WANG LI SHUANG AND ANOTHER v. WANG HANNING AND OTHERS

HCA 1586/2024

[2026] HKCFI 3553

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1586 OF 2024

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J U D G M E N T

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Overview

1.  This is the 2^nd Defendant’s application to discharge an interlocutory injunction dated 9 September 2024 (“Injunction”) on the ground of material non-disclosure and failure to provide full and frank disclosure.

2.  The application is led by王耀昆的非宗教式誓祠 whereas the Plaintiffs have not filed any evidence. On 29 May 2026, the Plaintiffs gave notice to act in person. They did not appear at the hearing. The 2^nd Defendant appeared through counsel Ms Cyndi Ho. At the end of the hearing, I reserved judgment, which I now give.

3.  The Injunction restrains the 1^st and 2^nd Defendants from selling, trading, transferring, assigning, conveying, converting, dealing with or otherwise disposing of certain convertible bond issued by the 3^rd Defendant to the 2^nd Defendant (“Convertible Bond”), which would result in the value of the Convertible Bond held by the 2^nd Defendant to fall below HK$106,820,000.

4.  According to the Plaintiffs’ pleaded case, the Convertible Bond with the value of HK$106,820,000 was held by the 2^nd Defendant on trust for them pursuant to an oral agreement made around 20 March 2011 (“Alleged Oral Agreement”) and as evidenced by the following documents signed by the 1^st Defendant on behalf of the 2^nd Defendant: (a) two written undertakings dated 29 March 2011 (“Undertakings”) and (b) Form of Transfer in connection with the Convertible Bond with the total value of HK$106,820,000 (“Forms”), which were handed to the Plaintiffs.

5.  It is said the property held on trust by the 2^nd Defendant represented the Plaintiffs’ commission for introducing a listed company to the 1^st Defendant’s father (Wang Guoju) who wanted to execute a reverse takeover (or a backdoor listing) of an apparently valuable natural gas field. It is further said that on 20 June 2024, the 2^nd Defendant acted in breach of trust and transferred HK$446,880,000 worth of the Convertible Bond (while retaining Convertible Bond in the value of HK$232,790,000) to a third party without the Plaintiffs’ knowledge or consent. It would appear the alleged breach of trust was the trigger point for the Plaintiffs’ application for the Injunction.

6.  On the other hand, the 1^st and 2^nd Defendants deny in their pleadings there was a trust, and deny the Alleged Oral Agreement. They further claim that the Undertakings were forged documents, and deny the 1^st Defendant has signed the Undertakings. As to the Forms, their only plea is that the Forms did not contain the 2^nd Defendant’s company chop, and therefore cannot be used to effect a transfer of shares.

Analysis

7.  An antecedent question to the 2^nd Defendant’s application is whether the Plaintiffs owed a duty to make full and frank disclosure in the first place.

8.  The Plaintiffs’ application for Injunction was made by way of an inter partes summons dated 13 August 2024 and returnable on 16 August 2024 at 10 am. According to the Affirmation of Hui Man Yee dated 15 August 2024, that summons, a hearing bundle, skeleton submissions and authorities were served on the 3^rd Defendant and left at the address of the 1^st and 2^nd Defendants on 14 August 2024.

9.  It was unclear from the Court file what had transpired at the hearing on 16 August 2024. Ms Ho confirmed that as far as she knew, no injunction was granted against the 1^st and 2^nd Defendants.

10.  Further, according to the 3^rd Affirmation of Moosa Shawn Nicholas dated 4 September 2024, that same summons, a hearing bundle, skeleton submissions and authorities were served on the Defendants on 3 September 2024. The cover letter alerted the Defendants to the hearing on 6 September 2024 at 10 am.

11.  The preamble of the Injunction recorded that Keith Yeung J (as he then was) heard from the Plaintiffs’ counsel whereas the 1^st and 2^nd Defendants were absent while the 3^rd Defendant was excused.

12.  Thus, it would appear that the Injunction was granted at an inter partes hearing that the 2^nd Defendant was given proper notice of but did not attend. Ms Ho accepted this was the case.

13.  In this connection, there is a divergence of opinion (at Court of First Instance level) whether the duty to make full and frank disclosure applies at an inter partes hearing.

14.  On the one hand, it is thought that where proper notice of a hearing has been given pursuant to the applicable rules of court, the hearing should be treated as inter partes to which the duty of full and frank disclosure does not extend: CSIL v Lo Fung Hung [2024] HKCFI 1200 at §§26-35 (Cheng J); Alpha & Leader Associates Ltd [2023] HKCFI 2322 at §§146-161 (DHCJ Winnie Tsui).

15.  The other view is that an applicant in an inter partes hearing is not absolved from the duty to make full and frank disclosure where the responding party has had no fair and reasonable opportunity to present his/her evidence and arguments in opposition: Chen Lingxia v 中國金谷國際信託有限責任公司 [2019] HKCFI 379 at §§40-42 (Mimmie Chan J); HKCOLO.NET v Hong Kong Telecommunications (HKT) [2023] HKCFI 138 at §112 (DHCJ Herbert Au Yeung).

16.  It seems to me that for present purposes it is probably unnecessary to choose between the two lines of authorities. They are both against the 2^nd Defendant on the facts of this case. It is plain that the 2^nd Defendant was given proper notice according to the relevant rules of court. It is equally plain the 2^nd Defendant has had ample chance to present its case but did not take up the opportunity. It follows from both lines of authorities that the duty of full and frank disclosure is not engaged, which undermines the present application.

17.  But in case I were wrong, I would further address this application on the footing that the Plaintiffs owed a duty of full and frank disclosure. It goes without saying the Plaintiffs must not mislead the Court (see CSIL at §§29-31), which to be fair was the focus of Ms Ho’s oral submissions.

18.  Ms Ho’s first complaint is that the Plaintiffs failed to disclose the 1^st and 2^nd Defendant’s pleaded defence that the Undertakings were forgeries. This is a non-starter. The 1^st and 2^nd Defendants’ defences were filed on 3 March 2025 so their defence was not something which the Plaintiffs could have disclosed to the Court beforehand. See Sino Wood Investment Ltd v Wong Kam Yin (HCA 307/2002, 23 December 2002) at §24 (DHCJ Andrew Cheung).

19.  Ms Ho’s second complaint is that the Plaintiffs did not disclose the fact that according to their recollection, the Alleged Oral Agreement was reached at a meeting in Shenzhen on around 20 March 2011 which the 1^st Defendant (who purportedly signed the Undertakings and Forms on the 2^nd Defendant’s behalf) did not attend. It is said that such disclosure was only made in the Plaintiffs’ Answers to the 1^st and 2^nd Defendants’ Request for Further and Better Particulars filed on 27 January 2025 (“Answers”), which came after the Injunction was granted.

20.  Ms Ho further pointed out that the Undertakings were amongst the supporting evidence of the application for the Injunction but the Plaintiffs never alerted the Court that they were dated 29 March 2011 (and not 20 March 2011). She made a similar point when she referred me to the Answers where the Plaintiffs appear to say the Undertakings were signed at the meeting in Shenzhen on around 20 March 2011. She argued this was inconsistent with the Undertakings, which were dated 29 March 2011.

21.  I do not consider there was any material non-disclosure or attempt to mislead the Court here. Properly read, it seems to me a fair reading of §§14-16 of the Amended Statement of Claim shows the Plaintiffs’ pleaded case is that the Alleged Oral Agreement was reached by the Plaintiffs, Wang Guoju and the 1^st and 2^nd Defendants on or around 20 March 2011 (在2011年3月20日前後), and that insofar as the 1^st and 2^nd Defendants were concerned, their agreement was evidenced by the Undertakings and Forms. I also note that in both Undertakings, the date of 29 March 2011 appeared immediately below the 1^st Defendant’s signature, which would suggest he signed it that date, whereas no date appeared under the respective signatures of the 1^st and 2^nd Plaintiffs. All in all, I do not consider there is anything materially inconsistent with the Answers that the Plaintiffs subsequently gave that would have substantially impacted the case.

22.  Ms Ho’s third complaint is that whereas the Plaintiffs did disclose to the Court that they had previously issued proceedings (in HCA 98/2014) against the same three Defendants, and the fact that it had since been discontinued, they failed to disclose that they pleaded a case that is said to be inconsistent with the trust case presently pleaded in this action. It is also said the Plaintiffs should have disclosed the pleading in the earlier action but failed to do so.

23.  To make good her point, Ms Ho referred me to §§4-5 of the Statement of Claim in the earlier action where the Plaintiffs pleaded that the 1^st Defendant granted them an option to acquire and/or agreed to transfer shares of the 3^rd Defendant. Ms Ho pointed out that in pleading the option the Plaintiffs accepted their entitlement to the 3^rd Defendant’s shares predicated on them paying consideration, which they never did. As the argument went, Ms Ho reasoned that the Plaintiffs’ pleaded case in the earlier action was different from the trust case they are presently running in this action as the trust case proceeds on a different footing, namely that the Plaintiffs have the beneficial ownership in the Convertible Bond in question (and the 3^rd Defendant’s shares which may be exchanged for).

24.  In my judgment, Ms Ho has misread the pleading. If one further reads §§6-8 of the Statement of Claim in the earlier action, the pleader pleaded that as at 2 August 2013, the Plaintiffs had found potential buyer(s) for the 3^rd Defendant’s shares and as a result, on about 2 August 2013, the Plaintiffs’ solicitors wrote to the 1^st Defendant to inter alia (a) exercise the right to acquire the 3^rd Defendant’s shares (b) ask the 3^rd Defendant to “surrender the relevant Certificate of CB” and (c) inform the 3^rd Defendant that the Plaintiffs “were willing to give priority to the 3^rd Defendant to acquire the said shares if the 3^rd Defendant informed them”.

25.  In this regard, the 1^st Plaintiff’s affirmation in support of the application for the Injunction at §26 explained that the earlier action was discontinued because the potential buyer(s) later decided not to acquire the 3^rd Defendant’s shares.

26.  So it seems to me any inconsistency between the Plaintiffs’ pleaded case in the earlier action and in the present action are not material in the context. Both the Plaintiff’s previous and present claim remains broadly consonant, i.e. that they are entitled to the beneficial interest of the Convertible Bond (and the 3^rd Defendant’s shares which may be exchanged for) in the hands of the 2^nd Defendant on their behalf.

27.  In the circumstances, I reject Ms Ho’s submission that there was material non-disclosure or that the Court had been misled into granting the Injunction.

Conclusion

28.  For these reasons, I dismiss the 2^nd Defendant’s application with costs to the Plaintiffs to be taxed if not agreed.

29.  All that said, the Injunction was granted almost 2 years ago. It is trite that a party who has obtained interlocutory relief is obliged to pursue the action expeditiously. As presently advised, it seems that little progress has been made to bring this action to trial. The parties are reminded of their duties to assist the Court to further the underlying objectives of the Rules of the High Court.