Bison Birdsville Global Ltd v. Yang Mingzhi and Others

HCA 2031/2020 &

HCA 1951/2021

[2023] HKCFI 3130

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2031 OF 2020

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BETWEEN

AND

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1951 OF 2021

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BETWEEN

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D E C I S I O N

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A. INTRODUCTION

1.This is an appeal by D1 and D2 and cross appeal by the Plaintiff against a Master’s decision on summary judgment and security for costs, and an application for re-amendment to the Defence.

2.The Plaintiff agreed to invest in PRC Companies. The parties hoped that the business would eventually achieve an IPO and the Plaintiff would acquire shares in the listco. If an IPO could not be achieved by 30 June 2020, D1, D2 and others have to buy back the Plaintiff’s shares at the specified Put Price.

3.The Plaintiff invested RMB 10 million (“the Sum”), which were transferred to one of the PRC Companies. IPO could not be achieved before the deadline. Therefore, the Plaintiff sought repayment of the Sum plus interest in HCA 2031/2020 (“Old Action”).

4.The Defendants deny the claim, asserting that no payment had been made by the Plaintiff. If there had been payment, the money was remitted through an illegal channel that violated Mainland China’s foreign exchange control regulations.

5.Post-writ, the Plaintiff also instituted HCA 1951/2021 (“New Action”). The Old Action and New Action are essentially the same. The New Action was instituted only to avoid potential technical argument that the Old Action contained post-writ causes of action against D1 and D2. D3 and D4 are not parties to the New Action.

6.On 30 March 2023, a Master gave summary judgment in favour of the Plaintiff in the Old Action. Insofar as relevant, he ordered, (i) D1 and D2 to pay the Plaintiff RMB10 million and interest at 25% per annum from 28 June 2018 until payment; (ii) the Plaintiff to execute an instrument of transfer to transfer its shares to D1 and D2 within 14 days of D1 and D2’ compliance with item (i). He declined to order security in respect of D1 and D2’s costs in view of the summary judgment. He made no order for summary judgment or costs in the New Action.

7.Before me are:

(1) D1 and D2’s appeal against the learned Master’s decision in respect of (a) the summary judgment; and (b) the failure to grant security for costs against the Plaintiff (D3 and D4 have not appealed).

(2) The Plaintiff’s cross appeal for summary judgment, such that if D1 and D2 succeed in the appeal in the Old Action, there will still be summary judgment in the New Action.

(3) The summons of all 4 Defendants filed on 21 August 2023, 5 months after the Master’s decision, for leave to re-amend the defence and add a counterclaim (“Amendment Summons”).

B. FACTUAL BACKGROUND

8.The facts are largely taken from the helpful summary of Mr Chong, counsel for the Plaintiff.

9.The Plaintiff is a BVI company which carried on business in investment and finance.

10.D1, D2 and one Mr Zhao Tong (“Mr Zhao”) were the Founders of 2 PRC Companies, including one called You Wei Hui (Beijing) International Travel Agency Company Limited (游尾會（北京) 國際旅行社有限公司) (“You Wei Hui”). The Founders and the PRC Companies were engaged in the business of, amongst others, last minute travel services in the Mainland.

11.In 2017, the Bison Group (of which the Plaintiff was an affiliate) was invited to invest in the Founders’ business. On 30 October 2017, the Founders and the PRC Companies signed a Term Sheet, which provided, amongst others, that:

(1) The Bison Group would invest an aggregate of RMB30 million in the PRC Companies in 2 tranches.

(2) The Bison Group would pay to the PRC Companies RMB10 million (“Tranche A”) by 1 November 2017. In return, the Bison Group would acquire 3.3% of the share capital of the PRC Companies.

(3) If certain targets were achieved, the Plaintiff would pay the balance under Tranche B which, for present purpose, is not relevant.

(4) A Cayman Islands or BVI company would be incorporated, which would be the listing vehicle for a future IPO and would take over the PRC Companies. The shareholders would swap their shares in the PRC Companies for the same shareholding in the listing vehicle.

(5) In the event that there was no IPO before 30 June 2020, Bison Group would be entitled to require the Founders to purchase its shares at the original purchase price, plus all declared but unpaid dividends and interest at 25% per annum from the date of Tranche A Closing until the date of payment of the amount due upon such purchase (“Put Price”).

12.On 8 November 2017, pursuant to the Term Sheet, the Plaintiff effected payment of the Sum to You Wei Hui through money changers. The receipt of this money is disputed by D1 and D2. However, the PRC Companies and the Founders have acknowledged receipt of the Sum in satisfaction of Tranche A on the same day.

13.About 7 months after the Term Sheet was signed:

(1) On 5 June 2018, the Founders incorporated Urway Holding Ltd (“Urway”), a Cayman Islands company intended to be the listing vehicle. Through their respective corporate vehicles, the Founders became the directors and shareholders of Urway.

(2) On 28 June 2018, a Subscription Agreement and a Shareholders’ Agreement were signed among the Plaintiff, Urway, D1, D2 and Mr Zhao as Founders, and their respective company (D3, D4 and Aloha Sunrise Ltd) as “Founder Companies”. The PRC Companies were not parties to these 2 Agreements.

14.Pursuant to the Subscription Agreement, Urway allotted 330 shares (3.3%) (“Investment Shares”) to the Plaintiff.

(1) Under preamble (F), it was stated that the Plaintiff had paid Tranche A in full to the PRC Companies “prior to the date of this Agreement”.

(2) Under Clause 2.2(ii), the parties acknowledged that the Tranche A Subscription Price (defined thereunder to mean the Sum) was “received in full by the PRC Companies from the Investor (ie the Plaintiff) prior to the date of this Agreement”.

(3) Under Clause 5.1, Tranche A Completion shall take place on the same date of the Subscription Agreement, ie 28 June 2018.

15.Separately, the Shareholders’ Agreement provided, under Clause 4.6, that if no IPO took place by 30 June 2020, the Plaintiff shall have the right to require the Founders or the Founder Companies to purchase all (and not only part) of the Investment Shares at the Put Price.

16.It is not disputed that no IPO was achieved by 30 June 2020.

17.Starting from 26 August 2020, demand letters had been sent to the Founders and the Founder Companies requiring them to purchase the Investment Shares under the Shareholders’ Agreement.

18.On 3 December 2020, the Old Action was commenced.

19.By letters all dated 8 November 2021 (after the Old Action was commenced), pursuant to Clause 4.6 of the Shareholders’ Agreement, the Plaintiff demanded the Founders, to pay the Put Price. Mr Zhao never disputed the fact that the PRC Companies had received the Sum and that the Plaintiff was and is entitled to redeem the Investment Shares.

20.On 30 December 2021, the New Action was commenced.

21.There is no dispute that the Put Price has not been paid.

C. D1 and D2’s Case

22.D1 and D2 deny that Mr Zhao was a Founder of the PRC Companies. They only got acquainted with Mr Zhao in around June 2017. Mr Zhao represented to D1 and D2 that he had very strong connections in the USA and claimed to be able find investors for the PRC Companies.

23.On 5 July 2017, D1, D2 and Mr Zhao entered into the You Wei Hui Shares Allotting Agreement, whereby Mr Zhao shall raise RMB100 million within 180 business days in consideration of 10% shares in each of the PRC Companies, failing which Mr Zhao would be obliged to pay RMB 600,000 in exchange for the 10% shares. The 10% shares were transferred to him.

24.Mr. Zhao had failed to introduce any investment funds to the PRC Companies at all or lawfully and has refused to pay RMB 600,000 in accordance with the You Wei Hui Shares Allotting Agreement. Hence, they have filed a lawsuit in the PRC against Mr. Zhao for the RMB 600,000.

25.In October 2017, Mr Zhao told D1 and D2 that the Plaintiff intended to inject RMB 10 million into the PRC Companies and that the Plaintiff would use its expertise and commercial network to assist You Wei Hui to achieve IPO. However, Mr Zhao never told them that the Plaintiff would have the right to redeem its investment with interests at 25% if IPO was not achieved by 30 June 2020.

26.D1 and D2 claim that they were unable to read or understand the Term Sheet, which was in English. They had signed, purely out of trust in Mr Zhao. They had also signed the Subscription Agreement and the Shareholders’ Agreement (also in English) without inspecting and agreeing with the contents therein.

27.The PRC Companies have never received Tranche A or any funds from the Plaintiff at all or lawfully. Although the bank account of You Wei Hui did on 8 November 2017 receive the Sum from a company named Shenzhen Municipal Xin Qin Fu Industrial Company Limited (深圳市新勤富实业有限公司), D1 and D2 aver that the Sum was not paid by the Plaintiff. In any event, the payment through a money changer was an illegal activity contravening PRC laws.

28.Contrary to Mr Zhao’s representations, the Plaintiff had never used its expertise and commercial network to assist any of the companies to achieve IPO.

29.D1 and D2 allege that the Plaintiff “benefitted from washing money from unknown source” and does not come to Court with clean hands. The Court should decline to grant specific performance.

30.The Plaintiff has not issued a demand letter to Mr Zhao or Aloha until 1 December 2020 and has not sued them. Mr Zhao has even become a witness for the Plaintiff.

31.On 2 March 2022, the Defendants filed and served their Defence in the Old Action which was subsequently amended on 31 October 2022. The Defendants now seek leave to re-amend their Defence and to add a counterclaim for, amongst others, declarations that the Term Sheet, the Subscription Agreement and the Shareholders’ Agreement “are set aside and unenforceable”. The new pleas include asserting that Mr Zhao acted on behalf of the Plaintiff and the 2 of them had conspired to defraud and injure D1 and D2.

D. ISSUES

32.D1 and D2 have raised various defences in this appeal:

(1) Whether the Plaintiff had paid Tranche A (“No Payment Defence”);

(2) Whether the Plaintiff had made payment through illegal means prohibited in the PRC (“Illegality Defence”);

On a provisional basis, assuming that leave is granted under the Amendment Summons:

(3) Whether Mr Zhao had made misrepresentations to D1 and D2 as an agent of the Plaintiff (“Misrepresentation Defence”);

(4) Whether the Plaintiff had conspired with Mr Zhao with intent to defraud and injure the Defendants (“Conspiracy Issue”).

(5) Whether it is appropriate to grant specific performance due to the Plaintiff’s Conduct (“Specific Performance Defence”) and

E. LEGAL PRINCIPLES

33.An appeal from a master’s decision to a judge in chambers is by way of rehearing as if the application came before the judge for the first time.

34.Before the court looks at the defence, it must look at the plaintiff’s case first. If possibly genuine weaknesses are exposed in the plaintiff’s case, the Court should not give summary judgment: Li Mingren v Questex Development Inc & Anor, CACV 141/2014, 18 November 2015, at §13, applying Billion Silver Development Ltd v All Wide Investments Ltd [2000] 2 HKC 262.

35.If the plaintiff has made out a prima facie case, the burden then falls on the defendant to show that there are triable issues and the defendant must condescend upon particulars. The mere assertion in an affidavit of a given situation by the defendant does not, ipso facto, ground leave to defend. The defendant must satisfy the court that his evidence is capable of belief and that on the basis of such evidence, there is a fair or reasonable probability of the defendant having a real or bona fide defence: Biel Crystal (HK) Manufactory Ltd v U-Borne Environmental Ltd [2021] HKCFI 2097, §24, Au-Yeung J.

36.Whilst the Court should not embark on a mini-trial on affidavit, that does not mean that the Court is obliged to suspend its critical faculties and assume that the defendant’s evidence is accurate. If having regard to inherent plausibility, inconsistency with contemporaneous documents, and other compelling evidence, the defence is not credible, the court must say so. If the defendants’ defence is incredible in any material respect, it cannot be said that there is a fair or reasonable probability that the defendant has a real or bona fide defence: Biel Crystal, §§25-26, citing Menfond Electronic v Wong Wang Tat Victor [2013] 2 HKC 259, §61 DHCJ Lisa Wong SC (as she then was).

37.Where there are unexplained features of both the claim and the defence because they bear the appearance of falsity and questionable conduct, the court should not make tentative assessments of the respective chances of success of the parties, but should give unconditional leave to defend so that the matters can be ventilated at trial. Hong Kong Civil Procedure 2024, Vol 1, §14/4/9B, p352-353

F. PLAINTIFF’S PRIMA FACIE CASE

38.The Plaintiff’s case is straightforward. It was the common objective of the parties to achieve an IPO. If an IPO could not be achieved, the Plaintiff’s investment would be returned with interests accrued thereon. The Plaintiff’s case is supported by the Term Sheet and Various Agreements. It paid but IPO was not achieved. The Plaintiff has passed the threshold test for seeking return of its investment.

G. NO PAYMENT DEFENCE

39.The Plaintiff paid through Hui’s Brothers Currency Exchange to an account of You Wei Hui specified by the Founders. One 深圳市新勤富实业有限公司 (“the Transferee”) transferred the money to You Wei Hui (P -> Hui’s Brothers -> 深圳市新勤富 -> the PRC Company, according to Mr Chong). There appears to be no direct documentary link between Hui’s Brothers and the Transferee. Mr Chong submits that the Transferee was obviously the money changer’s counterparty in the Mainland in remitting the Sum to the PRC Company’s account.

40.According to D1 and D2, the Plaintiff has denied to the Mainland authorities that the Sum in You Wei Hui’s account was paid by the Plaintiff. Despite such denial, the payment and receipt of Tranche A were evidenced by many documents.

41.Firstly,

(1) You Wei Hui had acknowledged receipt of the Sum by issuing a receipt dated 8 November 2017.

(2) The Subscription Agreement had acknowledged that Tranche A had been paid prior to the execution of that Agreement. This Agreement was admittedly signed by D1 and D2. The fact that they had not read and/or were unable to understand this English document was not a defence because it is trite that persons of full age and understanding are bound by the documents they signed: Ming Shiu Chung & ors v Ming Shiu Sum & ors (2006) 9 HKCFAR 334 at §§84-87, Ribeiro PJ.

(3) D1 and D2 had signed another document, namely the 融资后工作总结, which was sent to the Plaintiff in the second half of 2018. D1 and D2 expressly acknowledged therein that the Plaintiff had invested in You Wei Hui, and that they had used up the RMB 10 million investment fund.

(4) In the Share Re-Purchase Agreement dated 18 January 2019, D1, on behalf of the PRC Companies, acknowledged that the Sum had been paid by the Plaintiff.

(5) During the investigations of Mainland authorities on the violation of foreign exchange control, on 3 December 2019, D1 and D2 had told the officers that Tranche A was paid by the Plaintiff. The Amended Defence (§8D) admitted that D1 and D2 so informed the Mainland authorities. In the end the Mainland authorities dropped the criminal investigation and passed the case to the State Administration of Foreign Exchange Shenzhen Branch (“SAFE”). SAFE imposed a penalty on You Wei Hui for the reason that its Hong Kong shareholder (ie the Plaintiff) conducted illegal cross-border remittance of funds in breach of PRC law.

42.Secondly, it is undisputed that the Sum had ended up in You Wei Hui’s account. Whilst asserting that the PRC Company did not have business dealing with the Transferee, D1 and D2 spent the huge Sum in their business and now claim that the money had not come from the Plaintiff. D1 and D2 have not even averred that the Sum had a source other than the Plaintiff. For 6 years since the Sum was first deposited in You Wei Hui’s account, no stranger has ever claimed entitlement to the Sum.

43.Thirdly, if Tranche A had never been paid,

(1) There was no reason why the Investment Shares were allotted to the Plaintiff. D1 and D2 have no answer to this.

(2) It was illogical that the PRC Companies would be prepared to buy out the Plaintiff’s interest under the Share Repurchase Agreement for RMB 30 million. (It was only because You Wei Hui could not find a new investor that the Share Repurchase Agreement was not proceeded with.)

44.Before the Old Action was commenced, there was no complaint from the PRC Companies, Urway, D1 or D2 that Tranche A had not been paid by the Plaintiff.

45.For the reasons given in this Section, the No Payment Defence is not triable.

46.To complete the analyses, if the Plaintiff had not paid Tranche A, the proper claimant should be the PRC Companies or Urway under the Term Sheet and not D1 and D2. The failure of the Plaintiff to pay does not provide a defence to D1 and D2 to the Plaintiff’s claim under the Shareholders’ Agreement.

H. Illegality Defence

47.Indisputably, based on the expert evidence, the remittance of Tranche A from Hong Kong to Mainland China through a money changer was illegal under Mainland China’s foreign exchange control regulations.

48.The first thing to note is that the Illegality Defence (meaning that money had been paid) is inconsistent with the No Payment Defence. A defendant is not permitted to run an inconsistent defence without reasonable grounds: Hong Kong Civil Procedure 2024, Vol 1, §18/7/12.

49.Assuming that D1 and D2 are permitted to run the Illegality Defence:

(1) The Plaintiff has made clear that its claim is based on the Shareholder’s Agreement instead of the Term Sheet.

(2) The Shareholders’ Agreement governs the relationship and obligations among the shareholders of Urway. Unlike the Term Sheet, the Shareholders’ Agreement does not carry a payment obligation and its validity is not challenged as the Amended Defence currently stands.

(3) Violation of foreign exchange control occurred in the performance under the Term Sheet. However, the Plaintiff is not requiring D1 and D2 to re-purchase the Plaintiff’s shares in the PRC Companies under the Term Sheet, but the Plaintiff’s shares in Urway under the Shareholders’ Agreement.

(4) The Shareholder’s Agreement is governed by Hong Kong law and there is no suggestion that that Agreement is illegal under Hong Kong law.

(5) Clause 19 of the Shareholders’ Agreement stipulates that if one or more of the provisions are invalid, illegal, unenforceable or incapable of performance, it/they would not affect the validity of the remaining provisions.

(6) Even if PRC law is applicable, apart from a general denial, D1 and D2’ expert has not provided any basis to support his assertion that the violation of exchange control regulation invalidated the Shareholders’ Agreement, in particular, Clause 19, which came into existence well after payment of Tranche A. On the other hand, the Plaintiff’s expert states categorically that the violation would not affect the validity of the Shareholder’s Agreement.

50.For the reasons given in this Section, the Illegality Defence is not triable.

I. Misrepresentation Defence

51.In essence, it is alleged that Mr Zhao made certain representations to D1 and D2 as the agent of the Plaintiff, which would allow the Defendants to set aside the Term Sheet, the Subscription Agreement and the Shareholders Agreement. D1 and D2’s case against Mr Zhao is pitched at “intentionally or negligently” made false representation or misrepresentation (§5(c) of the Amended Defence).

52.Mr Pun submits that that a claim in misrepresentation can stand even if the misrepresentation was made by the agent of the other party, acting within the scope of his authority, or by someone with whom the other party shared a joint design to defraud and who thus was a joint tortfeasor; or that the other party had actual or constructive notice of the misrepresentation. See Chitty on Contracts (34^th ed) at 9-030.

53.Insofar as D1 and D2’ case is premised on negligence, there is no plea as to the existence of a duty of care. Insofar as it is intentional misrepresentation, there are no particulars of falsity.

54.More importantly, even if those misrepresentations were made, there are no pleaded facts or evidence (such as express appointment or holding out by the Plaintiff) to show that Mr Zhao was the Plaintiff’s agent or that the Plaintiff was aware of those misrepresentations. Even D1 admits that he had never met Mr Darwin Cheung, the sole director and shareholder of the Plaintiff. They had only met Eric Cheung and they were not even clear if he could represent the Plaintiff.

55.The Misrepresentation Defence is not triable.

J. CONSPIRACY DEFENCE

56.To establish a conspiracy, there are 4 elements:

(1) The agreement between two or more persons. The means of carrying out the agreement, whether lawful or unlawful, must be set out;

(2) The intention to injure the plaintiff;

(3) The acts that were carried out pursuant to the agreement and the stated intention;

(4) The damage caused to the plaintiff.

57.Fraud and dishonesty should not be inferred from pleaded facts that are consistent with honesty.

58.See a statement of principles by this Court in Chan Shu Chun v Dr Kung Yan Sum and ors, [2023] HKCFI 840, §143-153

59.The pleaded case in the draft Re-Amended Defence & Counterclaim is that Mr Zhao and the Plaintiff conspired to implement arrangements with the intention of defrauding and injuring the Defendants. In return, Mr Zhao gained 10% shares of each of the PRC Companies without paying a cent and the Plaintiff can claim the high interest of 25% per annum. The fact that the Plaintiff chooses to sue D1 and D2 only and not Mr Zhao and his company and that Mr Zhao is now acting as the Plaintiff’s witness and made admission against D1 and D2’ interest support D1 and D2’ case in this regard.

60.First of all, the draft pleas do not identify the 4 elements of Conspiracy and fraud with particulars.

61.Secondly, Mr Pun concedes that if there was no agency relationship between the Plaintiff and Mr Zhao, the Conspiracy Defence has no leg to stand on. He is correct. In particular, D1 and D2 would have failed simply on the first element of conspiracy.

62.Mr Chong submits that the Conspiracy Defence does not make sense. The Plaintiff was merely an investor who wanted to make a substantial return from the IPO. The Defendants were running a business who also wanted to achieve the IPO.

63.In my view, the Plaintiff’s conduct was equally consistent with honesty and a claim in conspiracy or fraud cannot be properly constituted.

K. Specific Performance Defence

64.Even if there is no fraud or misrepresentation sufficient to justify the rescission of the contract, the court may still refuse the equitable remedy of specific performance if the conduct of the plaintiff has been tricky or unfair, or he has not come with clean hands: Quadrant Visual Communications Ltd and others v Hutchison Telephone (UK) Ltd and Anor [1993] BCLC 442, 451c-g, Butler-Sloss LJ.

65.Moreover, a court of equity would refuse to allow damages for breach of contract in a case in which it is of opinion that the contract is vitiated, for it is unconscientious for a person to avail himself of legal advantage which he has obtained. Mr Pun relies on Buckley v. Irwin [1960] N.I. 98 for this proportion.

66.The Plaintiff has allegedly not come with clean hands because he would benefit from “washing money with unknown source with intention to turn it into legal funds”. With respect, this submission suggesting money-laundering is not backed up by evidence at all and should not have been made in the first place.

67.Mr Pun also contends that if the Plaintiff chooses to exercise its right under Clause 4.6 of the Shareholders Agreement, it has to be exercised against the Founders or the Founder Companies but not both. And if the Plaintiff proceeds against the Founders, it has to exercise its right against all the Founders and not only 2 of them.

68.With respect, I am unable to agree with Mr Pun’s restrictive construction of Clause 4.6. All that that Clause means is that the Plaintiff has the option to sue any or any combination of Founders and Founder Companies. It cannot be a proper approach to litigation that the Plaintiff is still obliged to sue Mr Zhao who does not dispute the Plaintiff’s claim.

69.Moreover, Mr Pun’s submission is contrary to the law. Where the liability of two or more persons is several, or joint and several as well as joint, the plaintiff may choose which of them he wishes to sue and he need not join, nor can he be compelled to join, the other persons also liable to him even if their liability is under a joint contract only. If the defendant desires to obtain a contribution from the other joint contributors, he may do so by making his claim under Section 5 of the Civil Liability Contribution Ordinance, Cap 377, or at common law, but this is no longer of any concern to the plaintiff. The defendant is no longer entitled to apply that all the persons jointly liable should be joined by the plaintiff as defendants in the action, and that unless and until he did so, the action should be stayed. See Hong Kong Civil Procedure 2024, Vol 1, §15/4/14. The fact that the Plaintiff did not sue the other Founders would not negate the Plaintiff’s case at all.

70.Mr Pun’s submission is also wrong as a matter of fact, because the Plaintiff has in fact exercised the right against all 3 Founders, including Mr Zhao by a letter dated 1 December 2020, before the New Action was issued.

L. CONCLUSION ON APPEAL AGAINST SUMMARY JUDGMENT

71.It is clear from the above analyses that there are no triable issues. Accordingly, I dismiss D1 and D2’ appeal in the Old Action. There shall be an order nisi for D1 and D2 to bear the Plaintiff’s costs.

72.The Plaintiff’s cross-appeal was taken out as a matter of caution to face the potential argument that the Plaintiff’s election to require D1 and D2 to purchase the Plaintiff’s shares was made after the Old Action has commenced. Order 18, rule 19 now provided that a party may plead a matter that has arisen at any time, whether before or since the issue of the writ: Hui Tze Ha, the sole executrix of the estate of Lam Yim (deceased) v Ho Yuet Lin [2021] HKCFI 1901, at §§43-44, DHCJ MK Liu. This is particularly so since the post-writ cause of action is closely tied to the cause of action in the original claim. Accordingly, there is no need to make any order in this appeal in the New Action. On a nisi basis, I make no order as to costs.

73.Given this decision, there is no need to consider security for costs against the Plaintiff.

M. AMENDMENT SUMMONS

74.Given the dismissal of the D1 and D2’ appeal despite having considered the draft re-amendments, I dismiss the Amendment Summons as regards D1 and D2. On a nisi basis, D1 and D2 should bear the costs of the Plaintiff.

75.Most of the draft re-amendments concern D1 and D2. It is not clear whether or not D3 and D4 still want to pursue some or all of the re-amendments or adjust the wording having regard to the outcome of this appeal. I adjourn the Amendment Summons as regards D3 and D4. Within the next 14 days, D3 and D4 shall provide a fresh set of draft re-amendments, if so advised, failing which the Amendment Summons shall stand dismissed with costs to the Plaintiff to be summarily assessed. Should they file a fresh set of draft re-amendments, I shall give directions then.

76.I summarily assess all of the Plaintiff’s costs and allow the sum of $140,000.

77.I thank counsel for their assistance.

Mr. Patrick Chong, instructed by Howse Williams, for the Plaintiff in both actions

Mr. Chase Pun, instructed by Yan Lawyers, for the Defendants in both actions