LUEN TAT WATCH BAND MANUFACTURER LTD v. STEPHEN LIU YIU KEUNG AND ANOTHER

HCA 1397/2018

[2026] HKCFI 3259

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1397 OF 2018

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DECISION

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Introduction

1.  P commenced this action to claim against Ds who were its former joint and several liquidators for damages resulting from their alleged wrongdoings committed in the course of their administration of its affairs (“this Action”). By summons dated 9 July 2025 (“the Summons”), Ds seek further and better particulars of the Statement of Claim filed on 9 December 2020 (“the SOC”) and the Amended Reply filed on 7 December 2023 (“the Reply”).

2.  This is the substantive hearing of the Summons. P opposes the application. Mr Ng appears for P and Mr Hui appears for Ds.

Background facts

3.  Mr Ng in his written submissions provides a summary of the background facts which is not disputed by Mr Hui. I shall adopt his summary with minor modifications as follows.

4.  P is a company set up by Mr Lee Sai Nam (“Late Father”). At all material times before his death, Late Father was the beneficial owner of P. Li Shu Chung Ken (i.e., Ken Li) and Lee Shu Hang (“Richard Lee”) held Late Father’s shares in P on trust by for him. Li Sin Man Seline (“Seline Li”) is the sister of Ken Li and Richard Lee.

5.  On 6 August 2009, Late Father commenced HCA 1711/2009 (“the Main Action”) for a declaration that he was the sole beneficial owner of all the shareholdings in, inter alia, P.

6.  Further, on 17 August 2009, Late Father commenced the petition proceedings under HCCW 497/2009 (“the Petition”) to wind up P on just and equitable grounds. By an order dated 6 July 2010, P was wound up by the Court.

7.  On 13 October 2010, Ds were appointed as P’s joint and several liquidators.

8.  The case of P is that since their appointment, Ds have allegedly committed various egregious wrongdoings in office, including but not limited to actively pursuing Ken Li’s interest and creating work and profits for themselves, acting in bad faith and having an intention to benefit themselves to the prejudice of the persons who are interested in P’s assets, and exercising their power with an irrational preference in favour of Ken Li and against Late Father.

9.  Late Father passed away in around August 2014.

10.  By a judgment in the Main Action dated 9 December 2015 (“the Main Action Judgment”), DHCJ Leung (as he then was) (“the Trial Judge”) held in favour of Late Father. The Court of Appeal dismissed the appeal of Ken Li against the Main Action Judgment by the judgment dated 19 January 2017 (“the CA Judgment”).

11.  Further, by a decision dated 27 November 2017 (“the Removal Decision”), DHCJ To acceded to the application of the petitioner in HCCW 497/2009 (“the Petition”) to remove Ds as P’s liquidators (“the Removal Application”) with an indemnity costs order against Ds. The removal was based upon findings against Ds for six heads of misconduct. In the Removal Decision, DHCJ To made criticisms against Ds.

12.  Ds’ appeal against the Removal Decision was dismissed by the Court of Appeal by a Judgment dated 27 April 2021 (“the Appeal Judgment”).

13.  After the removal of Ds, P commenced this Action on 15 June 2018.

P’s claims in this Action

14.  Altogether P has pleaded 15 alleged wrongdoings against Ds. The particulars which Ds are seeking concern a particular group of P’s complaints about Ds’ failure or refusal to commence legal proceedings to pursue certain claims on behalf of P. Mr Hui characterizes such claims as follows:

(a)  The misappropriation of HK$28 million (“the Sum”) from P by Ken Li, a former director of P from 5 February to 26 May 2009 (“the Misappropriation Claim”);

(b)  The diversion of accounts receivables by Ken Li from P to a Mainland company named Lianda Metal Watchband (Shenzhen) Co Ltd (“Shenzhen Lianda”) which was controlled by Ken Li and/or his associate (“the Accounts Receivables Diversion Claim”);

(c)  The diversion of businesses and orders by Ken Li from P to companies owned and/or controlled by him and/or his associate since June 2009 (“the Business Diversion Claim”); and

(d)  Claims against David Cho of Mazars CPA Limited (“Mazars”) for negligence tax advice given to P in 2002 (“the Negligence Claim”)

15.  By the Summons, Ds make 14 requests. At the outset, it should be noted that P has twice provided further and better particulars to Ds previously and it has just taken out a summons dated 9 March 2026 (“the Amendment Summons”) to amend its Statement of Claim as per the draft attached to the summons. Mr Hui confirms that Ds still find it necessary to seek further and better particulars notwithstanding the answers previously given and the proposed amendments to the Statement of Claim.

16.  Before examining each of the 14 requests, a review of the following relevant principles is helpful.

Applicable legal principles

17.  O.18 r.12(3) and (3B), Rules of the High Court provide,

“(3) The Court may order a party to serve on any other party particulars of any claim, defence or other matter stated in his pleading, or in any affidavit of his ordered to stand as a pleading, or a statement of the nature of the case on which he relies, and the order may be made on such terms as the Court thinks just.”

“(3B) No order shall be made under paragraph (3) unless the Court is of the opinion that the order is necessary either for disposing fairly of the cause or matter or for saving costs.”

18.  As to how the discretion to order particulars should be exercised, Mr Ng helpfully refers to Taching Petroleum Company Limited v Meyer Aluminium Limited [2020] HKCT 2 in which Au-Yeung J said this at §§131-135,

“Pleadings should clearly elicit the issues to enable the other side to know what case he is going to meet and to marshal the required evidence to meet such case, and FBPs are to facilitate this so as to eliminate surprise and achieve fair and open litigation between parties.” (at §133(1))

“Order 18 rule 12(3B) provides that FBP should not be ordered “unless the Court is of the opinion that the order is necessary either for disposing fairly of the cause or matter or for saving costs”. This highlights the emphasis on procedural economy, proportionality and cost-effectiveness in the post-CJR culture that encourages parties not to engage in interlocutory skirmishes over FBP unless there is a genuine need to clarify the opposite party’s case to ensure fairness and to avoid cost-wasting.” (at §133(2))

“It is inappropriate to make requests for FBP with a view to cross-examine the other side or to expose some weaknesses of the pleaded case of the other side.” (at §133(3))

The Final Report of the Chief Justice’s Working Party on CJR states that “… [G]iven the modern practice of requiring witness statements, expert reports and so forth to be exchanged, satellite litigation merely to clarify pleadings is seldom necessary. A pleading which conveys the nature of a party’s case, stating the material facts, should not attract an application for particulars even if certain details (which are peripheral or likely to emerge in the usual course) are not disclosed. … unnecessary applications should attract appropriate costs sanctions.” (at §134)

“It is for the applicant for FBP to satisfy the court that the order is necessary either for disposing fairly of the cause or matter, or for saving costs. It is not enough for him to merely show that the particulars requested are relevant.” (at §135)

19.  Mr Ng further draws to my attention what Lord Woolf MR (as he then was) said about applications for further and better particulars in McPhilemy v Times Newspaper Ltd [1999] 3 All ER 775 from pp 792j to 793c. In gist, it was observed that the requirement of exchange of witness statements has reduced the need for extensive pleadings including particulars. Given discovery of relevant documents and exchange of witness statement, the detail of the nature of the case that the other side has to meet should be obvious. As such, pleadings should contain no more than concise statements of the material facts.

20.  With these principles in mind, I turn to the requests and assess their merits individually.

Analysis

Requests (1) to (5)

21.  Requests (1) to (5) relate to the Misappropriation Claim.

22.  Briefly stated, the Misappropriation Claim is based on the allegations that Ken Li caused Seline Li to pay HK$28 million (“the Sum”) from Yuen Hing Enterprise Macao Commercial Offshore Ltd (“Yuen Hing”) by “misrepresentations and/or deceitful conducts”. Yuen Hing was incorporated in Macau as a treasury of P and its associated companies and Seline Li was in charge of Yuen Hing. Yuen Hing played a pivotal role in a re-invoicing scheme (“the Re-invoicing Scheme”) deployed by P to reduce its tax liability.

23.  P’s allegation is that Ken Li misrepresented to Seline Li that such payments had been approved by Late Father so as to cause her to make such payments to him.

24.  P accuses Ds of refusing to take any action on its behalf against Ken Li despite their clear knowledge of the circumstances of his misappropriation of the aggregate sum of HK$28 million.

25.  Mr Hui submits that P must first establish that Ken Li did misappropriate the Sum so that he was liable to P for the said amount in the first place; otherwise, Ds’ alleged failure to sue Ken Li would not have caused any loss to P. Hence, D should be allowed to challenge the alleged misappropriation.

26.  Mr Hui further submits that the particulars sought are material facts that must be pleaded so as to enable Ds to understand fully P’s case.

27.  The primary objection of Mr Ng to these Requests is premised on the doctrine of res judicata and/or issue estoppel. Mr Ng submits that in any event sufficient particulars have been supplied to Ds in respect of the Misappropriation Claim.

28.  It is well-established that there are 3 essential conditions for the application of res judicata and/or issue estoppel:

(1)  The same question must have previously been decided;

(2)  The judicial decision which is said to create the estoppel must have been a final decision of a court of competent jurisdiction; and

(3)  The parties to the prior judicial decision (or their privies) must have been the same persons as the parties to the subsequent proceedings in which the estoppel is raised (or their privies).

29.  Mr Ng submits that the fact that Ken Li had misled Seline Li and/or deceitfully caused Seline Li to make payment had been finally and conclusively determined in the Removal Decision and affirmed in the Appeal Judgment. Thus, the Misappropriation Claim has been established and cannot be open to challenge by Ds in this Action.

30.  Mr Ng’s argument runs as follows. He submits that the Removal Decision was a decision in which the substantive rights of the parties were summarily determined and no leave to appeal was required. Thus, the Removal Decision gives rise to res judicata and/or issue estoppel between P and Ds.

31.  By the Removal Decision, DHCJ To ordered that Ds be removed as liquidators of P. It follows that the Removal Decision is a final judgment over the issues of Ds’ misconduct and their breach of fiduciary duties owing to P.

32.  Mr Hui disagrees. He points out P only pleads res judicata in its Amended Reply and it remains a contested issue at trial and should not be determined in the present application.

33.  Mr Hui next submits that in any event the Removal Decision was an interlocutory decision made on affidavit evidence only. It was merely concerned with whether the liquidation should be stayed and whether Ds ought to be removed as the liquidators of P. He submits that the civil liability as between Ken Li and P on the one hand and P and Ds on the other hand arising from the alleged misappropriation of Ken Li and the alleged breach of Ds of their fiduciary duties were not determined in the Removal Decision.

34.  Mr Hui reminds this court that absent the existence of an estoppel per rem judicatam, a judgment and factual findings of another court or tribunal in earlier proceedings, whether civil or criminal, are inadmissible in subsequent proceedings: Bank of Huludao Co., Ltd v Zhongying Int’l Holding Group Limited [2025] HKCA 978 at §25 per Ng J.

35.  The first question is whether the Misappropriation Claim was already decided in the Removal Decision. It is imperative to find out what exactly DHCJ To decided in the Removal Decision. At §§74-75, the learned deputy judge referred to the Main Action Judgment and said this about the Misappropriation Claim at §§74-75,

“74.  As was found in the Main Action, Ken caused Seline to pay $28 million from Yuen Hing to his personal accounts on the excuse that it was part of the $53.6 million of the Company’s profits kept by Yuen Hing.[1]  The court found that the excuse was false as there was no such profit kept in Yuen Hing’s account; the Father had never admitted that there was such sum in Yuen Hing’s account; and that Mazars’ calculation on which Ken’s excuse was based was misconceived. The court noted that “the claim was dropped to avoid complication as the same should now be matter for [the Liquidators]”. The court also dismissed Ken’s counterclaim for the balance of $25.6 million from this sum of $53.6 million. Ken appealed against the dismissal of his counterclaim but then abandoned it and was ordered to pay indemnity costs. On the basis of these findings, there was simply no such sum of $53.6 million profit kept in the account of Yuen Hing. Accordingly, Ken had misappropriated the sum of $28 million from Yuen Hing, which he caused Seline to pay to him. However, the Liquidators took no action against Ken to recover this sum.

75.  Yet, instead of pursuing Ken for this clearly misappropriated sum, the Liquidators insisted on pursuing the Father and Yuen Hing for the balance of $25.6 million allegedly kept in Yuen Hing’s account, which the court had held did not exist[2]. The Liquidators’ action in the face of the court’s findings was absurd. It demonstrates irrational preference in favour of Ken and against the Father. It also gives rise to loss of confidence in the Liquidators by the Petitioner.”

36.  In the Appeal Judgment, Cheung JA first reviewed the Main Action Judgment and noted the Trial Judge’s rejection of the purported defence of Ken Li to the Misappropriation Claim, though dropped by Late Father in the course of the trial.

37.  Then, Cheung JA referred to the finding of DHCJ To in §75 of the Removal Decision cited above. Cheung JA noted that the basis of this finding is that despite Ken Li’s misappropriation of the Sum from Yuen Hing by causing Seline to pay the same to him, Ds took no action against Ken Li to recover the Sum.

38.  Cheung JA upheld this finding and at §7.51 said this,

“In our view, the starting point is that, as found by Judge Leung, there was no $53.6 million in existence and there was no idle cash being kept in Yuen Hing’s account because it was needed for expenses and distributions. Relying on this fictitious $53.6 million, Ken misappropriated $28 million of Luen Tat’s money: $4 million directly from Luen Tat and $24 million drawn by eleven cheques from Yuen Hing. Judge Leung held in [220] of his judgment that Ken was able to retrieve the money from Yuen Hing allegedly in partial settlement of his share of profits only after ensuring that it was put in funds by Luen Tat. With this clear finding, the Liquidators took no action against Ken to recover the $28 million belonging to Yuen Hing. The Liquidators’ argument that they had no locus to sue Ken because the $28 million was Yuen Hing’s money and not Luen Tat’s money is clearly not sustainable in the light of these findings. In any event, the locus argument was not raised below. The Liquidators are now barred from raising this argument because of the Flywin principle. The Judge had not forgotten that the Liquidators had also previously rejected Ken’s proof and also had sued Ken. This, as the Petitioner submitted, paled in comparison with the other actions taken by the Liquidators in this case. Again by reference to the stance of the Liquidators in the pre‑litigation correspondence, Judge To’s finding that the Liquidators’ action demonstrated an irrational preference in favour of Ken and gave rise to loss of confidence in the Liquidators by the Petitioner cannot be faulted.”

39.  Thus, it can be seen that DHCJ To did not actually make any factual finding about the Misappropriation Claim on affidavit evidence himself. The learned deputy judge merely relied on the findings of the Trial Judge in the Main Action Judgment. Nor did the Trial Judge determine the Misappropriation Claim, which had been abandoned by Late Father and left to be pursued by the liquidators of P.

40.  Given the abandonment of the Misappropriation Claim, the Trial Judge did not expressly make a factual finding that Ken Li misappropriated the Sum from Yuen Hing being the funds of P. It appeared to be common ground that Ken Li had indeed caused the Sum to be paid to his personal account from Yuen Hing. Ken Li contended that such payments were his share of profits with the knowledge of Seline Li. In his determination of the counterclaim of Ken Li, the Trial Judge rejected the contention of Ken Li and found that Ken Li did not have any entitlement to the funds in the account of Yuen Hing as his share of profit distribution at all. The Trial judge further refused to accept that Seline Li indirectly acknowledged Ken Li’s alleged entitlement by her handling of the transfers of the Sum to the personal account of Ken Li.

41.  The flip side of these findings is that Ken Li had no legitimate reason to cause Seline Li to transfer the Sum from Yuen Hing to his personal account. This forms the solid basis for the Misappropriation Claim.

42.  On this basis, DHCJ To concluded that Ken Li misappropriated the Sum from Yuen Hing by causing Seline Li to make the payments. The learned deputy judge found that P had a valid claim for the “clearly misappropriated sum” and so Ds should have pursued this claim against Ken Li to recover the Sum for P. The learned deputy judge held that their failure to do so was a breach of their fiduciary duties owing to P and constituted a valid ground for their removal.

43.  It is noteworthy that neither Ken Li nor Ds challenged Ken Li’s misappropriation of the Sum in the Removal Application. It is apparent from the Appeal Judgment that there was no debate about Ken Li’s misappropriation of the Sum too.

44.  In the premises, the following determinations were made by DHCJ To in the Removal Decision (“the Determinations”):

(1)  Ken Li caused Seline Li by a false excuse to transfer the Sum from Yuen Hing to his personal account without legitimate reasons. It follows that Ken Li misappropriated the Sum;

(2)  P was the beneficial owner of the Sum; and

(3)  Ds have failed to make a claim against Ken Li for the Sum clearly misappropriated by him and their inaction in face of the findings in the Main Action Judgment was absurd.

45.  DHCJ To was tasked with determining the substantive rights between P and Ds in the Removal Application. The Determinations formed the factual basis for his conclusion that Ds should be removed. By the Removal Decision, the substantive rights between the petitioner and Ds were summarily determined. I am of the view that the Removal Decision was, to all intents and purposes, a final decision.

46.  P was represented by Ds and Ds were parties to the Removal Application. They were separately represented by senior counsel and counsel.

47.  I therefore come to the conclusion that by reason of the doctrine of res judicata and issue estoppel, Ds are debarred from arguing against the Determinations in this Action. The relevance of the Requests (1) to (5) should be assessed in this light.

48.  Requests (1) and (2) are on paragraph 16(1) of the Amended Reply and are for the particulars of Ken Li’s misrepresentations and deceitful conducts such as their dates of creation and their nature.

49.  In paragraph 16(1) of the Amended Reply, it is pleaded that Ken Li misled Seline Li to believe that the payments of the Sum were approved by Late Father and as result of his misrepresentation and/or deceitful conducts, Seline Li effectuated the payments as directed by Ken Li.

50.  This averment is made in reply to paragraph 16.3 of the Amended Defence. There, Ds plead that it is admitted that on diver dates between February and May 2009, Seline Li caused or authorized Yuen Hing to pay a total of HK$28 million to Ken Li.

51.  This plea is made in reply to paragraph 14 of the Statement of Claim in which P pleads that Ken Li wrongfully misappropriated the aggregate amount of the Sum by causing and/or misleading Yuen Hing directly or indirectly to pay him the same on separate occasions.

52.  The Amended Defence does not really raise any factual dispute about the Misappropriation Claim. The main thrust of the defence is that Ds did not have adequate information about the misappropriation and they honestly, genuinely and reasonably believed that the Sum was more likely than not to be a distribution to Ken Li as his profit share.

53.  The alleged misrepresentation and/or deceitful conducts of Ken Li causing Seline Li to make each of the transfers are not expressly pleaded in the Statement of Claim. However, in light of the Determinations and the respective pleaded cases of the parties, they are immaterial. Ds accept that Ken Li has appropriated the Sum and given the Determinations, it was a misappropriation with a false excuse given to Seline Li. I do not agree with Mr Hui that P has to prove the misappropriation of the Sum in this Action. The issue between the parties is whether Ds had a solid ground to make the Misappropriation Claim against Ken Li before their removal and not whether or how Ken Li caused Seline Li to pay the Sum to him by misrepresentation and/or deceitful conducts.

54.  I am of the view that the alleged misrepresentation and/or deceitful conducts of Ken Li add little to the Misappropriation Claim. Despite their presence in the pleaded case of P, I do not think an order for particulars relating to them is necessary either for disposing fairly of the cause or matter or for saving costs.

55.  Request (3) relates to the alleged clear knowledge of the circumstances of Ken Li’s misappropriation on the part of Ds, which is pleaded in paragraph 18 of the Statement of Claim.

56.  Mr Hui draws my attention to paragraphs 25 to 27 of the 2^nd Affirmation of Seline Li filed in opposition to this application. He submits that the matters deposed therein seem to be material facts in support of P’s allegation of Ds’ clear knowledge of Ken Li’s misappropriation of the Sum. He submits that this can be no substitution for particulars and those matters should be properly pleaded. He does not question the adequacy of such matters.

57.  I have read the said three paragraphs. They refer to the Petition and the Main Action (including the Appeal Judgment).

58.  I note that Ds in fact made the same request in their Request for Further and Better Particulars of Statement of Claim and Amended Reply dated 28 January 2025 (“the 2025 Request”) and P gave the same answer in March 2025 (“the 2025 Answer”). I cannot understand why Ds now make the same request.

59.  Mr Hui submits that in the 2025 Answer, the position of P is that the request is improper and no particulars is necessary. Nevertheless, P gave the answer. Mr Hui argues that its position is untenable.

60.  I do not accept this explanation. Regardless of the gloss P has put over the particulars supplied, the clear fact is that they are given and they are sufficient in my view. Request (3) is wholly unmeritorious.

61.  Requests (4) and (5) are on paragraphs 14(1) to (9) of the Statement of Claim. Ds ask for the particulars of each payment of the Sum that Seline Li caused Yuen Hing to make to Ken Li.

62.  Given the admission of Ds in their pleaded case on the transfers of the Sum to Ken Li on diver dates between February and May 2009, I see no reason why Ds require such particulars to understand the case that they have to meet.

63.  I further agree with Mr Ng that such information of the payments is subordinate fact or evidence only. I do not think that such information should be pleaded as material facts.

64.  Besides, in light of the Determinations, there is no need for P to prove the transfers of the Sum to Ken Li at all.

65.  These two Requests are devoid of merit and must be rejected.

Request (6)

66.  Request (6) relates to the Accounts Receivables Diversion Claim pleaded in paragraphs 27(1) and 27(2) of the Statement of Claim. The gist of this claim is that Ken Li has wrongfully diverted an aggregate sum of HK$28,810,932.08 payable by P’s customers to Shenzhen Lianda and another aggregate sum of HK$9,727,168.33 to Wong Shun Chiu, an alleged associate of Ken Li.

67.  Ds now complain about the lack of basic information of the fund flow of the alleged diversion of accounts receivables from P to Shenzhen Lianda and Wong Shun Chiu. They say that they need such information to make proper inquires regarding the nature and purpose of those payments.

68.  However, Ds in their pleaded case accept that they became aware of the payments to Shenzhen Lianda and Wong Shun Chiu. They aver that the diversion of payments was necessitated by the fact that P’s bank accounts were frozen. Hence, the diversion was to enable P to continue its business.

69.  Thus, the diversion of accounts receivables is not in dispute. The fund flow of such diversion is neither here nor there.

70.  As rightly pointed out by Mr Ng, this request is merely for subordinate facts or evidence. The material facts in support of this claim have been sufficiently pleaded.

71.  I do not think that the provision of such information in the pleading is necessary and can save any costs.

72.  Mr Ng highlights to this court that Ds in fact in their report submitted to P in support of an application for leave to commence legal action dated 9 December 2011 (“the Liquidators’ Report”) gave an account of their investigation of the Accounts Receivables Diversion Claim. Further, in a letter dated 19 March 2012 (“the 19/3/2012 Letter”), Ds through the solicitors acting for P raised this matter with Ken Li. Clearly, they have a good understanding of the Accounts Receivables Diversion Claim and Request (6) cannot be genuine.

73.  Lastly, Mr Hui submits that the particulars sought are germane to the issue of quantum as well. He points out that if the allegedly diverted payments were in fact used to pay the suppliers of P or defray the expenses of P, P has not suffered any loss as a result of such diversions of payments.

74.  I cannot accept this submission. This suggestion is purely speculative without an iota of supportive evidence notwithstanding all the investigations carried out by Ds previously.

75.  I can conclude that Request (6) should be rejected.

Requests (7) to (13)

76.  Requests (7) to (13) relate to the Business Diversion Claim. Mr Hui has helpfully provided the following summary of P’s pleaded case of this claim:

(a)  At §35, P pleads that from around June 2009 onwards, Ken Li devised the Re-invoicing Scheme with his associates to divert customers, orders and/or businesses of P to certain companies controlled by Ken Li or persons closely connected to him, including Icon Precision Co Ltd (“Icon”), Kenta Precision Ltd (“Kenta”) and Henfung Precision Technologies Ltd. (“Henfung”).

(b)  At §36, overt acts committed by Ken Li as part and parcel of their scheme are pleaded. Such overt acts included the incorporation of Icon, Kenta and Henfung, causing and/or procuring employees of P to operate and/or work for Icon, Kenta and Henfung, and issuing notices to P’s customers and/or suppliers suggesting that the name of P was changed to Kenta and/or Henfung.

(c)  At §37, it is pleaded that as a result of Ken Li’s wrongdoing, customers belonging to P were diverted from P to companies owned and/or controlled by Ken Li. The names of 6 diverted customers are expressly pleaded.

(d)  At §37B, it is pleaded that Ken Li, Icon, Kenta and Henfung are liable to P for breach of duties, dishonest assistance, knowing receipt or unlawful means conspiracy.

(e)  At §§37C-42A, it is pleaded that Ds as liquidators had knowledge of Ken Li’s wrongdoing, but in breach of their duties to P, Ds decided not to pursue the Business Diversion Claim against Ken Li.

(f)  At §43, it is then pleaded that as a result of Ds’ breach of duties, P suffered loss and damage “to an amount to be assessed”, including but not limited to loss of profits of the diverted business and business revenue or profits made by Ken Li which could have been disgorged by him.

77.  I note that Ds made requests identical to Requests (7) to (13) in the 2025 Request already and by the 2025 Answer P have supplied them the particulars albeit with a caveat that the requests were not proper and no further particulars was necessary.

78.  By Request (7), Ds ask for particulars of each of the notices issued to P’s customers and/or suppliers for the purpose of diverting business.

79.  In its answer thereto, P first relies on the relevant finding in the Main Action Judgment referred to in the Removal Decision. P further refers to the Liquidators’ Report and the 19/3/2012 Letter and points out that Ds have themselves set out the full particulars of such notices.

80.  I agree with Mr Ng that P has already pleaded the material facts relating to the notices in the Statement of Claim. In any event, having identified such notices in the Liquidators’ Report and the 19/3/2012 Letter, Ds can have no problem with them and Request (7) is not necessary and cannot save any costs in my view.

81.  Requests (8) to (12) relate to the details of each business opportunities and orders allegedly diverted from P.

82.  In the first place, I find the material facts to support the Business Diversion Claim are adequately pleaded in the Statement of Claim and the Reply.

83.  Moreover, I find the answers given in the 2025 Answer to be sufficient. P makes it clear that the relevant information in the Liquidators’ Report and the 19/3/2012 Letter would be relied on and Ds could not be heard to say that they are uncertain about the formulation of the Business Diversion Claim.

84.  It should be noted that P’s claim against Ds is about their failure to carry out full investigation into the wrongful activities of Ken Li and to pursue the Business Diversion Claim against Ken Li. Such a failure was found in the Removal Decision and constituted one of the grounds for removal. By reason of res judicata and issue estoppel, Ds should not argue against this finding in this Action in my view.

85.  Given the particular circumstances of this case, P may not be able to identify any specific orders or business opportunities which Ken Li caused to be diverted from P but this information may not be essential and the validity of its claim against Ds may not be affected.

86.  Therefore, I opine that an order for particulars for Requests (8) to (12) is not necessary and can only incur unnecessary costs. I refuse to make such an order.

87.  By Request (13), Ds ask for the particulars of the “loss and damage” allegedly suffered by P, including the quantum of such loss and the methodology for its calculation.

88.  In the 2025 Answer, P say that this request is not meritorious. P further says that particulars of “loss and damage” and quantum are matters for evidence on quantum (including expert evidence) and P would adduce expert evidence on quantum at an appropriate juncture.

89.  In the particular circumstances of this case, I accept Mr Ng’s submission that the basis of the claim is clearly articulated and, as indicated by P, the claim may be made good by expert and factual evidence. It is not necessary to plead the quantum of such loss: Lewin on Trusts Volume II (20^th Ed.) at §41-003.

90.  Ds should have no doubt about the basis of the Business Diversion Claim. The particulars sought are not necessary and cannot serve any costs saving purpose. I refuse to accept Request (13).

Request (14)

91.  Request (14) relates to the Negligence Claim. The gist of this claim is that Ds failed to take any legal action against David Cho and/or Mazars for the negligent advice rendered to P. P’s case is that pursuant to their professional accounting and/or tax advice, P implemented the Re-invoicing Scheme to reduce the tax liability of P in Hong Kong. The Re-invoicing Scheme was subsequently found by the Inland Revenue Department to be illegal and P was fined HK$3.4 million as a result.

92.  Again, Ds has made the same request in the 2025 Request already and by the 2025 Answer P have supplied them the particulars with the same caveat that the requests were not proper and no further particulars was necessary. I opine that the claim has been sufficiently pleaded and the answer given is adequate.

93.  It should be noted that DHCJ To in the Removal Decision held that Ds must know that P had a strong case against David Cho and/or Mazars and said this about the Negligence Claim at §82:

“As analysed above, the Liquidators must know, in view of David Cho’s admission in David Yen’s presence during that interview that David Cho and/or Mazars were the architects of the re-invoicing scheme. David Cho and/or Mazars owed contractual and common law duty of care to the Company. They could have absolutely no defence to an action by the Company for professional negligence. They would have been the most ideal and cost effective targets for recovery as they were probably covered by insurance. The Liquidators must know that the Company has a meritorious and indefensible claim against David Cho and/or Mazars for professional negligence.”

94.  In light of this finding, by reason of res judicata and issue estoppel, it is not open to Ds to challenge the validity of the Negligence Claim now.

95.  In the premises, I can see no substance in Request (14) and it serves no meaningful purpose.

Conclusion and disposition

96.  For the reasons given, I do not find any merit in all the 14 requests of Ds. None of the particulars sought is necessary for present purposes and this exercise has only incurred avoidable legal costs. The observation of Lord Woolf MR in Mcphilemy is very apposite.

97.  Accordingly, I dismiss the Summons.

98.  There is no reason why costs should not follow the event. I make an order nisi that costs of and occasioned by the Summons be paid by Ds to P, to be taxed if not agreed.

99.  With the determination of the Summons, the parties should take steps to restore the hearing of the Amendment Summons as soon as possible, particularly given that this Action was commenced in 2018.

100.  Last but not least, I thank Mr Ng and Mr Hui for their helpful assistance in this matter.