JACKY ZONG AND OTHERS v KELLY FULI ZONG AND ANOTHER

CAMP 200/2025, [2026] HKCA 1292

On An Intended Appeal From [2025] HKCFI 3355

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 200 OF 2025

(ON AN INTENDED APPEAL FROM HCMP NO 2772 OF 2024)

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BETWEEN

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D E C I S I O N

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Hon G Lam JA (giving the Decision of the Court):

1.This is the defendants’ renewed application for leave to appeal against the decision of Deputy High Court Judge Gary C C Lam dated 1 August 2025 (“Decision”), granting a preservation order to restrain the defendants from withdrawing or encumbering the HSBC Account Assets (as defined below)  under s 21M of the High Court Ordinance (Cap 4)  (“Ordinance”)  together with an ancillary disclosure order.

2.The background facts and the parties’ cases are set out in [4]-[35] of the Decision, which we shall not repeat.  Suffice it to set out the more salient facts below.

3.The plaintiffs and the 1^st defendant are the children of the late Mr Zong Qinghou (“Zong Senior”)  by different mothers.  The 2^nd defendant (“Jian Hao”)  is a BVI company holding assets, including an account with HSBC Hong Kong (“HSBC Account”)  containing various assets (“HSBC Account Assets”)  with a net asset value of approximately US$1.8 billion as at 31 May 2024.  Zong Senior, the founding chairman and CEO of the Wahaha group, passed away on 25 February 2024.  The 1^st defendant has since 2 February 2024 been Jian Hao’s sole shareholder.  She also became its sole director, replacing Zong Senior after his death.

4.The plaintiffs assert an interest in the HSBC Account Assets, relying on three documents, namely, (i)  an undated handwritten document allegedly written by Zong Senior in late January 2024 (“Handwritten Instructions”), (ii)  a letter of entrustment dated 2 January 2024 (“Letter of Entrustment”)  executed by Zong Senior and agreed to by the 1^st defendant on 2 February 2024, and (iii)  an agreement (“Agreement”)  between the plaintiffs and the 1^st defendant entered into on 14 March 2024.  Their contents are set out in [10], [11] and [14] of the Decision below.  In broad terms the plaintiffs contend that as a result of these documents, the 1^st defendant is bound by trust or fiduciary obligations to hold the HSBC Account Assets for their benefit.

5.The plaintiffs complain that the 1^st defendant has acted in breach of her obligations.  She made unauthorized withdrawals from the HSBC Account without their knowledge or consent, and refused to provide information regarding the account (except for the statements in January and May 2024).  She has also failed or refused to sign the necessary documentation to establish the offshore trusts which she is obliged to set up.

6.The plaintiffs have brought proceedings against the 1^st defendant, naming Jian Hao as the third party, in the Higher People’s Court of Zhejiang Province in Hangzhou (“Hangzhou Proceedings”).  In those proceedings the plaintiffs contend that the HSBC Account Assets constitute trust assets in respect of which the 1^st defendant owes fiduciary duties to the plaintiffs and claim reliefs including orders requiring performance of the 1^st defendant’s obligations, payment of the interest income on the relevant assets, and compensation for the unauthorised disposal of trust assets.

7.In response the 1^st defendant, inter alia, disputes the validity of the Handwritten Instructions and says that the withdrawals were attributable to currency fluctuations and portfolio shifts, or were made to repay loans and interests or settle capital calls for certain funds in which Jian Hao had invested.  She contends that the plaintiffs have no proprietary interest in the HSBC Account Assets, and at most she may have fiduciary duty in respect of the income generated, and that no trust can be set up so long as the HSBC Account falls short of the sum of US$2.1 billion required for setting up the trusts.  The 1^st defendant contends that she has a “say” in the terms of the trusts to be set up, pursuant to the Agreement.

8.By originating summons filed on 30 December 2024, the plaintiffs commenced proceedings in Hong Kong seeking relief in aid of the Hangzhou Proceedings under s 21M of the Ordinance including, inter alia, a preservation order over the HSBC Account Assets.  On the same date, the plaintiffs also took out an inter partes summons for, inter alia, an interim preservation order pending the final resolution of the originating summons.

9.The substantive hearing of the originating summons and the summons took place on 11 July 2025.  On 1 August 2025, the judge handed down the Decision.  For the reasons given therein, the judge gave judgment for the plaintiffs on the originating summons.  Given the outcome on the originating summons, the judge found it unnecessary to make any order on the inter partes summons.  The order made by the judge provides:

“ 1. The 1^st Defendant must not, whether by herself or her servants or agents or otherwise howsoever, in any way withdraw or encumber any of the assets in the [HSBC Account] under the name of the 2^nd Defendant, or the substitute or traceable proceeds of assets which were in the HSBC Account between 2 February 2024 and the date of service of this Order on the 1^st Defendant.

[Paragraph 2 is in materially identical terms to paragraph 1, except it is addressed to the 2^nd Defendant]

3. The 1^st and 2^nd Defendants must inform the 1^st to 3^rd Plaintiffs within 7 days after this Order has been served on them:

a. The latest balance of the HSBC Account;

b. If assets in the HSBC Account have been disposed of or transferred to third party/ies on or after 2 February 2024, what has become of such assets and the location of such assets or their substitute / traceable proceeds, and to whom, to where, and under what circumstances such assets were disposed of or transferred out of the HSBC Account; and

c.  A full account of the movements of assets, income and expenditure in respect of the assets in the HSBC Account from 2 February 2024 until the date of service of this Order on the relevant Defendant.”

10.The defendants applied to the judge for leave to appeal and a stay of execution against paragraph 3(b)  and (c)  of the disclosure order.

11.On 26 September 2025, the judge handed down his decision (“Leave Decision”), dismissing the defendants’ application for leave to appeal but granting an interim stay of part of paragraph 3(b)  and (c)  pending the determination of the defendants’ intended application to the Court of Appeal for leave to appeal.

12.By summons of 9 October 2025, the defendants renewed their application for leave to appeal before this court and for stay of paragraph 3(b)  and (c)  pending appeal.

Discussion

13.Both sides have proceeded below and in this court on the basis that the judge’s order is interlocutory in nature and that to appeal from it leave is therefore required under s 14AA(1)  of the Ordinance.  We are aware of the first instance decisions in ZL v WY [2023] HKCFI 2447 at [6]-[14][1] and First Laser Ltd v Fujian Enterprises (Holdings )  Co Ltd [2025] HKCFI 1940 at [26]–[28] in which the view was taken that an order made under s 21M is interlocutory.  The order in this case, whilst “interim” in nature in relation to the Hangzhou Proceedings,[2] is the judgment in the originating summons finally disposing of those proceedings so far as this jurisdiction is concerned.  The parties have not addressed the question whether this makes a difference.  In these circumstances we do not express a view on whether leave to appeal is required.  But if leave is not required, the defendants will need an extension of time to bring an appeal.  In the circumstances of this case we would not have granted an extension if leave to appeal, had it been required, would not have been granted.  On either basis, therefore, the question that arises is whether the intended appeal has a reasonable prospect of success or there is some other reason in the interests of justice why it should be heard.

14.Having considered the papers before us, we take the view that it is appropriate to determine the present application on paper without an oral hearing.

15.We deal with the five intended grounds of appeal set out in the draft notice of appeal in turn below.  The detailed reasons given by the judge in refusing leave to appeal in his 31-page Leave Decision have enabled us to be relatively brief as we are in broad agreement with him.

16.Ground 1 is that the judge erred in failing to require the plaintiffs to establish a good arguable case and a real risk of dissipation that is not compensable by an award of damages in circumstances where the plaintiffs were, in substance, seeking an injunction to freeze the HSBC Account Assets over which they have no proprietary claim.

17.We reject the defendants’ argument that what the plaintiffs sought was a Mareva injunction “in substance”.  The judge correctly characterised the order sought (see Decision, [41]-[48], [65]; Leave Decision, [5]-[9]).  Section 21M is not confined to Mareva injunctions, and reliefs granted under that provision may serve other purposes: Dicey, Morris & Collins, The Conflict of Laws (16^th ed), at para 10-042.  A preservation order can be made under s 21M to preserve the assets which may be affected by an order for specific performance or transfer eventually made in the other jurisdiction.  In the Hangzhou Proceedings the plaintiffs are seeking, inter alia, an order for specific performance of the terms of the Agreement which affects the HSBC Account Assets.  There is no serious dispute that an order like that can in principle be enforced in Hong Kong.

18.As the judge explained in his Decision at [40]-[48], for the first stage of the analysis the court asks itself the same questions as it would if the interim relief were sought in support of an action proceeding in Hong Kong: see Compania Sud Americana de Vapores SA v Hin-Pro International Logistics Ltd (2016)  19 HKCFAR 586, [47]-[53]; Jiang Xi An Fa Da Wine Co Ltd v Zhan King [2019] HKCFI 2411, [48].  Accordingly, we do not think it is reasonably arguable that for the plaintiffs’ application the threshold must be modified to require a good arguable case and a real risk of dissipation.  In any event, the judge took the view that there was a good arguable case shown by the evidence: Decision, [49] & [56].

19.Ground 2 contends that the judge erred in failing to have regard to the fact that the plaintiffs had a right to apply to the Mainland court for similar relief, in undertaking an assessment of the parties’ expert evidence on the practice of the Mainland court in respect of such interim relief, and in holding that the plaintiffs had good reason not to apply first to the Mainland court.  The nub of the defendants’ arguments is that the plaintiffs must either seek interim relief in the Mainland court or provide cogent explanation for their failure to do so, though not as a matter of pre-condition for an application under s 21M.

20.The judge clearly considered the plaintiffs’ expert evidence that “PRC Courts have jurisdiction to grant the preservation order even in respect of the assets outside jurisdiction” (Decision, [76]).  The judge did proceed to consider the explanation given by the plaintiffs for not taking out an application for interim relief in the Mainland courts (Decision, [73]-[80]).  There is no serious basis to suggest that the judge erred in attaching weight to the plaintiffs’ explanation or that his evaluation of the plaintiffs’ factual and expert evidence was plainly wrong.  We agree with the judge that the intended Ground 2 is not reasonably arguable.

21.Ground 3 contends that the judge erred in finding a serious issue to be tried that the documents relied on by the plaintiffs created a “trust-and-fiduciary” relationship between the plaintiffs and the defendants in relation to the HSBC Account Assets.

22.We do not need to repeat the parties’ disputes (see Decision, [36(3)], [50], [51])  or the Judge’s analysis (see Decision, [53]-[56]; Leave Decision, [24]-[44]), except to state that we agree with the Judge that there are serious issues to be tried.  In our view, there are plausible counter-arguments to each of the points taken by the defendants, which cannot be finally adjudicated at this stage.  Thus:

(1)  As to the defendants’ argument that the Letter of Entrustment did not gift the beneficial interests in the HSBC Account Assets to the plaintiffs, that is not what was contended by the plaintiffs (see Decision, [50(1)]).

(2)  As to the defendants’ argument that the Agreement does not bind Zong Senior’s estate, there is no dispute that it binds the 1^st defendant (who confirmed her agreement in writing, see Decision, [12]).

(3)  As to the defendants’ dispute over the enforceability of the Agreement, such issue is heavily contested and can only be resolved at trial.

(4)  Although the defendants repeat that the 1^st defendant is not a party to the Handwritten Instructions, the defendants are unable to definitively refute the reasons given by the judge for inferring that it came to the 1^st defendant’s notice (see Decision, [54]).

23.Further, as mentioned above, the plaintiffs’ claim for breach of contract in respect of the Agreement (which the defendants agree gives rise to serious issues to be tried, see Decision, [49])  and the potential order for specific performance would be sufficient to justify the preservation order over the HSBC Account Assets.

24.Based on the foregoing, we do not find the intended Ground 3 reasonably arguable.

25.Ground 4 contends that the judge erred in finding that there was a need for security, when he only found “some risk (though not necessarily a real risk of dissipation)”.  It is also said that the judge erred in finding that there was a risk of dissipation or that the defendants would not be able to satisfy any order for compensation as a matter of inherent probability.

26.Having found “some risk (though not necessarily a real risk of dissipation)” (Decision, [57(4)]), it was open to the judge to consider that on the facts there was a need for security.  All that is required is a need to preserve the property that is the subject matter of a cause or matter.  The factual circumstances were duly considered by the judge, and no arguable ground based on any palpable error in his findings has been established.  This is an evaluative judgment based on a broad consideration of the circumstances of the case.  The defendants have not shown reasonable prospects for meeting the high threshold for challenging a conclusion of this kind.

27.The defendants complain that there is no evidence from the plaintiffs that calls into question the defendants’ ability to meet any monetary award, and that the judge erred in finding that damages would not be an adequate remedy.  The judge explained in his Leave Decision at [51] that the plaintiffs raised this point in their written submissions and that he made this determination on the basis of the substantial amount at stake as a matter of inherent probability and the lack of contrary evidence.  In our view, as the defendants’ ability to meet any monetary award was called into question, the defendants were at liberty to adduce contrary evidence.  The judge was entitled to take into account all the relevant circumstances, including the value of the loss likely to be suffered by the plaintiffs and the absence of evidence from the defendants relating to their ability to meet any monetary judgment.  

28.Ground 5 contends that the judge erred in granting the disclosure order, which covers historical information and pre-empts the Hangzhou Proceedings as the disclosure order is the same as a substantive relief sought there.  It is also said that the order should not have been made as there was no real risk of dissipation of assets.

29.There is no dispute that the judge had a broad discretion to make a disclosure order ancillary to and for ensuring the effectiveness of the preservation order.  Section 21N(2)  of the Ordinance expressly provides that the court has the same power to make any incidental order or direction for the purpose of ensuring the effectiveness of an order granted under s 21M as if the order were granted under s 21L in relation to Hong Kong proceedings. 

30.The judge recognised that there is some overlap between the ancillary disclosure order and the substantive relief sought in the Hangzhou Proceedings insofar as the plaintiffs claim there for an order that the 1^st defendant provide an account or explanation of the whereabouts of the trust assets (Decision, [84]-[85]).  But this is not a jurisdictional bar against the grant of such ancillary disclosure order.  The judge made clear that the order was made for the purpose of supporting the preservation order, not as substantive relief based on the merits of the plaintiffs’ underlying claim.  The judge explained in his Leave Decision at [55] that the presence of unexplained transactions or real risk of dissipation would be important factors but did not regard them as essential prerequisites.  He took account of the relevant matters and duly exercised his discretion in granting the ancillary disclosure order.  We see no reasonably arguable ground for appellate intervention with such discretionary exercise.

31.As for the point that no legitimate purpose is served by requiring disclosure of past dealings, it is to be noted that the preservation order itself restrains the defendants from withdrawing or encumbering not only assets in the HSCB Account as at the date of the order, but also “the substitute or traceable proceeds of assets which were in the HSBC Account between 2 February 2024 and the date of service of this Order”.  Assets removed from the account during that period are therefore also covered.  There is no proposed appeal specifically against the scope of the preservation order as such.  On this basis the judge was entitled to take the view that disclosure in relation to disposals or transfers on or after 2 February 2024 was reasonably necessary for identifying the assets falling within that part of the preservation order and therefore for policing compliance with it.

32.For the above reasons, we are of the view that the proposed grounds of appeal are not reasonably arguable.  We do not think there is any other reason in the interests of justice for the appeal to be heard.  Accordingly, we refuse leave to appeal if leave is required or an extension of time to appeal if leave is not required.  Insofar as leave to appeal is concerned, we also make an order under RHC Order 59 rule 2A(8)  that the defendants may not request the determination to be reconsidered at an oral hearing.

33.It follows that the defendants’ application for a stay of paragraph 3(b)  and (c)  of the order pending appeal also fails.

34.Accordingly we dismiss the defendants’ summons. We make an order nisi that the defendants do pay the plaintiffs’ costs, summarily assessed in the sum of $250,000.

Written statements by Mr William Wong SC, leading Ms Sharon Yuen and Mr Charlie Liu, instructed by Karas So LLP, for the plaintiffs

Written statements by Mr Benjamin Yu SC and Mr Jonathan Chang SC, leading Mr Bernard Mak, instructed by Anthony Siu & Co, for the defendants