Securities and Futures Commission v. Leung Anita Fung Yee Maria and Others

HCMP 1917/2019

[2024] HKCFI 1210

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1917 OF 2019

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BETWEEN

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D E C I S I O N

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1.Introduction

1.1These proceedings, premised upon section 214 of the Securities and Futures Ordinance Cap 571 (“SFO”), were commenced by the Petitioner (“P”) against the Respondents on 25 October 2019. The 1^st Respondent (“R1”), between October 2002 and September 2013, held a number of senior positions in the senior management of the 4^th Respondent (“Company”). The Company was previously listed on the Main Board of the Hong Kong Stock Exchange (stock code: 2366) and was wound up in November 2020.

1.2The following 3 applications require my determination:

(1) P’s Summons dated 19 September 2023 for a Mareva injunction against R1, as amended as per a consent summons dated 30 January 2024 (“Injunction Summons”);

(2) R1’s Summons dated 29 January 2024 to adjourn the hearing of the Injunction Summons (“Adjournment Summons”); and

(3) R1’s Summons dated 2 February 2024 for leave to file and serve a signed but unsworn version of the 5^th Affidavit of R1 (“Evidence Summons”).

1.3The Injunction Summons was first heard by DHCJ Jonathan Chang SC on 22 September 2023. On that occasion, the learned Deputy Judge: (1) adjourned the Injunction Summons for substantive argument, (2) ordered R1, pending the determination of the Injunction Summons, to give written notice to P upon, inter alia, the execution of any sale and purchase agreement (“SPA”) in respect of 7 specified properties (“Notification Injunction”), (3) restrained R1, pending the determination of the Injunction Summons, from disposing of, dealing with or diminishing the value of the purchase price of the specified properties unless 28 days had elapsed from the notification given under the Notification Injunction, and (4) granted ancillary disclosure orders relating to R1’s assets and certain particulars in the event that any SPA was executed in respect of the specified properties (“22/9/23 Order”).

1.4Of the 7 specified properties, 2 in particular took on significance at the hearing before me, namely (1) 上海青浦區滬青平路2222弄銀濤高爾夫119號 (“Shanghai Property”) and (2) 150 Mountain Drive, Lions Bay, Vancouver, British Columbia, Canada (“Lions Bay Property”).

1.5R1’s solicitors gave notification pursuant to the Notification Injunction that R1 had already signed SPAs in respect of the Shanghai Property (“Shanghai SPA”) and the Lions Bay Property (“Lions Bay SPA”). By a summons issued on 17 October 2023, P sought interim relief to restrain completion of the two SPAs pending the substantive determination of the Injunction Summons. On 19 October 2023, Cheng J granted an order embodying R1’s undertakings that, pending the determination of the Injunction Summons (“19/10/23 Order”):

(1) Except with P’s prior written consent or leave of the Court, R1 would not implement the terms of or proceed to completion of the Shanghai SPA or Lions Bay SPA; and

(2) R1 would notify P in writing within 3 calendar days of any variation, amendment, cancellation or novation of the Shanghai SPA or Lions Bay SPA (or any terms thereof), to be verified by affidavit within 14 days thereafter.

1.6At the hearing, P was represented by Mr Jin Pao SC (leading Ms Sheena Wong) and R1 by Mr Norman Nip SC (leading Mr Vincent Chen).

2.P’s allegations against R1 in these proceedings and R1’s response

2.1The Company and its subsidiaries (“Group”) were founded by R1 and the 2^nd Respondent (“R2”), her late husband[1], in 1995. According to the Company’s annual reports, the Group was principally engaged in the provision of media services, including TV programme related and production related services, TV advertising and other public relations services in the PRC.

2.2During divers periods between 2002 and 2013, R1 had assumed the roles of chief executive director, chairman, authorized representative, executive director and non-executive director of the Company. Between 2002 and 2012, R2 was the chairman and a non-executive director of the Company. R1 and R2 were also substantial shareholders of the Company, with an aggregate interest of around 22.47% of its issued share capital prior to June 2012. Between June 2012 and July 2023, R1 and R2 reduced their aggregate interest in the Company from 22.47% to below 5% (“Disposal of Shares”).

2.3On 28 February 2020, Harris J, upon the parties’ consent, gave directions for the filing of pleadings. The following summary is not intended to be an exhaustive catalogue of all the pleaded issues between P and R1, but is instead a sufficient summary of those issues which are germane to my present deliberation.

2.4It is P’s pleaded case that R1 and R2, together with the 3^rd Respondent (“R3”), masterminded or were involved in the implementation of an elaborate scheme (“Scheme”) whereby substantial assets in the range of HK$35.2 million to HK$74.27 million were misappropriated from the Company and channelled to R1 and/or her companies and the Company suffered significant losses of up to HK$235.36 million which ought to be compensated by R1 to R3.

2.5In particular, P contends that:

(1) The Scheme was implemented under R1’s direction by the execution of 10 alleged sale and purchase Agreements (“Alleged S&Ps”) between June 2010 and July 2011. Under the Alleged S&Ps, the Group purchased licenses of TV dramas from 9 BVI companies (“BVI Signatories”), namely (as defined at Points of Claim §23) Affluent King, Headchoice, Bao Yuan, Cosmo Sky, Ever Nice, Heng Nuo, Rosy Expand, Sino Origin, and Bounty Business;

(2) Under the Alleged S&Ps, total payments of HK$327.75 million (“Alleged Payments”) were purportedly made by the Group to 7 BVI companies (“BVI Intermediaries”), namely (as defined at Points of Claim §28) Bounty Business[2], Billion Full, Dragon Union, Rang Yao, Beauty Plus, Hero Sonic and China Wise;

(3) After the execution of the Alleged S&Ps, between 15 September and 26 December 2011, the Group entered into 7 licensing agreements (“Licensing Agreements”), under which the Group purportedly granted to 4 BVI companies (“Appointed Buyers”) the right to broadcast some of the TV dramas in a specified territory for a specified time period. The Appointed Buyers were (as defined at Points of Claim §31) Heng Nuo[3], Sino Origin[4], Liqun and Country Giant;

(4) These Alleged S&Ps and Licensing Agreements were not genuine arm’s length transactions, but were executed at a gross overvalue, in order to conceal the Scheme and to facilitate the misappropriation of assets by R1;

(5) R1 fabricated the material transactions and used nominees through closely connected individuals or BVI entities to disguise the Scheme. It is P’s pleaded case that all of the BVI Signatories and the BVI Intermediaries were nominees of R1 and/or R2, and reliance is placed, inter alia, on the facts that all of the BVI Signatories were struck off the BVI Company Registry within 2 years of executing the Alleged S&Ps and 5 of the 7 BVI Intermediaries were struck off the BVI Company Registry at around the same time as or within 2 years of the Disposal of Shares and R1’s resignation from the management of the Company;

(6) The Alleged Payments far exceeded the market value for the purchased license rights at the material time (which P’s expert opined to be in the range of HK$10.44 million to HK$45.26 million), and only generated licence fees of around HK$47.1 million;

(7) On the foregoing bases, P seeks as its primary relief, a compensation order against, inter alios, R1 for loss and damage suffered by the Company under the Scheme, which is at least in the sum of HK$235.39 million (HK$327.75 million - HK$47.1 million - HK$45.26 million). In other words, P’s pleaded case proceeded on a “conservative” approach, in that the higher end of the valuation of the purchased license rights was adopted.

2.6The legal bases relied on by P are that R1 to R3 had conducted the business and affairs of the Company in a manner:

(1) involving fraud, defalcation, misfeasance or misconduct towards the Company or its members (SFO s.214(1)(b));

(2) resulting in the Company’s members not having been given all the information with respect to its business or affairs that they might reasonably expect (SFO s.214(1)(c)); and

(3) unfairly prejudicial to the Company’s members (SFO s.214(1)(d)).

2.7In the light of the arguments ventilated, a number of specific areas merit mention, and they relate to the truth or falsity of the explanations provided by R1 and R3 at interviews with P.

2.8The first is in relation to the BVI Signatories and the BVI Intermediaries. According to the explanations provided by R1 and R3, the BVI Signatories were appointed by the true owners of the purchased license rights to enter into the Alleged S&Ps on behalf of the actual sellers (“Alleged Sellers”), which were PRC companies and might have included TV stations, TV production companies and other businessmen in the industry in the PRC. The BVI Signatories and BVI Intermediaries were used in executing the Alleged S&Ps and receiving payments thereunder as a result of tax advice provided by the Company’s tax adviser and auditor. The explanation proffered was that in order to minimize the amount of tax payable, the sale and purchases of the TV license rights ought to be structured subject to 3 conditions, namely (1) the purchasers and vendors had to be BVI companies, (2) the negotiations and execution of the agreements had to take place outside of the PRC and Hong Kong, and (3) the payments for such transactions must be made in a currency otherwise than RMB.

2.9The second is the explanation that the Company had outsourced the management of its TV programme related business to a PRC state-owned entity known as “Fujian QJY Production Centre” (“Fujian QJY”).

2.10It is P’s pleaded case that each of the explanations provided by R1 and R3 is false and misleading.

2.11In R1’s (and R2’s) Points of Defence, she denied any wrongdoing or misappropriation of the Company’s assets, and contended that:

(1) The Alleged S&Ps and Licensing Agreements were genuine, arm’s length transactions which were conducted as part of the Company’s usual and ordinary trading;

(2) None of the BVI entities involved in the Alleged S&Ps, Licensing Agreements or the related payments were R1’s nominees;

(3) The execution of the Alleged S&Ps was brokered through Fujian QJY, which was entrusted to source TV programmes and conduct due diligence for the Company;

(4) The consideration stated in the Alleged S&Ps was not at an overvalue and P has failed to take into account the special characteristics which were unique to the Company’s business model. In particular, there was an understanding between the Company and Fujian QJY that the Company retained the right and option to swap any TV programme series in case there were problems in future sale, and the understanding was stipulated in and evidenced by the confirmation letters issued to Fujian QJY on 19 December 2006, 30 September 2007, 16 December 2008, 3 December 2009, 27 December 2010 and 10 December 2011 (collectively “Confirmations”);

(5) R1 only had a supervisory role and was not responsible for the execution of the Alleged S&Ps.

3.Impetus for the issuance of the Injunction Summons

3.1On 2 August 2023, one Madam Zhao Huixia also known as Ellen Chiu (“Zhao”), a former employee of the Company, contacted P with information relating to these proceedings (“New Information”). The New Information was provided by Zhao to P between 3 August and 13 September 2023.

3.2It is P’s case that the New Information provides cogent evidence to further substantiate its case on merits against R1 for the following reasons.

3.3First, the New Information suggests that some of the Confirmations (§2.11(4) above) were in fact created sometime between April and June 2020. The timing is significant because (1) the Points of Claim was filed on 14 April 2020 and (2) R1 (and R2) filed their Points of Defence on 6 July 2020. According to the New Information, in around December 2019 (which was around one month after P issued the Petition in October 2019), R1 recruited a group of typists in Mainland China (“Typist Group”), whose duties were to prepare and type documents as requested by R1 in order to answer P’s investigations into her misconduct. R1 would email manuscripts or handwritten documents to the Typist Group, either directly or through Zhao. R1 would use the email address of one Hanson Lau, who is the husband of her god-sister, via an “Email Machine” (“Email Machine”) located in R1’s home in Vancouver to request the Typist Group to type up or revise certain documents. After completing their tasks, the Typist Group would either send the documents directly to Leung, or to Zhao for her to forward to Leung.

3.4Some of the documents which were typed up under R1’s directions between April and June 2020 were: (i) the Confirmation dated 16 December 2008 (“2008 Confirmation”), and (ii) the Confirmation dated 3 December 2009 (“2009 Confirmation”). The authenticity of this aspect of the New Information has been verified by P by inter alia cloning a copy of all the emails from Madam Zhao’s mailbox and conducting a comparison with the WeChat data extracted by Deloitte Advisory (Hong Kong) Limited (“Deloitte”) from Zhao’s phone. A table reconstructing the events shown by the New Information was prepared by P and adduced as evidence.

3.5Secondly, according to the New Information, at various times since 2020, R1, via her driver or assistant, passed company chops packed in bags or luggage cases to Zhao for her keeping. Zhao thereafter placed those company chops in the storage room of the flat of her mother in Guangzhou. On 27 June 2022, R1 sent her driver to collect the chops, but two bags of company chops were left behind and not returned to R1. The chops kept by Zhao were the chops of 14 BVI companies[5], which were some of the BVI Signatories, BVI Intermediaries and/or Appointed Buyers: §§2.5 above.

3.6Thirdly, the New Information also comprised documentary evidence showing that (1) R1 maintained records to keep track of the BVI company chops and the BVI / Hong Kong companies controlled by her; and (2) R1 in fact authored, produced and/or fabricated documents relating to the closure of the BVI Companies.

3.7In addition to providing further substantiation to P’s case on merits, the New Information also contained materials relevant to the issue of risk of dissipation of assets.

3.8First, it was revealed that Leung was concurrently seeking to dispose of a number of her properties, namely the Shanghai Property, the Lions Bay Property and a property in Hong Kong at Unit B, 35/F and 36/F, Kensington Hill, 98 High Street, Hong Kong (“Kensington Hill Property”).

3.9Secondly, R1 had sent WeChat messages to Zhao in August and September 2023 (“WeChat Messages”) which showed that (1) R1 intended to sell her properties in Hong Kong and Shanghai, with plans to move to Canada and not return to Hong Kong thereafter and (2) R1 had sent multiple threatening messages to Zhao (insinuating that the safety of Zhao and her daughter would be at risk), which demonstrated R1’s flagrant disregard for the law.

3.10As noted at §1.5 above, the Shanghai SPA and Lion Bay SPA were disclosed pursuant to the Notification Injunction. At the hearing before me, P contended that their unusual terms formed part of a larger scheme by R1 to dissipate valuable assets beyond the reach of P.

4.R1’s applications

4.1I propose to first deal with R1’s applications before I turn to the Injunction Summons.

(i) Evidence Summons

4.2The Evidence Summons may be dealt with swiftly. The Evidence Summons seeks leave to file and serve a signed but unsworn version of the 5^th Affidavit of R1 (“Leung 5^th”). Leung 5^th is a 31-page document (excluding exhibits) and its purpose is to respond to one specific paragraph of the 11^th Affirmation of Yip Yuk Yu (“Yip 11^th”) dated 19 January 2024. Yip 11^th is part of P’s reply evidence filed in the Injunction Summons.

4.3At Yip 11^th §79, P made certain criticisms in respect of a purported joint venture between R1 and one Mr Zhao Lu in October 2023, under which substantial sums were paid by R1. It was pointed out by P that there was no supporting documentary evidence and that it was likely a devise used by her to dissipate her assets.

4.4Mr Pao was content for me to consider Leung 5^th on a de bene esse basis. As described by Mr Pao (and I agree with him), Leung 5^th “read like a novel” and contains materials which are largely irrelevant to the Injunction Summons.

4.5There was no attempt by Mr Nip to justify the Evidence Summons, whether on substance or on why the court should grant an abridgement of time for its service. Although Yip 11^th §79 was raised in the Mr Nip’s Skeleton Submissions at §16(e) as being one of the allegations newly-raised by P, it was raised in the context of the Adjournment Summons. In other words, Mr Nip only sought time for R1 to reply to Yip 11^th §79 by some other “proper” and relevant evidence to be prepared and adduced.

4.6For the above reasons, the Evidence Summons is dismissed.

(ii) Adjournment Summons

4.7The bases for the Adjournment Summons are two-fold. First, R1 seeks time to file evidence in respect of matters newly raised in P’s reply round of evidence (“First Basis”). Secondly, R1 seeks leave to cross-examine Zhao (“Second Basis”), and consequently an order for the adjournment of the Injunctions Summons to a date to be fixed with 3 days reserved.

4.8After hearing submissions from counsel, I dismissed the Adjournment Summons at the hearing and indicated to the parties that I would provide my reasons in the main decision. These are my reasons.

4.9In the course of his submissions on the Adjournment Summons, Mr Nip accepted that P has a good arguable case on merits, irrespective of the WeChat Messages, which as noted at §3.9 above, are relevant principally to risk of dissipation of assets.

4.10In relation to the First Basis, after clarification from Mr Pao that no reliance would be placed on many matters identified by Mr Nip as requiring further responsive evidence, the only matter which Mr Nip said R1 required time to file responsive evidence was in relation to the authenticity of the WeChat Messages.

4.11The WeChat Messages were first adduced by P in Yip 6^th dated 19 September 2023 which was filed in support of the Injunction Summons. Their content is as follows:

	Time	Message from R1 to Zhao (emphasis added by Mr Pao)
(1)	20.8.2023	我刚刚从恶梦中惊醒，梦见妳出卖舆我，招慧霞，我希望妳好自为之，出卖我的下场比比皆是，我可以讓妳生不如死，想想妳的女儿，妳是我旧部，又是我干女儿我希望妳不要出卖我，否则我讓妳白发人送黑发人，各何况妳即便出卖我也不会有人相信，所以我要提醒妳招慧霞，不要做对不起我的事情，否则意外随时会出现，法律是讲证据的妳懂的，妳好自为之招慧霞。
(2)	20.8.2023	招慧霞：妳不要说许多没有用的，我告诉妳招慧霞哪个钱是妳应该给我的，妳要是不醒目敢出卖我，妳就准备白发人送黑发人，我保证没有人给妳养老送终，我会讓妳的下场会生不如死，宜弘托梦给我说妳要害我，告发我，我不怕，妳在我身边这么多年妳应该知道我的关系，知道香港证监会当年为什么搞不到我梁凤仪吗？证监会我是有人的，我可以明着话给妳听，当年搞不到我梁凤仪，现在也一样搞不到我的，招慧霞妳不要背后搞小聪明，妳敢出卖我，我证监会的朋友会马上话我知的，妳自己好好过妳生活，千万不要搞什么小动作。
(3)	6.9.2023	招慧霞：我想了想有关手表的事情我可以不和妳计较，但是妳必须要把我讓妳签署的文件合同签好给我，妳提出的无理要求我现在无法接受，我现在正在卖香港的房子，如果房子卖个好价格我可以考虑给妳一些生活费用，招慧霞这么多年我一直把妳当女儿一样看待，我希望妳不要出卖我，我也不赶尽杀绝妳，我这次卖完香港和上海的房子就回加拿大养老，香港是我伤心之地从此也不会在踏足香港了，妳只要不出卖我，我会考虑卖掉房子以后给妳一笔费用讓妳养老，如果妳要总想着出卖我，妳不但什么也拿不到，我还会把妳送进监狱，妳也要为妳的家人好好想一下，尤其妳的女儿，妳尽快把文件签署好给到我。机会给妳了招慧霞妳自己想想清楚。
(4)	6.9.2023	招慧霞：我已经给妳机会，给几多不是妳说算的，妳有资格讨价还价吗？我说了妳尽快签署好合同给 到我，等我香港上海的房子卖掉自会给妳一笔费用养老，招慧霞妳认为妳现在有的选吗？即便妳出卖我会有人相信吗？即便有人相信，即便妳去香港举报我，妳觉得会有什么用，我都不会再踏足香港了妳举报有什么用，我的背景和关系网妳是很清楚，香港证监会10年都奈何不了我梁凤仪，更何况妳。招慧霞妳不用那么多废话，妳想要钱就先吧事情做好，妳按照我的要求把事情做好，我就不会赶尽杀绝，妳会拿到妳想要的。听不听妳自己决定。警告，想想妳女儿。

4.12Prior to the 22/9/23 Order, on 21 September 2023, R1 adduced evidence from one Dr Alice Wong and one Mr Warren Chan, to the effect that they, having inspected R1’s phone, could not see any messages sent by R1 to Zhao from 26 August 2023 onwards. R1’s response in her 4^th Affirmation dated 6 December 2023 (“Leung 4^th”) went further, in that she stated that she had never sent the above messages (including those before 26 August 2023), and suggested that they might have been forged by Zhao. It was expressly stated at Leung 4^th §53 that R1 reserved her right to adduce expert evidence and such evidence would be provided to the court as soon as possible. To counter the allegation that the WeChat Messages were fabricated by Zhao, P retained Deloitte to prepare two reports, respectively the Phase 1 Report dated 12 January 2024 and the Phase 2 Report dated 15 January 2024 which were exhibited in Yip 11^th.

4.13The purpose of the Phase 1 Report was to compare (1) the data obtained by an examination of Zhao’s phone and (2) those obtained by extraction using a number of software programmes, including one called “手机大師 V5” during data collection. Deloitte found them to be the same, which served as evidence that the WeChat Messages were authentic.

4.14There are two versions of WeChat conversation history respectively adduced by Zhao and R1. The main differences are (1) the sequences of the two sets of conversations were different, in that some of the messages appeared on one and not the other and (2) the timestamps on the messages were different in the two sets. The Phase 2 Report was prepared (1) to explain “the inconsistencies observed between Zhao’s Sequential Set of Messages and Leung’s Sequential Set of Messages”, (2) to ascertain “whether Zhao’s Sequential Set of Messages and Leung’s Sequential Set of Messages belong to the same chain of messages” and (3) to reconstruct “the conversation between Zhao’s Account and Leung’s Account, specifically between 20 August 2023 to 6 September 2023, to the fullest extent possible”. Deloitte found that the differences in the displayed timestamps of the messages shown R1’s conversation history and Zhao’s conversation history were due to the time difference and that “Zhao’s Sequential Set of Messages and Leung’s Sequential Set of Messages belong to the same chain of messages”, but with certain entries deleted by the parties.

4.15Mr Nip said that, as the authenticity of the WeChat Messages is in dispute, R1 should be afforded the opportunity to file expert evidence in response to the Phase 1 and Phase 2 Reports.

4.16I disagree with Mr Nip for the following reasons:

(1) First, as Mr Pao submitted, some of the conclusions reached by Deloitte is not “rocket science”. I have examined the full sequence of the version of from Zhao’s phone[6]. R1 accepts that at least one of the messages (timestamp 23-08-30 14:56:56) appears on her phone (but with a timestamp of 23-08-29 23:56). The time difference (-15 hrs) is precisely that between Hong Kong (or the PRC) and Vancouver;

(2) As a matter of chronology, the authenticity of the WeChat Messages was already raised by R1 on 21 September 2023. On 22 September 2023, P by way of Yip 8^th had already adduced factual evidence showing that it is impossible to retrospectively add messages to an existing WeChat conversation history. No explanation has been proffered as to why R1 did not adduce any expert evidence to respond to Yip 8^th;

(3) As submitted by Mr Pao, he was prepared to proceed on the basis that the authenticity of the WeChat messages was in dispute and allowing R1 to adduce expert evidence would not materially change the character of debate although the disagreement would be raised to an additional level, ie expert evidence. As R1 was still in the course of locating and liaising with suitable experts, Mr Nip was unable to outline the precise scope of the expert evidence to be adduced, apart from a general assertion that R1 might question the appropriateness or the effectiveness of the methodology adopted by Deloitte. Certainly, Mr Nip did not suggest that the effect of R1’s expert evidence was of the cogency level that it would conclusively undermine the reports prepared by Deloitte;

(4) Relatedly but perhaps more importantly, it must be emphasized that the WeChat Messages are predominantly only relevant to the issue of risk of dissipation of assets, the assessment of which involves looking at the matter holistically. The WeChat Messages are only relevant to P’s allegations that (a) R1 has low regard of the law (in making threats to Zhao) and (b) R1 has plans to emigrate to Canada. Whether such allegations are supported by “solid” evidence is an exercise carried out in the light of all the evidence before the Court, of which the WeChat Messages is only one aspect. For example, in relation to the former allegation, Mr Nip accepted P has good arguable case on claims based on fraud and dishonesty, and in relation to the latter, there are in evidence indisputable records from the Immigration Department showing R1’s prolonged absence from Hong Kong.

4.17In my view, the First Basis does not assist R1 in the Adjournment Summons.

4.18The Second Basis for the Adjournment Summons is the need to cross-examine Zhao.

4.19It is plain from the evidence that Zhao previously had a very close relationship with R1 and was part of the “wrongdoings” revealed by the New Information. For example, on Zhao’s own case, she was the person who hired the employees forming the Typist Group. Zhao had also previously signed a document for the purpose of supporting R1’s defence in these proceedings, namely the 2023 招慧霞報告. It is R1’s case that Zhao has now turned against her because of various disputes which have arisen between them.

4.20Both parties referred to Taihan Electric Wire Co Ltd & Anor v Lee Chi Yuen Arctic & Ors, HCA 454 of 2013, 10 September 2013. In that case, the defendants sought leave to cross-examine a deponent at the hearing of a Mareva injunction, on the basis that the deponent (1) was the person providing the plaintiffs with the evidence to found the action and to seek to raise a good arguable case in the Mareva application, (2) the deponent was a self-confessed fraudster and (3) the deponent was financially motivated to give evidence for the plaintiffs due to a settlement agreement.

4.21In refusing the application, Au-Yeung J in Taihan pointed out the following:

(1) Ordering prejudgment cross-examination on affidavit is rare, and requires good and sufficient reason for the application in all the circumstances (§3);

(2) What constitutes a good and sufficient reason must be considered in the light of the purpose of the proceedings for which such need is said to have arisen (§4);

(3) In the context of an injunction, the discretion to order cross- examination is to make the injunction more effective, not to enable material to be obtained with a view to impugning a party’s credit, for issuing contempt proceedings or for eliciting material to be used at trial. Where the cross-examination would deal with the same issues as those at trial, exceptional circumstances have to be shown (§5);

(4) The power to order cross-examination of a deponent is more often exercised where a final order is to be made or where the substantive relief sought has an element of finality (§6);

(5) The court has to consider the delay and expense that will arise as a result of the need to cross-examine a deponent (§7);

(6) At the hearing of a Mareva injunction, all that is required is for a plaintiff to show a good arguable case and the court acts on affidavit evidence alone even though there may be cross-allegations or the affidavit evidence is sometimes conflicting. The court does not have to make positive findings of facts (§17).

4.22Whilst Mr Nip referred to a number of cases from other jurisdictions, I agree with Mr Pao that they do not detract from the eneral guidance set out in Taihan.

4.23Without necessarily agreeing with her sentiment, I can understand R1’s subjective perception of betrayal by Zhao. But as I pointed out at the hearing, it seems to me the proper approach is to examine the cogency of the New Information, stripped of R1’s own emotive perceptions of disloyalty on Zhao’s part. In my view, it is quite plain that P did not simply take Zhao’s word, as the New Information was independently analyzed and verified.

4.24I think Mr Nip fairly acknowledged the above. As accepted by Mr Nip, P has crossed the threshold of a good arguable case on merits, even if P’s case is in part “based on the dubious evidence of Zhao”[7]. It therefore does not appear to me that cross-examination ought to be allowed on issues relating to merits: Taihan §17.

4.25In so far as the New Information impinges on the issue of risk of dissipation assets, I repeat my observation that its assessment involves looking at the matter holistically. I agree with Mr Pao’s submissions that many of the factors relied on by P are either not disputed or based on objective evidence and therefore do not hinge on Zhao’s credibility, for example, (1) the uncontested evidence that R1 is concurrently selling very substantial real properties worldwide, (2) the documentary evidence disclosed by R1 herself showing dubious features in the Shanghai SPA and the Lions Bay SPA, and (3) the objective evidence that R1 has not returned to Hong Kong since her departure in December 2021.

4.26I have not lost sight of the fact that R1 was prepared to agree to an interim injunction on substantially the same terms sought by P in the Injunction Summons (subject to adjustments to the monetary exceptions) during the sought-for adjournment. However, as pointed out by Mr Pao, were cross-examination of Zhao permitted, P should also be allowed to cross-examine R1, leading to a full-blown mini-trial which would last for around 5 to 6 days. That course would be wholly disproportionate bearing in mind the duplication of costs and wastage of judicial resources in cross-examining matters properly reserved for the trial. I also accept Mr Pao’s submissions that I should take into account the public interest for which these proceedings are brought and exceptional circumstances are required to be shown (which are not shown) for the extraordinary course proposed by R1. In my view, the present occasion is not one for R1 to ventilate her grievances over any personal issues with Zhao.

4.27As such, the Second Basis also does not assist the Adjournment Summons.

4.28For the above reasons, I dismissed the Adjournment Summons at the hearing.

5.The Injunction Summons

5.1There is no real dispute between counsel on the applicable principles.

5.2In seeking a Mareva Injunction, P must show: (1) the existence of a good arguable case on the substantive claim on both merits and quantum, (2) in the case of a worldwide Mareva, there are insufficient assets within the jurisdiction to satisfy the claim and there are assets outside the jurisdiction, (3) there is a real risk of dissipation, and (4) the balance of convenience lies in favour of the grant.

5.3On the issue of a good arguable case, the engagement of section 214 of the SFO requires 3 conditions to be satisfied: (1) the corporation in question is or was a listed corporation, (2) the business or affairs complained of is that of the corporation (which may include the affairs of a subsidiary taking a realistic approach), and (3) the conduct complained of falls within one or more heads of "misconduct" specified in s.214(1)(a)-(d).

5.4As to section 214(1)(b):

(1) Defalcation is defined in Part 1 of Schedule 1 to the SFO as "misapplication, including misappropriation, of any property" and can refer to misapplication or misappropriation of property of the listed corporation and its subsidiaries;

(2) Misappropriation is a commonly understood word, and may be defined as the wrongful conversion of or dealing with anything by the person to whom it has been entrusted;

(3) Misfeasance is defined in Part 1 of Schedule 1 to the SFO as "the performance of an otherwise lawful act in a wrongful manner". The notion considerably overlaps with the notion of breach of fiduciary duty and covers a wide range of misconduct.

5.5As to section 214(1)(d), "unfairly prejudicial conduct" has been described as conduct which results in harm to the members of the company in their capacity as members. The harm is that which could have been avoided or ameliorated without harming the legitimate interests of others who were parties to the particular transaction. It covers a wide range of conduct, from fraud on the one end, to neglect or inaction on the other.

5.6Given Mr Nip’s acceptance that P has demonstrated a good arguable case on the merits, the arguments between counsel focused on the following matters:

(1) Whether P has demonstrated a good arguable case on quantum;

(2) Whether P has demonstrated a solid basis for concluding that there is a real risk of unjustified dissipation of assets by R1;

(3) In the context of balance of convenience, whether there should be any adjustments to the monetary exceptions from those sought by P.

(i) Whether good arguable case on quantum

5.7Mr Nip pointed out that P’s case on quantum is based solely a report prepared by P’s expert in TV Drama Industry on 24 October 2019 (“P Expert Report”), well before the Points of Defence was filed on 6 July 2020. The following criticisms were advanced:

(1) P Expert Report contains a number of reservations, in that the findings therein are based on a number of assumptions which may not be accurate; and

(2) P Expert Report has not taken into account matters raised in the Points of Defence, including (a) the Company’s accounts were audited and verified as accurate by the Company’s auditors and (b) the special features of the Company’s business model identified at §2.11(4) above.

5.8In my view, there are two overarching points to note.

(1) In order to establish a good arguable case, a plaintiff does not need to go so far as to persuade the court that he is likely to win; he needs to show a case which is more than barely capable of argument, albeit not necessarily one that has better than 50% chance of success. Further, the existence of a good arguable defence does not necessarily negate the existence of a good arguable case: HKCP 2024 at §29/1/66;

(2) R1 was at liberty but chose not to adduce any expert evidence on quantum earlier. Whilst Practice Direction 3.4 §8 precludes the filing of expert evidence without leave of the court, that Practice Direction only took effect on 17 July 2023. Prior to that, R1 could have filed expert evidence under RHC Order 38, rule 2(3) and rule 36(2) to respond to P Expert Report (filed with the Petition in 2019).

5.9In relation to the reservations set out in P Expert Report, I agree with Mr Pao that such qualifications or limits on accuracy are standard in expert valuation reports, and do not diminish P’s good arguable case on quantum. In particular, having pointed out the reservations, no evidence has been adduced by R1 to show whether the assumptions adopted on P Expert Report are in fact unjustified, and if so, how the valuation in P Expert Report is thereby affected.

5.10I am also of the view that Mr Nip’s criticism that P Expert Report has not taken into account matters raised in the Points of Defence misses the mark. Where it is accepted that there is a good arguable case on merits, it logically must follow that the relevance of the Company’s auditor “clean” opinion is a matter of trial[8]. Turning to R1’s reliance on the Company’s unique business model, the existence of the same is disputed. It is not the function of P Expert Report to prefer one factual case over the other. Presumably, even had P Expert Report taken into account the alleged business model, that would only lead to two alternative valuations, a primary valuation (on the basis that the alleged business model did not exist) and an alternative valuation (on the basis that the alleged business model did exist). That does not render the primary valuation not being a good arguable case.

5.11For the above reasons, I am satisfied that P has demonstrated that it has a good arguable case on quantum to justify the monetary sought in the Injunction Summons.

(ii) Risk of dissipation

5.12On the issue of risk of dissipation, the burden is the plaintiff to show objectively that there is a solid basis for concluding that there is a real risk of dissipation of assets by the defendant. That question is to be answered by examining the evidence holistically. Evidence of dishonest and fraudulent conducts or other serious wrongdoings which form the basis of the claims, and which reflect adversely on the integrity of the defendant can point towards an inference of such risk: Convoy Collateral Ltd v Cho Kwai Chee [2020] 6 HKC 81 at §53.

5.13However, it must be emphasized that conduct which may be regarded as being of low commercial morality is not necessarily relevant to risk of dissipation, and where the underlying claim against a defendant involves dishonest or fraudulent conduct or other serious wrongdoings, it is still necessary to examine whether the conduct or wrongdoings in question is indicative of or relevant to the risk of dissipation: China Medical Technologies Inc (In Liquidation) v Samson Tsang Tak Yung & Ors [2022] HKCA 41 at §38. Some examples of low commercial morality which may be regarded as not necessarily relevant to risk of dissipation are: (1) putting up poor excuses to get out of a bargain, (2) breach of contract without solid evidence pointing to dishonesty or any attempts to conceal inventory or proceeds, and (3) coercion and duress.

5.14P relies on the following factors to show a real risk of dissipation of R1’s assets:

(1) P’s underlying claim against R1 based on fraud and dishonesty, as fortified by the New Information showing the forgery of the 2008 and 2009 Confirmations and the fact that many of the company chops of supposedly independent BVI companies were in fact under the control of R1;

(2) The usual features of the Shanghai SPA and the Lions Bay SPA;

(3) The WeChat Messages; and

(4) R1’s intention to permanently relocate to Canada.

5.15In my view, the factors relied on by P amply provide a solid basis for inferring that there is a real risk of dissipation of assets by R1. I now deal with each of the above factors in turn.

P’s underlying claims against R1

5.16In the light of Mr Nip’s acceptance that there is a good arguable case on merits, Mr Pao submitted that I should pay specific regard to the following observations made by the Court of Appeal in Convoy:

“[59] The judge went through the various specific dispositions and changes in financial arrangements relied upon by CCL at [28] to [33]. It is clear from [28] that in so doing, the judge confined himself to ‘what he can be shown to have done from about the time one would expect him to have become alive to the investigations’.

[60] Then, at [34] to [36], the judge viewed the purpose of these specific dispositions and arrangements ‘against the background’ of the substantive allegations in the claims and Roy Cho’s disappearance for 10 months. He held at [35] and [36] that these were largely unremarkable changes in the financial affairs of Roy Cho and the court was unable to conclude from them that there is a concrete risk of dissipation of assets.

[61] It is apparent from these paragraphs that the judge did not consider the evidence of the underlying substantive claims on their own as evidence of risk of dissipation. Instead he focused on the specific dispositions and arrangements discussed at [28] to [33] of his judgment as the backbone of CCL’s case on such risk. As the judge came to the view that such backbone was not solid enough, he did not find sufficient concrete evidence on risk of dissipation.

[62] That the judge’s approach was indeed so confined was confirmed in A his Decision of 7 May 2020 refusing leave to appeal. At [11], he categorically said that the allegations of wrongdoing in the present case were not of themselves relevant to the risk of dissipation.

[63] We have examined the nature of the allegations against Roy Cho in the substantive claims advanced by CCL. As summarised above, there were five heads of claims. It is not disputed by Mr S Wong that there was a good arguable case for these claims.

[64] The main underlying premise for all the claims of CCL is that Roy Cho exercised control and acquired ownership in Convoy through appointment of his associates, nominees and/or agents to occupy key positions in Convoy without himself holding a formal position. Through such secret control and ownership, he was able to commit the serious wrongs complained of, which in many respects involved manipulations of the corporate affairs of Convoy and other listed companies in a dishonest manner. As can be seen from the summary above, the scale of these wrongdoings is very substantial and sophisticated. Most of them were carried through complicated schemes with dishonesty and fraud practiced not only against Convoy or CCL, but also the other shareholders of the listed companies involved. In our judgment, the concealment of a person’s actual ownership and control over the affairs of a listed company in the manner that Roy Cho allegedly did in order to evade one’s fiduciary obligations to listed companies and side-step compliance with the rules imposed by regulatory authorities designed for the protection of the general investing public is a serious form of dishonest deception. The court can readily accept that the perpetrator of such serious wrong would have little hesitation in dissipating assets to avoid the consequence of a judgment against him.” (emphasis added)

5.17I have borne in mind the caution that not all conduct of low commercial morality is necessarily relevant to risk of dissipation. However, between the two ends of the spectrum (ie on one end of the spectrum are the examples identified at China Medical §38 as being not necessarily relevant to risk of dissipation and on the other end are claims of the nature described at Convoy §64 which provide a basis for the court to infer a risk of dissipation), it seems to me plain that the nature of the claims made against R1 is decidedly closer to the Convoy end of the spectrum.

5.18The nature of the claims made against R1, like that of the claims made against Roy Cho in Convoy, demonstrates that R1 is adept at using an extensive network of corporate and offshore entities as nominees for channeling funds and for concealing her illicit activities. In my view, R1, as a perpetrator of such serious wrongs, would have little hesitation in dissipating assets to avoid the consequence of a judgment against her.

5.19Mr Nip understandably raised the argument that if R1 had intended to dissipate her assets, she would have done so during the lengthy period since the commencement of these proceedings during which no interim measures were in place. I will deal with this argument after I have considered the other factors relied on by Mr Pao.

Unusual features of the Shanghai SPA and the Lions Bay SPA

5.20The Shanghai SPA and the Lions Bay SPA were executed one day apart, respectively on 14 and 15 August 2023. The purchasers of the Shanghai Property are Ms Agnes Yau (“Yau”) and Mr Li Wo Hing (“Li”) and the purchaser of the Lions Bay Property is Yau. Both Yau and Li have a close relationship with R1 but apparently not with each other. The peculiar features of the two SPAs are taken from Mr Pao’s Skeleton Submissions:

(1) Yau is R1’s god-sister and the wife of Hanson Lau and they both reside with R1 in Vancouver (§3.3 above). Yau is named as an executor by both R1 and R2 in their respective wills;

(2) Li is the brother of R1’s godfather and a former non-executive director of the Company and the brother of Li He Qing, the sole shareholder and director of Ever Nice, one of the BVI Signatories;

(3) If the 2 SPAs are implemented on their stated terms, R1 would only receive RMB 1 million of net payment under the Shanghai SPA and no net payment under the Lions Bay SPA;

(4) In relation to the Shanghai SPA, completion could take place any time within 3 years of 14 August 2023. Of the sale consideration (RMB 48 million), RMB 27 million is to be set off against debts alleged owed by R1 to Yau, Li and/or their family members, and RMB 20 million is to be paid by Yau and Li to charitable organizations stipulated by R1. The Shanghai SPA further provides, inter alia, that: (a) R1 could reside in the property rent free for 3 years after completion, (b) the property could be further sold to a third party, and (c) R1 has a right to repurchase the property subject to certain conditions;

(5) In relation to the Lions Bay SPA, the completion date and consideration are unusual in that the consideration is stated to be the greater of (i) CAD 8 million and (ii) the appraised value of the property as at 31 December 2024 and the completion date is stated to be 90 days from 31 December 2024 or any other date as agreed by the parties. The Lions Bay SPA sets out a list of third-party recipients of the purchase price, some of them are said to be creditors of R1 and some of them are recipients (either identified or yet to be agreed/ascertained) of charitable donations;

(6) The peculiar features of the Shanghai SPA and the Lions Bay SPA are consistent with the existence of a wider scheme in place, pursuant to which R1’s properties were transferred to her nominees but in fact remained under R1’s effective control. An example is the arrangement comprising three documents all executed on 3 July 2020. First, R1 and Yau executed a SPA to sell the shares of a company that held a property in Vancouver (3636 South West Marine Drive). On the same day, Yau executed a power of attorney, appointing R1 as her attorney who is authorized to deal with Yau’s funds and execute all necessary documents. Yau further executed a will pertaining to the shares and properties transferred by R1. Under that will, the beneficiaries included R1’s stepsons and R1’s grandson. In the schedule, Yau stated that she had not named her husband (Hanson Lau) as a beneficiary, and that she would ask the court not to grant any remedy to Hanson Lau if sought, taking into consideration, inter alia, that the acquisition of the shares and properties was “solely from [R1] and for specific reasons known only to me and [R1]”.

5.21Leung 4^th gives a very lengthy explanation for the timing and the peculiar terms of the Shanghai SPA and the Lions Bay SPA which R1 acknowledges as being unusual when considered in isolation with their relevant background. Despite Mr Nip’s valiant efforts, I do not find R1’s explanation at all convincing.

5.22One of the underlying premises for the sale of the Shanghai Property and the Lions Bay Property is that R1 wishes to repay debts owed to Li and Yau for over 10 years (unsecured and interest free). The other premise is that she wishes to complete various charitable projects in commemoration of R2. On both fronts, R1 explains that given the demise of R1 and her own age, she wants to ensure that all her affairs are properly arranged, since achieving physical health and attaining mental serenity are now her priorities.

5.23I do not believe it can be gainsaid that there is evidence showing the previous philanthropic activities of R1 and R2. But equally, it does not appear to me that there is any cogent evidence (and Mr Nip did not refer to any) that such philanthropic activities are legally obligated. Nor is there any evidence that the unsecured and interest-free debts purportedly owed to Li and Yau for over 10 years have now been demanded.

5.24The cogency of the R1’s explanation that the highly unusual terms of the Shanghai SPA and the Lions Bay SPA may be explained by R1’s wish to achieve physical and attain mental serenity is difficult to be verified objectively and must be assessed holistically.

5.25On the present material, the chronology strongly suggests that the Shanghai SPA and the Lions Bay SPA were executed in part as a result of R1 having realized that Zhao has turned against her. Zhao first approached P on 3 August 2023, and the two SPAs were executed shortly thereafter on 14 and 15 August 2023. Thereafter, on 20 August 2023, the first of the WeChat Messages was sent by R1 to Zhao, threatening Zhao not to betray her and pointing out that she has ways to handle or deal with P (“知道香港证监会当年为什么搞不到我梁凤仪吗？证监会我是有人的，我可以明着话给妳听，当年搞不到我梁凤仪，现在也一样搞不到我的”).

The WeChat Messages / R1’s plan to emigrate to Canada

5.26On the present material, it seems to me more likely than not that the WeChat Messages were not fabricated. As alluded to at §4.16(2) above, there is factual evidence that an everyday user cannot retrospectively add messages to an existing WeChat conversation history. As it is accepted by R1 that at least the message of 30 August 2023 on Zhao’s phone (or 29 August 2023 on R1’s phone due to the time difference as set out at §4.16(1) above) is “genuine”, it seems to me unlikely that Zhao would go to the length of fabricating the WeChat Messages using some sophisticated but unidentified technique.

5.27As already mentioned, the timing of the first two WeChat Messages sent on 20 August 2023, when viewed together with that of the execution of the Shanghai SPA and the Lions Bay SPA, compellingly paint a picture that R1 was incensed at the discovery of Zhao’s betrayal and measures were put in place to counter that development. The third and fourth WeChat Messages sent on 6 September 2023 (mentioning the sale of the Kensington Hill Property) are also consistent with the discovery of the listing of that property for sale in that period.

5.28In so far as the WeChat Messages mention R1’s plan to leave Hong Kong, it is entirely consistent with (1) the indisputable evidence of R1’s attempt to sell the Kensington Hill Property, (2) R1’s own evidence of the fact that her liquid assets in Canada are worth far more than those in Hong Kong, and (3) the objective evidence that she has been absent from Hong Kong for a prolonged period since December 2021.

R1’s argument on delay

5.29Drawing the above threads together, it seems to me that there is a compelling and solid basis for an inference to be on the risk of dissipation of assets. I now deal with Mr Nip’s submissions on delay.

5.30At Convoy §§76-81, it is stated:

“[76] In this appeal, Mr S Wong very properly acknowledged the difficulty in overturning this part of the judgment in terms of the reasonableness on the CCL’s part to pursue such relief in BVI instead of Hong Kong. However, counsel submitted that the objective state of affairs was that Roy Cho was at liberty to dispose of his Hong Kong assets and the stable-door argument should militate against the grant of Mareva relief in Hong Kong. He drew our attention to the fact that other than his holding in Broad Idea,Roy Cho was not subject to any injunction in the BVI proceedings over his assets in Hong Kong.

[77] As identified by P Ng J in Re Chan Cham Wong Patrick [2016] 2 HKLRD 278, [2014] HKCU 1500 at [24], the underlying premise of the stable-door argument is that equity does not act in vain.

[78] It is also clear from the authorities that delay per se would not necessarily bar relief. The ultimate question is still whether the plaintiff could show a real risk of dissipation despite delay. A recent exposition of the relevant law is contained in the judgment of Jacobs J in PJSC National Bank Trust v Boris Mints [2019] EWHC 2061 (Comm) at [48] to [51] where recent English Court of Appeal judgments were discussed. In JSC Mezhdunarodniy Promyshlenniy Bank v Pugachev [2015] EWCA Civ 906 at [34] Bean LJ endorsed the proposition that if the court is satisfied on the evidence that there remains a real risk of dissipation it should grant an order, notwithstanding delay, even if only limited assets are ultimately frozen by it.

[79] Thus, the significance of delay in each case must be considered on its own circumstances. There are no doubt cases where a defendant has little connection with and limited assets within Hong Kong, particularly when the assets could be easily removed. There are also cases where the fact that the assets remain here notwithstanding a defendant has knowledge of the claim for a long period of time can be evidence negating an inference of risk of dissipation. In those cases, an unexplained delay can be fatal. The authority cited by Mr S Wong, China Art Bank Co Ltd v Xu Zhiqiang [2018] HKCA 63, [2018] HKCU 447 is one of such cases.

[80] On the contrary, the delay in this instance is not unexplained and the stable door was not completely opened (secured as it were, at least with regard to Roy Cho’s holding in Broad Idea, by the BVI injunctions). Further, given the fact that the base of the defendant’s business empire is in Hong Kong and the scale and complexity of his financial affairs, we are satisfied that there is still a real risk of unjustified dissipation notwithstanding the lapse of time before the summons was issued on 25 June 2019.

[81] In short, we do not think equity will act in vain by the grant of Mareva relief. For these reasons, we rejected Mr S Wong’s arguments based on delay.” (emphasis added)

5.31In my view, the timing of the present application is explained by the provision of the New Information by Zhao to P, which revealed R1’s attempts to dispose of her properties (and in the case of the Shanghai Property and the Lions Bay Property on highly unusual terms) contemporaneously with her discovery that Zhao had turned against her. The stable door has not been completely opened, as plainly evidenced by the fact that various properties are now subject to the 22/9/23 Order and the 19/10/23 Order. There can be no suggestion that equity will act in vain were the Injunction Summons granted. It does not appear to me that the delay argument assists R1.

(iii) Balance of convenience: Terms of the injunction

5.32The issue of balance of convenience was argued primarily in the context of the monetary exceptions to be allowed under the injunction order.

5.33Having considered the evidence and the submissions, I allow HK$150,000 per month for R1’s ordinary living expenses (P offered HK$100,000) and a sum not exceeding HK$250,000 per month on legal advice and representation (on the basis that it appears to be common ground that the present proceedings are still in a “busy phase” of preparing expert reports and statements). The sum allowed for ordinary living expenses has taken into account that the parties, at my invitation, have agreed on a separate provision to be inserted into the draft order for payment of mortgages and other property-related expenses.

5.34I also record that (1) there is no undertaking as to damages offered by P as it is usually not required where a public authority is seeking injunctive relief to enforce the law for the benefit and (2) in so far as the injunction order contains notification requirements, the granting of them are subject to the same test and standard of proof as for the grant of a Mareva injunction. Mr Nip did not dispute the foregoing propositions.

6.Conclusion

6.1For the above reasons, in respect of the Injunction Summons, I grant an order in terms of the draft order annexed to Mr Pao’s Skeleton Submissions dated 1 February 2024, but amended (1) to reflect the sums allowed under the monetary exception as set out at §5.33 above and (2) to insert the new agreed paragraph set out in the parties’ joint letter to court dated 23 February 2024. I give parties liberty to apply.

6.2As stated above, the New Evidence Summons and the Adjournment Summons are dismissed.

6.3I also make a costs order nisi that R1 is to pay to P forthwith the costs of and occasioned by the 3 summonses (including any costs reserved in the Injunction Summons), to be taxed if not agreed with a certificate for 2 counsel. In respect of the Injunction Summons, I think it is now established that it is no longer the case that, as a matter of principle, the costs of an interlocutory injunction should be in the cause unless there is justification for its departure, and the court is entitled and should look at the merits of the injunction itself at the time of the application to decide what should be the proper costs order for that application in all the circumstances: Hengshi International Investments Ltd v Bayspring International Ltd and Another, HCMP 1916 of 2015, 21 March 2016 §§40-43.

6.4I thank all counsel for their assistance.

Mr Jin Pao, SC leading Ms Sheena Wong, instructed by Securities and Futures Commission, for the Petitioner

Mr Norman Nip, SC leading Mr Vincent Chen, instructed by Messrs. Chiu & Partners, for the 1^st Respondent