Contributed By Gall
There are various options presently available in Hong Kong to identify the asset position of another party by conducting the following public searches either in person or online at the relevant departments of Hong Kong:
Apart from the above publicly available information, freezing orders and ancillary asset disclosure orders are also available by making applications with basis to Hong Kong courts.
A party can also instruct private investigators or external companies to compile search reports which would comprise information which is not publicly available through their own database. For example, a party can instruct them to conduct (i) a landed property transaction search to determine if a party has been involved in any landed property transactions in Hong Kong, so that the relevant land search can be conducted against the property identified to ascertain if the party owns such property, and (ii) a marriage search to identify the name of a party’s spouse if there is any suspicion that the spouse is holding any assets for such party.
The following types of domestic judgments are available in Hong Kong.
A default judgment is a judgment without a trial. It is available where a defendant has failed to file an acknowledgment of service or a defence. It applies where the claim is for liquidated damages, unliquidated damages, detention of goods or possession of land, but not where the claim is not squarely within the four types above.
A summary judgment is a judgment without a trial. It is available where a defendant has no defence to a claim. It applies to every action begun by writ other than (i) an action which includes a claim by the plaintiff for libel, slander, malicious prosecution, false imprisonment or seduction, (ii) an action which includes a claim by the plaintiff based on an allegation of fraud, (iii) an Admiralty action in rem.
A final judgment can be obtained for all types of actions, including but not limited to a claim for a specified amount of money, injunctive relief, specific performance or declaratory relief.
The following options and procedures are generally available and involved for enforcing a domestic judgment in Hong Kong.
This is a court order which imposes a charge on any property or securities owned by the judgment debtor to secure the payment the judgment debt. An application for a charging order involves two stages: (i) Charging Order Nisi on ex parte basis (ie, without notice to the other party); and (ii) Charging Order Absolute on inter partes basis (ie, the other party is notified of the hearing).
First, the judgment creditor may apply ex parte with a supporting affidavit to a Master in Chambers for an order to show cause. The Charging Order Nisi granted shall then be registered immediately with the Land Registry if the charging order is over a landed property, in order to put any third party on notice of the same. A sealed copy of the Charging Order Nisi which specifies the hearing time and date of the return date hearing for further consideration shall then be served on the judgment debtor.
At the inter partes hearing stage, a Master in Chambers will determine if the Charging Order Nisi should be made absolute. The Charging Order Absolute granted should be immediately registered against the landed property with the Land Registry.
The judgment debtor will be cross-examined on oath by the Registrar or such officer as the court may appoint to obtain information on his assets. The judgment creditor may apply ex parte with a supporting affidavit to a Master in Chambers. A sealed copy of the Order (which is endorsed with a penal notice stating that if the judgment debtor fails to attend the examination without good cause, the judgment debtor may be arrested and brought before the court for examination) shall be personally served on the judgment debtor ordered to attend the examination. The oral examination will usually be heard by a Master in open court.
Writ of Execution and FIFA
A bailiff will seize and sell the judgment debtor’s property to repay the judgment debt. The judgment creditor shall first issue a writ of execution; examples of such writ include a writ of fieri facias – FIFA (to obtain the judgment debt), a writ of possession (to obtain repossession of the land), a writ of delivery (for the delivery of goods), and a writ of sequestration (to enforce judgments that require a person to perform an act within a specified time or abstain from performing any act). For certain writs of execution, the judgment creditor must apply for leave before issuing the same. After the writ of execution is issued, the judgment creditor is required to make appointment with the Bailiff Office of the Bailiff Section to arrange execution. In case of a FIFA, the bailiff may seize the goods and chattels on the judgment debtor’s premises to repay the judgment debt.
This requires a third party (usually a bank) which owes money to the judgment debtor to pay the money owed directly to the judgment creditor. An application for a garnishee order involves two stages – (i) Garnishee Order Nisi on ex parte basis, and (ii) Garnishee Order Absolute on inter partes basis.
First, the judgment creditor may apply ex parte with a supporting affidavit to a Master in Chambers. A sealed copy of the Garnishee Order Nisi which specifies the hearing time and date shall then be served on the judgment debtor.
At the inter partes hearing, a Master in Chambers will determine if the Garnishee Order Nisi should be made absolute. The bank will be ordered to pay the money held in the judgment debtor’s account(s) directly to the judgment creditor.
Winding up/Bankruptcy Proceedings
This will wind-up the judgment debtor company or bankrupt an individual judgment debtor so that the trustee-in-bankruptcy or liquidator (as the case may be) is empowered to look into the assets and affairs of the judgment debtor.
To commence winding-up/bankruptcy proceedings, the most common ground is to demonstrate that the judgment debtor is insolvent by issuing a statutory demand demanding payment within 21 days, failing which, the judgment creditor may proceed to present a petition. The court will hear the petition and if satisfied, grant a winding-up/bankruptcy order. The trustee-in-bankruptcy or liquidator shall be appointed to administer and look into the affairs and assets of the bankrupt, and to distribute the assets to repay the debts according to the priority of the unsecured creditors based on the proof of debt.
Where a judgment creditor is entitled to funds in court, a Stop Order will prohibit the transfer, sale, delivery out, payment or other dealing with such funds, or any part thereof, or the income thereon.
Where a judgment creditor has an interest in the judgment debtor’s securities, a Stop Order will prohibit the registration of a transfer of such securities, the payment of any dividend or interest in respect thereof, and in the case of a unit trust, any acquisition of, or other dealing with the units by any person or body exercising functions under the trust.
An application for a Stop Order must be made by summons in the cause or matter relating to the funds in court (ie, in pending proceedings), or, if there is no such cause or matter, by originating summons. The summons must be served on every person whose interest may be affected by the Order.
Where a judgment creditor has an interest in the judgment debtor’s securities, a Stop Notice will enable the judgment creditor to be notified of any proposed transfer or payment of such securities. As long as the Stop Notice has been served and is in force, the entities on which it is served shall not register a transfer of the securities or take any other steps restrained by the Stop Notice until 14 days after sending notice thereof to the judgment creditor.
An application for a Stop Notice can be made by filing a notice in the prescribed form with a supporting affidavit. The applicant must then serve an office copy of the affidavit, and a copy of the notice sealed by the court:
The costs involved and length of time it takes to enforce a domestic judgment depend on the enforcement action(s) to be taken and whether enforcement is contested. Generally, it would take at least three months at a cost of at least HKD100,000 for an uncontested enforcement action.
The defendant/judgment debtor can be cross-examined under oath to obtain information on what assets he/she holds and where they are located. In addition, where the judgement debtor is wound-up or bankrupt, the liquidator or the trustee in bankruptcy will investigate the assets and affairs of the judgment debtor.
A defendant may challenge summary or final enforcement by appealing the judgment and seeking a stay of enforcement. A defendant may challenge enforcement by seeking to set aside the default judgment on the following grounds:
Generally, all types of domestic judgments can be enforced.
There is no central register of all judgments in Hong Kong. Certain (reported and unreported) judgments are publicly available online on the website of the Hong Kong Judiciary and/or by subscribing to other paid online platforms such as LexisNexis; the Court Libraries, and the Law Libraries at certain universities in Hong Kong would also have hard copies of the judgments.
The judgment generally contains the action number, the names of the parties, the date of the hearing, the date of the judgment, the background of the case, the issues in dispute, the submissions made by the parties and the decision made.
Even after a judgment debtor has paid what is owed, he/she is unable to remove the judgment, and the judgment would remain searchable.
Hong Kong is not a party to any international treaties/conventions relevant to the enforcement of foreign judgments (such as the Hague Convention on Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters).
In order for a foreign judgment to be enforced in Hong Kong, it must be registrable under the Foreign Judgments (Reciprocal Enforcement) Ordinance (Cap 319) (FJREO) or recognised under the common law.
In order for a judgment granted by a court in the mainland (ie, any part of China other than Hong Kong, Macau and Taiwan) to be enforced in Hong Kong, it must be registrable under the Mainland Judgments (Reciprocal Enforcement) Ordinance (Cap 597) (MJREO).
For a foreign judgment to be registrable under the FJREO:
For a foreign judgment to be registrable under the MJREO:
If a foreign judgment is not from the above-mentioned countries and is therefore not registrable under either the FJREO or the MJREO, the only recourse is for it to be recognised under the common law, provided that:
Only those types of judgments which can be registered under FJREO or MJREO or recognised under the common law are enforceable in Hong Kong. Other types of judgments cannot be enforced. Please refer to 3.3 Categories of Foreign Judgments Not Enforced, below, for the categories of foreign judgments which cannot be enforced in Hong Kong.
Under the FJREO and the common law, only final money judgments can be enforced.
Under the MJREO, only final money judgments in relation to a commercial contract can be enforced.
Other categories of foreign judgments will not be enforced. For example, a foreign Mareva injunction order is not enforceable because it is interlocutory rather than final and so is a foreign order for specific performance because it is not a money judgment. In addition, judgments for a sum payable in respect of taxes or other charges of a like nature or in respect of a fine or other penalty will not be enforced.
For a foreign judgment to be registrable under the FJREO, an application may be made ex parte upon supporting affidavit and draft order to a Master in the Hong Kong Court of First Instance (CFI). However, the court may direct a summons to be issued, in which case the summons shall be an originating summons. If the judgment is registered, the notice of registration should be served on the judgment debtor. Similarly, for a foreign judgment to be registrable under the MJREO, an application may be made ex parte upon supporting affidavit and draft order to a Master in the CFI. However, the court may direct a summons to be issued, in which case the summons shall be an originating summons. If the judgment is registered, the notice of registration should be served on the judgment debtor.
For a foreign judgment to be recognised under the common law, fresh proceedings by way of Writ of Summons must be issued in the CFI based on the judgment. A Statement of Claim is usually indorsed with the Writ of Summons. If the defendant fails to file the Acknowledgement of Service, the plaintiff may proceed to obtain default judgment.
If, however, the defendant (judgment debtor) has filed an Acknowledgment of Service, the plaintiff (judgment creditor) may apply for summary judgment by issuing an inter partes summons with a supporting affidavit. The defendant may file an affidavit in response and the plaintiff may file an affidavit in reply. The court will then decide whether the defendant has no defence to the claim for enforcement.
Once a foreign judgment is registered or recognised in Hong Kong, it can be enforced in the same manner as a Hong Kong judgment; for the options, please refer to 2.2 Enforcement of Domestic Judgments, above.
Generally, an application under the FJREO or MJREO takes around two to four months, whereas an application under the common law takes around six to 12 months, on the basis that it is uncontested.
Garnishee proceedings are more efficient than the other enforcement methods in the circumstances that there is sufficient money in the debtor’s bank account.
The options available to challenge enforcement of a foreign judgment differ depending on the applicable legislation or law under which it is registered or recognised.
Under the FJREO, the registration of a foreign judgment can be set aside on the following grounds:
Under the MJREO, the registration of a foreign judgment can be set aside on the following grounds:
The following principles set out in KB v S  HKEC 2042 apply generally in relation to enforcing an arbitral award in Hong Kong:
Hong Kong categorises arbitral awards into convention awards, non-convention awards, mainland awards and Macau awards but the overall approach to enforcement does not vary for different types of arbitral awards. Once leave from the court has been granted to enforce an arbitral award, it can be enforced in the same manner as a Hong Kong judgment, subject to possible challenge to the enforcement as explained in 4.6 Challenging Enforcement of Arbitral Awards, below.
There are no specific categories of arbitral awards which will not be enforced in Hong Kong, subject to possible challenge to the enforcement as explained in 4.6Challenging Enforcement of Arbitral Awards,below.
The first step to enforce an arbitral award would be to obtain leave from the court by way of originating summons. The application may be made on an ex parte basis with an affidavit in support. For ex parte application, the applicant must make full and frank disclosure of all relevant information. Where the court considers it appropriate for the other side to be heard, it may direct that the application be made inter partes. If the application is contested, the court will list the matter to be heard with a date to be fixed.
Once leave from the court has been granted (and in the absence of any application to set aside the order granting leave), a judgment can be entered in terms of the arbitral award, which can then be enforced in the same manner as a Hong Kong judgment and please refer to 2.2 Enforcement of Domestic Judgments, above.
The costs involved and length of time it takes to enforce an arbitral award depend on the enforcement action(s) to be taken and whether enforcement is contested. Generally, it would take at least two to three months for an uncontested enforcement action in order to enforce the arbitral award. In general, garnishee proceedings are more efficient than the other enforcement methods in the circumstances that there is money in the debtor’s bank account.
Generally speaking, an arbitral award is final under the AO (which applies only where the seating of arbitration is in Hong Kong). There is no automatic right to appeal against an arbitral award, but in the arbitration agreement, the parties may expressly opt for certain provisions in Schedule 2 to the AO, which provide for the right of the parties to challenge the arbitral award on the ground of serious irregularity or question of law. However, such grounds are unusual and the party seeking to appeal has to meet a very high threshold.
When seeking to set aside an order granting leave for enforcement, such application may be granted in different circumstances, depending on the type of the award. Although different sections in the AO applies to different types of awards, the grounds for refusal of enforcement provided under such sections are either the same or substantially similar (save that for non-convention awards, the court may refuse enforcement of the same if for any other reason the court considers it just to do so). One may make attempt to set aside an order allowing for enforcement of an arbitral award within 14 days after service of such order, but only if he/she can show that: