HCA 1727/2025
[2025] HKCFI 5899
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF FIRST INSTANCE
ACTION NO 1727 of 2025
________________________
BETWEEN
Fremery Resources Limited
1st Plaintiff
(華隆物產有限公司)
Sit Yau Kam
2nd Plaintiff
and
Chan Kam Ping
1st Defendant
Fremery Enrich Holdings Limited
2nd Defendant
(華瑞資源有限公司)
________________________
Before: Deputy High Court Judge Alan Kwong in Chambers (Open to Public)
Date of Hearing: 28 November 2025
Date of Decision: 28 November 2025
____________________
DECISION
____________________
A. Introduction
1. This is the substantive hearing of the Plaintiffs’ summons dated 17 September 2025 seeking (i) a worldwide Mareva injunction against the 1st Defendant to the extent of US$24,587,645; (ii) a Chabra injunction against the 2nd Defendant to the extent of US$24,587,645; and (ii) a proprietary injunction against the 1st and 2nd Defendants in respect of a sum of US$19,734,319.
B. Material Background
2. The 2nd Plaintiff (hereinafter “Wife ”) and the 1st Defendant (hereinafter “Husband ”) were married in 1977. They separated in September 2014.
3. The Husband and the Wife used to run a family business of trading iron ores through various companies. The 1st Plaintiff was one of these companies.
4. The Wife and the Husband respectively hold 50% shareholding in the 1st Plaintiff.
5. Both of them were the 1st Plaintiff’s directors.
6. It is the Wife’s case that as evidenced by the records in the Companies Registry and the Husband’s WhatsApp messages in March 2025, the Husband had resigned as a director of the 1st Plaintiff.
7. The dispute that led to the present litigation concerns the 1st Plaintiff’s commissions arising from a mining project in Australia.
8. In 2004, the 1st Plaintiff invested in the said mining project, and its business partners were a company named Mineralogy Pty Ltd (“Mineralogy ”) and a company named International Minerals Pty Ltd.
9. Pursuant to the terms and provisions of a deed of release dated 4 August 2006 (the “Deed of Release ”), the 1st Plaintiff was entitled to receive commissions from Mineralogy on a quarterly basis.
10. The Wife said that she was misled by the Husband to believe that the prospect of receiving commissions from Mineralogy was slim. Against this background, the Husband asked the Wife to sign a special resolution to declare that the 1st Plaintiff was dormant.
11. However, unbeknownst to the Wife, the Husband insidiously set up an account under the purported name of the 1st Plaintiff (ie “Fremery Resources Ltd”) with United Overseas Bank Ltd in Singapore (hereinafter the “UOB Account ”). The Husband then wrongfully procured Mineralogy to pay the commissions, to which the 1st Plaintiff is entitled, into the UOB Account.
12. As evidenced by the contemporaneous records:-
(1) The Husband issued an invoice dated 30 September 2019 and an undated invoice to Mineralogy requesting that commissions in the amount of US$17,491,886 and US$1,803,618 be paid into the UOB Account.
(2) As a result, on 22 October 2019, Mineralogy paid a sum of US$19,734,319 into the UOB Account.
(3) Further, the Husband subsequently issued another undated invoice to Mineralogy, requesting that a further commission of US$4,853,326 be paid into the UOB Account.
13. The Wife said that she discovered the aforesaid matters in September 2022.
14. Subsequently, it was discovered that:-
(1) The UOB Account is held by a company incorporated in Seychelles (the “Seychelles Company ”), which shares the same Chinese name and English name as the 1st Plaintiff; and
(2) The Seychelles Company was incorporated on 20 August 2019, and the Husband is the sole director and shareholder thereof.
15. It was also discovered that:-
(1) On 7 July 2021, the 2nd Defendant received a sum of US$5,000,000 from the UOB Account held by the Seychelles Company.
(2) The 2nd Defendant is incorporated in Hong Kong in 2020, and the Husband is the 2nd Defendant’s sole shareholder and director[1]
(3) On 14 March 2022, the Husband received a sum of SGD1,500,000 from the Seychelles Company.
16. On 7 November 2022, the Wife obtained an interim Mareva injunction against the Husband up to US$12,293,822.50 under FCMC 2441/2017 (the “FCMC Injunction ”). This is equivalent to the Wife’s 50% share of the total commission of US$24,587,645 that was said to be wrongfully diverted to the UOB Account. It appears obvious that the Wife’s claims in FMCM 2441/2017 are brought on the basis that she is entitled to half of the matrimonial pot in the ancillary relief proceedings.
17. Pursuant to the ancillary disclosure order under the FCMC Injunction, the Husband disclosed that his personal assets consisted of a time deposit of US$12,500,000 under the 2nd Defendant’s bank account maintained with Bank of Communication (the “BoCom Account ”).
18. On 8 May 2024, His Honour Judge G Own discharged the FCMC Injunction. He took the view that there was material non-disclosure on the part of the Wife, and that the FCMC Injunction could not bite on the commissions to which only the 1st Plaintiff is entitled.
19. On 17 September 2024, the Wife took out a notice of appeal under CACV 377/2024, and the discharge of the FCMC Injunction had been stayed pending the resolution of the appeal.
20. It transpired that CACV 377/2024 was disposed of by consent. At the substantive hearing on 11 November 2025, the Wife and the Husband agreed that upon the Husband paying US$12,293,822.50 from the BoCom Account into court, the FCMC Injunction would be discharged.[2]
21. On 21 November 2025, a sum of US$12,293,822.50 was paid into court pursuant to the consent order made by the Court of Appeal at the substantive hearing on 11 November 2025 (the “CA Consent Order ”).
22. In their submissions, Mr Bernard Man SC, leading Ms Bonnie Cheng and Mr Keith Chan, (for the Wife and the 1st Plaintiff) emphasized that whilst CA Consent Order is to facilitate the enforcement of the Wife’s claims in the ancillary relief proceedings, the claims in the present action are brought by the 1st Plaintiff, which is plainly entitled to recover the commissions paid by Mineralogy. Thus, the CA Consent Order is not ipso facto a reason for refusing to grant interim relief in favour of the 1st Plaintiff.
23. I cannot find fault with Mr Man’s submissions.
24. As a matter of law, the Wife and the 1st Plaintiff are separate legal entities. Indeed, they have brought separate claims against the Husband. If a wrong were done to the 1st Plaintiff and it can be shown that the balance of justice lies in its favour, the 1st Plaintiff is entitled to ask the court to grant appropriate interim relief to protect its own interests, provided that the interim relief granted by the court does not go beyond the liabilities to which the Husband and his associated entities are exposed. After all, the interests of the 1st Plaintiff are not identical to those of the Wife. For instance, the 1st Plaintiff may have creditors, whose indirect interests may be affected by the outcome of these proceedings.
25. The Husband’s stance is to oppose the Wife and the 1st Plaintiff’s summons dated 17 September 2025. To this end, he issued a letter dated 24 October 2025 to the court.
26. Despite my order dated 10 November 2025, the Husband did not file an affirmation[3] st Plaintiff were contented that their application be disposed of substantively at the present hearing.
C. Mareva Injunction
C1. General Legal Principles
27. The legal principles relating to Mareva injunction are well-established. The applicant has to show that: (i) he has a good arguable case; (ii) there are assets within the jurisdiction; (iii) the balance of convenience lies in favour of granting a Mareva injunction; and (iv) there is a real risk of dissipation. The court may grant a worldwide Mareva injunction where some of the assets are within the jurisdiction and some are abroad. See Hong Kong Civil Procedure (2025) (Vol 1) at paras 29/1/65 and 29/1/83.
28. The question of whether there is a real risk of dissipation involves evaluative and predictive judgment. It is trite that the risk can be inferred from the defendant’s low commercial morality or dishonesty: see Convoy Collateral Ltd v Cho Kwai Chee [2020] 6 HKC 81 at paras 40 and 53 (per Lam VP, as Lam PJ then was)
C2. Good Arguable Case
29. It is hardly controvertible that the commission payments from Mineralogy belong to and should only be received by the 1st Plaintiff.
30. The Husband and the Seychelles Company have no rights to receive the commissions paid by Mineralogy pursuant to the Deed of Release. There is no reason why the Husband would issue invoices for the purpose of procuring Mineralogy to pay the commission sums of US$19,734,319 and US$4,853,326 into the Seychelles Company’s UOB Account.
31. This was tantamount to misappropriation of the 1st Plaintiff’s assets.
32. The contemporaneous bank record shows that the commission sum of US$19,734,319 was in fact diverted to UOB Account, which was indisputably controlled by the Husband via the Seychelles Company.
33. As regards the remaining sum of US$4,853,326:-
(1) It is noteworthy that the CA Consent Order as well as the FCMC Injunction were made or granted on the basis that the total amount of commission payments involved was US$24,587,645, and this subsumed the sum of US$4,853,326.
(2) More importantly, I accept Mr Man’s submissions that there is an inference that Mineralogy had already paid the sum of US$4,853,326 into the UOB Account. In this connection, the position of the Husband has been opaque. Although he made an assertion that Mineralogy had not paid the sum of US$4,853,326, he failed to produce all the bank records relating to the UOB Account to show that this was actually the case. I do not see any sound reason why the Husband did not put forward the relevant documentary evidence to substantiate his assertion. In my view, it is, to say the least, arguable that an adverse inference should be drawn against the Husband: see Tullet & Tokyo International Securities Ltd. v APC Securities Co. Ltd [2001] 2 HKLRD 356, at 365B-J (per Le Pichon JA); South China Securities Ltd v Lam Kwen Yuen [2012] 5 HKLRD 524 at para 7 (per DHCJ Lisa Wong SC, as Lisa Wong J then was); and Triunion (HK) Cereal & Oil Co Ltd v APAC Investment Holdings Ltd & Ors [2022] HKCFI 3326 at para 60 (per Recorder Victor Dawes SC).
34. At the material times, the Husband was a director of the 1st Plaintiff.
35. By diverting the commission payments to the Seychelles Company (which he solely owned), the Husband had, inter alios , (i) injured the 1st Plaintiff; (ii) failed to act in the best interests of the 1st Plaintiff; (iii) placed the interests of himself and the Seychelles Company above the interests of the 1st Plaintiff.
36. In the premises, there must be a good arguable case that the Husband breached his fiduciary duties owed to the 1st Plaintiff and that the 1st Plaintiff has suffered loss and damage to the extent of US$24,587,645.
37. For completeness, it should be mentioned that Ms Jacquelyn Ng (who was belatedly instructed to represent the Husband and the 2nd Defendant) contended that the Wife does not have the locus standi to bring a common law derivative action on behalf of the 1st Plaintiff.
38. This contention would not avail the Husband at all. The common law derivative action brought by the Wife in her personal capacity as the 2nd plaintiff in this action is merely an alternative position. It is the Wife’s primary position that the Husband had resigned from the 1st Plaintiff already. As such, she is entitled to cause the 1st Plaintiff to sue the Husband in its own capacity.
C3. Balance of Justice and Risk of Dissipation
39. In my view, there is a risk of dissipation, and the balance of justice lies overwhelmingly in favour of granting the Mareva injunction sought.
40. The evidence shows that the Husband calculatedly took a series of insidious actions for the purpose of misappropriating the commission payments, which belong to the 1st Plaintiff:
(1) He insidiously set up the Seychelles Company, which has the same Chinese name and English name as the 1st Plaintiff.
(2) He insidiously set up the UOB Account, which is maintained by Seychelles Company.
(3) He then unilaterally communicated with Mineralogy, and requested it to pay the commission sums of US$19,734,319 and US$4,853,326 into the Seychelles Company’s UOB Account.
(4) Worse still, the Husband procured the Wife to sign a special resolution declaring that the 1st Plaintiff was dormant when the 1st Plaintiff was clearly in a position to receive the commission payments from Mineralogy pursuant to the Deed of Release.
41. The Husband is unable to put forward any meaningful explanation as to his conduct.
42. In my view, what the Husband sought to do was to (i) mislead Mineralogy to believe that the UOB Account belonged to the 1st Plaintiff and (ii) conceal the matters relating to the commission payments from the Wife.
43. On the evidence (which is overwhelming), I am satisfied that the Husband is in fact dishonest and of low commercial morality. In light of his conduct canvassed above, I have doubts as to whether he is the kind of person who would graciously face the consequences of his wrongdoings. I am satisfied it can be inferred that the Husband might dissipate his assets with a view to evading judgment: see Convoy Collateral Ltd v Cho Kwai Chee (supra ) at para 53.
44. I do not lose sight of the fact that the relevant events took place back in 2019, and it can be said that there has been inordinate delay on the part of the Wife and the 1st Plaintiff in pursuing the present application.
45. However, as pointed out by Harris J in Re Wako Giken (HK) Co Ltd [2010] 4 HKLRD 121 at paras 24 to 25, it is not sufficient for the defendant to show that the applicant has delayed unreasonably. It is also necessary to show that “because of the delay in bringing [the] application it would be unreasonable or unjust to grant the order sought by the [applicant]”
46. Whilst I accept that equity would not act in vain, I am not of the view that the court should be lenient towards unscrupulous litigants who may, in bad faith, dissipate assets, thereby rendering themselves “judgment-proof”. There are no reasons why unscrupulous litigants should be allowed to benefit from their unconscionability.
47. After all, the material question is whether the Mareva injunction sought will be of practical value. Depending on the circumstances, if it can be shown that the Mareva injunction sought is of no practical value at all, this may be a reason why the court may exercise its discretion against granting the proposed Mareva injunction.
48. In the present case, there is no evidence showing that the Husband and the 2nd Defendant have already dissipated all their assets, such that the Mareva injunction granted by the court would be completely futile.
49. In this connection, Mr Man pertinently pointed out that in his summons seeking discharge of stay and respondent’s notice filed on 25 October 2024 in CACV 377/2024, the Husband complained that as the FCMC Injunction and solicitors’ letters were served on his bankers, all his assets had been frozen. The Husband has not adduced any evidence to show that his assets and/or bank accounts have been “unfrozen” or that he has been in complete liberty to dispose of his assets after he paid the sum of US$12,293,822.50 into court on 21 November 2025 (which only took place about 1 month ago). There is simply no evidence showing that the Husband’s bankers have been informed of the recent development, such that they might have “unfrozen” the bank accounts belonging to the Husband. Indeed, in her skeleton submissions[4]
50. In the circumstances, it does not appear to me that the Mareva injunction sought will be of no practical value, such that the 1st Plaintiff’s application should be dismissed on this basis.
51. Ms Ng asks me to take into account that the Husband, being a 50% shareholder of the 1st Plaintiff, is effectively entitled to half of the commission payments from Mineralogy, and this ought to be the common understanding between the Husband and the Wife.
52. For the reasons set out in paragraphs 22 to 24 above, I am not of the view that this is, as a matter of law, the correct analysis:-
(1) As pointed out, the claims pursued by the 1st Plaintiff in this action is different from the Wife’s claims against the Husband in the ancillary relief proceedings under FCMC 2441/2017. In my view, the 1st Plaintiff is entitled to pursue appropriate interim relief to protect its own interests, which is different from the Wife’s interests.
(2) It must be emphasized that until and unless the 1st Plaintiff properly declares dividends in favour of its shareholders, the Husband has no entitlement to the commission proceeds at all. Thus, although the Husband is a 50% shareholder of the 1st Plaintiff, it does not follow that he is necessarily entitled to share 50% of the commission proceeds, and he is not in a position to appropriate the same in disregard of the 2nd Plaintiff’s interests.
(3) In this connection, the Husband has not adduced evidence on the 1st Plaintiff’s financial position, and the audited accounts of the 1st Plaintiff is not available to this court. As such, it is uncertain as to whether the 1st Plaintiff has creditors and is exposed to substantial liabilities.
(4) In the circumstances, I am simply not in a position to assume that the Husband will necessarily be entitled to receive 50% of the commission payments at the end of the day.
53. I now consider the question of whether it is justifiable to grant a worldwide Mareva injunction.
54. In this connection:-
(1) There is no evidence showing that the Husband and 2nd Defendant have sufficient assets in Hong Kong to meet the claims brought by the 1st Plaintiff.
(2) Meanwhile, in his letter dated 24 October 2025, the Husband asserted that he was “materially based in Dubai or China” throughout most of 2025.
(3) The fact that the Husband is out of Hong Kong most of the time is also evidenced by the fact that his affirmation filed in CACV 377/2024 was notarized in Singapore.
55. In my view, the fact that the Husband has assets outside of Hong Kong can be inferred from the fact that he has been based overseas recently. As a matter of fact, the Husband is capable of setting up overseas companies (such as the Seychelles Company) and overseas bank accounts (such as the UOB Account).
56. In the circumstances, I am of the view that the Husband must have assets overseas.
57. Although the Wife and the 1st Plaintiff were unable to adduce precise evidence on the whereabouts of the Husband’s assets, it does not appear to me that they can be criticized. It is not realistic to expect them to have precise information relating to the Husband’s financial position.
C4. Sum Up
58. For all the above reasons, I am satisfied that it would be just, fair, and appropriate to grant a local and worldwide Mareva injunction against the Husband.
59. The amount of the 1st Plaintiff’s claim against the Husband is US$24,587,645.
60. As Mr Man indicated, the 1st Plaintiff will give credit in regard to half of the amount (ie US$12,293,822.50), which has already been paid into court pursuant to the CA Consent Order.
61. In the premises, I will grant a local and worldwide Mareva injunction against the Husband to the extent of US$12,293,822.50 (ie US$24,587,645 less US$12,293,822.50).
D. Chabra Injunction
D1. General Legal Principles
62. In XY, LLC v Jesse Zhu & Anor [2017] 5 HKC 479 at para 24, Kwan JA (as Kwan VP then was), citing PJC Vseukrainskyi Atksionernyl Bank v Maksimov [2013] EWHC 422 (Comm) at para 7, stated:-
“(1) The Chabra jurisdiction may be exercised where there is good reason to suppose that assets held in the name of a defendant against whom the claimant asserts no cause of action (the NCAD) would be amenable to some process, ultimately enforceable by the courts, by which the assets would be available to satisfy a judgment against a defendant whom the claimant asserts to be liable on his substantive claim (the CAD).
(2) The test of ‘good reason to suppose’ is to be equated with a good arguable case, that is to say one which is more than barely capable of serious argument, but yet not necessarily one which the judge believes to have a better than 50% chance of success.
(3) In such cases the jurisdiction will be exercised where it is just and convenient to do so. The jurisdiction is exceptional and should be exercised with caution, taking care that it should not operate oppressively to innocent third parties who are not substantive defendants and have not acted to frustrate the administration of justice.
(4) A common example of assets falling within the Chabra jurisdiction is where there is good reason to suppose that the assets in the name of the NCAD are in truth the assets of the CAD. Such assets will be treated as in truth the assets of the CAD if they are held as nominee or trustee for the CAD as the ultimate beneficial owner.
(5) Substantial control by the CAD over the assets in the name of the NCAD is often a relevant consideration, but substantial control is not the test for the existence and exercise of the Chabra jurisdiction. Establishing such substantial control will not necessarily justify the freezing of the assets in the hands of the NCAD. Substantial control may be relevant in two ways. First, evidence that the CAD exercises substantial control over the assets may be evidence from which the court will infer that the assets are held as nominee or trustee for the NCAD as the ultimate beneficial owner. Secondly, such evidence may establish that there is a real risk of dissipation of the assets in the absence of a freezing order, which the claimant will have to establish in order for it to be just and convenient to make the order. But the establishment of substantial control over the assets by the CAD will not necessarily be sufficient: a parent company may exercise substantial control over a wholly owned subsidiary, but the principles of separate corporate personality require the assets to be treated as those of the subsidiary not the parent. The ultimate test is always whether there is good reason to suppose that the assets would be amenable to execution of a judgment obtained against the CAD.”
63. It is also pertinent to refer to Hui Chi Ming v Koon Wing Yee [2010] 4 HKC 86 at para 31. There, Fok J (as Fok PJ then was) pointed out that:-
“So, a Mareva injunction may be granted over assets where it is shown that there is good reason to suppose as against a non-party that the assets of or held by the non-party would be susceptible to a procedure which would lead to satisfaction of a judgment.
64. In 苏州太合汇投資管理有限公司 v 霍尔果斯市摩伽互联娱乐有限公司 [2023] 1 HKLRD 342 at paras 22, 23 and 28, Recorder William Wong SC pointed out that:-
“22… the existence of a wholly-owned subsidiary per se , without more, does not justify the grant of a Chabra injunction…Insofar as it is suggested that the existence of a wholly-owned subsidiary is a sufficient condition for the granting of a Chabra injunction, such suggestion must be incorrect.
23… the ultimate test is always whether there is a good reason to suppose that the assets would be amendable to execution of a judgment obtained against the CAD. Chabra injunction will be readily available to a claimant without analysing the facts of the particular case.
28… The ultimate and underlying objective is to analyse and determine whether there is good reason to suppose that the assets would be amenable to execution of a judgment against the CAD. In the present case, the PRC Judgment. I see no intellectual difficulties in appreciating that the enforcement of the PRC Judgment could well lead to the liquidation of the Defendant herein, and a liquidator may then be able to pursue claims against third parties, including procuring MMOGA to declare dividends or simply passing a resolution to wind up MMOGA and make distribution to its contributory, namely, the Defendant herein. These are all prospective claims, causes of action or obligations which liquidation or receivership, as proper legal process, could lead to assets amenable to an execution of the PRC Judgment
(emphasis added)
D2. Deliberation
65. For the reasons set out in Section C above, I am satisfied that the 1st Plaintiff has a good arguable case against the Husband to the extent of US$24,587,645, and the balance of justice lies in favour of granting a Mareva injunction, such that the interests of the 1st Plaintiff could be protected when the dispute in this action is pending resolution.
66. It appears to me that the 2nd Defendant falls squarely within the court’s Chabra jurisdiction.
67. First
(1) The Husband was the one who set up the 2nd Defendant in 2020 after he procured Mineralogy to pay out the commission sums behind the Wife’s back.
(2) It is hardly controvertible that the Husband, as the sole shareholder and a director[5] nd Defendant.
68. Moreover, the bank records show that on 7 July 2021, a sum of US$5,000,000 was in fact transferred from the Seychelles Company’s UOB Account to the 2nd Defendant.
69. It appears that the Husband (who owned and controlled the Seychelles Company and the 2nd Defendant) was the person who orchestrated the transfer. In this connection, there is no evidence showing that (i) the Seychelles Company carried out any substantive business operation; (ii) the 2nd Defendant carried out any substantive business operation; and (iii) there was any genuine business dealing between the Seychelles Company and the 2nd Defendant.
70. In the premises, there are sound reasons to believe that:-
(1) The 2nd Defendant was set up by the Husband for the purposes of receiving and dealing with (i) the commission payments emanating from Mineralogy, and/or (ii) other assets belonging to himself that are susceptible to enforcement.
(2) The 2nd Defendant is the Husband’s nominee, and it has been holding the commission payments from Mineralogy and/or the Husband’s personal assets. In this connection, it should be mentioned that for the reasons elaborated in the affirmation filed by the Wife (which I do not intend to regurgitate), it appears that the Husband has been evasive as to disclosure of documents. In my view, there are good reasons to believe that the 2nd Defendant might be holding part of the commission payments and/or some of the Husband’s assets, which have not yet come to light.
71. Second nd Defendant were not the Husband’s nominee at all, applying the Recorder William Wong SC’s observations in 苏州太合汇投資管理有限公司( supra) at para 28, there are good reasons to suppose that the assets held by the 2nd Defendant would be amenable to execution of a judgment obtained against the Husband:-
(1) There is a possibility that the Husband may fail to pay damages at the end of the day, as a result of which a bankruptcy order will be against him and trustees-in-bankruptcy will be appointed.
(2) If this happens, the trustees-in-bankruptcy will take over the Husband’s shareholding in the 2nd Defendant, and take steps to realize the 2nd Defendant’s assets for the purpose of making distribution to the 2nd Plaintiff (being a judgment creditor).
72. For all the above reasons, I accept Mr Man’s submissions that it would be appropriate to invoke the court’s Chabra jurisdiction, and I will accordingly grant a Chabra injunction against the 2nd Defendant to the extent of US$12,293,822.50.
E. Proprietary Injunction
E1. General Legal Principles
73. Order 29 rule 2 provides that:
“(1) On the application of any party to a cause or matter the Court may make an order for the detention, custody or preservation of any property which is the subject-matter of the cause or matter, or as to which any question may arise therein.
(2) …
(3) Where the right of any party to a specific fund is in dispute in a cause or matter, the Court may, on the application of a party to the cause or matter, order the fund to be paid into court or otherwise secured.
(4) An order under this rule may be made on such terms, if any, as the Court thinks just.
74. In Gentle Soar Limited v CMBC Capital Finance Limited & Others [2021] HKCFI 3450 at para 36, Keith Yeung J summarised the relevant principles as follows:
“36. … As summarized at Sections C1 and C2 of Mr Ho’s written submissions (citing inter alia Pacific Bulk Investment Ltd v Chu Kong [2020] HKCFI 2825 , Samtani v Samtani [2012] 4 HKLRD 872, Liao Chen Toh v Loyal International Enterprises Co Ltd & Ors , HCA 2302/2014 (30 March 2016) and Music Advance Ltd v Incorporated Owners of Argyle Centre Phase I [2010] 2 HKLRD 1041):
(a) For the grant of an interlocutory injunction, the broad requirements are that (a) there is a serious issue to be tried, and (b) the balance of convenience lies in favour of granting or continuing the injunction;
(b) Specifically in relation to the grant of a proprietary injunction or a preservation order:
(i) There is property which is bona fide the subject matter of the cause or matter, or as to which any question may arise;
(ii) Something ought to be done for the security of that property, because for example damages may not be an adequate remedy;
(iii) Unlike application for a Mareva injunction, no risk of dissipation needs to be demonstrated;
(iv) Even if there has been delay in making an application which may lead to refusal of a freezing injunction, a proprietary injunction may nonetheless be granted;
(v) An enquiry into the relative merits of rival claims is not necessary. In respect of the merits of the claim, the party seeking the preservation order only needs to show that there is a serious issue to be tried on the merits on the normal American Cyanamid principles;
(vi) If the opposing party seeks to show that there is no serious issue to be tried, the threshold is high, as it would be necessary to demonstrate that the claim should be struck out;
(vii) There is no strict requirement for an undertaking as to damages where the Court grants a proprietary injunction or a preservation order, albeit that the Court may require such an undertaking ‘where the circumstances warrant’;
(viii) There is no need for P to show that damages would not be an adequate remedy;
(c) As a fundamental principle, the Court at the interlocutory stage would take whichever course that appears to carry the lower risk of injustice if it should turn out that it is wrong;”
E2. Deliberation
75. It is trite that where a fiduciary acquires a benefit, he is treated as having acquired that benefit on behalf of his principal, so that the benefit is owned by the principal who has a proprietary remedy against the fiduciary: see China Forestry Holdings Co Ltd v Top Wisdom Overseas Holdings Ltd [2025] HKCFI 2893 at paras 134 to 143 (per Recorder Jenkin Suen SC).
76. For the reasons set out in Section C2 above, I am of the view that the 1st Plaintiff does have a strong proprietary claim in respect of the commission sum of US$19,734,319. As a director of the 1st Plaintiff, the Husband should not have diverted the sum to the Seychelles Company (which is owned and controlled by himself). As pointed out, I am of the view that this was tantamount to misappropriation of the 1st Plaintiff’s assets.
77. In this connection, it is also well-established that when property is obtained by fraud or unconscionable conduct, equity imposes a constructive trust on the fraudulent or unconscionable recipient so that the property is recoverable and traceable in equity: see Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] AC 669 at 716C-D; and Predicine Holdings Ltd v Bianchi (Hong Kong) Ltd [2021] HKCFI 123 at para 90 (per Coleman J)
78. In my view, it is, to say the least, arguable that the Seychelles Company and/or the Defendant (who controlled the Seychelles Company) were unconscionable in receiving the sum of US$19,734,319 from Mineralogy. As such, the 1st Plaintiff is in a position to mount a claim in respect thereof based on the doctrine of constructive trust.
79. It appears to me that the balance of convenience lies in favour of granting the interlocutory proprietary injunction sought.
80. First of all, the fact that the 1st Plaintiff has an arguable proprietary claim over the commission payment of US$19,734,319 is a significant factor in favour of granting the proposed interlocutory injunction: see Hengshi International Investments Ltd v Bayspring International Ltd (HCMP 1916/2015, 18 December 2015) at para 84 (per Queeny Au-Yeung J); and Wason Holdings Ltd & Ors v BHP International Markets Ltd & Anor (HCA 1692/2014, 20 March 2015) at para 39 (per Chow J, as Chow JA then was).
81. Second, it is doubtful whether damages would be an adequate remedy. As mentioned, there is no evidence showing the Husband and/or the 2nd Defendant have adequate assets within the jurisdiction to meet the 1st Plaintiff’s claims.
82. In the premises, I will grant an interlocutory proprietary injunction in favour of the 1st Plaintiff to the extent of US$7,440,496.50 (ie US$19,734,319 less US$12,293,822.50).
F. Disposition
83. For all the above reasons, I accede to the Wife and the 1st Plaintiff’s application under their summons dated 17 September 2025.
84. I make an order in terms of the draft submitted by Mr Man[6]
85. As regards costs, I order that the costs of the summons dated 17 September 2025 be in the cause, save and except that the Husband and 2nd Defendant do forthwith pay the costs incurred by the Wife and the 1st Plaintiff arising from his opposition to the said summons (including the costs in respect of the present hearing), to be summarily assessed by this court.
86. I further direct that:-
(1) The Wife and the 1st Plaintiff should file its statement of costs within 7 days; and
(2) The Husband and the 2nd Defendant should file his statement in opposition within 7 days thereafter.
87. Lastly, I express my gratitude to Mr Bernard Man SC, Ms Bonnie Cheng, Mr Keith Chan, and Ms Jacquelyn Ng for their most helpful assistance.
(Alan Kwong)
Deputy High Court Judge
Mr Bernard Man, SC, Ms Bonnie Cheng and Mr Keith Chan, instructed by M/s DLA Piper Hong Kong, for the 1st and 2nd Plaintiffs
Ms Jacquelyn Ng, instructed by M/s Choi, Leung & Associates, for the 1st and 2nd Defendants
[1] There are 2 other directors. According to the Wife, one of them is the Husband’s cousin.
[2] However, if Mineralogy disclosed that the total commission paid was in fact more than US$24,587,645, the injunction would take effect in regard to the Wife’s 50% share of the surplus amount.
[3] As Mr Man agreed that the Husband’s affirmation be admitted, I will agree leave in respect thereof.
[4] Paragraph 13
[5] The 2 other directors are Chen Fan and Liu Sheng. According to the Wife, Liu Sheng is the Husband’s cousin.
[6] In light of the credit given in regard to the sum of US$12,293,822.50 that has already been paid into court pursuant to the CA Consent Order, (i) the figure in paragraph 1 in respect of the proprietary injunction should be US$7,440,496.50; and (ii) the figures in paragraphs 3, 4, and 5 in respect of the Mareva injunction and the Chabra injunction should be US$12,293,822.50.