JB MANAGEMENT LTD AND OTHERS v. LAU LIK WAH DAVID AND OTHERS

HCA 908/2021

[2025] HKCFI 2702

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 908 OF 2021

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REASONS FOR DECISION

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INTRODUCTION

1.  This is the 1^st and 2^nd defendants’ (“D1” and “D2” respectively and “Ds” collectively) appeal against the Order of Master YH Hew (“the Master”) dated 30 July 2024 who had entered judgment against each of D1 and D2 in favour of various plaintiffs (“Ps”) in divers sums in this case. The appeal hearing took place before me on 13 March 2025. At the end of the hearing, I dismissed Ds’ appeal and ordered them to pay Ps’ costs of the appeal. I also summarily assessed the costs of the appeal at HK$150,000 and ordered Ds to pay them forthwith.

2.  I said I would hand down the reasons for my decision in due course. Here are the reasons.

BACKGROUND

3.  In view of the voluminous documentary evidence with Ps had gathered and relied upon for the earlier Mareva injunction application against Ds in this case, the facts of this case have become quite clear by the time when proceedings were issued against Ds.

4.  Ms Nataile So, counsel for Ps, has very helpfully summarized them in the skeleton submissions she has prepared on behalf of Ps for the appeal hearing (“Ps’ Submissions”). I shall borrow her summary and set them out below by way of introduction to the background to this case.

The Parties

5.  Ps belong to the Lane Crawford Joyce Group of companies (“the Group”), which is in the business of fashion, retail and brand management. They can be separated into the “Joyce Group” (the 1^st to 4^th plaintiffs) and the “LC Group” (the 5^th to 7^th plaintiffs).

6.  D1 was an employee of various companies within the Joyce Group from 2006 to 2020, initially as a Senior Accounting Manager, and ultimately as Financial Controller (until his summary dismissal).

7.  D2 is a company solely owned by D1. He was its sole director. The 3^rd defendant (“D3”) is a Seychelles company also wholly owned by D1, though it has been struck off from the company registry.

Discovery of D1’s fraudulent scheme

8.  On 3 November 2020, a report was made by the Hong Kong Jockey Club (“HKJC”) to the former General Counsel of LCJG Limited (Ps’ holding company) about 7 corporate cheques amounting to some HK$1.7 million purportedly been issued by Ps which had been deposited into D1’s personal betting account between March 2016 and May 2020.

9.  It was then discovered that such cheques had been purportedly issued upon forged invoices issued by HKJC to Ps.

10.  On 5 November 2020, representatives of Ps met with D1 to confront him about the funds transferred to his personal betting account. As set out in the minutes of such meeting, which were duly signed by D1 at the time (“the Nov 2020 Minutes”):

(a)  D1 admitted that he “[had] done something wrong… using the Company money and banked into [his] own account”, and that he was “addicted to gambling” and “greedy”, but that he was “sorry”. He claimed that the scheme was “the only way that [he] could think of…to deal with [his gambling losses]”.

(b)  He also admitted that the purported invoices against which the aforesaid cheques had been issued were forged by him.

11.  D1 was summarily dismissed on the same day. A police report was made by the Joyce Group in respect of such fraud on 6 November 2020. On 12 November 2020, Ps were informed by the police that D1 had been arrested. The investigation against him appears to still be ongoing.

Investigation into the fraudulent scheme

12.  From mid-November 2020 onward, Ps conducted further investigations and uncovered more fraudulent transactions involving over HK$81 million of unlawful transfers from Ps to D1, his companies and/or for his personal purposes.

13.  On 18 June 2021, Ps sought and obtained a worldwide Mareva and proprietary injunction against D1 and his companies, restraining them from disposing funds of up to a value of HK$81,788,898.49: see §1(1) of the Order of Mimmie Chan J dated 18 June 2021. On the same day, the learned judge also granted a Banker’s Book Order against Ds’ banks requiring disclosure of information to Ps.

14.  In support of the injunction and Banker’s Book applications, Ps filed the affirmation of Chan Oi-Man[1], which detailed the investigations that had been conducted by both their internal investigation team as well as by forensic accountants Ernst & Young Advisory Services Limited.

15.  Such investigations identified a sprawling total of at least 212 fraudulent transactions from 2010 to 2020. To the best of Ps’ knowledge based on such investigations, D1’s misappropriations appeared to be through two main methods.

16.  First, the “Forged Invoice Method”, whereby D1 forged, and then issued, invoices from various purported payees (including D2 and D3). Ps were then procured to make payment in respect of such invoices by issuing cheques pursuant to Ps’ payment procedures. Notably:

(a)  Ps discovered an “invoice template” on an Excel spreadsheet on D1’s work computer, which was used to create fake invoices to be issued to Ps for payment.

(b)  D1 apparently went a step further to even forge the signature of Mr Andrew Keith (“Mr Keith”), the then president of the Group, on certain invoices, to strengthen the authenticity of the purported invoices.

(c)  D1 would also take advantage of his knowledge of Ps’ payment procedures, such as splitting payments into smaller amounts so as not to require approval from a separate list of signatories involving corporate officers (which was necessary for payments exceeding HK$500,000).

17.  Second, the “Unknown Cheque Method”, where D1 would directly request finance team members to prepare blank cheques on the excuse that these would be used for employees’ bonus or incentive payments such that the names of payees had to be confidential – when in fact the cheques were deposited in D1 or his companies’ accounts.

Summary judgment entered against Ds

18.  Ps’ application for summary judgment under the Summons dated 5 February 2024 (“the Summons”) was confined only to direct receipts by D1 and D2 of funds originating from Ps.

Fund flow

19.  Ps’ lawyers have very helpfully summed up the fund flow of the money Ds had defrauded from Ps in table form in this case. They are based on direct receipts on the part of Ds. They can be found in the hearing bundle[2]. References have also been provided to the supporting documents in the bundles to support underlying evidence in relation to those receipts. They can principally be divided into 3 categories.

20.  Table 1 sets out 22 discrete sums which are traceable from Ps to D1 personally[3]:

(a)  These transfers add up to a total of HK$7,496,590[4].

(b)  7 of these transfers (Nos. 1.2-1.3, 1.18-1.22) are transfers which D1 caused various Ps to effect to his personal betting accounts held with HKJC, totalling HK$1,704,200, as referred to in §§41-48 of the amended statement of claim (“the ASOC”)[5]. This aspect of receipt has never been addressed/justified by D1. Nor has he ever sought to explain his confession in November 2020. In the absence of any defence, Ps say these 7 transfers are plainly impeachable.

(c)  The remaining 15 transfers are in respect of purported “staff costs” pleaded at §§106-113 of the ASOC, whereby D1 caused some of the Ps to issue “staff cheques” or payments for “incentive bonus provision”, when in fact there was no such need or basis for the same. Instead, these cheques were written out and cashed into D1’s personal account held with Hang Seng Bank.

21.  Table 2 sets out 36 sums traceable from Ps to D2[6]:

(a)  These transfers add up to HK$29,104,120[7].

(b)  1 transfer (No. 2.1)[8] is in respect of a purported “staff cheque” which was paid into D2’s bank account held with Hang Seng Bank. This head of claim is dealt with at the ASOC, §§41-48 and Item 168[9] of Schedule 5[10]. This explains the slight increase in the above amount compared to the pleaded figure at the ASOC, §21.

(c)  The rest are the transactions pleaded in Schedule 1 of the ASOC[11], which are dealt with at §§21, 23-28 of the body itself[12].

22.  Finally, Table 3[13] sets out 34 sums traceable as receipts by D3. Again:

(a)  These transfers add up to HK$9,952,660.

(b)  Again, there is 1 transfer (No. 3.1)[14] which was traceable to a purported cheque issued for “incentive bonus provision” but which was paid into D3’s bank account held with HSBC. This is the reason for the slight increase in the amount associated with D3 as compared with the figure at the ASOC, §22[15].

(c)  The remaining transactions are those pleaded in Schedule 2 of the ASOC[16], which are dealt with at §§22, 23-28 of the body itself[17].

P’s Causes of Action against D1, D2 & D3

23.  Ps’ claims against D1, D2 and D3 are based on 2 different causes of action, ie (i) unjust enrichment; and (ii) constructive trust.

(i)  Unjust enrichment

24.  Insofar as Ps’ claims against Ds in this action (in respect of which the Master had entered judgment) were based on unjust enrichment, I consider it has been clearly made out.

25.  In my view, Ps have amply satisfied the 4 criteria set out by the Court of Final Appeal in Shanghai Tongji Science and Technology Industrial Co Ltd v Casil Clearing Ltd (2004) 7 HKCFAR 79 at §67 for unjust enrichment. They are:

(a)  Was the defendant enriched?

(b)  Was the enrichment at the plaintiff’s expense?

(c)  Was the enrichment unjust?

(d)  Are any of the defences applicable?

26.  In this case, as Ms So has submitted, there is no doubt that the first and second questions can be easily satisfied with reference to Tables 1 to 3:

(a)  Table 1 shows direct enrichment of D1 given that he received various amounts at the expense of the relevant Ps which made the payments identified therein.

(b)  Tables 2 and 3 equally show the enrichments of each of D2 and D3, again at the expense of the relevant Ps.

27.  For the third question on unjust factors they are satisfied by the following:

(a)  The enrichments were due to mistake given the fraudulent scheme perpetrated, whereby D1 took steps to induce Ps to effect various payments to pay forged/false invoices which did not in fact correspond to any actual services rendered by the recipient(s).

(b)  Further, certain payments were effected due to mistake in the form of and misrepresentations by D1 about “staff costs”, resulting in Ps having effected payments on inaccurate understandings about whether sums were properly due and authorised.[18]

28.  On the fourth question, neither D1 nor D2 has pleaded or advanced any viable defence(s) in answer to the claim in unjust enrichment.

29.  I agree with Ms So that, at least in respect of D1 and D2, judgment ought to be entered against each of them for respectively HK$7,496,590 and HK$29,104,120 based on direct enrichment.

(ii)  Constructive trust

30.  Insofar as Ps’ claim against D1 is based on constructive trust is concerned, I also find that it has been clearly made out.

31.  This claim is based on monies received by D2 and D3 (being traceable proceeds of fraud) having been diverted back to D1:[19]

(a)  The sums set out in the judgment entered by the Master on 30 July 2024 against D1 are the total of his own direct receipts from each of the Ps and also receipts by D2 and D3.

(b)  Those sums were based on the breakdown Ps have prepared which were submitted to this Court as well as to the Master previously as Annex 1 to Ps’ Submissions.

32.  On this part of the case, it is based on the well-established principles that where property has been obtained by fraud, equity imposes a constructive trust on the fraudster recipient so that the money is recoverable and traceable in equity: see IQ Solutions Inc v WKJ Ltd [2024] HKCFI 559 at §9 (per DHCJ Le Pichon).

33.  In this case, there is beyond dispute that the monies received by D2 and D3 (as set out in Tables 2 and 3) are accordingly subject to a constructive trust in favour of the respective Ps who effected the subject transfers.[20]

34.  Then, at Table 4[21], Ps have set out the detailed evidence and fund flow showing D2 and D3’s transfers to D1 over the years, totalling at least HK$24 million. Again, I cannot see how Ds can dispute such clear fund flow from D2 and D3 to D1.

35.  In summary, the fund flow is as follows:

	D2	D3
Amount received from Ps	HK$29,104,120[22]	HK$9,952,660[23]
Amount transferred to D1	HK$13,858,000[24]	HK$10,228,432.61[25]
Bank account balance	(As of February 2019) HK$6,803.40[26]	(As of September 2019) HK$74,720.33[27]

36.  It is Ps’ case, as upheld by the Master and of which I entirely agree, that the irresistible inference to be drawn is that D1 was the person holding onto the traceable proceeds of fraud which were initially received by, and routed through, his companies D2 and D3:

(a)  Both D2 and D3 are wholly owned by D1, and solely under his control. It is Ps’ case that D1 caused Ps to effect payments to these two companies by his perpetration of fraud pleaded in Section D2 of the ASOC: see §§21-22, 27[28].

(b)  D1 has never, in the evidence filed in the present proceedings, ever addressed why significant sums were transferred from D2 and D3 to him personally; or what use(s) either company made of the funds received from Ps – which he claims to be tasked to “spend” on behalf of the Group.

37.  Insofar as D3 is concerned, the sum transferred from D3 to D1 exceeds the total amount which D3 received from Ps.

38.  Ms So on behalf of Ps submits and I accept that, applying the relevant equitable tracing rules (particularly the rule in Re Oatway),[29] it is to be presumed against D1 / D3 that he intended to, and did, effect transfers from D3 out of the stolen funds belonging to Ps, to enable this tracing exercise to be done to pin the liability on D1.

39.  I also find that the pleadings also bear out the claim of constructive trust. Ms So in Ps’ Submissions has set them out in details and I do not intend to repeat them here save to say that I consider Ps have clearly made out a case against D1 on constructions trust under the ASOC of which D1 has no credible answer.

40.  Insofar as D2 is concerned, I agree with Ms So that, although the sum it transferred to D1 is less than the total amount D2 received from Ps, even though Ps (and the Court) may not have full clarity on the entire fund flow, the irresistible inference is that D1 is the ultimate beneficiary:

(a)  As mentioned above, D2 paid out over HK$13.8 million of the sums received from Ps from its account, and had only HK$6,803.40 remaining its bank account as of February 2019.

(b)  In the absence of any evidence or suggestion D2 may have paid someone other than D1, and noting that (i) D1 was the person who caused D2 to receive the funds from Ps (and who had control over D2 and accordingly, its account); and (ii) D1 has always been the sole mastermind behind the fraud, which was perpetrated for his personal benefit, Ps submit and I accept the Court can properly infer that D2’s receipts were ultimately routed to D1.

Principles on summary judgment

41.  The principles concerning summary judgment are trite and need no reminding. For the record, I have taken into account of the principles set out in Hong Kong Civil Procedure 2025 §§14/4/8, 14/4/9, 14/4/9A and 14/4/9B. I shall not repeat them here.

The Admissions made by D1

42.  In my judgment, the Master was absolutely right in entering judgment against Ds given the complete lack of bona fide defence in the face of undisputed and indisputable wrongdoing. This is particularly so when D1 had candidly admitted his wrongdoings when first confronted by his employer with the unauthorized transfer of monies into his betting account with HKJC.

43.  As Ms So has pointed out, it is important to note that D1 has not in any way addressed or denied his admissions as recorded in the Nov 2020 minutes, nor disputed his signature on the same. At §§6-7 of the defence, Ds merely makes “no admission” of the pleas on the confession and lamely repeats the excuse that monies had been deposited into his betting account “pursuant to the instructions, approval and/or authorization of his superior and/or other management staff of [Ps]”.

44.  In my view, it is ludicrous to suggest that the senior management of the Group would instruct, approve or authorize D1 to cause the Group to pay him over HK$1.7 million to gamble. However, incredibly, this is essentially what D1 is trying to say in his defence.

45.  It is also important to note that D1 has expressly admitted to having “done something wrong” when he was confronted, and even apologised. This is in stark contradiction to the current defence put forward by Ds about how all his actions were somehow authorised.

46.  In light of those clear admissions, I cannot see how any purported defence can be viewed as genuine or bona fide at all.

47.  On top of the clear admissions made by D1 at the meeting in November 2020, it is also important to note that D1 did not deny:

(a)  the fact that he repeatedly forged invoices from various third parties (including the HKJC and Aberdeen Marina Club) and even forged the signature of Mr Keith,[30]or the use of deceptive Unknown Cheque Method which resulted in numerous payments directly to D1 or his companies,[31]

(b)  the existence of the various transactions identified in Tables 1 to 3[32], being the monies channelled from Ps to D1, D2 and D3 (and the fact of receipt);[33]

(c)  the fact that no services were ever provided by either D2 or D3, despite purported invoices issued by them resulting in payments from Ps thereto;[34] and

(d)  the veracity of all the supporting documents put together by Ps which show the fund flow from Ps to D1, D2 and D3, over a span of several years and under the guise of “staff cheques” and false invoices.

48.  In my view, all the above have to be taken into account when considering the purported defence put up by Ds both before the Master and in the appeal before me.

D1 & D2’s Purported Defence

49.  Ds’ purported defence consisted of the following:

(a)  The claims were brought in fragmentation (“the Fragmentation Defence”);

(b)  Inconsistent claims under the ASOC and the Summons (“the Inconsistent Claims Defence”);

(c)  D1 was authorized by Ps to transfer the various sums (“the Authorization Defence”);

(d)  Ps’ claims are time-barred (“the Time Bar Defence”); and

(e)  There exists other reasons why the case should go to trial (“Other Reasons Grounds”).

(i)  The Fragmentation Defence

50.  Ds argue that it is undesirable for litigants to fragment their cases, and note that the present summary judgment against Ds would result in a “partial judgment”.[35]

51.  In particular, Ds rely on Skillsoft Asia Pacific Pty Ltd v Ambow Education Holding Ltd (No. 2) [2016] 1 HKLRD 1052, where Anthony Chan J discussed an application for summary judgment on only part of the plaintiff’s claim. In that case, the learned judge remarked that it was generally undesirable for litigants to fragment their cases into parts and to advance them as they please, as this was not conducive to proper deployment of the scarce resources of the Court.

52.  I agree with Ps that one must not overstate such principle. The first point is that there is no fixed rule against parties proceeding to judgment on parts of their claim. To the contrary, Order 14, rule 1(1) of the Rules of the High Court (Cap. 4A) itself allows this. Even Skillsoft at §10 only noted that fragmentation is “generally” undesirable.

53.  As Ms So has pointed out, there are other cases where the Court would allow partial judgment to be entered against the defendant with the underlying objectives of the Civil Justice Reform (“CJR”) being the most important considerations: See for example 株式会社日源商事 v Crazyegg Ltd [2019] HKCFI 2526 at §§31-32, 39 (per Recorder Manzoni, SC) and Pt Ark Visi Teknik v Owners and/or demise charterers of “Tangkas” [2018] HKCFI 2587.

54.  In my view, the underlying objectives of the CJR will be achieved by having partial judgment entered against D1 and D2 at this stage as submitted by Ps:

(a)  As Recorder Manzoni, SC explained in the Crazyegg case, “fragmentation” is not a bar to summary judgment especially if there are other distinct issues to be tried – such as, in this case, how the unjust enrichment claim operates when purported services are rendered by third parties in consideration for Ps’ payments. There is an added dimension of complexity with the remaining claims which justify separate treatment.

(b)  In addition, if Ps are right that Ds’ purported defence(s) to the fraud are thoroughly bad and can be rejected summarily, it would plainly be in the interests of procedural economy and expedition that judgment be entered now for the clearer claims. Indeed, if Ds’ arguments cannot even hold up to scrutiny at the summary judgment stage, it would be a further waste of time to spend resources holding a full trial just to obtain the same outcome. The concerns about issue estoppel are thus neither here nor there.

(c)  In that way, the remaining issues can be crystallised, saving the Court’s time in due course. Ds will be prevented from dragging their feet and delaying the inevitable (whilst wasting the Court’s resources in litigating a meritless defence).

(d)  Partial judgment against Ds (signalling the Court’s rejection of the purported defence(s)) would likely be helpful to achieve further savings of time and costs for the parties. It would indicate the futility of Ds’ defences and provide a reality check as to the way this action should be conducted going forward.

55.  Mr Ng in Ds’ Submissions tries to argue that it is summary judgment application against D1 in this case would result in a partial judgment. He submits that if the Court enters judgment in favour of Ps for the claims under the Summons, it would effectively mean that the Court had rejected D1’s defence on the Authorization Defence or the Time Bar Defence. He says that would create an issue estoppel against D1 in defending the remaining claims subsequently. He further submits that the risk of estoppel does not stop here. It extends to privies: See Best Year Enterprises Ltd (in Liquidation) and Another v Power Securities Co Ltd and Another [2019] HKCFI 2920 (HCA 1071/2019, 5.12.2019), per Coleman J at §§55-60.

56.  In my view, this is a circular argument. If there is no substance in D1’s Authorization Defence and Time Bar Defence (which as I find in the passages below there is none), then Ds will not be able to rely on the issue estoppel claim or the privies point.

57.  Hence, I find there is nothing wrong for Ps to bring the claims against D1 and D2 in a “fragmented” manner in this case as it will only help to achieve the underlying objectives of the CJR in the particular circumstances of this case. This is especially so when Ds have no arguable defence under the Authorization Defence or the Time Bar Defence in this case at all.

(ii)  The Inconsistent Claims Defence

58.  Insofar as Ds’ attempt to resist the entering judgment against them based on such “inconsistency” or alleged defect on the pleadings is concerned[36], I consider this is futile. I agree with Ms So’s submission that at this stage of the proceedings when summary judgment is sought, necessarily the parties have not gone through exhaustive discovery and/or engaged further forensic accountants etc. in order to trace every single cent which flowed from Ps. However, the Court is still entitled to look at the pleadings in order to ascertain if a properly pleaded claim has been made – and to enter judgment if no other triable issues are raised.

59.  I do not consider there is any substance in Ds’ Inconsistent Claims Defence.

(iii)  The Authorization Defence

60.  In my view, Ds’ only real purported defence is that D1 was allegedly instructed and authorised by Ps’ senior management to help the Group spend money each year to defray surplus amounts, in a way which could sidestep audit enquiries.[37] D1 was allegedly given discretion to decide how to spend this provision, given that “the benefit [of D1 spending] the surplus amount far outweighs the detriment of paying these surplus amount to [D1 and/or his companies]”.[38]

61.  In my judgment, this is a ludicrous defence which is not capable of believing. In my view, the Master was absolutely right in rejecting such an absurd and incredible defence.

62.  As Ms So has pointed out, as a matter of inherent probabilities, it is incredible to think that a reputable group of companies (which included a listed company prior to the privatisation in 2020,[39] during the time when D1’s fraud was perpetrated) would somehow have engaged in conduct to instruct an employee to spend over HK$81 million on himself at his own discretion in order to “get money off the books”. In this regard, such a serious (yet entirely unsubstantiated) allegation made against Ps has been categorically denied by Ps’ senior management in the evidence filed on behalf of Ps.[40]

63.  As Ps submit, putting aside the fact this is a serious allegation with significant regulatory consequences (and thus requires cogent evidence to prove – which is entirely lacking), basically what Ds are asking the Court to believe is that the Group’s only solution to defraying surplus was to ask one single employee to, inter alia, create forged invoices and signatures, lie to other staff about the purpose of various payments, and even financially support that employee’s gambling habits.

64.  This is bordering to ask the Court to believe in some delusional scheme made up by D1.

(a)  The privatization argument

65.  Mr Ng in Ds’ Submissions at §§45, 52, 54 and 55 repeatedly referred to the Group’s “privatization” and the alleged “need to limit the amount of connected transactions” within the Group.[41]

66.  In my view, there is nothing in these arguments.

67.  First, I do not see how the existence of privatization would in any way justify the payments to D1 and his companies (for his own benefits).

68.  Second, it is also not clear why there was a need to limit the amount of connected transactions within the Group and if there was indeed such a need why that would somehow justify paying them directly into D1 or his companies’ accounts. It is like saying that the Group needed to use D1 or his companies to help them to “defray expenses”. D1 has failed to explain why such a need even arose in the first place.

69.  Third, if it is really for the purpose of helping the Group to “defray expenses for the purpose of privatization and/or purported compliance with connected transactions discourse compliance requirement” as claimed by Ds, then Ds have not shown how and when those monies were channelled back to the accounts of the Group.

70.  In the aforesaid circumstances, any authorization defence which is based on the Group’s privatization can be soundly rejected.

(b)  Ps’ alleged role in the fraud

71.  Ds’ other answer to the allegations is to claim it would have been “impossible” for multiple layers of payment approval within the Group to have been bypassed for years, and that Ps have not explained how or why D1 could successfully perpetrated his fraud for so many years without notice. Ds also somehow accuse Ps of not having particularised “how FAD Procedures could be bypassed”.[42]

72.  This argument is like saying how clever D1 was in defrauding Ps over the years and the fact that he was not caught earlier shows that Ps had somehow took part in the fraudulent scheme. It is tantamount to Ds reversing the burden to ask Ps to explain how sophisticated D1’s fraud was. In my view, this is a perverted argument.

73.  As Ps submit, if anything, all of this went to show the complicated and pervasive nature of Ds’ scheme, which went on for a number of years, based on D1’s understanding (and abuse) of Ps’ payment systems and controls as an insider. He was thus able to manipulate and exploit loopholes (for example by presenting false invoices for approval; having payment amounts capped so corporate signatories were not required to sign off on cheques; claiming confidentiality reasons for leaving out payees for cheques to be issued) for his own benefit.

74.  In my judgment, it is not open for D1 to argue that there were controls and systems within Ps, or that they were not good enough to detect his wrongdoing over the years.

(iv)  The Time Bar Defence

75.  Lau 2^nd at §5[43] and Ds’ Submissions at §§60-66 also in the pleadings refer to potential time bar and/or laches as a defence to Ps’ claims.[44]

76.  In my judgment, there is no substance in this defence also.

77.  By raising this defence, Ds are effectively saying that it was too bad that Ps were not able to discover D1’s fraudulent scheme earlier and that they are now time-barred in bringing the claims against Ds.

78.  Section 26(1) of the Limitation Ordinance (Cap. 347) provides for postponement of the limitation period where, inter alia, the action is based on fraud of the defendant and/or any fact relevant to the cause of action is deliberately concealed by Ds.

79.  Based on the above discussions, it is clear that D1 had committed fraud against Ps. Therefore, the relevant limitation period only began to run in November 2020 when the fraud was uncovered. The present action is therefore not time-barred.

(v)  Other Reasons Grounds

80.  In a last-ditch effort to suggest there are “other reasons” which could justify a trial of this action, at §77 of Ds’ Submissions, Ds claim that D1 being laid off and his inability to gain access to internal communications to support their case warrants further investigation.

81.  In my view, this is a desperate plea on the part of Ds.

82.  As Ms So has submitted in P’s Submissions:-

(a)  It is notable that neither in Lau 2^nd nor the Defence has D1 ever particularised or identified any document which may be in existence that supports his case – but which is presently unavailable to him.

(b)  For example, Ds have never claimed that there are emails or internal communications of any sort showing express directions from Ps’ management (let alone details on when, who, or how such instructions may have been given).

(c)  It is thus plainly insufficient for Ds to merely assert that they need to go to discovery to make good their defence.

83.  The Court must be satisfied there is a prima facie case which is reasonably credible. Ds have failed even at that juncture. I agree with Ps that there is no reason for the Court to waste further time entertaining Ds’ attempts to delay judgment.

CONCLUSION

84.  Therefore, based on the above reasons, I consider that the Master was absolutely right in rejecting Ds’ various defences and entering summary judgment against Ps in terms of the Summons. For the same reasons, I dismissed Ds’ appeal on the date of the hearing with costs in favour of Ps.