HOU HSIAO BING v. REN BAOGEN

HCA 1657/2019

[2026] HKCFI 1255

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1657 OF 2019

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JUDGMENT

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1.  This Court handed down its decision on 24 October 2025 (the “Decision”) whereby this Court:

(1) Allowed the application for amendment of this Court’s Judgment and dismissed the Setting Aside Application (“Amendment and Dismissal Order”); and

(2) Dismissed the Injunction Discharge Application save that the ceiling of the Injunction be revised downwards (“Injunction Order”).

2.  On 7 November 2025, the Defendant took out a Summons (the “Appeal Summons”) for:

(1) A direction under O.59, r.21(3) of the Rules of High Court that no leave is required for the Defendant to appeal against the Amendment and Dismissal Order on the grounds set out in the Notice of Appeal filed with the Court on 7 November 2025.

(2) Alternatively, leave to appeal against the Amendment and Dismissal Order on the grounds as stated in the Notice of Appeal.

(3) Leave to appeal against the Injunction Order on the grounds stated in the draft Notice of Appeal annexed to the Appeal Summons.

3.  Directions were given to the parties to file written submissions for the Appeal Summons to be disposed of on paper. Written submissions have since been filed.

4.  This Court has duly considered the parties’ written submissions.

5.  First, as both parties agree that the Defendant does not require leave to appeal under s.14AA of the High Court Ordinance (Cap. 4), since the Amendment and Dismissal Order is a final order, rather than an interlocutory order,  I make a direction under O.59, r.21(3) of the Rules of High Court that, no leave is required for the Defendant to appeal against the Amendment and Dismissal Order on the grounds set out in the Notice of Appeal filed with the Court on 7 November 2025.

6.  For reasons as set out in both parties’ written submissions to which I do not find it helpful to repeat, I am of the view that the Amendment and Dismissal Order is a final order.

7.  Secondly, for the application for leave to appeal against the Injunction Order, whilst I agree with the Plaintiff that the grounds as set out in the draft Notice of Appeal are a rehash of the points already considered and rejected by this Court and it is an appeal against this Court’s exercise of its judicial discretion as such normally, no leave to appeal should be granted, the Plaintiff agrees that if the Judgment is to be set aside, the Injunction should also be discharged.

8.  I am of the view that leave should be granted on this ground so that both the appeal against the Amendment and the Dismissal Order and the appeal against the Injunction Order can be dealt with together.

9.  I fully appreciate the Plaintiff’s submission that if the Court of Appeal allows the Defendant’s appeal against the Amendment and Dismissal Order and sets side the Judgment, the Injunction should be discharged (subject to any application for continuation by the Plaintiff after disposal of the Defendant’s appeal) even in the absence of any standalone appeal against it. Thus, there is no utility in granting leave to appeal on this ground.

10.  However, as a matter of logic, I cannot say this ground of appeal should not be considered by the Court of Appeal given that this very ground is, by definition, surely to be considered by the Court of Appeal because of the direction given by this Court. On balance, I accede to the Defendant’s submission that there is “some other reason in the interests of justice why the appeal should be heard” such that leave to appeal on this ground ought to be granted. (The Yerrid Law Firm v Qiansbaizi Trading Ltd [2021] HKCFI 1578 at §15 per Deputy High Court Judge Paul Lam SC).

11.  Further, as a matter of practical reality, it is better for the Injunction matter also to be placed before the Court of Appeal so that it can determine how best to deal with it instead of waiting to the matter to be disposed on another occasion.

12.  For Grounds 2 to 6, I have addressed the same in the Decision and do not intend to rehearse the same again. I just like to stress three points. First, share consolidation and split are normal financial activities that could be expected from listed securities. It is perfectly normal for the Plaintiff to take the honest view that a share consolidation or splitting will not render the performance of the Defendant’s contractual obligations under the Guarantee impossible. Commonsense dictates that if the obligation is to purchase 100 shares at HK$10 per share, upon a 10:1 consolidation, the new 10 shares would represent the value and/or agreed price of the original 100 shares, namely HK$1,000.  The commercial deal is to pay HK$1,000 for 100 shares (which then consolidated into 10 shares). It is hard to believe that the Plaintiff would have himself understood that the performance of such simple contractual obligation to be impossible until the Defendant raises such contention.

13.  Secondly, on the real of risk of dissipation, this Court does not just rely on the decision of the Australian Court but independently come to the view that for all the reasons as set out in the Decision (§§90-96), on the evidence available to the Court, it is reasonable for this Court to come to the view that there is a real risk of dissipation.

14.  Thirdly, in relation to the ceiling amount of the Injunction, I am of the view that no injunction should cover any excessive amount. However, the remedy for the same is not simply to discharge the injunction altogether but to adjust it downwards to achieve fairness and justice. The duty of the Court is to balance the interest of the parties and try its best to achieve justice in the interim period but not to penalize a party because it has applied, ex parte, to freeze for an amount that exceeds what he or she is entitled to.

15.  For the sake of completeness, I should state that I have perused the parties’ submissions and in relation to Grounds 2 to 6 of the application for leave to appeal against the Injunction Order, I agree with the analysis of the Plaintiff.

16.  For all the reasons stated above, I will make the following orders:

(1) An order in terms of Paragraph 1 of the Appeal Summons with costs to be in cause of the appeal pursuant to the Notice of Appeal;

(2) Leave to appeal against the Injunction Order based on Ground 1 as stated in the Draft Notice of Appeal.

17.  As far as costs of the application for leave to appeal against the Injunction Order, I make a costs order nisi that the Plaintiff is entitled to 80% of the costs of the application, to be taxed on party to party basis, if no agreement can be reached.  This costs order nisi will be made absolute within 14 days hereof unless an application is taken out to vary the same within the 14-day period.

18.  Finally, I thank counsel for their helpful assistance in this matter.