DIAGCOR BIOSCIENCE INCORPORATION LTD AND ANOTHER v. ZENDEX BIO STRATEGY INCORPORATED AND OTHERS

DIAGCOR BIOSCIENCE INCORPORATION LTD AND ANOTHER v. ZENDEX BIO STRATEGY INCORPORATED AND OTHERS

Court found plaintiffs failed to prove the pleaded representation was false and dismissed the misrepresentation claim and all claims by P1; the Collaboration Agreement was an unenforceable framework/agreement to agree and the Commission Agreement imposed a best‑endeavours obligation at city/district level which was not shown to have been breached; fiduciary duties were owed to P2 by D2 and D3 but not to P1; only P2's claim based on the 2nd and 3rd LIS contracts (payment of RMB 2,765,000 / HK$3,448,060.86) was established and awarded against D1, D2 and D3 (jointly and severally) together with a declaration of knowing receipt against D1; conspiracy and other Stage II claims failed.

Citation
[2021] HKCFI 146
Parties
1st Plaintiff: Diagcor Bioscience Incorporation Limited; 2nd Plaintiff: Guangzhou Diagcor Clinical Laboratory Co. Ltd.; 1st Defendant: Zendex Bio Strategy Incorporated; 2nd Defendant: Chan Wing Sin, Christopher; 3rd Defendant: Liang Yuwei
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
20 January 2021
Case Number
HCA2733/2015
Procedural Posture
Civil Trial Contractual, Tort and Equitable Claims / Trial Judgment Delivered
Outcome
Partial judgment for plaintiffs: majority of claims dismissed; judgment for P2 on 2nd/3rd LIS contracts against D1, D2 and D3 for HK$3,448,060.86 (RMB2,765,000) with declaration of constructive trust/knowing receipt against D1; all other claims dismissed; conspiracy claim dismissed.
Legal Topics
Misrepresentation, Negligent Misrepresentation, Innocent Misrepresentation (misrepresentation Ordinance S3), Breach of Contract, Breach of Fiduciary Duty, Knowing Receipt/constructive Trust, Conspiracy to Defraud, Misappropriation of Funds, Agency
Source Language
EN
Contract Law Tort (misrepresentation) Equity and Fiduciary Duties Company Law Civil Fraud/conspiracy Misrepresentation Negligent Misrepresentation Innocent Misrepresentation (misrepresentation Ordinance S3) +6 more

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 6 Authorities cited 11 Party arguments 2 Amounts and remedies 2
Sign in to unlock

Parties

Diagcor Bioscience Incorporation Limited

1st Plaintiff

Guangzhou Diagcor Clinical Laboratory Co. Ltd.

2nd Plaintiff

Zendex Bio Strategy Incorporated

1st Defendant

Chan Wing Sin, Christopher

2nd Defendant

Liang Yuwei

3rd Defendant

Procedural Posture

Civil Trial Contractual, Tort and Equitable Claims / Trial Judgment Delivered

Legal Issues

  1. 1 Whether D1/D2 made a representation that a WOFE could be set up to provide ICL services in PRC and whether it was false and induced P1
  2. 2 Whether D1 breached Collaboration and Commission Agreements by failing to obtain licences and to introduce USD7,000,000 investment
  3. 3 Whether D2/D3 owed fiduciary duties to P1 and/or P2 and whether there was breach in relation to LIS contracts, Sulong Agency Agreement, secret branch office and alleged misappropriation

Ratio Decidendi

Court found plaintiffs failed to prove the pleaded representation was false and dismissed the misrepresentation claim and all claims by P1; the Collaboration Agreement was an unenforceable framework/agreement to agree and the Commission Agreement imposed a best‑endeavours obligation at city/district level which was not shown to have been breached; fiduciary duties were owed to P2 by D2 and D3 but not to P1; only P2's claim based on the 2nd and 3rd LIS contracts (payment of RMB 2,765,000 / HK$3,448,060.86) was established and awarded against D1, D2 and D3 (jointly and severally) together with a declaration of knowing receipt against D1; conspiracy and other Stage II claims failed.

Court Disposition

Partial judgment for plaintiffs: majority of claims dismissed; judgment for P2 on 2nd/3rd LIS contracts against D1, D2 and D3 for HK$3,448,060.86 (RMB2,765,000) with declaration of constructive trust/knowing receipt against D1; all other claims dismissed; conspiracy claim dismissed.

Orders

  • Declaration that D1 is liable to account as constructive trustee for HK$3,448,060.86 (being RMB2,765,000) received in breach of D2 and D3's fiduciary duties and is ordered to repay that sum to P2
  • Judgment that D2 pay P2 HK$3,448,060.86 (jointly and severally with other defendants)