{"id":12520,"date":"2026-11-01T22:34:10","date_gmt":"2026-11-01T14:34:10","guid":{"rendered":"https:\/\/hkytl.com\/?p=12520"},"modified":"2026-11-01T22:37:38","modified_gmt":"2026-11-01T14:37:38","slug":"cfa-indemnity-costs-non-party-funders-winding-up-appeal","status":"publish","type":"post","link":"https:\/\/hkytl.com\/cn\/2026\/11\/01\/cfa-indemnity-costs-non-party-funders-winding-up-appeal\/","title":{"rendered":"\u6881\u5ef6\u8fbe\u5f8b\u5e08\u4e8b\u52a1\u6240\u6210\u529f\u5411\u7ec8\u5ba1\u6cd5\u9662\u53d6\u5f97\u547d\u4ee4\uff0c\u8981\u6c42\u6e05\u76d8\u4e0a\u8bc9\u7684\u8d44\u52a9\u8005\u53ca\u7b56\u52a8\u8005\u4ee5\u5f25\u507f\u57fa\u51c6\u652f\u4ed8\u8bbc\u8d39"},"content":{"rendered":"\t\t
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This article follows our earlier article on the dismissal of the final appeal in China Properties Group Limited v JIC Trust Co., Ltd<\/em> (FACV No. 8 of 2026, [2026] HKCFA 34) and addresses the separate costs decision handed down in the same case.<\/p>

Background<\/strong><\/p>

YTL LLP acted for JIC Trust Co., Ltd (JIC Trust) in successfully resisting CPG\u2019s appeal against the winding-up order. The CFA unanimously dismissed the appeal. In its Reasons for Judgment dated 14 October 2026, the CFA then considered the appropriate costs order, in particular whether the costs should be borne by the persons who were behind, funded or instigated the appeal, rather than out of CPG\u2019s liquidation estate (which would have meant at the expense of its creditors).<\/p>

The CFA\u2019s decision and key takeaways<\/strong><\/p>

  1. Costs may be ordered against non-party funders and instigators<\/strong><\/li><\/ol>

    The CFA confirmed that it has power under section 17 of the Hong Kong Court of Final Appeal Ordinance (Cap. 484), read with section 52A of the High Court Ordinance (Cap. 4), to order non-party funders and instigators to pay the costs of an unsuccessful final appeal against a winding-up order brought in the sole name of an insolvent company.<\/p>

    The Court emphasised that those who promoted or engineered the final appeal may be held liable, even if they did not directly fund it. Otherwise, the costs of the proceedings in the CFA would unfairly deplete the insolvent company\u2019s assets to the prejudice of its creditors.<\/p>

    The CFA directed that the identified funders and instigators be joined as parties for the purposes of costs and be jointly and severally liable for JIC Trust\u2019s costs on an indemnity basis, subject to their opportunity to make submissions against such liability.<\/p>

    1. Security for costs at the final appellate level<\/strong><\/li><\/ol>

      The CFA considered whether non-party funders and instigators could be required to provide security for costs as a condition for the grant of leave to appeal. While it held that section 25 of the Hong Kong Court of Final Appeal Ordinance does not itself provide a basis for ordering non-parties to provide such security, it considered it reasonably arguable that a parallel power exists.<\/p>

      The Court also observed that the statutory ceiling of HK$400,000 was set in 1997 and may no longer reflect present-day legal costs. It observed that it would be timely for the legislation to \u00a0be amended to increase the ceiling, and that it would be appropriate to clarify the Court\u2019s power to require security from non-parties.<\/p>

      1. Additional security may be agreed by consent<\/strong><\/li><\/ol>

        The CFA further clarified that the statutory limit under section 25 of the Hong Kong Court of Final Appeal Ordinance does not prevent a consent order for additional security exceeding HK$400,000, where the additional security is agreed by the parties and is not imposed as a compulsory condition for leave to appeal.<\/p>

        Significance of the decision<\/strong><\/p>

        The ruling reinforces the principle that those who instigate or fund unsuccessful appeals against winding-up orders may be held responsible for the resulting costs, thereby protecting the assets available to an insolvent company\u2019s creditors and preventing the costs of unsuccessful appeals from being thrown on the assets of an insolvent company.<\/p>

        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.<\/p>

        The full Reasons for Judgment can be found here<\/a> (FACV No. 8 of 2026, [2026] HKCFA 34).<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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        \n\t\t\t\t\t\t\tDavyd Wong\t\t\t\t\t\t<\/h4>\n\t\t\t\t\t<\/a>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t
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        Partner
        \nD: +852 3468 7030
        \nM: +852 9432 4050
        \ndavydwong@hkytl.com<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t

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        \n\t\t\t\t\t\t\tAndy Kwan\t\t\t\t\t\t<\/h4>\n\t\t\t\t\t<\/a>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t
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        Associate
        \nD: +852 3468 7261
        \nM: +852 6740 9942
        \nandykwan@hkytl.com<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t

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        This article is introductory in nature. Its content is current at the date of publication.\u00a0 It does not constitute legal advice and should not be relied upon as such. You should always obtain legal advice based on your specific circumstances before taking any action relating to matters covered by this article. Some information may have been obtained from external sources, and we cannot guarantee the accuracy or currency of any such information.<\/em><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"

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