CHEUNG HON KUEN v. HANG SENG BANK LTD

HCA 3002/2018

[2019] HKCFI 2874

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 3002 OF 2018

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D E C I S I O N

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1.  This is D’s application before me as the Summons Judge on an inter partes basis for a Mareva/Proprietary Injunction against some of the Third Parties, namely TP7, TP11, TP16, TP18, TP19 and TP20 (“Summoned TPs”). Some of the other TPs have previously been dealt with. And even in respect of these Summoned TPs, and for the purpose of this decision, I am only concerned with TP19. TP19 opposes the application. The substantive hearing will have to be adjourned. The only live issue is whether any interim interim relief should be granted.

2.  D is a bank.  P was one of its customers which has maintained a number of accounts with D.  It appears that both P and D are victims of fraud perpetrated on them by certain other party or parties.  The pleadings suggest that forged and faked instructions had been given in P’s name to D for realization of certain securities held by P in his accounts with D, and for the transfer out of the related proceeds (the “Proceeds”).  D complied allegedly without knowledge of the fraud.  The amount of Proceeds so transferred out was in excess of HK$100m.  Recipients of some of those Proceeds have been identified.

3.  For his loss arising from the fraud P is suing D.  D denies liability. I do not need to go into the details of its defence.  Suffice for me to point out that D has taken out Third Party Proceedings against a total of 20 TPs ^[1].  They are said to be recipients of the Proceeds at different levels.

4.  TP19 was one of those alleged recipients.  The relevant transfer took place on 24 February 2018.  That amount was “frozen” by the police by way of a “no‑consent” letter which TP19 knew about in about April 2018.  In December 2018, D was first sued by P.  In February 2019, P issued the Third Party Notice against TP19, but that was not served until 30 October 2019.  In the meantime, the “freeze” imposed by the no‑consent letter had been lifted.  Then on the same time when P served the Third Party Notice on TP19, the present inter partes summons was also issued and served upon TP19.

5.  There is little dispute that TP19 is an active company doing business.

6.  Mr Yu seeks interim interim relief primarily on the basis that in the absence of any, TP19 may use up or otherwise dissipate the sum concerned.

7.  I bear in mind the chronology of the matters set out in §4 above. I note in particular that this is an inter partes application.  If there were any intention on the part of TP19 to use up or otherwise dissipate its assets, it would have had ample opportunities to do so.

8.  Applying the balance of fairness test, I refuse any interim interim relief.  I stress on the other hand that any view which I may have expressed above is necessarily provisional in nature.

9.  I will hear parties on the directions to be given.