KENNETH ANTHONY DEVUN v. ZHANG XIAOLI

DCCJ 2982/2024

[2024] HKDC 1232

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 2982 OF 2024

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DECISION

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INTRODUCTION AND BACKGROUND FACTS

1.  I have before me an application by the Plaintiff (“P”)  by Inter Partes Summons dated 14 June 2024 (“the Summons”)  against Standard Chartered Bank (Hong Kong)  Limited (“the Bank”)  for disclosure of the documents set out in the schedule to the Summons pursuant to s 21 of the Evidence Ordinance, Cap 8 (“EO”)  and the court’s inherent jurisdiction.

2.  According to the affirmation of P’s solicitors, P is an American national and is 77 years old.  P claims that unknown fraudsters led him to believe that his computer has been hacked and subsequently coerced him to transfer the amount of US$91,594.67 (“the Sum”)  from his account maintained with Gulf Coast Bank and Trust (“GCB”)  to a bank account of the Defendant (“D”)  maintained with the Bank (“D’s Account”)  on 22 December 2023.

3.  On around 23 December 2023, P contacted the Vice President, Retail Security & Fraud Manager of GCB of his concerns that he may have been a victim of an online scam who in turn contacted the Hong Kong authorities on his behalf.

4.  On 6 January 2024, an e-report was filed through the Hong Kong Police Force e-Report Centre.

5.  According to the email received from a police inspector, a Letter of No Consent was issued against D’s Account.

6.  P now seeks an order for disclosure of copies of: (1)  the monthly account statements of D’s Account from and including 22 December 2023 to 31 December 2023; and (2)  account opening forms setting out D’s particulars.

7.  Mr Middleton, solicitor, appears on behalf of P.

8.  The Bank was served the Summons but indicated by letter dated 17 June 2024 that subject to timing for production of the documents sought and costs to the Bank, they adopt a neutral stance with regard to P’s application and wish to be excused from attending today’s hearing.  The Bank has not appeared.

APPLICABLE PRINCIPLES

9.  The applicable principles governing an order under s 21 of EO are well-established.  Although it has been said that a s 21 order is justified where the plaintiff seeks to trace funds which in equity belong to him and of which there was strong evidence that he has been fraudulently deprived, there are 3 limits:

(1)  Firstly, the plaintiff must demonstrate a real prospect that the information may lead to the location or preservation of assets to which he is making a proprietary claim;

(2)  Secondly, the documents sought to be disclosed must be identified with some specificity as would be expected of a subpoena; and

(3)  Thirdly, the court needs to balance the potential advantage against the detriment to the person against whom the order is sought, not merely in terms of costs but by way of invasion of privacy and requiring breach of obligations of confidence to others.

See CTO (HK)  Ltd v Li Man Chiu & Others [2002] 2 HKLRD 875, §§12-13.

ANALYSIS AND ORDERS

10.  Applying the above legal principles to the facts of the present case, I am satisfied the orders sought should be granted.

11.  In this action, P has claimed against D for payment of the Sum on the basis of unjust enrichment, restitution, constructive and/or resulting trust.

12.  Whilst the evidence before me are all hearsay evidence, given that P has not himself deposed to the affirmation in support of this application, there is nonetheless strong documentary evidence that P has been fraudulently deprived of the Sum.  That said, I wish to remind legal practitioners of the obiter of Ma J (as he then was)  in A Co v B Co [2002] 3 HKLRD 111 at §29 that in applications for Norwich Pharmacal relief the persons who have direct knowledge of the relevant facts should be asked to depose to affidavits and that correspondingly, hearsay or multiple hearsay is avoided as much as possible.  I see no reason in principle why the same should not apply to applications for disclosure orders under s.21 of EO.

13.  I am also satisfied that the information sought would likely reap substantial and worthwhile benefit to enable P to preserve and/or recover monies which he has made a proprietary claim against D in this action as well as enable P to serve court documents on D.

14.  The discovery sought is specifically defined and not unduly wide.  I have also taken into account the neutral stance adopted by the Bank who has not suggested any difficulty in complying with the orders sought save for the time to provide the documents which is taken into account in the draft order submitted to me.

15.  Having balanced the competing interests of the victim and the innocent party (the Bank)  caught up in the wrongdoing, and mindful that the power to order disclosure should be exercised with great caution, I would make an order in terms of the draft Order submitted to me save the order as to costs should be amended to read: “The Plaintiff do pay SCB’s costs of and occasioned by this application, including costs incurred in complying with this Order, on  an indemnity basis to be taxed if not agreed.”