Properties Ltd v Cheung Yu Ping [2018] 6 HKC 165: the rule protects honest claims reasonably advanced on incomplete information, and excludes claims that are opportunistic and speculative. Poon Hau Kei was distinguished as a case of genuine factual uncertainty in which the respondent had itself pleaded both alternatives. Arguments that inconsistency is abusive only where there is an election or an unfair advantage did not need to be resolved, since it was in any event “plainly inequitable” to allow the Plaintiff to fall back on a loan case he disavows, and he would further obtain unfair advantages if he were permitted to do so.
The remaining amendments were refused as unarguable, the Judge noting that one of them, if read as the Plaintiff belatedly suggested, would likewise have had to rest on the disavowed loan case.
Three points are of wider interest. First, Chu Yue Bun concerned inconsistent allegations that had not been carried through to judgment; this decision confirms that the principle applies with greater force where the earlier position has produced judgments or awards, and that the earlier proceedings need not have been in Hong Kong. That is of obvious relevance to parties litigating the same commercial arrangement in the Mainland and Hong Kong, or before an arbitral tribunal and the courts. Secondly, the Judge’s treatment of Order 18 rule 12A gives practical content to the “reasonable grounds” condition: the rule caters for a party who does not know which of two factual accounts is true, not for one who has pleaded his own account with personal knowledge and wishes to hedge against losing on it. A defendant’s denial does not, of itself, supply the plaintiff with grounds to adopt the denial as his own alternative case. Thirdly, the decision leaves open, without needing to decide, whether an election or a demonstrable unfair advantage is a necessary ingredient of this species of abuse; on the Court’s approach, following Chu Yue Bun, the vice lies in the effect on the integrity of the administration of justice.
Read the judgment here: https://legalref.judiciary.hk/lrs/common/ju/ju_frame.jsp?DIS=184534&currpage=T
Mr Anson Wong SC, leading Mr Lai Chun Ho and Ms Stephy Lo, instructed by Linklaters, acted for the Jinan Group.
Mr Jose Maurellet SC, leading Mr Alexander Tang and Mr Kevin Lau, instructed by Stephenson Harwood, acted for the SH Defendants.
