HOU HSIAO BING v. REN BAOGEN

HCA 1657/2019

[2025] HKCFI 5024

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1657 OF 2019

____________

____________

_______________

D E C I S I O N

_______________

INTRODUCTION

1.  On 25 July 2024, this Court handed down its judgment (the “Judgment”) in the present action. The Judgment was subsequently sealed (the “Sealed Judgment”).

2.  On 5 November 2024, upon an ex parte application by the Plaintiff, Recorder Eugene Fung SC granted a post-judgment worldwide Mareva injunction (the “Injunction”) and ancillary disclosure order (the “Ancillary Disclosure Order”) against the Defendant. The Injunction was varied on 8 November 2024, and again on 13 December 2024.

3.  This is the substantive hearing of:

(1)  The Plaintiff’s applications, by Summons dated 9 January 2025 (the “Amendment Summons”), to amend the Sealed Judgment in the form of the draft annexed thereto (§1 of the Amendment Summons) pursuant to O. 20 r. 11 and the Court’s inherent jurisdiction; alternatively, to clarify or amend the Judgment in such manner as the Court deems fit (§2) (“Amendment Application”).

(2)  The Defendant’s applications, by Summons dated 26 November 2024 (the “D’s Summons”):

(1)  To discharge, dissolve, and/or set aside the Judgment (§1 of D’s Summons); alternatively, to discharge, dissolve, and/or set aside the order for specific performance in §§76(1)–(4) of the Judgment and §§1–4 of the Sealed Judgment (§2) (the “Setting Aside Application”);

(2)  Further or alternatively, to stay execution of the Judgment pending the substantive determination of D’s appeal against the Judgment (§3) (the “Stay Application”);

(3)  To discharge and/or set aside the Injunction (§4) and the Ancillary Disclosure Order (§7) (the “Injunction Discharge Application”);

(4)  Alternative to discharging the Injunction, to vary the Injunction from a worldwide Mareva injunction to a domestic Mareva injunction (§5) (the “Variation Application”); and to require fortification of the Plaintiff’s cross-undertaking in damages (§6) (the “Fortification Application”).

THE AMENDMENT APPLICATION

4.  The background and material facts of the present case are set out in the Judgment, and I do not repeat the same. What is pertinent is that by the Judgment, this Court made, inter alia, the following orders:

“1. An order for specific performance that the Defendant do purchase the Plaintiff’s 131,140,000 shares in the Company at the price of HK$0.36 per share pursuant to the Guarantee;

2. The Defendant do pay the sum of HK$47,210,400, being the purchase price of the Plaintiff’s 131,140,000 shares in China Technology Solar Power Holdings Limited (the “Shares”) within 28 days herein;

3. The Defendant do pay interest on the purchase price payable by the Defendant to the Plaintiff at 4% per annum from 6 September 2019 up to the date of payment within 28 days herein; and

4. Upon the Defendant paying the Plaintiff the sums in paragraphs (2) and (3) above, the Plaintiff should forthwith execute all necessary documents for the purpose of transferring the Shares to the Defendant.”

5.  The Plaintiff’s case is that although this Court ordered the Defendant to pay the sum of HK$47,210,400 together with interest to the Plaintiff within 28 days of the Judgment (i.e. on or before 22 August 2024), the Defendant did not take any steps to comply with the Judgment.

6.  On 20 August 2024, the Defendant took out an appeal against the Judgment (the “Appeal”).

7.  On 26 November 2024, the Defendant took out D’s Summons. In the supporting affirmation for D’s Summons (i.e. the Defendant’s 1^st Affirmation):

(1)  The Defendant suggested, for the first time, that his failure to comply with the Judgment was due to the Judgment being “impossible to perform” (the “Impossibility Issue”). In particular, whilst the Judgment ordered the Defendant to purchase the Plaintiff’s 131,140,000 shares in the Company, the Plaintiff’s holding had in fact been reduced to 26,228,000 shares due to a share consolidation on 19 June 2021 (the “Share Consolidation”), which consolidated every 5 shares of the Company into 1 share. There is no dispute that the Plaintiff was aware of the Share Consolidation before the Judgment was handed down.

(2)  Hence, the Defendant submitted that:

(1)  the Judgment should be discharged, dissolved or set aside; and

(2)  the Injunction should likewise be discharged or set aside because, inter alia, the Plaintiff had failed to disclose the Impossibility Issue to the Court.

8.  On 9 January 2025, the Plaintiff filed the Amendment Summons, seeking to amend the Judgment under RHC O.20, r.11 and the Court’s inherent jurisdiction. The proposed amendment (the “Proposed Amendment”) concerns §§1-2 of the Judgment are as follows:

“1.  An order for specific performance that the Defendant do purchase the Plaintiff’s shares in the Company (“Shares”), originally comprising 131,140,000 shares which have been consolidated into 26,228,000 shares on 19 July 2021, at the price of HK$0.36 per pre-consolidation share pursuant to the Guarantee;

2.  The Defendant do pay the sum of HK$47,210,400, being the purchase price of the Shares within 28 days herein.”

9.  On 23 January 2025, Queenie Au Yeung J directed, inter alia, that D’s Summons and the Amendment Summons be heard together.

10.  By directions made by Chu VP on 16 June 2025, the Appeal has been adjourned pending determination of the Amendment Application.

11.  The Plaintiff relies on the slip rule. Mr Chang SC for the Plaintiff submitted that the Plaintiff’s case is a simple one. The manifested intention of the Court was to order the Defendant to purchase all the Plaintiff’s shares. In this sense, 26,228,000 shares equal to 131,140,000 shares after the consolidation.

12.  The Plaintiff relies on the following legal propositions:

(1)  O.20, r.11 of the Rules of High Court provides:

“Clerical mistakes in judgments or orders, or errors arising therein from any accidental slip or omission, may at any time be corrected by the Court on summons without an appeal.”

(2)  For the “slip rule” to be engaged, it is necessary to identify “clerical mistakes” or “errors arising from an accidental slip or omission” in a judgment or order. This may arise where the judgment or order does not encapsulate the intention of the Court: Wo Hing Engineering Limited v Tyco Engineering & Construction (Hong Kong) Limited; CACV 1120/2000, unrep., 28 October 2002 at §4.

(3)  A failure of the Court’s original order to cover a particular matter as a result of “an accidental omission of counsel or solicitors or a party” is capable of being corrected under the “slip rule”. The discretion conferred under the “slip rule” should be “liberally approached to ensure that the Court’s decisions are properly given effect”: Man Ping Nam v Man Fong Hang (No. 2) (2007) 10 HKCFAR 140 at §§20-21. The discretion should be exercised if the Court would “unhesitatingly have ordered the same” if sought at the original hearing: Man Ping Nam (supra) at §22.

(4)  It matters not that an application is made after the Court’s order has been sealed, since the amendment or clarification of the order merely serves to make plain what the Court has in fact already decided. It does not involve the Court acting when functus officio: Man Ping Nam (supra) at §11.

(5)  It is also well-settled that, where an order as drawn up is ambiguous, the Court has an inherent or implied discretionary power to clarify the original order, if the Court’s intention appearing from the body of the judgment is manifest: Man Ping Nam (supra) at §10.

13.  The Plaintiff submitted that this is a clear case in which the Court should exercise its powers under O.20, r.11 and its inherent jurisdiction to amend the Judgment in order to give effect to the Court’s manifest intention. This is in furtherance of the primary aim in exercising the powers of the Court as securing the just resolution of disputes in accordance with the substantive right of the parties, as enshrined under the Rules of High Court O.1A, r.2(2).

14.  The Plaintiff further submitted that, first, the “slip rule” is plainly engaged here, as both the Plaintiff and the Defendant acknowledged that they had inadvertently omitted to draw the Court’s attention to the Share Consolidation during the trial:

(1)  In the Plaintiff’s case, the Plaintiff did not raise the issue at trial because it never occurred to him that the Share Consolidation had any bearing on the issues to be determined at trial. Consequently, the Plaintiff did not inform his legal representatives about the Share Consolidation, who, in turn, also did not raise the issue with the Court.

(2)  In the Defendant’s case, the Defendant claimed that he did not raise the issue of Share Consolidation at trial because he was simply unaware of it at the time.

15.  An error arising from an accidental omission by the parties or their legal representatives to draw the Court’s attention to a particular matter is one that may be corrected under the “slip rule”.

16.  Secondly, it is evident from the Court’s reasoned Judgment that its manifest intention was to order the Defendant to acquire “all of P’s shares” in the Company at the agreed price pursuant to the Guarantee.

17.  Since the Court was not apprised of the Share Consolidation, the Judgment ordered the Defendant to purchase “131,140,000 shares”, which was indeed “all of the Plaintiff’s shares” in the Company when the Plaintiff commenced the present action.

18.  Thirdly, the above reading of the Judgment is reinforced by the fact it has always been common ground between the parties that the term “1.3亿股” in the Guarantee is merely a shorthand for the Plaintiff’s “entire shareholding” in the Company. In §4 of the Statement of Claim, the Plaintiff pleaded that:

“In the Guarantee, the Plaintiff’s shareholding in the Company was stated as “1.3 亿股” (translated as “130 million”) only as a shorthand for the Plaintiff’s entire shareholding in the Company”.

The Defendant admitted this in §22 of his Defence.

19.  There is thus no basis for the Defendant to suggest that the Proposed Amendment would somehow have the effect of “re-writing” the Guarantee. On the contrary, the proposed amendment serves only to reflect the Court’s manifest intention by clarifying that the Defendant shall purchase “all of the Plaintiff’s shares” in the Company pursuant to the terms of the Guarantee.

20.  Fourthly, the fact that the Judgment has been sealed has no consequence at all. An amendment or clarification of a judgment or an order under the “slip rule” or the Court’s inherent jurisdiction does not involve the Court acting when functus officio.

21.  On the other hand, the Defendant’s submissions, although expressed in various formulations as set out below, are also very simple. The Plaintiff pleaded a case of 131,140,000 shares. This Court made an order for the Plaintiff to sell his 131,140,000 shares. The Plaintiff does not have 131,140,000 shares to be delivered to the Defendant. As the Court’s attention was not drawn to the Share Consolidation, the Court could not have any intention of ordering the Defendant to purchase 26,228,000 shares from the Plaintiff. There are no mistakes or errors on the part of both the Court and the Defendant. As far as the Plaintiff is concerned, there are also no mistakes or errors as the Plaintiff’s legal team was not aware of the same and the Plaintiff himself considers the Share Consolidation to be irrelevant to the orders to be made by the Court.

22.  Mr Yu SC on behalf of the Defendant impressed upon this Court the importance of applying correct legal principles to the facts of this case. I totally agree. I constantly remind myself that the duties of a judge are to find the correct result and deliver justice but to do so within the four corners of the law.

23.  I agree that the principles applicable to the amendment of judgments under the slip rule in O.20 r.11 or the Court’s inherent jurisdiction are summarised in To Pui Kui v Ng Kwok Piu [2023] 5 HKLRD 278 at §20:

(1)  The Court has an inherent power to vary its own orders so as to carry out its own meaning and to make that meaning plain.

(2)  The Court also has an express power to do so under O.20 r.11, which provides that: “clerical mistakes in judgments or orders, or errors arising therein from any accidental slip or omission, may at any time be corrected by the Court on summons without an appeal”.

(3)  But these powers extend only to the correction of errors in expressing the Court’s manifest intention. The Court has no power to correct mistakes of its own; even where it is satisfied that it has indeed made such a mistake. This is, of course, not even the case here.

(4)  To be capable of being corrected under the slip rule or the Court’s inherent jurisdiction, the error or omission must be an error in expressing the manifest intention of the Court. The Court only has power to clarify the original order “if the Court’s intention appearing from the body of the judgment is manifest”.

(5)  A fortiori, the Court has no power under the slip rule or its inherent jurisdiction to correct a mistake of a party in failing to draw the attention of the Court to a material fact which he ought to have pleaded.

(6)  In other words, the slip rule permits clerical errors in orders to be corrected where the order does not, as a result of the error, properly reflect the manifest intention of the Court appearing from its judgment. The inherent jurisdiction permits the Court to vary an order to carry out its meaning and clarify its meaning. But in both cases, it is only permissible to correct an error in the expression by the order of the Court’s intention: To Pui Kui at §21.

(7)  “Manifest”, in this regard, means “easily noticed” or “obvious”: Chen Hongqing v 其姓名載於2018年3月26日存檔的再修訂傳訊令狀附表第二欄的人士 [2024] HKCFI 3658 at §6

(8)  If the order or judgment of the Court correctly expresses the intention of the Court, it cannot be corrected under this rule or the inherent jurisdiction even if the decision of the Court is procured by fraud or misconception. A party cannot use the slip rue to insert, into the original order, a provision which was not there, not because of any slip in expressing the Court’s intention but because it was not originally asked for: Wong Hung Kar Kee Mimi v Severn Villa Ltd [2014] 1 HKLRD 1088 §§19–20.

(9)  Further, the slip rule does not entitle the Court to make variations of a significant nature to a final and proper order: Lo Ka Chun v Lo To; CACV 44/1985, unrep., 2 January 1987.

24.  Mr Yu SC submitted that the Share Consolidation is a material fact which ought to have been pleaded. It was not. The prayer for relief in the Writ and Indorsement of Claim is for the performance of the Guarantee for the Defendant to purchase 130 million shares of the Company at HK$0.36 per share. In the Amended Statement of Claim, the Plaintiff sought specific performance of the Guarantee, which was the purchase of 131,140,000 shares at HK$0.36 per share. The Plaintiff cannot seek to amend the Judgment for a claim which is not even what he claimed for in his Indorsement of Claim (O.18 r.15(2)) or in the prayer for relief in his Amended Statement of Claim.

25.  The Guarantee was understood to be over the Plaintiff’s 131,140,000 shares. It did not contain any provision which catered for any share consolidation. How the Share Consolidation affected the rights and obligations of the parties under the Guarantee was not explored at the trial because it was not even pleaded.

26.  In effect, the Plaintiff is seeking, by the Amendment Summons, to obtain judgment on a case which he has not even pleaded and has not been the subject of consideration and scrutiny by the Court. It follows that it is impossible for the Defendant to comply with the Judgment and Order and “purchase the Plaintiff’s 131,140,000 shares in the Company”. The subject matter of the Order does not exist. Nor would it be possible for the Plaintiff to transfer “the Shares”, i.e. 131,140,000 shares in the Company, to the Defendant upon the Defendant’s payment.

27.  Mr Yu SC further submitted that, first, the manifest intention of the Court was that the Defendant should purchase the Plaintiff’s 131,140,000 shares in the Company. This was stated in this Court’s order and the Sealed Judgment. This is evident from the purchase price which the Defendant was asked to pay, namely HK$47,210,400, being the price of HK$0.36 per each of the Plaintiff’s 131,140,000 shares in the Company.

28.  Secondly, the Court could not have intended, let alone manifestly intended, that the Defendant should purchase 26,228,000 shares in the Company that the Plaintiff currently holds. Nor could the Court have intended that instead of paying HK$0.36 per shares, the Defendant would in effect be required to pay a multiple (5 times) of HK$0.36 per share. Again, this could not have been the Court’s intention, let alone its manifest intention. To state the obvious, the Court could not have manifestly intended to make an order in respect of something of which it was unaware at the time of the order.

29.  Thirdly, in other words, the reference to the Plaintiff’s “131,140,000 shares in the Company” is not an “accidental slip”. This is not a case where the Court accidentally referred to the Plaintiff’s 131,140,000 shares when it in fact had in mind and meant to refer to the Plaintiff’s 26,228,000 shares. The Court referred to the Plaintiff’s 131,140,000 shares because this was what the Court had in mind as the Plaintiff’s shareholding, as pleaded at §§3, 8, and 9 of the Plaintiff’s Amended Statement of Claim and in the Indorsement of Claim, as being the number of shares that the Guarantee supposedly covered, and as being the number of shares disclosed by the Plaintiff to the Court in a list of Disclosure of Interests notices filed by the Company.

30.  Fourthly, this case is therefore a case where the Court’s decision was procured by a mistake, namely the misconception that the Plaintiff still had 131,140,000 shares in the Company which were the shares supposedly covered by the Guarantee and that the Plaintiff was in a position to transfer 131,140,000 shares in the Company to the Defendant upon payment of the supposed guarantee price of HK$0.36 per share. Mr Yu SC submitted that as explained in Wong Hung Kar Kee Mimi at §19, this is precisely what cannot be corrected under the slip rule or the inherent jurisdiction of the Court.

31.  Fifthly, by now seeking an order for the Defendant to purchase the Plaintiff’s 26,228,000 shares, the Plaintiff is seeking an order which was not originally asked for, which is (again) precisely what is impermissible: Wong Hung Kar Kee Mimi at §20. The Plaintiff originally asked for the Defendant to purchase 131,140,000 shares at HK$0.36 per share. In the Indorsement of Claim, the Plaintiff’s claim was for the Defendant to perform the guarantee to purchase the Plaintiff’s 130m shares of the Company at HK$0.36 per share.

32.  Sixthly, any amendment to the Order along the lines proposed by the Plaintiff (or along any similar lines) would amount to a rewriting of the terms of the Guarantee, which the Court is not entitled to do. On the Court’s finding, the parties agreed that the Defendant would purchase the Plaintiff’s 131,140,000 shares in the Company at HK$0.36 per share in the event that the Plaintiff’s shareholding became substantially diluted and this resulted in economic loss. The purchase of the Plaintiff’s shareholding in the event that it was reduced to 26,228,000 shares was never part of the parties’ agreement. It was submitted that any amendment would amount to an impermissible rewriting of an essential term of the Guarantee, given that the quantity to be purchased and the price are essential terms in any sale and purchase agreement.

33.  In relation to the Plaintiff’s submission that it is the clear intention of this Court to order the Defendant to acquire all of the Plaintiff’s shares in the Company, Mr Yu SC submitted that, first, when this Court referred to “all” of the Plaintiff’s shares in the body of the Judgment, it was proceeding upon the basis that the Plaintiff had 131,140,000 shares in the Company. The Court never contemplated the possibility that the Plaintiff’s shareholding had been reduced from 131,140,000 shares to 26,280,000 shares, because this was never disclosed during the proceedings and was never pleaded. The Court could not have manifestly intended something which it had never contemplated.

34.  Secondly, the Plaintiff is effectively suggesting that the reference in the Order and Sealed Judgment to “the Plaintiff’s 131,140,000 shares” was accidental, whereas the Court intended to refer to “all of the Plaintiff’s shares” or something similar to that effect. But one can also readily understand why the Court would specifically (and indeed deliberately) refer to the Plaintiff’s “131,140,000 shares”. An order for specific performance must be drawn up in precise terms. If the terms of the Court’s order cannot be precisely drawn, the possibility of wasteful litigation over compliance is increased. So is the oppression caused by the Defendant having to do things under threat of proceedings for contempt: Co-Operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1998] AC 1, 13.

35.  Thirdly, Mr Yu SC also submitted that the Plaintiff’s argument is contradicted by what the Plaintiff himself puts forward as the Court’s manifest intention in the draft Amended Sealed Judgment annexed to the Plaintiff’s Summons. There, the Plaintiff does not suggest that the Court’s manifest intention was for the Defendant to purchase “all” of the Plaintiff’s shares at HK$0.36 per share. Instead, the Plaintiff proffers yet another version claiming it to be the Court’s manifest intention, which is for the Defendant to purchase the Plaintiff’s shares, “originally comprising 131,140,000 shares which have been consolidated into 26,228,000 shares on 19 July 2021, at the price of HK$0.36 per pre-consolidation share”. Mr Yu SC’s point is that the Court could not have intended to cater for (let alone refer to) the Share Consolidation and its effects when it was not aware of those matters in the first place. Equally, the Court could not have intended the purchase price to be HK$0.36 “per pre-consolidation share”. Neither the notion of a “pre-consolidation share”, nor the issue of how the purchase price should be calculated in the event of the Share Consolidation was ever pleaded or put to or addressed by the Court. There is no basis for the purchase price to be calculated by reference to a “pre-consolidation share”. No such thing even exists. Nor was this pleaded.

36.  The Plaintiff is effectively suggesting that the Court’s manifest intention was that the Defendant should purchase 26,228,000 shares at HK$1.80 per share. This is a price five times higher than what the Court ordered, and indeed manifestly contrary to the Court’s intention. This is not even the relief sought in the Plaintiff’s Indorsement of Claim or his prayer for relief.

37.  Further, the Defendant disagrees that it was “common ground between the parties” that the term “1.3億股” in the Guarantee was a shorthand for the Plaintiff’s entire shareholding in the Company because the same was pleaded in §4 of the Plaintiff’s Amended Statement of Claim and admitted in §22 of the Defendant’s Re-Amended Defence and Counterclaim, and there was never any dispute that the Defendant was to purchase the Plaintiff’s entire shareholding.

38.  Mr Yu SC submitted that the Defendant was not aware of the Share Consolidation when the Re-Amended Defence and Counterclaim was filed and was only made aware it after trial: Read in context, §22 of the Defendant’s Re-Amended Defence and Counterclaim merely pleads to the Defendant’s understanding at the time, namely that “1.3億股” was a shorthand for the Plaintiff’s 131,140,000 shares in the Company, which the Defendant believed was the Plaintiff’s entire shareholding.

39.  Further, the Share Consolidation was never pleaded or disclosed.

40.  In essence, the Court’s manifest intention is what is said on the tin, rather than (as the Plaintiff suggests) something it never contemplated. The Defendant was to purchase the Plaintiff’s 131,140,000 shares in the Company. This was not an “accidental slip”, but rather what the Plaintiff sought all along.

41.  Lastly, Mr Yu SC also submitted that since the Plaintiff is not entitled to rely on either the slip rule or the Court’s inherent jurisdiction, the Plaintiff is also not entitled to ask that “the Judgment be clarified or amended in such manner as the Court thinks fit”: §2 of the Amendment Summons.

42.  A judgment that has been formally entered can only be altered by the Court which pronounced it within the narrow limits of the slip rule and the inherent jurisdiction: Re GW Electronics Co Ltd [2021] HKCFI 1869 §49; Spencer Bower and Handley, Res Judicata (6^th ed, 2024) §5-03.

43.  Given that the Judgment and Order have been perfected by way of the Sealed Judgment, the Court is functus officio and has no power to reconsider or vary its decision, and any variation must be sought by way of an appeal, which the Defendant has already lodged: R v Cripps ex parte Muldoon [1984] QB 686, 695A-B, Ampittia Inc v B-Tech (Holdings) Ltd [2001] 2 HKC 574, 579 ; R (Commissioner of Police of the Metropolis) v Independent Police Complaints Commission [2016] PTSR 891 §42 .

44.  Moreover, the Plaintiff’s Summons sought an order that “the Judgment be clarified or amended in such manner as the Court deems fit”. This is wholly unsatisfactory. It is surely incumbent upon the Plaintiff to set out in clear terms what he says the amendment or clarification should be, and not leave the task to the Court. Such application is also manifestly unfair to the Defendant since the Defendant would not be able to respond to the Plaintiff’s application in any meaningful way, including any need to marshal evidence and submissions.

Analysis

45.  First, I am of the view that it is correct that this Court’s manifest intention was to order the Defendant to purchase 131,140,000 shares of the Company from the Plaintiff at HK$0.36 per share. Mr Yu SC is correct that this Court could not have intended the Defendant to purchase a different number of shares, namely, 26,228,000 shares as this Court simply did not have that information at the time of the trial.

46.  It is also true that there could not have been any error on the part of the Court and the Defendant as both were not aware of the Share Consolidation. The Plaintiff’s legal team was equally unaware of the same.

47.  Secondly, I also agree with all the legal propositions advanced by the Defendant.

48.  However, it is pertinent to note that the subject shares are listed securities. Share splitting and consolidation are usual incidents of the life of listed securities, particularly, for second liner or third liner securities. In the course of oral submissions, I proposed to Mr Yu SC that what this Court should have done, out of abundance of caution is to make an order to the following effect:

“1. An order for specific performance that the Defendant do purchase the Plaintiff’s 131,140,000 shares in the Company (including any consolidation and/or splitting of the said 131,140,000 shares) at the price of HK$0.36 per share (and to be adjusted according to any consolidation and/or splitting of the said 131,140,000 shares) pursuant to the Guarantee;

2. The Defendant do pay the sum of HK$47,210,400, being the purchase price of the Plaintiff’s 131,140,000 shares (including any consolidation and/or splitting of the said 131,140,000 shares) in China Technology Solar Power Holdings Limited (the “Shares”) within 28 days herein.”

49.  Mr Yu SC agreed that if the Share Consolidation took place after the handing down of the Judgment, it is legally permissible for the order of this Court to be amended according to the terms as set out in Paragraph 48 above. This is only fair as it reflects the manifest intention of the Court.

50.  What Mr Yu SC takes issue with is, on the facts of the present case, the Share Consolidation took place before the handing down of the Judgment. Mr Yu SC submitted that in such case, the Plaintiff needs to plead the Share Consolidation. It is further submitted that the Guarantee on its proper construction may not include any share consolidation given that the trading of the subject shares is volatile and the liquidity of the same is low.

51.  In my view, this Court must deal with disputes resolution with a strong dosage of common and commercial sense. Whilst what Mr Yu SC submitted above in relation to the trading of the subject shares are correct, it does not necessarily follow that the Guarantee would be ineffective if it so happens that there were share consolidations or share splitting after the Guarantee was signed and executed. It is for the Defendant to advance a case as to why share consolidation and/or splitting will affect his contractual obligations to purchase the 131,140,000 shares as a result of any share consolidation or splitting.

52.  The Defendant’s best case is that the specific number of shares after consolidation, namely, 26,228,000 must be pleaded but the Plaintiff chose not to. Before the same is pleaded, the Defendant could not possibly anticipate and advance a case against that. Whilst that is true, again, I do not think it takes the Defendant’s case any further. If the Court can, out of abundance, make an order according to the terms as set out in paragraph 48 above, the effect of the same must be applicable to any share splits or consolidations irrespective of when that happened.

53.  Whilst the Court could not have intended 26,228,000 shares to be bought by the Defendant as the Court had no idea or information of the Share Consolidation, I am of the view that this Court clearly intended for the order to cover 131,140,000 shares including any share consolidation or splitting from such shares. It will be commercially absurd if an order can reflect post-judgment consolidation or splitting but not pre-judgment consolidation or splitting. For all intent and purposes, share consolidation or splitting could take place one day before or one day after the handing down of the Judgment. I do not see any logical reason why the legal consequences should be different.

54.  The Plaintiff could, again out of abundance of caution, plead his case in terms of the orders as set out in paragraph 48 above in his Writ of Summons and his prayer of relief. That would have been unobjectionable. It is correct that he did not do so. However, I am of the view that the number of listed shares is always subject to share consolidation and/or splitting. That must be implied and goes without saying. Hence, Mr Yu SC fairly agrees that if the Share Consolidation took place after the Judgment was handed down, this Court could amend the order according to the terms as set out in paragraph 48 above.

55.  As a matter of logic and commonsense, as far as share consolidation and/or splitting are concerned, I do not see any distinction between blue chip stocks and second liner or third liner stocks. The effect is virtually the same. Mr Yu SC has not identified any differences for this Court to take into consideration to justify a different treatment in law. Mr Yu SC stressed the impact of share consolidation and/or splitting on the price of second liner or third liner stocks. However, I do not see how it logically relates to contractual obligation to purchase the said listed securities which are always subject the necessary fate of consolidation or splitting. It is an inherent nature of such listed securities which is the subject matter of the Guarantee. I have not heard any arguments to support the proposition that once there is a share consolidation or split, the validity or enforceability of the Guarantee will be called into question.

56.  Hence, whilst I am persuaded by Mr YU SC that it is not safe for this Court, acting within the four corners of the law, to make an amendment order as proposed by the Plaintiff by specifically pointing to the figure of 26,228,000 shares as the Court had no idea of such figure at the time of making the order, this Court can and will amend the order according to the terms as set out in paragraph 48 above.

57.  Finally, for the sake of completeness, whilst this Court agrees that the 131,140,000 shares were all the shares that the Plaintiff held in the Company, it is undeniable that this Court was not informed of the Share Consolidation or the fact that 26,228,000 represents all the Plaintiff’s shareholding in the Company. Strictly speaking, this Court did not make an order for the Defendant to purchase all the Plaintiff’s shares in the Company though that would be the substantive effect of the order. It is also not the terms of the Amendment Summons prayed for by the Plaintiff.

58.  In the circumstances, for all the reasons set out above, I am of the view that it is in the interests of justice and within the four corners of the law for this Court to make an order to amend this Court’s order according to the terms as set out in paragraph 48 above.

SETTING ASIDE APPLICATION

59.  Both parties agree that if this Court accedes to the Amendment Summons, it follows that the setting aside application should be dismissed. The order of this Court as amended is capable of being performed and should be performed. Accordingly, I dismiss the setting aside application.

DISCHARGE OF THE MAREVE INJUNCTION

60.  The Plaintiff submitted that after the Judgment was handed down, the Plaintiff discovered that the Defendant had taken various steps to dissipate, dispose of or transfer his assets to his wife and daughters, in an apparent attempt to place his assets beyond the Plaintiff’s reach and render himself judgment-proof.

61.  On 10 September 2024, the Plaintiff conducted a search on Shanghai Rensheng Machinery Manufacturing Co., Limited (上海任盛机械制造有限公司) (“Shanghai Rensheng Machinery”) via TianYanCha (天眼查), a website which allows public users to obtain information about companies in mainland PRC.

62.  According to the search report on Shanghai Rensheng Machinery:

(1)  Prior to 7 May 2024, the Defendant and his wife, Ms. Qiuya Ying (應 秋雅) (“Ms. Ying”), were the shareholders of Shanghai Rensheng Machinery, with the Defendant holding 70.7% of the shares and Ms. Ying holding the remaining 29.3%.

(2)  On 7 May 2024, the Defendant transferred 30% of the shares in Shanghai Rensheng Machinery to his elder daughter, Ms. Ren Xiao Yan (任曉燕).

(3)  On 28 May 2024, the Defendant and Ms. Ying transferred their respective remaining 40.7% shares and 29.3% shares to Ms. Ren Xiao Yan and their younger daughter, Ms. Ren Li (任麗).

63.  After the Plaintiff became aware of the above share transfers, the Plaintiff became concerned that the Defendant may be seeking to transfer his assets to family members to evade his liability under the Judgment. The Plaintiff decided to monitor the Defendant’s assets more closely.

64.  On 28 October 2024, the Plaintiff received a title alert notification that an instrument was registered against 23 Munro Street, Kew East Vic 3102 Australia (“Australian Property”). The Plaintiff then conducted a search on the Australian Property.

65.  According to the search documents:

(1)  Prior to 28 October 2024, the Australian Property was held by the Defendant and his wife as “joint proprietors”.

(2)  On 28 October 2024, a Transfer of Land by Endorsement was registered against the Australian Property. The instrument was executed by the Defendant and Ms. Ying (as transferors) in favour of Ms. Ying (as transferee).

(3)  As a result of the transfer, the Australian Property is now held by Ms. Ying as “sole proprietor”.

66.  On 5 November 2024, the Plaintiff filed an ex parte application seeking a post-Judgment Mareva injunction against the Defendant. The application was heard and granted on the same day by Recorder Eugene Fung SC, who made the Injunction Order restraining the Defendant from disposing of his assets worldwide up to the value of HK$47,210,400.

67.  The Defendant now seeks to discharge the Mareva Injunction on three grounds:

(1)  The Plaintiff is guilty of material non-disclosure and there is no justification for re-granting an injunction.

(2)  There is no real risk of dissipation.

(3)  The Plaintiff has failed to demonstrate a good arguable case as to quantum.

Material non-disclosure: Applicable principles

68.  The Defendant relies on the following legal principles as set out by Recorder Manzoni SC in Aleksandr Narimanovich Kushaev v Greenly Holdings Ltd [2019] HKCFI 2745 at §69:

(1)  The duty of the applicant in an ex parte application is to make a full and frank disclosure of all the material facts.

(2)  Material facts mean all facts that are relevant to the weighing operation which the Court has to make in deciding whether to grant the order. The correct test is not simply whether, if the non-disclosure had not occurred, the ex parte judge would nevertheless have made the order, but whether the facts not disclosed, being relevant, should have been in the scales: see also Citibank NA v Express Ship Management Services Ltd [1987] HKLR 1184, 1190.

(3)  The test of materiality is objective. It is not for the Plaintiff or their advisers to decide the question. It is no excuse for the Plaintiff subsequently to say that he was genuinely unaware, or did not believe, that the facts were relevant or important. All matters relevant to the weighing operation that the Court has to make must be disclosed: see also New Asia Energy Ltd v Concord Oil (Hong Kong) Ltd [2000] 2 HKC 681 at 685.

(4)  In addition, the Plaintiff must identify any defences, which, although not yet taken, would have been available to be taken by the defendant had he been present at the ex parte application: see also New Asia Energy at 685.

(5)  The duty of full and frank disclosure is not discharged by making partial disclosure on oath or deposing to half-truths. The Court is entitled to assume that the Plaintiff acts with the utmost good faith.

(6)  The disclosure must be made in the affidavit (and/or submissions) and not in the exhibits. This is to ensure that the ex parte judge will not overlook the matters which require disclosure, ex parte applications being usually urgent (so the judge usually has little reading time) and ex parte hearings are often short: see also Tiong King Sing v Sam Boon Peng Yee [2011] 5 HKLRD 651 at §14.

(7)  The Plaintiff has a duty to inform the Court as soon as he becomes aware that the Court has been misinformed or given incomplete information at the time of the ex parte application.

69.  Further, if the facts were such that the Plaintiff came under a duty to make disclosure, it is irrelevant that the non-disclosure was inadvertent: Wah Nam Holdings Co Ltd v Excel Noble Development Ltd [2000] 3 HKC 118, 129.

70.  The Plaintiff relies on the following legal principles:

(1)  Whilst an applicant for an ex parte Mareva injunction needs to make full and frank disclosure to the Court, he cannot be expected to know the defence with hindsight: Cheer Signal Development Ltd v Wong Siu Fan; HCA 780/2015, unrep., 26 October 2015 at §47.

(2)  There is no material non-disclosure merely because an applicant fails to posit and canvas every conceivable argument which a creative respondent might conjure up in the face of a claim: Sky Motion Holdings Ltd v China Create Capital Ltd [2019] HKCFI 2408 at §88.

(3)  In laying down principles concerning disclosure of all material facts, the Courts have not intended to give active encouragement to undeserving defendants to search ingeniously for facts which a plaintiff might innocently have failed to disclose, in the hope that a judge may consider them material and so discharge the injunction. Common sense must prevail. The heavy burden cast on a plaintiff must not be allowed to become so onerous as to be intolerable: Xie Li Xin v Law Ka Yan, Thompson [2018] HKCFI 1096 at §60.

71.  The Defendant submitted that the Plaintiff is guilty of material non-disclosure in two ways. First, he failed to disclose the Share Consolidation and the impossibility of enforcing the Judgment according to its terms. Secondly, he also failed to make full and frank disclosure as to his financial position and his ability to honour his cross-undertaking as to damages.

72.  In relation to the Share Consolidation issue, the Defendant submitted that the Plaintiff failed to disclose the Share Consolidation when applying for the Injunction, including the following matters:

(1)  That the subject matter of the Order (namely the Plaintiff’s 131,140,000 shares in the Company) no longer existed;

(2)  The Plaintiff only had 26,228,000 shares in the Company;

(3)  It was therefore impossible for the Defendant to comply with the Judgment and Order, nor for the Plaintiff to comply with the same; and

(4)  The Judgment and Order was granted on an erroneous basis because the trial judge had not been made aware of the Share Consolidation.

73.  It is also submitted that in the Plaintiff’s 2^nd Affirmation (filed in support of the Plaintiff’s application for the Injunction), the Plaintiff merely summarises the effect of the Judgment as being that the Defendant is obliged to purchase "my 131,140,000 shares in the Company", and goes on to seek the Injunction on the basis that the Defendant has failed to “comply with the Judgment” or pay the sum of HK$47,210,400, being the purchase price for “my 131,140,000 shares in the Company”.

74.  The Defendant stresses that the Share Consolidation is plainly material to whether the Injunction ought to be granted:

(1)  The Court grants post-judgment Mareva injunctions on the basis that P is a judgment creditor entitled to enforce the judgment by executing it on the Defendant’s assets: Menno Leendert Vos v Global Fair Industrial Ltd; HCA 4200/1995, unrep., 25 March 2010 at §9. The whole basis of the Injunction was that the Judgment ought to be enforced and the Defendant had failed to comply.

(2)  Circumstances that might affect the validity or enforceability of the Judgment, such as circumstances rendering it impossible for the Judgment to be enforced or for the Defendant to comply with the Judgment, would have been highly material to the Court’s decision whether or not to grant the Injunction. Indeed, they strike at the premise of the Injunction itself.

(3)  The Plaintiff does not dispute that he failed to disclose the Share Consolidation or the fact that he did not have 131,140,000 Shares. Rather, the Plaintiff blames the Defendant for not raising it with the Plaintiff before taking out the Defendant’s Summons, and asserts that the Judgment and Order remain valid because they can be amended under the slip rule or the Court’s inherent jurisdiction. The Plaintiff also claims that although he was aware of the Share Consolidation, it was not brought up due to “inadvertent oversight”.

75.  I agree that the materiality of a fact is to be decided objectively. It does not depend on whether the Plaintiff thought whether a particular fact is material or not. However, in law, context is everything. On the facts of the present case, the issue of impossibility of performance was never an issue up to the time of the application of the Mareva Injunction. The Plaintiff proceeded on the basis that, as Mr Chang SC submitted, the 26,228,000 shares represented the 131,140,000 shares after consolidation. To the Plaintiff, it is the exact same block of shares representing the same percentage of economic interest in the Company. The Plaintiff certainly did not think that it was not possible to perform.

76.  Mr Chang SC submitted that prior to the issuance of the Defendant’s Summons, neither the Defendant nor his legal representatives had ever raised the issue of impossibility of performance with the Plaintiff. At no point did the Defendant suggest to the Plaintiff that the Defendant was ready and willing to perform but the Plaintiff did not numerically have 131,140,000 shares.

77.  Notably, although the Defendant had already filed his Notice of Appeal at the time of the Plaintiff’s ex parte application, the Impossibility Issue was not included amongst the Defendant’s grounds of appeal. The Defendant only applied for leave to introduce the Impossibility Issue o as a new ground of appeal in June 2025, long after the Injunction Order had been granted.

78.  I am of the view that the Plaintiff is legitimately entitled to take the honest view that there is no issue of performance, let alone impossibility of performance when first, the 26,228,000 shares were consolidated from the 131,140,000 shares and the Defendant has never suggested that it was impossible to perform.

79.  I agree that it is unreasonable to demand the Plaintiff to anticipate such a defence from the Defendant when the Defendant himself did not even raise the same in his own Notice of Appeal. It is reasonable for the Plaintiff to proceed on the basis that the grounds for challenging the Judgment are fully set out in the Notice of Appeal. In my view, it is far too demanding to expect the Plaintiff to come up with defences not even contemplated by the Defendant’s very competent legal team.

80.  Secondly, in relation to the Plaintiff’s financial position, the Defendant’s case is, in essence, the failure of the Plaintiff to disclose encumbrances on the Plaintiff’s landed properties. The fact that properties owned by the Plaintiff are subject to encumbrances is a material fact which ought to be disclosed to the ex parte judge: Han Jaejoon v Lee Sang Young [2023] HKCFI 2202 at §66. This is because it is incumbent on the Plaintiff to make full and frank disclosure of his financial position to the ex parte judge. All relevant material must be placed before the judge so he can determine for himself the correct order to make in the light of such disclosures.

81.  However, I am of the view, depending on the facts, it is not necessary to disclose all the encumbrances on properties in each case. For example, if the liquid assets possessed by an applicant is sufficient to support the cross-undertaking, it cannot be right that the injunction should be discharged simply because the applicant has not disclosed certain encumbrances on his real properties. Of course, there will be cases where the failure to disclose the same will be material.

82.  It is pertinent to note in the present case that the Plaintiff has obtained a judgment in the sum of HK$47,210,400 to be paid by the Defendant which can be used to set off against any damages suffered by the Defendant as a result of the Mareva Injunction. Unless and until the Judgment is discharged or overturned, the Plaintiff has a valuable and valid judgment. As held in Elegant Jump Ltd v Tribune Bridge Ltd [2000] 3 HKC 133 at 140G-H, where there are no realistic doubts regarding the ability of an applicant for injunctive relief to honour his cross-undertaking in damages, it is not necessary for the applicant to make full and frank disclosure of his financial position. That should be the end of analysis.

83.  In any event, Mr Chang SC has drawn to the attention of this Court that:

(1)  In relation to the Hennessey Road Property, the mortgage registered against the property secures a loan advanced by the Bank of Communications to the Plaintiff. The outstanding balance of the loan was HK$1.88 million as of 1 January 2025, which is far below the current market value of property, estimated at approximately HK$10 million.

(2)  In relation to the Southorn Garden Property, the mortgage in question secures a credit facility granted by Bank of China to Pretty City Ltd. The credit facility has a credit limit of HK$1.5 million, which is far below the current market value of the Southorn Garden Property, estimated at around HK$6.25 million.

84.  Accordingly, I am of the view that there is no material non-disclosure by the Plaintiff in obtaining the Mareva Injunction.

85.  Secondly, the Defendant submitted that there is no risk of dissipation.

86.  The relevant applicable legal principles are not in dispute. See Convoy Collateral Ltd v Cho Kwai Chee [2020] 6 HKC 81 at §§39–54.

87.  In addition, as pointed out in Re Chau Cham Wong Patrick [2016] 2 HKLRD 278 §§31–32, 43, given the serious consequences of a Mareva injunction, the standard of proving a real risk of dissipation is “relatively high”. The Plaintiff must establish that risk by reference to “solid evidence” or “cogent evidence”.

88.  It is also undisputed that the burden is on the Plaintiff to prove a real risk of dissipation of assets. There is no burden on the Defendant, whether by voluntarily disclosing their assets or otherwise, to disprove it.

89.  On the facts of the present case, I am satisfied that there is a real risk of dissipation of assets. First, in relation to the Australian Property, it is itself subject to an injunction in Australia. The same has not been discharged. The Australian Court must have satisfied that there is real risk of dissipation.

90.  I agree that the Defendant’s explanation that he transferred his interest to Ms. Ying as part of an agreed matrimonial asset distribution upon their divorce is not convincing, to say the least. I agree with Mr Chang SC that whilst the Defendant asserts that he and Ms. Ying had been discussing a divorce since around October 2023, he has produced no documentary evidence of such discussions. Although he seeks to explain the absence of documentary records by claiming his discussions with Ms. Ying were “mainly face-to-face”, the Defendant cannot produce even one single text message indicating that divorce was being contemplated back in October 2023.

91.  Further, despite the Defendant’s claim that he and Ms. Ying “started to live separately” in around October 2023, he has provided no documentary evidence of any move or relocation during that period. The suggestion that the Defendant and Ms. Ying began living separately is not supported by anything but the Defendant’s own say so.

92.  The only documentary record which the Defendant has produced concerning his divorce is a consent order dated 1 October 2024 (“Consent Order”) issued by the Australian family court. However, it is noteworthy that the Defendant’s filing for divorce and his application for matrimonial asset distribution occurred just 3 months after the Judgment was handed down.

93.  Importantly and most relevantly, this Court has also not lost sight of the fact that the matrimonial asset distribution agreed between the Defendant and Ms. Ying under the Consent Order is highly lopsided. The distribution arrangement results in (i) the Defendant divesting a substantial portion of his assets to Ms. Ying with zero consideration in return and (ii) the Defendant retaining only very limited assets under his own name. The Plaintiff has filed an application in Australia to set aside the consent order on the ground that the distribution prejudices his interest as a creditor. The application is scheduled to be heard in October 2025.

94.  Regarding the transfer of the Defendant’s shareholding in Shanghai Rensheng Machinery to his two daughters, whilst the Defendant claims in that it had always been his plan to hand over the business of Shanghai Resheng Machinery to his two daughters, and that Shanghai Rensheng Machinery had been “under their leadership” for some time, he has produced no documentary evidence showing that he had discussed any succession plans with his daughters or anyone within Shanghai Rensheng Machinery prior to the transfers in question.

95.  According to the TianYanCha (天眼查) search report, the Defendant’s daughters did not occupy any significant positions in Shanghai Rensheng Machinery at the time of the relevant share transfers. Neither of the Defendant’s daughters was listed as a director or key personnel of Shanghai Rensheng Machinery. This does not sit well with the Defendant’s case that his two daughters had “played a crucial role” in Shanghai Rensheng Machinery long before the trial of this case.

96.  Although the Defendant claims that his elder daughter had signed some contracts on behalf of Shanghai Rensheng Machinery in a few isolated instances, this falls far short of demonstrating that the Defendant had long intended to transfer his shares to his daughters before the Judgment.

97.  This Court lives in a real world. I am of the view that there are unexplained features of transfer of assets out from the Defendant to his wife and daughters after the handing down of the Judgment. Although Mr Yu SC in his submissions attempted to justify such transactions by reference to certain timelines and suggested that it is unrealistic to assume that the Defendant went so far as to divorce his wife to transfer his assets out of the reach of his creditors. However, the net effect of the Consent Order is that the Defendant’s wife has most of their family assets. The transfer of shares to his daughters are non-arm’s length disposals of assets by the Defendant to his close family members for no consideration.

98.  Such transactions, which go beyond the mere ordinary or usual dealing with assets, are sufficient to give rise to a real risk of unjustified dissipation of assets by the Defendant, thereby justifying the grant and continuation of the Injunction Order.

99.  However, I agree that the Mareva Injunction needs to be varied as the quantum is incorrect. Mareva injunctions are set by reference to a “ceiling figure”. The applicant must demonstrate a sufficiently meritorious claim to a particular ceiling figure. Recognising the rarity of circumstances in which it would be appropriate for the Court to interfere with a person’s ability to deal with his own assets as he sees fit, the interference is only to the minimum appropriate amount: Universal Entertainment Corp v Kazuo Okada [2020] HKCFI 1406 §35 (Coleman J) ; affirmed [2020] HKCA 995 §8.

100.  First, the Plaintiff cannot be entitled to HK$47,210,000 (being the figure imposed in the Injunction) when he is at the same time holding 26,228,000 shares of the Company which must have a market value.

101.  Secondly, the Plaintiff has already obtained an injunction over the Australian Property which has a certain value. The Plaintiff should not have the protection of two concurrent court orders.

102.  I am of the view that a Mareva injunction should not cover assets over and above the Plaintiff’s claim and should balance the interest of both parties. In the circumstances, I direct the Plaintiff to submit a new draft order reflecting the deductions as set out in paragraph 100 and 101 above.

THE VARIATION APPLICATION

103.  The Defendant submitted that even if the Injunction Order is to be continued, it ought to be varied from a worldwide Mareva injunction to a domestic one, since the Defendant’s assets in Hong Kong are more than sufficient to cover his liability under the Judgment.

104.  Originally, I was attracted to the application as the Defendant maintains with The Bank of East Asia Ltd (“BEA Account”), which holds bonds worth an estimated USD12,000,000.

105.  However, I am told that all the bonds held in the BEA Account were issued by China Evergrande Group. It is a matter of public record that China Evergrande Group was wound up in June 2024: Re China Evergrande Group [2024] 1 HKLRD 1128.

106.  Given the insolvency of China Evergrande Group, Mr Chang SC submitted that the bonds held by the Defendant in the BEA Account are most likely worthless or of nominal value only. I agree that this Court cannot just take into account the face value of the Defendant’s China Evergrande bonds.

107.  Discounting the China Evergrande bonds, the Defendant’s only other assets in Hong Kong were the shares (valued at HK$541,176) and cash (HK$126,398.02) in his account with Orient Securities (Hong Kong), which are far from sufficient to cover his liability under the Judgment.

108.  In the circumstances, I do not think it is appropriate to accede to the variation application.

FORTIFICATION APPLICATION

109.  As far as the application for fortification is concerned, Mr Yu did not press for it in his oral submissions. This makes good sense because there is no evidence to show that the Defendant is likely to suffered significant loss as a result of the Injunction Order and if so, how much and the Plaintiff will be unable to make good such loss.

110.  Given that the Defendant has filed no evidence as to what loss (or its likely quantum) may be caused to him by the Injunction Order, there is no basis for Defendant to even begin to suggest that the Plaintiff would not be able to make good such losses. It is therefore also of no surprise that the Defendant did not propose any figure for fortification. Further, this Court cannot pick a figure out of the thin air, so to speak.

111.  I also take note that the Plaintiff has expressly confirmed that he held other financial assets, including, amongst other things, an investment portfolio with Nomura Singapore Limited which has a net asset value of USD 2,338,095.07.

112.  In the circumstances, the fortification application is dismissed.

THE STAY APPLICATION

113.  In determining whether to grant a stay of execution, the Court will consider:

(1)  The merits of the appeal, on a preliminary view and without going too deeply into the merits and strengths of the appeal: Star Play Development Ltd v Bess Fashion Management Co Ltd [2007] 5 HKC 84 at §9(5).

(2)  Whether there is a good reason for a stay, including whether the absence of a stay would render the appeal nugatory: Star Play at §§8, 9(1)–(4).

114.  The Defendant has advanced very comprehensive grounds of appeal. which this Court has digested. However, this Court can only form a preliminary view on the same. In relation to the first two grounds, the difficulty faces by the Defendant is that the Defendant has chosen to confine himself to argue that the duration of the Guarantee should be tied to the tenure of Madam Wang’s chairmanship. I had specifically asked the Defendant’s counsel and got his confirmation.

115.  Mr Chang SC is correct that where a point, though pleaded, was expressly abandoned at trial, the Court of Appeal would be slow to exercise its discretion to allow the appellant to raise it on appeal: VSC Steel Company Ltd v Wing Key Construction Co Ltd: HCMP 1497/2011, unrep., 31 August 2011 at §19.

116.  The Plaintiff is entitled to complain that had the Defendant pursued the arguments now advanced under first two grounds at trial, the state of evidence would likely have been materially different. In particular, Grounds 1 and 2 focus heavily on the factual context and the circumstances in which the Guarantee was entered into, which are plainly fact-and-evidence sensitive matters. An appellant cannot run a new point if there is a reasonable possibility that the state of evidence would have been materially different had the point taken at trial: Flywin Co Ltd v Strong & Associates Ltd (2002) 5 HKCFAR 356 at §38.

117.  As to the new Ground 2A, no leave to pursue the same in the Appeal has been granted by the Court of Appeal yet.

118.  As for Ground 3, this ground merely repeats the arguments raised by the Defendant at trial regarding causation and economic loss, which were considered and rejected by the Court. I agree that this ground is unmeritorious and unlikely to succeed on appeal.

119.  As to Ground 4, the Defendant appears to have overlooked the corrigendum issued by the Court on 26 July 2024, which clarified that the costs of the amendment summons are to be paid by the Plaintiff, not the Defendant.

120.  In respect of the new Ground 5, again no leave to pursue the same in the Appeal has been granted by the Court of Appeal yet. In any event, this ground has been taken care of by this Court’s decision on the Amendment Summons.

121.  However, importantly, I am of the view that the Defendant has failed to establish that the appeal will be rendered nugatory if no stay is granted. There is no sufficient evidence for this Court to conclude that there is no reasonable prospect for the Defendant to recover the judgment sum from the Plaintiff in the event of a successful appeal. The Plaintiff is entitled to his fruit of litigation.

122.  Mr Chang SC reminded this Court that the Plaintiff owns fixed and permanent assets in Hong Kong, including (i) Unit A, 18/F, Success Commercial Building, 245-251 Hennessey Road, Hong Kong and (ii) Unit 1 39/F Southorn Garden, No. 2, O’Brien Road, Hong Kong, both of which are of substantial value.

123.  In addition to his real property holdings, the Plaintiff also owns other valuable financial assets, including, amongst other things, an investment portfolio with Nomura Singapore Limited which has a net asset value of USD 2,338,095.07 (equivalent to around HKD 18,182,196.31) as of 31 October 2024.

124.  This Court cannot speculate that the Plaintiff will not be able to pay back the Defendant the Judgment sum once the same is paid over.

DISPOSITION

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

(1)  The Amendment Summons is allowed but according to the terms as set out in paragraph 48 above.

(2)  The Defendant’s Summons is dismissed save that the ceiling of the Injunction Order has to be revised taking into account the matters set out in paragraph 100 and 101 above.

(3)  The Plaintiff is to file an amended Injunction Order within 7 days herein.

(4)  Parties are to file and exchange written submissions on costs within 14 days herein and reply submissions within 7 days thereafter.

126.  Finally, it remains for me to thanks Mr Chang SC and Mr Kwan for the Plaintiff and Mr Yu SC and Mr Tang for the Defendant for their very comprehensive and helpful submissions.