A “New Normal” in Enforcement: Hong Kong Competition Commission Cracks Down on Bid-rigging in the Building Maintenance Sector

(A) Introduction

Bid-rigging in the building maintenance sector has long been a primary target of Hong Kong Competition Commission (the “Commission”). 

Over the past two years, the Commission has intensified its crackdown through a series of enforcement actions, including two joint operations with the Independent Commission Against Corruption (the “ICAC”) in April 2024 [1] and August 2024 [2], followed by two independent operations in August 2025 (the “August 2025 operation”) [3] and September 2025 (the “September 2025 operation”) [4].

The Commission’s latest operation on 28 - 29 January 2026 (the “January 2026 operation”) [5] marks a significant evolution in its enforcement strategy. Unlike previous actions triggered by new intelligence, this operation emerged from a deep analysis of evidence collected in earlier cases, uncovering a sophisticated and previously hidden bid-rigging syndicate. In this operation, the Commission executed search warrants at 27 premises, targeting 14 companies, including project contractors and a consultancy firm, as well as the residences of the individuals involved. The companies were suspected of engaging in bid-rigging, in contravention of the First Conduct Rule of the Competition Ordinance (the “Ordinance”).

This article analyzes the Commission’s three most recent sole operations (August 2025, September 2025 and January 2026) and concludes with implications for Hong Kong’s evolving enforcement landscape.

(B) Similarities of the Operations

The three operations share the following similarities:

(1) Sector Focus 

All the operations targeted bid-rigging in Hong Kong’s building maintenance sector:

(a) The August 2025 operation involved tender manipulation for a private housing estate in Kowloon City.

(b) The September 2025 operation targeted a bid-rigging case involving 25 building maintenance projects across 23 residential estates/ buildings and 2 industrial buildings. 

(c) The January 2026 operation addressed bid-rigging in the tendering process of building maintenance projects at residential estates/ buildings as well as industrial and commercial buildings. 

(2) Key Actors and Syndicate Composition
 
Each operation involved organized collaboration between multiple parties.

(a) In August 2025, a building maintenance consultant was suspected of colluding with a contractor.

(b) The September 2025 operation uncovered two structured syndicates comprising several contractors coordinating bids.

(c) The January 2026 operation identified a deeply embedded syndicate, led by a mastermind contractor and actively supported by a consultancy firm which leaked confidential cost estimates. 
 
(3) Enforcement Tools
 
The Commission consistently deployed its statutory powers during these operations, including executing search warrants at offices and residences, demanding document production and information disclosure and summoning individuals to provide relevant information.

(C) Differences of the Operations

The three operations reveal a clear evolution in the Commission’s strategy and the scale of the violations uncovered. They differ across four key aspects:
 
(1) Trigger and Investigative Origin

The operations demonstrate a shift from reactive to proactive, intelligence-led enforcement.

(a) The August 2025 operation was triggered by a referral (external tip-off). 

(b) The September 2025 operation stemmed from the Commission’s own detailed study and information gathered from prior joint operations with the ICAC. 

(c) The January 2026 operation was initiated based on the Commission’s in-depth analysis of evidence collected during earlier investigations.

(2) Scope and Scale of the Violations

The geographical reach, number of projects and contract values expanded significantly across the operations.

(a) The August 2025 operation focused narrowly on a single private housing estate in the Kowloon City District, with a contract value of around HK$40 million.  

(b) The September 2025 operation broadened to 25 building maintenance projects of 23 residential estates/ buildings and 2 industrial buildings, spanning 10 districts across Hong Kong, Kowloon and the New Territories. The total value of the relevant contracts exceeded HK$600 million.

(c) The January 2026 operation involved 17 housing estates and buildings across 9 districts in Hong Kong. The total value of the relevant contracts was around HK$700 million.

(3) Scale of the Enforcement Actions

The Commission’s operational response grew in intensity.

(a) In the August 2025 operation, the Commission executed search warrants at 4 premises, including the offices of a building maintenance contractor and a building maintenance consultant, as well as the residences of the individuals involved. 

(b) The September 2025 operation was a two-day operation targeting 19 premises, including the offices of 9 project contractors and residences of the individuals involved. 

(c) The January 2026 operation was the largest raid to date, a two-day operation covering 27 premises and involving 14 companies, including contractors and a consultancy firm. 

(4) Nature of Violations and Syndicate Complexity

Each case revealed increasingly sophisticated and deeply embedded forms of collusion.

(a) The August 2025 operation focused on collusion between a consultant and a contractor, with the notable escalation of violent intimidation used to coerce potential bidders. 

(b) The September 2025 operation uncovered two established syndicates with cohesive organizational structures, comprising various project contractors and other relevant parties. They allegedly coordinated bidding prices and submitted cover bids (commonly referred to as “pig quotes”). Such conduct amounts to bid-rigging, price-fixing and the exchange of competitively sensitive information, contravening the First Conduct Rule of the Ordinance.

(c) The January 2026 operation revealed a deeply hidden syndicate led by a mastermind contractor, supported by a consultancy firm which leaked confidential project cost estimates. The scheme involved systematic cover bidding and turn-taking arrangements among contractors to rig multiple tenders. Such conduct amounts to bid-rigging, price-fixing and exchange of sensitive information, contravening the First Conduct Rule of the Ordinance. 

(D) Key Takeaways

Undoubtedly, bid-rigging is a year-long and serious issue in Hong Kong’s building maintenance sector. The Commission has significantly intensified its focus, not only through standalone enforcement, but also via deepened inter-agency collaboration, particularly with the ICAC. This partnership has been demonstrated by two joint operations in 2024, the signing of a Memorandum of Understanding in December 2024 [6] as well as the joint participation in the Building Management Summit in June 2025. 

The Commission has reiterated that bid-rigging in building maintenance is a top enforcement priority. The unprecedented scale of its latest operation targeting sophisticated and multi-district syndicates signals a major escalation in its proactive crackdown on such anti-competitive conduct.

At present, bid-rigging cases are subject to the civil standard of proof to establish a defence, namely the balance of probabilities. This means that while the Commission must prove the prohibition applies in principle beyond a reasonable doubt, the burden shifts to the business to demonstrate that its arrangement meets the criteria for an exclusion. As such, there is a growing concern on whether criminalizing bid-rigging with its higher standard of “beyond reasonable doubt” is necessary to act as a stronger deterrent. It certainly takes time (may be years) to establish such a legal framework. Further, whether criminalizing bid-rigging will be effective in combating it remains an open question.

In the meantime, as industry self-regulation is in fact the quickest and most effective solution to the problem, it is necessary for companies in the building maintenance sector to take proactive steps. They should urgently review and strengthen their internal compliance programmes. Key measures include establishing clear protocols for handling tender invitations, formulating bids and managing interactions with competitors, as well as strictly prohibiting any discussions with competitors regarding pricing, bidding strategies, market allocation, or tender outcome. 

---

[1] https://www.compcomm.hk/en/media/press/files/Joint_operation_PR_EN.pdf

[2] https://www.compcomm.hk/en/media/press/files/PR_Joint_operation_AUG_EN.pdf

[3] https://www.compcomm.hk/en/media/press/files/building_maintenance_search_PR_EN.pdf

[4] https://www.compcomm.hk/en/media/press/files/Janus_PR_EN.pdf

[5] https://www.compcomm.hk/en/media/press/files/Hunter_PR_EN.pdf

[6] https://www.compcomm.hk/en/media/press/files/CC_ICAC_MoU_PR_EN.pdf

A Triple Warning: Hong Kong Courts Reinforce Strict Procedural Compliance

(A) Introduction

Re Tsoi Man (HCB 5570/2025, date of judgment: 26 January 2026) (“Tsoi Man”), [1] Re Tritech Distribution Ltd (HCCW 458/2025, date of judgment: 23 January 2026) (“Tritech”) [2] and Carmon Reestrutura-Engenharia e Serviços Técnicos Especiais (SU) Limitada v. Carmon Restrutura Ltd and another (HCA 1812/2022, date of judgment: 26 January 2026) (“Carmon”) [3] underscore the Hong Kong courts’ strict approach to procedural compliance and case management in litigation and insolvency proceedings.

Tsoi Man highlights the Bankruptcy Court’s expectation that petitioners adhere strictly to the procedural requirements of the Bankruptcy Rules (Cap. 6A) (“BR”). The Court emphasized that pursuing bankruptcy in a “sloppy manner” and asking the Court to overlook defects and errors in the statutory demand and petition is unacceptable, particularly when the debtor has specifically raised such matters as grounds in opposition to the petition. [4]

Tritech reaffirms the established principle and rationale behind the standard practice of imposing conditions for late filing of evidence. The Court highlighted that compliance with statutory time limits is necessary to enable the court to effectively manage and potentially dispose of matters at the first hearing and that late filing causes prejudice by depriving parties and the court of sufficient preparation time.

Carmon indicates the Court’s rejection of last-minute tactical applications that disrupt trial preparation. The Court viewed an attempt to introduce 187 pages of new documents two days before trial as an ambush and an abuse of process. This stance is particularly stringent in the post-Civil Justice Reform (“CJR”) era where trial dates are “milestone dates” which cannot be moved except in special circumstances. Further, the Court found that the Defendants’ 15-minute time estimate for the hearing was a gross and unrealistic underestimation, deliberately calculated to circumvent the requirement under Practice Direction 5.4 for a written skeleton argument in any hearing expected to exceed 30 minutes. Therefore, such conduct was unreasonable and unacceptable. 

(B) Facts

Re Tsoi Man (HCB 5570/2025, date of judgment: 26 January 2026)

By Petition presented on 18 July 2025, the petitioner, Sun Kong Petroleum Company Limited (the “Petitioner”) sought a bankruptcy order against the debtor, Mr Tsoi Man (the “Debtor”), on the ground that he failed to comply with a statutory demand dated 29 April 2025 (the “SD”) requiring him to pay HK$3,806,719.20 (the “Debt”). [5]

In the SD, the Debt was claimed to have arisen from a supply agreement covering the period from 1 January to 31 December 2025 (the “Supply Agreement”) between the Petitioner and a company named Nanyang International Shipping Ltd (“Nanyang”). The Petitioner relied on a deed of guarantee dated 10 May 2024 (the “2024 Guarantee”), under which the Debtor purport guaranteed Nanyang’s obligations. [6]

In the Petition, the Petitioner referred to a Deed of Guarantee dated 10 May 2025 (the “2025 Guarantee”), under which the Debtor purported to guarantee Nanyang’s obligations under the supply agreement dated 6 January 2025 (“2025 Agreement”). [7]

The Debtor opposed the petition. His main defence was that (1) he did not sign the 2025 Guarantee; (2) the 2024 Guarantee did not cover the 2025 Agreement. [8]

In its reply affirmations, the Petitioner sought to raise new matters. None of which had been referred to in the SD or pleaded in the Petition. [9]

Re Tritech Distribution Ltd (HCCW 458/2025, date of judgment: 23 January 2026)

At the first Monday morning hearing of the Petition filed on 28 July 2025 (the “Petition”) on 13 October 2025, the Court granted condition leave for Tritech Distribution Limited (the “Company”) to file and serve the Affirmation of Ip Ka Wai Charlie dated 6 October 2025 out of time, conditional upon payment of US$22,500,000 being 50% of the underlying debt of the Petition (the “Order”). [10] 

Subsequently, the Company applied for leave to appeal against the Order on the following grounds: [11]

(1) The payment condition imposed by the Court would effectively bring the dispute to Hong Kong Court while it should have been litigated in the foreign court in favour of which the parties have agreed to an exclusive jurisdiction clause.

(2) The Foreign Proceedings Condition should be imposed instead.

Carmon Reestrutura-Engenharia e Serviços Técnicos Especiais (SU) Limitada v. Carmon Restrutura Ltd and another (HCA 1812/2022, date of judgment: 26 January 2026)

On 21 January 2026 (at 3:46 pm according to the Registry’s record), only two clear days before the trial (26 January 2026), the Defendants (“Ds”) filed a summons (“Ds Summons”) to make discovery of a total of 187 pages of new documents. Ds’ Summons was supported by the 10^th Affidavit of the 2^nd Defendant (“10^th Cuenda”). [12]

Ds’ Summons was fixed to be heard at 10:00 am on 26 January 2026, before the commencement of the trial itself. Ds’ solicitors provided a time estimate of 15 minutes for the hearing and did not file any skeleton submissions. [13]

(C) Decision

Re Tsoi Man (HCB 5570/2025, date of judgment: 26 January 2026)

The Bankruptcy Court dismissed the Petition on the following grounds:

(1) The Petitioner failed to comply with the procedural requirement under Rule 56 of the BR as no verifying affidavit was filed. The statement the Petitioner’s reply affirmation did not satisfy the prescribed wording in Form 11 of the Bankruptcy (Forms) Rules (Cap. 6B). Further, the verifying statement, which claimed that the contents of the Petition “are all true and accurate” was factually incorrect as it was undisputed that the Debtor never executed the 2025 Guarantee. [14]

(2) There were glaring inconsistencies between the SD and the Petition regarding the Petitioner’s case but the Petitioner made no attempt to amend the SD or the Petition. In particular: [15]

(a) In the SD, the Petitioner referred to a supply agreement without mentioning its date whereas in the Petition, the Petitioner referred to 2025 Agreement; and

(b) In the SD, the date of the Guarantee was 10 May 2024 while in the Petition, the Petitioner relied on 2025 Guarantee.

(3) It was arguable that the 2024 Guarantee did not cover the debt claimed by the Petitioner.

The Court highlighted that a bankruptcy petition is a serious matter affecting an individual’s status. As such, it expects petitioners to strictly comply with procedural rules and to promptly rectify any mistakes in the statutory demand or petition. This case serves as a stark warning that a petitioner should not pursue bankruptcy proceedings in a sloppy manner and ask the Court to ignore defects and errors, particularly when the debtor has specifically raised such matters as grounds in opposition to the petition. [16]

Re Tritech Distribution Ltd (HCCW 458/2025, date of judgment: 23 January 2026)

The Court dismissed the application for leave to appeal against the Order. Its reasoning is as follows:

(1) The Court reaffirmed that it is a “decade-long standard practice” to impose a condition upon leave to file an opposing affirmation out of time according to Practice Direction 3.1 §16.1. The rationale for this practice is that late filing of the opposing affirmation deprives the petitioner and the Court of any or any sufficient time before the Monday morning hearing to determine whether the matter could be disposed of immediately at the Monday morning hearing. The Court considers all the relevant factors holistically in the exercise of its discretion, including whether there would be any prejudice caused by the late filing. [17]

(2) The Court expressed dissatisfaction that despite repeated judicial warnings since at least 2015 and the subsequent codification in Practice Direction 3.1 §16.1 dated 30 June 2023, the Companies Court and the Bankruptcy Court continue to face with late applications for filing opposing affirmations out of time accompanied by arguments that no condition should be imposed without proper evidence to substantiate such arguments (for example, a specific timeline to explain why despite prompt actions taken, more time would still be needed). [18]

(3) The Court clarified that the rationale for the payment condition is to ensure the company to take the matter seriously and promptly and enable the Court to determine whether the petition could be disposed of immediately at the first Monday morning hearing. It is not a ruling on the merits of the dispute or an attempt to assert jurisdiction over a matter subject to an exclusive jurisdiction clause. [19]

(4) The Court held that there was no inconsistency between a payment condition and a Foreign Proceedings Condition. They were not mutually exclusive. The former sanctions procedural delay, while the latter ensures compliance with a jurisdictional agreement. As such, both can be imposed together if appropriate. [20]

(5) The Court rejected the Company’s argument that the subsequent commencement of Singapore arbitration proceedings on 24 October 2025 rendered the payment condition inappropriate. The appeal was against the exercise of discretion based on the circumstances as of 13 October 2025. The Company had provided no evidence of difficulty in satisfying the condition and the existence of the arbitration proceedings could be addressed through separate case management applications, not by challenging the Order. [21]

(6) In light of the above, the Court found that the intended appeal had no reasonable prospect of success and was not in the interests of justice. [22]  

Carmon Reestrutura-Engenharia e Serviços Técnicos Especiais (SU) Limitada v. Carmon Restrutura Ltd and another (HCA 1812/2022, date of judgment: 26 January 2026)

First, the Court found Ds’ 15-minute estimate to be unreasonable and unacceptable on the following grounds: [23]

(1) It was a gross and unrealistic underestimation for an application concerning 187 pages of new documents. 

(2) It was designed to circumvent the requirement under Practice Direction 5.4 that written skeleton argument would be required for any hearing more than 30 minutes before a judge sitting in chambers. 

The Court dismissed Ds’ Summons with costs on an indemnity basis, with certificate for two counsel, in favour of the Plaintiff (“P”) on the following grounds:

(1) The Court found that Ds’ Summons was an “obvious and tactically timed ambush of P”. Ds’ Summons was issued 2 clear days before trial, the minimum amount of time required for a summons to be heard without leave of the court for abridging of time. No explanation was given as to why it was issued at such late stage. [24]

(2) At the Pre-Trial Review hearing on 14 October 2025 (“PTR”), the learned deputy judge specifically mentioned that the court is “always skeptical of any late application”. P’s Counsel also specifically stated for the record at that hearing that there should not be any attempt for making any last-minute applications. Ds’ Summons contravened this judicial guidance. [25]

(3) The Court found that although Ds’ Summons was dressed up as a discovery of documents application, in essence, D2 was trying to put in a “supplemental witness statement” in the form of 10^th Cuenda in order to introduce those documents and bolster Ds’ defence. This was a “back door” way of trying to do something that they had been specifically warned by the court not to do at the PTR. The Court did not and should not condone to this kind of litigation conduct. [26]

(4) The Court rejected Ds’ claim that the 187 pages of new documents caused no prejudice. If the Court allowed Ds’ Summons, it would inevitably cause an adjournment of the trial as P would need time to study those documents and to respond to them, including filing supplemental witness statements and/or making further discovery, and possibly amending their pleadings. Under the CJR, the dates reserved for the trial are “milestone dates” which cannot be moved for reasons such as last-minute discovery. [27]

(5) The Court found that the new documents were highly questionable. The issues were disputed provenance of WhatsApp messages, questionable relevance of emails, PowerPoints and foreign court documents concerning different legal proceedings. Part of the proposed evidence was untranslated. Therefore, the manner of introduction was described as “sloppy” and “totally unacceptable”. [28] 

(D) Key Takeaways

The above three cases are significant on the following grounds:

(1) Strict Procedural Compliance: The cases underscore the necessity of strict compliance with rules and timelines. Sloppiness, whether in bankruptcy petitions (Tsoi Man), missing deadlines (Tritech), or ambush tactics (Carmon), is unacceptable and will be met with severe sanctions, including the dismissal of claims, indemnity costs orders or the imposition of conditions.

(2) High Threshold for Late Applications in the Post-CJR era: Carmon serves as a clear reminder that the threshold for late applications to amend or to introduce new evidence is particularly high in the post-CJR era. Practitioners must comply with the court’s timetable where trial dates are “milestone dates”.

---

[1] https://legalref.judiciary.hk/lrs/common/ju/ju_frame.jsp?DIS=176647

[2] https://legalref.judiciary.hk/lrs/common/ju/ju_frame.jsp?DIS=176627

[3] https://legalref.judiciary.hk/lrs/common/ju/ju_frame.jsp?DIS=176699

[4] Re Tsoi Man (HCB 5570/2025, date of judgment: 26 January 2026), §21

[5] Ibid, §1

[6] Ibid, §6

[7] Ibid, §8

[8] Ibid, §9-§10

[9] Ibid, §11

[10] Re Tritech Distribution Ltd (HCCW 458/2025, date of judgment: 23 January 2026), §1 

[11] Ibid, §10

[12] Carmon Reestrutura-Engenharia e Serviços Técnicos Especiais (SU) Limitada v. Carmon Restrutura Ltd and another (HCA 1812/2022, date of judgment: 26 January 2026), §6

[13] Ibid, §5

[14] Re Tsoi Man (HCB 5570/2025, date of judgment: 26 January 2026), §16

[15] Ibid, §17

[16] Ibid, §21

[17] Re Tritech Distribution Ltd (HCCW 458/2025, date of judgment: 23 January 2026), §8

[18] Ibid, §9

[19] Ibid, §12

[20] Ibid, §13

[21] Ibid, §14

[22] Ibid, §16

[23] Carmon Reestrutura-Engenharia e Serviços Técnicos Especiais (SU) Limitada v. Carmon Restrutura Ltd and another (HCA 1812/2022, date of judgment: 26 January 2026), §8

[24] Ibid, §12

[25] Ibid, §13

[26] Ibid, §14

[27] Ibid, §18

[28] Ibid, §23-§29

Finding the Right Path: Clarifying the District Court’s Jurisdiction to Grant Norwich Pharmacal Relief

(A) Introduction

In Chan Chun Hei Ryan v. Hang Seng Bank Limited, DCMP 1602/2025, date of judgment: 22 January 2026, [1] the District Court addressed an important and fundamental question: whether, and under which provisions, the District Court has jurisdiction to grant relief under Norwich Pharmacal Co v Customs and Excise Commissioners [1974] AC 133 (“Norwich Pharmacal” / “Norwich Pharmacal relief”).

At the outset, the Judge noted that, although District Court Judges have frequently granted such relief, there were only two District Court decisions in which the issue of jurisdiction was expressly examined, namely, (1) A v B [2019] HKDC 594 [2] and (2) Kwong Sin Yee Florence v Cathay Pacific Airways Limited [2025] 5 HKC 819 (“Kwong Sin Yee Florence”) [3]. Most importantly, neither of those decisions was binding on the court. The Judge ultimately agreed with the learned Judges’ conclusion that the District Court does have jurisdiction to grant Norwich Pharmacal relief. Having said that, he departed from their reasoning and offered a new statutory foundation for that jurisdiction.

The landmark decision provides significant clarification on the jurisdictional framework governing the District Court’s power to grant disclosure orders against innocent third parties.

(B) Facts

In around August 2022, the Plaintiff and Lam Wei Chuen Joe (“Lam”) entered into an oral agreement, under which the Plaintiff agreed to grant Lam two supplementary cards from two American Express accounts (the “Cards”), on the condition that Lam would repay all expenditures incurred by him no later than the repayment date stated on the monthly charge card statements issued by American Express. [4]

Between November 2023 and January 2024, Lam incurred expenditures on the Cards and failed to make any repayment of those sums. [5]

In January 2025, Lam provided the Plaintiff with two post-dated cheques (the “Cheques”) drawn by one Chung Mei Ling (“Chung”) on an account held with the Defendant bank. [6] Both cheques were dishonoured. [7]

The Plaintiff intended to sue Chung in respect of the Cheques, but did not know her identity or address. [8] Therefore, by way of an Originating Summons, he made a Norwich Pharmacal application and sought an order that the Defendant do disclose to him or his legal representatives all bank statements and transaction information relating to Chung from 1 January 2025 onwards as well as Chung’s last known address. [9]

At the hearing on 5 November 2025, the Plaintiff confined his application to seeking only Chung’s last known address on the ground that such information was necessary for the Plaintiff to commence legal proceedings against her (the “Plaintiff’s Application”). [10]

(C) Decision

The District Court has jurisdiction to grant Norwich Pharmacal Relief

The Court rejected the Plaintiff’s reliance on three grounds to establish jurisdiction for granting Norwich Pharmacal relief: (i) inherent jurisdiction of the District Court; (ii) Section 47A of the District Court Ordinance (Cap 336) (“DCO”); and (iii) Order 24 rules 7A(1) and 11A of the Rules of District Court (Cap 336H) (“RDC”) as the bases upon which this Court may grant Norwich Pharmacal relief to him. [11]

Its reasoning was as follows:

(1) Inherent jurisdiction: Under Section 3(2) of the DCO, the District Court’s jurisdiction and powers are limited to those expressly conferred by the DCO or other enactments. Unlike the High Court, it does not possess inherent jurisdiction to hear any case. [12]

(2) Section 47A of the DCO: This provision was not applicable in the present case as the Defendant bank is an innocent third party and is unlikely to become a party to any subsequent proceedings. Further, the relief sought by the Plaintiff, namely, Chung’s last known address, was not a “document” within the meaning of Section 47A. [13]

(3) Order 24 rules 7A(1) and 11A of the RDC: These rules only prescribe the procedure for applications under Section 47A of the DCO. They don’t themselves confer jurisdiction. [14]

Further, the Judge referred to the Hong Kong Court of Appeal’s obiter observation in Manufacturer’s Life Insurance Co of Canada v Harvest Hero International Ltd  [2002] 1 HKLRD 828 that Norwich Pharmacal “was not about injunctive relief” and concluded that a Norwich Pharmacal order does not fall within the ambit of Section 52 of DCO. [15]

The Judge also declined to characterize Norwich Pharmacal applications as merely “procedural”. [16] Instead, it was held that an application for Norwich Pharmacal relief is a standalone action seeking substantive equitable relief. [17]

Moreover, the Judge disagreed with the reasoning in Kwong Sin Yee Florence, which held that there was no express provision for the District Court’s power to grant Norwich Pharmacal relief, but such power is derivable by statutory implication. [18] The Court held that such a power is not reasonably required for the effective exercise of the jurisdiction under Part 4 of the DCO.  [19] 

The Court added that Norwich Pharmacal relief is not confined to facilitating the commencement of civil claims. [20] Therefore, it would be difficult to justify the District Court’s jurisdiction to grant such relief on the basis that it is impliedly necessary to ensure that “potential claims” within its jurisdiction can be effectively commenced. The relief is neither confined to enabling proceedings to be brought in the District Court and its scope is materially wider. [21] 

The Correct Jurisdictional Route

The Court identified a direct route to establishing jurisdiction: a combined reading of Part 4 and section 48 of the DCO. [22]

Part 4 of the DCO sets out the District Court’s civil jurisdiction. In summary: [23]

(1) Section 32(1) confers jurisdiction to hear and determine any action founded on contract, quasi-contract or tort where the claim does not exceed HK$3,000,000;

(2) Section 33(1) confers jurisdiction to hear and determine actions for the recovery of money (not exceeding HK$3,000,000) by virtue of any enactment in force;

(3) Section 35 confers jurisdiction to hear and determine actions for the recovery of land where the annual rent, or the rateable value, or the annual value, whichever is the least, does not exceed HK$320,000;

(4) Section 36 confers jurisdiction to hear and determine actions in which the title to an interest in land comes into question, subject to the same limit; and

(5) Section 37(1) sets out the District Court’s equity jurisdiction in matters such as administration of estates, execution of trusts, foreclosure or redemption of mortgages, proceedings for specific performance, rectification, or rescission of an agreement for the sale, purchase or lease of property, matters relating to infants, winding-up of partnerships, and relief against fraud or mistake, subject to the value limit under section 37(2).

As for its ancillary jurisdiction, Section 48(1)(a) provides that the District Court has the same power as the Court of First Instance to grant “the relief, redress, or remedy or combination of remedies… which ought to be granted or given”. Section 48(2) further provides that the District Court has to administer law and equity, and in cases of conflict the rules of equity shall prevail. [24]

The Court explained that in every application for Norwich Pharmacal relief, the plaintiff must identify an underlying cause of action or complaint against a wrongdoer. If the underlying claim falls within one of the jurisdiction-conferring provisions in Part 4, then the District Court may invoke its ancillary jurisdiction under Section 48 to grant equitable relief in the form of a Norwich Pharmacal order. [25]

Conditions for Granting Norwich Pharmacal Relief

The Court reaffirmed the conditions for granting Norwich Pharmacal relief, namely that it must be satisfied: [26]

(1) There is cogent and compelling evidence to demonstrate that serious tortious or wrongful activities have taken place; 

(2) The order will very likely reap substantial and worthwhile benefits for the plaintiff; and 

(3) The discovery sought must not be unduly wide.

The Plaintiff’s Application

The Court allowed the Plaintiff’s Application on the ground that all the requisite conditions were met:

(1) The Plaintiff’s underlying claim against Chung was founded on contract (dishonoured cheques) and fell within the scope of Section 32(1) of the DCO. [27]

(2) The Court accepted that the dishonour of the Cheques constituted serious wrongful conduct. [28]

(3) The Plaintiff had no means of contacting Chung. As such, disclosure of Chung’s last known address was necessary to commence legal proceedings against her. [29]

(4) The discovery sought was limited to Chung’s last known address and was not unduly wide. [30]

(D) Key Takeaways

Norwich Pharmacal relief is a useful tool for victims of wrongdoing to identify potential defendant(s) to an action and/or to obtain information necessary to plead a claim.  This decision is of major practical significance for parties seeking such relief in the District Court on the following grounds:

(1) Clarifications on Jurisdictional Route: The Court held that the District Court has no inherent jurisdiction to grant Norwich Pharmacal relief and Section 47A of the DCO is inapplicable to applications against innocent third parties. Instead, jurisdiction arises from a combined reading of Part 4 and Section 48 of the DCO. If the underlying claim falls within the District Court’s civil jurisdiction, the Norwich Pharmacal application is treated as an “action” falling under the corresponding jurisdictional provision. The Court may then grant relief as ancillary equitable relief under Section 48 of the DCO.

(2) Norwich Pharmacal as Substantive Equitable Relief: The Court clarified that a Norwich Pharmacal application is not merely procedural or injunctive. It is a standalone substantive equitable remedy.

(3) Practical Guidance for Applicants: Applicants should (i) clearly identify the underlying cause of action and ensure that it falls within the District Court’s jurisdictional limits under Part 4 of the DCO; (ii) frame the relief sought narrowly and precisely, for example, by seeking only the identity or contact details of the alleged wrongdoer; and (iii) demonstrate that such disclosure is necessary to enable the commencement of the proceedings.

---

[1] https://legalref.judiciary.hk/lrs/common/ju/ju_frame.jsp?DIS=176581

[2] https://legalref.judiciary.hk/lrs/common/ju/ju_frame.jsp?DIS=121704

[3] https://legalref.judiciary.hk/lrs/common/ju/ju_frame.jsp?DIS=171002

[4] Chan Chun Hei Ryan v. Hang Seng Bank Limited, DCMP 1602/2025, date of judgment: 22 January 2026, §6

[5] Ibid, §8

[6] Ibid, §11-§12

[7] Ibid, §13-§14

[8] Ibid, §15

[9] Ibid, §16

[10] Ibid, §17

[11] Ibid, §20

[12] Ibid, §21

[13] Ibid, §23

[14] Ibid, §24

[15] Ibid, §37

[16] Ibid, §46

[17] Ibid, §47

[18] Ibid, §51

[19] Ibid, §52

[20] Ibid, §53

[21] Ibid, §54

[22] Ibid, §55

[23] Ibid, §56

[24] Ibid, §57

[25] Ibid, §58

[26] Ibid, §71

[27] Ibid, §70

[28] Ibid, §72

[29] Ibid, §73

[30] Ibid, §74

Mortgage Enforcement Halted: How a Breach of Duty of Confidentiality and "Irrational" Conduct Created a Triable Defence for the Mortgagors

(A) Introduction

DBS Bank (Hong Kong) Ltd v. Honour Elite Corporation Ltd and another, DBS Bank (Hong Kong) Limited v. Legend World Corporation Ltd and another, DBS Bank (Hong Kong) Ltd v. Happy Global Inc Ltd and another, DBS Bank (Hong Kong) Ltd v. Universal Talent Inc Ltd and another ([2026] HKCFI 401, date of judgment: 16 January 2026) [1] concerned four consolidated mortgagee actions. The Plaintiff (the “Bank”) applied for summary judgment against four mortgagors (the “Mortgagors”) and a common guarantor (the “Guarantor”), (collectively the “Defendants”) for payment of all outstanding loan sums and vacant possession of the mortgaged properties (the “Mortgaged Properties”). [2] Separately, the Defendants applied for the four originating summonses to be consolidated and continued as if the matter had been begun by writ. [3]

The Court dismissed the Bank’s application for summary judgment and granted the Defendants’ conversion application on the grounds that (1) there were triable issues and the Defendants were entitled to unconditional leave to defend; and (2) the proceedings should be converted to a writ action. [4]

This case provides significant clarifications on the threshold for granting summary judgment under the Order 88 of the Rules of the High Court, Cap. 4A (mortgage actions). In particular, a bank’s unreasonable exercise of contractual right to “call in” a loan on demand and a breach of its duty of confidentiality may give rise to a triable defence in a summary judgment context. 

This case also offers helpful guidance on when an originating summons should be converted into a writ under Order 28 rule 8 of the Rules of the High Court, Cap. 4A. It confirms that such conversion is appropriate where serious material factual disputes are central to the case. 

(B) Facts

Each Mortgagor entered into a mortgage (collectively the “Mortgages”) and a set of banking facilities (the “Banking Facilities”) secured by the Mortgages with the Bank as the lender. [5] The Guarantor also entered into four guarantees, under which he undertook to pay to the Bank on demand all sums of money and liabilities owing to the Bank by the Mortgagors, as primary debtor. [6]

By letters dated 30 September 2024, the Bank demanded that each of the Mortgagors and Guarantor to repay the outstanding indebtedness under its respective Banking Facilities (the “Outstanding Sums”) within 7 days of the letters (the “Demand Letters”). [7]

The Mortgagors and the Guarantor did not pay and continues not to pay the Outstanding Sums to the Bank. [8] Therefore, the Bank issued the present mortgagee actions to recover the Outstanding Sums and vacant possession of the Mortgaged Properties. [9] Subsequently, it sought summary judgment for the Outstanding Sums and vacant possession of the Mortgaged Properties. [10] It argued that the originating summonses were simple mortgage actions which could be disposed of summarily. [11] 

The Defendants opposed the Bank’s summary judgment application on two main grounds: [12] 

(1) No Right to Call in Loans Defence: The Mortgagors had never defaulted and the Bank failed to justify the sudden demand for full repayment; 

(2) Breach of Prevention Principle Defence: The Bank breached its duty of confidentiality to CAN Metals China Limited (“CNAM”) by disclosing confidential information on CNAM’s fund flow to CNAM’s major client, namely Realord Group Holdings Limited (“Realord”). This caused CNAM to lose Realord and suffer a drastic revenue drop. Such wrongful act directly impaired the financial capacity supporting the loan repayments. 

 
Further, the Defendants applied for to consolidate the four originating summonses and convert them into a writ action. [13] The Bank did not oppose this application given the substantial overlap of facts and common issues. [14]

(C) Decision

The Court dismissed the Bank’s summary judgment application and granted the Defendants’ application for conversation on the grounds that (1) there were triable issues and the Defendants were entitled to unconditional leave to defend; and (2) the proceedings should be converted to a writ action. 

The Court’s key reasonings are as follows:

Reaffirmation of Burden of Proof in Summary Judgment Applications under Order 88

The Court explained the difference between Order 14 applications and summary judgment applications under the Order 88 procedure. Under Order 14 applications, the defendant should provide sufficient grounds to justify the action continuing to trial. In contrast, in summary judgment applications under the Order 88 procedure, the plaintiff should prove its entitlement to summary judgment. Once this is prima facie demonstrated on the evidence, the defendant should show that he has a defence to the claim. [15]

The Court also highlighted that summary judgment is only for clear cases. The issue is whether the defendant’s assertions are believable, not whether they are to be believed. [16]

Triable Issues

The Court held that there were triable issues under the No Right to Call in the Loans Defence and loss of a major client for the Plaintiff’s breach of the prevention principle.

(a) No Right Call in the Loans Defence

The Court held that this defence was arguable on the following grounds:

(1) The Mortgages had been in existence for 8-9 years by the time the Demand Letters were issued. The Mortgagors had never defaulted. [17]

(2) The Demand Letters did not state that there was a default or identify an event of default. They only demanded immediate repayment “pursuant to the Mortgage” or “the Guarantee and Indemnity”. The Bank provided no explanation for calling in the loans and did not even assert that CNAM was in default. [18]

(3) The Bank had never purported to terminate the Banking Facilities under their “overriding right” clause, nor did it justify the sudden demand for full repayment of a long-term instalment loan. [19]

(b) Breach of the Prevention Principle Defence

The Court affirmed the prevention principle that a person is not permitted to take advantage of his own wrong. A contractual party who is in breach of an obligation owed to the other party will be prevented from asserting rights which arise in consequence of his breach. [20]

While the Bank had no contractual duty to issue consent letters to the Mortgagors or to act reasonably in terms of issuing consent letters, its refusal to do so for the existing tenancies was wholly irrational. [21] Such conduct, taken together with the act of calling in the loans without reasons, created a sufficient credible foundation on which an inference may be drawn that the Bank’s recovery actions were not taken in good faith. [22]

Further, the Court held that the Bank breached its duty of confidentiality to CNAM by disclosed confidential information of CNAM to Realord. Although the “breach” was not directly of the Mortgages or Guarantees, it was arguably foreseeable that such breach of duty of confidentiality may have impact on the ability of CNAM (a core entity in the borrowing structure) to repay under the Mortgages. [23] The loss of a major client caused by the Bank’s breach could give rise to an arguable defence for the Defendants. [24]

Clarifications on the Principles of Conversion to Writ

The Court stated that although there is no absolute rule as to what cases can properly be dealt with by the originating summons procedure, it may consider the following factors: [25]

(1) The existence of factual disputes;

(2) Whether the procedural advantages of a writ action, such as delivery of pleadings and discovery, justify conversation;

(3) Whether conversation would cause significant delay.

In the present case, the triable issues involved serious factual disputes. As such, the Court held that it was appropriate to convert the proceedings as if there were commenced by writ. [26]

(D) Key Takeaways

This case is significant on the following grounds:

(1) Burden and High Threshold for Summary Judgment under Order 88: This case underscores that an application for summary judgment in originating summonses is not a simple route to judgment. The plaintiff bears the initial burden of proof to justify its entitlement to summary judgment. However, once this is prima facie demonstrated on the evidence, the burden of proof shifts to the defendant to show that he has a defence to the claim. No summary judgment will be granted if the defendant raises believable assertions.

(2) “On Demand” Clauses & Mortgagee's Conduct Scrutiny: This case demonstrates that in the context of a summary judgment application under Order 88, the Court will scrutinize the mortgagee’s overall conduct when determining whether triable issues exist. A bank’s demand for immediate repayment should be grounded in a recognizable default or valid contractual trigger, even where facility letters contain “on demand” clauses. The bank's unexplained demands despite a consistent repayment history, the refusal of consent letters despite knowledge of existing tenancies and the breach of duty of confidentiality can create a “sufficiently credible foundation” for an inference that the bank’s recovery actions might not have been exercised in good faith. This may raise triable issues barring summary judgment.

(3) Bank’s Duty of Confidentiality to Customers: This case serves as a stark reminder that a bank owes a duty of confidentiality to its customer. Such duty of confidentiality extends to all the transactions that go through the account. If a breach of this duty could affect the repayment of the mortgages, even against a closely related non-party to the loan, it can raise an arguable point of law to bar summary judgment. 

(4) Clarifications on Conversion to Writ: This case sheds light on the principles governing the conversion of an originating summonses to a writ action. When serious factual disputes are central to the case, the Court is likely to allow such a conversion. 

---

[1] https://legalref.judiciary.hk/doc/judg/word/vetted/other/en/2025/HCMP000069_2025.docx

[2] DBS Bank (Hong Kong) Ltd v. Honour Elite Corporation Ltd and another, DBS Bank (Hong Kong) Limited v. Legend World Corporation Ltd and another, DBS Bank (Hong Kong) Ltd v. Happy Global Inc Ltd and another, DBS Bank (Hong Kong) Ltd v. Universal Talent Inc Ltd and another ([2026] HKCFI 401, date of judgment: 16 January 2026), §1

[3] Ibid, §3

[4] Ibid, §83

[5] Ibid, §8

[6] Ibid, §16

[7] Ibid, §18

[8] Ibid, §19

[9] Ibid, §20

[10] Ibid, §1

[11] Ibid, §4

[12] Ibid, §2

[13] Ibid, §3

[14] Ibid, §4

[15] Ibid, §35

[16] Ibid, §36

[17] Ibid, §38

[18] Ibid, §39

[19] Ibid, §42

[20] Ibid, §53

[21] Ibid, §62

[22] Ibid, §63

[23] Ibid, §70

[24] Ibid, §80

[25] Ibid, §37

[26] Ibid, §82