SHE SAU CHING, Administratrix of the Estate of FUNG SIU YING MICKY, Deceased v. FUNG SIU CHUNG

HCA 1796/2024

[2025] HKCFI 4724

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1796 OF 2024

________________________

BETWEEN

________________________

________________________

DECISION

________________________

I. INTRODUCTION

1.  Before me is the Plaintiff’s Summons (the “Plaintiff’s Summons”) filed on 2 May 2025 based on Order 27 rule 3 and Order 43 rules 1-3 of the Rules of the High Court and inherent jurisdiction for the following reliefs which I think it is necessary to set out in full for better explanation of my decision herein:-

“1. A declaration that the partnership known as “Chi Wing Rattan Fty” (“New Chi Wing”), as constituted between Fung Siu Ying Micky (“Deceased”) and the Defendant on 15 February 2006, was dissolved on 7 March 2022;

2. A declaration that the Defendant is liable to account for and pay to the Plaintiff:

(1) The Deceased’s 50% share and interest in New Chi Wing (“50% share”); and

(2) In addition to sub-paragraph (1) herein above, such share of the profits made since the dissolution of New Chi Wing which the Court may find attributable to the Defendant’s use of the 50% Share, or alternatively, at the Plaintiff’s election, interests at the rate of 8% per annum on the 50% Share;

3. The following accounts and inquiries be taken in respect of New Chi Wing during its subsistence:

(1) all the dealings, transactions, credit and assets belonging to New Chi Wing;

(2) all the debts and liabilities of New Chi Wing;

(3) an inquiry as to the transactions recorded in the current accounts maintained with New Chi Wing with each of the Deceased and the Defendant; and

(4) an inquiry as to the whereabouts of the credits and assets of New Chi Wing during the subsistence of New Chi Wing.

4. A declaration that the amount due from the Defendant to the Plaintiff shall be treated as a debt accruing as at the date of dissolution of New Chi Wing;

5. The Defendant do render a full and proper account in respect of the matters set out in paragraphs 2 and 3 herein above, together with supporting documents in the following manner:

(1) The Defendant do within 28 days from the date of this Order file and serve an affirmation (“Account Affirmation”):

(a) Identifying and listing out all New Chi Wing’s assets… as at 7 March 2022 and their value as at the date of the Account Affirmation in tabular form;

(b) Identifying and listing out all the dealings, transactions, credit, income, profits, expenses, debts and liabilities of New Chi Wing, as well as the use of its assets, in tabular form; and

(c) In both cases, exhibit all documents that the Defendant possesses, and/or are within his power and/or control, relating to New Chi Wing and/or the respective partner’s current accounts of the Deceased and the Defendant…

(2) The Plaintiff do within 28 days thereafter file an affirmation setting out her list of objections and relevant evidence…

6. Save to the extent that documents have been produced by the Defendant in providing the account ordered above, the Plaintiff shall be at liberty to serve notice on the Defendant within 21 days after service of the aforesaid accounts requiring the Defendant to produce for the Plaintiff’s inspection any documents or class of documents specified in and/or relating to the aforesaid accounts and any other documents referred to by the Defendant in his affidavit or affirmation…

7. The Defendant must, within 7 days after the service of any notice upon him pursuant to paragraph 6 above, serve notice on the Plaintiff stating a time within 14 days after the service thereof at which the said documents may be inspected at a place specified in the notice;

8. There be liberty to apply…

9. The Defendant do within 14 days make payment of the amount certified to be due on the taking of such account, together with interest thereon…

10. Costs of these proceedings (including this application) be paid by the Defendant to the Plaintiff.”

2.  For convenience, I shall refer to the above reliefs as “Summons §1”, “Summons §2” and so on.

II. BACKGROUND

3.  The Plaintiff is the widow of the Deceased and the administratrix of the estate of the Deceased (the “Deceased’s Estate”). The Defendant was the elder brother of the Deceased. Their father was Fung Yuk Luen: see Statement of Claim (“SOC”) §§1-2 and Defence §2.

4.  From 15 February 2006 until his death on 7 March 2022, the Deceased and the Defendant were “the only and equal partners of New Chi Wing”: see SOC §7 and Defence §7.

5.  On 7 March 2022, upon the Deceased’s death, New Chi Wing was dissolved pursuant to section 35(1) of the Partnership Ordinance (Cap. 389): see SOC §8(1) and Defence §8(1).

6.  After the dissolution, the Defendant carried on the business of New Chi Wing using its capital and assets “without any final settlement of accounts”: see SOC §8(2)-(3); Defence §8.3.

III. CORRESPONDENCE BETWEEN THE PARTIES

7.  In this part, I shall set out the correspondence between the parties chronologically, because both parties rely on the correspondence significantly to explain how they think they acted reasonably but the other side did not. This relates to the basis of the present application and more importantly, to costs.

8.  The correspondence concerned not only New Chi Wing but also other matters. For the present purpose, I only need to set out those concerning New Chi Wing.

9.  On 16 May 2022, the Plaintiff’s then solicitors, Oldham, Li & Nie (“OLN”), sent a letter to the Defendant and New Chi Wing demanding, among other things:-

(1) “The latest audited accounts and copies of the bank statements from the date of the latest audited accounts to date (if any)”;

(2) “Latest tax return”; and

(3) “Latest employer’s return”.

10.  On 19 May 2022, OLN wrote yet another letter to the Defendant, referring to the letter of 16 May 2022 and further demanding, among other things, “[a]ll bank statements, Hong Kong tax returns and audited accounts from March 2021 to February 2022 inclusive in relation to accounts held by [New Chi Wing], including but not limited to the DBS bank accounts… Citibank accounts… and Agricultural Bank of China (HK branch) DBS account…”

11.  On 27 May 2022, OLN sent a chaser to the Defendant, demanding the Defendant to reply by 31 May 2022.

12.  On 31 May 2022, the Defendant’s solicitors, Karas So LLP (“KSLLP”) replied in writing that they would need time to consider the various requests made in the letters.

13.  On 28 June 2022, KSLLP provided all the documents requested as stated above except for the 2021/2022 audited accounts which the Defendant was “in the process of preparing” and would be provided “once it is available”.

14.  On 15 August 2022, in reply, OLN thank KSLLP for providing the documents and asked OLN to provide them a copy of the 2021/2022 audited accounts once it is available.

15.  On 29 September 2022, OLN sent a chaser to KSLLP for response to their letter dated15 August 2022.

16.  On 7 October 2022, KSLLP sent a holding reply, saying that they were in the course of seeking instructions.

17.  On 21 October 2022, KSLLP sent to OLN a copy of the 2021/2022 audited accounts of New Chi Wing.

18.  There was no correspondence between the parties after that until 18 April 2023.

19.  On 18 April 2023, the Plaintiff’s new solicitors, Betty Chan & Co. (“BCC”) wrote to KSLLP that:-

“On a date unknown to our client bur prior to 31 January 2023, the business status of [New Chi Wing] was changed from a partnership to individual with your client becoming the sole owner of the business. We enclose a copy of the information extracted from the business register of [New Chi Wing] on 31 January 2023 which is self-explanatory.

Clearly, your client has acquired the share and entitlement of the Deceased in the partnership with the intention to carry on the business of [New Chi Wing] as his own, your client having done so without any notice or consent from the estate of the Deceased.

Please would your client let our client know the amount he proposes to pay for the share of the Deceased in the partnership and to settle the accounts with our client. We look forward to receiving your client’s reply within the next 14 days from the date of this letter.”

20.  On 2 May 2023, KSLLP sent a holding reply, endeavouring to reply by 16 May 2023.

21.  On 16 May 2023, KSLLP clarified that there were no audited accounts but accounts prepared for tax purposes, and explained that there was ongoing valuation of New Chi Wing’s assets and liabilities and/or settlement of its account, delayed by COVID in 2022.

22.  There was no correspondence between the parties after that until 8 March 2024.

23.  On 8 March 2024, the Plaintiff’s current solicitors, Sit, Fung, Kwong & Shum (“SFKS”) wrote to KSLLP that:-

“2. It is not in dispute that the Deceased’s estate is entitled to 50% of the partnership assets of [New Chi Wing] as at 7 March 2022. Insofar as your client has made use of the partnership assets of [New Chi Wing] in continuing the business of [New Chi Wing] as sole proprietorship of your client, he must account to our client for 50% of the profits made.

3. Up to now our client has not received the Deceased’s due share of the assets and account for profits.

4. You have alleged in your letters to OLN dated 28 June 2022 and 16 May 2023 that valuation of the assets of [New Chi Wing] was being made. However, that cannot be the reason for the long delay in making the distribution to our client. In fact, the accounts of [New Chi Wing] clearly show that as at 31 March 2021 and 31 March 2022, its assets included cash of HK$124,389,974 and HK$85,540,915 respectively and accounts receivables (which should have been collected by now).

5. It is inconceivable that a valuation of the plant and machinery of [New Chi Wing] is necessary for the distribution of cash to be made. In any event, the alleged valuation should have been completed long time ago.

6. Your client is therefore required to distribute to our client 50% of the assets of [New Chi Wing] as at 7 March 2022 plus our client’s due share in the profits made with [New Chi Wing]’s partnership assets after 7 March 2022 and render all proper accounts to our client. Your client is also required to explain the huge drop in the amount of cash balance of [New Chi Wing] from HK$124,389,974 (as at 31 March 2021) to HK$85,540,915 (as at 31 March 2022).”

24.  On 8 April 2024, KSLLP replied in writing that:-

(1) There were a litany of requests in the 8 March 2024 letter and they needed time to retrieve and collate the relevant documents.

(2) “It has always been our client’s intention to fairly distribute to the Estate what it is entitled to.”

(3) Referring to sections 44 and 46 of the Partnership Ordinance, “it is therefore misconceived for you to contend that the Estate is entitled to 50% of the partnership assets of [New Chi Wing] as at 7 March 2022, and also 50% of the profits made by our client using the partnership assets of [New Chi Wing] in continuing its business. Your client cannot have it both ways.” (original emphasis)

(4) “Our client has taken steps to finalise the accounts of [New Chi Wing] before the provision of the copy of the relevant extract of the Letters of Administration… on 18 April 2023. However, it has taken more time than expected… One of the major reasons is that, as of the date of this letter, the Inland Revenue Department (“IRD”) has not finalised its assessments on the financial statements for the year ended 31 March 2022…

(5) “[T]he valuation of the plants and machinery of [New Chi Wing] is plainly relevant to the finalisation of [New Chi Wing]’s accounts, as the impairment loss, if any, would affect the amount of cash to be distributed to the Estate”.

(6) For the drop in the amount of cash balance of [New Chi Wing] from the year ended 31 March 2021 to the year ended 31 March 2022, they were for normal course of business including payments to employees, suppliers, manufacturers and shipping companies and distribution of a total amount of US$6,000,000 (HK$46,800,000) to Defendant and the Deceased in equal share (i.e. each receiving US$3,000,000 or HK$23,400,000) in October 2021. For the distribution, copies of the relevant payment vouchers were enclosed with the letter.

(7) All the bank accounts of New Chi Wing were listed out.

25.  On 25 April 2024, SFKS wrote to KSLLP that:-

(1) Delay in payment to the Estate was inexplicable and in any event caused by the Defendant’s own fault.

(2) They did not agree with KSLLP that the Estate was not entitled to 50% interests in New Chi Wing as at 7 March 2022 and 50% profits after the dissolution of New Chi Wing.

(3) They demanded from KSLLP explanation of what steps had been taken in respect of the valuation of plant and machinery.

(4) They demanded from KSLLP records of payment of the HK$23,400,000 to the Estate.

26.  On 16 May 2024, KSLLP replied:-

“1. Upon further consideration, our client agrees and is prepared in principle to distribute a share of [New Chi Wing]’s assets and/or post-dissolution profits to the Estate, on the basis that there would be no overlap in or double counting of the share of the partnership assets or profits made since dissolution. The precise calculations will of course need to be worked out.

2. The valuation of plant and machinery is recorded in Note 1 of [New Chi Wing]’s financial statements. We enclose herewith the relevant extracts of the valuations as at 31 March 2022 and 31 March 2023 (Enclosure 1), as well as the financial statements submitted for the 2022/23 profits tax return assessment (Enclosure 2) for your client’s reference.

3. Our client will endeavour to settle the accounts of [New Chi Wing], if possible, within three months after the IRD’s final assessments of the profits tax filing for the relevant years. Please, however, note that to date the IRD has still not made its final assessments on [New Chi Wing]’s profits tax filing for the years 2021/22 and 2022/23. A copy of the latest letter from the IRD is enclosed for your reference (Enclosure 3). As your client would appreciate, the lack of final assessments from the IRD will affect the actual amount of [New Chi Wing]’s expenses and profits adjustments. In this regard, if your client is agreeable in principle to a distribution based on the accounts pending IRD’s definitive assessment on the profits tax to be paid, please let us know.

4. As for the USD3,000,000 (i.e. HKD23,400,000) paid to the Deceased in October 2021, our client confirms that he has not retained any photocopies of the cheques written to the Deceased. However, the relevant bank statement of [New Chi Wing] recording the inward cheque clearing… (enclosed herewith as Enclosure 4) should be self-explanatory.”

27.  On 19 June 2024, SFKS wrote to KSLLP:-

(1) They maintained that there was inexplicable inordinate delay.

(2) The income of New Chi Wing for the financial year ending on 31 March 2022 was HK$60,598,509 and the maximum tax liability would be HK$9,089,776 (by HK$60,598,509 x 15%). The cash was HK$85,540,915 and so providing for the tax, the cash available for distribution should be HK$38,225,569.50.

(3) The Defendant should otherwise explain how much should be provided for the potential tax liability.

(4) The Defendant had failed to prove payment of US$3,000,000 to the Deceased on 21 October 2021.

28.  On 26 June 2024, KSLLP sent a holding reply and stated that they would endeavour to provide a substantive response by 24 July 2024.

29.  On 3 July 2024, SFKS demanded distribution of HK$38,225,569.50 in respect of New Chi Wing.

30.  On 24 July 2024, KSLLP explained that:-

(1) The final assessment of New Chi Wing’s profits tax filing by the IRD would be relevant to a fair and appropriate distribution.

(2) The retained earnings in partners’ current account, in particular “ex-partner’s (deceased) current account” in the sum of –HK$40,323,497 must be taken into account in working out the amount of distribution.

(3) “Given that there has not been consensus between our respective clients on the basis of distribution, our client does not accede to your client’s demand as set out in paragraph 5 of Your 19 Jun Letter and Your 3 Jul Letter.

(4) The proof of payment of US$3,000,000 to the Deceased had already been sufficient, but copies of the cheques for the payment were also enclosed therewith.

31.  On 5 August 2024, SFKS wrote to KSLLP that:-

(1) They were “most astonished” that the issue concerning the “ex-partner’s (deceased) current account” was raised and they did not admit to the amount. I note here that to be fair to KSLLP, the financial statements enclosed with KSLLP’s letter of 8 April 2024 already showed this account and the figure. This was not mentioned in the body of the letter, but I would have thought that the Plaintiff, being so eager to know the financial positions of New Chi Wing, would have read it in detail once she obtained it in April 2024.

(2) They demanded the breakdowns for this account with supporting documents within 7 days.

32.  On 2 September 2024, KSLLP provided the relevant records from 2017 to 2023 for the “ex-partner’s (deceased) current account”.

33.  What followed was not any further correspondence, but the Writ of Summons herein issued on 5 September 2024.

IV. THE PLAINTIFF’S CLAIM

34.  In the SOC specifically endorsed on the Writ of Summons, the Plaintiff claims that the Deceased and the Defendant were “the only and equal partners of New Chi Wing”: see SOC §7(2), that the partnership dissolved upon the Deceased’s death on 7 March 2022: see SOC §8(1), and that the Defendant continues to carry on the business of the partnership using its capital and assets after the Deceased’s death without a final settlement of account: see SOC §8(2). Then, in §§9 and 10 of the SOC, the Plaintiff pleads:-

“9. Upon the dissolution of New Chi Wing, the Defendant is obliged to account for and to pay the Estate the Deceased’s 50% share and interest in New Chi Wing (“50% Share”), whether pursuant to section 30 and/or 41 [of the Partnership Ordinance] and/or otherwise under general law.

10. In addition to the said 50% Share, pursuant to section 31 and/or 44 [of the Partnership Ordinance] and/or otherwise under general law, the Plaintiff (representing the Estate) is entitled to the following at her election:

(1) Such share of the profits made since the dissolution of New Chi Wing, which the Court may find attributable to the Defendant’s use of the Deceased’s 50% Share (“Post-Dissolution Profits”) and the Defendant shall account for and pay the same; or

(2) Alternatively, the Plaintiff is entitled to interests at the rate of 8% per annum on the Deceased’s 50% Share (“Post-Dissolution Interests”); and

(3) The Plaintiff reserves her right to elect…”

35.  Having pleaded that the Defendant has breached his duty to account and so on and that the Plaintiff has suffered loss and damage as a result of the breaches, the Plaintiff prays for the following relief:-

“(1) A declaration that New Chi Wing has been dissolved on 7 March 2022;

(2) A full and proper account of all assets, monies, income, business and/or operation of New Chi Wing from the Defendant both as at 7 March 2022 and thereafter;

(3) An order that the Defendant do deliver up and/or transfer to the Plaintiff such assets and/or monies found due upon the taking of such account and enquiry;

(4) Further or alternatively, an award of equitable compensation to be assessed;

(5) Interest…

(6) Further and/or other relief; and

(7) Costs.”

V. THE DEFENDANT’S DEFENCE

36.  The Defendant admits that he and the Deceased were the only and equal partners of New Chi Wing: see Defence §7, and that the Defendant carried on the business of the partnership using its assets and capital after its dissolution upon the Deceased’s death on 7 March 2022 without a final settlement of account: see Defence §8. In respect of SOC §§9-10, the Defendant pleads at §9 of the Defence:-

“9. As to paragraphs 9 and 10:

9.1 It is admitted that the Defendant is obliged to account to the Estate for a share of New Chi Wing’s assets and/or post-dissolution profits, provided that there would be no overlap or double counting.

9.2 The Defendant repeats paragraph 8.3 above [which is that the Deceased’s current account has to be taken into account].

9.3 Save as aforesaid, paragraphs 9 and 10 are not admitted.”

37.  In respect of the relief prayed for by the Plaintiff, the Defendant pleads at §§16-17 of the Defence:-

“16. Subject to the matters pleaded above, the Defendant has no objection to the Plaintiff’s claim for the following relief:

16.1 A declaration that New Chi Wing has been dissolved on 7 March 2022;

16.2 An order for the taking of a full and proper account of all assets, monies, income, business and/or operation of New Chi Wing from the Defendant both as at 7 March 2022 and thereafter;

16.3 An order that the Defendant do deliver up and/or transfer to the Plaintiff such assets and/or monies found due upon the taking of such account and enquiry.

17. Nothing in this Defence shall limit the Defendant’s contentions in the taking of the account (if any) ordered by the Court.”

VI. BASES OF THE PLAINTIFF’S SUMMONS

38.  The Plaintiff’s present application can be divided into two parts, the first is liability and the second is account and inquiry. For the first part, the basis of the application is Order 27 rule 3, and for the second part, the basis of the application is Order 43 rules 1-3.

A. Order 27 rule 3

39.  Order 27 rule 3 provides that:-

“Where admissions of fact or part of a case are made by a party to a cause or matter either by his pleadings or otherwise, any other party to the cause or matter may apply to the Court for such judgment or order as upon those admissions he may be entitled to, without waiting for the determination of any other question between the parties, and the Court may give such judgment, or make such order, on the application as it thinks just.”

40.  First, the “admission” may be express or implied, but must be “clear and unambiguous”, to be assessed in context: see Wingames Investments Ltd v Mascot Land Ltd [2013] 1 HKLRD 26 at §§16, 17, 21-24 per Barma J.

41.  Second, entering judgment on admission is discretionary. In exercising the discretion:-

(1) In the absence of reasons to the contrary, judgment is entered on admission to save time and costs: see Hong Kong Civil Procedure 2025 Vol. 1 §27/3/6.

(2) It is unlikely that a judgment on admissions (admissions by the Defendant of the Plaintiff’s case) would be granted where summary judgment (based on the Plaintiff’s own case) would not: see Hong Kong Civil Procedure 2025 Vol. 1 §27/3/9.

(3) A declaration is usually granted upon proper argument and cannot be made merely on admissions by the parties whether in pleadings or otherwise. That said, the Court has a paramount duty to do the fullest justice to the Plaintiff and so if this requires a declaration, the Court will grant such a declaration: see Hong Kong Civil Procedure 2025 Vol. 1 §15/6/2.

42.  Third, there is dispute between the parties whether “admissions… by otherwise” covers admissions made in pre-action correspondence.

(1) Mr Jason Fee, counsel for the Plaintiff, relies on the English Court of Appeal’s judgment in Standerwick v Royal Ordnance PLC [1996] CLY 672 and answers the question in the positive.

(2) Mr Keith Chan, counsel for the Defendant, relies on a subsequent English Court of Appeal’s judgment in Walley v Stoke-on-Trent City Council [2007] 1 WLR 352 at §§41-44 suggesting that Standerwick v Royal Ordnance PLC may have been decided wrongly and Otsuka Shuichi v Ushiyama Masaharu [2022] HKCFI 738 at §25 where Recorder Sit SC doubted by way of obiter the reasoning in Standerwick v Royal Ordnance PLC and answers the question in the negative.

43.  In my view, pre-action letters cannot constitute “admissions” for the purpose of Order 27 because:-

(1) Textually:-

(a) The “admissions” “are” made by “a party to a cause”.

(b) “Are” is used, in the present tense, as opposed to “have been”.

(c) “A party to a cause” presupposes the “cause”.

(d) While “a party to a cause” can “have” made admissions before the cause, “a party to a cause” cannot “make” (in the present tense) admissions before the cause.

(e) Thus, textually, the wording is clear that pre-action admissions are not included.

(2) Further, as a matter of policy, positions taken in pre-action correspondence (or other pre-action materials) could have change from time to time. This may go to the credibility of the positions, but change or withdrawal of the pre-action positions can be made without any court leave or even the other side’s consent, unlike amendment to or withdrawal of an averment in pleadings which would in general require court’s leave (Order 20 rule 5) or which would be disallowed if the Court thinks fit (Order 20 rule 4).

B. Order 43 rules 1 – 3

44.  In the event that I would exercise my discretion under Order 43 rules 1 and 2 to order accounts and inquiries on admission under Order 27, the Plaintiff seeks consequential directions under Order 43 rule 3 for the accounts and inquiries. There is no dispute that I have such discretion to give directions. The dispute is over whether I should make the directions now and by myself or leave this for the Master.

45.  Mr Chan, counsel for the Defendant, relying on Amidas Hong Kong Ltd v Che Si Ltd [2025] 3 HKC 977 at §30 per Au-Yeung J, submits that it is premature to order account before judgment. With respect, in my view, §30 of that case has to be understood in the context of that case. That case was an email scam case, where the Plaintiff was a victim of an email fraud and therefore sought default judgment for monetary relief and proprietary declaration as well as account and inquiry. The duty to account would arise only after the proprietary declaration, without which essentially there would be no finding of liability of the defendant, unlike in the present case where a partner of a partnership always has a duty to give account. Further, in that case, the issue at §30 Au-Yeung J was addressing was whether she should order inquiry at the same time. It was in that context where her Ladyship said:-

“It is, of course, usual for an account to be given after judgment by a defendant first before there is an inquiry.” (emphasis added)

46.  In other words, §30 of that case simply stands for the proposition that the usual practice is to order an account before there is an inquiry, but not for the proposition that in a partnership context, it is premature to order taking of account before the judgment is made. As regards an inquiry after an account to be given, in that case, her Ladyship found it appropriate to order an account and an inquiry at the same time. In the present case, the context of which is partnership, where a partner is a fiduciary to the other partners and therefore a duty to give information to the other partners in relation to the partnership, I think an account and inquiry should normally be ordered at the same time.

47.  As to whether the Court should order an account and inquiry now or leave it to Master, the Court should bear in mind the underlying objectives in Order 1A. If, without judgment on the disputed issues, the liability to take account is clear on its own, and if the disputed issues would not affect the taking of account (for example, credibility of the same witnesses for the disputed issues would affect how the disputed items in the taking of account), I see every reason to order taking of account right away. Similarly, if the Court sees fit to order taking of account right away, I also see every reason to give directions for the taking of account if appropriate (for example, Joe Zhixiong Zhou v Saif Partners II L.P. [2018] HKCFI 1448, where DHCJ Field gave detailed reasons for his ruling on directions for taking of account after considering parties’ submissions). For example, the usual steps needed for taking of account, or some items in the account are clearly in dispute, and I see every reason to make the usual directions and directions in respect of those items at the very least, without prejudice to the Master’s power to order further directions as he or she sees fit.

VII. ANALYSIS

48.  For the Summons §1, a declaration of the dissolution of New Chi Wing upon the Deceased’s death on 7 March 2022, it is a usual declaration that the Court would grant. It is necessary to do fullest justice not only to the partnership but also to outsiders – so that everyone would be clear that the partnership was dissolved on 7 March 2022 and the Deceased was no longer the partner from then on, and any business carried out in the similar manner is by a new partnership nothing to do with the Deceased or his Estate. I grant the Summons §1.

49.  For Summons §2, reading the SOC alone in context, “equal partner”, read together with §15 of the SOC, is clearly intended by the Plaintiff to mean 50% share. However, while admitting “equal partnership” in §7 of the Defence, the Defendant, in response to §15 of the SOC, avers in §14.1 of the Defence that the “the Defendant is obliged to account to the Estate for a share of New Chi Wing’s assets and/or post-dissolution profits…” (emphasis added). Considering this §14.1 of the Defence as part of the context, I am not satisfied that the Defendant has made any clear and unequivocal admission to the 50% share. “Equal partner” in the context may just mean that both the Deceased and the Defendant had equal voting right or equal say in the operation of the business of the partnership.

50.  Any reliance on the apparent admission in KSLLP’s letter of 8 April 2024 (see §24(3) above) is not permissible on my construction of Order 27 rule 3 set out in §43 above. In any event, the “admission” there is not clear and unequivocal. While KSLLP wrote that the Deceased was not entitled to 50% of the partnership assets as at 7 March 2022 “and also” 50% of the profits made thereafter, it is not a clear admission to me that the Deceased was entitled to 50% of the partnership assets as at 7 March 2022. It is particularly not clear when read together with KSLLP’s subsequent letter dated 16 May 2024, where they wrote that “upon further consideration”, the Defendant would agree and be prepared to distribute “a share” of the partnership’s assets.

51.  Lastly on Summons §2, I note that the Defendant does not have any positive case on what the percentage should be, but since the Plaintiff’s Summons is not an Order 14 summons but an Order 27 Summons for judgment on admission, without any clear admission, I am unable to enter judgment under Order 27. Therefore, I refuse to grant Summons §2.

52.  For Summons §§3-8, the pre-condition is that there should be judgment for account and inquiry, and Summons §§3-9 flesh out all the details by way of directions under Order 43 rule 3. Therefore, the questions I should determine are (1) whether there is any admission on which I can enter judgment for account and inquiry; and (2) whether I should do so.

53.  In my view, the following are clear admissions on which I can order account and inquiry:-

(1) The admission of the partnership, New Chi Wing, and the Defendant’s carrying on the business using its assets and capital without a final settlement of account after the dissolution is sufficient to found the Defendant’s liability for account and inquiry (see §36 above); and

(2) The admission to account and inquiry made in §16 of the Defence (see §37 above) is also sufficient for that purpose.

54.  On such admissions, subject to the terms and scope of the account and inquiry, I see no reason in principle for not ordering account and inquiry to which the Plaintiff is entitled as a matter of law on such admissions. Insofar as Mr Chan, for the Defendant, seems to suggest that Summons §§3-9 are not permitted because they are not in the same terms of the relief prayed for in the SOC, I do not accept such suggestion. The judgment under Order 27 is entered upon admissions of facts. First, there is no requirement that the judgement to be so entered must be in the same terms as the relief in the SOC or the Writ of Summons. Second, once I am satisfied that an order for account and inquiry should be made upon admissions, the power to formulate the terms and define the scope is the power under Order 43.

55.  There are two areas of dispute over the terms and scope of the account and inquiry. The first relates to the period for the account and inquiry. Mr Fee, for the Plaintiff, submits that the period should start from the formation of the partnership until the date of the affirmation for account (the “Account Affirmation”). Mr Chan, for the Defendant, submits that the account and inquiry should be for (a) the date as at 7 March 2022 and (b) the period from 7 March 2022 until the date of the Account Affirmation.

56.  In my view, the general starting points must be:-

(1) For the purpose of distribution upon dissolution, the relevant point of time must be the date of dissolution, that is, 7 March 2022. Anything prior to that should generally be unnecessary.

(2) For the purpose of section 44 of the Partnership Ordinance (see SOC §10 quoted in §34 above), the relevant period should be from the date of dissolution, that is, 7 March 2022 until the most recent date, that is, the date of the Account Affirmation, subject to any further update thereafter as the proceedings progress.

57.  Should I provide exception for these starting points?

58.  While I agree with Mr Fee that I have the power to order account and inquiry for such wide period of time as he seeks, the case Cheung Hau Chun v To Suet Chun [2021] HKCFI 264, Mr Fee relies upon cannot be regarded as a case that the Court will in general order account and inquiry for the whole period of the partnership. In that case, the wrong doing subsisted during the whole partnership and it is not surprising that the account and inquiry was for the whole period: see §76 of the judgment. Ultimately, it is a matter of discretion, and I should exercise it proportionately bearing in mind the underlying objectives under Order 1A. On the evidence before me and the parties’ submissions thereon, the only disputes over the account are:-

(1) the ex-partner’s current account of the Deceased;

(2) the partner’s current account of the Defendant; and

(3) what are the account receivables (proposed by the Defendant but disagreed by the Plaintiff to be written off for the purpose of tax: see [B1/29] and [B2/143]).

59.  Given the disputes, I think exceptions should be provided for them. However, I would rather not formulate the exceptions in terms of period of time. In my view, it is more appropriate to formulate the exceptions in terms of transactions constituting the amounts in the respective current accounts and the account receivables. This may or may not go back to the start of the partnership, but it is the transactions, rather than the time, that are relevant for the purpose of account and inquiry over these disputes over the account.

60.  The second area of dispute relating to the terms and scope of the account and inquiry is the scope of discovery of documents. Similarly, I should exercise my discretion proportionately bearing in mind the underlying objectives under Order 1A. Thus, in my view, on the evidence before me, only those documents related to the disputes over the account should be disclosed.

61.  In conclusion, Summons §§3-8 should be revised to reflect the above.

62.  For the avoidance of doubt, in the process of account and inquiry, the information disclosed, or some other information not obtained in the process, may reveal more disputed areas in the accounts. There and then, if justified, the Plaintiff may always be at liberty to make appropriate applications.

VIII. ISSUE OVER PERCENTAGE OF DECEASED’S SHARE IN THE PARTNERSHIP

63.  The Summons §9 is about payment of the amount certified to be due. To expedite the matter, on 22 September 2025, I made directions on this issue. Here are my reasons.

64.  This issue would depend on how much share the Deceased was entitled to the partnership as at 7 March 2022. As held above, there is no admission on this issue. However, I did not (and do not) think this issue should prevent me from exercising my discretion to order account and inquiry, something to which, as I mentioned above, the Deceased was entitled as a partner. Seeing this issue was a narrow issue and the parties confirming this issue to be the only issue in the proceedings after order of account and inquiry (if I would make such an order, as I now will), in my view, it was appropriate to exercise my case-management power to make directions for the resolution of this issue. Having considered the submissions during the hearing and the proposed directions in the joint letter of 18 September 2025 sent to me pursuant to my directions made at the end of the hearing, on 22 September 2025, I gave directions for discovery and trial by consent on the issue of the percentage entitlement of the Deceased to the partnership as at 7 March 2022.

65.  For the avoidance of doubt, the directions do not prejudice the Plaintiff’s right to make an Order 14 application or other appropriate applications on this issue if she thinks fit. I, however, make it clear that I am not expressing any view on the merits or demerits of any such applications.

IX. CONCLUSION

66.  For the above reasons, I made the directions as mentioned in §63 above on 22 September 2025, and also make the following order now:-

(1) A declaration that the partnership known as “Chi Wing Rattan Fty” (“New Chi Wing”), as constituted between the Deceased and the Defendant on 15 February 2006, was dissolved on 7 March 2022 upon the Deceased’ death on that date.

(2) The following accounts and inquires shall be taken in respect of New Chi Wing (the relevant scope and time period being subject to paragraph (4) below):-

(a) all the dealings, transactions, credit and assets belonging to New Chi Wing;

(b) all the debts and liabilities of New Chi Wing;

(c) an inquiry as to the transactions recorded in the current accounts maintained with New Chi Wing with each of the Deceased and the Defendant; and

(d) an inquiry as to the whereabouts of the credits and assets of New Chi Wing during the subsistence of New Chi Wing.

(3) A declaration that the amount due from the Defendant to the Plaintiff shall be treated as a debt accruing as at the date of dissolution of New Chi Wing.

(4) The Defendant do render a full and proper account in respect of the matters set out in §(2) above, together with supporting documents in the following manner:-

(a) The Defendant do within 56 days from the date of this Order file and serve an affirmation (the “Account Affirmation”):-

(i) Identifying and listing out all of New Chi Wing’s assets (monetary or otherwise) as at 7 March 2022 and their value as at the date of the Account Affirmation in tabular form;

(ii) Identifying and listing out all New Chi Wing’s (A) debts and liabilities as at 7 March 2022 and as at the date of the Account Affirmation; and (B) dealings, transactions, credit, income, profits, expenses as well as the use of its assets from 7 March 2022 to the date of the Account Affirmation (without prejudice to §§(4)(a)(iii) and (4)(a)(iv) below) in tabular form;

(iii) Identifying and listing out transactions constituting the respective amounts of the current accounts maintained with New Chi Wing with each of the Deceased and the Defendant in tabular form;

(iv) Identifying and listing out all accounts receivables which were proposed to be written off as shown at §3 of the IRD’s letter dated 29 November 2023 to New Chi Wing at [B1/29];

(v) In each of the above cases, exhibit all books, vouchers, receipts, general ledgers, management accounts, bank statements and financial statements in the Defendant’s possession, power and/or control, relating to §§(5)(a)(i) to (iv) above; and

(b) The Plaintiff do within 56 days thereafter file and serve an affirmation setting out her list of objections and relevant evidence (if so advised).

(5) Save to the extent that the documents have been produced by the Defendant in providing the account ordered above, the Plaintiff shall be at liberty to serve notice to the Defendant within 21 days after the service of the aforesaid accounts requiring the Defendant to produce for the Plaintiff’s inspection any documents mentioned in the Account Affirmation.

(6) The Defendant must, within 7 days after the service of any notice upon him pursuant to §(5) above, serve notice to the Plaintiff stating a time within 14 days after the service thereof at which the said documents may be inspected at a place specified in the notice;

(7) There shall be a further directions hearing before a Master for the taking of account, to be fixed in consultation with counsel’s diaries, with 30 minutes reserved, no earlier than 28 days after the completion of §(6) above. Any interlocutory applications should be taken out 14 days before the hearing;

(8) There shall be liberty to apply (including any applications for discovery of further documents if appropriate); and

(9) The Defendant do within 14 days make payment of the amount certified to be due on the taking of such account (such certification only to be issued upon the outcome of the Trial on the issue of the percentage entitlement of the Estate to New Chi Wing), together with interest thereon to be assessed at such rate and for such period as the Court shall think fit.

67.  In respect of costs:-

(1) The Plaintiff’s Summons is partially allowed. The Plaintiff does not have the wide account and inquiry it seeks, which I found is unjustified.

(2) The Defendant’s position as appears in the opposing evidence that the entire of the Plaintiff’s Summons should be dismissed is not accepted. It is only in Mr Chan’s written submissions that an alternative submission that some narrower account and inquiry would be agreeable was made.

(3) Both parties are to blame for the delay as shown in the correspondence set out above. There were inexplicable substantial periods where the Plaintiff was silent. There were also no good reasons for the Defendant’s late revision of accounts for tax purpose.

(4) The issue over the 50% has not been resolved yet but will be resolved at the Trial. But not much has been spent on this issue in the Summons, and the costs of the application for directions on the issue of percentage entitlement of the Deceased has already been ordered to be in the cause of the determination of that issue.

68.  Adopting a broad brush approach, I think the appropriate costs order (save and except for the costs of the application for directions on the issue of percentage entitlement of the Deceased) should be, and so I make, no order as to costs.

69.  It remains for me to thank Mr Fee, counsel for the Plaintiff, and Mr Chan, counsel for the Defendant, for their assistance.