Press Summary (English)

Press Summary (Chinese)

FACV No. 6 of 2024

[2024] HKCFA 32

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FINAL APPEAL NO. 6 OF 2024 (CIVIL)

(ON APPEAL FROM CACV NO. 377 OF 2022)

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JUDGMENT

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Chief Justice Cheung:

1. I agree with the judgment of Lord Hoffmann NPJ.

Mr Justice Ribeiro PJ:

2. I agree with the judgment of Lord Hoffmann NPJ.

Mr Justice Fok PJ:

3. I agree with the judgment of Lord Hoffmann NPJ.

Mr Justice Lam PJ:

4. I agree with the judgment of Lord Hoffmann NPJ.

Lord Hoffmann NPJ:

Introduction

5. In 2004 Hutchison Whampoa (“HW”) proposed to undertake a construction project in Qingdao. They needed someone to smooth the path to obtaining the necessary approvals and the defendant, who appears to have worked for HW in some capacity, suggested to them that the plaintiff might have the right connections. As a result, HW engaged the plaintiff as a consultant. In an agreement which the plaintiff says was negotiated by the defendant on his behalf, HW agreed that he would be remunerated by a payment in cash and a 10% interest in the profits of the venture. The latter was referred to as the “dry shares”. All the parties acted through special purpose corporate vehicles but that does not affect any issue in this appeal.

6. The plaintiff says that the defendant later persuaded him that he should accept a further payment of RMB 40 million in place of the dry shares and he authorised the defendant to reach an agreement with HW to this effect. But the parties afterwards fell out and on 13 November 2018 the plaintiff commenced proceedings against the defendant in the High Court. The action followed a rather leisurely course but this appeal arises out of an application by the plaintiff by summons dated 12 April 2021 to amend the Statement of Claim in various respects including an allegation that, in breach of his fiduciary duty to the plaintiff as his agent, the defendant had by 29 June 2006 secretly acquired the dry shares for himself. These allegations, if true, would have entitled the plaintiff to claim that the defendant held the dry shares for him as a constructive trustee. But the question was whether by 2018 such a claim was barred by the Limitation Ordinance ( Cap. 347 ).

7. Section 20 of the Ordinance reads as follows:

Limitation of actions in respect of trust property

(1) No period of limitation prescribed by this Ordinance shall apply to an action by a beneficiary under a trust, being an action—

(a) in respect of any fraud or fraudulent breach of trust to which the trustee was a party or privy; or

(b) to recover from t