SHEN YANG v. HAI YUE

HCA 583/2026

[2026] HKCFI 4762

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 583 OF 2026

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BETWEEN

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REASONS FOR DECISION

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1.  This is the substantive hearing of the Plaintiff (“P”)’s inter partes summons dated 14 April 2026 (“the Injunction Summons”) applying by way of interlocutory relief for a proprietary injunction, a Mareva injunction and disclosures ancillary to each of them.

2.  Also before me for determination are two time summonses both issued by P.

3.  At the conclusion of the hearing, I

a. granted the interlocutory proprietary injunction with an ancillary disclosure order in terms as asked for but with some alterations, some of which were agreed and 2 disagreed on which I ruled orally at the hearing;

b. refused to issue the Mareva injunction and the disclosure ancillary to it;

c. after hearing submissions on costs, ordered that the costs of the Injunction Summons, including the costs of the hearings on 17 and 24 April 2026 which were reserved, be costs in the cause, with certificate for a senior counsel, but in the event P ultimately wins in this action he be only entitled to 80%, the reason for this costs order was given orally at the hearing;

d. made an order in terms of P’s summons dated 6 August 2026 to extend time to file his Statement of Claim; and

e. reserved my decision on P’s summons also dated 6 August 2026 to extend time to file and serve by way of reply the 2^nd affirmation of P affirmed on 5 August 2026 and the affirmation of Mr Gu Zhengguo (“Gu”) affirmed on 7 August 2026 to be given in these reasons.

4.  These are my reasons and decision on P’s said summons.

The parties’ respective case

5.  P is a director of Hong Kong Shang Yin Group Company Limited (“Shang Yin”). From October 2020 to February 2025, the Defendant (“D”) was engaged by Shang Yin essentially to act as P’s personal assistant.

6.  P’s case is that in mid-November 2023, he requested D and D agreed to act as his nominee to apply for, with funds to be provided by P, placement of 104,210,000 new shares of Pak Tak International Limited (HK Sock Exchange Code: 2268)(respectively “the Subject Shares” and “the Listco”) under the Listco’s share placement exercise. It was agreed that upon successful placement, D would hold the same on trust for P in a securities account to be opened and maintained with the placing agent ChaoShang Securities Limited (“ChaoShang”) and would only be disposed of or dealt with according to P’s directions.

7.  On 22 November 2023, two tranches of funds of HK$1 million each were arranged by P to be deposited into D’s bank account with CMB Wing Lung Bank by respectively Huatai Longsheng Investment Co Ltd and Hongcheng Investment Group Co Ltd, which companies were respectively owned by Mr Gu Qiansheng (“Gu Jr”), the son of Gu, and Mrs Gu Jia (“Mrs Gu”), the wife of Gu.

8.  On 1 December 2023, the Subject Shares were placed with D at the price of HK$0.019 per share at the total consideration of HK$1,979,990. Per P’s instructions, D opened a securities account with ChaoShang and deposited the Subject Shares to be held therein. On the same day, D provided to P a screenshot of the email sent by ChaoShang to D confirming the opening of the securities account no. 9002935 in D’s name (“D’s CS Account”).

9.  In anticipation of the termination D’s employment with Shang Yin, P started to discuss with D concerning the return of the Subject Shares (and other shares also held by D as P’s nominee) around February 2025, but D did not immediately respond. Since late August 2025, D said that matters concerning the Subject Shares and other shares held by D would be handled by her husband (“Zhong”).

10.  In the meantime, the closing price of shares of the Listco has increased substantially. The parties have only provided the closing prices since January 2026, which show that its price has risen from HK$0.186 per share on 2 January 2026 to HK$0.550 on 19 January 2026, and to an average price slightly over HK$0.3 in February 2026.

11.  In a meeting held around 2 February 2026 between P and Zhong (“the February Meeting”), Zhong demanded 10% of the market value of the Subject Shares as “remuneration”.

12.  On around 31 March 2026, P discovered that D has transferred the Subject Shares from D’s CS Account[1] to an account held with Futu Securities International (“D’s Futu Account”).

13.  On 14 April 2026, P issued the Writ herein and the Injunction Summons.

14.  D’s case is that the Subject Shares were purchased by her as her own personal investment and they belong to her.

15.  She does not dispute that the Subject Shares were paid by the two tranches of funds of HK$1 million each deposited into D’s bank account by Huatai Longsheng Investment Co Ltd and Hongcheng Investment Group Co Ltd on 22 November 2023, as P said.

16.  She says the HK$2 million was a loan lent to her by Gu, a friend of P and a substantial shareholder of the Listco, whom she got acquainted at a dinner party held at P’s home, and with whom she became “close personal friends”. However, her case is that she herself did not ask Gu for the loan but she asked P to, and P did, convey to Gu her request for the loan.

17.  D now relies heavily on 2 written loan agreements both back dated to 22 January 2023 signed by her respectively with Gu Jr and Mrs Gu. According to D, the 2 loan agreements were signed in early January 2024 when one Mr Lam of CMB Wing Lung Bank requested documentary evidence of the source of funds received into D’s bank account for the purchase of the Subject Shares.

18.  In her affirmation filed on 22 June 2026, D

a. sought to explain why she and Zhong sent a number of WeChat messages to P (some of which will be alluded to below), and explained how and why they should not be read and understood according to the plain texts;

b. sought to explain why and how she worked with one Mr Zhang, an assistant of Gu in relation to the transfer of the funds and the opening of D’s CS Account;

c. sought to explain why upon the completion of the subscription of the Subject Shares, she provided Gu with the login credentials and password for D’s CS Account;

d. mentioned that Gu Jr had regularly accessed D’s CS Account;

e. mentioned that on 16 October 2024, Gu Jr messaged her and requested her essentially to liaise with ChaoShang to re-activate D’s CS Account which was frozen as D had changed her mobile phone number, and afterwards, D duly provided Gu Jr with the new login credentials;

f. said that the Subject Shares were not discussed in the February Meeting, and the 10% “remuneration” was proposed in relation to the Feiyang Shares (which D also held for P as nominee) and not the Subject Shares; and

g. said that in March 2026, she transferred the Subject Shares to be held in Futu and confirmed that she sold approximately 41,210,000 shares of the Subject Shares at prices between HK$0.24 to $0.4 per share to profit from her own investment.

Granting the proprietary injunction

19.  The principles guiding whether a proprietary injunction should be granted are well-settled and not seriously disputed. They have been succinctly summarized by DHCJ Grace Chow in Vasily Trubnikov v Evgeny Volosov and Others [2025] HKCFI 1576 §14:

“(1) For the grant of a proprietary injunction, there are three requirements: (a) there is a serious issue to be tried on the merits; (b) that the balance of convenience lies in favour of the injunction; and (c) it is just and convenient to grant the injunction;

(2) The threshold of “serious issue to be tried” is not a very steep hurdle but if the opposing party seeks to show that there is no serious issue to be tried, the threshold is high as it would be necessary to demonstrate that the claim should be struck out;

(3) It is not necessary to show any risk of dissipation of assets;

(4) Nor is it necessary to show that damages would not be an adequate remedy. However, it remains necessary to demonstrate that the balance of convenience favours the granting of the injunction, and that it would be just and convenient to do so; and

(5) As a fundamental principle, the Court at the interlocutory stage would take whichever course that appears to carry the lower risk of injustice if it should turn out that it is wrong.

See e.g.: Gentle Soar Limited v CMBC Capital Finance Limited & Ors [2021] HKCFI 3450 at §36 per K Yeung J; Wason Holdings Limited & Ors v BHP International Markets Limited & Anor [2018] HKCA 113 per Barma JA at §37; and Heitkamp & Thumann KG v Living Profit Trading Develop Limited & Ors [2018] HKCFI 1006 per DHCJ Marlene Ng (as she then was) at §§55-57”

20.  Though it is not necessary to show any risk of dissipation of assets, the existence of such risk is clearly a factor that weighs heavily in favour of the plaintiff (Hengshi International Investments Ltd v Bayspring International Ltd and Another HCMP1916/2015, 18 December 2015, Q Au Yeung J at §88).

21.  Mr Chain SC, leading Mr Yeung, counsel for D, emphasized the point it had been held that where the subject matter of the proprietary injunction sought is a fungible asset (as the Subject Shares are) and if there is nothing to suggest that it would be beyond the defendant’s means to meet a monetary judgment for the amount that would after trial be awarded, a proprietary injunction ought not be granted as damages would be adequate remedy.

22.  Despite Mr Chain’s contentions to the contrary, in my view P has clearly shown a more than serious question to be tried on his claim, for the following reasons.

23.  Firstly, the following contemporaneous documents and WeChat messages on their face support P’s claim:

a. The email D sent to P on 1 December 2023[2] forwarding ChaoShang’s email to D confirming that D’s CS Account was opened and containing details of that account. If D beneficially owned the Subject Shares as her personal investment, there would be no reason, and in fact rather strange, that she would provide to P the details of D’s CS Account immediately after it was opened. D in her affirmation did not explain why she sent this email.

b. D’s WeChat message sent to P on 20 February 2025[3] enclosing a table setting out in the 1^st roll the number of the Subject Shares, that they were held in ChaoShang, and the closing price of HK$0.37 on that day with this remark “代持: 賬户登陆手机及，密碼資料交顾总保管，賬户: 9002935 賬户持有人 : HAIYUE” and in the 2^nd to 4^th rolls, providing similar information regarding 4 lots of Feiyang shares held in 4 different financial institutions; the table was followed by the message “沈总，上图是股票的情况，请您查看”.

c. Then, the next day, ie. 21 February 2025, P by WeChat message to D asked “百德股份只有你代持的嗎”, and D answered immediately “据我所知只有我，之前顾㤐让我准备其他人的資料，我准备了好后通知他，他說找时间对接，但一直没有对接”[4].

24.  Secondly, I find D’s purported explanations as to why the WeChat messages sent on 20 and 21 February 2025 was sent rather unconvincing. Her various assertions in her affirmation concerning how these WeChat messages should be read and understood, including that the remark “代持” was only meant to apply to the Feiyang shares are rather disingenuous, as by the way the information was set out in the table, the remark “代持” plainly applies to the Subject Shares.

25.  Thirdly and importantly, if the Subject Shares were her own investment and property, there is no credible reason why she would give to Gu and Gu Jr the credentials and password for operating D’s CS Account, and then told P in the WeChat message dated 20 February 2025 that “代持: 賬户登陆手机及，密碼資料交顾总保管”. It would mean that P, Gu and Gu Jr were put in a position to operate D’s CS Account, including selling the securities held thereunder. In October 2024, D even complied to Gu Jr’s request to him fresh credentials when she had changed her mobile phone number. And the compliance, as shown by the WeChat messages, was without query or hesitation. There was also no complaint by D, or any surprise or other reaction on her part, in relation to the repeated access of D’s CS Account by Gu Jr. Her explanation in her affirmation that she “voluntarily” gave Gu and Gu Jr the credential and password is rather incredible.

26.  Fourthly, the transcript of WhatsApp voice recordings between Gu and D on 5 January 2024[5], which is proffered by D, shows that there were discussions between them that the 2 companies should not be named as the lenders in the 2 loan agreements (even though the 2 tranches of HK$1 million were transferred respectively by them to D) but a shareholder thereof should be, as well as other discussions concerning how the 2 loan agreements should be signed so as to meet the requirements of the bank, but no discussion between them as to the terms of the loan agreements, like interest rate and such, on which one would expect a lender and borrower would discuss. The tenor of the conversation lends some support to the suggestion that the 2 loan agreements were made merely to satisfy the requirement of the bank.

27.  Lastly and also importantly, according to the 2 loan agreements, the terms of the 2 loans were both 12 months, ie., repayable on 21 November 2024, and interest was to be calculated at 3% per annum to be paid together with the principal at the end of the term. However, and based on D’s own evidence, there was never any demand to date by Gu Jr or Mrs Gu for repayment of either the principals or interests under the 2 loans. D’s explanation was that HK$2,000,000 was to Gu family but a negligible sum compared to their wealth, and suggested that they did not care for repayment. I find that rather inherently improbable and incredible in that the lenders cared enough to have 2 loans agreements signed, but did not care at all, according to D, for their performance and enforcement.

28.  Mr Chain contended strenuously that as the Subject Shares are shares of the Listco and therefore could be purchased from the Exchange, and therefore fungible and that D was good for the monetary judgment, the proprietary injunction application should be refused.

29.  At a price per share of say HK$0.3, the market value of the Subject Shares would be HK$31,263,000.

30.  The material placed before this Court shows that the only valuable asset D has is a flat she purchased in December 2021 at the price of HK$9,502,000. However, it is subjected to a mortgage securing a loan of “all moneys”, and the precise amount of the outstanding loan D has not disclosed by D at all.

31.  Mr Chain submitted that the Subject Shares should be regarded as part of D’s assets for the purpose of assessing whether she would be good for the ultimate money judgment, should P later prevailed.

32.  I am not convinced that I should so regard as I consider there is not insignificant risk that D may from now until trial dissipate the Subject Shares and its traceable proceeds if she is not enjoined.

a. I think the timing of D’s recent sale of part of the Subject Shares, telling. D did not sell any of them for profit from December 2023 until recently, nor did she sell any when the share price was very high in January and February 2026, but only began to sell in March 2026 after the February Meeting. Such timing of sale suggests that she sold part in response to P intended action to seek the return of the Subject Shares

b. I do not find convincing that D was selling in March and April 2026 by way of usual commercial sale of an investor, as Mr Chain urged. The monthly statements of D’s Futu account for March and April 2026 showed that since mid-March 2026, she began selling the Subject Shares continuously and frequently by lots varying from 10,000 shares to about 500,000 shares several sales a day at HK$0.34 per share up to the highest of HK$0.4 on 24 March 2026 and then at and despite gradually lower prices down to HK$0.24 by mid to late April 2026 when she quitted selling on 28 April 2026 (2 weeks after P issued the Injunction Summons). In my view, the sale pattern was more consistent with one liquidating at a hurry rather than one selling in a timely manner to maximize profit;

c. The total worth of the Subject Shares represented very significant wealth compared to what she has as shown by the materials placed before this Court; and

d. I regard P’s claim as stronger than just a serious question to be tried.

33.  As is shown and not disputed that P is holding in his own name a significantly larger number of shares in the Listco than the Subject Shares, this Court enquired with P at the hearing, and P was prepared to give an undertaking that he will retain until trial or further order the unencumbered beneficial ownership of at least an equal amount of shares in the Listco as the Subject Shares by way of fortification of his undertaking as to damages should a proprietary injunction be granted as sought.

34.  Mr Chain has submitted that there was delay on the part of P, that P has failed to show urgency or there existed such a real risk of immediate dissipation. Those are operative considerations in relation to the Mareva injunction application. However, concerning the principles governing the grant of proprietary injunction, as was not seriously disputed, these matters weigh relatively little, especially in light of my view that from now until trial there exists a not insignificant risk of dissipation by D.

35.  In the round, I think on balance of convenience the proprietary injunction as sought by P ought to be granted. I therefore so ordered at the conclusion of the hearing and also granted the ancillary disclosure order, the contentious parts of the terms of which were ruled on at the hearing and the remaining parts, as indicated, the parties were able to agree on within 2 days of the hearing.

Refusing to grant the Mareva injunction

36.  The pertinent procedural background is that:

a. The Injunction Summons was issued on 14 April 2026 by way of an inter-partes summons fixed to be heard on 17 April 2026, but it was only served onto D’s address on 16 April 2026, and therefore it was not served 2 clear days before the scheduled hearing;

b. D was absent at the hearing on 17 April 2026. When enquired by the Summons Judge, P (who then engaged a different legal team) did not choose to proceed ex-parte. The Judge then refused to grant an abridgment of time and did not hear the Injunction Summons because it was not served 2 clear days before the hearing;

c. D then initiated correspondence with P concerning P’s application by the Injunction Summons by her solicitors’ letter dated 23 April 2026;

d. The Injunction Summons was then heard on 24 April 2026 before another Summons Judge. Both sides attended by counsel. The Judge refused to grant any form of interim interim injunction; P did not appeal against the Judge’s refusal;

e. The correspondence between the parties continued, and D offered by letter dated 28 April 2026 to give an undertaking not to dispose of or dissipate the remaining about 63,000,000 shares of the Subject Share held in Futu. The undertaking was not accepted as D refused to disclose the whereabout of the proceeds of sale of the 41,210,000 shares of the Subject Shares, as asked for by P.

37.  Having heard the parties, I refused to grant the Mareva injunction on top of the proprietary junction and its ancillary disclosure, as asked for by P, for following reasons.

38.  First, I think there is validity in Mr Chain’s contention that even though P knew that about 63,000,000 shares now remain in Futu and D was willing to give an undertaking concerning them, P continues to apply and press for, on top of the proprietary injunction and not in some form of alternative to, a Mareva injunction covering the estimated value of the entire lot of Subject Shares. There is thus an unfair over-reach seeking to enjoin against D much more than the value of P’s claim.

39.  Second, I accept Mr Chain’s submissions that by issuing the Injunction Summons inter-partes but served it not in time for the 17 April hearing, not proceeding with it as an ex-parte application on 17 April 2026 even though been effectively invited by the Judge, not appealing against the refusal of interim interim injunction, and then engaging in discussions with D over correspondence regarding the injunction application – all these indicated that there was no such serious urgency or such a real and appreciable risk of dissipation that justify the issuance of a Mareva injunction.

40.  Lastly and in the round, I am of the view that granting the proprietary injunction is already the appropriate course that balances the justice and fairness between the parties, and is one that might occasion the least irremediable prejudice to one party as measured against that of the other. On the other hand, imposing the Mareva injunction sought on top would produce an interlocutory state of affairs relatively unjust to D.

Refusing P’s summons to file and serve his reply affirmations out of time

41.  The matters deposed to in P’s 2 reply affirmations concern the merits of P’s claim, in that principally by Gu’s affirmation, Gu refuted D’s version that they were close personal friends and that the transaction was a personal loan he caused to be made to D as D claimed.

42.  As expressed above, I was able to come to my said view on the merits of P’s claim without even considering any of the matters deposed to in the 2 reply affirmations sought to be filed by P.

43.  In this case, as often happened in interlocutory injunctions applications, a tight time table for the filing of affirmation evidence leading to the substantive hearing was given. Here D has applied for and was granted by consent an extension of 28 days from 22 May 2026 to 19 June 2026 to file her affirmation in opposition. P’s affirmation in reply was therefore due to be filed 28 days after on 17 July 2026.

44.  However, P only issued the time summons as late as on 6 August 2026, and by then only draft affirmations were provided. There was no explanation given by P for the delay. The affirmed versions of P’s and Gu’s affirmations were only served onto D on 10 August 2026, which was less than 2 clear days before this hearing.

45.  In the premises, I dismiss P’s said time summons with the costs order, on nisi basis, that costs be to D, but to be taxed together with D’s costs of the Injunction Summons (if D wins this action) or taxed separately by D then if P wins this action.

46.  I thank, Mr Chain SC, Mr Lau and Mr Yeung for their assistance.