ASIA ADVISORS LTD v. HK BSIN YU TRADING CO., LTD

HCA 846/2019

[2019] HKCFI 2433

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 846 OF 2019

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D E C I S I O N

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1.  This is the application of the plaintiff (“P”) for judgment against the defendant (“D”) in default of acknowledgment of service and defence, pursuant to Order 13 rule 6 and Order 19 rule 7 of the Rules of the High Court.

2.  The Writ herein was filed on 14 May 2019.  On 17 May 2019, I upon P’s application granted a Proprietary/Mareva injunction against D (the “Injunction”) (the continuation of which P is now also seeking).  On that same day, I further granted a banker’s books order against the Bank of China (HK) Limited (“BoC”) pursuant to s 21 of the Evidence Ordinance. 

3.  On 3 July 2019, P filed its Statement of Claim.  In gist, it is P’s case that it has fallen victim of an elaborate email and impersonation fraud, and has been deceived into remitting a sum in total of US$950,000 (the “Sum”) into a bank account held with the BoC under the name of D (“D’s A/C”). The fraud has since been discovered.  According to §7.2 of the Statement of Claim, US$442,249.43 remains in D’s A/C.

4.  I have considered the several affirmations of service before me.  I am satisfied that the Writ and the Statement of Claim have been validly served upon D.  D has filed neither any acknowledgement of service nor any defence.

5.  Relying upon the causes of action of proprietary restitutionary claim and unjust enrichment, dishonest assistance and knowing or unconscionable receipt, and unlawful means conspiracy, P seeks amongst others return of the Sum, an account and tracing enquiry, and a Declaration that the sum of US$442,249.43 remaining in D’s A/C is held by D on constructive trust for P.

6.  As the Writ and the Statement of Claim contain claims not mentioned in Order 13 rules 1 to 4 and Order 19 rules 2 to 5, the present application is governed by Order 19 rule 7(1).  I have considered the applicable approach in Spruce Australia Pty Ltd v New Senjia Trade Limited [2019] HKCFI 101, which I will not repeat.

7.  I am satisfied that on the face of the Statement of Claim, P appears entitled to the relief sought.  I note that a declaration is being sought.  I note on the other hand the proprietary nature of P’s claim.  I take further into account the fact that nothing is known about D, including whether it has any other creditors.  P has a genuine need for the Declaration sought, so as to avert any need for it to race against other creditors.  The Declaration sought is also necessary for P to get to the balance in D’s A/C for partial satisfaction of the monetary judgment.  In all the circumstances, I am satisfied that the facts of the present case are such that I should exercise my discretion in favour of granting the declaratory relief sought.

8.  P also seeks continuation and variation of the Injunction so as to get to the balance in D’s A/C.  I repeat what I have said in China Citic Bank Corporation Limited (Quanzhou Branch) v Li Kwai Chun & others [2018] HKCFI 1800 at paragraph 32, that:

“ … The mere fact that a judgment has been obtained does not by itself justify [a Mareva injunction]. But if a Mareva injunction is otherwise justified (applying the established considerations and with the fact that it is a post‑judgment application factored in), a Mareva injunction may be granted (subject to the rider that it should normally be of limited and specific duration). It acts in personam on the defendant and works in tandem with the usual execution mechanism.”

9.  In the present case, having considered all the circumstances, the fraudulent nature of the conduct in particular, and the clear risk of dissipation in the absence of any injunctive relief, I am of the view that the continuation of the Injunction post‑judgment is justified.  I am however not prepared to leave it open‑ended in the manner as sought.  I impose a time limit of 17 March 2020, after which the Injunction will lapse.  That will give P sufficient time to take out any execution process deemed necessary. This is however without prejudice to any application in the future for further continuation should the circumstances justify it.

10.  For the reasons set out above, I grant P’s application in terms of the Summons as amended.