CHAN BENAMI HOLDINGS LTD v. CHI CHI HUNG, KENNETH

HCA 1547/2024

[2026] HKCFI 993

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1547 OF 2024

________________________

________________________

________________________

DECISION

________________________

Introduction

1.  Before me is P’s Summons filed on 22 April 2025 for final judgment be entered against D for HK$4.5 million as claimed in the Amended Statement of Claim (“ASOC”)  with interest thereon under Order 14 rule 1 of the Rules of the High Court (“RHC”).  Further or alternatively, judgment be entered against D for the sum of HK$4.5 million upon the admission of D (“Summons”).

2.  D has also filed a summons on 14 July 2025 to amend his Defence under Order 20 rule 5 of RHC (“Amendment Summons”). 

3.  P served its ASOC dated 18 October 2024.  In response, D served his Defence on 13 February 2025. 

4.  In support of the Summons, P filed two Affirmations of Benami Emmanuel dated 9 April 2025 and 30 September 2025. 

5.  In opposition to the Summons, D filed the Affirmation of Chi Chi Hung, Kenneth on 14 July 2025. 

P’s Claim

6.  P’s claim is for HK$4.5 million under a Sale and Purchase Agreement dated 20 June 2024 (“Agreement”).  From around December 2023, D had various disputes with P, Dr Chan and Mr Benami concerning among other things the management and control of Con Brio Veterinary Services Co Ltd (“Company”), with D holding 70% of its issued shares (2,520 shares), and P holding 30% (1,080 shares)  of the Company (“P’s Shares”).  

7.  Under the Agreement between P, D, Dr Chan, Mr Benami, and the Company, D agreed to purchase from P for HK$4.5 million (i)  P’s Shares in the Company; and (ii)  the shareholder loan owned by the Company to P in the sum of HK$1,460,727.48 (“P’s Shareholder Loan”).  The following are material terms of the Agreement: 

(i)  Completion Date means 27 June 2024 (Definitions and Schedule 1 Table A);

(ii)  The Agreed Rate is an interest rate of 9% per annum (Definitions);

(iii)  The Defendant shall pay HK$3,039,272.52 as consideration for P’s Shares and HK$1,460,727.48 as consideration for P’s Shareholder Loan, together comprising the Total Consideration (“Total Consideration”)  (clause 2.1);

(iv)  D shall pay the total sum of HK$4.5 million to P on or before 2:00 p.m. at Completion (clause 2.8(b));

(v)  In the event of default or breach of any terms of the Agreement or delay in the performance of any of the obligations of any party by any of the Parties, the non-defaulting party shall be entitled to elect to terminate the Agreement and enforce its rights and remedies as available in law and equity, or to enforce the Agreement against the defaulting party and shall reserve the right to seek specific performance as a remedy (clause 4.1);

(vi)  Any failure by D to make any payment or part of any payment of the Total Consideration under the Agreement on time shall be a material breach of and shall render the entire Total Consideration immediately due and payable with interest at the Agreed Rate accruing from the due date up to the date of the actual payment (after as well as before judgment)  (clause 4.2);

(vii)  All costs and expenses arising from or incidental to the enforcement of the Agreement, including but not limited to legal costs, shall be paid by the defaulting party to the non-defaulting party on a full indemnity basis (clause 4.5); 

(viii)  Each time, date, or period is of the essence (clause 6.8); and

(ix)  D shall be responsible for the payment of Hong Kong stamp duty in respect of the agreement to sell, and completion of the sale of, P’s Shares under the Agreement (clause 6.16). 

8.  There were the following implied terms of the Agreement:

(i)  The parties agree to do all that is necessary on their part to bring about the completion of the Agreement; and

(ii)  The parties will cooperate with each other to bring about the completion of the Agreement. 

9.  On 26 June 2024 at 11:29 p.m., D wrote to P, Dr Chan and Mr Benami, indicating that he would default on payment of the Total Consideration. 

10.  P had been ready and willing to perform its obligations under the Agreement and/or had duly performed its obligations under the Agreement, including but not limited to the signing of the Deed of Assignment dated 27 June 2024 and the execution of the bought and sold notes for P’s Shares, the Instrument of Transfer, P’s Share Certificate No 10, and minutes of P’s board resolution authorizing the sale of P’s Shares. 

11.  On the Completion Date on 27 June 2024, in material breach of the Agreement, in particular clauses 2.1, 2.8(b), 6.16, and the implied terms, D failed to pay the Total Consideration or any part thereof. 

D’s Defence

12.  D denies the Agreement and its material terms in his Defence (§10 of Defence).  D’s case is that due to Dr Chan’s failure to perform and/or discharge her duties towards the Company and her breaches of the relevant employment agreement(s)  with the Company, the Company suffered loss and damage of approximately HK$5 million.  As a result, it was agreed among Dr Chan, the Company and P that: (a)  the Company would not pursue any claim(s)  against Dr Chan for her breach of duties and/or employment agreement(s); and (b)  Dr Chan and Mr Benami would procure P to transfer and assign P’s Shares in the Company to D and the consideration for the share transfer is approximately HK$4.5 million as a nominal consideration (“Settlement Agreement”).  D’s case is that P’s Shares in the Company have been transferred to D pursuant to the Settlement Agreement. 

13.  The rest of the Defence consists of bare denials.  It was verified by a statement of truth. 

14.  Under the Amendment Summons exhibiting the proposed Amended Defence and Counterclaim (“AD&C”), D radically changes his case. The Agreement and its material terms are admitted.  However, D advances a defence of economic duress (at §10C): the Agreement was executed as a result of economic duress exerted by P (through Dr Chan and Mr Benami)  on D and is liable to be rescinded. 

15.  Mr Wong submitted that it was still an early stage of the proceedings and Order 20 rule 5 of RHC principles should apply.  He did not accept that the defences were materially inconsistent but submitted that the economic duress defence was an additional defence at most.  At this stage of the proceedings, D should not be deprived of an opportunity of preparing a substantive defence.  

16.  Shih Mei Ling formerly known as Shih Mei Ling v Shih Mei Kei [2021] HKCFI 2964 concerns leave to amend a pleading which has been verified by a statement of truth. 

17.  In Shih Mei Ling,the statement of claim advanced a case that the plaintiff was the true beneficial owner of the property, even though the defendant became the registered owner pursuant to a 2018 transaction.  This was on the basis that the plaintiff and the defendant had come to a common understanding, agreement or express arrangement that the plaintiff would transfer the property into the sole name of the defendant. However, the plaintiff would remain the sole beneficial owner of the property, and the defendant would have no such interest and hold the property as a mere nominee for the plaintiff (at §§4-6). 

18.  Under the proposed amendments to the statement of claim in Shih Mei Ling, the common understanding had been removed and the plaintiff’s case was based on an oral agreement with the defendant that the property would be sold to the defendant but subject to a number of conditions.  There was an oral agreement that the plaintiff would be responsible for paying the mortgage installments, government rent and management fees.  However, the defendant would not be the legal or beneficial owner of the property.  The plaintiff’s case was based on a common intention that the plaintiff would be the sole beneficial owner of the property and the defendant would hold the property under a common intention constructive trust in favour of the plaintiff absolutely (at §§11-13). 

19.  In my view, D’s amendments in the AD&C are similar to the amendments in Shih Mei Ling.  D has changed his case substantially from what was originally pleaded and verified by a Statement of Truth.  I agree with Ms Wong’s submissions that this is not an amendment but a wholesale abandonment of D’s case and the substitution of a new one.

20.  The defence advanced in the AD&C is so different from the defence in the Defence.  There are factual inconsistencies in the Defence and proposed AD&C.  In the Defence, D denied the Agreement and his defence was based on the Settlement Agreement; it was pursuant to the Settlement Agreement that P’s Shares were transferred to D.  In the proposed AD&C, D admits the Agreement but claims that it was executed as a result of economic duress. 

21.  The Defence was verified by a Statement of Truth, signed by D stating his belief that the facts stated in the Defence are true.  The importance of a statement of truth was observed by Recorder Jin Pao SC in Shih Mei Ling at §23.  The requirement for a statement of truth seeks to ensure that only genuine and honest claims are advanced, to deter claims from being made without factual foundation, and to encourage discipline and precision in setting out a party’s case.  

22.  In Shih Mei Ling, Recorder Jin Pao SC observed that (at §24):

“where a party advances a defective case which is verified by a statement of truth and where it is demonstrated that the verification should never have been made in the first place, a proper explanation as to why the amendment should be granted may be necessary especially where it relates to an integral aspect of the case. The burden rests on the party seeking the amendment, and although there is no hard and fast rule, it should not be assumed that the court will necessarily grant the amendment as a matter of course even where an explanation has been offered. Each case will depend on its own facts.”

23.  The onus lies on D seeking to change his case in a manner inconsistent with an earlier statement of truth to explain why he made a mistake: Joesh Overseas Ltd v Lee Sai Nam & Ors [2020] HKCFI 350 at §14 per Harris J.  See also Hong Kong Civil Procedure 2026 at §20/13/1: “A party will be required to explain why its proposed amendment is required if it seeks to amend a pleading by introducing allegations inconsistent with those previously verified.” 

24.  In this case, D has not offered any explanation as to the change in case.  At §20 of D’s affirmation, D only explains the substantial delay in the filing of his Defence – which is due to the time required to retrieve and review all relevant documents, some of which date back several years.  D also explained that he had to compile the necessary correspondence, WhatsApp records, and financial statements to ensure that the court was presented with a complete and accurate picture of the underlying facts. 

25.  However, that was not the case.  The case presented in the Defence and the proposed AD&C contained factual inconsistencies, despite D taking 4.5 months to file his Defence, after multiple extensions of time, and an unless order.  There has been no explanation as to why the factual inconsistencies exist, despite the Defence being verified by a Statement of Truth. 

26.  No proper explanation, or any explanation at all, as to why the amendment should be granted has been provided by D despite the change in case.

27.  In Tong Kin Hing v Autron Mauritius Corp [2010] 1 HKLRD 77, Rogers VP sitting as a judge of the Court of First Instance struck out a derivative action and declined to allow the plaintiff to amend its statement of claim which had been verified by a statement of truth in order to reformulate a legitimate complaint (at §20). 

28.  I note that the amendment to the statement of claim was allowed in Shih Mei Ling even when the court was not impressed by the explanation given by the plaintiff for the change of case (at §34).  

29.  As observed by Recorder Jin Pao SC in Shih Mei Ling (at §38), Tong Kin Hing does not stand for a hard and fast rule that the court must refuse the amendments which involve a fundamental change of case where the original statement of truth should not have been verified by D because of the factual inconsistency.  It is a matter of the court’s discretion. 

30.  Mr Wong referred me to Hsu Ming Chi v Lam Shu Chit (HCCL 8/2013, unreported judgment of Ng J dated 22 October 2014)  in which Ng J observed (at §14)  that leave is readily granted to amend before trial unless it can be shown that the new claim based on the proposed amendment is bound to fail. 

31.  Absent any real prejudice, an application for amendment must be decided upon the general principle that a court of law seeks to adjudicate on the real issues and disputes between the parties and, if possible, technical and procedural rules should not stand in the way of allowing the parties to raise their real claims or defences before the court for adjudication: per Ng J in Hsu Ming Chi at §16, citing VSC Building Products Co Ltd v Kono Insurance Ltd, unrep HCA 947/2005, 9 September 2009, per A Cheung J (as he then was)  at §22.  

32.  Where prejudice is claimed, the burden is on the party opposing the amendment to show prejudice.  There is no injustice to the opposing party if it can be compensated by appropriate orders as to costs: per Ng J in Hsu Ming Chi at §17 referring to Re Playmates Investments Ltd [1996] 4 HKC 577 at 582H, 584C (per Le Pichon J as she then was). 

33.  In giving effect to the underlying objectives of RHC, including those concerning amendments, the court shall always recognize that the primary aim in exercising the powers of the court is to secure the just resolution of disputes in accordance with the substantive rights of the parties. 

34.  P submitted that D’s application to amend is highly prejudicial to P because D closed the Company on 31 July 2025, shortly after filing the application to amend.  In my view, the two are unrelated.  The Company has already closed irrespective of whether I grant leave to amend.  No real prejudice can be identified by P which cannot be compensated by a costs order. P has also proceeded based on D’s amendments for the summary judgment application. 

35.  In the circumstances, I allow D’s amendments and make an order in terms of §1 of the Amendment Summons.  P is entitled to the costs of the Amendment Summons with certificate for counsel, to be summarily assessed. 

36.  I now turn to P’s Order 14 application.  

Summary judgment

37.  In an Order 14 application, the court should not conduct a mini trial on affidavits.  The approach is to ask:-

(i)  whether the plaintiff has established a prima facie sustainable case on its claim; and if so,

(ii)  whether the defendant has discharged its burden to show there are triable issues.

38.  The defendant’s affidavit must condescend upon particulars, and should, as far as possible, deal specifically with the plaintiff’s claim and affidavit, and state clearly and concisely what the defence is, and what facts are relied on to support it: see Hong Kong Civil Procedure 2026, at §14/4/4. 

DISCUSSION

(i)  Whether P has established a prima facie sustainable case on its claim

39.  I have carefully reviewed the ASOC, the Agreement, and the two Affirmations of Benami Emmanuel filed in support of the Summons. 

40.  The Agreement was executed by P, D, Dr Chan, Mr Benami, and the Company.  Completion as defined in the Definitions in clause 1.1 of the Agreement means completion of the matters described in this Agreement (including the sale and purchase of [P’s Shares] and [P]’s Shareholder Loan by the performance by [D] and P of their respective obligations in accordance with clause 2.  Under clause 2.6, Completion shall take place on the Completion Date before 12:00 noon.  Completion Date as defined in clause 1.1 means 27 June 2024. Under clause 2.8(b), at Completion, D shall pay P the Total Consideration. 

41.  I note that P’s Shares have been transferred to D.  P has signed the Sold Note dated 27 June 2024, D has signed the Bought Note, P and D have executed the Instrument of Transfer dated 27 June 2024, and P and D have executed the Deed of Assignment dated 27 June 2024. 

42.  From the latest Annual Return of the Company filed by D (up to 18 November 2025), it shows that D is the sole shareholder of the Company.  D holds all 3,600 shares. 

43.  On 27 June 2024, in breach of clauses 2.1 2.8(b), 6.16, and the implied terms, D failed to pay the Total Consideration or any part thereof. 

44.  Accordingly, I am satisfied that P has established a prima facie sustainable case for its claim. 

(ii)  Whether D has discharged its burden to show there are triable issues

45.  The burden is on D to produce credible evidence of economic duress. 

46.  D’s case is that the Agreement was executed as a result of economic duress exerted by P (through Dr Chan and Mr Benami)  on D and is liable to be rescinded (§10C of AD&C):

(a)  Since around January 2023, Dr Chan has routinely (i)  failed to attend work without providing advance notice for applying for annual leave; and (ii)  claimed to be unwell without providing any medical certificates, in breach of her employment agreement with the Company dated 28 November 2022;

(b)  The breaches of Dr Chan, whose services represented a key income stream for the Company, has caused the Company to sustain substantial losses of approximately HK$7.2 million per annum (ie HK$600,000 per month);

(c)  Between around January 2024 and June 2024, P (through Dr Chan and Mr Benami)  engaged in conduct that was destructive and calculated to damage the business of the Company;

(d)  At all material times, P had knowledge of D’s dire financial circumstances and that D had injected substantial funds into the Company to sustain its daily operations;

(e)  P (through Dr Chan and Mr Benami)  had on multiple occasions: (i)  threatened to present winding-up petitions against the Company on the basis of P’s Shareholder Loan; and (ii)  asserted that upon presentation of such a petition, the banks would immediately call in outstanding loans owed by the Company and that D would be subject to potential bankruptcy proceedings by reason of the personal guarantees D provided in respect of the bank loans. 

(f)  The above amounted to P unconscionably exerting illegitimate pressure on D, in that the Company was placed in a precarious position by reason of P’s conduct.  D believed that unless he acceded to P’s demands and execute the Agreement, the Company would suffer further irreparable harm and would soon be driven into insolvency. 

(g)  Given that D was in dire financial circumstances and had no realistic chance of other sources of investment, D had no alternative option but to agree to enter into the Agreement. 

Elements of economic duress

47.  The general principles of economic duress were set out by Au-Yeung J in The Hongkong and Shanghai Banking Corp Ltd v King Wai Piece Goods Co Ltd [2025] HKCFI 1371 at §77-78 (“HSBC case”):

“77. For a contract to be set aside on the ground of duress, the claimant must establish two essential elements. The first is a threat (or pressure exerted)  by the other party that is illegitimate. The second is that that illegitimate threat (or pressure)  caused the claimant to enter into the contract. In the context of economic duress there is a third element, namely that the claimant must have had no reasonable alternative but to give in to the illegitimate pressure: Duress, Undue Influence and Unconscionable Dealing, 4^th edition, §§2-002, 2-003.

78.  A threat to break a contract will generally be regarded as illegitimate, particularly where the defendant must know that it would be in breach of contract if the threat were implemented: Zebra Industries (Orogenesis Nova)  Ltd v Wah Tong Paper Products Group Ltd (unrep. HCMP 436/2013, 31 August 2015), §84, G Lam J (as he then was), citing Kolmar Group AG v Traxpo Enterprises Pvt Ltd [2011] 1 All ER (Comm)  46, §92, Christopher Clarke J.”

First element: Whether there is an illegitimate threat

48.  In the HSBC case, HSBC as mortgagee pursued the defendants as mortgagors under Order 88 RHC for payment of monies and delivery of possession of the mortgaged properties.  The defendants argued that the facility letter was voidable for economic duress, in that the threat to immediately call in the loan was illegitimate and the borrower had no realistic alternative but to execute the facility letter (at §3). 

49.  Au-Yeung J found there was no illegitimacy shown in the HSBC case, apart from the great economic pressure felt by the defendants.  In the premises, the economic duress issue was not triable (at §§93-94). 

50.  In the HSBC case, Au-Yeung J referred to Esquire (Electronics)  Ltd v Hong Kong and Shanghai Banking Corp Ltd [2007] 3 HKLRD 439, in which Stock JA (as he then was)  held that:

“154. The key to proving economic duress is proof of the illegitimacy of the suggested pressure. Much commercial activity necessarily involves pressure, often considerable and sometimes overwhelming, exercised by parties who find themselves in powerful bargaining positions. But that of itself is not illegitimate. …”

51.  In the HSBC case, Au-Yeung J observed that even if HSBC had somehow threatened or pressurized the defendants into signing the facility letter by expressing a possibility to call in the loans, there was no illegitimacy in the pressure exerted, since a bank’s exercise of its overriding right to demand repayment is fundamental to the relationship. 

52.  In this case, D’s complaint on the illegitimate threat is based on P’s threats to present winding-up petitions against the Company due to P’s Shareholder Loan.  However, that was a legitimate request and not unlawful.  P was pursuing its legal right.  D admits that at the material time, the Company was indebted to P in the sum of HK$1,460,727.48 i.e. P’s Shareholder Loan (at §9.2 of D’s affirmation).  By an email dated 26 January 2024 attaching D’s letter, D also demanded repayment of his shareholder loan to the Company. 

53.  D further refers to the threat of legal proceedings before the Labour Tribunal at §14 of his affirmation.  Both Dr Chan and Mr Benami were employees of the Company and they were owed outstanding salaries.  In the ASOC (at §8), P claims that Mr Benami and Dr Chan had claims for outstanding wages and termination payments in the total sum of HK$5,821,851.05.  It is further pleaded that D never disputed such claims for outstanding wages and termination payments but wrongfully refused to settle the same. This is not denied in the AD&C (at §8). 

54.  In my view, it is a legitimate request to demand the payment of outstanding wages and to threaten Labour Tribunal proceedings if the wages are not paid.  

55.  A lawful act threat coupled with a demand motivated by commercial self-interest is legitimate: Fine Vision Opportunity III Ltd v Xinyuan Real Estate Co Ltd [2024] 5 HKLRD 300 at §30(v)  per Tam J, which referred to the New Zealand case of Dold v Murphy [2021] 2 NZLR 834 (which was cited by Lord Hodge with approval in Times Travel (UK)  Ltd & Anor v Pakistan International Airlines Corpn [2023] AC 101 at §98). 

56.  Turning to the other complaints by D, I do not think Dr Chan’s sick leave demonstrates any illegitimacy as alleged by D.  As recognised by D’s affirmation (at §8), Dr. Chan provided a medical certificate dated 18 January 2024 which recommended 92 days sick leave from 18 January 2024 to 18 April 2024. 

57.  Regarding D’s allegations (at §§9.1 and 9.4 of D’s affirmation)  that Dr Chan and Mr Benami had (i)  been spreading unfounded and damaging rumours about D in the workplace that D was trying to exclude them in the management and the operation of the Company; and (ii)  demanded that Ms Agnes Yan, the accountant, to disclose the Company’s bank balances, among other financial information, I do not see how they relate to P unconscionably exerting illegitimate pressure on D so that the Agreement was executed by D. 

58.  In respect of the allegation about the unfounded and damaging rumours, these are unparticularized without stating to whom the rumours were made, what words were used, when they were used, and in what circumstances. This allegation by D amounts to a bare assertion. D’s affirmation must condescend upon particulars, and state clearly and concisely what the defence is, and what facts are relied on to support it: Tang Yuan Yi 湯元儀 v Tokyo International Investment Limited, (unrep, HCA 2078/2018, 5 June 2020)  [2020] HKCFI 1133 at §8.

59.  As to the demand to the accountant Ms Yan for financial information, both Dr Chan and Mr Benami are in senior management of the Company (and a director and alternate director respectively).  They were entitled to the financial information. 

60.  D also submits that there is a factual enquiry as to whether P orchestrated the resignation of Dr Mark Gillyon, who resigned the day after the SPA was signed (§30.5 of D’s skeleton).  I note this is not a pleaded issue relied on for economic duress in the AD&C at §10C.  D’s affirmation alleges that “Dr Mark’s resignation could not have been a coincidence as all the circumstances point to Dr Chan and Mr Benami having procured his resignation.”  (§17 of D’s affirmation).  This is a bare assertion and D has not previously complained in correspondence what he is now alleging in his affirmation.  I also note Dr Mark Gillyon’s resignation happened after D’s execution of the Agreement.  

61.  For completeness, I also find nothing in D’s complaint that the Total Consideration of HK$4.5 million under the Agreement for the purchase of P’s Shares and P’s Shareholder Loan was manifestly uncommercial (§18 of D’s affirmation).  D alleges that the true value of P’s Shares was, at best, in the region of HK$1 to 2 million. 

62.  The breakdown of the Total Consideration is contained at clause 2.1 and Schedule 1: for Item A, P’s Shares is the sum of HK$3,039,272.52 and Item B, P’s Shareholder Loan is the sum of HK$1,460,727.48. As stated at §52, D admits that at the material time, the Company was indebted to P in the sum of HK$1,460,727.48 i.e. P’s Shareholder Loan (at §9.2 of D’s affirmation).  D could have negotiated for another price, and did so in the April draft Agreement attached to D’s email of 17 April 2024.  Even based on this draft Agreement, D’s solicitors did not amend the Total Consideration which is stipulated to be HK$4,150,000.  Further, in D’s WhatsApp messages to Mr Benami of 12 April 2024, Mr Benami states “[c]an you confirm me [sic] with me the total sum we agreed $4.5 (3.2 + 1.3)  or $4.15m (2.85 + 1.3)  … I made it 4.15 and if need to correct that figure let me know – can do that by Sunday.” In D’s WhatsApp message to Mr Benami dated 15 April 2024, D states “[a]nd if I cannot pay that $750,000, then I need to pay more instalments and the total consideration will rise to $4.5 mil.” (my emphasis). 

63.  In support of his economic duress defence, D also claims that Dr Chan knew that D was in financial distress and Mr Benami knew full well about the difficulties faced by the clinic and D (§§12-13 of D’s affirmation). 

64.  However, the mere knowledge by one party that another might have a need for funds is not sufficient in itself to amount to economic duress: Chow Sui Hei v Chow Sui Tak [2024] HKCFI 3360, per Mr Recorder Jin Pao SC, at §75. 

65.  In my view, no illegitimacy has been shown apart from commercial pressure.  

D did not take any steps to avoid the Agreement

66.  In Chow Sui Hei, Recorder Jin Pao SC rejected the defence of economic duress for the following reasons (at §78):

“In addition, as pointed out by Ms Lan, there was no contemporaneous protest made by Tak after the 2014 Agreement was concluded to support a case of economic duress. Instead, matters came to be disputed only in 2017 when the Third Street Property was sold. Even then, the focus of Tak’s complaint was not about any economic pressure having been applied. There was also no urgency for Tak to sign the 2014 Agreement at Hei’s residence. He was fully able, but declined, to take legal advice on its contents since Tak was no stranger to instructing solicitors. Indeed, after it was signed, Tak never took any prompt steps to avoid the agreement.” (my emphasis).

67.  Even if there was duress, D affirmed the Agreement and took no action at all to avoid the Agreement. 

68.  Inaction and delay could be held to amount to an affirmation: Duress, Undue Influence and Unconscionable Dealing, 4^th edition, at §29-005.  

69.  In North Ocean Shipping Co Ltd v Hyundai Construction Co Ltd [1979] QB 705 at §§719E-720A, 721B, Mocatta J held that the company’s threat to break the contract without any legal justification unless the owners increased their payments by 10 per cent, did amount to duress in the form of economic pressure which the owners could either affirm or avoid.  However, the owners, by making the final payments without protest and also by their delay of 9 months before making a claim for the return of the extra payments, had conducted themselves as to affirm the contract.  

70.  D, being the sole shareholder after the transaction, stayed in full and sole control of the Company before he chose to close it on 31 July 2025.  D executed all the documents referred to at §10 above, including the Deed of Assignment and Instrument of Transfer.  Even though the Company’s business did not ultimately work out, D enjoyed the fruits and benefits of being the sole shareholder and operated the business until he decided to close it.  D took the full benefits of the Agreement.  Even as recently on 1 December 2025, D filed the latest Annual Return of the Company. 

71.  D submits that affirmation is only effective if the alleged affirmation takes place after the original vitiating factor has ceased to operate on the victim’s mind: Duress, Undue Influence and Unconscionable Dealing, 4^th edition, at §29-006.  

72.  D alleges that the effect of the duress is continuing.  No evidence has been adduced by D in his affirmation.  This is also not pleaded in the AD&C.  

73.  However, once the Agreement was signed, P’s Shares were transferred to D on the Completion Date.  Dr Chan and Mr Benami resigned from their positions in the Company, and from their positions as directors.  Under clause 3.2(a)  of the Agreement, both Mr Benami and Dr Chan signed letters dated 27 June 2024 agreeing to release and waive any claims against the Company.  That is subject to full payment of the Total Consideration on Completion.  However, no evidence has been adduced by D that P has threatened claims after 27 June 2024.  In any event, as discussed above at §§52-55, threatened claims for P’s Shareholder Loan and salaries under employment contracts are not illegitimate threats. 

No contemporaneous protest

74.  I note that the economic duress defence was not raised in the Defence.  D had explained at §20 of his affirmation that the Defence had taken some time as he had to compile the necessary correspondence, WhatsApp records, and financial statements to ensure that the court was presented with a complete and accurate picture of the underlying facts.  It was only raised in his affirmation filed on 14 July 2025, at the same time the Amendment Summons was taken out.  This was after over one year since the Agreement was executed, and during these proceedings. 

75.  Despite taking the time to compile the correspondence, D has not adduced any evidence of any contemporaneous protest. Nowhere in D’s affirmation deals with this.  This is different to Progress Bulk Carriers Ltd v Tube City IMS [2012] 2 All ER (Comm)  855 at 859b.  In that case, there was a repudiatory breach by the owners and the charterers had only accepted the terms under protest.  

76.  D signed the Minutes of Meeting of the Board of Directors of the Company dated 20 June 2024 (“Minutes”)  that resolved to approve the transaction and Agreement (§6.1).  The Minutes also stated that (at §4.3):

“[a]fter carefully considering the terms and conditions of the Transaction Documents, the Directors considered that the Transaction Documents and the transactions contemplated thereby were fair and reasonable, and that the Transaction was in the interests of the Company and its shareholders as a whole.” (my emphasis).

77.  When Mr Benami on behalf of P sent an email on 27 June 2024 attaching P’s demand letter also of the same date, D did not respond.  When Messrs. Krishnan & Tsang, solicitors acting for P, sent D a demand letter dated 28 June 2024 requesting D to perform his obligation under the Agreement by paying the Total Consideration and interest, D did not respond by stating that the Agreement was entered into as a result of economic duress exerted by P (through Dr Chan and Mr Benami).  This points further towards D’s defence on economic duress being an afterthought and not genuine at all: Oriental FA Limited v To Yuen Fang Louise & Anor [2025] HKCFI 2689 at §75 per DHCJ Andrew Li.  

Second element: illegitimate threat (or pressure)  caused D to enter into the Agreement

78.  D was legally represented.  D had Dentons comment on the Agreement, and they made extensive edits to the Agreement in April 2024 (as can be seen from the email from D to P dated 17 April 2024). 

79.  Clause 6.17 of the Agreement provides that:

“Each party represents and warrants that it had every opportunity to and has in fact received independent legal advice from a qualified lawyer or a relevant independent adviser as to the terms and effect of this Agreement prior to entering into this Agreement.”

80.  There are also negotiations as set out in Mr Benami’s email to D dated 16 June 2024, in respect of D’s proposed changes to the Agreement, which were not acceptable to P.  D could have pulled out of the deal there and then.

81.  In the WhatsApp messages, there is clear evidence of negotiations on the draft Agreement on 18 June 2024. 

82.  The real reason why D could not come up with the Total Consideration of HK$4.5 million on the Completion Date was because the investor did not transfer monies to D (WhatsApp message of 26 June 2024).  D acknowledged that without Dr Mark Gillyon (one of the veterinary surgeons, see §60 above)  and investor support, he was not able to run the business.  He concluded that he was ready to accept the worst situation which was liquidation of the Company if he could not convince the investor next week to deposit the funds. He did not protest or seek to get out of the Agreement. 

83.  Mr Benami of P replied to state that the Agreement was between P and D personally, and P was ready for Completion.  If P did not receive the Total Consideration on the Completion Date, then P would have no alternative but to pursue the performance of the Agreement through the default clauses. That meant filing a High Court Action for D to pay the Total Consideration.  D responded later that day on 27 June 2024 that he could not pay P. 

84.  D’s own messages reveal the true reason he signed: he was expecting funds from an investor, which failed to materialise.  This was a commercial miscalculation, not illegitimate pressure that caused D to enter into the Agreement. 

Third element: D must have had no reasonable alternative

85.  First, there were no illegitimate means employed by P. 

86.  Even if there were, I am of the view that D had other reasonable alternatives, unlike in Borrelli and ors v Ting and ors [2010] BusLR 1718.  In that case, the liquidators entered into the settlement agreement as the result of the illegitimate means employed by James Henry Ting, namely by opposing the scheme of arrangement for no good reason and in using forgery and false evidence in support of that opposition, all in order to prevent the liquidators from investigating his conduct of the affairs of Akai Holdings Ltd or making claims against him arising out of that conduct.  There were two evils facing the liquidators: either to abandon the scheme which offered the only real prospect of recouping any losses in order to continue the liquidation, or to agree not to make any claims against Ting in respect of his conduct of the company’s affairs.  By adopting these means, the liquidators were left with no reasonable or practical alternative but to enter into the settlement agreement to waive claims against the former chairman (at §1728G). 

87.  In Borrelli, the court also held that the liquidators could withdraw from the settlement agreement so long as he had not affirmed it or waived his right of withdrawal, unlike in this case (see §§66-73 above). 

88.  This case can be distinguished from Borrelli.  D entered into the Agreement on the basis that the external investor would support him.  He could have sought other funding alternatives or other buyers for P’s Shares and to pay off P’s Shareholder Loan.  He could have negotiated a different price on different terms.  In order to resolve the dispute with P, Dr Chan, and Mr Benami, D could have sold his shareholding in the Company – either to P or another investor. 

89.  Where a key element of economic duress is absent, the Court cannot be satisfied that there is a triable issue of economic duress: Fine Vision Opportunity, at §31. 

90.  Based on the above discussion, the defence of economic duress is unarguable and improbable.  There is no triable issue. 

91.  Summary judgment shall be granted in favour of P for the sum of HK$4.5 million plus interest and costs. 

INTEREST AND COSTS

Interest

92.  The default position for the award of post-judgment interest is section 49(1)(b)  of the High Court Ordinance.  In practice, the courts are normally content to award interest at the judgment rate for the sake of consistency and certainty: Lo Yuk Sui v Fubon Bank (Hong Kong)  Ltd [2016] HKEC 2909 per Ng J at §§50, 55, and 60. 

93.  However, section 49(1)(a)  does enable the court to fix a post-judgment interest rate which need not be the judgment rate as determined by the Chief Justice.  But the power is discretionary in nature – the fact that such a power exists does not per se means it should be exercised in any given set of facts: Lo Yuk Sui per Ng J at §55. 

94.  In my view, it is possible for the contractual rate of interest to apply post judgment but such a clause must state specifically that any judgment obtained for recovery of the debt shall carry interest at a specified rate per annum and the higher rate until payment should form part of the judgment: Hong Kong Civil Procedure 2026 at §42/1/17.  

95.  Clauses 4.2 and 6.9 of the Agreement expressly provide for the contractual rate of interest to apply post judgment. 

96.  Under clause 4.2 of the Agreement, “[a]ny failure by D to make any payment of the Total Consideration shall render the entire Total Consideration immediately due and payable with interest at the Agreed Rate accruing from the due date up to the date of actual payment (after as well as before judgment).” (my emphasis). 

97.  Under clause 6.9 of the Agreement, “[i]f a Party fails to pay any amount payable by it under the Agreement, it shall immediately pay interest on such amount on demand by the Party to whom the payment was to be made, such interest accrue from the due date up until the date of actual payment at the Agreed Rate (after as well as before judgment).” (my emphasis). 

98.  Accordingly, I order interest on the sum of HK$4.5 million at the contractual rate of 9% per annum from 27 June 2024 until the date of this judgment, and thereafter at 9% post judgment (see §4 of the reliefs section of the ASOC). 

Costs

99.  Under clause 4.5 of the Agreement, all costs and expenses arising from or incidental to the enforcement of the Agreement, including but not limited to legal costs, shall be paid by the defaulting party to the non-defaulting party on a full indemnity basis. 

100.  Where a contract provides for costs to be payable on an indemnity basis, it provides the starting point for the court’s discretionary exercise and the court should be slow to disturb the parties’ agreement: Air Charter Service (HK)  Ltd v 美拓国际物流(上海)有限公司 [2021] HKCFI 56 at §53 per DHCJ Dawes SC quoting Bank of China (Hong Kong)  Ltd v Twin Profit Ltd (2012)  15 HKCFAR 560 at §21 (per Ribeiro PJ). 

101.  Given the Parties’ agreement in clause 4.5, it is appropriate for me to order costs on an indemnity basis to be paid by D to P (see §9 of the reliefs section of the ASOC). 

COUNTERCLAIM

102.  The AD&C introduces a counterclaim that the Agreement is unenforceable on the ground that it was procured by economic duress, and seeks a declaration that the Agreement has been rescinded. 

103.  Given that I have dismissed D’s defence on economic duress for lack of a triable issue, D’s counterclaim should be struck out: Sand Aire Ltd v Jin Zhanjie [2021] HKCA 1672 at §43-47.

DISPOSITION

104.  Summary judgment should be granted.  I formally make an order that D pays P HK$4.5 million pursuant to §1 of the Summons. 

105.  I order interest on the sum of HK$4.5 million at the contractual rate of 9% per annum from 27 June 2024 until the date of this judgment, and thereafter at 9% post judgment. 

106.  I order that the costs of this action, including the costs of the Summons and the Amendment Summons, be paid by D to P to be summarily assessed on an indemnity basis, with certificate for counsel. 

107.  For the purposes of summary assessment of costs, I direct that:-

(1)  P lodge and serve its Statement of Costs within 3 days hereafter;

(2)  D lodge and serve its List of Objections to P’s Statement of Costs within 4 days thereafter; and

(3)  Assessment of costs shall be conducted on paper without a further hearing.

108.  I thank Ms Wong and Mr Wong for their helpful submissions.