Jurisdiction - Hong Kong
Hong Kong – A Lost Cause? The Breadth Of Limitation Periods And Undertakings Not To Bring Further Proceedings In The Private Wealth Context.

27 November, 2013


Legal News & Analysis – Asia Pacific – Hong Kong – Dispute Resolution


A number of our recent blog posts have looked at Hong Kong estates disputes.  The case of Ho Sin Ying v Chan Yui Ling and Maryo Development Limited (HCA 1531/2012) is another such dispute, but it has a couple of unusual twists.  Rather than an argument over a Will or the administration of the estate, it concerns an alleged breach by the deceased of certain duties and attempts to bring proceedings in relation to that alleged breach against his estate.  The issue was that this seemed to be a second bite at the cherry – the Plaintiff having previously brought similar (but not identical) proceedings, which had been settled with her undertaking not to “commence another action based on the same cause of action“.  This case also considered whether a trustee could ever be said to have any general legal duty to account to a beneficiary.

Background To The Case

The Plaintiff was the step mother of Dr Tsang (the deceased). The First Defendant was the deceased’s half-sister and the administratrix of his estate and the Second Defendant was a company incorporated by the deceased for the purposes of holding investment properties.

At the heart of this dispute was a payment of HKD 3.9 million by the Plaintiff to the deceased. The Plaintiff alleged that she had given the money to the deceased to invest in property on her behalf and that the deceased had failed to identify properly her share of the investment or keep sufficient records of the assets held on trust for her.

The Plaintiff had previously commenced a trust action against the First Defendant in October 2010, in her capacity as the administratrix of the deceased’s estate, claiming that properties held by the estate were actually held on trust for her. That case was settled in 2012 by means of a consent order (the “2012 Consent Order”), pursuant to the terms of which the Plaintiff undertook not to “commence another action based on the same cause of action” (the “2012 Undertaking”).

The Plaintiff’s Claim

The causes of action pleaded by the Plaintiff in the present case included (i) breach of agent’s fiduciary duties (the deceased being the alleged agent of the Plaintiff), (ii) breach of contract and negligence, (iii) unjust enrichment, and (iv) money had and received.

The Defendants made a striking out application on the grounds of (i) abuse of the court’s process and (ii) limitation, premising their abuse of process claim on the 2012 Undertaking.

While it was undisputed that the facts pleaded in the Plaintiff’s statement of claim in the 2010 trust action and this action were essentially the same, the parties were divided over the proper construction of the phrase “…same cause of action…“, with the Plaintiff advocating a narrow construction of the phrase, such that the same set of facts could be capable of giving rise to other cause(s) of action, thus avoiding a breach the 2012 Undertaking.

The Court’s Finding

The Court struck out the Plaintiff’s amended statement of claim, ruling that the principles relevant to the construction of contract should be applicable to the construction of the 2012 Consent Order. Those legal principles state the overall importance of context (together with purpose), when constructing contractual terms.

(a)   Having considered the context of and background to the 2012 Consent Order, the Court ruled that the narrow construction put forward by the Plaintiff would (i) not reflect the intention of the 2012 Consent Order (i.e. dropping the 2010 trust action) and (ii) render the undertaking given therein to have no (or at least little) practical meaning, allowing it to be easily side-stepped by framing a claim based on other legal grounds (albeit on the same set of facts).

(b)   The Court noted that, even in the case of a trust (although the Plaintiff was not bringing a trust claim), trustees are not subject to any general duty to account to beneficiaries. A trustee must only when required provide a beneficiary with such reasonable information as to the manner in which the trust estate has been dealt with and as to the investments representing it. Similarly, no general legal requirement to account to beneficiaries exists under the law of contract or tort.

(c)   Although strictly unnecessary to do so, the Court found that the Plaintiff’s pleading should also be struck out by virtue of the provisions of the Limitation Ordinance (Cap 347).

(d)   Any agency relationship which previously existed between the Plaintiff and the deceased must have been a personal services contract, which would have terminated on either party’s death. Thus the deceased’s alleged breach arising out of his failure to keep sufficient records must have taken place prior to his death in 2001 (if at all). Any subsequent denial of the Plaintiff’s alleged interest in, or assertion of title by the Defendants over the Second Defendant’s assets merely constituted a manifestation of the resultant loss flowing from the deceased’s alleged breach. It could not “rejuvenate” the deceased’s breach, rendering the accrual of the cause(s) of action to occur at some later stage.

Take Home Points

Although the result was not surprising, it does highlight some important lessons:

  1. Although the estate eventually won, the dispute may have been avoided if the 2012 Undertaking had been framed more broadly and comprehensively.
  2. Claims against an estate should be pursued as expeditiously as other claims. The usual limitation periods still apply.
  3. Any breach of duty by a deceased person in the agency context must have taken place before his/her death and anything his/her personal representative does cannot “rejuvenate” it.


herbert smith Freehills


For further information, please contact:


Gareth Thomas, Partner, Herbert Smith Freehills
[email protected]


Richard Norridge, Herbert Smith Freehills
[email protected]

Herbert Smith Freehills Dispute Resolution Practice Profile in Hong Kong


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