WU JUN v. CAPTAIN HOLDINGS LTD (In Compulsory Liquidation) AND OTHERS

HCA 106/2022

[2026] HKCFI 1063

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 106 OF 2022

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BETWEEN

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DECISION

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A.  INTRODUCTION

1.  By summons filed on 11 March 2025 (“the Summons”), the plaintiff applies to:

(1)  exclude the witness statement of Hu Hongwei (“Hu”);

(2)  strike out certain paragraphs of the witness statement of Chan Cheuk Him Paul (“Chan”).

B.  BACKGROUND OF THE ACTION

2.  For the purpose of the Summons, it suffices to mention, as a matter of background of the present action, that the plaintiff claims that he is the victim of a scam disguised as a gold bar purchase and leaseback scheme (“the Scheme”) involving the defendants, which defrauded him of over HK$22 million. In relation to the 7^th defendant, it is alleged that it assisted in the Scheme by serving as a party to strengthen the plaintiff’s trust of the Scheme[1]:

(1)  On 5 June 2018, the 7^th defendant (acting by the 9^th defendant (its CEO and executive director)) entered into a strategic cooperation relating to a gold leasing arrangement with the 1^st defendant for a term of 18 months (“the Strategic Cooperation”);

(2)  An announcement on the Strategic Cooperation was made in June 2018 (“the Announcement”);

(3)  The Strategic Cooperation and the Announcement purported to support the Scheme;

(4)  However, the 7^th defendant in truth never entered into any gold leasing arrangement with the 1^st defendant. Neither had there been any intention to do so;

(5)  The 8^th defendant was the substantial shareholder of the 7^th defendant and had de facto control over it, as a number of the 7^th defendant’s directors back then (including the 9^th defendant) were the 8^th defendant’s board representatives in the 7^th defendant and would act in accordance with the 8^th defendant’s direction/instruction. The 8^th defendant (together with the 2^nd defendant) were the masterminds behind the Scheme.

3.  In gist, the 7^th defendant’s defence is that[2]:

(1)  all acts in connection with the Scheme were procured to be done by the 9^th defendant without authorization of the 7^th defendant’s Board of Directors (“the Board”);

(2)  the 7^th defendant’s Board had no knowledge of the Scheme or whatever unauthorized acts done by the 9^th defendant;

(3)  The 7^th defendant cannot be bound by the 9^th defendant’s act;

(4)  The 7^th defendant accordingly has not joined the conspiracy.

4.  The 7^th defendant has filed 2 witness statements in support of its case, by Hu and Chan respectively.

5.  Hu’s witness statement was signed on 2 June 2023 and filed on 5 June 2023, whereas Chan’s witness statement was signed more than a year later on 4 October 2024, and filed on 7 October 2024.

6.  As aforesaid, the Summons was taken out on 11 March 2025.

7.  On 24 March 2025, the 7^th defendant filed a hearsay notice which covers Hu’s witness statement.

C.  HU’S WITNESS STATEMENT

8.  The first limb of the plaintiff’s application relates to Hu’s witness statement, which is made on the basis of Chan’s witness statement, in which Chan stated at paragraph 4 thereof that:

“Since the filing of [Hu’s witness statement] on 2 June 2023, Mr Hu, along with all the then existing directors, have tendered his resignation as a non-executive director of the [7^th defendant]. As such, he is no longer able to testify on behalf of the [7^th defendant].”

9.  In the 4^th Affirmation of Leung Hon Wai filed by the plaintiff in support of the Summons, it was said that:

“3. I note from paragraph 4 of Chan WS that Mr. Hu, who according to paragraphs (sic) 7 of Hu WS joined the 7^th Defendant as a non-executive director on 29^th March 2019, will not testify on behalf of the 7^th Defendant. On this basis, as I understand, the trite legal principles dictate that Hu WS is inadmissible and ought not form part of the evidence at trial. On 17^th February 2025, I have caused my firm to make enquiries with the 7^th Defendant’s legal representative (“Jones Day”) on whether the 7^th Defendant would adduce Hu WS […]. Unfortunately, we have heard nothing from Jones Day or the 7^th Defendant. I therefore verily believe that it is necessary to take out an application to exclude Hu WS as hearsay evidence to protect and preserve the interests of justice.”

10.  In the submission of the plaintiff’s counsel, it was further argued that excluding Hu’s witness statement is appropriate in the present case because:

(1)  “Hu’s attendance at trial is not ensured”[3];

(2)  “when the plaintiff pressed for a confirmation that the 7^th defendant would take action to secure Hu’s attendance, the 7^th defendant refuses to do so”[4];

(3)  The 7^th defendant’s refusal to undertake to take appropriate steps for the purpose of securing Hu’s attendance at the trial “speaks volumes about the unlikelihood of Hu’s attendance”[5];

(4)  “Hu’s attendance at trial is something that cannot be taken for granted, and in fact is rather unlikely”[6].

11.  With greatest respect, the plaintiff’s application to “exclude” Hu’s witness statement on the above bases is totally misconceived. Although the 7^th defendant cannot confirm whether Hu would attend the trial and give evidence for the 7^th defendant, it has never been the 7^th defendant’s stance that it shall not call Hu to give evidence at the trial. Taking the plaintiff’s case to the highest, it can only be said that it is uncertain that Hu would attend the trial. Having said that, it is still possible that he will attend voluntarily, or under a subpoena. To “exclude” or strike out Hu’s witness statement under such circumstances is simply unfair and pre-mature.

12.  The plaintiff further submitted that Hu’s witness statement should be excluded on the ground that it is hearsay pursuant to section 47(1) of the Evidence Ordinance (Cap.8, Laws of Hong Kong), since, it was said, its exclusion is not prejudicial to the interests of justice. It was also argued that this witness statement cannot provide assistance to the trial judge anyway because he only joined the 7^th defendant in March 2019 whereas the Scheme had already started no later than 2018.

13.  I must say that the plaintiff has adopted quite an aggressive approach by asking the court to make a decision at the pre-trial stage on the merit of a witness’ evidence. With respect, this should not be done. The matter should be left to be decided by the trial judge.

14.  In any event, although the 7^th defendant has filed a hearsay notice in relation to Hu’s witness statement, at the end of the day, it is unknown as to whether his evidence would be adduced as hearsay evidence, which depends on whether Hu would attend the trial for cross-examination purpose. For that reason, it is in my view inappropriate for the Court to make any ruling at this stage as to whether the witness statement should be excluded on the basis that it is hearsay evidence. Neither should the court make a ruling on the question of whether the witness statement should be struck out on the basis that it is “unhelpful”.

15.  The plaintiff’s application in relation to Hu’s witness statement should therefore be dismissed.

D.  CHAN’S WITNESS STATEMENT

D1. The plaintiff’s grounds

16.  The plaintiff seeks to strike out paragraphs 2(b) and 11 – 21 of Chan’s witness statement on the following grounds:

(1)  Given Hu will not testify, his witness statement is inadmissible. As a result, it is impermissible for Chan to refer to Hu’s witness statement;

(2)  The plaintiff’s claim concerns matters which occurred in around March and April 2019[7], whereas Chan only joined the 7^th defendant in 2024. Therefore, Chan does not have personal knowledge of what happened back in 2019. As a result, he cannot adopt Hu’s witness statement nor the 7^th defendant’s Amended Defence as his own evidence;

(3)  Paragraphs 11 to 21 of Chan’s witness statement are not factual evidence but Chan’s analysis, opinion, belief, submission and/or commentary/recitation of documents which he has reviewed.

D2.  Applicable approach

17.  As a matter of general principle, a witness statement should cover only such material facts which the witness is able to prove of his own knowledge (Hong Kong Civil Procedure 2026, Vol.1, paragraph 38/2A/6). It is not the function of a witness statement to provide a commentary on the documents in the trial bundle, to set out quotations from such documents, to engage in matters of argument or to deal with other matters merely because they arise in the course of the trial: Sunni International Limited v Kao Wai Ho Francis & Others [2021] HKCFI 2418, at [7].

18.  Service of witness statements pursuant to Order 38 rule 2A of the Rules of the High Court (Cap.4A, Laws of Hong Kong) (“RHC”) would not render evidence which is otherwise inadmissible admissible: Order 38 rule 2A(8) of the RHC.

19.  If a witness statement contains inadmissible materials, the court has a discretion to strike out such materials.

20.  However, the rules as to witness statements and their contents are not rigid statutes and it is conceivable that in particular circumstances they may properly be relaxed in order to achieve the overriding objectives of the CJR. When the court considers whether to strike out certain contents of a witness statement, it should take into account, inter alia, the question of whether doing so would be conducive to securing the just resolution of disputes in accordance with the substantive rights of the parties and whether it would prevent the case from being dealt with as expeditiously as is reasonably practicable: Sunni International Limited v Kao Wai Ho Francis & Others (supra), at [7] and [27].

D3.  Discussion

21.  The only substantive purpose of sub-paragraph 2(b) of Chan’s witness statement is to adopt Hu’s witness statement and the 7^th defendant’s Amended Defence as Chan’s own evidence.

22.  As aforesaid, the plaintiff argued that since Hu will not testify in court, Chan should not be permitted to refer to Hu’s witness statement. As explained above, such an argument is pre-maturely made, and it collapses upon the court’s decision made under Section C above.

23.  Insofar as it is submitted that Chan is not eligible to adopt the contents of the 7^th defendant’s Amended Defence (which primarily pleads that the Board had never authorised/approved the 9^th defendant to participate in the Scheme on behalf of the 7^th defendant, nor did the Board have any knowledge thereon) since he does not have personal knowledge of what happened in 2019, such an objection may be considered together with the objections raised in relation to paragraphs 11 – 21 of Chan’s witness statement, in respect of which it was argued that such contents are at best Chan’s analysis, opinion, belief, submission and/or commentary/recitation of documents which he has reviewed, which is not allowed in witness statements.

24.  In this regard, it must be borne in mind that what the Court is considering at this stage is the admissibility of Chan’s evidence rather than the weight which should be attached to such evidence.

25.  In his witness statement, Chan explains that he has perused various materials, including but not limited to the documents and evidence in his possession, power and/or control. He also confirms that he has been provided with documents disclosed in the present action. By virtue of these documents, he gives evidence that, among other things, the 8^th and 9^th defendants have never been authorised by the 7^th defendant to act on behalf of the 7^th defendant in relation to the Scheme.

26.  On my part, I cannot see how it can be said that Chan should not even be allowed to give evidence on such matters.  On the face of it, Chan may be able to give evidence on what he perceives to be the situation on authority after he has perused the 7^th defendant’s documents such as the Board documents.

27.  In his witness statement, Chan has also referred to the 7^th defendant’s then applicable bye-law which appears to be the company’s constitution governing, inter alia, the management and control of the company. Such bye-law runs up to 68 pages with 170 articles. As aforesaid, while normally it is not the function of a witness statement to provide a commentary on documents, the rules as to witness statements and their contents may properly be relaxed in order to achieve the overriding objectives of the CJR. In my view, allowing Chan to give evidence on the bye-law would be conducive to the efficient and fair disposal of the trial since he can draw the court’s and all parties’ attention to the relevant parts of the documents which will be relied on in the 7^th defendant’s defence of the claim.

28.  It is true that Chan has also included materials such as opinion and submissions in his witness statements. However, I hesitate to exercise my discretion and strike those parts out. Firstly, it seems that those contents give the context in which his other evidence is given. Secondly, I do not think it would worth the while for further time and costs to be incurred on filtering out line by line and paragraph by paragraph the problematic parts of the witness statements. After all, it is trite that Judges are capable of excluding these materials from their mind if necessary. In other words, despite the breach of the rules (if any), the inclusion of such materials would not be prejudicial to the plaintiff’s interest.

29.  I also take the view that it would be much better for the trial judge to determine whether or not to exclude evidence on the ground that it is hearsay at the conclusion of the trial pursuant to section 47(2)(b) of the Evidence Ordinance.

30.  As Mr Yeung accepted, the law is to assist but not to hinder the expeditious and just resolution of disputes. However, the exercise which the plaintiff is asking the court to conduct is not conducive to that purpose.

31.  I would therefore also refuse to strike out any part of Chan’s witness statement.

E.  ORDER

32.  For reasons of the aforesaid, the Summons is hereby dismissed.

F.  COSTS

33.  Mr Yeung argued that the plaintiff would not have taken out the Summons but for Chan’s representation in his witness statement that Hu will not testify at the trial. It was also suggested that the 7^th defendant has only had a change of stance by saying in Chan’s affirmation filed in opposition of the Summons that it would reserve the right to adduce him as a witness at the trial upon the taking out of the Summons. It was therefore suggested that the 7^th defendant should bear the plaintiff’s costs from the date of the filing of the Summons up to the date of the filing of the 7^th defendant’s Affirmation in opposition.

34.  With respect, I do not accept this submission. In my view, this is a very aggressive application by which the plaintiff attempted to secure victory over the 7^th defendant by one knock-out blow, and it should not have been taken out in the first place. Further, by the time when the Summons was taken out, the 7^th defendant has not indicated that it would rely on Hu’s witness statement as hearsay evidence yet.

35.  I therefore take the view that costs should follow the event. Hence, the plaintiff shall bear the 7^th defendant’s costs of the Summons (including all costs reserved), which is summarily assessed at $200,000. It shall be paid no later than 26 February 2026.