LAM KIM FEI v. GLORY SKY PRECIOUS METALS LTD

DCCJ 1953/2019

[2026] HKDC 672

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 1953 OF 2019

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JUDGMENT

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A.  INTRODUCTION

1.  This is an action brought by the Plaintiff, an individual investor, for recovery of money from the Defendant, a precious metals trading platform, for HK$899,703.85 (“Sum”), being the alleged diminished in value of amount in his investment account maintained with the Defendant (“Investment Account”).

2.  The Plaintiff’s case, in essence, is that Ms. Yu On Ki Angel (俞安琪) (“Angel”) and Mr. Chan Chun Fung Ryan (陳浚鋒) (“Ryan”) were employees/agents of the Defendant having actual or apparent authority to enter into transactions on behalf of the Defendant as the Defendant’s employees/agents. The Plaintiff contends that Angel and Ryan had made various fraudulent misrepresentations and/or acted negligently in their conduct of investments in the Plaintiff’s investment account (A/C No: 6131111807) (“the Investment Account”) which caused him to suffer loss in the amount of the Sum. The Plaintiff contends that the Defendant should be held liable for Angel and Ryan’s conduct based on, inter alia, vicarious liability, bring of agreement, breach of fiduciary duties and breach of Quincecare duty.

3.  The Defendant denies liability. While the Defendant accepts that the Plaintiff has opened the Investment Account with it, it denies owing any of the above duties contended by the Plaintiff. According to the Defendant, it did not know and had not authorised Angel or Ryan to commit the alleged misconduct.

B.  PARTIES’ RESPECTIVE CASES

B1.  Plaintiff’s pleaded case

4.  In the Plaintiff’s Re-Amended Statement of Claim (“SOC”), he raises various causes of action against the Defendant to recover the Sum.

5.  The Plaintiff says that on or about 20 December 2016, he got connected with Angel on WeChat. On about 28 December 2016, the Plaintiff discussed with Angel about making investments via an account with the Defendant. During the discussion, Angel as agent of the Defendant and in order to induce the Plaintiff to make the investments, made a written representation to the Plaintiff that the maximum amount of loss would be limited to 50% of the amount of capital. When the Plaintiff indicated his intention to put up HK$300,000 as capital, Angel represented to the Plaintiff in writing that the loss would be limited to HK$100,000 (“the Limited Loss Representations”).

6.  On 5 January 2017, Angel filled in an application form entitled 灝天貴金屬網上開戶申請表 (“the Application Form”) for the Plaintiff. By an email with the domain name “@gloryskygroup.com”, Angel sent the filled-in Application Form and a blank unsigned authorisation letter (“the Authorisation Letter”) to the Plaintiff. On 11 January 2017, the Plaintiff indicated to Angel that he was not prepared to sign the Authorisation Letter as he could not afford the level of risk stated there. Angel acknowledged the Plaintiff’s refusal to sign the Authorisation Letter, but asked him to sign the Application Form.

7.  Induced and in reliance upon the Limited Loss Representations, on 11 January 2017, the Plaintiff signed the Application Form and sent it back to Angel/the Defendant.

8.  The Plaintiff maintains that he never received or read the Client Account Agreement (客戶帳戶協議書) which contained the Terms and Conditions (“the T&C”), the Risk Disclosure Declaration (風險披露聲明) (“the Risk Disclosure”) and the Exemption of Liability Declaration (免責聲明) (“the Disclaimer”. Together, “the Documents”), despite the Application Form containing a declaration that he had done so.

9.  On 16 January 2017, the Plaintiff had a first in person meeting with Angel. The Plaintiff claims that Angel was acting as the Defendant’s servant, agent and/or representative. Angel purported to perform her duties as an employed agent of the Defendant in handling the Plaintiff’s investment.

10.  The Plaintiff contends that by reason of the above, there is an agreement between the Plaintiff and the Defendant (“the alleged Agreement”). The Plaintiff goes on to say that there were various implied terms in the alleged Agreement as pleaded in §§4C-4D of the SOC, including (a) implied terms to the effect that the Defendant has to ensure that its staff, employees and/or agents shall perform their services with due skill and care, shall provide the balance of the Investment Account to the Plaintiff from time to time, shall provide accurate information to the Plaintiff and shall not provide negligent misstatements and/or advice to the Plaintiff in respect of his investments. Also, in providing investment advice to the Plaintiff and/or making investment decisions for the Plaintiff, the Defendant and its staff, employees and/or agents will ensure that such advice must be in accordance with the plaintiff’s risk assessment, the extent of 50% loss of initial investment and/or the extent of a risk of a person such as the Plaintiff (with no experience in precious metal investment) may reasonably bear; and (b) the Limited Loss Representations which should also be implied into the Agreement (“the Implied Terms”).

11.  Further, the Plaintiff alleges that the Defendant owes fiduciary duties to him in carrying out the Plaintiff’s instructions to trade, in the same scope as stated in §10 above (“the Fiduciary Duties”).

12.  On 18 January 2017, induced by and in reliance upon the Limited Loss Representations, the Plaintiff transferred HK$300,000 from his personal account into the Defendant’s bank account. On the same day, the Plaintiff received an email with domain name “@glorysky.ws” from the Defendant informing him that the Investment Account was set up with together with the Password.

13.  Angel requested the Plaintiff not to log in to the Investment Account as she was monitoring the Investment Account and making investment decisions for the Plaintiff. Angel said that if the Plaintiff logs into the Investment Account, her access would be forced out by the system and that may result in losses due to market volatility. Angel promised that she would update the Plaintiff of the status of the Investment Account on regular basis. Relying on what Angel said, the Plaintiff never logged into the Investment Account and allowed Angel to conduct investments in the Investment Account on his behalf on the understanding that she would abide by the Limited Loss Representations.

14.  Subsequently, without the Plaintiff’s knowledge, Angel changed the Password to one unknown to the Plaintiff.

15.  On about 24 January 2017, Angel informed the Plaintiff that his investments had earned profit and the capital in the Investment Account had increased from HK$300,000 to HK$443,017.20 (“the 1^st Profits Representation”).

16.  Induced by and in reliance upon the 1^st Profits Representations, on 24 January 2017, the Plaintiff transferred HK$400,000 from his personal bank account into the Defendant’s bank account.

17.  In about the end of January 2017 and early February 2017 respectively, Angel informed the Plaintiff that Ryan, her superior, would take over the trading in the Investment Account. The Plaintiff agreed to instruct Ryan to conduct trading on his behalf on the understanding that Ryan would provide an update of the status of the Investment Account on a daily basis and that he would abide by the Limited Loss Representations.

18.  As a result of the above, the Defendant had assumed the duty advise. Further or alternatively, the Defendant has a duty to advise the Plaintiff “notwithstanding the express and implied terms of the Agreement by reasons of waiver and/or estoppel” (“the Duty to Advise”).

19.  On 6 February 2017, Ryan in purported performance of his duties as the Defendant’s employee, informed the Plaintiff that his investments in the Investment Account had been making profits but would need further injection of capital to carry out “reverse hedging” (解對沖). On 13 February 2017, Ryan persuaded the Plaintiff again to inject further capital into the Investment Account as his investment has been making profits of HK$700,000 to HK$800,000 (“the 2^nd Profits Representation”).

20.  Induced by and acting in reliance upon the 2^nd Profits Representations, the Plaintiff transferred HK$200,000 from his personal bank account to the Defendant’s bank account.

21.  On 23 February 2017, Ryan informed the Plaintiff that his investments in the Investment Account suffered a loss of HK$56,869.80. The Plaintiff demanded that Ryan stop trading with the Investment Account. Ryan agreed.

22.  The Plaintiff did not receive any statement of the Investment Account from the Defendant until he specifically requested for it, as Angel filled in the Application Form stating that no statement was required. The Defendant only received the bank statements for March 2017 on 1 April 2017, and the bank statements for January and February 2017 from the Defendant on 5 April 2017.

23.  When the Plaintiff reviewed his monthly statement for the Investment Account for the month of March 2017, the Plaintiff discovered that Ryan continued trading in the Investment Account after 23 February 2017 and that there was only HK$296.15 left in the Investment Account.

24.  The Plaintiff alleges that the Defendant must have intended and/or authorised Angel and/or Ryan to make the representations such as the 1^st Profits Representations and the 2^nd Profits Representations in the course of their job as agents employed by the Defendant. The acts of Angel and/or Ryan are either “authorised by the Defendant or unauthorised mode of doing something authorised by the defendant”.

25.  After the Defendant received the monthly statements of the Investment Account for January 2017 and February 2017, the Plaintiff discovered that the Limited Loss Representations, the 1^st profit Representations and the 2^nd Profits Representations were false and they were made by Angel and Ryan fraudulently. Alternatively, the Plaintiff relies on Section 3 of the Misrepresentation Ordinance (Cap 284) for the reliefs claimed.

26.  The Plaintiff alleges that Angel and Ryan were acting within the actual and usual authority as the Defendant’s agent when they committed the above misconduct. Therefore, the Defendant is vicariously liable for Angel and Ryan’s fraudulent misrepresentations which were closely connected with their employment and duties.

27.  Further or alternatively, the Defendant is vicariously liable for Angel and Ryan’s negligence in carrying out the investments in the Investment Account.

28.  Further or alternatively, the Defendant was in breach of the Implied Terms of the Agreement and the Duty to Advice[1].

29.  Further or alternatively, the Defendant was in breach of the Fiduciary Duties.

30.  Further or alternatively, the Plaintiff alleges that the Defendant was put on inquiry that the transactions in the Investment Account were attempts to defraud the Plaintiff. Hence, the Defendant was under a duty to refrain from executing the instructions of the Investment Account (“the Quincecare Duty”). The Defendant was in breach of the Quincecare Duty in allowing Angel and Ryan to make the misrepresentations and carry out the trades in the Investment Accounts.

31.  The Plaintiff claims against the Defendant for loss in the amount of the Sum.

B2.  Defendant’s pleaded case

32.  The Defendant admits that the Plaintiff had opened the Investment Account with the Defendant for the purposes of trading in “spot gold” by way of placing buy/sell orders for the products. The Plaintiff signed the Application Form subject to the contents of the Documents and that forms the agreement between the Plaintiff and the Defendant. The Defendant admits that the Plaintiff has transferred a total of HK$900,000 to its bank account.

33.  The Defendant contends that Angel and Ryan were self-employed independent contractors engaged by the Defendant to carry out marketing activities. The Defendant denies that Angel or Ryan had the authority, whether actual or apparent, to carry out investment advisory business or investment management business for the Defendants.

34.  The Defendant did not know and did not authorise Angel to make the Limited Loss Representations. The Defendant also did not know and did not authorise Angel’s handling of the Plaintiff’s investment in the Investment Account. On that basis, the Defendant denies entering into the Agreement with the Plaintiff and denies the existence of the Implied Terms. The Defendant further denies owing the Fiduciary Duties to the Plaintiff.

35.  Upon the Plaintiff’s opening of the Investment Account, the Defendant provided a set of User ID and password (“the User ID” and “Password”) by email via the email account provided by the Plaintiff on the Application Form to login to the trading platform of the Investment Account. Without the User ID and the Password, no order could be placed using the Investment Account, save for making deposits into it. The use of the User ID and Password was governed by the T&C.

36.  The Defendant avers that it was the Plaintiff who gave the User ID and Password to Angel. The Defendant did not know and did not authorise Angel’s change of the Password. The Plaintiff knew or ought to have known about the transactions in the Investment Account as he could login to the Investment Account anytime with the User ID and Password.

37.  The Defendant did not know and did not authorise Angel or Ryan to take over the trading activities of the Plaintiff in the Investment Account.

38.  The Defendant denies that it has authorised Angel or Ryan to make any of the Limited Loss Representations, the 1^st Profits Representations or the 2^nd Profits Representations. The Defendant denies that Angel or Ryan’s conduct were authorised by it, or within their authorised scope of work.

39.  The Defendant avers that a monthly statement would be sent to the Plaintiff by the end of each month by email via the email address provided by the Plaintiff to the Defendant in the Application Form. If the Plaintiff chooses not to receive a monthly statement, a daily statement would still be sent to the Plaintiff via the email address in the Application Form with full details of the transactions carried out on the day. The Plaintiff should have known about all the transactions and the balance in his Investment Account. He could not have relied on the 1^st Profits Representations or the 2^nd Profits Representations.

40.  The Defendant denies that it owes Quincecare Duty to the Plaintiff or were in breach of it.

C.  THE ISSUES

41.  The parties have each proposed their list of issues under a “Joint Statement of Issues” dated 29 August 2025. Having considered the parties’ pleadings and their submissions, I consider the following to be the material issues between them:

(1)  Whether the Defendant is vicariously liable for the alleged fraudulent misrepresentations made by Angel and Ryan or the alleged negligence of them?

(2)  What are the terms of the agreement between the Plaintiff and Defendant and whether the agreement contains the Implied Terms? Has the Defendant breached the agreement? 

(3)  Whether the Defendant owes the Fiduciary Duties to the Plaintiff? If so, is the Defendant in breach of the Fiduciary Duties?

(4)  Whether the Defendant owes the Quincecare Duty to the Plaintiff? If so, is the Defendant in breach of the duty?

(5)  Whether the Defendant is liable to the Plaintiff for the Sum?

C1.  Issue 1: Whether the Defendant is vicariously liable for the alleged fraudulent misrepresentations made by Angel and Ryan or the alleged negligence of them?

42.  The Plaintiff cannot seriously dispute that there is no evidence showing that the Defendant actually authorised Angel/Ryan to make the Limited Loss Representations, the 1^st Profits Representations or the 2^nd Profits Representations. Hence, he has to resort to imposing vicarious liability on the Defendant based on (a) the alleged principal and agent relationship between the Defendant and Angel/Ryan; and (b) the alleged employment relationship/akin to employment relationship between the Defendant and Angel/Ryan.

Applicable Legal Principles

Agency

43.  Vicarious liability may be established based on a principal and agent relationship, focusing on the test of authority. As held by the Court of Appeal in Wong Wai Hing & Another v Hui Wei Lee [2001] 1 HKLRD 736 at 767A-H, citing Lloyd v Grace, Smith & Co [1912] AC 716 and Barwick v English Joint Stock Bank (1867) LR 2 Ex 259, a principal is liable for the fraud of his agent acting within the scope of his actual or ostensible authority, even if the principal did not authorise the particular fraudulent act, because the principal put the agent in his place to do that class of acts. See also, Chitty on Contracts, Hong Kong (11^th Ed) §1-061.

44.  Apparent authority is found where a principal, by words or conduct, has represented to a third party that the agent has actual authority to enter into the kind of transaction in question, and the third party enters into a transaction in reliance on that representation, which reliance must be reasonable: see Luk Wing Yan v CMB Wing Lung Bank Ltd [2021] HKCFI 279 at §137 per Coleman J.

45.  In determining whether ostensible or apparent authority exists, the Court looks at a variety of factors, including how the individual was held out by the alleged principal, whether reliance was reasonable, and whether there was a duty to inquire: see Lee Chau Mou v Incorporated Owners of Sunview Industrial Building [2007] HKEC 2298.

46.  An agent cannot clothe himself with apparent authority merely by representing that he has it. The representation of authority must emanate from the principal: see Luk Wing Yan (supra) at §207.

47.  The representation of authority may be implied and may take the form of a holding out of an agent as occupying a position that carries a usual authority: see Luk Wing Yan (supra) at §139.

48.  Although an agent who acts fraudulently may still be acting within his authority, the mere fact that the principal, by appointing the agent, gives him an opportunity to defraud a third party, does not without more make the principle viable. When the agent is acting in furtherance of his personal interest, this may negative actual authority, and if the third party knows or ought to know of it, negative apparent authority: see Bowstead at §8-063. Where a person who deals with an agent, whose authority he knows to be limited does so at his peril, in the sense that should the agent be found to have exceeded his authority his principal cannot be made responsible: see Luk Wing Yan (supra) at §140.

Employment/akin to employment relationship

49.  Vicarious liability can arise from an employment relationship or a relationship akin to employment. The modern two-stage test is summarised in Trustees of the Barry Congregation of Jehovah’s Witnesses v BXB [2024] AC 567 and recently applied in Tse Chi Wai v Chan Kwan Ho [2025] HKDC 1105 at §58 per DDJ Ebony Ling:

(a)  Stage 1: Is the relationship one of employment or akin to employment? The Court considers features such as how the work is paid (money vs. in kind), how integral the tortfeasor is to the organisation, the extent of control, and whether the work furthers the aims of the organisation. Liability can extend beyond strict employment contracts. Furthermore, the five policy reasons identified in Various Claimants v Catholic Child Welfare Society [2013] 2 AC 1 remain relevant to determining if it is fair, just, and reasonable to impose liability;

(b)  Stage 2: Is the wrongful conduct so closely connected with acts the tortfeasor was authorised to do that it can fairly and properly be regarded as done while acting in the course of employment or quasi-employment?

50.  In cases of fraud, as noted in Luk Wing Yan v CMB Wing Lung Bank Ltd (supra), the apparent authority of the employee often identifies the necessary close connection to render the employer liable: -

(a)  An employer will be vicariously liable if the employee’s fraudulent conduct falls within the scope of the employee’s authority, actual or ostensible. The essential feature for creating liability in the employer is that the party contracting with the fraudulent servant has altered his position to his detriment in reliance on the belief that the servant’s activities were within his authority, this belief having been induced by the employer’s representation by way of words or conduct: at §§132-134; and

(b)  An employee cannot confer authority on himself simply by representing that he has it. The employer must, by words or conduct, have induced the impaired party’s belief that the employee was acting within his authority. Furthermore, the plaintiff must show that he in fact relied upon the actual or ostensible authority with which he alleges the employer had clothed his employee. The test for liability is one of authority rather than the course of employment: at §§135-136.

Tortious liability vs contractual relationship

51.  Concurrent or alternative liability in tort cannot be used to “permit the plaintiff to circumvent or escape a contractual exclusion or limitation of liability for the act or omission that would constitute the tort”: see Henderson v Merrett Syndicates Ltd [1995] 2 AC 145 at p 191C per Lord Goff of Chieveley.

52.  In the context of finding a duty of care, where it would subvert the contractual structure designed by the parties, Lord Roskill observed in Junior Books Ltd v Veitchi Co Ltd [1983] 1 AC 520 at 546 that:

“During the argument it was asked what the position would be in a case when there was a relevant exclusion clause in the main contract. My Lords, that question does not arise for decision in the instant appeal, but in principle I would venture the view that such a claim according to the manner in which it was worded might in some circumstances limit the duty of care just as in the Hedley Byrne case the plaintiffs were ultimately defeated by the defendants' disclaimer of responsibility.”

Analysis

Is the Defendant vicariously liable under the principal/agent route?

53.  The focus here is whether the misconduct which the Plaintiff complains that Angel/Ryan had committed falls within their actual/ apparent authority from the Defendant.

54.  As could be seen from the SOC, in particular, §§4C-4F, 12, 15B-15C, 18-22 thereof, the Plaintiff is alleging that the Defendant had given Angel/Ryan the authority/apparent authority to:

(1)  Provide investment advice to the Defendant’s clients or making investment decision for the clients (“the Authority to Advice”); and

(2)  Operate clients’ account and conduct investment transactions for clients (“the Authority to Transact”).

55.  With respect to actual authority, there is no evidence to show that the Defendant had conferred any actual Authority to Advice or Authority to Transact on Angel/Ryan.

56.  As Ms. 許少英 (“Ms. Hui”) and Mr. 陳兆榮 (“Mr. Chan”) (witnesses of the Defendant) confirmed, the Defendant engaged Angel and Ryan as self-employed agents (自僱代理人, 俗稱經紀) to carry out marketing activities for the Defendant and help potential clients to open investment accounts with the Defendant. The Defendant has required these self-employed agents to use marketing materials provided by the Defendant, which were also available on the website of the Defendant’s group company.

57.  There is no document showing that the Defendant had given actual authority to Angel/Ryan to conduct any of the Defendant’s affairs beyond marketing activities.

58.  On the business cards of Angel and Ryan (“the Business Cards”), the Defendant made clear that they were working in the marketing department (市場部). There is no document showing that the Defendant had informed the Plaintiff that Angel/Ryan can provide investment advice on behalf of the Defendant or handle investment transactions for the Plaintiff on behalf of the Defendant.

59.  As for apparent authority, having due consideration of the evidence, I find that the Defendant had not clothed Angel/Ryan with the Authority to Advice or Authority to Transact.

60.  First, on the Business Cards, the Defendant only stated that Angel and Ryan were Assistant Vice President and Vice President in marketing (助理副總裁/副總裁 - 市場部). There is no holding out by the Defendant that Angel/Ryan was involved in providing investment advice or conducting transactions for clients. Insofar as Ryan claimed himself to be an analyst (分析師) in his Whatsapp messages with the Plaintiff, this was Ryan’s own representation, inconsistent with his title on his Business Card.

61.  Second, having Angel named as the “handling agent” in the Application Form (客戶有否經紀跟進: 是; 經紀姓名: Yu On Ki) does not show one way or the other whether Angel has the authority to provide investment advice or to carry out transaction on behalf of the Defendant for the Plaintiff. In addition, for the Authority to Transact, in the Application Form, after the Plaintiff indicated that he would not be giving transaction instructions himself, he was asked to contact his own client representative (請自行與客戶代表聯絡). There is no suggestion that the “handling agent” named in the Application Form must be the “client representative”. The Plaintiff was requested to make his own arrangement to contact the “client representative” of his choice.

62.  Third, and significantly, by signing the Application Form, the Plaintiff acknowledged that he had read the terms in Documents.

63.  The T&C contains, inter alia, the following express terms in Chinese:

(a)  Clause 18 “客戶知悉槓桿式買賣的虧損風險可以十分重大。客戶所蒙受的虧損可能超過客戶的最初保證金款項。即使客戶定下備用買賣指示，如 ‘止蝕’或 ‘限價’ 買賣指示，亦未必可以將虧損局限於客戶原先設想的數據，因市場情況可能使這些買賣指示無法執行。…因此，客戶必須根據自己的財務狀況及投資目標仔細考慮這種買賣是否適合自己。”. The same warning is contained in Clause 1 of the Risk Disclosure and the Disclaimer;

(b)  Clause 19: “客戶同意， 他是唯一經授權的網絡設施使用者。客戶對登錄密碼的保密性，安全性及其使用獨自承擔全部責任。”;

(c)  Clause 20: “客戶承諾並同意，他對使用登錄密碼通過網絡設施輸入的所有指示獨自承擔全部責任 (不論是不是經過他的授權，並且也不論該指令是不是由公司，其任何經理或僱員在客戶的明確要求下輸入) 。公司及和其任何經理，僱員或代理人都不對該指令的處理，錯誤處理或損失承擔任何責任。…”;

(d)  Clause 21: “客戶進一步承諾並同意，作為使用網絡設施發出指令的條件，客戶應立即通知公司，如果: (a)… (b) 他已經收到他並沒有對其發出指令的， 或存在類似衝突交易的書面確認。(c)他察覺到對其登錄密碼未經授權的任何使用； …”;

(e)  Clause 23: “客戶明確同意，公司可以通過網絡設施跟客戶聯絡或向其發出通知，快並且該通知或聯絡在公司傳送的時候被認為已經由客戶收取…”; 

(f)  Clause 36 “客戶同意，公司和其任何經理、僱員、 代理人對任何損失不承擔責任或具有任何責任。(a) 對於登錄或使用，或不能登錄或使用服務所造成的任何種類的損害，不論是直接的、間接的、 特別的、後續性的、或事故性的，包括，但不限于作為、不作為、過失、延遲或網絡設施中斷所造成的損害，甚至如果公司，其經理、僱員、代理人已經得到該損害或損失可能性的通知；…”.

(Emphases added)

64.  In the Risk Disclosure and the Disclaimer, it is stated that “本聲明並不完全披露金屬買賣之風險。鑑於買賣金屬存在著風險，所以投資者須完全理解有關這類產品的性質 (及契約上的關係)及其風險程度，才可進行買賣交易。買賣金屬並非適合任何人仕。投資者必須先衡量其承擔市場風險或虧損能力。”.

65.  In the T&C, there is no indication that the Defendant had authorised self-employed agents like Angle/Ryan to provide investment advice to clients. Rather, by Clause 18 of the T&C, the Defendant warns clients that leverage trading may entail high risk of loss and asks the clients to take their own financial condition and investment aim into account and consider carefully before making any investment decision. Similarly, in the Risk Disclosure and Disclaimer, the Defendant highlights the risks of metal trading and reminds clients to assess their own ability before entering into any transaction. These statements do not sit well with the suggestion by the Plaintiff that the Defendant had clothed Angel/Ryan with the Authority to Advice.

66.  Under Clauses 19 to 20 of the T&C, the Plaintiff agrees that the authority to use the Defendant’s platform is given by the Defendant to him solely and he has the responsibility to safekeep the Password. These clauses negate any suggestion that the Defendant had held out to the Plaintiff that Angel/Ryan had the Authority to Transact.

67.  Hoping to brush aside the clear terms in the T&C, the Plaintiff claims that he had never been provided with the Documents.

68.  I do not believe the Plaintiff’s evidence in this regard:

(a)  The Plaintiff is someone with a reasonable degree of sophistication. As stated in the Application Form, the Plaintiff is a general manager of a construction company. During cross-examination, the Plaintiff said that he is an engineer (工程師);

(b)  When the Plaintiff raised concerns about signing the Authorisation Form in his WeChat message to Angel, he said that he had plenty experience of signing contracts for his company and he had concluded business of around 100 million dollars each year. He acknowledged that signing a document cannot be done carelessly (“我自己都話我一年接成億生意，都幫公司簽唔少合約，簽名呢樣嘢唔可以太草率”). This shows that the Plaintiff was fully aware of the significance of appending his signature on a document;

(c)  During cross-examination, the Plaintiff accepted that he had read the Application Form in detail. When being asked if he had requested Angel for a set of the Documents if they were indeed not provided to him, the Plaintiff said that he could not recall if he had asked. From the Whatsapp and WeChat messages before this Court, there is no record of the Plaintiff ever asking Angel or any representative of the Defendants for the Documents;

(d)  In the Application Form, the declaration that the Plaintiff has read and understood the contents of the Documents is right above the Plaintiff’s signature. By appending his signature on the Application Form, the Plaintiff must be confirming that he has read and accepted the content of the Documents.

69.  In any event, as a matter of law, an account opening form is an offer by a potential client to the financial institute for financial services, offering that he is willing to be bound by the terms incorporated by reference in the application form: see DBS Bank (Hong Kong) Ltd v San-Hot HK Industrial Co Ltd [2013] 4 HKC 1 at §44 per DHCJ Jason Pow SC.

70.  It has been held authoritatively by the Court of Final Appeal in Ming Shiu Chung & Ors v Ming Shiu Sum & Ors (2006) 9 HKCFAR 334 at §84 per Ribeiro PJ that reliance is universally placed on signatures appended to documents by persons of full age and understanding as signifying the signatory’s assent to what the document states. Where such person has signed a document which purports to have legal effect, the law has never regarded it as enough to show that he signed without knowing its content for the documents to be disavowed.

71.  Hence, the Plaintiff must be taken to have agreed to be bound by the Documents, which form part of the agreement between the Plaintiff and the Defendant.

72.  Fourth, with respect to the Authority to Transact, the Plaintiff admitted during cross-examination that the Defendant did not expressly tell him that it had authorised Angel/Ryan to operate the Investment Account for the Plaintiff. When being asked during re-examination as to the basis upon which the Plaintiff believed that Angel/Ryan had such authority, the Plaintiff said that it was because Angel had published an article on a financial magazine under the Defendant’s name (“the Article”). Further, Angel could arrange for the Investment Account to be opened without the Plaintiff signing the Authorisation Form.

73.  The Article is incomplete, only contained in a photograph sent by Angel to the Plaintiff by Whatsapp. While the Article bears the logo of “Glorysky灝天金融” and states that the information is provided by “灝天金融”, the content does not indicate that Angel would have authority to operate clients’ accounts on behalf of the Defendant. Further, from the incomplete content of the Article, it appears that the Article only concerns general analysis on the market of gold trading in the light of the presidential election in the United States. It does not show that the Defendant had authorised Angel to give investment advice or conduct transactions for clients.

74.  As to the fact that the Defendant is able to arrange for the Plaintiff to open the Investment Account without him signing the Authorisation Letter, I cannot see how this would show that the Defendant had authorised Angel to provide investment advice or conduct transactions for clients. Further, as Ms. Hui explained during cross-examination, there is no requirement by the Defendant for a signed Authorisation Letter before an investment account can be opened.

75.  Fifth, in line with Clauses 19 and 20 of the T&C, in the email from the Defendant providing the Password to the Plaintiff dated 18 January 2017, the Defendant reminded the Plaintiff that he should keep the Password safely and should not give it to others (溫馨提示: 請客戶保管好自己的密碼, 切勿轉交予別人.謝謝”). This reinforces my view that the Defendant had not hold out to the Plaintiff that Angel/Ryan had the Authority to Transact.

76.  Lastly, also with respect the Authority to Transact, from the WeChat and Whatsapp messages between the Plaintiff and Angel/Ryan, it is apparent that the Plaintiff allowed Angel/Ryan to operate the Investment Account on his behalf solely out of his personal relationship with them. The Password of the Investment Account was provided to the Plaintiff, and it was the Plaintiff who authorised Angel/Ryan to use it to access the Investment Account. As the Plaintiff admitted during cross-examination, he provided the Password to Angel and authorised her to conduct transactions for him using the Investment Account. Amongst others, the Plaintiff said the following in his messages with Angel, showing that he had a close relationship with Angel and that he made the investments out of his trust on Angel:

(1)  “唔係因為大家傾落熟左我都唔會投資呢啲”[2];

(2)  “充夠電先靚先索 不過你唔明”; “我冇乜目標寧願你生活過得好”; “安琪呀我你係1000%信水(任)”[3];

(3)  “我希望你真係記得當日我願意投資都係因為當你係朋友，而之後亦前後加左三次錢，全都係因為一個信字”[4];

(4)  The Plaintiff persuaded Angel to attend a fortune telling session together[5]. Angel sent photos to the Plaintiff during her trip to Phuket, to which the Plaintiff responded “唔敢望你張相多個10秒”; “好在我定力好”[6].

77.  When the Plaintiff found out that his investment in the Investment Account suffered a substantial loss, he asked Angel over Whatsapp how much she would be prepared to compensate him personally (“The Plaintiff: 我都係問下：如果你話係私底下賠，有無話目標賠幾多?”; “Angel: 我應承你我籌到錢加左，追到幾多，我私底下賠比你”). This reinforces my conclusion that the Plaintiff allowed Angel/Ryan to trade with the Investment Account because of his personal relationship and private arrangement with them.

78.  The Plaintiff went into some length to comment on the Defendant’s business model and complained that it was seeking to confuse the public, including the Plaintiff, and induce them to think that agents like Angel/Ryan were authorised by the Defendant to perform financial advisory functions on behalf of the Defendant, i.e. having the Authority to Advice. I do not agree with the Plaintiff.

79.  Insofar as the “tools” which the Defendant had equipped Angel/Ryan with, the Business Card made clear that they were working in the marketing department. Allowing Angel/Ryan to use emails with the domain name of the Defendant/the group company, or to use the Defendant’s office premises do not show that the Defendant had given Angel/Ryan the Authority to Advice or the Authority to Transact. As for the Article, as I have discussed above, the general analysis therein does not show that the Defendant had clothed Angel/Ryan with the apparent Authority to Advice or Authority to Transact.

80.  As to the social media posts put up by Angel showing the Defendant’s trading interface with captions concerning making profits for clients for their investments, these were acts of Angel, not the Defendant. The Defendant cannot be said to have held out that Angel had authority to provide financial advice.

81.  While Ms. Hui said during cross-examination that the Defendant would not inquire or control how agents like Angel/Ryan conduct their marketing activities, she pointed out that the Defendant would ensure its clients know about the risks of the transactions and voluntarily enter into them. Importantly, as mentioned above, in the Documents, which form part of the agreement between the Plaintiff and the Defendant, the Plaintiff had acknowledged that he should assess his own condition carefully before entering into any metal trading transactions and that he is the person who will be responsible for the safekeep of the Password. He also acknowledged that he would be solely responsible for any loss suffered as a result of his investments. With these express terms in place, there is no room for the Plaintiff to say that the Defendant had held out Angel/Ryan to have the Authority to Advice or the Authority to Transact even though the Defendant may not have imposed strict control over how Angel/Ryan should conduct their marketing activities.

82.  Similarly, while Ms. Hui in her cross-examination said that the Defendant does not have any measure to prohibit agents like Angel/Ryan from investment advice, she made clear that this is not within the scope of activities which the Defendant engaged Angel/Ryan for. Any investment advice in the present case came from Angel/Ryan, the Defendant did not make any representation to the Plaintiff or the public that Angel/Ryan had the authority to do so. Given the express terms in the T&C as highlighted above, it cannot be said that the Defendant had clothed Angel/Ryan with the apparent Authority to Advice.

83.  For the reasons explained above, I find that the Defendant had not clothed Angel/Ryan with apparent Authority to Advice or Authority to Transact. Solely for completeness’ sake, even assuming the Defendant did clothe Angel/Ryan with the above apparent authority, by reason of the T&C, it is not reasonable for the Plaintiff to rely on any of the said authority.  

Is the Defendant vicariously liable under the employment/akin to employment route?

84.  It is the Defendant’s case that Angel/Ryan were their independent contractors. Even assuming that Angel/Ryan was under an employment relationship/a relationship akin to employment with the Defendant, I find that the Plaintiff has failed to satisfy Stage 2 of the test summarised in Trustees of the Barry Congregation of Jehovah’s Witnesses v BXB (supra) in showing that Angel/Ryan’s alleged misrepresentations and their operations of the Investment Account were “so closely connected” with the acts which the Angel/Ryan were authorised to do. In other words, the Plaintiff has failed to show that the alleged misconduct of Angel/Ryan falls within their actual or apparent authority from the Defendant.

85.  My analysis in §§53-83 is repeated. As I have found that the Defendant had not given Angel/Ryan any actual/apparent Authority to Advice or Authority to Transact, their alleged fraudulent misrepresentations and wrongful operations of the Investment Account fall outside the scope of Angel/Ryan’s authority.

86.  Hence, the Plaintiff cannot impose vicarious liability on the Defendant under the employment/akin to employment route.

87.  For all the reasons above, the answer to Issue 1 is “No”.

C2.  Issue 2: What are the terms of the agreement between the Plaintiff and Defendant and whether the agreement contains the Implied Terms? Has the Defendant breached the agreement?

88.  The Plaintiff’s pleaded case on the formation of the alleged Agreement is unclear. In §§4B-4C of the SOC, the Plaintiff pleads a first meeting between Angel and the Plaintiff on 16 January 2017 and avers that “Subject to the Court’s finding of a valid and/or enforceable agreement between the Plaintiff and the Defendant by reason of the foregoing (‘the Agreement’), the followings were the [Implied Terms]”. There is no particular whatsoever as to how the alleged Agreement was concluded and what were its express terms. There is no particular as to why the Implied Terms should be included in the alleged Agreement as a matter of business efficacy or necessity.

89.  I reject the Plaintiff’s case that the alleged Agreement was formed between the Plaintiff and the Defendant in the meeting on 16 January 2017. Without the alleged Agreement, there cannot be any alleged Implied Terms of it. It follows that the Defendant cannot be said to be in breach of the alleged Agreement or the Implied Terms.

90.  Rather, the contractual relationship between the Plaintiff and the Defendant is fully contained in the Application Form and the Documents. The express terms therein are those which govern the relationship between the Plaintiff and the Defendant.

91.  For the above reasons, the answer to Issue 2 is “No”.

C3.  Issue 3: Whether the Defendant owes the Fiduciary Duties to the Plaintiff? If so, is the Defendant in breach of the Fiduciary Duties?

92.  As could be seen from §4F of the SOC, the Plaintiff’s case on the alleged Fiduciary Duties is premised on there being the Agreement and the Implied Terms. As I have found that there is no alleged Agreement and Implied Terms, the Plaintiff’s claims based on the alleged Fiduciary Duties must fail.

93.  The answer to Issue 3 is “No”.

C4.  Issue 4: Whether the Defendant owes the Quincecare Duty to the Plaintiff? If so, is the Defendant in breach of the duty?

94.  It is a basic duty of financial institutions to comply with clients’ instructions. Where clients have authorised and instructed the financial institutions to enter into a transaction. It is not for the bank to concern itself with the wisdom or risks of the clients’ decisions: see Luk Wing Yan (supra) at §169.

95.  As a subordinate/ancillary duty, financial institutions owe their clients a duty of care when executing orders. Financial institutions would be liable if they execute order knowing it to be dishonestly given, or shut their eyes to the obvious fact of the dishonesty, or acted recklessly in failing to make such inquiries as an honest and reasonable man would make. Financial institutions should refrain from executing an order if and for so long as they were put on inquiry by having reasonable grounds for believing that the order was an attempt to misappropriate funds: see Excel Courage Holdings Limited v Seto Ming Wai & Anor [2024] HKCFI 984 at §26 per Harris J, citing Singularis Holdings Ltd v Daiwa Capital Markets Ltd [2020] AC 1189 at §1. As Harris J clarified in §58, the complainant needs to demonstrate that there are features of the transfers that suggest impropriety of some sort, which might involve a wrong done which requires explanation. A general irregularity in the structuring or documenting of a transaction will generally be insufficient.

96.  In determining whether the Quincecare Duty is breached, as the Court of Final Appeal in PT Asuransi Tugu Pratama Indonesia TBK v Citibank NA [2023] HKCFA 3 at §17 per Lord Sumption NPJ, if there are features of the transaction apparent to a financial institution that indicate wrongdoing unless there is some special explanation, then an explanation must be sought before it can be assumed that all is well. In other words, if a bank actually knows of the fact which to their face indicate a want of actual authority, it is not entitled to proceed regardless without inquiry.

97.  In §22C of the SOC, the Plaintiff pleads 4 particulars to show that the transactions in the Investment Account are “dubious”:

(1)  The Plaintiff stated in the Application Form that he had no prior experience in investing in precious metals;

(2)  The frequency, amount and type of products being traded in the transactions;

(3)  There are reasonable grounds to believe that the trades conducted in the Investment Account are attempts to defraud the Plaintiff or attempts to misappropriate funds from the Plaintiff by his agents;

(4)  The Defendant should have special internal monitor of the Investment Account to ensure financial prudence and staff’s personal integrity.

98.  However, as the Plaintiff admitted during cross-examination, his allegation that the transactions were unusual is only an afterthought which he came up after he suffered loss. The Plaintiff then claimed that as he is an engineer, he thinks that the transactions and the figures are suspicious. There is simply no credible evidence to show that the transactions in the Investment Agreement are in anyway dubious or should put the Defendant on inquiry.

99.  Indeed, as Ms. Hui and Mr. Chan both said in their evidence, in practice many clients of the Defendant would trade in high volume and frequently and there is nothing unusual about this.

100.  Moreover, as the Plaintiff admitted that he had provided the Password to Angel and Ryan for them to conduct transactions in the Investment Account, the Defendant should not be put on inquiry even if it had detected a login of the Investment Account by Angel/Ryan.

101.  The Plaintiff has failed to show that the features in the transactions in the Investment Account would have put the Defendant on inquiry. The Defendant does not owe any Quincecare Duty to the Plaintiff.

102.  The answer to Issue 4 is “No”.

C5.  Issue 5: Whether the Defendant is liable to the Plaintiff for the Sum?

103.  As I have found against the Plaintiff on Issues 1 to 4 above, the answer to Issue 5 is “No”.

D.  CONCLUSION

104.  For the reasons above, I will dismiss the Plaintiff’s claim in the Action.

105.  Costs should follow the event, I will grant a Costs Order Nisi that Plaintiff shall pay to the Defendant the costs of this Action (including any costs reserved), with Certificate for Counsel.

106.  Unless there is an application made by summons for the variation of the above Costs Order Nisi within 14 days after the handing down of this Judgment, the said Costs Order Nisi shall become absolute.

107.  Lastly, I thank counsel for their assistance.