Axht Company Ltd v. 王一诚

HCMP 1257/2024 and HCMP 1258/2024
(Heard Together)

[2025] HKCFI 6199

HCMP 1257/2024

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1257 OF 2024

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BETWEEN

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AND

HCMP 1258/2024

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1258 OF 2024

________________________

BETWEEN

________________________

(Heard Together)

________________________

DECISION

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1.On 30 September 2025, I handed down a Decision in these proceedings dismissing the plaintiff’s inter partes summons for a Mareva injunction against each defendant.

Plaintiff’s applications

2.On 14 October 2025, the plaintiff filed a summons in each proceeding for:

(1)  leave to appeal the Decision on the sole ground that I had erred in law and/or in the exercise of discretion when holding at §37 that “there is insufficient evidence from which the court should infer a real risk of dissipation” (“leave to appeal application”)  and

(2)  stay of execution of the Decision, such that the order made by the duty judge on 20 December 2024 (as varied in a consent order made during the hearing before me on 11 September 2025)  do continue pending the determination of the leave to appeal application, or if leave is granted, until the determination of the appeal (“stay application”).

3.On the same day, the plaintiff wrote to the court with proposed directions. 

4.On 17 October 2025, the defendants’ solicitors replied to those proposals. 

5.On 21 October 2025, Hon Au-Yeung J gave directions pursuant to which written submissions were provided. 

6.Pausing here, it would be noted that even though in an affirmation in support of the summons, the plaintiff’s director had alleged that “... the defendant will likely dissipate the assets in the meantime”, the plaintiff did not ask at any stage for an interim stay pending the disposal of the applications.  It is trite that an application for a stay does not have the effect of an interim stay.

Principles

7.It is well established that leave to appeal is not to be granted unless the appeal has a reasonable prospect of success (meaning more than fanciful, without having to be probable).  As was held in Convoy Collateral Ltd v Cho Kwai Chee & ors [2020] HKCA 537, §33, where the decision in question relates to an injunction which involves the exercise of discretion, the appellate court will not interfere unless there is an error of law, or misapplication of the law by the judge failing to take into account relevant considerations, or taking into account irrelevant considerations, or the decision is plainly wrong, in that the exercise of discretion is outside the generous ambit within which reasonable disagreement is possible. 

8.The plaintiff has not suggested that leave to appeal should be granted on the ground that there is some other reason in the interests of justice why the appeal should be heard.

Discussion

9.The plaintiff says that the following two aspects “have not been taken into account” in the Decision when I decided that it had failed to show a real risk of dissipation:

(1)  the defendants “dishonestly changed their cases”;

(2)  the defendants’ defences are “recent fabrications” and documents they relied on were contradicted or “substantially weakened” by other documents placed before me.

10.I shall deal first with (1).  The plaintiff relies on the fact that it was only in their 3^rd affirmations that the defendants put forward the “loan swap arrangement”.  This had been taken into account in the Decision as shown in §31:

“I do not accept the Plaintiff’s submission that the defendants have had a change of case as they had not mentioned the arrangement in their first affirmations challenging the application for Mareva Injunctions. I note that each defendant said specifically that the affirmation (filed only 4 working days after the Plaintiff’s application for a hearing 7 working days after the application)  was ‘without prejudice to my right to put forward my substantive defence at trial’ and that the focus was on the Plaintiff’s failure to demonstrate any real risk of dissipation”. (Emphasis added).

11.The defendants’ second affirmations were brief ones updating their bank statements.  It was under these circumstances that the defence of the loan swap arrangement was first put forward in their 3^rd affirmations.

12.I accept that the defendants were represented by lawyers who could have chosen to ask for a longer period of time to file one comprehensive affirmation covering both the evidence showing no transfer of the defendants’ assets out of Hong Kong despite knowing of the plaintiff’s claims for 5 months, as well as the loan swap arrangement, in one go.  However, given the state of the plaintiff’s evidence on the requirement of real risk of dissipation (discussed in §28.2), the defendants’ lawyers cannot be faulted for challenging the Mareva injunction at the earliest opportunity by relying on evidence showing no transfer of the defendants’ assets out of Hong Kong.

13.Coming then to (2), the plaintiff submitted that “no sufficient regard or consideration was given” to some documents which it says contradicted or “substantially weakened” the documents exhibited by the defendants.  I will not repeat the discussions in the Decision relating to these documents, including different versions of one document, in §§32-35.  

14.However, it is important to note the following.

(1)  As recorded at §26.1 and discussed at §§27-28, the focus of the hearing was on Requirement (4)  of Convoy i.e. whether there was a real risk of dissipation or removal of assets.

(2)  The plaintiff was seeking to rely on the documents in §32 to bolster its case of real risk of dissipation, on the ground that the documents showed the defendants were dishonest and fraudulent or were guilty of wrongdoings reflecting adversely on their integrity. 

(3)  Those documents (and other documents at §§33-34 including another version of a document in §32)  were expressly considered. Weight is a matter for the judge in the exercise of discretion.  Notably in the immediately following paragraph (§35), “more weight” was expressly accorded to the change in method of payment of interest.

(4)  I considered the plaintiff’s documents did not salvage its unsuccessful attempt to show a real risk of dissipation (§36):  

“I must emphasize that the above considerations do not go towards Requirement (1), but to Requirement (4)  in the context of rejecting the Plaintiff’s submission that there is evidence of dishonest and fraudulent conduct or other serious wrongdoings which formed the basis of the claims, and which reflected adversely on the integrity of the defendants, with which it sought to bolster its arguments regarding a real risk of dissipation of assets which I have rejected above. If the defendants were persons of low commercial morality, they would have realized and transferred all the assets out of Hong Kong during the 5 months between the demand letters and the issue of the OS in July 2024 and the issue of the application for the Mareva Injunction in December 2024".

(5)  Thus at §37, it was held:

“As the courts have noted, the purpose of a Mareva injunction is not to provide a plaintiff with preferential security for its claim (Lakatamia Shipping Co Ltd v Toshiko Morimoto [2019] EWCA Civ 2203, [34] quoted in Convoy §35). Requirement (4)  is a stand-alone requirement which I find the Plaintiff has not satisfied. There were ample opportunities for the defendants to transfer their assets away which they did not do in the 5 months before the application for the Mareva Injunction, and in light of the matters discussed above, there is insufficient evidence from which the court should infer a real risk of dissipation”.

15.As the matters at §9(1)  and (2)  had been taken into account, and given the undisputed fact that the defendants did not transfer their assets out of Hong Kong during the substantial period of 5 months after the plaintiff’s demand letters and issue of the OS, I do not see a reasonable prospect of success in the proposed appeal.

Disposal of the summons

16.I would therefore dismiss the application for leave to appeal.  It follows that the application for stay pending leave to appeal or appeal should also be dismissed. 

Costs

17.The defendants had in their submissions lodged on 7 November 2025 requested costs and annexed a statement of costs for summary assessment.  No opposition to that course of action was taken in the plaintiff’s reply submissions. 

18.There is no reason why costs should not follow the event.  Having considered the defendants’ statement of costs and in view of the fact that their case is that the defendant in HCMP 1258 was only an agent for the defendant in HCMP 1257, and that the submissions of the plaintiff and the defendants applied to both proceedings, I would assess the costs in each proceeding at $52,000.   

Mr Richard Leung and Mr Tommy Cheung, instructed by Messrs Cheung & Choy, for the Plaintiff (in HCMP 1257/2024 & HCMP 1258/2024)

Mr Jason Ko and Mr Chris Wong, instructed by Messrs Cedric & Co, for the Defendant (in HCMP 1257/2024 & HCMP 1258/2024)