MAXWELL ROAD LIMITED v. MO AH MAN

HCA 1933/2024

[2026] HKCFI 1871

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1933 OF 2024

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D E C I S I O N

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1.  This is the Defendant’s appeal against a Master’s order dated 6 October 2025 giving leave to the Plaintiff to amend its Amended Writ and Amended Statement of Claim in terms of the draft Re-Amended Statement of Claim (“RASOC”) attached to the Plaintiff’s summons dated 4 July 2025, except in relation to certain pleas which the Plaintiff describes as the Investment-Related Pleas.

2.  In this rehearing, the Defendant contends that all the amendments in the RASOC should be disallowed. On the other hand, the Plaintiff contends that all the amendments, including the Investment‑Related Pleas, should be allowed.

3.  I start by dealing with the Defendant’s objections to the amendments which were allowed by the learned Master.

A.  DEFENDANT’S OBJECTIONS TO THE AMENDMENTS

4.  The Defendant objects to the amendments on two grounds. First, she submits that the amendments introduce inconsistent alternative claims and that the Plaintiff has failed to comply with the “reasonable grounds” requirement under RHC O.18 r.12A to plead such claims. Second, the Defendant submits that the Plaintiff has no locus standi to sue as an assignee. I will deal with each of these objections in turn.

A1.  Are the Amendments Inconsistent Alternatives and without Reasonable Grounds?

5.  Before the amendments were sought to be pleaded in the RASOC, the Plaintiff’s pleaded case is that the Defendant failed to repay two loans advanced to her by Zhongrong International Finance Co Ltd (“Lender”) totalling US$150 million pursuant to two loan agreements. The Lender was subsequently wound up. All rights, interest and benefits under the loan agreements were assigned by the liquidators of the Lender ultimately to the Plaintiff.

6.  In response, the Defendant’s pleaded case is that she received the US$150 million from the Lender pursuant to an authorisation letter (“Authorisation Letter”) under which she agreed to make investments on the Lender’s behalf. She further pleaded that she could not identify any suitable investment opportunities during the relevant time and remitted US$150 million to a third party (“Third Party”) upon the Lender’s request.

7.  Under the amendments in the RASOC, the Plaintiff pleads a cause of action for breach of trust and a cause of action for breach of agency duties to respond to the Defendant’s case on the Authorisation Letter. Both of these claims are pleaded in the alternative to the non-payment of the loans on the “no admission” basis that the Authorisation Letter is “authentic, valid and binding”.

8.  It seems to me that the effect of the amendments is that if the Defendant succeeds in her case on the Authorisation Letter, the Plaintiff would rely on the two further new claims as alternatives to the Plaintiff’s primary claim under the loan agreements.

9.  The Defendant submits that the Plaintiff’s amendments constitute the advancement of inconsistent alternative claims. It is correct that they are alternative claims. However, I disagree that they are inconsistent with the Plaintiff’s primary case.

10.  The Defendant relies on RHC O.18 r.12A, which provides that “[a] party may in any pleading make an allegation of fact which is inconsistent with another allegation of fact in the same pleading if (a) the party has reasonable grounds for doing so; and (b) the allegations are made in the alternative.”

11.  If the Plaintiff is seeking to establish that both the loan agreements and the Authorisation Letter are valid, it will be setting up two inconsistent factual cases. But I do not think that the Plaintiff is doing that. The Plaintiff is seeking to establish that the loan agreements are valid. Relevantly, the Plaintiff is not seeking to establish that the Authorisation Letter is valid; it is only seeking to claim in the alternative that the Defendant is to remain liable even on the facts as pleaded by her (if they are found in her favour). I agree with the Plaintiff’s submission that the Plaintiff is simply “feeding off” the pleaded defence in relation to the Authorisation Letter. Such an approach has been held as not constituting an advancement of inconsistent alternative claims for the purpose of RHC O.18 r.12A: Sun Tian Gang v Changchun High & New Technology Industries Development Parent Co [2018] 5 HKLRD 485 at [18] & [29] (DHCJ Le Pichon).

12.  The Defendant submits that the Plaintiff’s alternative claims are not “feeding off” the defence because the Plaintiff has sought to introduce other pleas which are extraneous to the Defendant’s own case. I am unable to accept this submission.

(1)  The other pleas which are said to be extraneous to the Defendant’s own case are (a) a further assignment made on 9 June 2025 (“the Third Assignment”) by the Lender to assign to the Plaintiff, amongst other things, all rights, claims demands, actions, causes of action which the Lender has or may have against the Defendant, and (b) the advancement of new cases based on breaches of duties of trustee and agent.

(2)  The fact that the Plaintiff relies on other matters extraneous to the defence does not mean that the Plaintiff is now pleading inconsistent alternative facts. There is no inconsistency between the existence of the Third Assignment and the pleas forming part of the Plaintiff’s primary case under the loan agreements. Moreover, the new cases based on breaches of trust and agency are the legal consequences of the factual case pleaded by the Defendant, which the Plaintiff is not seeking to prove.

13.  It is unnecessary to go through the numerous authorities referred to by the Defendant. Whether or not a plaintiff has put forward inconsistent alternative facts which fall foul of RHC O.18 r.12A must depend on the particular facts of each case and the formulation of the relevant pleadings.

14.  If (contrary to the conclusion I made earlier) the Plaintiff’s new claims do amount to the advancement of inconsistent alternative facts so as to engage RHC O.18 r.12A, I consider that there are reasonable grounds for the Plaintiff to do so in the particular circumstances of this case.

(1)  The purpose or objective of RHC O.18 r.12A is “to exclude dishonest or opportunistic and speculative claims”, and “is not intended to exclude honest claims reasonably advanced on the basis of incomplete information which points to alternative sets of fact, each of which would be legally viable as part of the party’s case”: Herostar Properties Ltd v Cheung Yu Ping [2018] 6 HKC 165 at [38] (DHCJ Le Pichon).

(2)  The Plaintiff is the assignee of the debt and rights that arise from the loan agreements. It is not a party to the loan agreements or the Authorisation Letter. Objectively, it is clear that the question of whether such documents are genuine or authentic is not something within the Plaintiff’s personal knowledge. In these circumstances, I do not believe that O.18 r.12A could be used to exclude the Plaintiff’s alternative claims which arise out of the Defendant’s pleaded factual case.

(3)  The Defendant submits that the Plaintiff should have filed affidavit evidence to explain its lack of specific knowledge and what steps it had carried out in relation to numerous matters. For the reasons that I gave just now, I wholly reject this submission. I find it rather surprising that the Defendant would expect affidavit evidence be filed by the Plaintiff to support its application for amendment of pleadings. Indeed, I do not believe I would have considered such affidavit evidence helpful or necessary.

A2.  Does the Plaintiff Lack Standing to Sue?

15.  The Defendant relies on the lack of standing to sue as her second ground of objection. She submits that the Plaintiff has no standing to bring the alternative claims as assignee because the underlying rights are personal in nature and are unassignable as a matter of law.

16.  The relevant principles on what choses in action are incapable of assignment were summarised by A Chan J (as he then was) in Yang Foo‑Oi v Wai Wai Chen (No 3) [2020] 3 HKC 363 as follows:

(1)  Choses in action that are considered to be essentially personal in nature are not capable of assignment: [136] – [137].

(2)  The critical question is whether the identity of the person to whom the obligation is owed is an essential aspect of it: [137], [141].

(3)  In assessing whether a right is personal in nature, the question is whether the performance of the right sought to be assigned was intended by the parties to be rendered only to the obligee: [138].

17.  Further, the question whether a contractual right is or is not personal depends upon the construction of the contract, that is to say, it depends upon the intention of the parties, determined objectively, having regard to the nature and terms of the contract and the circumstances prevailing at the time it was made: Guest & Liew on the Law of Assignment (5^th ed, 2024) §4-51.

18.  The Defendant submits that the Lender’s rights under the Authorisation Letter are personal in nature and based on a relationship of trust and confidence, and therefore cannot be assigned to the Plaintiff.

19.  In my view, it is neither appropriate nor necessary for the court, at this stage of the proceedings, to come to a concluded view on whether the Lender’s rights under the Authorisation Letter can be assigned to the Plaintiff. It is sufficient for me to say that the assignability of the Lender’s rights under the Authorisation Letter is not demurrable and that the Plaintiff should not be barred from advancing it in its pleading.

20.  First, whether a contractual right is personal in nature (and therefore not capable of assignment) depends on the construction of the Authorisation Letter. The Defendant accepts that the assignability of the claims that the Plaintiff asserts must be answered by examining the ad hoc arrangement in question and as pleaded by the Plaintiff. Although the Defendant has filed an affirmation setting out the background to the Authorisation Letter, the Plaintiff should be allowed to test in cross‑examination the Defendant’s evidence (which is yet to be adduced) with other available evidence. I do not think the court can conclude at this stage that the objective intention of the parties to the Authorisation Letter was to treat the Lender’s identity as an essential aspect of the arrangement. In my view, these matters should be ventilated at the trial and should not be resolved at the pleading stage.

21.  Further, the Plaintiff refers to s.199(2) and Schedule 25 (Part 3, paragraph 1) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap 32) and Re Cyberworks Audio Video Technology [2010] 2 HKLRD 1137 at [6] to contend that liquidators have the power to, amongst other things, sell a cause of action vested in a company over which they have been appointed. The Plaintiff also submits that a claim for breach of fiduciary duty is a cause of action which falls within the statutory definition of “property” assignable by liquidators, relying on Re Colorado Products Pty Ltd [2014] NSWSC 789 at [343]‑[346] and EC Dawson Investments Pty Ltd v Crystal Finance Pty Ltd (No 3) [2013] WASC 183 at [889], [891], [898]-[904]. On the other hand, the Defendant submits that claims for breach of fiduciary duty are “personal” in nature and are unassignable even by liquidators. It is unnecessary for the court at this stage to resolve this difference. I am satisfied that the Plaintiff’s submissions are at least arguable and not bound to be rejected. This is sufficient for me not to accept the Defendant’s ground of objection based on standing to sue.

22.  For these reasons, I give leave to those amendments in the RASOC which the learned Master also allowed. I would therefore dismiss the Defendant’s appeal.

B.  INVESTMENT-RELATED PLEAS

23.  The Investment-Related Pleas are the Plaintiff’s pleas that the Defendant had breached duties as a trustee and agent to preserve property and to invest on the Lender’s behalf.

24.  The Plaintiff’s amendment application was taken out on 4 July 2025. The Defendant submits that all breaches arising out of the Investment-Related Pleas before 4 July 2019 (i.e. 6 years before the date when the amendment application was taken out) would be time-barred, and should be disallowed. This submission was accepted by the Master.

25.  The Plaintiff submits that all the Pre-July 2019 Investment‑Related Pleas should be allowed.

26.  In considering whether leave should be given to raise a new claim in an existing action, I have borne in mind what the Court of Appeal described in Shenzhen Futaihong Precision Industry Co Ltd v BYD Co Ltd [2019] 2 HKC 175 at [74] as the well-established three-stage test, namely:

(1)  Stage 1: Is it reasonably arguable that the opposed amendments are outside the applicable limitation period? If not, then the amendments fall to be considered under the general principles governing amendment applications.

(2)  Stage 2: If the answer to (1) is yes, do the proposed amendments seek to add or substitute a new cause of action? If not, then again the amendments fall to be considered under the general principles governing amendment applications.

(3)  Stage 3: If the answer to (2) is yes, does the new cause of action arise out of the same or substantially the same facts as are already in issue in the existing claim? If not, the amendments cannot be allowed. If so, then the court has a discretion to allow or refuse the amendments in accordance with the general principles governing amendment applications.

27.  The Plaintiff does not take issue that stages 1 and 2 are answered affirmatively, namely that the Pre-July 2019 Investment-Related Pleas are outside the 6-year limitation period and seek to add new causes of action. Further, the Plaintiff submits that stage 3 should also be answered affirmatively because the new causes of action arise out of the same or substantially the same facts as are already in issue in the existing claim.

28.  As to the meaning of “arise out of the same or substantially the same facts” in stage 3, the Court of Appeal in Shenzhen Futaihong (above) at [86] adopted, amongst others, the following propositions from Diamandis v Willis [2015] EWHC 312 (Ch) at [49]:

(1)  “The purpose of the requirement at Stage 3 is to avoid placing the defendant in a position where he will be obliged, after the expiration of the limitation period, to investigate facts and obtain evidence of matters completely outside the ambit of and unrelated to the facts which he could reasonably be assumed to have investigated for the purpose of defending the unamended claim.”

(2)  “It is thus necessary to consider the extent to which the defendants would be required to embark upon an investigation of facts which they would not have been concerned to investigate…”

(3)  “Finally, in considering what the relevant facts are in the original pleading a material consideration are the factual matters raised in the defence…”

29.  I agree with the Plaintiff’s submission that the facts on which the Pre-July 2019 Investment-Related Pleas rely are (1) the Authorisation Letter, (2) a total of US$150 million was paid pursuant to the Authorisation Letter and (3) the transfer of funds to the Third Party as a result of the Lender’s directions. These facts are matters which the Defendant could reasonably be assumed to have been investigated for the purpose of defending the Plaintiff’s original cause of action. Indeed, they did form the basis of the Defendant’s Defence.

30.  I disagree with the Defendant’s submission that it is only necessary to consider what has been pleaded by the party seeking the amendment (and not that by the opposing party) for the purpose of deciding whether the new pleas arise out of the same or substantially the same facts. This submission is contrary to what the Court of Appeal said in Shenzhen Futaihong at [86(5)]. The Defendant submits that what the Court of Appeal said in Shenzhen Futaihong is in conflict with what was said in Delco Participation BV v Chiho Environment Group Ltd [2020] 5 HKLRD 712, where Kwan VP at [50] observed what relevant facts in that case should be considered for the purpose of considering whether the new claim was within ss.35(5) and 35(6) of the Limitation Ordinance and O.20 r.5(5). I am not persuaded that there is such a conflict. In Delco, s.35 of the Limitation Ordinance was not engaged (see [49]), and therefore what Kwan VP observed at [50] was obiter. I also note that Shenzhen Futaihong was not cited or referred to in Delco, making the observation at [50] per incuriam.

31.  For these reasons, it is my view that the Pre-July 2019 Investment-Related Pleas do arise out of substantially the same facts as the same facts in respect of which relief has already been claimed in the Plaintiff’s original claim. I consider that stage 3 is also answered in the affirmative. I note that the Defendant has not identified any prejudice which is said to be caused by the Pre-July 2019 Investment-Related Pleas. I believe I should exercise my discretion to give leave to the Plaintiff to plead them so as to enable the real questions in controversy between the parties to be decided.

C.  DISPOSITION

32.  For all the reasons given, I dismiss the Defendant’s appeal. I also give leave to the Plaintiff to plead the Pre-July 2019 Investment‑Related Pleas. The result is that leave is granted to the Plaintiff to re-amend the Amended Writ and the Amended Statement of Claim in terms of the draft annexed to the Plaintiff’s summons dated 4 July 2025, save and except paragraph 14F.3 of the draft which the Plaintiff no longer pursues.

33.  I will now hear the parties on costs and the directions for the consequential amendments to the other pleadings.

[Submissions on costs]

34.  I make an order that the costs of the Notice of Appeal are to be paid by the Defendant to the Plaintiff, with a certificate for two counsel, to be summarily assessed.

[Submissions on summary assessment]

35.  Adopting a broad-brush approach, I summarily assess the Plaintiff’s costs occasioned by the appeal at HK$700,000.