Li San Chi v. Alpha Watch and Jewellery Ltd and Others

DCCJ 2069/2025

[2026] HKDC 1124

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 2069 OF 2025

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BETWEEN

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DECISION

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INTRODUCTION

1.There are three applications before the Court, namely:-.

(a)  The application of the 1^st Defendant (“D1”)  and the 3^rd Defendant (“D3”)  dated 21 May 2025 to strike out the Writ of Summons and the Statement of Claim on the ground that it discloses no reasonable cause of action against D1 and D3;

(b)  The application of the 2^nd Defendant (“D2”)  dated 13 June 2025 to strike out the Writ of Summons and the Statement of Claim on the same ground (the two striking-out applications are collectively referred to as the “Striking-out Applications”);

(c)  The application of the Plaintiff (“P”)  dated 12 February 2026 to amend the Statement of Claim (“Amendment Application”).

2.At the hearing, P was represented by Mr Jason Tang, D1 and D3 by Mr Simon So and Mr Herman Ho, and D2 by Mr Kenny Lau.

3.Counsel agreed, correctly in my view, that the Court should focus on the Amendment Application.  If the Court allows it, then, subject to the question of costs, the two Striking-out Applications should be dismissed.  Conversely, if the Court disallows it, the Writ of Summons and the Statement of Claim should be struck out and P’s claim against D1 to D3 be dismissed.

BACKGROUND

4.On 9 April 2025, P commenced the present action against D1, D2 and D3.  It is P’s pleaded case in the Statement of Claim (“SOC”)  that:-

(a)  On or around 1 November 2024, he met an unknown person (“Unknown Person”)  through Baidu (§2);

(b)  Subsequently, P engaged in several transactions with the Unknown Person exchanging Hong Kong dollars for Tether (“USDT”), a cryptocurrency, between 1 and 5 November 2024 (§2);

(c)  The transactions were conducted in cash at money exchange shop 805 located in the Energy Plaza Shopping Arcade (“Shop 805”).  A person whose identity was not known to P would Shop 805 on behalf of the Unknown Person and take the cash from P; and the Unknown Person would transfer the corresponding amount of USDT to P’s e-wallet;

(d)  On or around 11 November 2024, the Unknown Person expressed his intention to exchange HK$2 million for 261,438 units of USDT.  The Unknown Person instructed P to execute the transaction at the 1^st Defendant’s shop at G/F, 25 Granville Road, Tsim Sha Tsui (“D1’s Shop”)  at 2 p.m. on 12 November 2024 and to pay HK$2 million in cash to the staff at D1’s Shop.  P agreed to the arrangements despite expressing concerns about his safety to the Unknown Person (§4);

(e)  At around 2 p.m. on 12 November 2024, P arrived at D1’s Shop and was instructed by the Unknown Person via WhatsApp to pass the $2 million cash to a staff (whose identity was unknown to P).  P followed the instruction and handed the $2 million cash to the said staff accordingly (§5);

(f)  Given that the amount of transaction was large, the Unknown Person first transfer 100 units of USDT to P to ensure that the remaining USDT could be received by P.  The 100 units of USDT was successfully transferred and received in P’s e-wallet.  However, the remaining 261,338 units of USDT was never received by P and the Unknown Person could not be contacted afterwards (§6);

(g)  Despite repeated protests by P, another staff of D1 (whose identity was also not known to P), took the $2 million cash and carried it into the back office of D1’s Shop, and refused to return the same to P (§7);

(h)  P immediately reported to the Police.  According to the Police, D2 and D3 were arrested.  The Police investigation was still on-going (§§8-9); and

(i)  As a result, P suffered a loss of HK$1,999,235 (“Sum”)  (§10).

5.P alleges that :-

(a)  D1 to D3 are holding the Sum as constructive trustees for and on behalf of P.  By retaining the Sum and not accounting to P for the same, D1 to D3 are in breach of the trust and/or fiduciary duties owed to P (§§11-12);

(b)  D1 to D3 are liable to return the Sum on the basis of knowing receipt (§13);

(c)  D1 to D3 have been unjustly enriched by the Sum at the expense of P. It is unconscionable for D1 to D3 to retain the benefit of the Sum and they are liable to give restitution of the Sum to P (§§14-19);

(d)  D1 to D3 assisted and/or facilitated the Unknown Person by lending themselves as a conduit to receive the Sum, resulting in loss to P (§20); and

(e)  In collaboration with each other and/or with other persons unknown (including the Unknown Person), D1 to D3 had an agreement to act in conspiracy with the predominant intent to injure P and/or to conspire to use unlawful means to cause damage to P, namely misappropriating the Sum (§§21-23).

6.P claims against Ds for the Sum.

7.On 10 June 2025, Mr Lau sent a letter to P’s then counsel referring to an earlier conversation between them on 6 June 2025 where Mr Lau indicated D2’s intention to strike out the SOC and P’s then counsel confirmed that P would not make any application to amend the SOC. In the said letter, Mr Lau expressed his view that P’s claim against D2 was wholly misconceived and unmeritorious, and invited P to wholly discontinue the claim against D2. 

8.Similarly, on 12 May 2025, Mr So sent a letter to P’s then counsel indicating D1 and D3’s intention to strike out the Statement of Claim as against them on the ground that it disclosed no reasonable cause of action because of the problems identified in the said letter.  Mr So invited P’s Counsel to take instructions as to whether P would like to make any amendment to the SOC. 

9.As there was no response from P, Ds took out the Striking-out Applications on 21 May 2025 and 24 June 2025 respectively.

10.At the call-over hearing before Master Vivian Lee on 24 June 2025, P, acting in person, confirmed that he had no intention to amend the SOC.  Upon P’s separate application, the 4^th Defendant (“D4”)  was joined as a defendant in the present case at the same hearing.

11.The substantive hearing of the Striking-out Applications was scheduled to be heard by Deputy District Judge Ebony Ling on 6 October 2025. 

12.On 3 October 2025, P indicated that he had applied for legal aid and sought a stay.  Deputy District Judge Ebony Ling adjourned the substantive hearing of the Striking-out Applications to another date to be fixed. 

13.On 12 February 2026, P (who was legally represented)  took out the Amendment Application.  In the draft Amended Statement of Claim (“ASOC”)  annexed to the Summons, P has made extensive and large-scale amendments.  The most significant changes are as follows:-

(a)  At §5:

SOC	ASOC
“At around 2 pm on 12 November 2024, [P] arrived at [D1’s] Shop and was instructed by the Unknown Person via WhatsApp to pass the Physical Money to a staff. [P] did hand the Physical Money to the said staff. The identity of the said staff is not known to the Plaintiff …”	“At around 2pm on 12 November 2024, [P] arrived at [D1’s] Shop and was instructed by the Unknown Person via WhatsApp to pass the Physical Money to [D1] and/or [D2]. Upon arrival at [D1’s] Shop, [P] took out the Physical Money and placed it on the counter. [D3] then collected the Physical Money and had it counted on the spot”

(b)  At §7:

SOC

ASOC

In the meantime, despite protests by [P], another staff of [D1] (the identity of which is not known to the Plaintiff), took the physical money and carried it into the back office of [D1’s Shop, and refused to return the same (or parts thereof)  to [P] …

“When [P] informed [D2] and/or [D3] that he had not received the remaining 261,338 USDT, [D2] and/or [D3] claimed that they would liaise with the corresponding person(s). However, after a few phone calls, [D3] insisted that the USDT had been transferred out and that they should now retain the Physical Money. Subsequent-ly, [D3][1] took the Physical Money into the back office of [D1’s] Shop.  [P] could not retrieve the Physical Money from [D1’s] Shop, as it was entirely under the control of [D2] and/or [D3]. especially after it was taken into [D1]’s back office.”

LEGAL PRINCIPLES

14.Mr Tang submitted that the principles governing amendment of pleadings are well-established, namely:-

(a)  It is a guiding principle of cardinal importance on the question of amendment that generally speaking, all such amendments ought to be made “for the purpose of determining the real question in controversy between the parties to any proceedings or of correcting any defect or error in any proceedings”; Hong Kong Civil Procedure 2026, §20/8/6;

(b)  It is a well-established principle that the object of the Court is to decide the rights of the parties, and not to punish them for mistakes they make in the conduct of their cases by deciding otherwise than in accordance with their rights (Ibid);

(c)  As soon as it appears that the way in which a party has framed his case will not lead to a decision of the real matter in controversy, it is as much a matter of right on his part to have it corrected if it can be done without injustice, as anything else in the case is a matter of right; Hong Kong Civil Procedure 2026, §20/8/6;

(d)  However negligent or careless may have been the first omission, and however late the proposed amendment, the amendment should be allowed if it can be made without injustice to the other side.  There is no injustice if the other side can be compensated by costs.  An amendment ought to be allowed if thereby the real substantial question can be raised between the parties, and multiplicity of legal proceedings avoided (Ibid); and

(e)  The court is entitled to have regard to the merits of the case in an application to amend if the merits are readily apparent although a prolonged investigation into the merits of the case is inappropriate (Ibid).

15.On the other hand, Mr So submitted that:-

(a)  In the particular context of the present case where there is both an application to amend and an application to strike out, the Court would look at the proposed amendment and see if it could survive the striking-out application. If the amended pleading should not be struck out, the amendment application would be allowed with the striking-out application dismissed. Yet, if the proposed amendment could not survive the striking-out application, it would be futile to allow the application: LY Gropd Development Ltd v East Canton Ltd[2015] 4 HKLRD 84 at [12]-[13];

(b)  If an amendment was so far-reaching or so radical which amount to a totally new pleading which would probably provoke a fresh application to strike out, the correct course is to strike out; Cheung Chui Sou Ying v Personal Reps of Cheung Yuk Leun [1981] HKLR 585; and

(c)  Where the Court considers that an amendment is sought just to avoid a striking out application, the Court will scrutinize such application on “strike out” principles: Tsang Foo Keung v Chu Jim Mi Jimmy, HCA 7140/1995, 8 October 2013 at [6].

16.Mr Lau adopted Mr So’s submissions and added that it may be an abuse of process for a party, with full knowledge of the facts, to advance a claim that is diametrically opposed to its position taken in an earlier set of proceedings.  In considering what constitutes an abuse of process, an important factor in determining whether it is an abuse of process is to see whether there is any explanation why diametrically inconsistent cases have been advanced by a party in different proceedings; Chu Yue Bun v Lai Shiu Woon [2021] HKCA 1929 at [35].

THE PARTIES’ SUBMISSIONS

17.It was Mr So’s submissions that:-

(a)  The ASOC was introduced to avoid the Striking-out Applications;

(b)  The proposed amendments in the ASOC were extensive and large-scale;

(c)  There was substantial change of case.  As regard the person who received the $2 million cash in D1’s Shop, it was changed from “not knowing who that person was” to “that person being D2 and/or D3”.  There is no explanation on why the case was changed, particularly when P had signed the Statement of Truth for the SOC;

(d)  P had previously indicated by his Counsel (not Mr Tang)  or himself (when acting in person)  at various hearings that there would be no further amendment to the SOC.  It begged the question of the basis that P could now say that the persons who received the $2 million cash in D1’s Shop was D2 and/or D3; and

(e)  Even in the ASOC, P deliberately used the connective term “and/or” when referring to D2 and D3.  This indicated that he was still not sure about the number of persons(s)  he came into contact and the true identity of those persons.

18.Mr So further submitted that, when one objectively viewed all the matters before the Court, one could not help but to reach the conclusion that the Amendment Application was only taken out with a hope to avoid the SOC being struck out.  P clearly remained not knowing the identity of the person he allegedly dealt with in D1’s Shop and, as such, P had no choice but to amend to say that this unknown person was “D2 and/or D3”.  There was no hope that P could in fact prove the exact identity of this unknown person.  Had P possessed such knowledge, he would have been able to succinctly and clearly who this particular person is instead of trying to muddle up the water by using the connective “and/or”. 

19.Mr So argued that, if a pleading is hopeless, the Court should not tolerate the litigation to continue and should not hesitate to strike out the claim. 

20.Mr Lau adopted Mr So’s submissions.  Relying on Chu Yue Bun, Mr Lau further argued that P’s new case in the ASOC was so “dramatically opposed” to his case in the SOC  that it amounted to an abuse of process and should be struck out.

21.On the other hand, Mr Tang submitted that:-

(a)  The question was whether the case in the ASOC was bound to fail.  He submitted that whether the said case would succeed was a matter for trial and should not be summarily determined at this very early stage when Ds had not yet filed their Defence;

(b)  As D1 was a company, the person whom the Unknown Person instructed P to “pass the Physical Money” to must be, on proper interpretation, D2; and the relationship between D1 and D2/D3 had been pleaded at §1.3 of the SOC[2] and at §§1.2 and 1.3 of the ASOC[3];

(c)  The case in the ASOC was not “dramatically opposed” to the case in the SOC.  The ASOC was only “to clarify and to reinforce P’s case”.  Further, he argued that Chu Yue Bun involved a party putting forward two opposite cases in two different proceedings which was wholly different from the present case.  If D2’s argument were right, then effectively every party had only one chance to plead his case and this was against common sense and the underlying objectives of CJR, i.e. to secure just resolution of disputes in accordance with the substantive rights of the parties;

(d)  At this very early stage, it was sufficient for P to plead the general nature of his case for Ds to answer; and

(e)  The limitation period had not expired and therefore P could commence another action against Ds if the present case was struck out.  To allow the Amendment Application would achieve costs saving and avoiding multiplicity of litigation.

DISCUSSIONS

22.I agree with Mr So and Mr Lau that changes of P’s case in the ASOC are significant, particularly on the following issues:-

(a)  The person to whom the Unknown Person instructed P to pass the $2 million cash:  In the SOC, P alleged that it was “a staff” but, in the ASOC, it was changed to D1 and/or D2;

(b)  The person who took the $2 million cash and how:  In the SOC, P alleged that he handed the $2 million cash to the said “unknown staff” but, in the ASOC, P changed to say that he placed the cash on the counter and it was D3 who collected it;

(c)  The person who brought the $2 million cash to the back office: In the SOC, P alleged that it was “another staff of D1” (whose identity was also unknown to him)  who did it.  In the ASOC, P changed to say that it was D3 who took the cash into the back office.

23.I do not find it unnecessary to determine whether the principles in Chu Yue Bun are applicable to the present case or whether the case pleaded in the ASOC is “dramatically opposed” to the one pleaded in the SOC.  Suffice it for me to say that, given the significant amendments in the ASOC, particularly as regards the involvement and the role of D1, D2 and D3 in the incident, it is incumbent upon P to explain the reasons for changing his case.

24.I appreciate that police investigation takes time and the victim may not have all the information when he commences the proceedings.  When more information is later revealed from police investigation, the victim may need to amend the pleadings.

25.This appears to be the reason for the amendment at §8 of the ASOC where it is pleaded that “… before the Police arrived, [D4] attended [D1’s] Shop and secretively removed the Physical Money (or parts thereof)  from [D1’s] Shop upon the 1^st, 2^nd and/or 3^rd Defendants’ instructions” and P “only realized the removal upon later reviewing the CCTV footage provided by the Police”.  There is, however, no plea of such reason at §§5 and 7 of the ASOC.

26.I agree with Mr So’s submissions that D1 to D3 were joined as parties when P commenced the proceedings in April 2025, and that P owed an explanation as to why he pleaded in the SOC (and signed the Statement of Truth)  that the $2 million cash was given to an “unknown staff” and that “another unknown staff” took it into the back office, without pinpointing any of Ds.  There is no suggestion, let alone any evidence, that P only recently found out that the two “unknown staff” were D2 and D3 respectively because of any newly available evidence.

27.It was not disputed by Mr Tang that P had repeatedly confirmed to the Court, including at the call-over hearing before Master Vivian Lee on 24 June 2025 when P was acting in person, that there would be no amendments to the SOC.  Thus, the question is what happened after June 2025 that triggered the Amendment Application.

28.As no affidavit was filed in support of the Amendment Application, I explicitly asked Mr Tang at the hearing whether he would like to apply for an adjournment in order to file one to explain the reasons for P’s changes of cases on the incident occurred on 12 November 2024 in D1’s Shop and, in particular, the involvement of D1, D2 and D3.  After discussing with those instructing him, Mr Tang confirmed that he had no instructions to apply for adjournment. 

29.It was P’s decision not to file any affidavit in support when he took out the Amendment Application and not to seek an adjournment to do so at the hearing.  Mr Tang did not explain the reasons, and I did not consider it necessary to inquire further.

30.In my view, P’s failure to file an affidavit providing evidence to explain the reasons for changing his case on Ds’ involvement is fatal to the Amendment Application.  If the case goes to trial, P would definitely be asked about the changes of case.  If P cannot give any explanation now, it is most unlikely that he would be able to provide any credible explanation at trial and, in the absence of the same, his new case is bound to fail. 

31.I take the view that the lack of explanation strongly indicates that the Amendment Application was taken out merely for the purpose of avoiding the Striking-out Applications.

32.As to Mr Tang’s argument that it is still an early stage of the proceedings and that it is sufficient for P to plead only the general nature of his case, I am of the view that it is misplaced.  The complaint is not about the sufficiency of the particulars provided in the SOC; the complaint is on his significant changes of case in the ASOC in respect of the involvement and role of D1 to D3.

33.As to Mr Tang’s argument that P can commence a new action against Ds if his present claim is struck out, it is of course up to P to consider whether he wishes to do so in such circumstances, and it is equally up to Ds to consider whether any appropriate application should be taken out if P does so.  At this stage, however, I do not think I should give this any consideration.

CONCLUSION

34.By reason of the aforesaid, I dismiss the Amendment Application.  Following the parties’ agreement, I strike out the Writ of Summons and the Statement of Claim insofar as they concern D1 to D3, and dismiss P’s claim against D1 to D3.  As for P’s claim against D4, I leave it as it is and let P to consider whether to pursue it or not.

35.I order, on a nisi basis, that P do pay Ds’ costs of the Striking-out Applications and the Amendment Application (including any costs reserved)  to be taxed if not agreed, with a certificate for counsel.  The costs order nisi shall become absolute unless an application to vary it is made within 14 days from the date of this Decision.

36.Mr So and Mr Lau invited the Court to consider awarding costs on an indemnity basis because of P’s unreasonable conduct, such as ignoring Mr So and Mr Lau’s letters, applying for legal aid shortly before the hearing on 6 October 2025 resulting in an adjournment, and making a belated Amendment Application despite previous indications that no amendment was required.

37.Having considered all the circumstances of the present case, I do not consider this a suitable case for costs on an indemnity basis.  Ds’ costs will be taxed on a party-and-party basis.

38.I thank Counsel for their helpful submissions.

Mr Jason Tang, instructed by S H Chan & Co, for the Plaintiff

Mr Simon So and Mr Herman Ho, instructed by Oldham, Li & Nie, for the 1^st and 3^rd Defendants

Mr Lau Hon Wang Kenny, instructed by B Manek & Co, for the 2^nd Defendant