SOFIBUS PATRIMOINE v. THE HONGKONG AND SHANGHAI BANKING CORPORATION LTD

HCMP 1764/2020

[2020] HKCFI 3063

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1764 OF 2020

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D E C I S I O N

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Background

1.  This is the Plaintiff’s application for a Norwich Pharmacal order against the Defendant bank (“HSBC”). 

2.  The Plaintiff, a company incorporated under the law of France, was the victim of an email fraud.  Its accountant (Noulet) received an email from a fraudster on 16 May 2019, posing as the Plaintiff’s Chief Executive, asking if a lawyer (Mayet) had called.  The email was followed by a person representing himself to be Mayet.  Mayet told Noulet that some transfers of money had to be made to Hong Kong for the acquisition of a company.  He asked Noulet to keep the project confidential.  Mayet was in fact unknown to the Chief Executive and there was no such acquisition.

3.  Subsequently, 6 requests for fund transfers were sent by the fraudsters, posing as the Chief Executive and with his forged signatures, to Noulet. Noulet, as requested, arranged payments with the Plaintiff’s bank, Bred Banque Populaire (“Bred”) in France.  The requests were to transfer a total of €5,220,445.95 to 2 Hong Kong companies and one other company, some to the bank accounts with HSBC.

4.  The fraud was discovered on 24 May 2019.  Three transfers could be successfully recalled but the first 2 made on or about 22 May 2019 could not.

5.  The money had been transferred to 2^nd-tier accounts, some of which were maintained with HSBC.  With the aid of a Norwich Pharmacal order against HSBC in a former action, the Plaintiff could identify 3 recipients.  The Plaintiff obtained judgment against 2 of them and recovered part of the money from their accounts maintained with HSBC.  In respect of the 3^rd one, the Plaintiff only knew the recipient of €216,000 to be Haiyang Hu but did not know his/her address or whereabouts.

6.  By this originating summons, the Plaintiff thus seeks a further Norwich Pharmacal order against HSBC in respect of Haiyang Hu’s account.

7.  HSBC has been served but takes a neutral stance.  It requires 28 days to produce the documents sought.

8.  The hearing proceeded on 18 November 2020 but was adjourned to enable the Plaintiff to file and serve translations for the documentary exhibits in French and to give other evidence.  A further affirmation was filed on 20 November and served by 30 November.  This Court, as previously directed, proceeded to dispose of this case on the papers.

Legal principles

9.  The Norwich Pharmacal principles are well-established:

“... if through no fault of his own a person gets mixed up in the tortious acts of others so as to facilitate their wrong-doing he may incur no personal liability but he comes under a duty to assist the person who has been wronged by giving him full information and disclosing the identity of the wrongdoers. I do not think that it matters whether he became so mixed up by voluntary action on his part or because he was under a duty to do what he did. It may be that if this causes him expense the person seeking the information ought to reimburse him. But justice requires that he should co-operate in righting the wrong if he unwittingly facilitated its perpetration.” Norwich Pharmacal Co v Customs & Excise Commissioners [1974] AC 133 p 175B‑E per Lord Reid

10.  The principles have been recently summarized in A v P Co & ors [2018] HKCFI 907, Madam Recorder Y Cheng SC:

“5. Given the extraordinary nature of the relief, in order for a Norwich Pharmacal order to be made:

(1) there must be cogent and compelling evidence to demonstrate that serious tortious or wrongful activities have taken place, the degree of proof required being commensurate with the seriousness of the allegations;

(2) it must be clearly demonstrated that the order will or will very likely reap substantial and worthwhile benefits for the plaintiff. Where the plaintiff is likely to make a tracing claim, there must be a serious possibility that the discovery sought will allow the plaintiff to preserve what may well be his assets or realistically lead to the discovery of such assets;

(3) the discovery sought must not be unduly wide; there is no entitlement to general discovery. The order must be specific, and be restricted to those documents or classes of documents that are necessary to enable the plaintiff to preserve or discover assets; and

(4) the plaintiff must have exhausted other proper and reasonable avenues for obtaining the information sought.

See A Co v B Co at [13]; Danone Asia Pte Ltd v SB Chow & Co [2009] 1 HKLRD 470.”

Application of the legal principles

11.  The Plaintiff does not allege fault against HSBC.  However, HSBC got mixed up in the tortious act of the wrongdoers who deposited money into HSBC.

12.  The evidence produced through the affidavit of the Chief Executive, Jean-Marc Costes, was cogent and compelling in demonstrating that serious tortious activity had taken place to deprive the Plaintiff of its money.

13.  If a Norwich Pharmacal order is made, the Plaintiff will do tracing and may, like before, be able to track down the recipients and recover its money.  The Norwich Pharmacal order is thus very likely to reap substantial and worthwhile benefits for the Plaintiff.

14.  I note that it has been more than a year since the fraud was discovered that the Plaintiff took out this originating summons.  It was because the Plaintiff had wished to recover as much as possible from the other recipients before incurring legal costs on a 2^nd-tier recipient whom the Plaintiff had no idea of and not sure if he/she had assets in Hong Kong.  I am satisfied that the Plaintiff had exhausted other proper and reasonable avenues before taking out this originating summons.

15.  The period for which discovery is sought is from 20 May 2019 (shortly before transfer of the relevant funds took place) and 30 October 2019 (14 days after HSBC gave disclosure under the prior Norwich Pharmacal order which identified Hu as a 2^nd-tier recipient).  It was a reasonable period and not unduly long.

16.  I am satisfied that the discovery sought is properly defined.  The Plaintiff intends to use the information to trace the payments into and out of Haiyang Hu’s accounts, identify the recipients of the payments out of those accounts, identify the wrongdoers and bring proceedings against them, and make claims against Bred in France in respect of the money transfers.  I am satisfied that the scope of discovery is proper to meet such purposes.

Conclusion

17.  I therefore make a Norwich Pharmacal order along the lines of the draft order as amended.  HSBC shall produce the documents within 28 days.  The Plaintiff do pay reasonable costs to HSBC on indemnity basis.

18.  I thank Mr Peter Chung for his assistance.