YING MA v. HANG SENG BANK, LTD AND ANOTHER

HCMP 565/2022

[2022] HKCFI 1934

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS No 565 OF 2022

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D E C I S I O N

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Introduction

1.  This is the Plaintiff’s application (1) by way of Originating Summons dated 11 May 2022 for disclosure orders to issue against 5 Accounts at Hang Seng Bank, Limited, and 2 accounts at the Hongkong and Shanghai Banking Corporation Limited (together, the “Banks”); and (2) by way of summons to amend the Originating Summons.

2.  The Plaintiff is the victim of an investment scam. A female Wong Tingting (“Wong”) befriended and persuaded him into paying US$480,000 (approximately HK$3.74 million) (the “Stolen Monies”) to the Accounts.

3.  The Stolen Monies were supposedly for the purpose of trading spot gold through an account in the name of the Plaintiff at Red Sun Capital, a foreign exchange broker recommended by Wong. Huge profits were allegedly made from executed trades, but the Plaintiff was not able to withdraw monies from the purported “trading accounts”, unless a hefty fee, being 10% of the profits, was paid to Red Sun. Alarmed by the fee, the Plaintiff did investigation and discovered that Red Sun was a real company in Hong Kong but had a different website from the one with which the Plaintiff created his trading account.

4.  The Plaintiff seeks the following information from the Banks:

(1)  The current balance of the Accounts as of the date of the Order to be made;

(2)  The account opening documents for the Accounts;

(3)  The bank statements of the Accounts, from the date of transfer to the date of the Order to be made; and

(4)  Transaction details relating to onward transfers from the Accounts.

Disclosure Orders

5.  The legal principles have been summarized in a recent decision in Ren Wenlong v BOCI Securities Ltd [2021] HKCFI 3782, Au-Yeung J:

“10. The rationale for the provision of a Norwich Pharmacal order was explained by Ma J (as he then was) in A Co v B Co [2002] 3 HKLRD 111 at §10:

‘Where innocent parties are caught up or have become involved in the tortious or wrongful activities of others, thus facilitating the perpetration (or continuation) of such activities, justice may require (and therefore the court may order) that such innocent persons come under a duty to assist the victim of the tort or wrongful activities, by the provision of full information even though such innocent persons cannot be shown to incur any personal liability at that stage. …’

11. A recent statement of legal principles for the grant of a Norwich Pharmacal Order can be found in A v P company [2018] HKCFI 907 at §§4-5, Recorder Yvonne Cheng SC:

‘4 A Norwich Pharmacal order is not a usual order. It is not lightly granted in the absence of powerful factors:

(1) It is made against an innocent party whose only involvement is to have become mixed up in the tortious or wrongful activities of others.

(2) The wrongdoing exists only on the part of a person or persons against whom no relief may be sought at the stage of the application and against whom there is probably insufficient evidence to found an action.

(3) There will usually be a legal relationship between the innocent person against whom a discovery order is sought and the alleged wrongdoer, and the relationship may involve strict duties to be observed on the innocent party’s part. Any discovery to be made will involve a breach of confidentiality and may expose the innocent party to civil liability and possibly even criminal liability.

(4) The court must accordingly balance the competing interests of the victim of the alleged wrongdoing and an innocent party caught up in the wrongdoing.’

…

5. Given the extraordinary nature of the relief, in order for a Norwich Pharmacal order to be made:

‘(1) there must be cogent and compelling evidence to demonstrate that serious tortious or wrongful activities have taken place, the degree of proof required being commensurate with the seriousness of the allegations;

(2) it must be clearly demonstrated that the order will or will very likely reap substantial and worthwhile benefits for the plaintiff;

(3) the discovery sought must not be unduly wide; there is no entitlement to general discovery. The order must be specific, and be restricted to those documents or classes of documents that are necessary to enable the plaintiff to preserve or discover assets; and

(4) the plaintiff must have exhausted other proper and reasonable avenues for obtaining the information sought.’”

6.  Applying these criteria to the facts of this case, the evidence demonstrates very clearly that a wrong has been committed against the Plaintiff who has been cheated of his monies as a consequence of the acts of the fraudsters, and were paid to the benefit of the account holders of the Banks and, possibly other persons as yet unknown. As a consequence of such payments, those who own and/or operate the Accounts have been unjustly enriched at the expense of the Plaintiff and it would be unjust to let them retain the money to which they are not entitled.

7.  The Banks have information available to them which has been derived from its innocent role in the fraud as custodian of the Accounts and it is only by the Banks providing that information to the Plaintiff that it will be possible for the wrongdoers to be identified, and for the stolen Monies to be properly traced and recovered.

8.  With the above information, the Plaintiff would be able to reap substantial and worthwhile benefits in ascertaining:

(1)  Whether any monies remain in the Accounts;

(2)  If so, to what extent the Plaintiff has a proprietary claim against those monies;

(3)  Whether any part or all of the Plaintiff’s monies have been onward transferred to other bank accounts; and

(4)  If so, to which bank accounts have the Plaintiff’s monies been transferred.

9.  The order sought is specific and not unduly wide, and will enable the Plaintiff to trace his money. There is no other avenue for the Plaintiff to seek the information sought.

10.  Balancing the competing interests of the Plaintiff and the Banks as innocent parties who are a duty of confidentiality to their customers, the discretion ought to be exercised in favor of the Plaintiff.

The Banks’ Positions

11.  The Plaintiff served the Originating Summons on the Banks, neither of which contested the proceedings and did not appear.

12.  I am satisfied that a sufficient case has been made out for the Court to make a Norwich Pharmacal order and I so order.

13.  On a nisi basis, costs shall be paid by the Plaintiff to the Defendants on an indemnity basis. The Plaintiff’s own costs are reserved. The confirmation of Tanner De Witt in the last page of its letter dated 8 June 2022 that it will not charge the Plaintiff for answering the Court’s requisitions is noted.

Amendment Application

14.  The amendment is for a purely clerical error in paragraph 1, uncontested by the Banks. I give leave to amend.