MADAM SUN LING v. GROUP JOY (HK) LTD AND ANOTHER

HCA 2388/2024
HCMP 765/2024

[2026] HKCFI 2842

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO. 2388 OF 2024 AND HIGH COURT

MISCELLANEOUS PROCEEDINGS 765 OF 2024

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BETWEEN

(Consolidated by the Order of Master Roy Yu dated 12 February 2025)

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D E C I S I O N

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1.  This is the application by Group Joy (HK) Ltd (“D1”) by Summons dated 24 October 2025 (the “Summons”) for an interlocutory mandatory injunction the effect of which is to evict Sun Ling (“P”) and the children Ip Chi Keung (“son”) and Ip Sun Yu (“daughter”) (collectively, the “Children”) from Flat A, 75/F, Tower 3, The Harbourside, No. 1 Austin Road West, Kowloon (the “Property”).

2.  The Summons arises out of the following 2 actions:

(a)  an originating summons (HCMP 765/2024) taken out by D1 against P pursuant to Order 113, rule 2 on 9 May 2024 for possession of the Property (the “O.113 application”); and

(b)  a Writ of Summons (HCA 2388/2024 indorsed with a Statement of Claim (“SOC”) issued on 2 December 2024 by P against D1 and Ip Siu Kau (“D2”) for, inter alia, enforcement of an Oral Agreement[1] and/or a declaration that D1 and/or D2 hold the Property on trust for P, and reliance on estoppel preventing D1 from disposing of the Property (“HCA 2388”).

3.  Pursuant to the order of Master Roy Yu dated 12 February 2025, HCA 2388/2024 and HCMP 765/2024 were consolidated with HCA 2388/2024 as lead action.

Relevant background

4.  D2 is an experienced real estate investor. He is the sole director and sole shareholder of D1, one of the corporate vehicles used by D2 to hold his properties. D1 and D2 are collectively referred to as the “Defendants”.

5.  It is common ground that D2 and P had a romantic relationship prior to 2013. According to P, by the time D2 moved out of the Property in March 2024, they had been together for about 20 years[2].

6.  D1 purchased the Property on 10 October 2014 for a sum in excess of $82 million. After completion on 26 November 2014, D2 resided there together with P and the Children until he moved out of the Property in March 2024.

7.  Prior to that date, it is common ground that D2 and P were living in a rental property together with the Children. Their son was born in September 2013 and their daughter was adopted by P in China in 2012 and subsequently officially adopted in Hong Kong by P and D2 on 27 September 2016.

8.  On 2 May 2024, the Defendants’ solicitors sent a letter to the Plaintiff revoking the licence referred to in §10 below. The revocation letter gave the Plaintiff and the Children one week to vacate the Property.

9.  When that did not happen, on the day the notice of termination expired (9 May 2024), D2 caused D1 to commence O.113 application against P to recover possession of the Property.

10.  D2 made the supporting affirmation dated 6 May 2024 (“D2 1^st”) to the effect that

(a)  D2 is the “sole owner of the Property[3]”: §2;

(b)  D2 procured D1 to grant a licence to P and the Children to live together with him at the Property on condition that P undertook to take care of D2 while she resides in the Property: §4;

(c)  D2 no longer required P to take care of him and D2 intended to take possession of the Property for rent or for sale: §6; and

(d)  P failed or refused to deliver vacant possession of the Property to D2: §7.

11.  On 2 December 2024, P commenced HCA 2388.

12.  Attached to the Summons is a schedule containing undertakings given to the Court by the Defendants in the event of the Court granting the injunction sought. They include an undertaking by D1 not to sell the Property until the conclusion of the consolidated proceedings and an undertaking by the Defendants to provide P with a monthly allowance of $30,000 for renting another residential property until further determination by the Court.

Applicable legal principles

13.  It is well established that for an interlocutory injunction to be granted, it is for the applicant to show that (1) there is a serious question to be tried, and (2) the balance of convenience lies in favour of granting an injunction: Hong Kong Civil Procedure 2026, Vol 1 at §29/1/8.

14.  The key principles derived from Lord Diplock’s speech in American Cyanamide Co v Ethicon set out in §29/1/9 include the following:

“(3) It is no part of the court’s function at this stage of the litigation to try to resolve conflicts of evidence on affidavit as to facts on which the claims of either party may ultimately depend or to decide difficult questions of law which call for detailed argument and mature considerations. These are matters to be dealt with at the trial.”

15.  A useful statement of the principles on the grant of interlocutory mandatory injunctions is to be found in Music Advance Ltd v Incorporated Owners of Argyle Centre Phase I [2010] 2 HKLRD 1041 at §12. At the interlocutory injunction stage, the principal concern of the Court is that it might make a wrong decision. The Court will take whichever course appears to carry the lower risk of injustice if it should turn out that it is wrong.

16.  Generally, the Court would not grant an interlocutory mandatory injunction unless it felt a high degree of assurance that at trial, it would be shown that the injunction was rightly granted because in such a case, the risk of injustice can be quite acute[4]. If the plaintiff seeking an interlocutory mandatory injunction could not demonstrate more than a serious question to be tried, it would have to show that the balance of convenience tilted so much in its favour that justice required the injunction to be granted.

17.  It is where there is doubt as to the adequacy of the respective remedies and damages that the question of balance of convenience arises. Where other factors appear to be evenly balanced it is a counsel of prudence to take such measures as are calculated to preserve the status quo: HKCP 2026 at §29/1/11.

This Application

(A)  Nature of P’s occupation of the Property

18.  At the heart of the Parties’ dispute is the issue of beneficial ownership of the Property.

19.  Mr Jeffrey Tam and Mr Oscar Tang, Counsel for the Defendants, referred to Leung Hang Lin and Another v Lam Mei Yung [2019] HKCFI 2819 where it was held (at §8 (1)) that the starting point is that equity follows the law. There is a presumption that the beneficial interest follows the legal interest. Where the property is registered in a defendant’s name, the plaintiff bears the burden of showing, on the balance of probabilities, that the defendant held the property on trust for him or her such that the beneficial ownership differs to the legal ownership.

20.  It is the Defendants’ case that D1 had granted an implied bare licence for the Plaintiff and the Children to use the Property (the “Licence”) after its acquisition[5]. The Licence was conditional upon the “Arrangement” described in §10(b)[6] above. As the Licence has been revoked, the Plaintiff and the Children[7] are trespassers and must vacate the Property.

21.  Certain reasons for terminating the Licence are pleaded in D&CC at §6.2, including the allegation that since P and D2 moved into the Property, P did not take care of D2 “diligently as she promised in the first place”. Since D2 had put up with P’s caretaking services for 10 years, what event prompted the termination is unclear. It also raises the question under what circumstances the Licence could be determined.

22.  P’s case is that her occupation of the Property is based on an oral agreement between P and D2 set out in P’s Statement of Claim (“SOC”) at §6 as follows:

“On 20 May 2012, the 2^nd Defendant orally promise or agreed with the Plaintiff that:

(a) If the Plaintiff was able to give birth to a son that is of the 2^nd Defendant's own blood, he would purchase a new flat to be used by the Plaintiff, the 2^nd Defendant, the Son and the Daughter as their matrimonial home.

(b) When the 2^nd Defendant died, this property would be given to the Plaintiff as a gift.

(‘the Oral Agreement’)”

23.  As regards the purchase of the Property, P stated in her 3^rd affirmation filed on 5 January 2026 as follows:

“7. In fact, around 2022, the Property was purchased and registered under the name of [D2] for the following reasons.

…

(b) The Property was sold by the developer on a ballot scheme. I submitted a ballot to purchase the Property under my own name.

(c) To improve the chance under the ballot scheme, [D2] used [D1] (a limited company fully owned and controlled by him) as a vehicle to submit another ballot in parallel.

(d) Eventually, only [D1] was successful at the ballot thus the Property was purchased under the name of [D1]. If my ballot was successful, the original plan was to purchase the Property under my name.

(e) [D2] also considered purchasing the Property using a limited company could achieve tax savings.

(f) At that time, I trust [D2] so the Property was purchased under the name of [D1].”

24.  Mr Tam submitted that P’s case is unmeritorious for 3 reasons:

(1) P was putting forward 2 inconsistent cases on the question of ownership:

(a) that the Property would go to P immediately after its purchase which was in 2014; and

(b) it would only go to P after the passing of D2. He considered the inconsistency to be fatal.

(2) P has not adduced any documentary evidence in support of the Oral Agreement for example, instant messaging services such as WhatsApp and WeChat.

(3) The condition for the Oral Agreement, namely, the birth of a son is unbelievable as D2 already has 3 sons and a grandson.

25.  Mr Roy KY Lau, Counsel for P, explained that properly understood no such inconsistency exists. §6(a) of the SOC means that during the lifetime of D2, there will be four persons having the right to live in the Property for their lifetime, namely, P, D2 and the Children. It is not inconsistent with §6(b) of the SOC which refers to the situation prevailing after D2’s passing.

26.  P’s evidence[8] concerning the purchase of the Property is not inconsistent with the Oral Agreement as described in §24 above.

27.  As regards the absence of any documentary evidence of the Oral Agreement, of itself, that is hardly surprising given the delicate nature of the subject matter. Nor is there any evidence that P and D2 usually communicate with each other via WhatsApp or WeChat.

28.  Mr Lau submitted that D2 implicitly confirmed the Oral Agreement by conduct since the son was conceived via artificial insemination and that could not have happened without D2’s knowledge and cooperation.

29.  As regards §24(3) above, the Defendants submitted that the “condition” for the Oral Agreement is undermined by the fact that D2 already had 3 sons. However, P’s evidence is that at the time the 3 sons had cut off all means of contact with D2 including via the mobile phone or social media platforms.

30.  P was in her mid-40s at the time of the Oral Agreement. It is a fact that the son was born 16 months later through artificial insemination. Further, D2 does not deny that P is the biological mother and he the biological father.

31.  The Oral Agreement if made out at trial will undermine the Defendants’ case based on the Licence.

32.  In any case, there is clearly a serious issue to be tried.

(B)  Lifting the corporate veil

33.  The O.113 application was made in the name of D1. However, the matters identified in §10 above (extracted from D2 1^st filed in support) show that while the application was ostensibly made by D1, in reality D2 is asking for delivery of the Property to him[9], having deposed to the fact that he is the owner of the Property.

34.  Further, the undertakings set out in the Schedule to the Summons are given by both Defendants. Paragraph 3 of the undertakings concerned is the payment of a monthly allowance to P. D1 being a property holding company has no other assets and is not in a position to provide that undertaking.

35.  One of the circumstances when the veil of incorporation will be pierced is “where the company is an authorised agent of its parent or other members[10]”.

36.  Instances where the corporate veil has been lifted can be gleaned from the discussion of the relevant principles by the Court of Appeal in Winland Enterprises Group Inc v Wex Pharmaceuticals Inc [2012] 2 HKLRD 757 at §§43-54 and include the following situations:

(1)  ‘… this defendant company was formed and was carrying on business merely as a cloak or sham for the purpose of enabling the defendant … to commit the breach of the covenant …’: §44

(2)  ‘The defendant company is the creature of the first defendant, a device and sham, a mask which he holds before his face in an attempt to avoid recognition by the eye of equity.’: §45

(3)  ‘Using a corporate structure to evade legal obligation is objectionable. The courts’ power to lift the corporate veil may be exercised to overcome such evasion so as to preserve legal obligation …’: §49

37.  Mr Lau submitted that D2 fully controls D1 which is the agent of D2 to hold the Property. D2 should not be allowed to hide behind the corporate veil to evade his obligations under the Oral Agreement since, on his own evidence, he treats the Property as his own Property.

38.  If the Court is of the view that an injunction should not be granted to D2, D1 would not be in a better position as the corporate veil would be lifted.

(C)  Promissory estoppel

39.  This was raised in P’s reply submissions based on Hong Kong Hua Qiao Company Limited v Cham Ka Tai, CACV 178/2013, 4 March 2015. In that case, the plaintiff company which owned a property claimed vacant possession against the defendant’s mistress. She successfully counterclaimed for that property to be transferred to her, based on promises made by the deceased during his lifetime. The CA upheld the judgment based on promissory estoppel.

40.  Mr Lau submitted that as the facts are fairly similar in the present case, it is at least arguable that P has a case in promissory estoppel.

(D)  Adequacy of damages

41.  Until recently[11], the mortgage repayments were of the order of $166,000 per month[12]. Mr Tam submitted that the mandatory injunction sought is necessary because (i) there is a risk of default that will affect the financial credibility of D2; and (i) it is highly doubtful whether P is financially capable of paying mesne profits to D1 if P loses at trial.

42.  As regards (i) above, §5 of P’s Reply filed on 26 May 2025 listed 17 properties which D2 owns with a market value in excess of $500 million. In P 3^rd at §58[13], P stated that when D2 moved out of the Property he had $16 million in cash at the bank. In his affirmations made after that date[14], D2 failed to address those matters. Accordingly, the Court is in no position to form a view as to the risk of default.

43.  However, D2’s reason for revoking the Licence, a precursor to the Summons issued a week later, does not sit well with the former. Revocation of the Licence was said to facilitate the renting out of the Property to improve his “financial liquidity”.

44.  The rental value is no more than $70,000 per month or roughly just over 40% of the then monthly mortgage repayment of approximately $166,000. Since November 2025, the mortgage repayments became HIBOR-based[15] resulting in repayments of over $214,000 per month[16], representing a 29% increase in monthly repayments.

45.  But the net effect of the Defendants’ undertakings in the Schedule to the Summons after deduction of the allowance of $30,000 to P pending trial, would mean no more than a net improvement to D2’s financial liquidity of only $40,000 per month.

46.  The Defendants submitted that if P were unsuccessful at trial, she would not be financially capable of making payment of mesne profits[17] to the Defendants.

47.  On the Defendants’ evidence, the rental value is no more than $70,000 a month or $840,000 per annum. P and D2 jointly own a car park and a commercial property. There is no evidence of their value although P accepts that they are not ‘valuable[18]’ properties. Nevertheless, Mr Lau submitted that her half share would easily be worth $2-$3 million, sufficient to cover mesne profits for a period of say 2 ½ to 3 ½ years assuming the period were to run from 9 May 2024.

48.  Even on the assumption that the Defendants were to succeed at trial, it is extremely doubtful if the Court would consider a week’s notice to vacate as adequate in the circumstances of this case.

Balance of convenience

49.  In the case of the Defendants, damages are an adequate remedy.

50.  Insofar as there may be a shortfall in mesne profits should the trial not take place in the next 12 months, the parties could request a speedy trial.

51.  The Summons was not taken out until 24 October 2025, a year after the commencement of the O.113 application, 10 months after P commenced HCA 2388 and almost 6 months after the filing of D&CC where the Defendants seek the same relief in their counterclaim as in this application.

52.  That the Defendants failed to make a timely application is clear. Their delay suggests that they would not suffer irreparable harm if an injunction were not granted.

53.  In the case of P, it is quite clear that if the mandatory injunction sought turns out to be wrongly granted, the risk of injustice could be quite acute. To evict P and the Children (now aged 14 and 11) from the Property which has been their home for over 11 years and the only home that the Children know would be immensely disruptive, if not traumatic, in terms of schooling and everyday life. Should P prevail in HCA 2388 and the injunction is shown to be wrongly granted, the resulting damage may be irremediable.

54.  In those circumstances, the better course is to preserve the status quo.

Disposition

55.  The Defendants’ application for a mandatory injunction is dismissed.

56.  I make an order nisi of costs in favour of the Plaintiff with certificate for counsel, such costs to be summarily assessed.

57.  It is directed that (i) the Plaintiff do lodge her statement of costs 14 days of this Order; (ii) the Defendants do lodge their list of objections, if any, limited to 2 pages within 14 days thereafter; and (iii) the Plaintiff do lodge her reply, if any, limited to one page within 7 days thereafter.