深圳市法學會粵港澳大灣區法治建設青年研究會一行10多位理事及會員於2024年7月16日蒞臨香港金葉大律師事務所訪問交流，金葉有8位成員在場迎接和參與了歷時兩個多小時的座談會，大家對多個主題交流了一些有益經驗和觀點，氣氛活躍，交流愉快，為雙方的進一步交流合作建立了良好基礎。

On July 16, 2024, a delegation of PRC legal professionals from Shenzhen, led by the Shenzhen Law Society, paid a visit to Gilt Chambers. Our members warmly welcomed the esteemed guests and actively participated in open discussions covering a wide range of topics that are of mutual interest to all parties involved. We are grateful for the opportunity to engage in such fruitful and meaningful conversations with our distinguished guests. The exchange proved to be highly beneficial for both parties, laying a strong groundwork for future cooperation.

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In Bowers v Marbury Ridge Limited [2024] HKCA 640, the Court of Appeal held that, where the debt underlying a statutory demand, was a debt founded upon a signed loan agreement which consolidates previous indebtedness of the debtor, the doctrine of contractual estoppel precludes the debtor from challenging that part of the previous indebtedness which contained unenforceable penalty interest.  The Court of Appeal ruled in favour of the Respondent, and upheld the Court of First Instance’s decision not to set aside the statutory demand.  The Respondent was represented by Felix Ng in both the Court of Appeal and in the court below (Bowers v Marbury Ridge Limited [2023] HKCFI 8).

The Court of Appeal went into a detailed analysis of the construction of the relevant clauses in the loan agreement (which founded the debt underlying the statutory demand).  The Court of Appeal held that mere exchange of promises by the parties are sufficient to constitute good consideration for the loan agreement, even though those mutual promises remain unperformed before the loan agreement was breached.

Citing its previous judgement in Ng Kin Siu v Gentle Sora Limited [2023] HKCA 944 at paragraph 18, the Court of Appeal pointed out that, insofar as challenge is made to the findings of fact made by the judge on the evidence, the well-established principle is that the appeal court should be reluctant to interfere with the judge’s evaluation of the evidence, unless it is demonstrated that the judge had fallen into palpable errors in the finding of fact.  This is so even though the judge’s evaluation of evidence and findings of fact were based on affidavit evidence and contemporaneous documents rather than oral evidence.

The full judgment can be read in here.

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Chambers congratulates our member Professor the Honourable Leung Mei-fun, Priscilla, SBS, JP, who has been awarded the Gold Bauhinia Star in recognition of her exemplary contributions to Hong Kong SAR.

Hon. Leung is amongst the pioneers in the Hong Kong legal sector to conduct extensive research on the Mainland’s legal system.

As university professor, she has been devoted to nurturing legal talents in Hong Kong, and fostering various sectors’ understanding of the Constitution, the Basic Law, and the “One Country, Two Systems” principle.

Hon. Leung is also dedicated to the work of the Legislative Council and other public services, especially the development of the West Kowloon region and public transportation and environmental hygiene issues in the Kowloon City District.

The 2024 Honours List Government press release can be found at https://www.info.gov.hk/gia/general/202407/01/P2024063000273.htm.

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In Purple Surgical UK Ltd v Win Billion Investment Group Ltd [2024] HKCFI 1643, the High Court of Hong Kong held that the seller had engaged in fraud with respect to a US$27 million contract for the sale of medical products during the Covid pandemic. Nick Luxton led by Rachel Lam SC, and instructed by Stephenson Harwood, acted for the plaintiff buyer, who obtained judgment against the seller and its sole director based in Hong Kong.

In April 2020 (during the early stages of the Covid pandemic), the plaintiff entered into a contract with the UK government to supply surgical masks. The plaintiff was introduced to Win Billion Investment Group Ltd, the first defendant, which was operated by Wu Yun Fai, the second defendant. In order to perform the contract with the UK Government, the plaintiff agreed to purchase the masks from Win Billion.

Under the terms of its contract with Win Billion, the plaintiff paid US$27 million to a lawyer based in the United States, purportedly acting as an escrow agent. However, the masks were not supplied, and the transferred funds were not returned.

The plaintiff obtained freezing orders against Win Billion, Mr Wu and certain other recipients of the funds. Further, the plaintiff obtained a number of disclosure orders, which established that the funds had been transferred to third parties, without the plaintiff’s consent and without manufacturing or paying for the masks. Subsequently, the plaintiff was able to recover over US$17 million from certain recipients of the funds in Hong Kong, and the escrow agent in the United States.

In the High Court action, the plaintiff claimed against Win Billion and Mr Wu for the balance of the funds that the plaintiff had transferred under the sale contract. The defendants argued that they had attempted to supply the masks, but had been unable to do so, and that the plaintiff had terminated the contract prematurely. Win Billion said that it had:

• entered into a supply contract with a South Korean company, but the company was described as a lamp and lightbulb business;
• paid a deposit to a company in Georgia, Eastern Europe, even though the masks were to be manufactured in the United States, and the deposit was returned;
• paid substantial funds to a middle-man in China, who was not identified;
• paid millions of US dollars in dividends to Mr Wu, even though the masks were not supplied.

Deputy High Court Judge Kent Yee held that it was a case of serious and complex fraud. As the sole director and controlling mind of Win Billion, Mr Wu knowingly procured Win Billion to engage in such misconduct. There was substantial evidence that Win Billion had misrepresented its intentions to perform its obligations under the sale contract. The learned judge rejected the defendants’ remarkable explanations.

A copy of the judgment is available here: legalref.judiciary.hk/lrs/common/ju/ju_frame.jsp?DIS=160860&currpage=T

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On 28 March 2024, the High Court handed down its reasons for judgment in Valsalan Ivy Vimala v Castka Richard Patrick Josef & Castka Gillian Hancer [2024] HKCFI 912. Lut Chi Au and Anthony Wong obtained an order to demolish the fence in a boundary dispute of land in the New Territories.

In gist, this was a dispute about the re-establishment of land boundaries. The Plaintiff and the Defendants are neighbours. Their respective lots of land are adjacent to each other and had a common boundary. The Defendants erected a fence, part of which protruded and cut the northern corner of the Plaintiff’s lot.

There were several survey plans by different surveyors, all of which showed that there was encroachment despite to different extents. The Joint Expert Report also concluded that there was encroachment. On the other hand, the Defendants’ case was that the fence was built along the tiles which were previously laid down by a construction company. The Defendant’s Expert unilaterally prepared a Supplementary Report which sought to establish a boundary different from the Joint Expert Report by following the tiles.

At issue was whether the floor tiles of the two lots can be a feature to re-establish the common boundary and hence any encroachment. The Court found that the laying out of the tiles cannot be regarded reliable evidence that survey work was done or the work was done accurately. The Court hence found in favour of the Plaintiff.

LC and Anthony were instructed by Tsang, Chan & Woo Solicitors & Notaries. The Court’s reasons for judgment can be found here.

LC was called to the Bar in 2013. He has a civil practice and is regularly instructed in chancery and commercial cases, including land, contentious probate, administration of high value estate, trust, civil fraud litigation and personal injuries matters. View LC’s profile for more details.

Anthony was called to the Bar in 2023. Anthony is developing a broad civil and criminal practice, and accepts instructions in all areas of Chambers’ work. He is an Associate of the Hong Kong Institute of Arbitrators, and is also developing a practice in alternative dispute resolution. View Anthony’s profile for more details.

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Felix Ng published an article to critically review how the common law has coped so far, in giving effect to property rights in cryptocurrency for civil fraud cases. He gives an analysis on (1) how misdiverted cryptocurrency can be traced into crypto-exchange platforms; and (2) how should the governing law (lex situs) for cryptoassets be determined.

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Our member Ian Chu has recently been appointed by the Department of Justice to be a member of the Advisory Group of Guangdong-Hong Kong-Macao Greater Bay Area Lawyers. The Advisory Group will advise on the further development of legal business and enhancement of collaboration in legal services in the GBA. For details, please see https://www.info.gov.hk/gia/general/202403/01/P2024030100407.htm?fontSize=1.

Ian looks forward to contributing to further the development of Hong Kong legal services in the GBA.

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Dr. DU, Duke Jinsong 杜勁松 was recently invited to give a speech on shareholders rights under common law and exchange views with more than 20 Shanghai-based companies law specialists. The newly amended PRC Companies Law will come into effect on 1 July 2024.

Please refer to the WeChat press by MHP law Firm for more details.

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