ZELUS MATERIAL HANDLING INC. v. OMISCO HONGKONG LTD

DCCJ 611/2019

[2019] HKDC 234

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 611 OF 2019

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DECISION

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1.  On 13 February 2019, the plaintiff obtained an ex parte Mareva injunction against the defendant (“the injunction”).  On 14 February 2019, the plaintiff filed an inter partes summons seeking an order to continue the injunction until trial of this action or a further order made by the court (“the summons”).

2.  Having read the evidence on service produced by the plaintiff, I am satisfied that the documents in these proceedings have been duly served on the defendant.

The facts

3.  The plaintiff claims that it has been induced by a fraudulent scheme to transfer funds to the defendant.  The plaintiff’s case is as follows.

4.  The plaintiff is a Canadian company incorporated under the laws of the province of Ontario in Canada.  On or about 8 and 9 January 2019, the plaintiff’s staff received emails purportedly from the plaintiff’s co-president, in which the plaintiff’s staff was requested to transfer a sum of USD179,000 (“the sum”) to an account (“the account”) in Bank of China (Hong Kong) Limited (“BOCHK”) held by the defendant.  Induced by those emails and under the impression that those emails were from the co-president, the staff acceded to the request and made the transfer (“the transfer”).

5.  Thereafter, on or about 9 January 2019, the plaintiff’s staff discovered that the said emails in fact were not from the co-president.  The plaintiff then immediately reported the matter to its bank in Canada.

6.  On 10 January 2019, the plaintiff also reported the matter to the Canadian Police and the Hong Kong Police respectively.

7.  The plaintiff has never had any business or dealing with the defendant.

8.  The plaintiff’s solicitors have made enquiries with BOCHK.  On 12 February 2019, BOCHK wrote to the plaintiff’s solicitors and confirmed that the sum was still in the account.

Analysis

9.  In order to obtain a Mareva injunction, the plaintiff has to show:-

(1)  that it has a good arguable case on a substantive claim over which the court has jurisdiction;

(2)  there are assets within the jurisdiction;

(3)  the balance of convenience is in favour of granting the injunction; and

(4)  there is a real risk of dissipation of assets, or removal of assets from the jurisdiction, which would render the plaintiff’s judgment of no effect.

See Hong Kong Civil Procedure 2019, Volume 1, §29/1/65.

10.  Based upon the evidence before me, I am satisfied that the plaintiff has shown a good arguable case against the defendant on the ground of unjust enrichment.  The defendant has been enriched by the transfer.  The defendant has provided no consideration in exchange for the sum transferred to the account.  The transfer was procured by some emails purportedly from the plaintiff’s co-president, but in fact those emails are not from the co-president.  Prima facie, the emails are fraudulent emails used to mislead and induce the plaintiff to transfer the sum to the account.  There is evidence in support of the unjust element.

11.  BOCHK has confirmed that the sum is still in the account.  Obviously there are assets in Hong Kong which can be frozen by an injunction granted by this court.

12.  The evidence shows that the plaintiff may well be a victim of a fraudulent scheme.  Since the defendant is the holder of the account, the defendant may have taken part in this fraudulent scheme.  In my view, in these circumstances, if no injunction is granted, there would be a real risk that the judgment obtained by the plaintiff would go unsatisfied by reason of the disposal by the defendant of its assets.

13.  There is a real risk of dissipation of assets if the injunction sought is not granted.  At the same time, there is no evidence showing that the defendant would suffer any irreparable damage if the injunction is granted.  The balance of convenience is in favour of granting the injunction.

14.  I would continue the injunction.

Disposition

15.  I make an order in terms of paragraph 1 of the summons.  Costs of the summons and costs of the ex-parte application made on 13 February 2019 be the plaintiff’s costs in the cause.

16.  I thank the plaintiff’s solicitors for the assistance rendered to the court.