In Profound Success Investment Ltd v Multi Success Trading Ltd & Pan Haoran [2025] HKCFI 3022, the Court of First Instance clarified the scope of summary judgment under Order 14 of the Rules of the High Court (Cap. 4A). The Plaintiff sought summary judgment against the second Defendant, a guarantor, in respect of a debt exceeding USD259 million. The Court granted judgment in full and struck out the counterclaim in first instance but on appeal, Deputy High Court Judge Gary CC Lam only entered interlocutory judgment on liability and granted leave to defend on quantum, confirming that liability and quantum may be procedurally separated even in claims for liquidated sums.
The DLA Piper team, led by Harris Chan (Partner) and supported by Sandy Au (Of Counsel) and Catherine Wong (Senior Associate), act for the Plaintiff.
Background
The Plaintiff, Profound Success Investment Limited, a BVI-incorporated investment vehicle, brought proceedings to recover over USD259 million in outstanding loans and interest from the first Defendant (Multi Success Trading Limited) and the second Defendant (Mr Pan Haoran) (Mr Pan), who executed a personal guarantee.
Loans were advanced under a Facility Agreement dated 29 August 2019, as amended and restated, for the benefit of two PRC property development projects owned by subsidiaries of Fullsun International Holdings Group Co. Ltd (the ListCo), a Hong Kong-listed company (the Debt). Mr Pan, having become the controlling shareholder and Executive Director of the ListCo in 2019, executed a personal guarantee in favour of the Plaintiff (the Guarantee).
Following the ListCo’s financial distress and a winding-up petition in 2022, a Scheme of Arrangement was sanctioned by the Hong Kong Court in June 2023 (the Scheme). The Plaintiff, as the largest creditor, participated in the Scheme but expressly preserved its rights under the Guarantee.
With the aim of recovering the Debt, the Plaintiff commenced legal proceedings and applied for summary judgment against Mr Pan. The Court granted the application in full in the first instance, to which Mr Pan appealed.
Grounds of Opposition
Mr Pan’s appeal against the Master’s decision (the Appeal) raised the following grounds in opposition to the Plaintiff’s summary judgment application:
- The Plaintiff’s Statement of Claim was defective by failing to account for repayments received under the Scheme;
- The Plaintiff’s claim was inherently weak due to inadequacies in the evidence supporting the quantum of the Debt;
- An account was necessary to ascertain the amount recoverable, and would warrant leave to defend;
- There was a triable issue as to the existence of an oral agreement between the Plaintiff and Mr Pan to waive or limit liability under the Guarantee (the Alleged Agreement); and
- Further investigation into WeChat messages between the parties warranted a trial.
The Decision
The Court allowed the Appeal in part, making the following determinations:
- Interlocutory judgment entered on liability
The Court entered interlocutory judgment against Mr Pan on liability under the Guarantee, finding that no arguable defence had been raised. Mr Pan’s primary defence was that the Plaintiff had orally agreed not to enforce the Guarantee, or to limit his liability thereunder (i.e., the Alleged Agreement). It is Mr Pan’s case that the Alleged Agreement arose during restructuring negotiations and was supported by the parties’ conduct, including the circulation of draft letters of intent and WeChat messages. It was argued that the absence of written confirmation and/or executed agreements was due to internal constraints within the Plaintiff’s risk committee, and that Mr Pan had relied on oral assurances in agreeing to proceed with and support the Scheme.
The Court rejected Mr Pan’s arguments, holding that the Alleged Agreement was inherently improbable and unsupported by contemporaneous evidence. It noted that the Scheme expressly preserved the Plaintiff’s rights under the Guarantee. In addition, the Court observed Mr Pan’s shifting account of when the Alleged Agreement was purportedly reached, ranging from “around May 2022” to “shortly before 13 December 2022”, undermined Mr Pan’s credibility. The absence of any signed letter of intent or written record of the alleged waiver further weighed against Mr Pan. Accordingly, the Court held that no triable issue on liability had been raised and entered interlocutory judgment pursuant to Order 14.
- Leave to defend on quantum granted
While the Court was satisfied that the Plaintiff had established a complete and verified cause of action on liability, it accepted that there were genuine weaknesses in the Plaintiff’s calculation of the debt amount. Mr Pan argued that the Plaintiff’s claim was overstated and inadequately supported, pointing to discrepancies in the Plaintiff’s account to reflect accurately repayments received.
The Court agreed that these issues gave rise to “genuine weakness” and “doubts and suspicion” in the Plaintiff’s quantum claim. It held that the Mr Pan should not be deprived of his prima facie right to challenge the amount claimed and to put the Plaintiff to strict proof. Accordingly, the Court granted leave to defend on quantum only, allowing Mr Pan to contest the amount of the Debt at trial.
Key Takeaways
The Court’s decision is notable for its affirmation of the Court’s power to grant summary judgment on liability while reserving quantum for trial. Even in claims for liquidated sums, such as high value debt claims, the Court is not bound to adopt an “all or nothing” approach. Instead, the Court may adopt a bifurcated approach where appropriate.
The Court’s reasoning underscores a pragmatic balance between procedural efficiency and fairness. It affirms that where a defendant fails to raise any arguable defence on liability, the Court may grant summary judgment on that issue, even if there are genuine disputes as to the quantum of the claim. This approach allows a plaintiff to secure early determination on uncontested aspects of its case, narrowing the scope of litigation and conserving judicial resources. At the same time, it preserves the defendant’s right to challenge the amount claimed where triable issues exist. This decision is a valuable precedent for creditors seeking to enforce guarantees and other debt instruments, particularly in complex commercial contexts involving restructuring schemes and partial recoveries.
For the full judgment, please see: Profound Success Investment Ltd v Multi Success Trading Ltd & Pan Haoran [2025] HKCFI 3022.