Jione Hong Kong Co Ltd v. Chan Wah Sun (also known as Calvin Chan) and Another

HCA 422/2026

[2026] HKCFI 5726

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 422 OF 2026

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REASONS FOR DECISION

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A.   INTRODUCTION

1.On 12 March 2026, the plaintiff filed the Writ of Summons herein, and claimed against the 1^st defendant, inter alia, for having misappropriated at least a sum of HK$17,170,000 from the plaintiff’s bank account.

2.On 13 March 2026, K Yeung J (as he then was) granted an ex parte proprietary injunction against the 1^st defendant (“the Ex Parte Injunction”) restraining him from disposing of the sum of HK$17,170,000 paid by the plaintiff to the 1^st defendant by way of cheques drawn on the plaintiff’s bank account held with MUFG Bank in favour of the 1^st defendant.  The said sum had been deposited into the 1^st defendant’s accounts held with Nanyang Commercial Bank (“Nanyang Bank”), Industrial and Commercial Bank of China (Asia) (“ICBC”) and Fubon Bank (“the Bank Accounts”).

3.By an inter partes summons filed on 17 March 2026 (“the Continuation Summons”), the plaintiff sought the continuation of the Ex Parte Injunction and ancillary disclosure orders against the 1^st defendant, Nanyang Bank, ICBC and Fubon Bank.

4.On 17 September 2026, the plaintiff filed another summons and applied for leave to amend the Continuation Summons (“the Amendment Summons”), seeking a worldwide Mareva injunction either cumulatively with, or in substitution for, the Ex Parte Injunction, and for the injuncted amount to be increased to HK$21,476,000.

B.   THE 1^ST DEFENDANT’S ABSENCE

5.The 1^st defendant was absent at the hearing.

6.The 1^st defendant had been represented by Messrs. Solar Wong & Co. in this action since 14 May 2026. 

7.When the clerk of this Court called up Messrs. Solar Wong & Co. on 24 September 2026 at around 6pm (“the Telephone Conversation”) and chased for the 1^st defendant’s skeleton submission, she was told by a Mr Alexander Ho of the said firm that he would inform counsel that the Court had directed that the skeleton submission, which was already overdue, must be lodged no later than 10am in the following morning. 

8.However, the 1^st defendant then filed a Notice to Act in Person at 9:45am on 25 September 2026. 

9.According to Messrs. Solar Wong & Co’s letter of explanation dated 25 September 2026, they had indeed instructed counsel who was in the course of preparing the skeleton submission for this hearing at the time of the Telephone Conversation.  However, since the 1^st defendant did not pay certain fees, Messrs. Solar Wong & Co. “could not confirm instruction to counsel to continue his works for the Skeleton Submission and List of Authorities, especially after receipt of the copy of Notice to Act in Person”.

10.If anything, the above explanation only leads to more questions. 

11.Having said that, for the present purpose, I have no doubt that the 1^st defendant has notice of the hearing and therefore there was no injustice for the hearing to go ahead in his absence.

C.   THE AMENDMENT SUMMONS

12.The plaintiff sought to amend the Continuation Summons by virtue of the Amendment Summons. 

13.Subject to one matter, an order in terms of the Amendment Summons had been made.

14.The only amendment which was not allowed was the plaintiff’s attempt to increase the injuncted amount from HK$17,170,000 to HK$21,476,000, for the simple reason that the plaintiff has not applied to amend the corresponding claimed amount in the Writ of Summons. 

D.   WORLDWIDE MAREVA INJUNCTION

15.As Coleman J (as he then was) explained in Predicine Holdings Ltd v Bianchi (Hong Kong) Limited and Others [2021] HKCFI 123 at [74] – [76], an applicant for a Mareva injunction having extraterritorial effect needs to show that:

(1)  he has a good arguable case on his claim;

(2)  there are no or insufficient assets within Hong Kong to satisfy the claim, but there are assets outside the jurisdiction; and

(3)  there is a real risk of dissipation or secretion of those assets so as to render nugatory any judgment which the plaintiff may obtain.

16.The “good arguable case” threshold is higher than that of “serious issue to be tried”.  However, the existence of a good arguable defence does not necessarily negate a good arguable case.  It is possible, at the interlocutory stage, that both the claim and the defence seem more than barely capable of serious argument but not necessarily having a better than 50% chance of success.

17.As to “real risk of dissipation”, there is a need to scrutinise the evidence to see whether the alleged conduct of the defendant really points to the conclusion that assets may be dissipated. 

18.In Universal Entertainment Corporation and Another v Kazuo Okada [2020] HKCFI 1406 at [37], his Lordship identified the necessary considerations.  While some of those considerations are not applicable to the present case, I would set them out in full as a matter of completeness as follows:

(1)  The applicant must show a real risk, judged objectively, that a future judgment would not be met because of an unjustified dissipation of assets.

(2)  In this context, dissipation means putting the assets out of reach of a judgment whether by concealment or transfer.  Whilst it may not always be necessary to demonstrate a nefarious intent, there must be something more than the mere ordinary or usual dealing with assets.

(3)  What must be threatened is unjustified dissipation.  It is not the purpose of a freezing order to provide security for the claim.  Rather, the purpose is to restrain a defendant from evading justice by disposing of, or concealing, assets otherwise than in the normal course of business, in a way which will have the effect of making the defendant judgment-proof.

(4)  The purpose of a freezing order is not to prevent a corporate defendant from dealing with its assets in the normal course of business, or to restrict an individual defendant from conducting his personal affairs in the way he has always conducted them, provided that such dealing and conduct are legitimate.

(5)  Where there is more than one respondent to the application, the risk of dissipation must be established separately against each respondent.

(6)  The burden is on the applicant to show a real risk of dissipation, which must be established by solid evidence.  Mere inference or generalised assertion is not sufficient.  Neither are unsupported or bare statements of fear, which will carry little weight.  Resort to mantras such as “low commercial reality” are of little value unless supported by solid evidence.

(7)  It is not enough to establish a sufficient risk of dissipation merely to establish a good arguable case that the defendant has been guilty of dishonesty.  It is necessary to scrutinise the evidence to see whether the dishonesty in question points to the conclusion that assets may be dissipated.

(8)  It is also necessary to take into account whether there appears at the interlocutory stage to be properly arguable answers to the allegations of dishonesty.

(9)  An assessment of the risk of dissipation necessarily involves an evaluative and predictive judgment.  The evidential burden can be satisfied by drawing proper inferences from a holistic consideration of all the circumstantial materials that are indicative of risk, including matters which point against such risk.

(10)  Where the court accepts that there is a good arguable case that a respondent has engaged in wrongdoing against the applicant relevant to the issue of dissipation, that holding will, or may, point powerfully in favour of a risk of dissipation.

(11)  Hence, where the dishonesty alleged is at the heart of the claim against the defendant (being either the substantive claim or the claim for an injunction), the court may find it able to draw the inference that the making out of that case to the necessary standard also establishes sufficiently the risk of dissipation of assets.  But the evidence of dishonesty must be relevant to the risk of dissipation and not simply the underlying claim.

(12)  Evidence of delay in making the application may be relevant in the assessment of risk of dissipation.  Delay after a defendant gained knowledge of a plaintiff’s claim can militate against the risk of dissipation because that defendant has already had the opportunity to dispose of assets, should he be inclined to do so.  But the lay of itself does not necessarily bark relief. The ultimate question remains whether the plaintiff can show a real risk of dissipation despite delay.

(13)  Each case is fact specific, and the relevant factors must be looked at cumulatively.

19.In the present case, I am satisfied that the plaintiff has shown a good arguable case on the merits:

(1)  It appears that the cheques were never meant for the 1^st defendant.  Yet, at the end of the day, they were all deposited into his personal account.  There is no evidence that such deposit had been approved by the plaintiff.

(2)  While the 1^st defendant attempted to explain away the said cheques deposit in his Affirmation, his version of event is totally unsupported by documentary evidence.

20.As far as the location of the 1^st defendant’s assets is concerned, it is evident that there is basically nothing left in the Bank Accounts.

21.Since it appears that the 1^st defendant has moved to Taiwan, it is likely that he has moved his assets from Hong Kong to Taiwan as well.

22.As for the real risk of dissipation, as aforesaid, the objective fact is that there is basically nothing left in the Bank Accounts.

23.While the 1^st defendant has in his Affirmation alleged that the plaintiff had failed to comply with its duty of full and frank disclosure, the so-called “disclosure” related to the 1^st defendant’s version of event, in respect of which the plaintiff had strenuously denied.  There is thus nothing in this argument.

24.I therefore took the view that a worldwide Mareva injunction should be made against the 1^st defendant.

E.   ANCILLARY DISCLOSURE ORDERS

25.The relevant principles are trite and have been summarised in Carmon Reestrutura-engenharia E Servicos Técnicos Especiais(Su) Limitada v Carmon Restrutura Limited and Another [2024] HKCFI 435 at [18]:

(1)  The function of ancillary orders in aid of interim orders to preserve assets in which a plaintiff claims to have an equitable proprietary interest and their potentially traceable proceeds is to enable a plaintiff and the court to ascertain at an early stage what (if anything) has happened to the original assets and their potentially traceable proceeds (if any).  This is to enable interim preservation orders to be effective.

(2)  While a preservation order might be framed along the lines of restraining the disposition of the original assets and/or their fruits or proceeds (if any), such an order would not be able to achieve its objective if neither the court nor the parties are clear as to the identity and whereabouts of the assets sought to be preserved.

(3)  It will thus be necessary to ascertain from the defendant and sometimes 3^rd parties through compulsory orders what has happened to the original assets and their potentially traceable proceeds.  Courts have long recognised these to be strong orders.  However, it has been said that the courts of equity have never hesitated to use the strongest powers to protect and preserve a trust fund in interlocutory proceedings on the basis that if the trust fund disappears by the time the action comes to trial, equity will have been in vain.

(4)  Such orders serve an important subsidiary purpose: they require clear and precise framing of the injunction order so that the defendants subject to the order and relevant 3^rd parties know precisely what they can and cannot do.

(5)  The intrusive nature of such orders requires the court to consider carefully potential prejudice caused to the defendants and a fortiori 3^rd parties.

(6)  While the court’s equitable discretion is wide and flexible, the discretion is a principled one and it must guard against being used as an instrument of oppression, such as, for instance, allowing the plaintiff’s roving enquiry into the defendant’s affairs in search of other potential claims.

26.I accept the plaintiff’s submissions that the Court should make an ancillary disclosure order against the 1^st defendant and the banker’s books orders:

(1)  This action involves a proprietary claim whereby the plaintiff seeks to trace the whereabouts of the cheque proceeds or its traceable proceeds which in equity belong to the plaintiff;

(2)  The documents sought would reveal what (if anything) has happened to the cheque proceeds and the traceable proceeds (if any), and in turn that would assist the plaintiff in ascertaining the next steps to take for the purpose of preserving the funds or their traceable proceeds;

(3)  Unless the aforesaid orders are made, the plaintiff would not be able to identifying the whereabouts of the funds or their traceable proceeds.

F.   DISPOSITION

27.I have therefore made order in terms of the draft orders lodged by the plaintiff with necessary amendments.

G.   COSTS

28.Mr Wong SC suggested that costs of the applications should be in the cause of the action.  I agreed and made the order accordingly.

Mr William Wong, SC leading Mr Justin Ismail, instructed by Chin & Associates, for the plaintiff

The 1^st defendant was unrepresented and was absent