OPERA NATIONAL DE PARIS v. SUN BON INTERNAITONAL LOGISTIC LTD

DCCJ 218/2021

[2022] HKDC 766

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 218 OF 2021

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BETWEEN

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DECISION

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Introduction

1.  This is the defendant’s appeal against the order of the learned Master dated 24 January 2022 granting summary judgment in favour of the plaintiff.

Legal principles on appeal against Master’s decision

2.  An appeal from the master to the judge in chambers is dealt with by way of an actual rehearing of the application which led to the order under appeal, and the judge treats the matter as though it came before him for the first time: 58/1/2 Hong Kong Civil Procedure 2022 Vol 1

The plaintiff’s case

3.  The plaintiff is a national public institution and the primary opera and ballet company of France. It operates, inter alia, the Palais Garnier, an opera house in Paris, which, apart from being a venue for artistic performances, also provides banqueting services.

4.  On 21 November 2019, the plaintiff signed a reservation letter with one Mr Garg for the reservation of Palais Garnier for a wedding reception to be held on 7 April 2020 under which a deposit of EUR120,000 (“the deposit”) was paid on 19 December 2019.

5.  Due to COVID-19, the French Government decreed a lock-down on 17 March 2020.

6.  On 6 July 2020, an imposter sent an e-mail to the plaintiff requesting for the refund of the deposit to Manne Style Limited (“MS”), a Hong Kong company.

7.  On 21 July 2020, the plaintiff remitted the deposit to MS’s Dah Sing Bank account in Hong Kong, which was received and converted into Hong Kong dollars on 23 July 2020.

8.  On 24 July 2020, the plaintiff discovered the fraud and that on the same day, out of the sum remitted, HK$991,692 (“the money”) was transferred from MS’s Dah Sing Bank account to the defendant’s account with Bank of China No 012-91800281562 (“the BOC account”).

The defendant’s case

9.  The defendant is a Hong Kong company with the BOC account.

10.  WT China HK Limited (“WT”) is a licensed operator for money service pursuant to s 30 of the Anti-Money Laundering and Counter-Terrorist Financing Ordinance, Cap 615.

11.  The BOC account was registered with the Customs & Excise Department for the operation of money service operation by WT at zero consideration.

12.  One Mr Hui Man Ngai, who was known to WT for about 4 years, approached WT on or around 24 July 2020 for a potential currency exchange arrangement for around US$120,000 to be transferred to Nigeria upon the request of MS at a fee.

13.  WT was satisfied with the documents provided by Mr Hui that MS was carrying out legitimate business of trading in wedding decoration materials and gave details of the BOC account to Mr Hui to effect the transfer.

14.  On the same day, ie 24 July 2020, the defendant received the money by way of bank transfer from MS. Soon after the receipt, Mr Hui informed WT that it was no longer necessary for MS to effect the overseas transfer. He requested and WT agreed that HK$987,710 be refunded to MS which was to be picked up by him in person at WT’s shop in Kowloon Bay, and the remaining balance was kept by WT in the BOC account as service fee.

15.  Accordingly, Mr Hui collected HK$987,710 in cash on 24 July 2020 and HK$3,982 was retained in the BOC account.

Legal principles on summary judgment

16.  The principles governing the grant or refusal of summary judgment under Order 14 is well established. It was for the defendant to show that there was an arguable defence or triable issue. In doing so, the defendant must condescend to particulars. The mere assertion in an affidavit of a given situation by the defendant did not, ipso facto, ground leave to defend. The defendant must satisfy the court that his evidence was capable of being believed and that on the basis of such evidence, there was a fair or reasonable probability of the defendant having a real or bona fide defence: see Menfond Electronic Art & Computer Design Co Ltd v Wong Wang Tat Victor and anor [2013] 2 HKC 259

The defendant’s argument

17.  In the light of the established principle, I should give consideration to the defendant’s defence as raised.

18.  Mr Ernest Ng, counsel for the defendant, argued that the defendant has raised triable issues on (i) ministerial receipt; (ii) change of position and (iii) bona fide purchaser for value without notice.

Ministerial receipt

19.  The defence is available to the agent in that:-

“an agent who receives a benefit for which he must account to his principal should be able to resist a claim in unjust enrichment whether or not he pays the value of the benefit to his principal, and whether or not he takes good title to property which he then uses as his own, because his obligation to account means that he never takes the value of the benefit for himself, and that the principal alone is enriched by the transaction.”

See Goff & Jones, The Law of Unjust Enrichment, 9^th Ed at 28-02.

20.  Mr Thomas Wong, counsel for the plaintiff, submitted that the defendant was not a receiving agent of WT because there is no evidence that WT had obtained any approval from the Customs & Excise Department to use the BOC account. Mr Wong added that from 18 February 2020 onwards, the Customs & Excise Department began proactively banning money service operators from using a unrelated third-party account. Mr Wong also submitted that the copy of Form 6 produced by the defendant did not state the BOC account and is dated 16 April 2019, not 7 March 2010. Mr Wong relied on The Yerrid Law Firm v Qiansbaizi Trading Ltd [2021] HKCFI 620.

21.  My first observation is that The Yerrid Law Firm (supra) is a case on setting aside a default judgment for which the defendant must show that his case has a real prospect of success. In considering the application, the court is required to form some provisional view of the probable outcome of the action. Here, the court is concerned with whether the defendant has raised any triable issues.

22.  Secondly, the 2^nd defendant in that case had failed to demonstrate that it was the receiving agent for the money service operator to whom the money was remitted. The Form 6 only showed that the 2^nd defendant allowed another money service operator to use its bank accounts.

23.  By the affirmation of Calvin K Cheng, the defendant produced the full set of Form 6 submitted to the Customs and Excise Department on 16 April 2019 giving notification that the BOC account was added for the use of WT’s money service. In my view, this is sufficient to show that the defendant was the receiving agent of WT. Section 40 of the Anti-Money Laundering and Counter-Terrorist Financing Ordinance, Cap 615 only imposes a duty on the money service operator to notify the Commissioner of any change in particulars whereupon the Commissioner is required to amend the relevant particulars in the register. Approval of the Commissioner is not required.

24.  As the BOC account was used by WT for its money service, the defendant was acting as the agent of WT. I have no doubt that the defence of ministerial receipt is available to the defendant and is properly raised.

25.  Mr Wong further argued that the defence of ministerial receipt should be rejected because of WT’s failure to comply with the customer due diligence requirements of the statute thereby rendering the transaction illegal.

26.  Whether the transaction was rendered illegal by reason of the inaction or inadequate action of WT is a matter for trial. Evidence from the parties, particularly those from WT, are required in order to resolve the issue one way or the other.

Change of Position and bona fide purchaser

27.  To raise the defence of change of position, the defendant has to prove:-

(a) there was a causative link between the receipt of the benefit and his change of position, so that, but for the receipt of the benefit, the defendant’s position would not have changed, either because the defendant no longer has the benefit received or because he has changed his position in some other way in reliance on the receipt of the benefit; and

(b) the defendant’s position must have changed in circumstances which make it inequitable for him to make restitution to the plaintiff.

See TTI Global Resources HK Ltd v Hong Kong Myhone Technology Co Ltd [2021] HKCFI 306.

28.  To raise the defence of bona fide purchaser for value without notice, the defendant has to prove:-

(a) there was a purchase for value;

(b) of the estate in property;

(c) in good faith;

(d) without notice; and

(e) at the time of transfer of the legal estate.

See also TTI Global Resources (supra).

29.  For the defence of change of position, Mr Ng is saying that the defence is made out for WT. As WT is not a party to this action, I take it that Mr Ng is conceding that the defence is not available to the defendant.

30.  For the defence of bona fide purchaser for value without notice, Mr Ng is saying that WT, as the principal and ultimate beneficial owner of the money, has provided consideration in the form of the use of the BOC account and the retention of service fees, therefore, the defence is available to WT. For the same reason, I take it that Mr Ng is conceding that the defence is not available to the defendant.

Sea change of case

31.  Mr Wong complained that the defendant has had a sea change of its case between the original defence and the affidavit evidence. The defendant’s case is plainly incredible, unbelievable and not bona fide, citing Bangkok Bank Public Co Ltd v Hui Yan Moon [2019] HKCFI 321.

32.  With respect, I do not think the complaint of Mr Wong is made out. The current case of the defendant is no different from the case as stated in the original defence. The current case added more details to the course of the transaction between WT and Mr Hui as well as the role of MS by stating the underlying facts leading to the payment of the money to the BOC account by MS and eventually the collection of HK$987,710 by Mr Hui. I do not regard such addition of details as a sea change of case.

33.  Mr Wong also raised queries on the lack of explanation and lack of evidence on various aspects of the defendant’s case. For example, whether Mr Hui was operating another licensed money service operator and if so, why the transaction was not done through his own company; why WT would use the BOC account for its money service business; no evidence was adduced to show MS was a company carrying on the business of trading wedding decoration materials; why Mr Wong Shun Hang had the capability to operate his own business with one single overseas order worth EUR120,000; no evidence was produced to substantiate the remittance of money to Nigeria; why HK$991,692 was remitted to the defendant instead of US$120,000 (equivalent to HK$936,000) and why the defendant did not produce the bank record showing the cash refund of HK$987,710.

34.  Suffice it to say, the queries raised by Mr Wong can only be explored at the trial. It is trite that the court must not embark on a mini trial on affidavits.

Criticism of the plaintiff’s case

35.  Mr Ng went a great length in criticising the plaintiff’s case as defective.

36.  There is no application by the defendant under Order 18.

37.  For the purpose of this appeal, it is sufficient for me to say that I am satisfied that a prima facie case is established by the plaintiff. I would refrain from expressing my view on the defendant’s criticism further as this should be the subject of an appropriate application.

Conclusion and order

38.  By reasons of the aforesaid, I would allow the appeal and make the following orders:-

(a) the order of the learned Master dated 24 January 2022 is set aside;

(b) the defendant is granted unconditional leave to defend.

Costs

39.  I make a costs order nisi that the plaintiff shall pay the defendant the costs of this appeal and the costs of the summary judgment application with certificate for counsel, to be taxed if not agreed.

40.  In the absence of any application for variation by letter within 14 days from the date of this decision, the costs order nisi shall become absolute.