Your injunction's reach is only as wide as its words – The Hong Kong Court of Final Appeal clarifies the limits of contempt Liability

In High Fashion New Media Corp Ltd v Leong Ma Li [2026] HKCFA 18, the Hong Kong Court of Final Appeal (the "CFA") provides important guidance on the interpretation and enforcement of injunctions and the circumstances in which a person may be held in contempt for acts carried out by others.

Importantly, the CFA draws a clear distinction based on authority and control: a party may be liable if they deliberately circumvent an injunction through another person, but not when someone outside their control acts in breach of the order.

Summary of facts

• The Plaintiffs (“Lams”) and the Defendant (“Leong”) had a long litigation history regarding the management of a subsidiary company (“Longford”) and the use and control of its bank account (“Account”).
• During the process, Lams obtained an injunction against Leong (“Injunction”) prohibiting dealings with the Account by Leong herself, her servants or her agents, except in accordance with an agreed protocol between the parties ("Protocol"), which requires shareholders’ signatures to be obtained before any transfer is made.
• Leong was later held in contempt for breaching the injunction by withdrawing money from the Account without obtaining the said approval. 
• After the first contempt proceedings, Leong resigned as chairman of Longford and handed her company seal to Longford’s financial controller (“Tong”), who thereafter handled the operation of the Account. Leong also sent an email instructing Tong that transfers should be made according to the Protocol.
• Despite this arrangement, further transactions were made by Tong without compliance with the Protocol. Lams brought a second set of contempt proceedings against Leong for further breaches of the Injunction.
• The lower courts held Leong in contempt, finding that she was responsible for Tong’s acts because she had authorised them or failed to take all reasonable steps to prevent breaches of the Injunction.

CFA allowed Leong's appeal and held that there is no contempt on Leong’s part.

Clarification of the legal principles on contempt

Concerning liability for breaches of injunctions committed through others, the CFA examined the principles arising from Hone v Page [1980] FSR 501 and subsequent authorities, which altogether formed two distinct bases for liability, namely “Imputation basis” and “Implied term basis”.

Imputation basis

• A defendant may be responsible for another person’s acts where that person is acting, within the given scope of authority, as the defendant’s servant or agent. 
• In such circumstances, the acts are treated as the defendant’s own acts. 

Implied term basis

• A defendant may be required to take reasonable steps to prevent persons under their control from carrying out prohibited acts if it is a term implied in an injunction.
• However, the CFA emphasised that such a positive obligation should not be casually implied into a purely negative injunction. The obligation must be expressed in clear and unambiguous terms, where the defendant would be able to understand clearly what acts are required, for the courts to find its imposition just and convenient.
• In implying such term, the courts would also consider the degree of control and reasonableness of requiring a defendant to take positive steps to prevent another person from acting in breach of an injunction.

Applying these principles, the CFA held that Leong was not to be held in contempt: 

• Although Leong’s seal was used, the prohibited act was the operation of the Account, not merely the use of the seal.
• The injunction was a negative one and did not explicitly impose a positive obligation on Leong to ensure that other persons would comply with the Protocol in the operation of the Account.
• After Leong’s resignation, Tong was acting as Longford’s employee and financial controller, rather than as Leong’s agent. There was no evidence that Leong directed, instructed or caused the transactions to breach the Injunction, nor did Leong have any duty in supervising Tong’s acts to avoid such breach.

Practical implications

For litigants seeking injunctive relief involving potential third-party conduct

The focus should be on seeking an order whose terms clearly extend to third parties acting as agents of, or under the control of, the defendant, and which expressly delineates the preventive obligations intended to be imposed on the defendant.

• Parties seeking an injunctive relief involving potential third-party conduct should not assume that a general prohibition would automatically create broad preventive obligations on the defendant. 
• The Court will not easily impose a positive obligation into a negative injunction unless the scope of the injunction already clearly defines so.
• In disputes involving personnel changes in corporate management, if a party intends to require the defendant to monitor employees, prevent third-party actions or maintain a particular arrangement even after their resignment, such obligations must be clearly stated in express and unambiguous terms in order to be effective.
• Any person who resigns from management would not necessarily be held in contempt under an injunction merely because certain formalities, such as bank mandates or corporate seals, have not yet been updated and/or are misused after their resignation.

For parties subject to injunctive relief

It is imperative that the scope of obligations imposed by an injunction is carefully interpreted and followed, particularly where operational responsibilities may be delegated to employees, agents or representatives, whose acts could potentially constitute breach of the injunction.

• The Court remains cautious in finding control or authorisation. Liability ultimately depends on the nature of the relationship, the scope of authority delegated and the wider corporate context and structure, rather than the mere fact of delegation or formalities.
• Notwithstanding the fact that a party may have left the corporate structure, they may remain liable for the risks or breaches created by another person if that person is genuinely acting as an agent for the individual, or if the party continues to exercise control, give instructions or authorise other persons to carry out prohibited activities.
• Accordingly, parties leaving management should take practical steps to document transfer of control and compliance with the injunction, so as to prevent claims of contempt.

Conclusion

The decision marks an important clarification of the law of civil contempt involving potential third-party acts. It reaffirms that injunctions remain effective against parties who attempt to evade court orders by authorising acts of others. At the same time, the Court recognises that third-party contempt liability must be found only upon clear legal basis and should not be extended beyond what the injunction actually mandates.

If you have any questions on this topic, please get in touch with your usual Withers contact or the authors of this article.