ROBERTA CHRISTINA TEH MAY LING v. LUI CHUN SING AND ANOTHER

DCMP 1599/2022

[2022] HKDC 929

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO 1599 OF 2022

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J U D G M E N T

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A. Originating Summons

1.  By the present Originating Summons, the Plaintiff claims for, inter alia, (1)  a declaration that the 1^st Defendant is liable to account to the Plaintiff for a sum of HK$550,000 as constructive trustee; (2)  a declaration that the HK$550,000 in the 1^st Defendant's current account held with the 2^nd Defendant (account number 2500051001985)  represents the funds held by the 2^nd Defendant on constructive trust for the Plaintiff; (3)  an order that the right to sue for and recover the sum of HK$550,000, being a chose in action held by the 1^st Defendant on constructive trust and currently standing in the 1^st Defendant's bank account held with the 2^nd Defendant (Account No.2500051001985)  shall be vested in the Plaintiff; and the said sum of HK$550,000 be forthwith released and returned by the 2^nd Defendant to the Plaintiff's solicitors, Messrs. Mike So, Joseph Lau & Co as stakeholder pursuant to Section 51(1)(e)  and Section 52(5)  of the Trustee Ordinance (Cap 29).

(B)  Plaintiff's Evidence

2.  This case involved a telephone fraud practiced in Singapore on 30 April 2021.  The Plaintiff was a 52 years old Singaporean lady.

2. On 30 April 2021, the Plaintiff received a phone call from a man who claimed to be the staff of her phone service provider.  The caller told her that there were unusual activities in her data usage and that the Plaintiff became a suspect of money laundering activities.  He directed the Plaintiff to download an application program called “Quick support”.  After downloading and installing the application, the Plaintiff provided her username and PIN of the application to the caller.  The Plaintiff followed his instructions and let him remotely access and control her laptop computer and her mobile phone.

3.  In the afternoon on the same day, the caller told the Plaintiff that he would carry on with his checks the following day at about 9 o'clock a.m.  In the evening on the same day, the Plaintiff discovered that most of her money in her bank account had disappeared.  But she still thought that the caller might have held her money temporarily for the purpose of his checks.

4.  In the morning of 1 May 2021, the Plaintiff waited but the caller did not call back. The Plaintiff checked her bank account online again but her missing money had not been returned.  She did not have any means to contact the caller, so she consulted with her sister.  After discussing with her sister, she reported the matter to her banks and the Singapore police.

5.  The Plaintiff had a DBS Multiplier Account in Singapore.  Her bank statement showed that on 30 April 2021, a sum of SGD99,500 in her DBS Multiplier Account was first transferred to her Citibank Singapore bank account.

6.  On the same day, the money in the Plaintiff's Citibank Singapore bank account was converted to HK$550,000 which was then transferred to the 1^st Defendant's Citibank bank account (“the Defendant’s Citibank Hong Kong Bank Account”)  which was maintained with the 2^nd Defendant in Hong Kong

7.  The Plaintiff did not know the 1^st Defendant at all.  The Plaintiff had no reasons to transfer any money to the 1^st Defendant.  In fact, the Plaintiff did not consent to the transfer of any money from her Citibank Singapore bank account to the 1^st Defendant's Citibank Hong Kong Bank Account.

8.  The Plaintiff then obtained a Norwich Pharmacal Order against the 2^nd Defendant herein in DCMP4392/2021 for disclosure of the bank documents and bank statements of the 1^st Defendant herein.

9.  Concerning the 1^st Defendant's Citibank Hong Kong Bank Account, the 1^st Defendant actually opened this new bank account on 15 April 2021.  Before the Plaintiff's HK$550,000 was transferred to the 1^st Defendant's Citibank Hong Kong Bank Account, there was only one transaction of a HK$200 deposit.

10.  According to the 1^st Defendant's Citibank Hong Kong Bank Account statement of April 2021, after the transfer of the Plaintiff's HK$550,000, the balance was HK$550,200.  Thereafter, there was only one withdrawal of HK$100 on 30 April 2021, leaving an account balance of HK$550,100.

11.  The Plaintiff reported the fraud to the Singapore and the Hong Kong police on 1 May 2021 and 3 May 2021 respectively.  The 1^st Defendant's Citibank Hong Kong Bank Account was then frozen.

(C)  Service

12.  Affirmations of service have been filed on 9 August 2022 and 23 August 2022 to prove the due service of the Originating Summons, supporting affirmation and the Notice of Appointment on both the 1^st Defendant and the 2^nd Defendant.

13.  Up to present, no acknowledgement of service has ever been filed by the 1^st Defendant.  The 1^st Defendant has never entered appearance in these proceedings.

14.  By two letters dated 16 June 2022 and 22 July 2022, the 2^nd Defendant indicated that it maintained a neutral stance in these proceedings and would not be appearing before this court.

15.  I am satisfied that notices of these proceedings had been duly served on the 1^st Defendant and the 2^nd Defendant.  I am also satisfied that the present case should be disposed of summarily.

(D)  Declaratory Relief

16.  According to Hong Kong Civil Procedure 2022, vol1, para 19/7/20, it is stated that:-

“Declaration-- It is not the normal practice of the court to make a declaration without a trial, particularly where the declaration is that the defendant in default of defence has acted fraudulently (Wallersteiner v Moir (No 1) [1974] 1 WLR 991); Top One International (China)  Property Group Company Ltd v Top One Property Grp Ltd [2011] 1 HKLRD 606, [83] & [85] (Fok J (as he then was)). However, this is only a rule of practice which should not be followed when the plaintiff had a genuine need for the declaratory relief and justice would not be done if such relief were denied (Lam Shing Shou v Lam Hon Man [2002] 1 HKLRD D3; Lai Wai Kuen v Wong Shau Kwong, (HCA 3424/ 2003, [2004] HKEC 1373); Law Yuk Fong v Man Chung Wai (HCA 2195/2015, [2017] HKEC 57).”

17.  In the circumstances of the present case, it would be just to have declaratory relief granted, even in the absence of the Defendants, as it serves no other meaningful purposes by requiring the Plaintiff to go through a full trial with unnecessary and additional legal costs to be incurred.  Further, the Plaintiff has a genuine need to have her interest declared by this Court, so that she can recover her money in a more effective way.  I am satisfied that justice is served if declaratory relief is granted in this case which can be disposed of summarily even in the absence of the 1^st Defendant: Hong Kong Civil Procedure 2022, Vol 1, para 28/3A/2.

(E)  Vesting Order

18.  It is well established that when a property is obtained by fraud, equity imposes a constructive trust upon the fraudulent recipient so that the property is recoverable and traceable in equity.

19.  In Wismettac Asian Foods Inc v United Top Properties Limited [2020] 3 HKLRD 732, Deputy High Court Judge Paul Lam SC made an extensive review of telephone scam cases in Hong Kong and examined the court's approach on whether or not a vesting order should be granted.

20.  I agree with the analysis of Deputy High Court Judge Paul Lam SC that the definition of trust and trustee as defined in the Trustee Ordinance included constructive trust and constructive trustee.

21.  For constructive trust arising from fraud cases, the trust is imposed by the operation of law as a result of which the legal title of the victim's money or its traceable proceeds is vested in the fraudster or the subsequent recipients, but the victim retains or holds the equitable or beneficial interest therein. Section 52(1)(e)  of the Trustee Ordinance empowers the Court to make a vesting order.

22.  I have no doubt that the money in the 1^st Defendant's Citibank Hong Kong Bank Account was the money that was fraudulently received and transferred from the Plaintiff's Citibank Singapore bank account.

23.  I am satisfied that the grant of a vesting order in this case will not affect the rights and interests of any potential creditors or victims of fraud, if any.

24.  The Plaintiff's counsel has submitted to this Court a draft order which is in line with the prayers of the Originating Summons as stated in paragraph 1 of this Judgment.  I make an order in terms.  The costs between the Plaintiff and the 1^st Defendant shall be to the Plaintiff, with certificate for counsel for today’s hearing; and there be no order as to costs as between the Plaintiff and the 2^nd Defendant.