YTL LLP Secures Court of Final Appeal Victory Upholding Winding-Up Order Against China Properties Group

YTL LLP successfully represented JIC Trust Co., Ltd (JIC Trust) in the Court of Final Appeal (CFA) in having an appeal against a winding-up order by China Properties Group Limited (CPG). The hearing before the CFA was held on 11 September 2026 and, in its Reasons for Judgment published on 14 October 2026, the CFA clarified important principles concerning the finality of Mainland judgments and the effect of an assignment of debt on a petitioner’s standing to present a winding up petition.

Background

In 2017, JIC Trust lent RMB1.2 billion to a subsidiary of CPG (at the time, a listed company in Hong Kong), with CPG acting as guarantor. Following default, JIC Trust commenced proceedings in the Mainland against the borrower and CPG. Subsequently, on 3 April 2020, the parties resolved those proceedings by entering into a Consent Judgment before the Mainland Court and under which CPG acknowledged it was jointly and severally liable for the debt.

JIC Trust attempted to recover the debt based on the Consent Judgement, but was left unsatisfied. It then petitioned to wind up CPG in Hong Kong for the balance of the Consent Judgment debt. On 31 May 2023, the High Court made a winding-up order against CPG. CPG strongly resisted the petition and the appointment of liquidators, which has been the subject of separate decisions of the Court of First Instance.  CPG also appealed against the winding-up order, arguing that JIC Trust had purportedly assigned the debt to a third party before presenting the petition and therefore lacked standing as a creditor. CPG sought to adduce fresh evidence in the appeal in support of that argument, but the Court of Appeal refused the application because the evidence could and should have been presented at the first-instance hearing. As CPG’s appeal depended on that evidence, the Court of Appeal dismissed the appeal. CPG’s application for leave to appeal to the Court of Final Appeal was dismissed by the Court of Appeal.

CPG subsequently applied directly to the CFA for leave to appeal. The CFA granted leave to appeal on one specific question only, namely, whether the Court has jurisdiction to grant a winding-up order if, prior to presenting a winding-up petition, the petitioner has assigned the debt to a third party without notice to the debtor company.

The CFA’s decision and key takeaways

The CFA dismissed the appeal for three principal reasons:

1. The Consent Judgment in the Mainland Court conclusively established JIC Trust’s standing

The CFA held that the petition was based on the debt established by the Consent Judgment, rather than the original loan. As a recognised, final and conclusive Judgment, it conclusively established that CPG owed the debt to JIC Trust and that JIC Trust was a creditor entitled to present the winding-up petition. CPG could not go behind the Consent Judgment and re-open that issue after having agreed to the judgment and unsuccessfully sought to set it aside.

2. There was no admissible evidence requiring the Court to investigate its jurisdiction

The CFA held that CPG had no evidential foundation for its allegation that the debt had been assigned. The evidence it sought to rely on could have been presented at the first-instance hearing and had properly been excluded by the Court of Appeal. Accordingly, there was nothing before the Court, requiring an investigation of its jurisdiction on the basis advanced by CPG. The CFA also rejected CPG’s submission that the Court, when considering a winding up petition, has an independent duty to investigate standing even if it is not raised by any party.

3. An equitable assignor retains standing to present a winding-up petition

The CFA further held that an assignment of debt without notice to the debtor takes effect as an equitable assignment. Unlike an action to recover an assigned debt, a winding-up petition initiates a collective process for the benefit of all creditors. An equitable assignor therefore retains sufficient standing to petition without joining the assignee.

The CFA also clarified that a petitioner’s lack of standing is distinct from a court’s lack of jurisdiction. Any error concerning standing is ordinarily a matter for appeal and does not deprive the court of jurisdiction.

Significance of the decision

The decision reinforces the finality of recognised Mainland judgments in Hong Kong insolvency proceedings and clarifies the principles governing equitable assignments and standing to present winding-up petitions.

The case was handled by Davyd Wong (Partner) and Andy Kwan (Associate), with Mr Laurence Li SC, Mr Keith Chan and Mr Jonathan Fung appearing for JIC Trust.

The full Reasons for Judgment can be found here (FACV No. 8 of 2026, [2026] HKCFA 34).