CHAN SHU HOI v. CHAN CHUNG MUN OR OTHERWISE KNOWN AS CHAN CHUN MAN

IN THE HIGH COURT OF JUSTICE

HONG KONG

___________

BETWEEN

___________

JUDGMENT

___________

1. On the 20th February 1987 I made an ex-parte order in favour of the plaintiff restraining the defendant from withdrawing a sum of money from his current account with the Hang Lung Bank, Yaumati Branch that will not leave a net balance of $150,000. The application was supported by an affirmation of the plaintiff which was made on the same day.

2. The facts show that the plaintiff was introduced to a person in the course of his business, by the name of Lee Wah-chor who was described as a broker. He says that in August 1986 Mr Lee asked him if he was interested in exchanging some Hong Kong dollars for Reminbi. The plaintiff said he was interested and eventually he arranged a financial transaction with Mr Lai who was introduced to him by Mr Lee. The negotiations eventuated in Mr Lai agreeing to exchange RMB140,000 with a sum of HK$200,000, and it was at the suggestion of Mr Lai that the plaintiff said he would purchase a banker's cheque to exchange Reminbi with cash. On the 18th August 1986 as a result of a telephone call made by Mr Lai the plaintiff arranged with his bank to purchase a banker's cheque for HK$150,000 and to pay the balance of HK$50,000 by way of a postdated cheque.

3. The banker's cheque was drawn at the request of Mr Lai in favour of Mr Chan Chung-mun, who is the defendant. The plaintiff did not know the defendant nor did the defendant provide any consideration for the payment. It is clear from the evidence of the plaintiff that in making this payment he was the subject of a deception for he parted with the cheque without ever receiving the Reminbi.

4. The defendant has filed an affirmation in reply in which he describes himself as an innocent party and was merely requested by his brother to open a bank account at the instigation of a person called Lee Ming. He agrees that he does not know the plaintiff. The monies were eventually transferred from the plaintiff's bank account to the account of the defendant with the Yaumati Branch of the Hang Lung Bank which is the subject of the ex-parte injunction. Subsequently the matter was reported to the police who made certain investigations, but it appears no charges were brought although the defendant was originally arrested and later released.

5. The writ, which was issued on the same day that the injunction was granted, not only alleges fraud and fraudulent misrepresentation, but there are also claims for money had and received, conversion and/ or detinue and tortious conspiracy.

6. By the application that is made today, the defendant seeks to discharge the order on the grounds that the transaction was tainted with illegality and the plaintiff has shown no real prospect of success at the trial. From the point of view of Hong Kong law, the transaction would not appear to be illegal although it may well be so in China. Again there is no necessity to establish that the defendant is guilty of any fraud.

7. Various matters of law have been argued before me today with regard to bills of exchange. However, as I have already said, the plaintiff's case is not only based upon a claim in fraud, but also on the other grounds to which I have referred. Upon the evidence, if it is accepted at the trial, the plaintiff will be able to trace his money into the defendant's account. The plaintiff has established that there is a serious question to be tried whilst the balance of convenience is weighted heavily in favour of preserving the status quo. If the order was discharged the plaintiff would have little or no chance of seeing his money again in the event that he obtains judgment. Accordingly, the application to discharge the order is refused.

8. After hearing the parties, I made an order that the costs should be the plaintiff's costs in the cause.