HCA3391/2016

A A B HCA 3391/2016 & HCA 1417/2013 B [2025] HKCFI 4997 C C HCA 3391/2016 D D IN THE HIGH COURT OF THE E E HONG KONG SPECIAL ADMINISTRATIVE REGION F COURT OF FIRST INSTANCE F ACTION NO 3391 OF 2016 G G _______________ H BETWEEN H I CHINA MEDICAL TECHNOLOGIES, INC. 1st Plaintiff I (IN LIQUIDATION) J J CMED TECHNOLOGIES LTD 2nd Plaintiff K COSIMO BORRELLI AND YUEN LAI YEE 3rd Plaintiffs K IN THEIR CAPACITY AS THE JOINT AND SEVERAL LIQUIDATORS OF CHINA MEDICAL L L TECHNOLOGIES, INC. (IN LIQUIDATION) M and M N WU XIAODONG 1st Defendant N SAMSON TSANG TAK YUNG 2nd Defendant O O CHEN ZHONG 3rd Defendant P ZHU FENG (CHARLES) 4th Defendant P CHONG WING HIP (IN HIS PERSONAL 5th Defendant Q CAPACITY AND FORMERLY TRADING AS Q KAM HING TRADING CO) R R HAO XIAOQING ALLAN 6th Defendant S SUPREME WELL INVESTMENTS LIMITED 7th Defendant S th EAST HOPE INTERNATIONAL LIMITED 8 Defendant T T U U V V  -2- A A B CHEER LINK INTERNATIONAL LIMITED 9th Defendant B INNOVATIVE TECHNOLOGY INVESTMENT 10th Defendant C C LIMITED D DYNAMIC SENSE LIMITED 11th Defendant D th TIME REGION HOLDINGS LIMITED 12 Defendant E E BI XIAOQIONG (IN HER PERSONAL CAPACITY 13th Defendant AND AS TRUSTEE OF THE XIAO QIONG BI F TRUST AND THE ALISA WU IRREVOCABLE F TRUST) G G WORLDPRO INVESTMENTS LIMITED 14th Defendant H LONG CHART INVESTMENTS LIMITED 15th Defendant H th CHAVIS INVESTMENTS LIMITED 16 Defendant I I SINOWELL INTERNATIONAL INVESTMENT 17th Defendant LIMITED J J th CHENGXUAN INTERNATIONAL LTD 18 Defendant K WEIXIAO MEDICAL TECHNOLOGY LIMITED 19th Defendant K WB INTERNATIONAL HOLDING PTE LTD 20th Defendant L L st MAX PROSPER ENTERPRISES LIMITED 21 Defendant M JUN YUN BI 22nd Defendant M GLOBAL FLASH LIMITED 23rd Defendant N N O _______________ O P AND P HCA 1417/2013 Q Q R IN THE HIGH COURT OF THE R HONG KONG SPECIAL ADMINISTRATIVE REGION S S COURT OF FIRST INSTANCE T ACTION NO 1417 OF 2013 T U U V V  -3- A A B _______________ B C BETWEEN C D CHINA MEDICAL TECHNOLOGIES, INC. Plaintiff D (IN LIQUIDATION) E and E WU XIAODONG 1st Defendant F F SAMSON TSANG TAK YUNG 2nd Defendant G CHEN ZHONG 3rd Defendant G ZHU FENG (CHARLES) 4th Defendant H H SUPREME WELL INVESTMENTS LIMITED 5th Defendant I I _______________ J J (Consolidated by Order of Master Chow dated the 23rd day of July 2018) K K Before: Hon Eugene Fung J in Court L L Date of Hearing: 16 October 2025 M Date of Decision: 16 October 2025 M N __________________ N O DECISION O __________________ P P Q 1. On the third day of the trial, an issue arose during counsel’s Q oral opening submissions as to whether the 6th Defendant can raise a factual R R point during the trial and whether such a point needs to be pleaded. The S issue arose in this way. S T T U U V V  -4- A A B 2. In this trial, one of the issues to be determined is whether the B Plaintiffs’ claims are time-barred. In order to overcome the time bar C C defence raised by the 6th Defendant, the Plaintiffs rely on section 26 of the D Limitation Ordinance (Cap 347) to postpone the commencement of the D limitation period. Specifically, the Plaintiffs have pleaded that they could E E th not, with reasonable diligence, discovered the fraud of the 6 Defendant F before 23 or 24 December 2013. According to the Plaintiffs, that was the F date when the Plaintiffs obtained the relevant banking documents and G G nd discovered that the 2 Defendant was on both sides of the relevant H transactions. H I I 3. In their written opening dated 15 September 2025, Mr Kerby J Lau and Mr Paul Law on behalf of the 6th Defendant submitted that J “the Alleged Theft and/or the relevant facts of the case against D6 clearly K K could have been discovered by Ps much earlier by 2009 at the latest, even L before liquidators were appointed”. Subsequent to the receipt of the L document, I understand that the Plaintiffs’ solicitors wrote to the M M 6th Defendant’s solicitors and complained that this was an unpleaded case. N N 4. At the end of his oral submission on the third day of the trial, O O Mr Charles Manzoni SC on behalf of the Plaintiffs submitted that the P 6th Defendant should not be allowed to raise the unpleaded case now P because significant prejudice will be caused to the Plaintiffs. He also lay Q Q down the marker that the Plaintiffs will object if their factual witnesses are R cross-examined during the trial for the purpose of advancing the R 6th Defendant’s unpleaded case. S S T T U U V V  -5- A A B 5. In his oral opening submission and when dealing with the B Plaintiffs’ pleading objection, Mr Lau confirmed that the 6th Defendant C C does intend to argue that the Plaintiffs could have discovered the fraud on D a date much earlier, and that he will cross-examine the Plaintiffs’ factual D witnesses on this point. But he disagreed that this point needs to be pleaded. E E F (1) First, he submitted that the burden falls on the Plaintiffs to F show that they could not with reasonable diligence have G G discovered the fraud. He said the 6th Defendant has put them H to strict proof, and the 6th Defendant does not need to prove H anything. I I (2) Further, Mr Lau argued that the Plaintiffs have included in the J J trial bundles some documents for the purpose of showing that K K they could not have discovered the fraud with reasonable L diligence, and the 6th Defendant must be allowed to test the L Plaintiffs’ case by suggesting some earlier dates or events. M M (3) Moreover, Mr Lau suggested that the Plaintiffs must have N N known that this point would be taken against them because the O very same point appeared in a striking out decision in a O different action by the Plaintiffs against the Bank of China. P P Q (4) Finally, Mr Lau urged the court not to make a hasty decision Q to rule on the pleading point now and should instead hear all R R the evidence on a de bene esse basis before coming to a final S view. S T T U U V V  -6- A A B 6. For the reasons that I am about to give, I am unable to agree B with the 6th Defendant’s submissions that the new point does not need to C C be pleaded. D D 7. First, it is clear that the 6th Defendant’s current pleading E E simply contains a bare denial on the application of s.26(1)(a) of the F Limitation Ordinance, and puts the Plaintiffs to strict proof that they could F not with reasonable diligence have discovered the 6th Defendant’s alleged G G fraudulent, dishonest or unconscionable conduct sooner than they did. This H appears in paragraph 59 of the 6th Defendant’s Amended Defence. Under H RHC O.18 r.13(5), where an allegation made in a statement of claim is I I traversed by a denial, the party who denies the allegation shall in his J defence (a) state his reasons for doing so and (b) if he intends to put forward J a different version of events from that given by the plaintiff, state his own K K version. Accordingly, if the 6th Defendant wishes to suggest that the L Plaintiffs could have discovered the fraud on a date much earlier than their L pleaded date of 23 December 2013, the 6th Defendant must state his own M M version of when he says the Plaintiffs could have discovered the fraud. As N noted in Hong Kong Civil Procedure 2025 vol 1 at Note 18/13/12, if a party N fails to plead his own version, he will be taken not to have put forward any O O positive case in defence and will not be entitled to call any evidence of fact P contrary to or inconsistent with the plaintiff’s pleaded contention. P Q Q 8. Second, by suggesting that the Plaintiffs could have R discovered the fraud on a date much earlier than their pleaded date of R 23 December 2013, the 6th Defendant would have gone beyond merely S S testing the Plaintiffs’ case. In my view, testing the Plaintiffs’ case on s.26 T may involve the 6th Defendant showing, for example, that the Plaintiffs did T U U V V  -7- A A B not obtain the relevant banking documents on 23 December 2013, or that B such documents did not reveal the 2nd Defendant’s role in the relevant C C transactions. But the advancement of suggestions that the Plaintiffs could D have discovered the fraud earlier than 23 December 2013 would constitute D a positive case on the part of the 6th Defendant, and would need to be E E pleaded. F F 9. As far as the documents in the trial bundles identified by the G G 6th Defendant are concerned, they are minutes and notes of meetings and H were included in Annexure 2 to Dr Crum’s witness statement. It is H important to see what Dr Crum said in his witness statement as to why the I I various minutes and notes of meetings were referred to. Annexure 2 is J referred to at paragraph 19.7 of Dr Crum’s witness statement. It appears J from paragraph 19 that the purpose of referring to such meeting minutes K K and notes is to illustrate the general practice of the Board and Committee L meetings of the 1st Plaintiff. Contrary to Mr Lau’s suggestion, it does not L appear that the purpose of including the documents in Annexure 2 is to M M show that the Plaintiffs could not have discovered the fraud with N reasonable diligence. N O O 10. Third, the fact that a similar point was taken by the Bank of P China against the Plaintiffs in a different action does not mean that the P Plaintiffs must have known or anticipated that one of the Defendants in this Q Q action will take the same point in this trial. As pointed out by Mr Manzoni, R the Bank of China expressly pleaded the point in its defence. If the point R is not pleaded by any of the Defendants in these proceedings, there is no S S reason for the Plaintiffs to expect that the point would be taken against T them at the trial. T U U V V  -8- A A B 11. Fourth, as Ma CJ said in Kwok Chin Wing v 21 Holdings Ltd B (2013) 16 HKCFAR 663 at [21], “[i]t is the pleadings that will define the C C issues in a trial and dictate the course of proceedings both before and at D trial. Where witnesses are involved, it will be the pleaded issues that define D the scope of the evidence, and not the other way round. In other words, it E E will not be acceptable for unpleaded issues to be raised out of the evidence F which is to be or has been adduced.” It is therefore wholly inappropriate F for the trial judge to allow evidence to be adduced on an unpleaded issue G G first, even on a de bene esse basis, and then to decide on whether the H unpleaded issue can be advanced at the end of the trial. H I I 12. Finally, I accept Mr Manzoni’s submission that allowing the J 6th Defendant to advance the point would cause significant prejudice to the J Plaintiffs. It was pointed out that pursuant to the discovery protocol K K ordered by Ng J on 10 May 2019, the Plaintiffs have not disclosed any L documents in these proceedings in relation to the engagement of the L different professional advisers of the 1st Plaintiff, or the advice they gave. M M And the Plaintiffs have also been deprived of the opportunity to investigate N the extent to which the various advisers might or might not have made the N alleged fraud of the 6th Defendant discoverable, and adduce any form of O O evidence in these proceedings to rebut the unpleaded point. P P 13. For these reasons, I rule that the 6th Defendant is not permitted Q Q to contend in this trial that the Plaintiffs could have discovered the alleged R fraud of the 6th Defendant earlier than 23 December 2013. R S 14. It is right to record that the 6th Defendant’s Amended Defence S was not settled by either Mr Lau or Mr Law. Both of them were only T T U U V V  -9- A A B instructed shortly before the trial commenced. They have tried to take the B point as far as they possibly can, but the point is simply not open to the C C 6th Defendant to take on the existing pleading. D D E E F F G (Eugene Fung) G Judge of the Court of First Instance High Court H H I Mr Charles Manzoni SC and Ms Cherry Xu, instructed by Karas So LLP, I for the 1st to 3rd Plaintiffs J J The 3rd Defendant appeared in person K Mr Kerby Lau and Mr Paul Law, instructed by Li & Partners, for the K 6th Defendant L L Mr Benjamin Lam, instructed by Guantao & Chow Solicitors and Notaries, for the 13th Defendant M M The 1st, 2nd, 4th, 5th, 7th to 12th, 14th to 23rd Defendants were not represented N and did not appear N O O P P Q Q R R S S T T U U V V