Hong Kong

Oldham, Li & Nie (OLN), a leading independent Hong Kong law firm, is pleased to announce the launch of a dedicated U.S. Tax Advisory Practice. This new practice expands the firm's ability to assist Hong Kong clients with U.S. federal and California tax and legal matters, as well as business and corporate issues involving U.S. interests. The practice is designed to support U.S. expatriates, multinational businesses, and investors with U.S. connections. Leading this new chapter is Joshua Maxwell, who joins OLN as a Registered Foreign Lawyer (California, USA). Joshua brings extensive experience in tax advisory work, along with a practical and client-focused approach. Mr. Maxwell said “I am excited to join OLN and lead the new U.S. Tax Advisory Practice. This initiative will integrate seamlessly with the OLN’s existing teams and enhance the value delivered to the firm’s clients with U.S. tax and business interests. Our aim is to offer expert guidance on both U.S. federal and California tax, business, and legal matters, ensuring that our clients feel confident and well-supported. I am looking forward to collaborating with the talented team at OLN and contributing to the firm's continued growth and success". This launch marks an important milestone in Oldham, Li & Nie's journey to expand its international service platform, building on its established Chinese, French, and Japanese practices. For more information about the OLN’s U.S. Tax Advisory Practice, visit: https://oln-law.com/practice-areas/us-tax-advisory-services/. Contact: [email protected] About Oldham, Li & Nie: Oldham, Li & Nie is a highly awarded full-service Hong Kong law firm whose commitment to professional excellence has been the cornerstone since its establishment in 1987. The firm currently has over 45 lawyers, with specialists in corporate and commercial law, dispute resolution, employment, family, intellectual property, private client and tax law. For more information about Oldham, Li & Nie, please visit  https://oln-law.com/.

Trials are not won in the courtroom — they are won in the months of relentless, painstaking preparation that precede them, of which the trial itself is merely the final, public validation. There is a pervasive and theatrical myth surrounding the art of litigation. It paints the courtroom as a stage upon which charismatic barristers, with flourishes of rhetoric and last-minute revelations, snatch victory from the jaws of defeat. This is a fiction. As a litigator who has navigated the unforgiving currents of Hong Kong’s courts for over two decades, particularly in the complex arena of trust and estate disputes, I can assert with absolute conviction that trials are not won in the courtroom. They are won in the months, sometimes years, of relentless, painstaking, and often unglamorous preparation that precedes them. The trial itself is merely the final, public validation of that unseen war.   To view litigation as a performance is to fundamentally misunderstand its nature. It is not a sprint to a dramatic conclusion; it is a war of attrition, fought in the trenches of discovery, witness preparation, and procedural compliance. In trust and estate litigation, where the primary witness — the testator — is by definition unavailable, this preparation becomes even more critical. A failure in this preparatory phase is not a mere setback; it is a catastrophic structural flaw that can cause the most righteous of cases to collapse. Conversely, a mastery of this discipline can dismantle a seemingly unassailable opponent, piece by methodical piece.   In the post-Civil Justice Reform (CJR) era, the Hong Kong judiciary’s patience for unpreparedness has worn thin. The system is designed to facilitate the just, cost-effective, and efficient resolution of disputes, placing a heavy burden on parties to actively manage their cases. Our approach is built on a single principle: that an aggressive and decisive litigation strategy is the inevitable result of uncompromising preparation. This is a discipline we demand not only of ourselves but of our clients, who are indispensable partners in the complex gambit of litigation.   The mirage of the meritorious case One of the most dangerous beliefs a litigant can hold is that the inherent “rightness” of their case will guarantee success. In probate disputes, where emotions run high and family history is long, "merit" is often subjective. A factually strong case is an asset, but it is only the raw material of victory. The rules of evidence and the logic of civil procedure are the furnace in which that raw material is tested.   The court is not an omniscient arbiter of truth; it is a forum where a conclusion is reached based on the evidence properly put before it. A crucial document never discovered, a key witness never called, or a vital point never put to an opponent in cross-examination are not minor oversights. They are black holes in the fabric of a case.   The Hong Kong courts frequently signal their intolerance for procedural laxity through “unless orders” — draconian directions that carry automatic sanctions, such as striking out a claim, for non-compliance. A salient illustration is Chan Chung Sing v Chan Andy Yuan & Anor [2024] HKCFI 536. Here, a plaintiff’s action was jeopardised by a failure to adhere to such an order. While the court ultimately granted relief, the case teetered on the brink of dismissal. The lesson is stark: procedural discipline is the very framework that allows the merits to be heard.   Deconstructing defeat: the anatomy of a preparation failure When a case fails, the post-mortem rarely reveals a single blunder. Instead, one typically finds a series of smaller, interconnected failures in preparation. In the context of trust and estate litigation, these failures often manifest in three crucial domains.   The uncalled witness and the echo of adverse inference A trial is a narrative, and witnesses are its narrators. In estate disputes, the decision of whom to call is critical. Failing to call a witness who would be expected to have material evidence — such as a long-serving family solicitor or a close confidant of the deceased — is an open invitation for the court to draw an “adverse inference.” This is a judicial conclusion that the witness’s evidence would likely have been unhelpful or damaging to the party who failed to call them.   While the adverse inference principle is well-established in commercial cases like Ahuja Investments Ltd v Victorygame Ltd [2021] EWHC 2382 (Ch), its application is particularly potent in probate litigation. For instance, in disputes over a deceased's intentions or the validity of a will, the failure to call a witness who was present during the will's execution or who managed the deceased's affairs can be fatal. The court may infer that their testimony would have undermined the claim of testamentary capacity or supported an allegation of undue influence.   The treacherous sands of memory In estate litigation, the events in question often took place years or even decades ago. This makes the landmark judgment of Mr Justice Leggatt (now Lord Leggatt) in Gestmin SGPS SA v Credit Suisse (UK) Ltd [2013] EWHC 3560 (Comm) essential reading. He highlighted the fallibility of human memory, noting that the process of litigation itself subjects memories to powerful biases and "interference." “The process of civil litigation itself subjects the memories of witnesses to powerful biases. The witness is asked to make a statement, often (as in the present case) when a long time has already elapsed since the relevant events. The statement is a collaborative effort with the lawyers who are themselves concerned with winning the case for their client… Considerable interference with memory is also introduced in civil litigation by the procedure of preparing for trial.”   His conclusion — that judges should place little reliance on witness recollections and instead focus on contemporaneous documentary evidence — has profound implications for trust and estate disputes. In cases where the testator is gone, the "paper trail" — medical records, bank statements, and correspondence — becomes the most reliable evidence of their true intentions. Discovery is not a chore; it is the central, case-defining exercise. A client’s duty is to unearth every relevant record. Incomplete disclosure is an act of self-sabotage, leaving a witness exposed when confronted with a document that contradicts a rehearsed but flawed recollection.   The silence that condemns: a failure in cross-examination Cross-examination is a disciplined process governed by the "rule of fairness" in Browne v Dunn (1893) 6 R 67 (HL). If you intend to submit that a witness’s evidence is untrue, you must first put that contention to them during cross-examination, giving them an opportunity to respond.   The Hong Kong Court of Appeal in HKSAR v Chan Hing Kai [2019] HKCA 172 demonstrated the gravity of failing this rule. While a criminal case, the principle is equally potent in civil litigation, including probate. If you challenge a medical expert’s opinion on testamentary capacity but fail to put your core factual challenges to them during cross-examination, you may forfeit your right to challenge their narrative in closing submissions. Negligent preparation of cross-examination can render even the strongest challenge ineffective.   The client as co-strategist: a non-negotiable partnership Modern, high-stakes litigation requires a deep and continuous partnership. The client is not a passive spectator; they are the co-strategist and the keeper of the institutional or family memory.   In trust and estate disputes, this partnership is vital. It requires frank conversations about family dynamics and the strengths of a case. It means committing resources to the discovery process and making key individuals available for intensive preparation — not to coach evidence, but to test recollections against the documentary record. A client who resists this process or treats preparation as a distraction is actively undermining their own prospects.   We see our role as litigation counsel in the truest sense, guiding clients through the strategic minefield of preparation. This collaborative, disciplined approach is the only way to build a case resilient enough to withstand the intense pressure of a trial.   Victory in litigation is not a moment of inspiration; it is the culmination of a thousand disciplined actions. It is a testament to a strategy meticulously planned, evidence rigorously tested, and a partnership committed to the unforgiving art of preparation.    

The Hong Kong luxury real estate market has, in recent years, contended with a confluence of formidable challenges, including a protracted period of elevated interest rates, pervasive global economic uncertainties, evolving geopolitical dynamics, and shifts in local demographic patterns. As the legal community and market participants cast their gaze towards 2026, a cautious yet discernible optimism begins to emerge regarding the prospects for a recovery within this high-value segment. This article aims to provide an incisive overview of the intricate legal and regulatory landscape that is poised to shape and potentially facilitate this anticipated recovery, meticulously examining the key drivers, prospective policy shifts, and persistent legal challenges from the vantage point of a leading real estate practitioner.   The current market dynamics and the trajectory towards recovery The luxury residential sector, typically defined by properties commanding values in excess of HK$30 million, has experienced notable price corrections and a discernible contraction in transaction volumes. This downturn can be attributed to several critical factors. Globally, the tightening of monetary policy has directly impinged upon mortgage affordability and investment yields, while a broader economic deceleration, both regionally and internationally, has eroded investor confidence and dampened wealth creation. Furthermore, ongoing geopolitical tensions have fostered a more conservative investment climate, and shifts in talent mobility have inevitably influenced demand patterns. Notwithstanding these headwinds, 2026 is increasingly viewed as a potential inflection point, propelled by several anticipated catalysts. A global pivot towards the stabilization or reduction of interest rates could significantly alleviate borrowing costs, thereby stimulating renewed demand. Concurrently, a robust economic rebound, particularly within mainland China and across global markets, is expected to inject fresh capital and confidence into Hong Kong. This period of subdued activity has also cultivated a substantial reservoir of pent-up demand among high-net-worth individuals (HNWIs) who seek prime assets for both wealth preservation and lifestyle enhancement. Moreover, the inherent scarcity of genuinely prime luxury properties in Hong Kong, particularly in prestigious locations such as Hong Kong Island, continues to underpin a compelling long-term value proposition for discerning investors.   Banks lift Hong Kong property forecasts as market shifts Hong Kong’s residential property market is poised for a sustained recovery in 2026, with major financial institutions upgrading price forecasts amid tightening supply and resilient demand. Citi Research now expects home prices to rise 8% this year – a significant increase from its October projection of 3% – citing a faster-than-expected rebound in 2025 and dwindling housing stock. This follows Morgan Stanley’s recent upgrade of the sector to "attractive," forecasting gains exceeding 10%. The optimism stems from fundamental shifts: new land supply has hit a 14-year low, while available housing inventory contracted by roughly 10% last year. Concurrently, structural demand is strengthening. Rising student enrolments, continued inflows of skilled workers, and falling mortgage rates are converting renters into buyers. UBS (forecasting +5% prices) notes that two consecutive years of rental growth – even during earlier price declines – prove buying demand was deferred, not destroyed. Bank of East Asia aligns with this view, predicting 6-8% growth fuelled by "strong rental demand and improving economic fundamentals." Yet caution persists. While Bank of America anticipates single-digit price growth, it warns that equity market volatility could derail the recovery. OCBC highlights a concerning trend: despite recent price increases, transaction volumes remain stagnant, indicating buyers are highly selective. Critically, S&P Global Ratings points to a major overhang – over 26,000 completed but unsold units remain on the market, with new supply expected to match demand in 2026. "Home prices will likely remain rangebound this year," notes S&P’s Edward Chan. OCBC’s Cindy Keung adds that price growth is now outpacing rents, potentially capping investment yields. The market’s trajectory now hinges on external forces. Bank of America suggests aggressive Federal Reserve rate cuts could accelerate price gains, but acknowledges elevated valuations leave little margin for error. While a multi-year upcycle may be emerging, Hong Kong’s recovery remains delicately balanced between supply constraints and persistent inventory challenges.   Pivotal legal and regulatory considerations for market resurgence The overarching legal and regulatory framework exerts profound influence on market dynamics. For sustained recovery in the luxury real estate sector in 2026, several critical legal domains warrant scrutiny and potential adjustment. The Strategic Role of Stamp Duty Regimes Hong Kong's property market has been subject to a decade of "cooling measures" through various stamp duties: the Buyer's Stamp Duty (BSD), a 15% levy on non-permanent residents and corporate buyers; the Special Stamp Duty (SSD), imposing tiered duties up to 20% on properties resold within 36 months; and the higher Ad Valorem Stamp Duty (AVSD) rates of 15% for second-time buyers and corporate entities. Any relaxation or abolition of these demand-side measures would serve as the most potent legal catalyst for market recovery. Reducing or removing the BSD could re-attract mainland Chinese and international HNWIs who view Hong Kong properties as attractive global assets. Adjusting the higher AVSD rates would encourage local upgraders and investors, liberating capital for luxury acquisitions. While SSD relaxation may have less direct impact on long-term luxury investment, it would enhance market liquidity and investor confidence. The government's decisions on these duties represent a critical policy choice, balancing market stabilization against overheating concerns. Legal analysis will focus on specific thresholds, exemptions, and implementation timelines of any proposed changes. Mortgage Policies and Financial Regulatory Frameworks The Hong Kong Monetary Authority (HKMA) sets loan-to-value (LTV) ratios and debt-servicing ratio (DSR) requirements for residential mortgages. While luxury buyers often possess substantial cash reserves, easing LTV ratios for high-value properties—currently subject to stringent limits—or recalibrating DSR stress tests could improve financing options and bolster market sentiment. Hong Kong's banking sector stability and robust regulatory oversight, governed by stringent legal frameworks, remain cornerstone attractions for international investors. Land Supply and Development Policy Imperatives Hong Kong's geographical constraints make government land sales and urban planning policies paramount. The legal framework governing land premiums for lease modifications or new grants directly influences developers' costs and property pricing. Zoning regulations, building height restrictions, and environmental protection laws in prime enclaves such as The Peak and Island South legally restrict new supply, underpinning existing asset values. Streamlining planning and building approval processes could facilitate more efficient introduction of new luxury developments. Foreign Ownership and Investment Regulations Unlike many global metropolitan centres, Hong Kong maintains a remarkably liberal framework for foreign property ownership, imposing no restrictions beyond standard stamp duties for non-permanent residents. Continuation of this open policy is vital for attracting international capital. Any legislative shift restricting foreign ownership would profoundly deter luxury investment. The legal certainty and administrative ease of property transfer for international buyers remain significant competitive advantages. Anti-Money Laundering (AML) and Sanctions Compliance Hong Kong operates a stringent anti-money laundering (AML) and counter-terrorist financing (CTF) regime. Robust enforcement of AML/CTF laws by the Land Registry, financial institutions, and legal professionals is indispensable for preserving Hong Kong's reputation as a clean and reliable financial hub. This rigorous oversight instils confidence in legitimate HNWIs and institutional investors, ensuring transparent and compliant property transactions. Contract Law and Dispute Resolution Mechanisms The stability of Hong Kong's common law system, independent judiciary, and established dispute resolution mechanisms, including international arbitration, form the bedrock of investor confidence. Luxury real estate investors rely upon enforceable contracts, secure property titles, and fair dispute resolution. Any erosion of this legal certainty would undermine confidence regardless of economic factors. Preserving the integrity of the legal system is paramount for sustained long-term investment.   Challenges and inherent risks from a legal standpoint Despite the palpable potential for recovery, several legal and regulatory risks continue to cast a shadow of uncertainty. The precise timing and extent of any policy relaxation remain inherently uncertain, fostering a "wait-and-see" approach among prospective buyers. Furthermore, external geopolitical pressures could conceivably lead to the introduction of new regulations, such as those pertaining to sanctions compliance, which might impact international capital flows or specific investor groups. The increasing global emphasis on environmental, social, and governance (ESG) factors could also precipitate new building codes, disclosure requirements, or investment criteria that might affect property values and development costs, particularly for older luxury assets. Lastly, while not directly a matter of Hong Kong law, any tightening of capital outflow controls from mainland China could legally restrict the capacity of mainland HNWIs to invest in Hong Kong property, thereby impacting a significant demand segment.   Notable high-value transactions in Hong Kong's luxury market The resilience of Hong Kong's luxury property market is exemplified by several landmark transactions that have occurred despite challenging conditions. In the ultra-prime segment, a luxurious house at 75 Deep Water Bay Road on Hong Kong Island was sold for approximately HK$1.93 billion in late 2024, setting a record for the highest price per square foot for a residential property in Hong Kong. Similarly, prestigious developments in the Southern District have commanded substantial attention, with luxury units at Headland Road and properties in the exclusive Repulse Bay area transacting at prices exceeding HK$500 million. The corporate sector has also demonstrated confidence, with significant acquisitions of luxury residential developments by major conglomerates and family offices seeking trophy assets. These transactions underscore the enduring appeal of Hong Kong's most coveted addresses and the willingness of ultra-high-net-worth individuals to commit substantial capital to prime real estate, even in periods of broader market uncertainty. Such high-value deals serve as important barometers of underlying market strength and investor confidence in Hong Kong's long-term property fundamentals.   Some recent transactions our team was involved The vitality of Hong Kong's luxury property market is further demonstrated by the significant transaction activity undertaken by leading real estate firms. Hugill & Ip's Real Estate team has been at the forefront of this market activity, having been involved in several high-profile and valuable transactions over the past few months. Notable among these are the advisory roles of the purchaser in Swire Properties' two single-house development on Deep Water Bay Road, representing one of the most prestigious residential projects in the Southern District; Mont Verra, an exclusive luxury development that has attracted considerable interest from discerning buyers; The Southside Phase 2 La Marina, a premium waterfront residential project; and Blue Coast of the Southside, another distinguished development in one of Hong Kong's most sought-after locations. Collectively, our real estate team led by our partner, Ms. Polly Chu has managed few transactions for the past three months representing a total deal value of approximately HK$31 billion, underscoring both the scale of investment flowing into Hong Kong's luxury property sector and the sophisticated legal and transactional expertise required to execute such complex, high-value deals. This substantial transaction volume reflects the continued confidence of major developers and investors in Hong Kong's luxury residential market, even amid broader economic headwinds.   Final thoughts The Hong Kong luxury real estate market in 2026 stands at a critical juncture, poised for a potential resurgence. While underlying economic fundamentals and interest rate trajectories will undoubtedly serve as primary drivers, the intricate legal and regulatory framework will play an equally decisive role in either facilitating or impeding a robust recovery. The government's judicious willingness to adjust demand-side management policies, coupled with the unwavering stability and reliability of Hong Kong's time-honoured legal system, will be the ultimate determinants. As legal practitioners, it is incumbent upon us to meticulously monitor these evolving developments, providing our clients with astute counsel to navigate the emerging opportunities and mitigate the inherent risks within this dynamic and strategically significant market.

In Re Success Lane Development Limited [2025] HKCFI 1121, the Companies Court considered whether a company could resist a winding-up petition presented based on outstanding interlocutory costs orders (payable forthwith or within 14 days upon summary assessment) by relying on a cross-claim for damages in ongoing legal proceedings. Background The dispute between the Petitioner and the debtor Company  arose over a "Long Stay Room Contract" under which the Company rented a hotel room for storage purposes.  In the District Court, the Petitioner alleged that the Company had damaged various items stored in the hotel room, and claimed against the Petitioner for damages in the sum of at least HK$3,000,000. The Petitioner had obtained various costs orders against the Company as a result of interlocutory applications in the District Court proceedings.  The costs orders are all payable forthwith in the total sum of HK$697,534.66 plus judgment interest (the “Costs Orders”). Based on the unpaid Costs Orders, the Petitioner served a Statutory Demand on the Company.  Shortly after the expiry of the Statutory Demand, the Company applied to set aside and stay the Costs Orders by commencing a separate set of District Court proceedings.  Yet, the said applications were also dismissed. As of the date of the Petition hearing, the Costs Order were either orders not appealed against, or orders against which leave to appeal had been refused by the Court of Appeal.  The main issue at the hearing was whether the Company could resist the Petition (based on Costs Orders payable forthwith) with a cross-claim (for damages in the sum of at least HK$3,000,000 in the ongoing District Court proceedings, the “Cross-claim”). The Court’s Reasons The Companies Court held that the Company could not resist the Petition with the Cross-claim for the following reasons:- (1)         The underlying policy of making costs orders payable forthwith is to deter parties from commencing unmeritorious interlocutory applications.  To uphold this policy, the Court should regard such costs orders as free-standing, and though such costs orders are not equivalent of cash, it should be as readily enforceable almost as readily cash-able as cheques.  In this case, the Company should not be allowed to use the Cross-claim to resist the Petition. (2)         There could be no injustice done to the Company if it is to be wound up, because if the Company has a valid claim against the Petitioner, the Company in liquidation could still pursue it. (3)         On the contrary, it would be unjust if the Company could resist the Petition based on the Corss-clam, as (a) it would in effect confer a right on the Company to retain the Petitioner’s money as a security for its Cross-claim, and (b) the Costs Orders, being free-standing and supposed to be readily enforceable, have nothing to do with the Cross-claim, in the sense that even if the Company eventually succeeds in its claim in the District Court, the Company would still have to pay the Costs Orders. Having said that, the Companies Court also indicated that its decision was made based on the present facts, and that there may be different considerations if, e.g. the District Court main proceedings are not ongoing but finally concluded, or the receiving party may be to blame for not enforcing any immediately payable costs orders earlier. In view of this case, company debtors should note that the existence of a cross-claim against the petitioner generally would not constitute a valid ground to oppose a winding-up petition presented based on costs orders payable forthwith.  As such, it is advisable for company debtors to settle any costs orders payable forthwith as soon as possible to avoid winding-up petitions being presented against them.  In case of any doubt, legal advice should be sought. If you have any inquiries, please feel free to contact us for more information Managing Partner: Ian Lo Email: [email protected] Partner: Anderson Siu Email: [email protected]