HONG KONG Law and Practice Contributed by: George Lamplough, Edward Beeley, Vanessa Cheng and Curtis Pak, Holman Fenwick Willan
2.7 Rules for Pleading Fraud It is well established that fraud or dishonesty must be distinctly alleged and sufficiently particularised in pleadings. The pleadings must set out the pri - mary facts that are relied upon to justify any alleged inference of fraud or dishonesty. It is not open to the courts to infer dishonesty from facts that have not been pleaded. The courts have inherent jurisdiction to strike out allegations of fraud made without proper evidence. 2.8 Claims Against “Unknown” Fraudsters The Hong Kong courts have granted injunctive relief and judgments against persons unknown. In a num - ber of cases, plaintiffs have obtained proprietary and Mareva injunctions against cryptocurrency wallets by identifying the defendants as “The Account Holders of Wallet Address [x]” ( Wang Weiqing v Zhuo Yihao and others [2025] HKCFI 4941). 2.9 Compelling Witnesses to Give Evidence A witness in Hong Kong can be compelled to attend court to give evidence by a writ of subpoena. A sub - poena can be issued either to obtain oral evidence at trial (subpoena ad testificandum) or to obtain docu - ments (subpoena duces tecum). Since a subpoena is an order of the court, deliberate failure to obey the order by non-attendance or non- production of documents may amount to contempt, and the intended witness may be liable to a fine or imprisonment. 3. Corporate Entities, Ultimate Beneficial Owners and Shareholders 3.1 Imposing Liability for Fraud on a Corporate Entity An important feature of any fraud claim is the extent to which the knowledge of directors and officers of a company can be attributed to the company. The starting points are the “primary rule” and the general rules of agency. The “primary rule” looks at the company’s articles of association or company law statutes and identifies whose decisions bind the company. For example, the articles of the company
may state that the decision of the board of directors or a majority of shareholders is treated as the decision of the company for a specified purpose. In such a case, the knowledge of the board or a majority of sharehold - ers will be attributed to the company. These starting points are subject to any special rules of attribution that the court may fashion based on the context and, importantly in fraud cases, to the “fraud exception”. The special rules of attribution will depend on the facts of the case and the language and legislative purpose of the relevant statutory provisions ( Moulin Global Eyecare Trading Limited (in liquidation) v The Com- missioner of Inland Revenue (2014) 17 HKCFAR 218). In deciding whether the “fraud exception” applies, the Hong Kong Court of Final Appeal in Moulin Global distinguished the following situations: • where a company commences legal action against its directors and officers for wrongdoing, which caused loss to the company, the knowledge of the director or officer is not attributable to the com - pany because it would be “absurd and unjust to permit a fraudulent director or employee to be able to use his own serious breach of duty to his corpo - rate employer as a defence”; and • where a third party takes legal action against the company for the fraudulent conduct of a director or employee, the knowledge of the director or officer is attributable to the company, because the com - pany must take responsibility for such fraudulent conduct, even if the company may be a victim in a way. 3.2 Claims Against Ultimate Beneficial Owners Common Law It is well established that a company is a separate entity from its beneficial owners. Beneficial owners are often said to exist behind a “corporate veil” and are protected from liability for the actions of the company. However, in certain circumstances, the corporate veil can be pierced so that the actions of a company are treated as the actions of its shareholders. When the
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