S.C.S. FABRICATION CO LTD v. AF.EUROPA DEVELOPMENT CO TD

DCCJ4806/2014

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 4806 OF 2014

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D E C I S I O N

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The application

1.  By summons made under to s.21 (S.21) of the Evidence Ordinance, (Cap 8) and s.47B (S.47B) of the District Court Ordinance, the plaintiff applied for an order against the Hong Kong and Shanghai Banking Corporation Limited (“HSBC”), which is not a party to this action, for disclosure of documents.

2.  In the summons filed on 28 January 2015, the plaintiff applied for an order in §1 and 2, that:

(1) The plaintiff  by itself or its authorized agent or solicitors, on giving due notice, be allowed to enter the premiese of HSBC for the purpose of inspecting and photocopying the bank records in relation the the following documents (“Documents”):-

(a) The account opening documents in respect of the defendant’s bank account no. 817-723380-838 held with HSBC (“the Bank Account”);

(b) Address proof provided by the defendant and documents showing the defendant’s business address and correspondence address; and

(c) Bank statements in respect of the Bank Account since 26March 2014.

(2) Alternatively, HSBC do produce the Documents for the purpose of these proceedings.

Hearings

3.  At the hearing of the summons on 18 March 2015, after I was told that the defendant had not been served with the writ and the summons, I acceded to the plaintiff’s application by allowing the  dispensation of the service of the summons on the defendant believing at that time that the defendant could not be served, and further made the following orders :

(1) Service of this summons on the defendant be dispensed with;

(2) HSBC do within 14 days from the service of this order produce to the plaintiff’s solicitors the following documents :

(a) The account opening documents in respect of the defendant’s bank account no. 817-723380-838 held with HSBC (“the Bank Account”);

(b) Address proof provided by the defendant and documents showing the defendant’s business address and correspondence address; and

(c) Bank statements in respect of the Bank Account since 26 March 2014;

(3) The plaintiff shall in the first instance pay the HSBC’s costs of complying with the order, which costs  are to be costs in the cause; and

(4) The plaintiff’s costs of this application be costs in the cause.

4.  After the making of the above orders, it came to my attention that the defendant was in fact a Hong Kong registered company. Since the order of 18 March 2015 was not yet sealed, I requested the solicitor for the plaintiff, Mr Fong, to address me on the issue of dispensation of service on the defendant.

5.  This led to the hearing the next day on 19 March 2015 in which hearing Mr Fong agreed that the court still retained the power to set aside the order for dispensing service, and that in the light of the court’s concern, the summons should be served on the defendant.  Thus I set aside § (1) of the order of 18 March 2015, and directed the hearing to be heard inter partes on 27 March 2015. The plaintiff was further directed to serve on the defendant together with the summons and its supporting affirmation a covering letter setting out the orders that I made on 18 March and 19 March 2015. Since HSBC did not object to the application and the issue of service did not concern HSBC, I had not required it to be notified of the hearing.

6.  According to the affirmation of service the plaintiff filed on 23 March 2015, the plaintiff’s solicitors on 20 March 2015 served the defendant the above documents by leaving them on the defendant’s address of the registered office as disclosed in the defendant’s Incorporation Form (NC1) dated 23 December 2013 filed with the Companies Registry.

7.  Since the address shown on the said Incorporation Form is stated to be the intended address of the defendant’s registered office, I had doubt as to whether that address was indeed the registered office address of the defendant.

8.  Mr Fong has very helpfully submitted to the court a copy of the latest document index search of the defendant from the Companies Registry that show a complete record of the documents having been filed by the defendant in the last 3 years. According to this index, the said Incorporation Form was filed with the Companies Registry on 6 January 2014, which was, according to the search, was also the date  the defendant was incorporated. After its incorporation, the search shows that there has not been any notice of change of the defendant’s address. Thus, I am satisfied that the intended address is indeed the address of the defendant’s registered office with effect from the date of its incorporation.

9.  I am therefore satisfied that the defendant has been duly served with the documents and been properly notified of today’s hearing.

10.  The defendant up until now has not filed any response to the application and is absent from the hearing today. In the circumstances, I am satisfied that for the reasons that I gave on 18 March 2015 as set out below, the orders that I made on 18 March 2015, apart from § (1) of the order that was already set aside, should remain.

11.  The plaintiff’s costs of the hearing today be costs in the cause.

Background

12.  In this action, the plaintiff seeks recovery of a sum of US$101,95.14 having been paid into an account , number 817-713380-838 held with HSBC (“Fraudster’s Account”) held in the name of AF Europa Development Ltd, (which is believed to be the correct name of the defendant, AF Europa Development  Co., Limited), as a result of an email deception.

13.  The plaintiff, is a limited company incorporated under the laws of Thailand, and the defendant is a limited company incorporated in Hong Kong which had never had any previous dealings with either the plaintiff or Tata Steel International (Asia) Limited (“Tata”), also a Hong Kong limited company, with which the plaintiff had been conducting business.

14.  The email deception, according to the plaintiff’s case, originated from various emails the plaintiff received from an email address of the sales manager of Tata on 26 and 27 March 2014. In these emails, the plaintiff was instructed, purportedly due to an audit of Tata’s account, to make a payment to a new account, which was the Fraudster’s Account. Having been deceived into believing that the instruction for the payment was from Tata, the plaintiff on 27 March 2014 executed a transfer of the said sum of US$101, 95.14 from the plaintiff’s bank account in Thailand to the Fraudster’s Account.

15.  On 28 March 2014, the fraud came to light when Tata informed the plaintiff that it had never sent the said emails or the payment instruction. A report was then made by the plaintiff to its remitting bank which in turn requested HSBC to cancel the said transfer which had been made to the Fraudster’s Account.

16.  On 31 March 2014, the plaintiff and Tata reported the deception to the police in Thailand, and Tata also made a report on 1 April 2014 to the police in Hong Kong who informed Tata that the Fraudster Account with a balance of US$38,574 had been frozen.

17.  HSBC has been duly served with the summons together with its supporting affirmation. By its letter of 13 February 2015 to the solicitors for the plaintiff, HSBC stated that it would not oppose the summons and would not be attending the court hearing. It also asked for 14 days to produce the requisite documents should the court grant an order in terms of the summons.

18.  As stated in the above, the name of the defendant is slightly different to the name of the Fraudster’s Account, AF Europa Development Ltd, which name has not, according to a company search, been registered with the Companies Registry. It is therefore submitted that the Documents will enable the plaintiff to verify the identity of the defendant in order that a correct party can be sued and served with the proceedings. 

19.  The plaintiff explained that the application for the Documents has to be made due to the refusal by the HK Police to release - apart from confirming that the name of the Fraudster’s account is that of the defendant - any other information as well as the refusal by HSBC to provide the necessary documents without a court order on the ground of duty of confidentiality to its client.

20.  Apart from confirming the identity of the defendant, the Documents can also, the plaintiff submitted, aid the plaintiff in making a subsequent potential Mareva injunction application against the defendant.

21.  The law in relation to production of banker’s documents and generally of documents against a non-party is respectively set out in S.21 and S.47B, and the rules governing S.47B, which are set out in Mr Fong’s written submission, are found in O.24 r.7A of the Rules of the District Court (“RDC”).  It is a matter of good practice that a reference in the summons should be made to this rule: Hong Kong Civil Procedure 2015(“HKCP”), p 582 at §24/7A/4.  The plaintiff has omitted to include a reference to this rule in its summons, which omission is inappropriate but is not an irregularity.  

22.  The test for an application under S.47B and O.24 r 7A of the RDC is relevance and necessity in respect of the documents sought by a party.  If the documents are sufficiently identified and meet the criteria of relevancy and necessity, discovery ought to be ordered: see HKCP, p 583 at §24/7A/6.

23.  According to the facts of this case, it is necessary in my judgment, for the plaintiff to clarify the name of the defendant in particular that the correct party can be sued and the correct address can be found for service. The Documents sought in particular item (a) of the documents in relation to the account opening documents of the Fraudster’s Account will be of particular relevance in this regard.

24.  The address proof will likely be, in my view, found in item (b) of the Documents sought as such documents will help the plaintiff locate the correct address for the service of the proceedings on the defendant.  Lastly, Item (c), the bank statements will, apart from throwing light on the identity of the defendant and perhaps also its address as well, also be relevant in enabling the plaintiff to consider whether a mareva injunction is to be applied for.

25.  Having had regard to the circumstances of this case and of the nature of the Documents outlined above, I consider that it is appropriate for me to exercise my discretion in favour of granting the order. In the light of HSBC’s non-objection to the application, I do not think §1 of the order is necessary. Mr Fong is also content with an order to be made in terms of §2 of the summons. Thus, I grant an order in terms of §2 by giving HSBC 14 days as it has requested from the service of this order to produce the Documents.

Costs

26.  According to O.24 7A of the RDC, HSBC should be entitled to its costs of the application and of complying with the order for production: HKCP, p584 at §24/7A/8.

27.  Mr Fong has informed the court at the hearing on 18 March 2015 that he has telephoned and spoken to Miss Li, the officer of HSBC, who is the officer handling this application and that Miss Li has confirmed to him that HSBC would not seek costs of this application and would only require photocopying charges as its costs of the complying with the order for production.

28.  Hence, I allow HSBC the costs of complying with the order, which costs should be borne by the plaintiff in the first instance and should be made the costs in the cause.

29.  I order that the plaintiff’s costs of this application be costs in the cause.

Order

30.  I summarize my orders as follows:

(1) HSBC do within 14 days from the service of this order produce to the plaintiff’s solicitors the following documents :

(a) The account opening documents in respect of the defendant’s bank account no. 817-723380-838 held with HSBC (“the Bank Account”);

(b) Address proof provided by the defendant and documents showing the defendant’s business address and correspondence address; and

(c) Bank statements in respect of the Bank Account since 26 March 2014;

(2) The plaintiff shall in the first instance pay the HSBC’s costs of complying with the order, which costs  are to be costs in the cause; and

(3) The plaintiff’s costs of this application, including the costs of the hearings on 18 March, 19 March and 27 March 2015 be costs in the cause.