LI WEI WONG v. PANG GUEI HUA AND OTHERS

HCA 494/2018

[2024] HKCFI 1255

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 494 OF 2018

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J U D G M E N T

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Background

1.  This is the Plaintiff’s application for summary judgment against D2 by a summons filed on 18 July 2023. The Plaintiff only seeks money judgment and interests but not other reliefs.

2.  As set out in the amended statement of claim, the Plaintiff, a resident of Canada, was the victim of cyber fraud in September 2017. She had been induced by one Mr Chen, whom she has never met, to invest. Mr Chen gained her trust by prolonged conversations conducted via text messages. As a result, the Plaintiff made 2 payments totaling CAD500,000 on 21 and 25 September 2017 into a bank account in BOCHK no. 012-91X-9-XXX-XXX-9 in the name of D1 in Hong Kong (“D1’s Account”).

3.  Mr Chen has since disappeared without trace and it appeared that there was no investment scheme as he alleged. The Plaintiff reported to the police and learnt from the police that her money was deposited into D1’s Account.

4.  It transpired that D1 had converted the Plaintiff’s monies into Hong Kong dollars and made 2 transfers into an Intermediary Account, subsequently found to be another of account of D1 with the same bank. From the Intermediary Account, 5 transfers were made to D2’s BOCHK account no. 012-7XXX011XXXX (“D2’s Account”) between 22 and 27 September 2017 totalling HK$2,598,180 (“the 5 Transfers”) as follows:

Date of deposit into D2’s Account	Amount
22 September 2017 at around 12:38	HK$653,180
25 September 2017	HK$350,000
25 September 2017	HK$20,000
26 September 2017 at around 12:40	HK$1 million
27 September 2017	HK$575,000

5.  D3’s Account received 2 sums (each of HK$346,820) from the Intermediary Account and D2’s Account, respectively. The monies were converted to Australian dollars and transferred to another BOCHK account in D3’s name.

6.  The Plaintiff commenced the present action against all 3 Defendants but only D2 had taken an active part initially. The Plaintiff’s claim against D2 is premised on money had and received and unjust enrichment, constructive trust, and knowing receipt of monies as a result of a fraud perpetrated on her.

7.  D2 has consented to the making of the Order dated 10 September 2018 whereby she gave an undertaking not to dispose of or deal with the balance of HK$2,651,260.77 held in D2’s Account until trial or further order.

D2’s defence

8.  D2 denies the claim. Her pleaded defence is that she did not know the Plaintiff or Mr Chen and had no knowledge of their dealings. She admitted that the 5 Transfers were transferred from the Intermediary Account to D2’s Account.

9.  D2 claims to be a cleaner employed by a Hong Kong company called WT China HK Ltd (“WT China”), a registered money service operator. She voluntarily allowed D2’s Account to be used by WT China for the purposes of its operation of money exchange business. D2’s Account was registered with the Customs and Excise Department of Hong Kong on 6 September 2017, as a feeder account to WT China. D2 did not maintain control over D2’s Account.

10.  In around mid-September 2017, Wah Tai Foreign Exchange (“Wah Tai”), a registered money service operator but not related to WT China, received instructions from an individual known as Bai Shu Yu for a remittance from Hong Kong to an individual known as Or Chung Ming in the PRC. Wah Tai gave instructions to WT China for a RMB remittance in a sum equivalent to HK$2,598,180. WT China conducted due diligence on Wah Tai and Bai Shu Yu and was satisfied that the latter was not a sanctioned individual. Wah Tai then arranged for 5 transfers totalling HK$2,598,180 into a designated Hong Kong feeder account of WT China, which happened to be D2’s Account. D2 was unclear as to who was or is the account holder of the Intermediary Account and/or the relationship of that account holder with Wah Tai. She had signed a cheque to transfer HK$346,820 to D3 based on the instructions of WT China, who had in turn obtained instructions from Wah Tai. D2 thus denies the claim.

11.  D2’s has sought leave to amend the defence to plead change of position and ministerial receipt as an innocent recipient but it has been dismissed by Master KW Wong. She has appealed against that decision but eventually withdrew the appeal on 31 March 2020.

Hearing of the Order 14 Summons

12.  At the time the Order 14 summons was issued on 18 July 2023, D2 was represented by solicitors. Her solicitors were served with this Summons. (They had previously issued applications to amend the defence and applied for security for costs in 2019.) D2 has since 31 August 2023 acted in person. She has become contactable.

13.  Despite given numerous opportunities, D2 has not filed any affirmation or submission in opposition to the Order 14 Summons. Notice of these proceedings and the directions for paper disposal were served on her by leaving in the letterbox of her last known address and that was deemed good service.

Analyses

14.  Summary judgment is granted only where the defendant does not have a defence. It is up to the defendant to raise triable issues.

15.  D1’s representation to the Plaintiff was false as there had been no investment as he claimed. There was a total failure of consideration and D1 had no basis to keep the Plaintiff’s money.

16.  D2 originally denied, in her affirmation to resist the Plaintiff’s application for an interim injunction and banker’s books order, that the money in D2’s Account had anything to do with the fraud committed on the Plaintiff. However, she has admitted in §6(3) of her defence filed on 5 December 2018 that she had received the 5 Transfers from the Intermediary Account of D1.

17.  On the evidence, D2 was thus enriched with money belonging to the Plaintiff. It was unjust as there had been no dealings between the Plaintiff and D2 which would have entitled D2 to retain the Plaintiff’s money. The enrichment was at the expense of the Plaintiff who has been deprived of her money. D2 has not come forth to support her pleaded defence with evidence.

18.  Even if the Court were to take into account the affirmations she has filed in previous interlocutory applications, D2 has disclaimed personal interests in the 5 Transfers. She has not asserted, eg that she held the monies in D2’s Account as agent or trustee of WT China or anybody. For 6 years since the 5 Transfers were first deposited into D2’s Account, no one has asserted rights over the money.

19.  For the reasons given in paragraphs 15-18 above, the causes in money had and received and unjust enrichment (Shanghai Tongji Science and Technology Industrial Co Ltd v Casil Clearing Ltd (2004) 7 HKCFAR 79, §67, have been established. D2 has not raised any triable issue. These are sufficient to give money judgment to the Plaintiff. It is not necessary to deal with the other causes of action in equity as the Plaintiff is not seeking equitable relief.

20.  This action has been dormant from about April 2020 to June 2023 due to the Plaintiff’s lack of available resources to pursue this litigation and not the lack of merits of this case.

Conclusion

21.  I grant judgment to the Plaintiff in the sum of HK$2,598,180, with interests from the respective date of D2’s receipts in the table in §4 above to the date of judgment at the rate of P+1%, and thereafter at judgment rate until full payment.

22.  Costs of the action, including this summons and all costs reserved, be paid by D2 to the Plaintiff, to be taxed if not agreed.