Liu Hsiao Cheng v. Wong Shu Wai and Others

HCA 1278/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 1278 OF 2013

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（by original action）

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（by counterclaim）

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D E C I S I O N

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INTRODUCTION

1.The main legal issue which arises for my determination is whether Section 4(2) of the Limitation Ordinance, Cap 347, prescribing a limitation period of 6 years for an action for an account has application to a claim by a principal against a fiduciary for an account of the properties of the principal which have been received by, or come under the control of, the fiduciary.  This legal issue arises in the following circumstances.

2.Paragraph 125 the Re-Amended Defence and Counterclaim of Wong (the 1^st defendant by original action and the plaintiff by counterclaim) states as follows:-

“As pleaded above, Liu has, in breach of his fiduciary duties to GDIL, refused and/or failed to produce any financial information in relation to the Tobacco Business and the Zimbabwe Businesses in Zimbabwe. In the premises, Liu is liable to give an account of the funds remitted to Zimbabwe in the total sum of HK$447,636,928.67. Insofar as such an account may reveal that he has misappropriated any part of this sum, he is liable to repay the same and account for the profits made out of the same.”

3.Particulars of the alleged remittances, totalling HK$447,636,928.67, are given in Appendices A to A-11 to the Re‑Amended Defence and Counterclaim.  As one can see from those Appendices, some of the remittances were made prior to 12 July 2007, being the date which was 6 years prior to the date of commencement of this action.

4.By a summons dated 3 March 2017, Liu (the plaintiff by original action and the 1^st defendant by counterclaim) applies to strike out paragraph 125 of the Re-Amended Defence and Counterclaim to the extent of any alleged remittances made on or before 12 July 2007.

5.The basis of the strike out application, according to Mr Wou (counsel for Liu), is that Wong’s claim for an account, to the extent that it relates to remittances made on or before 12 July 2007, would be time barred by virtue of Section 4(2) of the Limitation Ordinance.  In what follows, references to sections shall, unless otherwise expressly indicated, be references to the sections of the Limitation Ordinance.

6.Mr Lam SC (for Wong)’s answer to the strike out application is twofold:-

(1)   Section 4(2) does not apply to Wong’s claim for an account against Liu because it is a claim for equitable relief under Section 4(7).

(2)   In the alternative, Wong’s claim can be regarded as a claim to recover trust property or the proceeds thereof within the meaning of Section 20(1)(b) and therefore no period of limitation prescribed by the Limitation Ordinance shall apply to it.

BRIEF BACKGROUND

7.The pleadings in this case are very lengthy and complicated.  For the purpose of disposing of the present strike out application, it is not necessary for me to set out in full the respective pleaded cases of the parties.  I would gratefully adopt paragraphs 4 to 7 of Anthony Chan J’s decision delivered on 21 August 2015 when dealing with a previous application by Liu to strike out Wong’s Amended Counterclaim and related paragraphs of the Amended Defence (reported as Liu Hsiao Cheng v Wong Shu Wai [2015] 4 HKLRD 766) for a brief outline of their respective cases, as follows:-

“4. This is yet another case where former business partners are locked in a legal battle. According to the pleadings filed in this action, Wang and Liu were good friends and they became partners in various business ventures in Zimbabwe. The businesses were conducted via corporate vehicles. The main venture was a tobacco business involving millions of dollars.

5. Liu commenced this action as a common law derivative action (‘CLDA’) against, inter alia, Wong as follows:

(a)  Gold Driven Investments Ltd (‘GDIL’) is a Hong Kong company.  This was the corporate vehicle with which the tobacco trading was conducted;

(b)  Half of the shares in GDIL are held by Liu and his wife, Shen Luan.  The other half is held by Wong and his wife, Tsoi Yu Yu.  The 4 shareholders are also the only directors of GDIL.  The wives are merely nominees of their husbands;

(c)  Wong is in control of GDIL;

(d) Liu is claiming on behalf of all shareholders of GDIL except Wong and his wife;

(e)  Liu alleges that Wong had, inter alia, breached his fiduciary duties to GDIL by committing various wrongful acts. Such acts primarily concern money belonging to GDIL.

6.   Wong makes a counterclaim against Liu.  The counterclaim also takes the form of a CLDA.  In the Amended Counterclaim, apart from repeating his Amended Defence, Wong pleaded that:

(a)  Liu and Shen hold 50% of the shares in GDIL. Wong counterclaims on behalf of the shareholders of GDIL except Liu and Shen;

(b)  Liu was under fiduciary duties to GDIL;

(c)  Liu had breached his fiduciary duties by reason of 3 wrongful acts, and for which he is liable to give an account and/or pay damages.  The 3 wrongful acts are pleaded in paras 125, 126 and 127 respectively:

(i) Liu failed to account for the sum of HK$447,636,928.67 remitted by Wong to Zimbabwe;

(ii) In March 2012, Liu caused part of the sale proceeds of the ‘Tobacco Business’[1] in the total sum of US$3,356,100 to be transferred to an unknown account instead of the account of GDIL;

(iii) Liu failed to cause Wonderful International (a company beneficially owned by Liu and his wife) to return a total sum of US$1,213,157.50 to GDIL.

7.   In respect of the first alleged wrongful act committed by Liu, Wong has pleaded in the Amended Defence that:

(a)  GDIL was incorporated for the Tobacco Businesses in Zimbabwe;

(b)  GDIL would also be responsible for funding the other ‘Zimbabwe Businesses’[2];

(c)  GDIL became the financial hub for the Tobacco Business and the Zimbabwe Businesses.  Wong would arrange funds to be transferred to various accounts according to the instructions of Liu;

(d) Liu made requests for funds from time to time and had full control of the funds remitted to Zimbabwe.  Wong relied on Liu to manage those funds with the belief that Liu would use the funds honestly and for proper purposes.  He had never asked Liu to provide any accounts for the funds;

(e)  From 25 July 2003 to 31 March 2013, a total sum of HK$447,636,928.67 was remitted by Wong, through various entities, to Zimbabwe accordingly. Most of the money came from the income of GDIL paid by China Tobacco (one of its trading partners);

(f)  Since about early November 2011, Liu has failed to provide an account for the funds remitted to Zimbabwe despite Wong’s repeated requests.”

8.Although Wong has since further amended his Amended Defence and Counterclaim, the substance of his case has, I understand, remained the same.

9.I am told by the parties that there is a dispute as to whether Liu is a properly appointed director of GDIL.  Nevertheless, it does not appear to be in issue that, for the purpose of the present application, Liu is, and at all material times was, at least a de facto director of GDIL.

10.There is one other matter that I should allude to before discussing the issue of limitation.  Although it is pleaded in paragraph 125 of the Re-Amended Defence and Counterclaim that Liu has, in breach of his fiduciary duties to GDIL, refused and/or failed to produce any “financial information in relation to the Tobacco Business and the Zimbabwe Businesses”, the substance of Wong’s complaint, as explained or clarified by Mr Lam, is that Liu has failed to provide information relating to the “use” or “application” of the funds remitted to Zimbabwe at his requests.  I believe that Liu understands that this is the case that has been raised by Wong against him, notwithstanding the fact that it could have been more clearly pleaded in paragraph 125.  For the purpose of this application, I shall read paragraph 125 as explained or clarified by Mr Lam.  If necessary, paragraph 125 can be amended accordingly.

Section 4(2) has no direct application to wong’s claim for an account

11.Section 4(2) states as follows:-

“An action for an account shall not be brought in respect of any matter which arose more than 6 years before the commencement of the action.”

12.Mr Wou relies upon this subsection to contend that Wong’s claim for an account, in so far as the relevant remittances were made more than 6 years prior to the commencement of this action (ie those made on or before 12 July 2007), is time barred.

13.Mr Lam argues, however, that the application of Section 4(2) is subject to Section 4(7), which provides as follows:-

“This section shall not apply to any claim for specific performance of a contract or for an injunction or for other equitable relief, except in so far as any provision thereof may be applied by the court by analogy in like manner as the corresponding enactment contained in the Limitation Act 1980 (1980 c. 58 U.K.) is applied in the English Courts.”

14.Mr Lam further argues that a claim for an account would be for “equitable relief” for the purpose of Section 4(7) if the duty to account arises from a violation of an underlying right which is equitable in nature.  Support for this approach can be found in the decision of Mr Recorder Fok SC (as he then was) in Hollywood Shopping Centre Owners Committee Limited v The Incorporated Owners of Wing Wah Building Mongkok Kowloon, HCA 1582/2007 (23 April 2008). That case concerned a dispute between (i) the incorporated owners of a building and (ii) the agent/manager of a shopping centre forming part of the building over the title to, and right to use, an external canopy of the building.  The agent/manager claimed that it had acquired title to the canopy by way of adverse possession, whereas the incorporated owners counterclaimed that the agent/manager did not have title to the canopy nor the right to use it as it had done (for the purpose of affixing advertising boards).  The incorporated owners further raised a counterclaim for (inter alia) an account and inquiry in respect of the agent/manager’s profits from the use of the canopy for the advertising boards in breach of the relevant DMC.

15.One of the defences raised by the agent/manager was that the counterclaim for an account was time-barred under Section 4(3), which provides that: “An action upon a specialty shall not be brought after the expiration of 12 years from the date on which the cause of action accrued …”.

16.The learned Recorder held that the incorporated owner’s claim for an account was a claim for equitable relief and therefore Section 4(3) had no application to the claim.  At paragraphs 36 and 37 of his decision, the learned Recorder stated as follows:-

“36 Furthermore, Mr Lam submitted that the Defendant’s claims in paragraphs (a) to (c) of the prayer for relief in the counterclaim were in the nature of claims for injunctive relief and that its claims for an account and inquiry in paragraphs (d) to (g) of the prayer were claims for equitable relief in the circumstances. Hence, he submitted, s.4(7) of the Limitation Ordinance must apply and there is no question of the counterclaim being time‑barred.

37 I think Mr Lam is correct in his characterisation of the nature of the Defendant’s counterclaims as being equitable.  Although Mr Wong submitted that the action for an account of profits was developed by the common law, it is clear that equity also recognised this concept and, in order to determine the nature of a claim for an account, it is necessary to look at the underlying right which has been violated.  Here, the Defendant’s claim is for breach of the DMC and, on the authority of Incorporated Owners of Man Hong Apartments v. Kwong Yuk Ching (see the passage quoted at paragraph 34 above and see also p.122E of the judgment), that is an equitable claim.”

17.I pause to observe that the learned Recorder did not, in that case, go on to consider whether the limitation period under Section 4(3) could be applied by analogy “in like manner as the corresponding enactment contained in the Limitation Act 1980 … is applied in the English Courts” under Section 4(7). 

18.The learned Recorder did not do so probably because his attention was drawn by counsel for the incorporated owners to the following statement of Mayo VP in Incorporated Owners of Man Hong Apartments v Kwong Yuk Ching [2001] 3 HKC 116, at 123H-I:-

“Equally s.4(7) specifically excludes actions for injunction and other equitable relief from the operation of the section.

There also can be no question of the statutes of limitation having any application by analogy as the claim here for breach of the terms of the DMC are in no way equivalent to any common law right of action.”

19.Since I am not dealing with a case of breach of DMC, the correctness of the above view expressed by Mayo VP does not arise for consideration.  I shall, however, have to come back to the application of the statute of limitations by analogy later in this decision.

20.In the present case, Mr Lam submits that Wong’s claim for an account against Liu is for “equitable relief” because it is based on the latter’s fiduciary duty, as a director or de facto director of GDIL, to account to GDIL for monies belonging to GDIL which were remitted by Wong to Zimbabwe pursuant to his requests and came under his control.

21.I accept Mr Lam’s submission that Wong’s claim for an account is for equitable relief, and therefore Section 4(2) has no direct application to it.

Section 4(2) applies, by “analogy”, to Wong’s claim for an account

22.It does not necessarily follow, however, that Section 4(2) can have no application to Wong’s claim for an account, because Section 4(2) may apply “by analogy in like manner as the corresponding enactment contained in the Limitation Act 1980 … is applied in the English Courts” under Section 4(7) (“the Analogy Exception”).

23.The meaning and effect of the Analogy Exception is a matter of some difficulties.  It was considered by Megarry VC in Tito v Waddell (No 2) [1977] 1 Ch 106 at 250-251 in the context of the equivalent Section 2(7) of the Limitation Act 1939.  I do not propose to quote the whole analysis of the Vice-Chancellor in this decision.  It suffices for me to refer to his conclusion at 251E-G, as follows:-

“I find this matter indeed puzzling… However, I think the answer may be along the following lines. In so far as the claim to an account is ancillary to the claim for equitable compensation, the application of the Act and the doctrine of laches to the ancillary claim ought to be the same as its application to the substantive claim. Thus it seems clear that where a claim against a person in a fiduciary position is not barred by lapse of time, he must account without limit of time: see Halsbury's Laws of England , 3rd ed., vol. 24 (1958), p. 282. If, contrary to what I have held, there is a time limit in the present case, I would hold that neither directly nor by analogy does section 2 of the Act of 1939 impose any time limit on the claim to an account that is not imposed on the substantive claim for equitable compensation.

The upshot is that if the plaintiffs’ claim were otherwise valid, I would hold that it is not barred by any statutory period of limitation, either directly or by analogy.  Through subject to the equitable doctrine of laches, it is not barred by laches either, since laches has not been pleaded.”

24.In other words, where the equitable claim for an account is ancillary to another equitable claim, the limitation period applicable to the other claim will also apply to the claim for an account.  On the other hand, if there is no limitation period applicable to the other equitable claim, the claim for an account would likewise not be subject to any limitation period.  These having been said, the claim for an account would still be subject to the equitable doctrine of laches.

25.The Analogy Exception was considered in a more recent decision of the English Court of Appeal in Gwembe Valley Development Co Ltd (in receivership) v Koshy (No 3) [2004] 1 BCLC 131. That case concerned a claim by a company against its director to account for secret profits arising from his breach of the “no profit” rule and his dishonest breach of fiduciary duty.  The question arose as to whether the action for an account of profits was barred by the Limitation Act 1980. 

26.The following provisions of the Limitation Act 1980 are relevant for the purpose of the present discussion:-

“21(1) No period of limitation prescribed by this Act shall apply to an action by a beneficiary under a trust, being an action – (a) in respect of any fraud or fraudulent breach of trust to which the trustee was a party or privy; or (b) to recover from the trustee trust property or the proceeds of trust property in the possession of the trustee, or previously received by the trustee and converted to his use.

21(3) Subject to the preceding provisions of this section, an action by a beneficiary to recover trust property or in respect of any breach of trust, not being an action for which a limitation period is prescribed by any other provision of this Act, shall not be brought after the expiration of six years from the date on which the right of action accrued …

23 An action for an account shall not be brought after the expiration of any time limit under this Act which is applicable to the claim which is the basis of the duty to account.

36(1)  The following time limits under this Act … shall not apply to any claim for specific performance of a contract or for an injunction or for other equitable relief, except in so faras any such time limit may be applied by the court by analogy in like manner as the corresponding time limit under any enactment repealed by the Limitation Act 1939 was applied before 1st July 1940.”

27.It can be seen immediately that the above provisions of the Limitation Act 1980 are similar to the corresponding provisions in our Limitation Ordinance save that we do not have the equivalence of Section 23 of the Act.

28.Delivering the judgment on behalf of the English Court of Appeal, Mummery LJ summarized the applicable principles as follows:-

“111 In the light of those cases, in our view, it is possible to simplify the court's task when considering the application of the 1980 Act to claims against fiduciaries. The starting assumption should be that a six year limitation period will apply - under one or other provision of the Act, applied directly or by analogy - unless it is specifically excluded by the Act or established case-law. Personal claims against fiduciaries will normally be subject to limits by analogy with claims in tort or contract (1980 Act s 2, 5; see the Seguros case [2000] 2 All ER (Comm) 787, [2001] 1 WLR 112). By contrast, claims for breach of fiduciary duty, in the special sense explained in Mothew, will normally be covered by section 21. The six-year time‑limit under section 21(3), will apply, directly or by analogy, unless excluded by subsection 21(1)(a) (fraud) or (b) (Class 1 trust).

112   In the present case, it is clear that these principles were applicable to a director in Mr Koshy's position. He had ‘trustee-like responsibilities’ in the exercise of the powers of management of the property of GVDC and in dealing with the application of its property for the purposes, and in the interests, of the company and of all its members. In our view, accordingly, the claim for an account, if it was based on a failure in the exercise of those responsibilities, was within the scope of section 21. It was in principle subject to a six-year time-limit under section 21(3). The question is whether it was excluded under either of the two statutory exceptions in section 21(1)(a) and (b).”

29.On the facts of that case, the English Court of Appeal further held that:-

(1) the action for an account of profits against the director was an action, or was treated for limitation purposes as analogous to an action, for “fraud or fraudulent breach of trust” within Section 21(1)(a) of the 1980 Act;

(2) no limitation period would apply to such action; and

(3) acting on the analogy of the statutory provision in Section 21(1)(a) of the 1980 Act, the court of equity before 1 July 1940 would hold that there was no limitation period applicable to the cause of action against the director (see paragraph 161 of the judgment).

30.It can be seen that under both the Limitation Act 1939 and the Limitation Act 1980, the English courts have adopted the approach that in determining whether the statute of limitations can apply by “analogy” to an action for an account in equity, one has to ask whether the underlying cause of action giving rise to the duty to account is itself subject to any time limit as prescribed by the statute of limitations.

31.This approach does not, however, provide an answer to the applicability of the statute of limitations by analogy in a situation where the action for an account is not dependent on proof of any breach of substantive duty, or is not ancillary to another equitable claim.  For example, a fiduciary is under a general duty to account without the need to prove any breach of fiduciary duty.  This general duty of a fiduciary to account, and its relationship to remedies which may flow from the account rendered by the fiduciary, were explained by Lord Millet NPJ in Libertarian Investments Ltd v Thomas Alexej Hall (2013) 16 HKCFAR 681, as follows:-

“167 It is often said that the primary remedy for breach of trust or fiduciary duty is an order for an account, but this is an abbreviated and potentially misleading statement of the true position. In the first place an account is not a remedy for wrong. Trustees and most fiduciaries are accounting parties, and their beneficiaries or principals do not have to prove that there has been a breach of trust or fiduciary duty in order to obtain an order for account. Once the trust or fiduciary relationship is established or conceded the beneficiary or principal is entitled to an account as of right. Although like all equitable remedies an order for an account is discretionary, in making the order the court is not granting a remedy for wrong but enforcing performance of an obligation.

168 In the second place an order for an account does not in itself provide the plaintiff with a remedy; it is merely the first step in a process which enables him to identify and quantify any deficit in the trust fund and seek the appropriate means by which it may be made good. Once the plaintiff has been provided with an account he can falsify and surcharge it. If the account discloses an unauthorised disbursement the plaintiff may falsify it, that is to say ask for the disbursement to be disallowed. This will produce a deficit which the defendant must make good, either in specie or in money. Where the defendant is ordered to make good the deficit by the payment of money, the award is sometimes described as the payment of equitable compensation; but it is not compensation for loss but restitutionary or restorative. The amount of the award is measured by the objective value of the property lost determined at the date when the account is taken and with the full benefit of hindsight.

169 But the plaintiff is not bound to ask for the disbursement to be disallowed. He is entitled to ask for an inquiry to discover what the defendant did with the trust money which he misappropriated and whether he dissipated it or invested it, and if he invested it whether he did so at a profit or a loss. If he dissipated it or invested it at a loss, the plaintiff will naturally have the disbursement disallowed and disclaim any interest in the property in which it was invested by treating it as bought with the defendant’s own money. If, however, the defendant invested the money at a profit, the plaintiff is not bound to ask for the disbursement to be disallowed. He can treat it as an authorised disbursement, treat the property in which it has been invested as acquired with trust money, and follow or trace the property and demand that it or its traceable proceeds be restored to the trust in specie.”

32.Wong’s claim against Liu for an account, as I understand it, is based on the simple fact that (i) Liu is a fiduciary vis-à-vis GDIL, and (ii) assets belonging to GDIL have (allegedly) come under his control.  I have not been referred to any authority by counsel on whether the limitation period of 6 years prescribed by Section 4(2) can be applied, by reliance upon the Analogy Exception, to a bare claim by a company against its director/de facto director for an account of the properties or assets belonging to the company which have come into the hands or under the control of its director/de facto director.

33.As a matter of principle, I consider that Section 4(2) can be so applied to such a claim.  That seemed to be the position in England prior to the Limitation Act 1939, as recognized by Megarry VC in Tito v Waddell (No 2). At page 250 of the law report, the Vice Chancellor referred to an old case called Knox v Gye (1872) LR 5 HL 656.  In that case, the House of Lords (by a majority) held that an action for an account of profits in a partnership was time-barred by applying the statute of limitations by analogy.

34.At pages 673 to 675 of the law report, Lord Westbury stated as follows:-

“That a Court of Equity will not, after the lapse of six years without acknowledgment, decree an account between a surviving partner and the estate of a deceased partner has been long settled by various decisions… The general principle was laid down as early as the case of Lockey v. Lockey, where it was held that where a Court of Equity assumes a concurrent jurisdiction with Courts of Law no account will be given after the legal limit of six years, if the statute be pleaded… because a Court of Equity, in affording such a remedy and giving such an account, would act by analogy to the Statute of Limitations. For where the remedy in Equity is correspondent to the remedy at Law, and the latter is subject to a limit in point of time by the Statute of Limitations, a Court of Equity acts by analogy to the statute, and imposes on the remedy it affords the same limitation. This is the meaning of the common phrase, that a Court of Equity acts by analogy to the Statute of Limitations, the meaning being, that where the suit in Equity corresponds with an action at Law which is included in the words of the statute, a Court of Equity adopts the enactment of the statute as its own rule of procedure. But if any proceeding in Equity be included within the words of the statute, there a Court of Equity, like a Court of Law, acts in obedience to the statute. I have no doubt, therefore, of the Statute of Limitations being a bar to the whole of the relief sought by the Appellant as executor of Thistlethwayte.

Your Lordships will no doubt recollect that in the observations I have made with regard to the adoption of the statute by a Court of Equity, I refer to those well-known expressions of Lord Redesdale, in which he distinguishes between the cases where a Court of Equity acts in analogy to the statute, and where it acts in obedience to the statute. Where a Court of Equity frames its remedy upon the basis of the Common Law, and supplements the Common Law by extending the remedy to parties who cannot have an action at Common Law, there the Court of Equity acts in analogy to the statute; that is, it adopts the statute as the rule of procedure regulating the remedy it affords.”

35.In Gwembe Valley Development Co Ltd, Mummery LJ stated, at paragraph 81, that the effect of Section 36 of the Limitation Act 1980 (equivalent to our Section 4(7)) was to preserve the cases in which a court of equity would have applied the statutory limitation periods by analogy, as explained by Lord Westbury in Knox v Gye.

36.In all, I am of the view that the limitation period of 6 years under Section 4(2) can be applied by analogy to the present claim by Wong for an account against Liu.  That being the position, his action for an account, in so far as it relates to remittances made on or before 12 July 2007, would be time-barred.

SECTION 20(1)(b) HAS NO APPLICATION to Wong’s claim for an account

37.I can dispose of Mr Lam’s alternative argument based on Section 20(1)(b) briefly.  I do not see that Wong’s claim can be regarded as an action “to recover from the trustee trust property or the proceeds thereof in the possession of the trustee, or previously received by the trustee and converted to his use”.  Granted that this subsection has application to a director as it does to a trustee (see Lewin on Trusts, 19^th Ed, paragraph 44-077), Mr Lam accepts that Wong is unable to allege, at this stage, that Liu has misappropriated any asset or property belonging to GDIL.  Hence, in paragraph 125 of Re-Amended Counterclaim, it is pleaded that insofar as the account sought may reveal that Liu has misappropriated any part of the monies, Liu is liable to repay the same and account for the profits made out of the same.

38.In other words, Wong’s claim for an account is the first step which may lead to further remedies against Liu.  This would be entirely consistent with what Lord Millet said in paragraph 168 of his judgment in Libertarian Investments Ltd, ante.  It is not, however, a claim for recovery of trust property belonging to GDIL or the proceeds thereof in the possession of Liu.

39.Mr Lam reminds the court that a pleading should not be struck out save in a plain and obvious situation.  I agree.  However, the limitation point raised by Mr Wou is a short point of law.  Although it is by no means an easy one, I do not consider that any useful purpose will be served by postponing its determination, there being no suggestion that further evidence may be adduced at the trial which could be relevant to its proper resolution.

DISPOSITION

40.For the above reasons, I hold that the claim for an account in paragraph 125 of the Re-Amended Defence and Counterclaim, to the extent that it relates to remittances made on or before 12 July 2007, is time-barred.  Since the parties have not addressed me on the question of whether the striking out of the entries relating to remittances made on or before 12 July 2007 in Appendices A to A-11 would or may have any impact on other pleas in the Re-Amended Defence and Counterclaim, I shall leave it to the parties to agree on the form of the order to give effect to this decision, with liberty to apply in the event of disagreement.

41.The parties are agreed that the costs of the strike out application should follow the event. Accordingly, Wong shall pay Liu the costs of and occasioned by the strike out summons dated 3 March 2017, to be assessed on a party and party basis if not agreed, with certificate for counsel.  In view of the fact that the hearing on 9 March 2017 was originally fixed for the hearing of Liu’s Notice of Appeal dated 11 August 2016 and there could be some issues regarding the proper apportionment of counsel’s brief fee for the hearing, I shall postpone the assessment of the costs, which I intend to do summarily, to the next hearing when the Notice of Appeal comes before me.

Mr Jean-Paul Wou, instructed by Chow Wong & Lawyers, for the plaintiff (1^st defendant by counterclaim)

Mr Paul Lam, SC and Mr Vincent Lung, instructed by ONC Lawyers, for the 1^st defendant (plaintiff by counterclaim)