MAJESTIC PLAN INTERNATIONAL LTD AND OTHERS v. JI CHANGQUN

HCA 1494/2019

[2026] HKCFI 1755

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1494 OF 2019

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D E C I S I O N

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A.  Introduction

1.  On 22 December 2025, I handed down the judgment in respect of the present action (the “Judgment”). In gist, whilst I dismissed the 3^rd Plaintiff’s claims against the Defendant, I partially allowed the 1^st and 2^nd Plaintiffs’ claims against the Defendant for the principal sums of HK$452,327,853.95 and HK$408,761,575.92, together with pre-judgment interest in the sums of HK$189,207,398.11 and HK$187,351,007.73[1].

2.  On 19 January 2026, the Defendant took out a notice of appeal under CACV 47/2026.

3.  By summons dated 23 January 2026, this is the Defendant’s application for a stay of execution pending appeal.

4.  Pursuant to my directions given on 30 January 2026, the parties have filed evidence and written submissions, which I have considered.

5.  Unless otherwise stated, in this Decision, I adopt the nomenclatures and definitions that were used in the Judgment.

B.  Legal Principles on Stay of Execution Pending Appeal

6.  The legal principles governing an application for a stay of execution pending appeal were set out in Star Play Development Ltd v Bess Fashion Management Co Ltd [2007] 5 HKC 84 at paras 6 to 10 (per Ma J, as Ma CJ then was) and summarized by Cheung JA in Fung Shing Chung v Choi King Hung [2024] HKCA 1021 at para 20 as follows:-

“(1) The applicant is required to demonstrate a ‘good reason’ for a stay of execution.

(2) Generally speaking, the existence of merely an arguable appeal cannot by itself amount to a sufficient reason to justify a stay. It is the minimum requirement before a court would even begin to consider granting a stay.

(3) In other words, if the Court is not convinced that there exist arguable grounds of appeal, no stay will be granted however exceptional the circumstances may otherwise be justifying a stay of execution.

(4) On the other hand, the existence of a strong appeal or a strong likelihood of success will usually by itself enable a stay to be granted because this would constitute a good reason for a stay.

(5) In most cases, where the Court is faced with simply the existence of an arguable appeal, it becomes necessary for the applicant to provide additional reasons as to why a stay is justified.

(6) Commonly, this is done by demonstrating that without a stay the appeal would be rendered nugatory, for example, because of an appreciable risk that the respondent to the appeal would not be able to repay in the event of a successful appeal against a money judgment, or because the failure to grant a stay would have a serious deleterious effect on the applicant.

(7) In considering an application for a stay pending appeal, it would be impractical and even undesirable for the Court to go deeply into the merits or strengths of the appeal, although the Court must still form a preliminary view of these aspects, see: Star Play Development Ltd v Bess Fashion Management Co Ltd [2007] 5 HKC 84 per Ma J (as he then was) at [9]-[10].

(8) While the existence of a strong appeal would tend to lead the Court to exercise its discretion in favour of granting a stay, the threshold is a high one. The Court has held that for there to be a ‘strong appeal’ such as would justify the grant of a stay without more, the situation must be one which would lead the Court to conclude that something has grievously gone wrong with the process of law in the Court below, or that the appellant is ‘almost bound to succeed’. Absent such a case, something more needs to be demonstrated: John Joseph Mc Gee v. Nold (HK) Ltd [2024] HKCA 354 per Barma JA at [30]”

C.  The Merits of the Appeal

7.  In his notice of appeal in CACV 47/2026, the Defendant contends that I erred in finding that the MOU is supported by valid consideration (see Judgment, paras 56 to 89).

8.  Mr Johnny Ma SC, leading Ms Cherry Xu, (for the Defendant)[2] contended that the appeal is strong and meritorious. Thus, for this reason alone, a stay of execution should be granted.

C1  The Plaintiffs’ obligations to sell and transfer the interests in the Fortune Fund and the OBOR Fund         

9.  Having reviewed the relevant terms of the MOU and set out the stance adopted by the Defendant’s trial counsel (see Judgment, paras 60 to 64), in paragraphs 65 to 69 of the Judgment, I stated that: -

“65. The effect of clause 2 in Section III of the MOU is such that if the Payment Schedule under Section II is not adhered to, the Defendant will immediately be liable to pay the entirety of the outstanding part of the Fund Fixed Return and the Fund Principal Amount by way of purchasing the Plaintiffs’ interests in the Fortune Fund and the OBOR Fund.

66. This means that whilst the Defendant will have to pay the amounts in respect of the outstanding part of the Fund Fixed Return and the Fund Principal Amount to the Plaintiffs, meanwhile, the Plaintiffs will have to transfer their corresponding interests in the Fortune Fund and the OBOR Fund in favour of the Defendant, and the corresponding interests to be transferred in favour of the Defendant should be in proportionate to the outstanding amount that the Defendant pays pursuant to clause 2 in Section III.

67. It is important to stress that it would be impossible for the Defendant to purchase the Plaintiffs’ interests in the Fortune Fund and the OBOR Fund if the Plaintiffs were not under a parallel obligation to sell or transfer the same in favour of the Defendant.

68. The Plaintiffs’ parallel obligations to sell or transfer are implicit, but vital to the operation of clause 2 in Section III.”

10.  First of all, Mr Ma submitted that on true construction, the MOU merely set out the Defendant’s unilateral promise to make payment, and there is neither express nor implied obligation on the part of the 1^st and 2^nd Plaintiffs to transfer the interests in the Fortune Fund and OBOR Fund[3].

11.  I am not of the view that what Mr Ma submitted is arguable.

12.  As stated in paragraph 60 of the Judgment and as accepted by the Defendant’s trial counsel (see Judgment, para 63), clause 2 in Section III of the MOU expressly provides that if the Payment Schedule is not adhered to: -

“…[the Defendant][4] shall immediately and unconditionally repay all unpaid Fund Fixed Return and Fund Principal Amounts by purchasing fund interest from [the 1^st Plaintiff, the 2^nd Plaintiff, and the 3^rd Plaintiff’s representative][5]”

13.  As explained in paragraphs 66 and 67 of the Judgment, I cannot see how the Defendant might “purchase” the fund interests if the Plaintiffs were not under a corresponding obligation to sell or transfer the same in favour of the Defendant. Mr Ma has not even put forward a rival construction. I cannot see how the Defendant might wriggle out of the express words in the MOU.

14.  Second, Mr Ma emphasized that on the Plaintiff’s pleaded case, the Fortune Fund and the OBOR Fund were “dressed up as investments”, but “in substance orchestrated for the purpose of advancing financing”[6].

15.  I am not of the view that Mr Ma’s observation would avail the Defendant at all. It appears to me that this is a red herring.

16.  As pointed out in paragraph 45(1)(a) of the Judgment, I found that “the Fortune Fund and the OBOR Fund were, in reality, set up for the purposes of making financing available to the entities associated with the Defendant, and the Defendant did have an interest in the matter”. However, neither the Defendant nor the Plaintiffs pleaded and/or suggested that the Fortune Fund and the OBOR Funds were shams. It is important to stress that the reality was such that the contractual documents relating to the 2 Funds governed the parties’ legal relationships. In the circumstances, there was no reason why the Defendant and the 1^st and 2^nd Plaintiffs might not enter into the MOU to govern their legal relationships when the payments to which 1^st and 2^nd Plaintiffs were entitled under the 2 Funds were not forthcoming. Again, the Defendant neither pleaded nor suggested that the MOU was a sham. I cannot see how the Defendant might rely on the commercial background relating to the 2 Funds to contend that the MOU is not supported by valid consideration. This simply does not follow.

17.  Third, Mr Ma raised a new point. He contended that despite substantial payments of HK$198,596,373 being made to the Plaintiffs, there is no contemporaneous evidence showing that any fund interests had been transferred to the Defendant[7].

18.  In this connection:-

(1)  The task before the court was to determine, as a matter of contractual construction, whether the MOU is supported by valid consideration. As pointed out by Mr Jenkin Suen SC, leading Ms Ebony Ling and Mr Adrian Lee (for the 1^st and 2^nd Plaintiffs), it is trite that post-agreement conduct and statements are generally irrelevant to contractual interpretation: see Marble Holdings Ltd v Yatin Development Ltd (2008) 11 HKCFAR 222 at paras 21 to 22 (per Mortimer NPJ). I agree with Mr Suen’s submissions.

(2)  In any event, without prejudice to the aforesaid, it is observed that there could be various practical and/or commercial reasons why the Defendant did not see fit and/or necessary to demand the Plaintiffs to transfer part of the interest in the Fortune Fund and the OBOR Funds when partial payments were received by the Plaintiffs[8]. For reasons best known to the Defendant, he did not testify at trial, such that he could provide an explanation. Further, for reasons best known to the Defendant’s former legal representatives, they did not pursue and/or explore this matter throughout the trial. In the premises, it appears that the Defendant is debarred from raising contentions on this matter on appeal under the Flywin principle: see Secretary for Justice v Timothy Owen (2022) 25 HKCFAR 288 at para 20.

(3)  For completeness, it should be pointed out that under paragraph 4 of the order in respect of the Judgment (the contents of which were agreed by the parties in light of my findings), it was provided that upon the unconditional payment of HK$452,327,853.95 and HK$408,761,575.92, “the 1^st and 2^nd Plaintiffs do transfer their respective interest as limited partners in Fortune Fund as defined in paragraph 14(1) of the Judgment and OBOR Fund as defined in paragraph 14(2) of the Judgment to the Defendant forthwith”. Having said that the terms of this order were agreed by the parties, arguably, this is indicative of how the Defendant understood the terms of the MOU.

(4)  More importantly, it is obviously not the case that the Defendant would not be in a position to receive and/or acquire the interests in the Fortune Fund and the OBOR Fund. There is no question that upon paying the 2 sums of HK$452,327,853.95 and HK$408,761,575.92, the Defendant would be entitled to receive the interests in the 2 Funds. There was plainly valid consideration.

19.  Fourth, Mr Ma contended that the statement of claim does not contain a plea that the Plaintiffs have an obligation to transfer the interests in the 2 Funds and that the Defendant was caught by surprise at trial[9].

20.  I am not of the view that there are merits in these submissions.

21.  As pointed out in paragraph 70 of the Judgment, in paragraph 12(3) of the statement of claim, the Plaintiffs pleaded the Defendant’s obligations to cause repayment by “purchasing the Plaintiffs’ interests in the Fortune Fund and the OBOR Fund as required”, and in paragraph 11 of the statement of claim, the material contents of the MOU are even set out verbatim. Since the relevant contractual provisions were pleaded in its entirety, the 1^st and 2^nd Plaintiffs were plainly entitled to address the court in regard to the legal effect thereof: see Hong Kong Hua Qiao Co Ltd v Cham Ka Tai [2015] 4 HKC 167 at para 20 (per Kwan JA, as Kwan JA then was); and In re Vandervell’s Trust (No 2) [1974] 1 Ch 269 at 321H-322A. Anyhow, this was a matter of contractual interpretation.

22.  Thus, I am also unable to accept Mr Ma’s suggestion that the Defendant was caught by surprise at trial. Putting aside the fact that the issue in question was a matter of contractual construction, it is worth mentioning that at the outset of the trial, the issue in question was indeed extensively canvassed in the course of the oral opening submissions of the Defendant’s trial counsel. Obviously, the Defendant’s trial counsel had ample opportunities to conduct cross-examination on the issue in question and to further address the court in respect thereof in her closing submissions. There is no room for the Defendant to suggest that he was ambushed at trial. This was not the case.

23.  Fifth, Mr Ma raised another new argument. He contended that as the Plaintiffs’ obligations to sell and transfer the interests in the 2 Funds were incidental to and consequential upon the Defendant’s performance, the same could not constitute good consideration[10].

24.  Mr Ma’s contention is a novel one. However, he has not cited any authority in support of the proposition that he seeks to establish. In my view, what Mr Ma suggested is contrary to the proposition propounded by A Cheung J (as Cheung CJ then was) in Chong Cheng Lin Courtney v Cathay Pacific Airways Ltd (CACV 7/2010, 16 November 2010) at paras 50 to 51. As pointed out in paragraph 59 of the Judgment: -

“where the parties acted on the basis that a valid contract existed, it would take very compelling reasons for the court to hold that the contract in question is invalid in law for want of consideration, and the court will adopt a pragmatic approach.”

C2  Forbearance to sue        

25.  In paragraphs 75 and 76 of the Judgment, I set out: -

(1)  the 1^st and 2^nd Plaintiffs’ contractual rights against the Fortune Fund, the OBOR Fund, Eastern Result, Glorious Fame, Yong Jian, the 5 individuals (including Mr Song) who executed the Zall Share Charges, and the Defendant; and

(2)  the demand letters and notices that the 1^st and 2^nd Plaintiffs issued to some of the aforesaid entities and individuals.

26.  In paragraph 80 of the Judgment, I pointed out that in light of the substantial stakes involved, I did not believe that the 1^st and 2^nd Plaintiffs’ inaction was ascribed to their desire to maintain a harmonious relationship with their commercial counterparts.

27.  Having reviewed the contemporaneous WeChat records and emails exchanged by the parties (see Judgment, para 81), in paragraphs 82 to 84 of the Judgment, I made the following findings: -

“82. On the evidence:-

(1) It is clear to me that the reason why the Defendant was willing to take up the personal obligations under the MOU was that he did not want the Plaintiffs to take enforcement action as the same would have an impact on the collateral in question. Bearing in mind that the Defendant was a substantial shareholder of Fullshare, which had significant cross-shareholding with Zall Smart Commerce Group Ltd[59] and that the Plaintiffs’ intended action might give rise to undesirable consequences on the prices of the shares, the Defendant’s concern was understandable.

(2) It also appears to me that the reason why the Plaintiffs did not take immediate steps to exercise their contractual rights was that the Defendant was willing to take up personal obligations for securing repayments in their favour pursuant to the terms of the MOU. This was the most likely reason why the Plaintiffs were willing to accept a deferred timetable for repayment (ie the Repayment Schedule under Section II of the MOU).

83. In light of the commercial reality, I am of the view that (i) there must have been an implied request from the Defendant that the Plaintiffs should forbear from taking enforcement actions in accordance with its strict contractual rights; and (ii) pursuant to the Defendant’s implied request, the Plaintiffs agreed to forbear from taking immediate enforcement action based on the contractual rights under the contractual instruments set out in paragraph 75 above.

84. This is the only conclusion that makes commercial sense. Had the Plaintiffs insisted that they be entitled to take immediate enforcement actions, the Defendant would not have agreed to take up personal obligations under the MOU. By the same token, had the Defendant refused to take up personal obligations under the MOU, it was more likely than not that the Plaintiffs would have taken steps to enforce their contractual rights earlier in order to protect their commercial and/or financial interests.

28.  Mr Ma submitted that I erred in finding that the 1^st and 2^nd Plaintiffs’ forbearance had a “causal connection” with Defendant’s implied request[11].

29.  Obviously, this is a challenge of my factual findings, which were based on assessment of, inter alios, the inherent probabilities, the objective circumstances, and the contemporaneous communication records. Despite Mr Ma’s submissions, I am not of the view that a palpable error has been identified or that my factual conclusion is plainly wrong.

30.  Mr Ma also raised a new contention. As I understand, Mr Ma suggested that some of the contractual rights enjoyed by the 1^st and 2^nd Plaintiffs were not “true” collaterals. Hence, the forbearance in respect thereof could not constitute valid consideration[12].

31.  In my view, Mr Ma’s contention elevates form over substance, and it seeks to draw a distinction without a difference. It is important to bear in mind that the commercial reality was such that the 1^st and 2^nd Plaintiffs enjoyed some indisputable contractual rights, and the Defendant’s concern was that if these contractual rights were exercised, his commercial interests might be jeopardized. It was in these circumstances that the parties entered into the MOU.

32.  As already pointed out, where the parties proceeded on the basis that there was a valid contract, it would take a compelling reason for the court to hold that the contract is void for want of consideration, and a pragmatic approach would be adopted: see Courtney Chong v Cathay Pacific at paras 50 to 51. Mr Ma’s contention, which is highly forensic, is contrary to the well-established approach propounded by A Cheung J (as Cheung CJ then was).

C3  Sum Up     

33.  For all the above reasons, I am unable to form a preliminary view that the Defendant has an overwhelmingly strong or meritorious appeal. It appears to me that there are problems with the contentions pursued by the Defendant. As such, I am not prepared to grant a stay of execution based on the alleged merits of the appeal.

34.  Nonetheless, erring on the side of caution, I would not go so far as to suggest that the Defendant’s appeal is utterly hopeless. Putting the Defendant’s contentions to the highest, I am inclined to accept that the Defendant may have an appeal that is not utterly unarguable.

D.  Will there be a serious deleterious effect on the Defendant if no stay of execution is granted?

35.  Having said that the Defendant’s appeal may not be utterly unarguable, it is necessary for me to consider whether a refusal to grant a stay of execution would have a serious and irreparable deleterious effect on the Defendant.

36.  In his supporting affirmation filed in support of the present application[13], the Defendant asserted that if no stay of execution is granted: -

(1)  in light of public authorities’ concern about his financial circumstances, he may not be able to act as the chairman and director of Fullshare[14]; and

(2)  he may be forced to sell or dispose of his interests in Fullshare (which controls 71.08% of the shareholding in another listed company, namely China High Speed Transmission Group Co Ltd), and the shareholding in these listed companies would change.

37.  As pointed out by Harris J in Joint and Several Liquidators of Day Implex Ltd (in liquidation) v Mahesh Nanik Dayaram [2025] HKCFI 4661 at para 9 (citing Star Play Development (supra) at para 9 (per Ma J, as Ma CJ then was) and Re Lee Chee Ho (HCB 8571/2016, 22 August 2017) at para 21 (per Lok J):-

“It is well-established that if a debtor’s reason for a stay pending appeal is that the levying or execution would have a serious deleterious effect on him, the court will require good and cogent evidence, such as production of documentary proof, in support of such a contention.”

38.  In the present case, the Defendant has not adduced a shred of concrete evidence on his current financial position. As pointed out in paragraph 10 of the Judgment, according to Forbes’ World’s Billionaires List in 2019, the Defendant had an estimated wealth of USD2.4 billion. The Defendant has not refuted this fact; nor has he suggested that his substantial wealth has been lost in the past few years.

39.  In the circumstances, it is highly doubtful as to whether the Defendant lacked the financial means to satisfy the Judgment. Bearing in mind the Defendant’s background, I am not satisfied that the Defendant has adduced sufficient evidence to show that the alleged deleterious effect will take place.

40.  However, the Defendant did point out that the 1^st and 2^nd Plaintiffs are foreign companies incorporated in the British Virgin Islands and that their shareholding or ownership structure has been opaque. In the circumstances, in the event that his appeal in CACV 47/2026 succeeds, he may not be able to recover the sums that he pays to the 1^st and 2^nd Plaintiffs pursuant to the Judgment.

41.  I accept that the Defendant’s concern mentioned in the paragraph immediately hereinabove is valid. I also accept that if the Defendant’s appeal succeeds at the end of the day, he may face some difficulty in recovering the sums that are paid to the 1^st and 2^nd Plaintiffs. Whilst the enforcement proceedings may be cumbersome, there will also be uncertainty regarding the prospect.

42.  However, as pointed out by Ma J (as Ma CJ then was) in Star Play Development (supra) at para 9(9):-

“It is important to stress that the court must not at any stage forget the position of the successful party. It is always relevant to consider the prejudice that would be caused to the successful party…in the event that a stay is granted and if necessary, to impose conditions so as to minimize the prejudice caused to him.”

43.  In this connection, there have been suggestions that the fact that the successful party is a foreign plaintiff merely supports an argument for making a payment into court, and it does not support an argument for seeking a stay outright: see Toeca National Resources BV v Baron Capital Ltd & Anor (CACV 55/2013, 16 August 2013) at para 12 (per Yuen JA); Red Asset Management Ltd & Anor v Sancus Group Ltd & Anor [2025] HKCFI 4166 at para 5.2(4) (per DHCJ Jonathan Wong).

44.  In the premises, having considered the full circumstances in the round, I am of the view that it would be fair to stay the execution of the Judgment upon the condition that the principal sums, together with the pre-judgment interest accrued thereon, be paid into court within 21 days.

45.  Whilst I take into account that the Defendant may face difficulty in recovering the sums that he pays pursuant to the Judgment should his appeal succeed, I also take into account that the parties had their day in court and that the 1^st and 2^nd Plaintiffs are the successful parties. In my view, the condition that I impose is capable of minimizing the prejudice caused to the 1^st and 2^nd Plaintiffs. This would ensure that the 1^st and 2^nd Plaintiffs would be paid without further delay in the event that the Defendant’s appeal fails.

E.  Disposition

46.  For the above reasons, I order that upon the condition that the principal sums of HK$452,327,853.95 and HK$408,761,575.92, together with pre-judgment interest in the sums of HK$189,207,398.11 and HK$187,351,007.73, being paid into court within 21 days, the execution of the order in respect of the Judgment in the present action be stayed pending the determination of the Defendant’s appeal to the Court of Appeal under CACV 47/2026.

47.  As regards the question of costs:-

(1)  In paragraphs 21 to 22 of the 3^rd affirmation of Wang Jing filed on 13 February 2026, the 1^st and 2^nd Plaintiffs ventilated their alternative stance that a stay of execution be granted upon the condition that the sums under the Judgment (or a substantial part thereof) be paid into court.

(2)  Despite the 1^st and 2^nd Plaintiffs’ indication, the Defendant insisted on contending that the execution of the Judgment be stayed in its entirety absolutely and unconditionally.

(3)  It transpired that I accept the 1^st and 2^nd Plaintiffs’ alternative stance.

48.  In the circumstances, it appears to me that it would be fair to order that (i) the costs incurred by the parties on and prior to 13 February 2026[15] be in the cause of the appeal in CACV 47/2026; and (ii) the costs incurred by the 1^st and 2^nd Plaintiffs after 13 February 2026 be paid by the Defendant, to be summarily assessed by this court.

49.  I make a costs order nisi in terms of paragraph 48 above.

50.  The 1^st and 2^nd Plaintiffs have already lodged their statement for gross sum assessment. Unless the parties apply to vary the aforesaid costs order nisi within 14 days, the Defendant shall lodge his statement in opposition within 21 days.

51.  I express my gratitude to Mr Johnny Ma SC, Ms Cherry Xu, Mr Jenkin Suen SC, Ms Ebony Ling, and Mr Adrian Lee for their helpful assistance.