In determining when the limitation period for a claim starts to run, a common question is when the plaintiff first suffers damage. In 

China Candy Holdings Ltd v HLB Hodgson Impey Cheng Ltd

[2025] HKCFI 304, the Court considered this question in the context of contingent liabilities.

The Plaintiff, a company formerly listed on the Hong Kong Stock Exchange, engaged the Defendant as its auditor. On 16 March 2017, the Defendant issued its independent auditor’s report for the Plaintiff’s 2016 financial statements. An investigation by the Securities and Futures Commission subsequently revealed that the Plaintiff’s staff had provided the Defendant with falsified documents during the audit. The Plaintiff was later delisted. On 3 October 2023 – more than 6 years after the auditor’s report was issued – the Plaintiff issued a writ, alleging the Defendant negligently failed to detect misstatements in its financial statements. The Defendant applied to strike out the Plaintiff’s claims on the grounds that they were time-barred.

appeared for the Defendant, instructed by Reynolds Porter Chamberlain.

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