Hong Kong Court Bars Vesting Orders for Internet Fraud Victims

 (A) Introduction
 
Whether the Court has jurisdiction to grant a vesting order in favour of victims of internet fraud and email fraud pursuant to Section 52 of the Trustee Ordinance (Cap. 29) (the “TO”) is the major issue vigorously contested in Hong Kong Courts. 

Historically, the Court’s attitude on this issue have varied. In 2025 (as at 26 September 2025), the Courts clarified this issue in three key cases:

(1) Amidas Hong Kong Limited v Che Si Limited (HCA 1406/2024 & HCMP 2754/2024, date of judgment: 25 March 2025) (“Amidas”) [1];

(2) Orion Engineered Carbons GmBH v Universall All Limited and others (HCA 1625/2024, HCMP 210/2025, date of judgment: 30 May 2025) (“Orion”) [2]; and

(3) Dana Wells v. Chan Yanfeng (DCCJ 1304/2023, date of judgment: 25 September 2025) (“Dana Wells”) [3]. 

The recent decision in Dana Wells reaffirms the limits of the Court’s jurisdiction established in Amidas, regarding constructive trusteeship arising from internet fraud and the distinction between different types of constructive trusts.
 
This article examines the above cases, demonstrating the Court’s strict approach to applications for vesting orders against defendants who received fraudulently obtained funds as constructive trustees.
 
(B) Amidas
 
Facts
 
The Plaintiff was a victim of an email fraud. On 7 March 2024, its Finance and Human Resources Manager received a fraudulent email that appeared to be from a supplier. it was deceived into transferring a sum of money to the Defendant’s account (the “Defendant’s Account”) at a bank (the “Bank”). The fraud was discovered later the same day when the Plaintiff's bank raised suspicions and the Plaintiff confirmed with the genuine supplier that no request to change bank details had been made.

 
The Plaintiff then commenced proceedings and obtained a proprietary injunction against the Defendant's Account. Subsequently, the Plaintiff applied for a a vesting order under Section 52 of the TO against the Defendant and the Bank in separate proceedings.
 
Decision on the Vesting Order
 
The Court refused to grant the vesting order. In its reasoning, the Court addressed the conflicting authorities on the proper construction of Section 52(1)(e) of the TO and availability of vesting orders as a relief in similar email fraud cases. [4]
 
The key issue was whether a defendant declared a constructive trustee of fraudulently obtained funds qualifies as a “trustee” under the TO for the purpose of making a vesting order. The Court clarified that there are 2 categories of constructive trusts: [5]

(i) Category 1 (Institutional): Arises from the breach of a pre-existing duty is, or is treated by an analogy as, an action by a beneficiary for breach of trust. The trustee is considered a “true” trustee.

(ii) Category 2 (Remedial): Imposed by the Court as a remedy for wrongdoing (such as fraud). The defendant's trusteeship is purely remedial.
 
The Court found that the Defendant was a Category 2 (remedial) constructive trustee. It held that the definition of “trustee” in the TO, which is also adopted by the Limitation Ordinance (Cap. 347) (the “LO”), does not extend to Category 2 constructive trustees. The TO is concerned with the administration of “true trusts” whereas a remedial constructive trustee’s sole obligation is to restore the assets immediately. [6] As such, the Court held that Section 52(1)(e) of the TO was not engaged in this fraud case. [7] 

The Court added that even if it is viable, a stand-alone vesting order against the garnishee bank is wrong as a matter of law as the Bank is not a trustee within the meaning of section 52(1)(e) of the TO. Its legal relationship with the Defendant is that of a debtor (Bank) to a creditor (Defendant), not a trustee. There was no allegation that the Bank itself held the funds on trust for the Plaintiff. [8] 

Further, it was not expedient to apply for vesting order when the Plaintiff has adequate alternative remedies, including garnishee proceedings, which are a more cost-effective means of enforcement. [9]

 
(C) Orion
 
Facts
 
The Plaintiff was a victim of an internet fraud. Fraudsters impersonated the Plaintiff's Chief Financial Officer and deceived the Plaintiff into transferring substantial sums in multiple tranches to various bank accounts in Hong Kong held by the Defendants.
 
The Plaintiff then commenced proceedings and obtained a proprietary and Mareva injunction against the Defendants. Subsequently, in separate proceedings, the Plaintiff applied for a vesting order under Section 52 of the TO against the Defendants.
 
Decision on the Vesting Order
 
The Court refused to grant the vesting order on the following grounds: [10]

(1) The Court endorsed and adopted the reasoning set out in Amidas. It reinforced the principle that the definition of “trustee” in the TO, which applies equally to the LO, is confined to “true” or institutional constructive trustees (Category 1) and does not extend to remedial constructive trustees (Category 2).

(2) As the Defendants were Category 2 constructive trustees, the Court held that Section 52 of the TO was not engaged in this case.

(3) The Court also reminded the Plaintiff that the appropriate procedure for enforcement must be followed, echoing the observation in Amidas that applying for a vesting order is often more costly than the garnishee proceedings. [11]

(D) Dana Wells
 
Facts
 
The Plaintiff was a victim of an email fraud. The fraudster deceived the Plaintiff into believing she had been wrongly charged for a subscription and induced the Plaintiff to transfer a sum of money to a bank account in Hong Kong held by the Defendant.
 
The Plaintiff then commenced proceedings against the Defendant. Subsequently, the Plaintiff applied for a vesting order under Section 52(1)(e) and 52(5) of the TO.

 
Decision on the Vesting Order
 
The Court refused to grant the vesting order. In its reasoning, the Court acknowledged the previously unsettled state of the law on this issue, but found clear guidance in Amidas. [12]
 
The Court adopted the reasoning in Amidas, which set out the critical distinction between two categories of constructive trusts:

(i) Category 1 (Institutional): This encompasses defendants who have assumed trustee duties through a lawful transaction that is independent of and antecedent to the breach of trust, and which is not impeached by the plaintiff.

(ii) Category 2 (Remedial): This includes cases where the trust obligation arises directly from the unlawful transaction that is impeached by the plaintiff.
 
The Court held that the Defendant, as a recipient of fraudulently obtained funds, was a Category 2 (remedial) constructive trustee. As such, the definition of “trustee” in the TO does not extend to the Defendant, and the statutory power to make a vesting order under section 52(1)(e) was not engaged. [13]
 
(E) Key Takeaways
 
In conclusion, Amidas, Orion and Dana Wells provide clarity for victims of internet fraud and email fraud in Hong Kong. Amidas is the landmark judgment which established the foundational framework for distinguishing between categories of constructive trusts. Orion confirmed the principles in Amidas. Dana Wells affirmed and applied the framework to resolve the previously unsettled state of the law.
 
The above cases set out the following useful guidelines for asset recovery in internet fraud and email fraud cases:

(1) The Critical Categorical Distinction: These cases reinforce the distinction between institutional and remedial constructive trusts:

(a) Category 1 (Institutional): Involves a defendant who assumed trustee duties through a pre-existing and lawful transaction. 

(b) Category 2 (Remedial): Imposed by the Court as a remedy for the wrongdoing itself (e.g., receiving fraud proceeds).  

(2) Vesting Orders are Unavailable for Email Fraud and Internet Fraud Cases: A recipient of fraudulently obtained funds is classified as a Category 2 (remedial) constructive trustee. This classification means the recipient does not qualify as a true “trustee” under the TO, and a vesting order under section 52 is therefore not an available remedy.

(3) Clear Path for Victims: Victims of internet fraud and email fraud cannot rely on vesting orders to recover funds directly from a bank account. Instead, the more cost-efficient enforcement path is through garnishee proceedings after obtaining a judgment.

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[1] https://legalref.judiciary.hk/lrs/common/ju/ju_frame.jsp?DIS=167303

[2] https://legalref.judiciary.hk/lrs/common/ju/ju_frame.jsp?DIS=169478

[3] https://legalref.judiciary.hk/lrs/common/ju/ju_frame.jsp?DIS=172799

[4] Amidas, §38-39

[5] Ibid, §45-46

[6] Ibid, §50

[7] Ibid, §56

[8] Ibid, §59-60

[9] Ibid, §64-65

[10] Orion, §19

[11] Ibid, §26

[12] Dana Wells, §33

[13] Ibid, §40

Hong Kong Court Clarifies the "Reasonably Arguable" Threshold for a Stay of Execution of Committal Order Pending Further Appeal

(A) Introduction

In High Fashion New Media Corporation Ltd (suing on behalf of itself and also in its capacity as the sole shareholder of Longford Information and Technology Co., Ltd) v. Leong Ma Li, HCMP 932/ 2020, [1] date of judgment: 19 September 2025, the Hong Kong Court of First Instance (the “CFI”) dismissed the Defendant’s application for suspension or stay of execution of a committal order pending further appeal.

This case clarifies the threshold requirement for staying a committal order, addressing the intersection of civil procedure and personal liberty in contempt proceedings. It affirms that an applicant must demonstrate a reasonably arguable appeal before a stay may be considered. It also emphasizes that a lower court lacks authority to stay an imprisonment order after a superior appellate court has dismissed an appeal on the merits. Further, it reinforces the procedural requirement that any application for suspension or stay of execution pending further appeal must be made directly to the appellate courts.

 
(B) Facts
 
By a Judgment handed down on 26 July 2022 (the “Liability Judgment”), the Defendant was found guilty of having committed contempt of court in failing to comply with an order in HCA 1953/2014 made by Chow J (as he then was). [2]
 
By a Decision (the “Sentencing Decision”) made on 30 May 2024, the Defendant was committed to prison for a 4 weeks (the “Committal Order”). The CFI further ordered that the execution of the Committal Order be suspended pending the determination of the Defendant’s appeal against the Liability Judgment, on the condition that the Defendant paid $500,000 into Court by 4pm on 31 May 2024.  She was also ordered to put the sum of RMB8,606,600.43 (or an equivalent sum in Hong Kong Dollars) into an escrow account. [3]

 
The Defendant's appeal against the Liability Judgment was dismissed by the Court of Appeal (the “CA”). Her application for leave to appeal that dismissal to the Court of Final Appeal (the “CFA”) was still pending. [4] Separately, her appeal against the Sentencing Decision was also still pending. [5]
 
There are 3 Summonses before the CFI: [6]
(1) The Defendant’s Summons filed on 15 November 2024 (“D’s 1^st Stay Summons”) for an order that the execution of the Committal Order be suspended or stayed until 28 days after the disposal of the Sentencing Appeal;
(2) The Defendant’s summons filed on 5 December 2024 (“D’s 2^nd Stay Summons”) for an order that the execution of the Committal Order be suspended or stayed until 28 days after:

(a) the disposal of the defendant’s application to the CA and (if necessary) the CFA for leave to appeal against the CA’s Judgment dated 18 November 2024 in CACV 341/2022,

(b) if leave to appeal is granted, the determination of the defendant’s appeal by the CFA, or

(c) further order of the Court; and

(3) The Plaintiff’s Summons filed on 12 December 2024 (“P’s Activation Summons”) for an order that the Committal Order be activated, and if necessary, a warrant for committal against the defendant be issued; alternatively, if the execution of the Committal Order is to be suspended, various conditions be imposed.
 
(C) Decision
 
The CFI dismissed the D’s 1^st Stay Summons and the D2’s 2^nd Stay Summons and P’s Activation Summons with costs to the Plaintiff on an indemnity basis with certificate for two Counsel (including all costs reserved) on the following grounds:
 
(a) D’s 1^st Stay Summons: The CFI held that a short sentence alone (and the possibility that the appeal would/might be rendered nugatory) does not automatically entitle the Defendant to a stay of execution of the imprisonment or an order to that effect. [7] While it is trite law in civil proceedings that an arguable appeal (i.e., one with reasonable prospect of success) is the minimum requirement for a stay, the CFI also considered the approach adopted in criminal cases, where personal liberty is at stage. Under both approaches, the Defendant must demonstrate that her appeal against sentence was "reasonably arguable" (i.e., had a real chance of success). [8] The CFI examined all five grounds of appeal and found none of them to be reasonably arguable. Therefore, the Defendant failed to meet to minimum requirement for obtaining a stay of execution of the Committal Order or an order to that effect. [9]

(b) D's 2^nd Stay Summons: The CFI found that it lacked jurisdiction to grant a stay pending an application for leave to appeal to the CFA when the CA has already made a determination on the Defendant's appeal on liability. The power to stay execution after the CA has decided a matter rests solely with the CA or the CFA under Section 26(1) of the Hong Kong Court of Final Appeal Ordinance (Cap. 484). [10] The CFI also held that it would be inappropriate for a lower court to assess whether a superior court’s judgment might be wrong on appeal. Any application for a stay must therefore be made directly to the appellate courts. [11]

(c) P's Activation Summons: The CFI activated the 4-week prison sentence. It highlighted that a suspended committal order cannot be activated automatically and hence a formal Court Order is required after an application made by Summons before an individual may be deprived of liberty. [12] The CFI also ordered the return of the HK$500,000 "bail money" to the Defendant. [13]

(D) Key Takeaways
 
In conclusion, this case provides the following significant guidance for applications for suspension and stay of execution of an imprisonment order:

(1) No Automatic Stay for Short Sentences: A contemnor facing a short term of imprisonment cannot assume they will automatically remain free pending appeal. The Court will not grant a stay merely to prevent the appeal from being rendered nugatory.

(2) Threshold for Stay of Execution: The requirement for obtaining a stay of execution is consistent across both civil and criminal proceedings. In all cases, the applicant must demonstrate that the appeal is "reasonably arguable" (i.e. has a real prospect of success).  

(3) Jurisdictional Limit of Lower Courts: It is inappropriate for a lower court to assess whether a superior court’s judgment might be wrong on appeal. Any application for a stay pending further appeal must therefore be made directly to the appellate courts.

(4) Activation Requires a Court Order: A suspended committal order cannot be enforced automatically upon a breach of its conditions. The applicant must apply to the court for an activation order before the contemnor can be imprisoned.

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[1] https://legalref.judiciary.hk/doc/judg/word/vetted/other/en/2020/HCMP000932C_2020.doc

[2] High Fashion New Media Corporation Ltd (suing on behalf of itself and also in its capacity as the sole shareholder of Longford Information and Technology Co., Ltd) v. Leong Ma Li, HCMP 932/ 2020, date of judgment: 19 September 2025, §1

[3] Ibid, §2

[4] Ibid, §3

[5] Ibid, §4

[6] Ibid, §5

[7] Ibid, §9

[8] Ibid, §10-11, 16

[9] Ibid, §53

[10] Where a judgment appealed from requires the appellant to pay money or perform a duty, the Court of Appeal or the Court, as the case may be, shall have power, when granting leave to appeal or subsequently, either to direct that the judgment shall be carried into execution or that the execution shall be suspended pending the appeal.

[11] High Fashion New Media Corporation Ltd (suing on behalf of itself and also in its capacity as the sole shareholder of Longford Information and Technology Co., Ltd) v. Leong Ma Li, HCMP 932/ 2020, date of judgment: 19 September 2025, §71

[12] Ibid, §82-85

[13] Ibid, §86

Hong Kong Court Clarifies Limits of Duty of Care: Contractual Disclaimers and Investor Sophistication Define Advisor-Client Boundaries in Financial Services

(A) Introduction
 
In a significant judgment clarifying the boundaries of duty of care in financial services, the Hong Kong Court in Xue Xiaoyun v Susan Yung and another, HCA 2526/2018, date of judgment: 12 September 2025, [1] dismissed a claim for negligent misstatement brought by a sophisticated investor against a securities firm and its relationship manager. The claim arose from the alleged loss in an informal cross-border remittance arranged to meet a investment deadline under Hong Kong’s Capital Investor Entrant Scheme (“CIES”).
 
This decision provides useful guidance on the enforceability of contractual disclaimers, the  assumption of duty of care and the assessment of reliance in financial advisory relationships, and the limitations of vicarious liability.
 
(B) Facts

The Plaintiff (“P”) is a mainland Chinese businessman. The 1^st Defendant (“D1”) was a relationship manager employed by the 2^nd Defendant (“D2”), which is a securities firm. [2]

In 2013, P opened his own CIES account with D2. [3] In 2018, his partner, Madam Xu, obtained an approval in principle for her own CIES application and was required to invest HK$10 million by 23 February 2018. [4] On 22 February 2018, P and Madam Xu met D1 at D2's offices to open a CIES account and investment account in Madam Xu’s name. D1 alleged that later that day, she and P met a coffee shop near D2’s office, which D1 claimed P asked for assistance in finding a money exchanger (the “Alleged Coffee Shop Meeting”). [5]
 
That afternoon, D1 provided P with the details of two personal bank accounts in mainland China and an exchange rate via WeChat, instructing him to remit RMB 8,383,000 to them. P transferred the funds the next morning. The money was subsequently lost and never appeared in Madam Xu's Hong Kong account. [6]
 
P claimed against D1 on the ground that D1 owed him a duty of care, that this had been breached as there had been negligent misstatements made regarding the remittance arrangements, that P had relied on the misstatements, and that there had been loss suffered in the form of the remitted funds. [7] P also claimed against D2 on the ground of vicarious liability as D1’s representations arose out of her employment with D2 and was made in D2’s premises during office hours. [8]
 
(C) Issues
 
The following are the agreed issues between the parties: [9]
 
(1) Issue 1: Whether D1 owed any duty of care to P.
(2) Issue 2: Whether D1 made any of the representations to the Plaintiff as pleaded in paragraphs 11 and 12 of the Re-Amended Statement of Claim (“Alleged Representations”).
(3) Issue 3: If the answer to Issue 2 above is “yes”, whether D1 negligently breached her duty of care to P.
(4) Issue 4: If the answer to issue 3 above is “yes”, whether P has relied on the Alleged Representations and suffered a loss of RMB 8,383,000 as a result (“Alleged Loss”).
(5) Issue 5: Whether D1 has a defence of voluntary assumption of risks on the part of P.
(6) Issue 6: Whether P took any reasonable step to mitigate the Alleged Loss.
(7) Issue 7: Whether the Alleged Loss was wholly or partly caused or contributed by alleged negligence on the part of P.
(8) Issue 8: Whether P is barred from any recovery of his loss, if the conduct which led to the aforesaid loss was illegal.
(9) Issue 9: If D1 is liable to P for her alleged negligence, the extent to which D1 is liable for the Alleged Loss.
(10) Issue 10: Whether D2 is vicariously liable for D1’s alleged negligence.
 
(D) Decision
 
The Court dismissed P's claim against D1 and D2 with costs to D1 and D2 (together with certificate for two counsel for D2) on the following grounds:

(1) Duty of Care: The Court held that D1 did not owe a duty of care to P and/or that there was no such assumption of duty based on the following findings: 

(a) P was educated, familiar with the business environment in the Mainland, and well versed in the CIES application process. Given his experience and acumen, the Court found that he was capable of critically assessing information given to him. P acknowledged that he was aware of the foreign exchange controls in the Mainland as well as the formalities and procedures required for remittances. 

(b) P acknowledged that D1 had never held herself out as a director of D2, undermining his claim of relying on her authority. 

(c) The contractual context between P and D2 contained clear disclaimers that negated any assumption of a duty of care, including: [10]

(i) The Account Opening Form:
“本人/吾等确认已收取中银国际证券有限公司之客户协议（包括协议所有部份及附录）、风险披露声明、客户资料声明、帐户申请表格及买他与是次开户有关的协议及文件（如适用）（合称「客户协议」）及确认客户协议（包括风险披露声明）是按照本人/吾等所选择的语言（英文或中文）而提供，并已邀请本人/吾等阅读该客户协议（包括风险披露声明）·提出问题及征求独立的意见（如本人/吾等有此意愿）。本人/吾等确认本人/吾等已仔细阅读，充分理解并接受较于客户协议内（包括风险披露声明）的所有条款和规定，井同意遵守客户协议（包括风险披露声明）可能会不时修改的所有条款和规定。”

(ii) The Customer Agreement, Clauses 11.1 and 14.1:
“You agree that we (including our directors, officers, employees and the Agents) do not provide tax, legal or investment advice nor do we give advice or offer any opinion or recommendation with respect to the suitability of any Securities or Transaction, You agree that you, independently and without reliance on us, make your own decision and judgments with respect to your Instructions” 

(iii) The Customer Agreement, Clauses 28.3 and 33.3:
“No Disseminating Party shall be liable in any way to you or to any other person for: (a) any inaccuracy, error or delay in, or omission of, (i) any such data, information or message, or (ii) the transmission or delivery of any such data, information or message; or (b) any loss or damage arising from or occasioned by … any such inaccuracy, error, delay or omission … due either to any negligent act or omission by any Disseminating Party …”

(iv) The Customer Agreement, Clauses 32.3(a) and 37.3(a):
“Under no circumstances shall we (including, for the purposes of sub-Clauses 32.3. 32.4, and 32.5 the Agents and their and our respective directors, officers or employees, or any other person involved in creating, producing or delivering the Services or managing us for all of whom we hereby also act), including any negligence on their parts, be liable for any direct, indirect, incidental, special or consequential losses or damages that result from the use of or inability to use the Account(s) and the Services or out of any breach of any warranty.”

(v) The Appendix, Clause 10:
“阁下同意，本公司（包括本公司的萤事、高级职员、雇员及代理人）不提供税务、法律、投资、移民或有关资本投资者入境计划方面的意见。本公司对于任何证券或交易是否适合投资者亦不给予任何意见或建议。阁下同意，阁下将在完全独立且对本公司无依赖的悄况下就阁下的指示自行作出决定及判断。阁下所作的任何投资决定，将完全是根据阁下对自身的财务状况及投资目标进行自行评估而作出的决定。”

The above contractual provisions counter P’s claim that there was a duty of care and/or that there was an assumption of such duty. As defined by Clauses 11.1 and 14.1 in the Customer Agreement and Clause 10 of the Appendix, the parties were agreed as to the parameters of how they were to deal with each other. D2 and D1 (as D2’s employee and agent) were not advisors and P and Madam Xu should make their own independent decisions about matters including cross-border remittance transactions. Having gone through the CIES process himself in 2013, P would have been aware of these parameters and the nature of his relationship with D2.

(2) Alleged Representations: The Court held that the Alleged Representations were not made as pleaded. The Court believed D1's account of the "Alleged Coffee Shop Meeting" and found P's evidence inconsistent and unreliable. The WeChat messages were merely the provision of information, not advice or representations.

(3) Reliance and Causation: The Court found that there was no reasonable reliance on the ground that P was fully aware of the context and the risks of the cross-border remittances and that he did not rely on D1 for advice on such remittance.

(4) Breach: The Court found that the pleadings insufficient, as the Statement of Claim lacked clear particulars defining the scope of the duty alleged. As such, the claim for breach of duty was not established.

(5) Voluntary Assumption of Risk by P: The Court viewed that this defence was a denial of the duty of care and relied on its reasoning under the issue of duty of care.  

(6) Mitigation: The Court found that P failed to take reasonable steps to mitigate his loss, for example, promptly and properly reporting to police.

(7) Contributory Negligence: Had liability been established, the Court would have found P 100% contributorily negligent for his own careless conduct in pursuing the informal transfer without due diligence.

(8) Illegality: The Court found that the illegality defence was not applicable to this case as there was no evidence to show that P had a deliberate intention to deceive the Immigration Department jointly with Madam Xu.

(9) Vicarious Liability: The Court found that D2 was not vicariously liable as D1's actions did not have a sufficiently "close connection" to her employment  given the unusual and informal nature of the request and the fact she was effectively on a “frolic of her own” for personal motives.
 
(E) Key Takeaways
 
In conclusion, this decision is significant for both investors and financial institutions on the following grounds:

(1) The Enforceability of Contractual Disclaimers: Clearly drafted disclaimers in customer agreements are effective in negating any assumption of a duty of care. Courts will uphold these clauses to define the boundaries of the relationship, making it clear that the institution is not acting as an advisor and that the investor is making independent decisions. Therefore, investors should review carefully all the contracts with the financial institutions before execution. Financial institutions should also regularly review their customer agreements and account opening forms in order to ensure that disclaimer clauses are unambiguous and written in plain language.

(2) The Standard for Reasonable Reliance: The Court will consider the investor's background, education, and business experience when assessing whether it was reasonable for him to rely on informal advice. Sophisticated investors are expected to exercise their own judgment.

(3) The Limitation of Vicarious Liability: An employer will not be held vicariously liable for an employee's actions if those action did not have sufficiently close connection to their employment. Financial institutions should educate their employees on the boundaries of their roles, including prohibitions on providing advice or information outside the scope of the employer's official products and services. 

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[1] https://legalref.judiciary.hk/doc/judg/word/vetted/other/en/2018/HCA002526_2018.docx

[2] Xue Xiaoyun v Susan Yung and another, HCA 2526/2018, date of judgment: 12 September 2025, §7

[3] Ibid, §10

[4] Ibid, §13

[5] Ibid, §15-16

[6] Ibid, §20

[7] Ibid, §26

[8] Ibid, §30

[9] Ibid, §45-55

[10] Ibid, §87

Escalating Enforcement: Hong Kong Competition Commission Targets Multi-District Bid-Rigging in Building Maintenance

(A) Introduction

On 9 and 10 September 2025, the Hong Kong Competition Commission (the “Commission”) executed a large-scale operation, targeting alleged bid-rigging syndicates involved in 25 building maintenance projects spanning Hong Kong. [1] 

This operation marks the Commission’s second major crackdown on bid-rigging in the building maintenance sector this year, signaling a significant escalation in the enforcement of Hong Kong's competition law.

(B) Operations

The Commission’s latest action follows an earlier operation on 5 August 2025, which targeted one tender for a around HK$40 million maintenance project at a private housing estate in Kowloon City. [2] During that operation, the Commission raided 4 premises, including the offices of a building maintenance contractor and a building maintenance consultant, as well as the residences of involved individuals.

In contrast, the subsequent operation on 9-10 September 2025 marked a substantial increase in scale and complexity. The Commission raided 19 premises over two days in a case encompassing 25 separate projects across 10 districts, with a total contract value exceeding HK$600 million. Additionally, the investigation revealed two sophisticated, cohesive syndicates comprising various project contractors and related parties. Their alleged methods included: (1) exchanging and coordinating bidding prices directly or through intermediaries; and (2) submitting non-competitive "cover bids" to manipulate tender outcomes. Such conduct constitutes serious violations of the First Conduct Rule of the Competition Ordinance through bid-rigging, price-fixing, and the exchange of sensitive information.

In both operations, the Commission exercised its compulsory powers, not only executing search warrants but also requiring relevant parties to produce documents and attend before the Commission to provide relevant information.

(C) Key Takeaways

The Commission has reiterated that bid-rigging in building maintenance is a prime enforcement concern. The unprecedented scale of its latest operation, targeting sophisticated and multi-district syndicates, signals a major escalation in its proactive crackdown on these anti-competitive conduct.

In light of the Commission’s intensified enforcement, proactive compliance is necessary. Building maintenance contractors and consultants should review and update their compliance programmes by:

(1) Educating all employees involved in tendering and pricing through mandatory and regular training sessions;

(2) Establishing clear protocols on how to handle tender invitations, formulate bids, and interact with competitors; and

(3) Ensuring strict avoidance of any discussions with competitors regarding pricing, bidding strategies, market allocation, or tender outcome. 

A Warning to Employers: Landmark Ruling Holds Employer Liable for Food Delivery Rider's Typhoon Signal No. 8 Injury

(A) Introduction

In Khan Farooq Ahmed v. Delivery Hero Food Hong Kong Ltd formerly known as Rocket Food Ltd, HCPI 65/ 2022, date of judgment: 3 September 2025, [1] the Court addressed a personal injury claim brought by a food delivery worker who was required to work under typhoon signal no. 8 (“T8”). 

This case establishes an important precedent regarding an employer’s duty of care toward employees under adverse weather conditions. It serves as a clear reminder to all employers of their obligations when instructing employees to work under adverse weather conditions.

(B) Facts
 
On 18 August 2020, the Plaintiff (“P”), a food delivery worker employed by the Defendant (“D”), commenced work at 7:34 p.m. while a typhoon signal no. 3 was in force. At 9:15 p.m., D sent a warning via the messaging platform Telegram (“Telegram”) stating that T8 was about to be issued and instructing the riders to prioritize their safety (the “Warning”). [2] Despite the Warning, P continued to accept and complete orders. At 10:58 p.m., about 18 minutes after T8 was issued, he was struck by a sudden gust of wind while riding his motorcycle home, causing him to lose control and fall (the “Accident”).
 
P alleged that D operated an unsafe system of work by permitting riders to accept orders until T8 was issued, and by expecting them to complete those orders while T8 was in force. He further claimed that D should have suspended operations once the Hong Kong Observatory issued a pre-T8 warning. 
 
D’s case is that it was impractical to give specific instructions to its riders/ delivery workers out in the field when each of them would be under different circumstances. Further, D submitted that P, who decided his own mode of work and provided his own means of transport, did not need specific instructions as to whether and how he should drive in rain and wind. D also argued that as a qualified and prudent driver, P should have exercised common sense and ceased driving when conditions became unsafe. Additionally, D submitted that it was impracticable to suspend its operation once the Hong Kong Observatory announced a pre-T8 warning and emphasized that it had adopted a safe system of work by ensuring no new orders were taken up after T8 was in force. 
 
(C) Decision
 
Liability
 
The Court held that D breached its duty of care owe to P in negligence, implied terms of the contract of employment and statutory duty under the Occupational Safety and Health Ordinance and found D liable for causing the Accident as well as the resulting injuries sustained by P on the following grounds:

(1) Failure to provide a safe system of work: The Court found that the Telegram messages directly contradicted the terms of P’s employment contract with D. The “Amendment to Employment” signed by P with D on 13 June 2018 (the “Amendment”) stipulated that by accepting a job after a T8 was hoisted, P implicitly agreed to deliver under those conditions. Further, if T8 was raised during a delivery, he was implicitly required to continue unless he contacted a dispatcher with a valid reason to stop. The Court rejected D’s argument that P was free to decline orders because (a) P's income and performance rating were directly tied to accepting and fulfilling orders and (b) the riders including P would be at its busiest during the typhoons or poor weather conditions as more customers would be placing their orders on the food delivery platform.

(2) Exposed P to an unnecessary risk of injury: The Court found that D, as the operator of the system, was responsible for ensuring it could be shut down in a timely manner to prevent workers from being exposed to the dangers of working under T8. By requiring riders to complete deliveries after T8 was issued, D exposed P and his co-workers to an unnecessary risk of injury.  

(3) Breach of the Code of Practice issued by the Labour Department: The Court found that D breached the Code of Practice in Times of Adverse Weather and Extreme Conditions issued by the Labour Department (the “Code”).The Telegram was an ineffective communication system because it required riders to close the delivery app to see messages, which was an unreasonable expectation during T8, one of their busiest time. Further, by requesting its employees including P to sign the Amendment, D attempted to get round the Code which advised all employees to suspend all outdoor work in exposed areas and take shelter in a safe place during typhoon.
 
Contributory Negligence
 
The Court found P 20% contributory negligence for the Accident on the following grounds:

(1) Failure to read messages on Telegram: P failed to check the Telegram messages from D, particularly the Warning.

(2) Failure to find a safe place or shelter: After completing his final delivery, P chose to ride a motorcycle under T8 home instead of finding a safe place to shelter until the typhoon passed.
 
Quantum
 
The Court accepted that P sustained genuine right knee injuries as a result of the Accident, but found that he significantly exaggerated his symptoms, particularly regarding the extent of his disability and dependence on a wheelchair.
 
Regarding P’s ability to resume pre-accident job, the Court rejected Dr. Ko’s opinion, which stated that P could resume his pre-accident job as a delivery rider with only minimal impairment. Instead, the Court found that due to the demanding nature of the job, especially during peak hours, P would not be able to return to work as a rider.
 
The damages were awarded as follows:
 

	HK$
Pain, suffering & loss of amenities	$500,000
Pre-trial loss of earnings & MPF	$827,035
Future Loss of Earnings & MPF	$1,360,553
Loss of earning capacity	Nil
Special damages	$20,000
	$2,707,588
Less contributory negligence at 20%	($541,518)
Gross total:	$2,166,070
Less EC payment	($817,861)
Net total:	$1,348,209

 
 
(D) Key Takeaways

In conclusion, this case provides useful guidance for employer liability and workplace safety, particularly within the gig economy and during extreme weather condition:

(1) Employers have a non-delegable duty of care to provide a safe system of work, which extends to protecting employees from foreseeable risks posed by severe weather conditions, including T8.

(2) Practical or operational impracticality is not a valid defence for failing to suspend hazardous work during T8. Employers should be responsible for implementing systems of work that can be shut down safely and promptly.

(3) Employers must adhere to the Code of Practice in Times of Adverse Weather and “Extreme Conditions” published by the Labour Department, making practical and reasonable work arrangements for employees during and after tropical cyclone warnings. [3]