• Home
  •  > 
  • Member Directory
  •  > 
  • Deacons
  •  > 
  • Articles
  •  > 
  • Court of Final Appeal rules that expiry of limitation period is to be assessed by looking at Indorsement on Writ and not Statement of Claim

News & Events

Court of Final Appeal rules that expiry of limitation period is to be assessed by looking at Indorsement on Writ and not Statement of Claim

Submitted By Firm: Deacons

Contact(s): Cynthia Chung


Karen Dicks

Date Published: 7/30/2014

Article Type:

Share This:

The effect of section 35 of the Limitation Ordinance (Cap. 347) is that where a "new claim" is sought to be made in the course of an action and such claim would otherwise be time-barred, it will be allowable only if it arises out of "the same facts or substantially the same facts" as a cause of action "in respect of which relief has already been claimed" in the action by the party seeking leave to make the amendment.

In a recent judgment, the Court of Final Appeal has held that for the purpose of determining whether an amendment to a pleading constitutes a "new claim" under section 35 of the Limitation Ordinance and is time-barred, the identity of the causes of action on which the plaintiff relies are to be ascertained by reference to the nature and scope of claims identified and constituted by the Indorsement on the Writ and NOT by reference to the then current Statement of Claim. In this case, the Court of Final Appeal held that the claims in the Amended Statement of Claim did fall within the purview of the Indorsement on the writ and were not therefore time-barred and should not therefore have been struck out by the Court of Appeal.


This was an action by the liquidators of Moulin Global Eyecare Holdings Ltd (Moulin), a company formerly listed on the Hong Kong Stock Exchange, against Moulin's former director and alleged principal advisor.

The action was commenced on 29 January 2008 and the Indorsement on the writ sought "... equitable compensation in respect of loss and damage suffered by the Plaintiff ... as a result of breaches of fiduciary...duties and/or breaches of the duty of care and skill owed by the Defendant ... arising out of her role as director or employee of the Plaintiff" in the course of the preparation, auditing and certification of the Moulin accounts, the discharge by the Defendant of her duties as a member of Moulin's Audit Committee, and the provision by the Defendant of professional advice and services to Moulin.

In the Amended Statement of Claim, the liquidators sought recovery of (a) dividends in excess of HK$242million paid by Moulin out of capital, despite Moulin being insolvent ("the Dividends Loss"), (b) US$15million and more than HK$98million paid by Moulin for early redemption in 2002 by Moulin of convertible notes, at times when Moulin was insolvent ("the Convertible Notes Loss"), and (c) more than HK$37million paid for share repurchases out of capital during the period 2000 to 2004 ("the Share Repurchases Loss").

Court of First Instance Ruling

The Court of First Instance struck out the Convertible Notes Loss and Share Repurchases Loss claims, but allowed an amendment to plead a claim quantifying Moulin's loss as at least HK$1.23 billion by reference to the increase in its net deficiency from 31 March 2001 (the date of the first accounts after the Defendant became a director), when Moulin contended that provisional liquidators would have been appointed had the Defendant discharged her duties, and the date of appointment of the provisional liquidators on 23 June 2005 ("the IND Loss").

Court of Appeal Ruling

The Court of Appeal upheld the Court of First Instance rulings that:

  1. the Convertible Notes Loss claim be struck out because Moulin had suffered no loss by virtue of its early redemption of the notes; and
  2. both the Share Repurchases Loss and Convertible Notes Loss claims were "new claims" within the meaning of s.35 of the Limitation Ordinance and should not be allowed because they were time-barred at the time of filing of the Amended Statement of Claim and did not arise "out of the same facts or substantially the same facts" as a cause of action in respect of which relief had already been claimed in the action.

Further, the Court of Appeal held that the IND Loss claim was also a "new claim" within the meaning of s.35 and struck it out. This left standing only the Dividends Loss claim which had been made in the original Statement of Claim, filed shortly after issue of the writ.

Court of Final Appeal Ruling

The first question before the Court of Final Appeal was whether the expiry of an applicable limitation period is to be assessed (i) by looking to the terms of Indorsement on a writ filed within time, or, (ii) exclusively by looking to the terms of the then current statement of claim, or (iii) by looking to both. The Court of Appeal held that (i) was correct.

The Court of Final Appeal also held that the following propositions (advanced by Moulin), were correct:-

  1. the issue of the writ will satisfy the statute of limitations with respect to all claims which fairly fall within the range or purview of the Indorsement;
  2. the Indorsement is not in the nature of a pleading, does not form part of the pleadings, and should not be read as such; rather, the Indorsement marks out the perimeter or range of the area within which the plaintiff may express its claim in a formal fashion in the statement of claim whether as originally filed or as sought to be amended;
  3. if a pleading first omits a claim within the purview of the Indorsement on the writ, this does not amount to abandonment of that claim, and does not have the consequence that a later amendment application must be refused; and
  4. the allowance of an amendment to the statement of claim to set up a claim within the Indorsement will be a matter of discretion under the applicable Rules of Court.

The Court of Final Appeal went on to consider the purview of the Indorsement on the Writ in this case. It identified equitable compensation for breaches of "fiduciary duty" and also for breaches of the duty of care and skill owed by the Defendant. In the Indorsement, the Court of Final Appeal said, the term "fiduciary" was used not in its strict sense, but more broadly to encompass the established or asserted equitable duties of a director to act bona fide in the interests of Moulin as a whole, to act fairly between different shareholders, and to consider the interests of creditors if Moulin be insolvent or of doubtful solvency.

Moulin relied in particular upon alleged failures of the Defendant in discharge of her equitable duty to act bona fide in the interests of Moulin as a whole, which failures were alleged to have occasioned loss and damage to Moulin for which the Defendant must account by providing equitable compensation. Accordingly, Moulin's claims were within the purview of the Indorsement.

In the above circumstances, the Court of Final Appeal set aside the Court of Appeal ruling which had struck out the IND Loss claim and which had affirmed the striking out of the Shares Repurchases Loss claim and Convertible Notes Loss claim. In respect of the Convertible Notes Loss claim, the Court of Final Appeal held that as presently drafted, it did not plead a triable issue and was therefore "embarrassing" and Moulin should, if so advised, seek leave to re-plead that claim, subject to the Court's discretion.


This case reinforces the importance of drafting the Indorsement of claim on the writ precisely and wide enough to cover all of the Plaintiff's possible claims in the action and the importance of clients providing full and detailed instructions and documents at the outset to enable this to be done.

Find a Member

View or print a complete ELA member list »

Client Successes

Altra Industrial Motion Inc.

Altra Industrial Motion Inc. has multiple locations in the U.S., as well as Central America, Europe, and Asia. The Employment Law Alliance has proved to be a great asset in assisting us in dealing with employment issues and matters in such diverse venues as Mexico, Australia, and Spain. We have obtained excellent results using the ELA network for matters ranging from a multi-state review of employment policies to assisting with individual employment issues in a variety of foreign jurisdictions.

In one instance, we were faced with an employment dispute with a former associate in Mexico that had the potential for substantial economic exposure. The matter had been pending for over a year, and we were not confident in the employment advice we had been receiving. I obtained a referral to the ELA counsel in Mexico, who was able to obtain a favorable resolution of the dispute in only a few days. Based on our experiences with the ELA, we would not hesitate to use its many resources for future employment law needs.

American University in Bulgaria

In my career I have been a practicing attorney, counsel to the Governor of Maine, and CEO of a major public utility. I have worked with many lawyers in many settings. When the American University in Bulgaria needed help with employment litigation in federal court in Syracuse, New York, we turned to Pierce Atwood, the ELA member we knew and trusted in Maine, for a referral. We were extremely pleased with the responsiveness and high quality of service we received from Bond Schoeneck & King, the ELA's firm in upstate New York. I would not hesitate to recommend the ELA to any employer.

David T. Flanagan
Member of Board of Trustees 

Arcata Associates

I really enjoyed the Conducting an Effective Internal Investigation in the United States webinar.  We are in the midst of a rather delicate employee relations issue in California right now and the discussion helped me tremendously.  It also reinforced things that you tend to forget if you don't do these investigations frequently.  So, many, many thanks to the Employment Law Alliance for putting that webinar together.  It was extremely beneficial.

Lynn Clayton
Vice President, Human Resources

Barrett Business Services, Inc.

I recently participated in the ELA-sponsored webinar on the Employee Free Choice Act.  I was most impressed with that presentation.  It was extremely helpful and very worthwhile.  I have also been utilizing the ELA's online Global Employer Handbook.  This compliance tool is absolutely terrific. 

I am familiar with several other products that purport to provide up-to- date employment law information and I believe that this resource is superior to other similar compliance manuals.  I am delighted that the ELA provides this free to its members' clients.

Boyd Coffee Company

Employment Law Alliance (ELA) has provided Boyd Coffee Company with a highly valued connection to resources, important information and learning. With complex operations and employees working in approximately 20 states, we are continually striving to keep abreast of specific state laws, many of which vary from state to state. We have participated in the ELA web seminars and have found the content very useful. We appreciate the ease, cost effectiveness and quality of the content and presenters offered by these web seminars.  The Global Employer Handbook has provided our company with a very helpful overview of legal issues in the various states in which we operate, and the network of attorneys has helped us manage issues that have arisen in states other than where our Roastery and corporate headquarters are located in Portland, Oregon.

Capgemini Outsourcing Services GmbH

As an international operating outsourcing and consulting supplier Capgemini has used firms of the Employment Law Alliance in Central Europe. We were always highly satisfied with the quality of employment law advice and the responsiveness. I can really recommend the ELA lawyers.

Hirschfeld Kraemer

Stephen HirschfeldAs an employment lawyer based in San Francisco, I work closely with high tech clients with operations around the globe. Last year, one of my clients needed to implement a workforce reduction in a dozen countries simultaneously. And they gave me 48 hours to accomplish this. I don't know how I could have pulled this off without the resources of the ELA. I don't know of any single law firm that could have made this happen. My client received all of the help they needed in a timely fashion and on a cost effective basis.

Stephen J. Hirschfeld

Hollywood Entertainment Corporation

As the Vice President for Litigation & Associate General Counsel for my company, I need to ensure that we have a team of top-notch employment lawyers in place in every jurisdiction where we do business. And I want to be confident that those lawyers know our business so they don't have to reinvent the wheel when a new legal matter arises. With more than 3400 stores and 35,000 employees operating in all 50 U.S. states and across Canada, we rely on the ELA to partner with us to help accomplish our objectives. I have been delighted with the consistent high quality of the work performed by ELA lawyers. I encourage other in-house counsel to use their services, as well.

Ingram Micro

Ingram Micro is the world's largest technology distributor, providing sales, marketing, and logistics services for the IT industry around the globe. With over 13,000 employees working throughout the U.S. and in 35 international countries, we need employment lawyers who we can count on to ensure global legal compliance. Our experience with many multi-state and multi-national law firms is that their employment law services are not always a high priority for them, and many do not have experts in many of their offices. The ELA has assembled an excellent team of highly skilled employment lawyers, wherever and whenever I need them, and they have proven to be an invaluable resource to our company.

Konami Gaming

Our company, Konami Gaming, Inc., is growing rapidly in a very diverse and highly regulated industry. We are aggressively entering new markets outside the domestic U.S., including Canada and South America. I have had the recent opportunity to utilize the services provided by the ELA. The legal advice was both responsive and professional. Most of all, the entire process was seamless since our Nevada attorney coordinated the services and legal advice requested. I look forward to working with the ELA in the future, as it serves as a great resource to the legal community.

Jennifer Martinez
Vice President, Human Resources

Nikkiso Cryo, Inc.

Until recently, I was unaware of the ELA's existence. We have subsidiaries and affiliates throughout the United States, as well as in Asia, the Middle East and Europe. When a recent legal issue arose in Texas, our long-time Nevada counsel, who is a member of the ELA, suggested that this matter be handled by his ELA colleague in Dallas. We are very pleased with the quality and timeliness of services provided by that firm, and we are excited to now have the ELA as an important asset to help us address employment law issues worldwide.

Palm, Inc.

The ELA network has been immensely important to our company in helping us address an array of human resources challenges around the world. I strongly encourage H.R. executives who have employees located in many different jurisdictions to utilize the ELA's unparalleled expertise and geographic coverage.

Stacy Murphy
Former Senior Director of Human Resources

Rich Products

As the General Counsel for a company with 6,500 employees operating across the U.S. and in eight countries, it is critical that I have top quality lawyers on the ground where we do business. The ELA is an indispensable resource. It has taken the guesswork out of finding the best employment counsel wherever we have a problem.

Jill K. Bond
Senior Vice President/General Counsel, Shared Services and Benefits

Ricoh Americas Corporation

We have direct sales and service offices all over the U.S., but have not necessarily had the need in the past for assistance with legal work in every state where we have a business presence. From time to time, we suddenly find ourselves facing a legal issue in a state where we have no outside counsel relationship. It has been a real benefit to know that the ELA has assembled such an impressive team of experts throughout the U.S. and overseas.

A few years ago, we faced a very tough discrimination lawsuit in Mississippi. We had never had to retain a lawyer there before. I was absolutely delighted with the Mississippi ELA firm. We received an excellent result. They will no doubt handle all of our employment law matters in Mississippi in the future. I have also obtained the assistance of several other ELA firms around the U.S. and have received the same outstanding service. The ELA is a tremendous resource for our company.

Roberts-Gordon LLC

Our affiliated companies have used the Employment Law Alliance in connection with numerous acquisitions, and have always been extremely pleased with our ability to obtain the highest quality legal advice on due diligence issues from jurisdiction to jurisdiction. We have found the Employment Law Alliance firms to be not only first rate with respect to their legal advice but also responsive and timely in assisting us with federal and state law issues critical to our due diligence efforts. We consider the Employment Law Alliance to be an important part of our team.

Rockwell Collins, Inc.

We have partnered with many ELA firms on the development and execution of case management strategies with very positive results. We have been very pleased with the legal advice and counsel provided by the law firms we have utilized who are affiliated with the Employment Law Alliance. The ELA firms we have worked with are customer focused, responsive, and thorough in their approach to handling labor and employment law matters.

Elizabeth Daly
Assistant General Counsel


Sanmina-SCI has facilities strategically located in key regions throughout the world. Our customers expect that we will provide them with the highest quality and most sophisticated services in the marketplace. We have that same expectation for the lawyers with whom we do business. With operations in 17 countries, we need to be certain that we have a team of lawyers working together to address our employment law needs worldwide. The ELA has delivered exactly what it promised-- seamless and consistent high quality services delivered in each locale around the globe. It has quickly become a key asset for our human resources department.


We own, manage, and franchise hotels throughout the U.S. and in more than 90 countries. With more than 145,000 employees worldwide, ensuring that we comply with the complex web of local labor and employment laws in every one of these jurisdictions is a daunting task. The Employment Law Alliance has served as an important resource for us and we have benefited greatly from its expertise and long reach. When a legal dispute or issue has arisen in some far-flung place, Employment Law Alliance lawyers have always provided responsive, practical, and cost-effective assistance.

Wilmington Trust Corporation

Wilmington Trust has used the ELA to locate firms in California, Washington State, Georgia, and Europe. Our experience with the ELA lawyers with whom we have worked has always been one of complete satisfaction and prompt, practical advice.

Michael A. DiGregorio
General Counsel