GOING BRIGHT LTD v. ZHU HUAYUE

GOING BRIGHT LTD v. ZHU HUAYUE

On the balance of probabilities the Court found the 2010 sale and 2011 assignment were sham transactions: the purchase funds principally derived from GB/Gladstrong and an advancement by Wang; title deeds and possession remained with GB/LI; Zhu was aware of and accepted the arrangements (including by signing the Letter of Undertaking) and therefore was not a bona fide purchaser for value without notice; accordingly Zhu holds legal title as bare trustee for GB and equitable relief (declaration and transfer order) is granted; the illegality argument does not bar relief on the facts and applying the appropriate public‑policy analysis.

Citation
[2025] HKCFI 6319
Parties
Plaintiff (original Action HCA 1603/2019); 1st Defendant (counterclaim): Going Bright Limited; Defendant (original Action HCA 1603/2019); Plaintiff (counterclaim) and Plaintiff in HCA 1721/2019: Zhu Huayue; Defendant in HCA 1721/2019; Defendant (purchaser in 2019): Li Kin Chung; 2nd Defendant (by Counterclaim) in HCA 1603/2019; Participant in Arrangements: Wang Yue Sheng
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
12 January 2026
Case Number
HCA1603/2019
Procedural Posture
Civil: Property/ Equitable Trust and Declaration / Judgment Following Trial (judgment Delivered 12 January 2026)
Outcome
Judgment for Going Bright Limited in HCA 1603/2019 and for Li Kin Chung in HCA 1721/2019; declarations and orders granted against Zhu Huayue; Zhu's counterclaim and Zhu's claims dismissed
Legal Topics
Bare Trust, Bona Fide Purchaser for Value Without Notice, Illegality, Tracing of Funds, Letters of Undertaking, Undue Influence, Conspiracy to Defraud
Source Language
EN
Equity Trusts Property Law Civil Procedure Immigration Law Bare Trust Bona Fide Purchaser for Value Without Notice Illegality +4 more

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Parties

Going Bright Limited

Plaintiff (original Action HCA 1603/2019); 1st Defendant (counterclaim)

Zhu Huayue

Defendant (original Action HCA 1603/2019); Plaintiff (counterclaim) and Plaintiff in HCA 1721/2019

Li Kin Chung

Defendant in HCA 1721/2019; Defendant (purchaser in 2019)

Wang Yue Sheng

2nd Defendant (by Counterclaim) in HCA 1603/2019; Participant in Arrangements

Procedural Posture

Civil: Property/ Equitable Trust and Declaration / Judgment Following Trial (judgment Delivered 12 January 2026)

Legal Issues

  1. 1 Whether the 2010 sale and 2011 assignment were genuine or a sham
  2. 2 Whether Zhu provided monetary consideration or was a bare legal trustee for Going Bright
  3. 3 Whether Zhu was a bona fide purchaser for value without notice

Ratio Decidendi

On the balance of probabilities the Court found the 2010 sale and 2011 assignment were sham transactions: the purchase funds principally derived from GB/Gladstrong and an advancement by Wang; title deeds and possession remained with GB/LI; Zhu was aware of and accepted the arrangements (including by signing the Letter of Undertaking) and therefore was not a bona fide purchaser for value without notice; accordingly Zhu holds legal title as bare trustee for GB and equitable relief (declaration and transfer order) is granted; the illegality argument does not bar relief on the facts and applying the appropriate public‑policy analysis.

Court Disposition

Judgment for Going Bright Limited in HCA 1603/2019 and for Li Kin Chung in HCA 1721/2019; declarations and orders granted against Zhu Huayue; Zhu's counterclaim and Zhu's claims dismissed

Orders

  • Declaration that notwithstanding the 2010 Agreement and the 2011 Assignment, Zhu Huayue has throughout been, and still is, holding the Property on trust for Going Bright Limited
  • Order that Zhu transfer/assign/vest the Property to Going Bright Limited within three months from date of judgment